Opinion
B317725
06-14-2023
EHM PRODUCTIONS, INC., Plaintiff and Respondent, v. STARLINE TOURS OF HOLLYWOOD, INC., Defendant and Appellant.
Lex Opus, Mohammed K. Ghods, Jeremy A. Rhyne and Lori L. Speak for Defendant and Appellant. King &Spalding, Lennette W. Lee and Samuel C. Cortina for Plaintiff and Respondent.
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County No. 21STCP00529, Maurice A. Leiter, Judge. Affirmed.
Lex Opus, Mohammed K. Ghods, Jeremy A. Rhyne and Lori L. Speak for Defendant and Appellant.
King &Spalding, Lennette W. Lee and Samuel C. Cortina for Plaintiff and Respondent.
CHAVEZ, J.
Defendant and appellant Starline Tours of Hollywood, Inc. (Starline), appeals from the judgment confirming an arbitration award against it and in favor of plaintiff and respondent EHM Productions, Inc., doing business as TMZ (TMZ). We affirm the judgment.
BACKGROUND
The parties and their arbitration agreement
Starline is a tour bus operator located in Los Angeles. TMZ owns and operates the TMZ Web site and television show. In August 2012, the parties entered into an agreement for the joint operation of TMZ-branded bus tours in the Hollywood area.
The agreement contains mutual indemnification clauses. Starline's indemnity obligations required it to "indemnify, defend and hold TMZ harmless . . . from any and all claims, suits, actions, liabilities, losses, damages, expenses (including, but not limited to, legal expenses and reasonable outside attorneys' fees) . . . that arise out of any performance or non-performance by Starline's employees or Starline's negligence, wrongful acts, or any beach [of] this Agreement."
The agreement also contains an arbitration provision requiring the parties to submit any dispute arising out of or related to the agreement to "final and binding arbitration." The agreement states that the arbitration shall be conducted pursuant to JAMS arbitration rules and procedures by a single neutral arbitrator. The agreement further states that the arbitrator "will provide a detailed written statement of decision, which will be part of the arbitration award and admissible in any judicial proceeding to confirm, correct or vacate the award." The arbitration provision allows the parties to pursue a JAMS appeal of the arbitrator's award.
The arbitration provision further states that "[i]f either party refuses to perform any or all of its obligations under the final arbitration award (following appeal, if applicable) within thirty (30) days of such award being rendered, then the other party may enforce the final award in any court of competent jurisdiction in Los Angeles County."
The arbitration provision in its entirety states:
"Arbitration: In the event that the parties are unable to resolve any Dispute informally, then such Dispute shall be submitted to final and binding arbitration. The arbitration shall be initiated and conducted according to either the JAMS Streamlined (for claims under $250,000) or the JAMS Comprehensive (for claims over $250,000) Arbitration Rules and Procedures, except as modified herein, including the Optional Appeal Procedure, at the Los Angeles office of JAMS, or its successor ('JAMS') in effect at the time the request for arbitration is made (the 'Arbitration Rules'). The arbitration shall be conducted in Los Angeles County before a single neutral arbitrator appointed in accordance with the Arbitration Rules. The arbitrator shall follow California law and the Federal Rules of Evidence in adjudicating the Dispute. The parties waive the right to seek punitive damages and the arbitrator shall have no authority to award such damages. The arbitrator will provide a detailed written statement of decision, which will be part of the arbitration award and admissible in any judicial proceeding to confirm, correct or vacate the award. Unless the parties agree otherwise, the neutral arbitrator and the members of any appeal panel shall be former or retired judges or justices of any California state or federal court with experience in matters involving the entertainment industry. If either party refuses to perform any or all of its obligations under the final arbitration award (following appeal, if applicable) within thirty (30) days of such award being rendered, then the other party may enforce the final award in any court of competent jurisdiction in Los Angeles County. The party seeking enforcement shall be entitled to an award of all costs, fees and expenses, including attorneys' fees, incurred in enforcing the award, to be paid by the party against whom enforcement is ordered."
The 2015 arbitration award and judgment confirming the award
In 2012, TMZ and Starline were named as defendants in a wage and hour class action by Starline employees, Harp v. Starline Tours of Hollywood, Inc. (C.D.Cal. July 27, 2015, No. 2:14-cv-07704-CAS(Ex)) 2015 U.S.Dist. Lexis 99138 (the Harp action). TMZ tendered defense of the Harp action to Starline, who rejected the tender.
TMZ filed a demand for arbitration of its indemnity dispute with Starline. Following a hearing on the matter, the arbitrator issued a partial final award ordering Starline to pay TMZ's attorney fees and costs incurred in defending the Harp action through January 31, 2015, and to pay TMZ's reasonable attorney fees and costs in the Harp action from February 1, 2015 onward, as incurred, within 30 days of receipt of TMZ's invoices. The arbitrator reserved jurisdiction over the matter to ensure enforcement of Starline's obligations and to resolve any dispute regarding indemnity. A JAMS appeal panel confirmed the partial final award in its entirety.
TMZ filed a petition to confirm the partial arbitration award, and the Los Angeles Superior Court entered judgment confirming the award. This court affirmed the judgment. (EHM Productions, Inc. v. Starline Tours of Hollywood, Inc. (Oct. 4, 2017, B277311) [nonpub. opn.].)
The 2019 arbitration award
Starline refused TMZ's subsequent demands to pay fees and costs TMZ incurred in defending the Harp action after February 2, 2015. TMZ filed a second demand for arbitration of Starline's indemnity obligations under the parties' agreement and the 2015 arbitration award.
An arbitration hearing was held on November 28, 2018. On February 27, 2019, the arbitrator issued a signed, 18-page final award resolving all issues presented, denying Starline's counterclaims, and awarding TMZ its fees and costs incurred in the Harp action after February 1, 2015, plus interest at 7 percent per annum. The award states that it "is subject to confirmation by a court of competent jurisdiction."
Starline's abandoned JAMS appeal
On March 26, 2019, Starline submitted a request to initiate a JAMS appeal of the 2019 arbitration award. On June 20, 2019, JAMS sent the parties notification of three proposed neutrals to serve on the JAMS appeal panel, along with an invoice for each party's pro rata share of preliminary fees to be deposited with JAMS. The invoice stated that payment of the fees was "due upon receipt." TMZ paid its share of the arbitration fees. Starline did not.
On January 14, 2020, JAMS sent notice to the parties that the JAMS appeal was administratively stayed because Starline had failed to pay its share of the preliminary fees. JAMS advised the parties that "[u]pon receipt of full payment of the preliminary retainer from [Starline], we will move forward with the arbitration appeal process." Starline did not respond to JAMS's notification of the administrative stay.
On October 14, 2020, TMZ's counsel sent a letter to JAMS, with a copy to Starline's counsel, requesting termination of the JAMS appeal given Starline's failure to submit its share of the required fee deposit. TMZ stated that it was declining to advance Starline's share of the fees. Starline did not respond to TMZ's letter.
On October 23, 2020, JAMS sent notice to the parties that it had closed its file on the matter pursuant to JAMS Comprehensive Arbitration Rules and Procedures, rule 6(c). The notice stated that JAMS had placed the arbitration appeal on administrative stay on January 14, 2020, because of Starline's nonpayment of the initial retainer, that the JAMS file had been opened for more than a year, and that the parties had not actively pursued arbitration appeal efforts. Starline did not respond to the notice.
JAMS rule 6(c) states: "If, at any time, any Party has failed to pay fees or expenses in full, JAMS may order the suspension or termination of the proceedings. JAMS may so inform the Parties in order that one of them may advance the required payment. If one Party advances the payment owed by a non-paying Party, the Arbitration shall proceed, and the Arbitrator may allocate the non-paying Party's share of such costs, in accordance with Rules 24(f) and 31(c). An administrative suspension shall toll any other time limits contained in these Rules or the Parties' Agreement."
TMZ's petition to confirm the 2019 arbitration award
TMZ filed a petition to confirm the 2019 arbitration award on February 18, 2021. Starline filed a response to TMZ's petition and requested dismissal of the petition on the ground that no final arbitration award had been issued.
On August 17, 2021, three days before the scheduled hearing on TMZ's petition, Starline filed with the trial court a letter it had sent to JAMS earlier that day stating that Starline wished to proceed with the JAMS appeal. In response to Starline's supplemental filing, the trial court continued the matter to allow JAMS to make a determination regarding the status of Starline's appeal.
Starline thereafter sent JAMS a check as payment for its share of the preliminary arbitration fees. Starline also corresponded repeatedly with JAMS, asserting Starline had the right to pursue its appeal. JAMS reaffirmed that the appeal had been terminated because of Starline's nonpayment of its share of the initial fees and that the 2019 arbitration award was now final. In a September 23, 2021 letter, JAMS advised the parties that "[o]n October 23, 2020, in consultation with the appeal panel and after several attempts to collect Starline's share of the initial retainer, JAMS terminated the appeal proceeding for nonpayment pursuant to Rule 6(c)." Starline filed with the trial court copies of the parties' correspondence with JAMS in advance of the continued hearing on TMZ's petition to confirm the arbitration award.
The trial court granted TMZ's petition on October 2, 2021. Judgment was entered in TMZ's favor on November 5, 2021. This appeal followed.
DISCUSSION
On appeal from a judgment confirming an arbitration award, we review the trial court's order de novo. (Toal v. Tardif (2009) 178 Cal.App.4th 1208, 1217.) To the extent the trial court made findings of fact in confirming the award, we affirm the findings if they are supported by substantial evidence. (Cooper v. Lavely &Singer Professional Corp. (2014) 230 Cal.App.4th 1, 1112.) An arbitrator's decision, on the other hand, generally cannot be reviewed for errors of fact or law. (Moncharsh v. Heily &Blase (1992) 3 Cal.4th 1, 11.)
As a threshold matter, the parties in this case specified that the JAMS arbitration rules and procedures applied. JAMS rule 6(c) authorizes JAMS to suspend or terminate proceedings when a party fails to pay the requisite fees. An arbitrator's interpretation of JAMS rules may be judicially reviewed on the merits only when the parties have explicitly and unambiguously agreed that the arbitration award is subject to that scope of review. (See Cable Connection, Inc. v. DIRECTV, Inc. (2008) 44 Cal.4th 1334, 1355, 1361, 1364-1365 &fn. 23.) Because the parties here did not agree to such expanded review, JAMS's interpretation and application of rule 6(c) is outside the scope of our review. (See Greenspan v. LADT, LLC (2010) 185 Cal.App.4th 1413, 1422, 1449-1455 ["defer[ring] to the arbitrator's interpretation and application of the [JAMS] rules" regarding the due date for an award]; accord, Ajamian v. CantorCO2e, L.P. (2012) 203 Cal.App.4th 771, 788 ["a reference to the rules of arbitration services [that] permit the arbitrator to determine issues of his or her jurisdiction [is] clear and unmistakable evidence that the parties intended to delegate the issue to the arbitrators"].)
JAMS confirmed in an August 19, 2021 letter to the parties that Starline's JAMS appeal was terminated on October 23, 2020, pursuant to JAMS rule 6(c). JAMS further confirmed that the February 27, 2019 arbitration award was final and that no JAMS appeal proceedings were pending with respect to that award.
JAMS's determination that Starline's JAMS appeal was terminated pursuant to JAMS rule 6(c) and that the 2019 award was final is conclusive as to those issues. (See Smart v. Internat. Brotherhood of Electrical Workers, Local 702 (7th Cir. 2002) 315 F.3d 721, 725-726; Local 36, Sheet Metal Workers Internat. Assn. v. Pevely Sheet Metal Co. (8th Cir. 1992) 951 F.2d 947, 949.) "[W]hile a trial court decides whether the right to arbitrate has been waived by delay in connection with the initial petition (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 982), any waiver due to delay in the arbitration itself is a matter for the arbitrator to decide." (Finley v. Saturn of Roseville (2004) 117 Cal.App.4th 1253, 1259.)
The trial court did not err by confirming the 2019 arbitration award and entering judgment thereon.
DISPOSITION
The judgment is affirmed. TMZ shall recover its costs on appeal.
We concur: ASHMANN-GERST, Acting P. J., KWAN, J. [*]
[*] Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.