Arbitrators Acted Within Their Powers, So It Didn’t Change Results Even If They Erred
In the underlying dispute, Plaintiffs obtained a substantial award of $150,000 compensatory and $302,784 in punitive damages, blown out when the Court of Appeal ruled that the dispute, related to lease provisions, was subject to arbitration. Defendants then moved, successfully, to compel arbitration, and the trial court set a date of November 24, 2010 as a deadline to complete arbitration. After November 24, 2010, Plaintiffs made a demand to the AAA for arbitration, and Defendants successfully argued to the arbitrators that the demand was untimely. After the trial court denied Plaintiffs’ motion to correct or vacate the arbitration award, Plaintiffs appealed. P.O.P. v. Onie O. Lively, D063550 (4th Dist. Div. 1 March 8, 2014) (Benke, Haller, McIntyre) (unpublished).
The issue as to whether the deadline to arbitrate should have been extended arose because Cal. Code of Civ. Proc. section 1283.8 permits a trial court to set a deadline to arbitrate where the agreement to arbitrate does not set a deadline, whereas the AAA rule at the time the arbitration was pending set its own deadline for rendering a decision, typically thirty days from the date of closing the hearing. If arbitration could be compelled, as it was, then arguably the trial court lacked jurisdiction to set a deadline.
The Court of Appeal chose the path of least resistance: because the record showed the parties agreed the arbitrators could decide whether the arbitration was timely, the arbitrators acted within their powers when they decided the issue. Whether the arbitrators erred was not an issued that even had to be decided, because if the arbitrators acted within their powers, then a mere mistake of law or fact was not reviewable by the trial court.
The result must have come as a double blow to Plaintiffs/Appellants, who won the underlying dispute, saw the judgment in their favor reversed, and then failed to initiate a timely arbitration. It happens.
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