Opinion
A163725
03-27-2023
BEHROOZ MOHAZZABI, Plaintiff and Appellant, v. GILDA TURITZ, Defendant and Respondent.
NOT TO BE PUBLISHED
(San Mateo County Super. Ct. No. 20-CIV-04463)
STREETER, ACTING P. J.
Behrooz Mohazzabi appeals from a judgment of dismissal entered by the trial court upon its issuance of an order sustaining a demurrer without leave to amend brought by defendant Gilda Turitz. The trial court ruled that Mohazzabi's claims against Turitz were barred by the common law doctrine of arbitral immunity. We agree and therefore affirm.
I. BACKGROUND
In October 2020, Mohazzabi, appearing in propria persona, filed a complaint against Turitz for professional negligence and legal malpractice in San Mateo County Superior Court. Turitz demurred to the complaint on the ground that Mohazzabi's claims were barred by the common law doctrine of arbitral immunity.
While Turitz's demurrer was pending, Mohazzabi filed and served a two-page "First Amended to Complaint" (amended complaint), which, it appears, he intended as a supplement to his original complaint. Turitz filed a demurrer to this amended complaint as well, again contending that Mohazzabi's claims were barred by the doctrine of arbitral immunity. Turitz asked that the court sustain her demurrer without leave to amend.
Reading his original and amended complaints together, Mohazzabi alleged that in September 2019, a federal district court in Nevada ordered that he and Wells Fargo Bank (Wells Fargo) submit a dispute between them to arbitration. The dispute was submitted to the American Arbitration Association (AAA), Turitz was assigned as arbitrator, and the parties agreed that California law governed the matter.
In his opening brief, Mohazzabi asserts facts for which he fails to cite to his complaint allegations or to anywhere else in the record that indicates they were considered below. Therefore, we disregard these assertions. (See Qualcomm, Inc. v. Certain Underwriters at Lloyd's, London (2008) 161 Cal.App.4th 184, 202 [court reviewing a trial court's demurrer ruling will not consider assertions about matters outside the pleadings]; Meridian Financial Services, Inc. v. Phan (2021) 67 Cal.App.5th 657, 684 ["reviewing court . . . may . . . treat arguments that are not developed or supported by adequate citations to the record as waived"].)
Shortly thereafter, Wells Fargo filed a request for leave to file a motion for summary judgment, which leave Turitz granted. Mohazzabi objected to Turitz's ruling, and thereafter he requested multiple times that Turitz be disqualified as arbitrator, including because she had a financial relationship with Wells Fargo that she had not disclosed.
Mohazzabi further alleged that Turitz granted Wells Fargo's motion for summary judgment in a written order, and that he again requested that she be disqualified, claiming that she lied in the order. He also revealed "more evidence" of Turitz's relationship with Wells Fargo. According to Mohazzabi, Turitz violated Code of Civil Procedure section 1281.9 by not disclosing that she "was a member of the Board of Directors for the Equal Rights Advocates for women and girls for 10 years while she has had financial relations with Wells Fargo Bank through the same organization," and Turitz was biased against him.
Mohazzabi also alleged that because of her "bad faith" bias, Turitz did not carefully read his response to a Wells Fargo filing that presented false evidence, jumped to a conclusion, made a careless mistake, ignored a relevant police report, and ignored two main undisputed facts. From the first day, she "was so biased and not neutral that she made her mind" up against him. She did not respect California law and failed to acknowledge that a main witness lied under penalty of perjury.
Mohazzabi sought damages of at least $300,000 and Turitz's dismissal as arbitrator for her alleged professional negligence and legal malpractice.
The trial court sustained Turitz's demurrer to Mohazzabi's amended complaint without leave to amend based on the doctrine of arbitral immunity. The court concluded that Mohazzabi's claim that Turitz was biased was barred under Stasz v. Schwab (2004) 121 Cal.App.4th 420, 430 (Stasz) and his claim that Turitz failed to disclose a conflict of interest was barred under La Serena Properties, LLC v. Weisbach (2010) 186 Cal.App.4th 893, 905 (La Serena). It subsequently entered a judgment of dismissal against Mohazzabi.
Mohazzabi filed a timely notice of appeal.
II. DISCUSSION
A. Standard of Review
On appeal from a judgment of dismissal following the sustaining of a demurrer without leave to amend, the appellant "has the burden to show either [that] the demurrer was sustained erroneously or that to sustain the demurrer without leave to amend constitutes an abuse of discretion." (Stanson v. Brown (1975) 49 Cal.App.3d 812, 814; see Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) Because a general demurrer raises only a pure question of law, "we review the operative complaint 'de novo to determine whether the complaint alleges facts sufficient to state a cause of action under any legal theory or to determine whether the trial court erroneously sustained the demurrer as a matter of law.' [Citations.] We give the complaint a reasonable interpretation and treat the demurrer as admitting all material facts properly pleaded that are not inconsistent with other allegations, exhibits, or judicially noticed facts. [Citations.] We need not accept as true, however, deductions, contentions or conclusions of law or fact." (Morris v. JPMorgan Chase Bank, N.A. (2022) 78 Cal.App.5th 279, 292.)
B. Analysis
In this appeal, Mohazzabi acknowledges the common law doctrine of arbitral immunity protects arbitrators from civil liability for their quasijudicial acts. (See La Serena, supra, 186 Cal.App.4th at pp. 901-902.) Nonetheless, he focuses on his pleading allegation that Turitz violated Code of Civil Procedure section 1281.9 by her purported failure to disclose her connection to Wells Fargo and subsequent failure to recuse herself upon his request that she be disqualified. He argues that the trial court "failed to appreciate that [his] claims fit within certain narrow exceptions to arbitral immunity recognized under California law," citing case law which indicates the doctrine of arbitral immunity does not apply to an arbitrator's complete nonperformance on the arbitration contract with the parties. (See Stasz, supra, 121 Cal.App.4th at p. 437, citing approvingly Caudle v. American Arbitration Ass'n. (7th Cir. 2000) 230 F.3d 920, 922; Morgan Phillips, Inc. v. JAMS/Endispute, L.L.C. (2006) 140 Cal.App.4th 795, 798, 801-802 [reversing judgment of dismissal entered upon the sustaining of a demurrer because arbitral "immunity does not apply to the arbitrator's breach of contract by failing to make any decision at all," as "the unprincipled abandonment of the arbitration . . . is not 'sufficiently associated with the adjudicative phase of the arbitration to justify immunity' "]; id. at p. 804.) According to Mohazzabi, Turitz's failure to recuse herself in response to his purported evidence of her undisclosed bias was not a part of the" 'adjudicative phase of the arbitration' and [therefore] is not protected by arbitral immunity."
Mohazzabi's argument is unpersuasive in light of the precedent relied on by the trial court to sustain Turitz's demurrer, which Mohazzabi fails to address. La Serena, a case decided by this division, is directly on point. There, the plaintiffs sued an arbitrator and AAA, alleging five causes of action, all of which arose out of the alleged failure of the arbitrator to disclose a certain conflict of interest during the appointment process. (La Serena, supra, 186 Cal.App.4th at p. 896.) The trial court concluded the conflict of interest disclosure procedure was an integral part of the arbitration process and, therefore, that the arbitrator and AAA were protected from civil liability by the common law doctrine of arbitral immunity for quasi-judicial acts. (Id. at pp. 896-897.) The defendants appealed. (Id. at p. 896.)
The La Serena court, after an extensive review of the case law regarding arbitral immunity, including Stasz, the other case relied on by the trial court here, held that the arbitrator and AAA were protected from civil liability by arbitral immunity for the alleged failure to disclose a conflict of interest because the disclosure procedure was an integral part of the arbitration process. We extensively quote the court's incisive summary of the law and its holding:
"The doctrine of absolute judicial immunity has its roots in the English common law, and has been applied in this state for more than a century. [Citation.] It protects judges from civil lawsuits for acts performed as part of the judicial function. It is limited to acts' "normally performed by a judge,"' and does not include purely administrative or legislative acts. [Citation.] Immunity applies if the acts fall within the scope of the judicial function, even if the conduct complained of was malicious or corrupt. [Citation.] [¶] Common law judicial immunity has been extended to private and public arbitrators. The leading decision in California on arbitral immunity is Stasz[, supra, 121 Cal.App.4th 420]. That case did not involve an allegation of failure to disclose a potential conflict of interest, but a claim that the arbitrator was biased against one of the parties. (Stasz, supra, 121 Cal.App.4th at p. 430.)
"The court extensively reviewed the history of the arbitral immunity, and the stated reasons for its continuing application. It began by quoting from two earlier California Supreme Court decisions: 'As our Supreme Court has stated:" 'Arbitrators are judges chosen by the parties to decide the matters submitted to them ....' . . . Arbitrators have been extended the protection of judicial immunity, because they perform' "the function of resolving disputes between parties, or of authoritatively adjudicating private rights." '" [Citation.] "It long has been recognized that, in private arbitration proceedings, an arbitrator enjoys the benefit of an arbitral privilege [of immunity] because the role that he or she exercises is analogous to that of a judge.... 'There is hardly any aspect of arbitration law and practice more settled, both in domestic and international relations, than the immunity of arbitrators from court actions for their activities in arriving at their award.' . . . This rule-immunizing arbitrators in private contractual arbitration proceedings from tort liability-is well established in California." [Citation.]' (Stasz, supra, 121 Cal.App.4th at p. 430.)
"Later, the Stasz opinion discussed the multiple public policy reasons offered by previous courts for applying the immunity: California's public policy encouraging arbitration as an efficient means for resolving disputes' "has created the need for independent judgments which are free from fear of legal action.... Arbitral immunity furthers this need .... '[T]he independence necessary for principled and fearless decision-making' is best achieved by shielding persons involved in the arbitral process from '. . . intimidation caused by the fear of a lawsuit' arising out of the exercise of arbitral functions.... [¶] "The existence of arbitral immunity is also in part due to the resemblance of arbitration proceedings to judicial proceedings.... '[A]lthough arbitration is a proceeding different from a court proceeding and the functions performed by the arbitrator are somewhat different from those of the judge, arbitration is as much an adjudicatory process as the judicial process.' . . . This comparability in functions creates a similar necessity for independence in decisionmaking.... Thus, it is reasonable to use arbitral immunity just as judicial immunity does in the judicial arena, to protect the decisionmaking process from reprisals by dissatisfied litigants." [Citation.]' (Stasz, supra, 121 Cal.App.4th at p. 431.)
"In determining whether absolute immunity applies to the conduct of a public or private arbitrator, 'the courts look at "the nature of the duty performed [to determine] whether it is a judicial act-not the name or classification of the officer who performs it, and many who are properly classified as executive officers are invested with limited judicial powers." [Citation.]' [Citation.] Where immunity applies, it likewise shields the sponsoring organization, such as AAA here, from liability arising out of the quasi-judicial misconduct alleged.... (Stasz, supra, 121 Cal.App.4th at pp. 436-437.)
"Central to impartial decisionmaking by arbitrators and judges alike is the need for them to make disclosures that may give rise to a challenge to the judge's impartiality by one of the parties, even if the judge or arbitrator concludes that he or she is not disqualified.... [¶] . . . [A] person serving as an arbitrator pursuant to an arbitration agreement has statutory and ethical duties to comply with certain disclosure requirements. Code of Civil Procedure section 1281.9, subdivision (a) mandates that a person 'proposed' to serve as a neutral arbitrator 'shall disclose all matters that could cause a person aware of the facts to reasonably entertain a doubt that the proposed neutral arbitrator would be able to be impartial ....' The section goes on to describe those types of relationships that must be disclosed, including '[a]ny professional or significant personal relationship the proposed neutral arbitrator . . . has or has had with any party to the arbitration proceeding or lawyer for a party.' (Code Civ. Proc., § 1281.9, subd. (a)(6).) [¶] . . . [¶]
"The importance of this disclosure responsibility to the proper functioning of the arbitration process has recently been discussed in Mahnke v. Superior Court (2009) 180 Cal.App.4th 565: 'Courts have long struggled with the problem of ensuring not only the neutrality but also the perception of neutrality of arbitrators, who wield tremendous power to decide cases and whose actions lack, for the most part, substantive judicial review. As the United States Supreme Court observed in vacating an arbitration award under the Federal Arbitration Act, "It is true that arbitrators cannot sever all their ties with the business world, since they are not expected to get all their income from their work deciding cases, but we should, if anything, be even more scrupulous to safeguard the impartiality of arbitrators than judges, since the former have completely free rein to decide the law as well as the facts and are not subject to appellate review. We can perceive no way in which the effectiveness of the arbitration process will be hampered by the simple requirement that arbitrators disclose to the parties any dealings that might create an impression of possible bias." [Citations.]' (Mahnke v. Superior Court, supra, 180 Cal.App.4th at pp. 573-574.) So important is this duty to disclose potential disqualifying relationships that a failure to disclose serves as a basis for setting aside the arbitration award. [Citation.]
"While the parties have not cited a California case directly on point, and we have not found one, we have no doubt that the alleged failure to make adequate disclosures of potential conflicts of interest falls within the scope of the absolute immunity for quasi-judicial acts. Arbitrators are mandated by law to make disclosures for precisely the same reasons that judges must do so. Therefore, the process of making these disclosures is virtually identical to the' "functions normally performed by judges." '" (La Serena, supra, 186 Cal.App.4th at pp. 900-903, fn. omitted.)
We will follow La Serena here and affirm the trial court's judgment.
We also point out that, as noted in La Serena, a remedy already exists for the type of wrong alleged by Mohazzabi here, the setting aside of the arbitration award.
As for whether Mohazzabi should have been allowed to further amend his complaint, "[a]buse of discretion is established when '" 'there is a reasonable possibility the plaintiff could cure the defect with an amendment.'" '" (Morris v. JPMorgan Chase Bank, N.A., supra, 78 Cal.App.5th at p. 292.) However, "[l]eave to amend should be denied where the facts are not in dispute and the nature of the claim is clear, but no liability exists under substantive law." (Lawrence v. Bank of America (1985) 163 Cal.App.3d 431, 436.) Here, it is the nature of Mohazzabi's claim and not the facts he alleges that led to the trial court sustaining Turitz's demurrer. Mohazzabi makes no effort to demonstrate that any further amendment would establish Turitz's potential liability, thereby failing to meet his appellate burden to show that the trial court abused its discretion by sustaining Turitz's demurrer without leave to amend. (See Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 866.) We therefore affirm the trial court's order denying Mohazzabi leave to amend.
Mohazzabi further argues that Turitz's alleged "bias and flagrant errors in the underlying Arbitration, further warrants reversal here." He argues that Turitz "purported to void the judgment of the federal court in Nevada . . . in a manner that undermined the legal basis for the Arbitration itself." He also complains of certain alleged errors by Turitz in her rulings. Mohazzabi does not establish that these contentions were any part of the demurrer proceedings below nor does he cite any meaningful legal authority to support them and, therefore, we disregard them. (Meridian Financial Services, Inc. v. Phan, supra, 67 Cal.App.5th at p. 684; Cahill v. San Diego Gas &Electric Co. (2011) 194 Cal.App.4th 939, 956 [" 'When an appellant . . . fails to support [a point] with reasoned argument and citations to authority, we treat the point as waived.' "].) In any event, his contentions all relate to conduct by Turitz in carrying out her adjudicative responsibilities and, accordingly, are subject to arbitral immunity as well.
III. DISPOSITION
The judgment is affirmed. Turitz shall recover her costs of appeal.
WE CONCUR: GOLDMAN, J., WHITMAN, J. [*]
[*] Judge of the Superior Court of California, County of Alameda, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.