And The Attack On Arbitrator's Bias Came Too Late.
The trial judge in Rivera v. Shivers et al., G057919 (4th Dist. Div. 3 8/31/20) (Bedsworth, Thompson, Goethals) sua sponte ordered the unlawful detainer action to mandatory statutory arbitration. What could go wrong? For one thing, unlawful detainer actions are exempt from mandatory statutory arbitration.
The parties advised the trial judge they had stipulated to an arbitrator. However, after further proceedings, the attorneys stipulated to another arbitrator, but the parties did not sign the stipulation. The trial judge noted in a minute order: "Pursuant to stipulation of parties, arbitration is proceeding as a binding arbitration." The case was arbitrated, leading to an adverse result for the plaintiff/landlord. The defendants petitioned to confirm the award, and the trial judge denied the motion, expressing "concern that the stipulation for arbitration was entered into by counsel rather than the parties and concluded the arbitration had been nonbinding."
The Court of Appeal reversed, finding that the statutory proceeding had morphed into a binding contractual proceeding. Why? First, the trial court had no authority to send an unlawful detainer action to mandatory statutory arbitration. Furthermore, the attorneys and the parties acted all along as if they intended to achieve a binding result. Though the parties had not signed a stipulation to binding arbitration, they did not object to the binding arbitration, nor did they object to binding arbitration during the course of the arbitration. While it is true that the right to a jury trial is not easily relinquished, and it would certainly have been better practice to place the parties' agreement to binding arbitration on the record, everyone's conduct, consistent with binding arbitration (as explained in greater detail in the Court of Appeal's unanimous published opinion), ratified the binding nature of the arbitration. "[E]ven an unauthorized act by an attorney concerning substantial rights can be later ratified by the client and thus bind him or her."
A secondary issue was that the disgruntled landlord attacked the arbitrator's credibility because at the time the arbitrator took on the arbitration, he failed to disclose that as a young attorney, the opposing counsel' father had been the arbitrator's mentor. The arbitrator did not realize the connection until the commencement of the arbitration hearing, at which time he disclosed the relationship, and nobody objected. Plaintiff also failed to object within 10 days of the filing the petition to confirm the award, and thus plaintiff's objection was untimely.
COMMENT: The dramatis personae will be familiar to longtime Orange County practitioners who can read the opinion if they are interested. Oh what a difference it made that the ultimate determination was that the arbitration was contractual. Contractual arbitration is binding, whereas a statutorily mandated arbitration might lead to a trial de novo in Superior Court.
Interestingly, the Court of Appeal never tells us whether the disclosure that would have allegedly revealed the arbitrator's bias was material-- to wit, the arbitrator's mentorship decades ago by the father of one of the attorneys. However, we note that the information was not concealed, because it was disclosed when the arbitrator became aware of it. And whether or not the information was material, it certainly was proper and appropriate for the arbitrator to disclose the relationship, leaving it to the parties and counsel to determine whether they considered it to be important. And if someone considered the information important enough to object, they should have done so at the time. The dispositive issue was the failure to timely object -- at the time of the arbitration, compounded by failure to object within ten days of the filing of the petition to confirm. Might not judges look with a jaundiced eye at untimely objections about arbitrator bias made only after a party finds itself on the receiving end of an unfavorable arbitration award?