Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment denying a petition to confirm an arbitration award and granting a petition to vacate the award, Superior Court of San Diego County Super. Ct. No. GIN051637, Richard G. Cline, Judge. Reversed with directions.
HUFFMAN, J.
Petitioner Daryl Mercer appeals a judgment denying his petition to confirm an arbitration award and granting respondent Michael Storeim's cross-petition to vacate the award. (Code Civ. Proc., § 1286 et seq.; all further statutory references are to the Code of Civil Procedure unless otherwise noted.) Mercer contends the trial court erred as a matter of law in granting Storeim's petition and denying his petition: (1) by applying an incorrect legal standard under section 1281.9 to vacate the award based upon an allegation of impression of possible bias; (2) by failing to consider whether Storeim waived the right to object to the arbitration award because he had actual and constructive knowledge of the purported possible bias at the time of the arbitration and failed to object; (3) by failing to consider whether Storeim was estopped to object to the arbitration award because he had filed a pre-arbitration state court action against the arbitral organization challenging its jurisdiction and thus knew the organization's counsel was involved in that action and also the arbitration, but nonetheless proceeded with the arbitration without objection; (4) by ruling under section 1286.2 that the three neutral arbitrators must have disclosed the fact that the arbitral organization, through its counsel, defended against the pre-arbitration state court action; and (5) by effectively destroying arbitral immunity.
Mercer claims that the above trial court's errors require this court to reverse the judgment with directions to grant his petition to confirm the arbitration award. As we explain, on de novo review of the record, we conclude the trial court erred in applying the appropriate legal tests to vacate the arbitration award, and it should have granted Mercer's petition to confirm that award. Accordingly, we reverse with directions.
We also deny Storeim's motion to augment the record with a stipulation to dismiss the pre-arbitration state court action as that document was not before the trial court when it ruled on the competing arbitration petitions in this case. (People v. Brawley (1969) 1 Cal.3d 277, 295.)
FACTUAL AND PROCEDURAL BACKGROUND
Mercer and Storeim are both rare coin dealers who live in the state of Colorado. Until his resignation in March 2004, Storeim was employed by Numismatic Professionals, Ltd. (NPL). Mercer, with whom Storeim had dealings with from about May 2001 in selling coins, works for Tebo Coin Company, Inc. (Tebo). At relevant times, Storeim and Mercer were both members of the Professional Numismatists Guild, Inc. (PNG), a non-profit organization of rare coins and paper money experts incorporated in Ohio with its principal place of business in San Diego County, California, and whose bylaws require its members to arbitrate disputes under the auspices of PNG as the arbitral organization.
At some point before Storeim's employment with NPL ended, Mercer sold several rare coins to Storeim with NPL agreeing to pay Tebo a portion of the profits from the subsequent sale of those coins. When a dispute arose as to whether Storeim had understated several of the subsequent sales prices for those coins and had underpaid Tebo, Mercer filed a demand with PNG to arbitrate the dispute. The arbitration was originally scheduled to be conducted by PNG on September 21, 2005.
On September 16, 2005, Storeim, through his California attorney, filed a complaint for declaratory and injunctive relief and money damages against PNG and Mercer in the North County Division of the San Diego County Superior Court (Case No. GIN047405) (referred to as the state court action). In the first instance, Storeim alleged that PNG had no jurisdiction to arbitrate the alleged claim and no jurisdiction to compel him to arbitrate. He then requested a stay of the PNG arbitration with Mercer because he needed business records from his former employment at NPL and its owner, who were under investigation for other matters by the state of Ohio who had seized the records. Storeim alleged that PNG had denied his request for a brief stay of the arbitration and instead had issued a subpoena duces tecum for the Ohio documents returnable five days after the set arbitration which would prejudice his ability to present any defense against Mercer's claims and cause irreparable harm.
On September 20, 2005, Superior Court Judge Lisa Guy-Schall issued a temporary restraining order (TRO) enjoining PNG from proceeding with the September 21, 2005 arbitration between Storeim and Mercer until further court order. The court set an October 7, 2005 hearing date on the matter for a preliminary injunction against PNG until jurisdiction could be determined on the merits and the court was satisfied that Storeim was able to obtain the documents he needed to effectively defend himself at the arbitration.
For that hearing, Armen R. Vartian, legal counsel for PNG, who assisted PNG's executive director with PNG's arbitrations and membership issues, submitted opposition, including his declaration, against issuance of a preliminary injunction on grounds the underlying dispute between Mercer and Storeim was arbitrable under the PNG bylaws and that Storeim had not raised any issue earlier regarding jurisdiction to proceed with the arbitration even though he had already responded to Mercer's complaint and had sought help through PNG on several discovery matters concerning the arbitration. PNG further asserted the issuance of the TRO obviated the need for a preliminary injunction because Storeim had begun receiving the documents he needed and that a new arbitration date would have to be arranged by the parties.
The court issued a tentative ruling granting the preliminary injunction to bar PNG from conducting an arbitration between Storeim and Mercer "until further order of this Court or until Michael Storeim notifies this Court that he has obtained discovery documents from the appropriate Ohio Authorities that he claims he needs to defend himself in the PNG Arbitration." At the hearing, Storeim and Mercer appeared through their respective California counsel, and Vartian appeared for PNG, advising the court that PNG "did not oppose the proposed preliminary injunction." The court thereafter essentially followed its tentative, but added that Storeim would have to post a $10,000 bond and that he would have to notify the court regarding the discovery of documents "in no event, more than 120 days from the date of this ruling."
In November 2005, Storeim and the executive director of PNG exchanged several emails, with copies sent to Vartian, regarding the on-going discovery process with Storeim in one email explaining why he had resorted to obtaining an attorney in California and filing a court case for injunctive relief. In another email sent on November 17, 2005 from Storeim to PNG's executive director, and copied to Vartian, Storeim claimed that his attorney's argument made for the injunctive relief hearing was made without his knowledge and that "[a]s Armen [Vartian] knows, attorneys throw everything at the fan that they can and hope for the best." On February 3, 2006, Storeim, through his California attorney, filed a status report in the state court action, stating "he has received copies of all documents that he is going to receive and he will proceed with the arbitration [which was then scheduled for February 8, 2006]."
The arbitration took place as scheduled in Fallbrook, California, before three arbitrators (Julian Leidman, Barry Stuppler and Michael Bianco), who were each PNG members but not employees, officers or directors of PNG, and who were appointed by PNG's executive director and to whom neither party objected. After considering "the entire record in this matter, which included written correspondence among the parties and the PNG; extensive documentary evidence received in response to subpoenas issued by PNG to witnesses; detailed written submissions from the parties; and oral presentations from the parties along with testimony of witnesses at an approximately eight-hour hearing [as well as] considering post-hearing Final Written Statements from the parties," the arbitrators issued their unanimous vote on the record on March 3, 2006, and "in accordance with PNG By-Laws, arbitration rules and procedures, and applicable law, the Arbitrators rendered their Award in writing . . . ." The panel of arbitrators found that Mercer had not proven his case against Storeim with regard to four rare coins and sets, but found he had proven Storeim liable to him with respect to the other claims and awarded Mercer "the total sum of $280,000 for compensatory damages, punitive damages, interest and expenses." The panel made no findings regarding liability on NPL's or the state of Ohio's part as they were not parties to the arbitration. Mercer and Storeim were served a copy of the award of the arbitrators on March 7, 2006.
Because neither Storeim nor the panel of arbitrators had contacted the PNG office to request that the award be modified in any way within the statutory time for making such application, Mercer filed a petition to confirm the arbitration award on April 4, 2006, in the North County Division of the San Diego County Superior Court. Storeim responded with opposition and his own petition to vacate the arbitration award on grounds the arbitrator created an impression of bias, specifically arguing that "[b]ecause Armen Vartian and the arbitration panel failed to disclose Vartian's involvement in related litigation directly adverse to Michael Storeim, the failure to disclose gave rise to an impression of possible bias, and the Court must dismiss Mercer's petition to confirm the arbitration award."
In support of his cross-petition, Storeim filed a declaration stating that he had not appeared at the state court action, only his California attorney; that he did not know that Vartian had represented PNG in opposition to his TRO and preliminary injunction to stay the arbitration at that hearing; and that although he realized the three appointed arbitrators were PNG members and not attorneys, Vartian, PNG's attorney, was at the arbitration and gave legal advice to the panel of arbitrators, telling them "something to the effect of 'you can do whatever you want' regarding allowance of the testimony" of witnesses who did not respond to Storeim's subpoenas. Storeim said that neither Vartian nor the arbitrators disclosed Vartian's adversity to him in the state court case and that he "never focused on the fact that Armen Vartian might have represented PNG in the related judicial proceedings. [He] did not become aware of this fact until April 13, 2006, when [he] informed [his California counsel] that [he] was served with the petition to confirm the arbitration award [and his California counsel] told [him] that Armen Vartian represented PNG in the related judicial proceedings." Storeim's California attorney also filed a declaration and lodged copies of the documents from the state court action in support of Storeim's petition to vacate the arbitration award.
In Mercer's response and reply to Storeim's petition and opposition, Mercer essentially argued that Storeim had actual knowledge, or at least constructive knowledge, of all the purported facts of which he was now alleging as bias and corruption. Mercer specifically noted that Storeim had no claims against the three arbitrators, that his only claim was against PNG and its counsel Vartian, neither of whom was a party to the arbitration between Storeim and himself, that Storeim had failed to show there was anything the three arbitrators knew that they purportedly had to disclose, and that Storeim had waived his right to object because he knew all the alleged facts about Vartian before the arbitration, i.e., knew his position as legal counsel for PNG and had constructive knowledge of Vartian's presence at both the state court case hearing and the arbitration.
In support of his position, Mercer submitted Vartian's declaration, a copy of a letter written to Vartian by Storeim's Colorado attorney regarding the pending arbitration and discovery problems which had been copied to Storeim, and copies of the above mentioned email messages between PNG's executive director and Storeim regarding discovery for the arbitration after the state court case had taken place. In his declaration, Vartian explained his role as PNG's attorney, that he had represented PNG in the state court action only because Storeim had made PNG a party to that proceeding and that PNG was not a party to the arbitration but only the administrator of the arbitration, "making sure that [the] proceedings are in accord with PNG rules." Vartian only attended the arbitration in the role as the administrator for PNG because the executive director was unavailable to participate. In that role, Vartian administered the oaths to the arbitrators and witnesses and was present "to ensure that PNG's arbitration rules were followed in other respects." Although Vartian denied telling the arbitrators "you can do whatever you want" regarding the admission of testimony and evidence, he said that "when a specific question came up regarding whether the arbitrators should receive certain evidence and testimony, [he told them] something to the effect of, 'The PNG rules do not require you either to admit or exclude the evidence and testimony.' The arbitrators then exercised their own judgment and received the evidence."
The court issued a tentative ruling June 7, 2006, denying Mercer's petition to confirm the arbitration award and granting Storeim's companion petition to vacate the award. After setting forth the basic law regarding confirmation and vacation of arbitration awards in general, including the grounds under section 1286.2 to vacate an arbitrator's award, and under section 1281.9 regarding required disqualification and disclosure of an arbitrator to ensure impartiality, the court specifically stated:
"Here, the required disclosure was not made and [Storeim], according to his properly admitted declaration, was not made aware of the grounds for disclosure until some time after the conclusion of the proceedings. The court recognizes that here the matter is a bit more complicated because Mr. Vartian was not himself a panelist, but sat in a position essentially as that of legal advisor to the panel. However, the court finds that Mr. Vartian clearly took a position adverse to that of [Storeim] with regard to [his] application for a TRO in that [Storeim] specifically argued that PNG had no jurisdiction to hear the matter and PNG, through Mr. Vartian, actually appeared to defend PNG's jurisdiction. [¶] An arbitration proceeding takes the place of a judicial adjudication of often serious matters and the parties, by agreeing to forego their right to a trial on the issues, are still entitled to expect both the appearance and the actuality of an impartial tribunal. Although Mr. Vartian was not himself a panelist, he sat in a position of authority during the arbitration proceeding and admits advising, rightly or wrongly, the panelists on the inclusion or exclusion of evidence. His presence at the hearing creates the appearance of impropriety and puts into question the impartiality of the panel's findings. Accordingly, the court hereby vacates the arbitrators['] award."
Mercer opposed the tentative and the matter was continued to June 14, 2006 for hearing. At that time, Mercer reiterated there was no claim of appearance or impression of bias on the part of the arbitrators, stressing that there was no showing that any of the arbitrators had anything to disclose; that Vartian only appeared in the state court action because Storeim had named PNG as a party thereby creating a "fiction" of PNG being in opposition; that Vartian's role at the arbitration was in a "functionary capacity to simply take care of issues regarding PNG rules, not rendering legal advice"; and that Storeim had actual and constructive knowledge of the situation. Nonetheless, the court expressed its concern that Vartian had appeared for PNG to defend its jurisdiction in the state court action thus putting PNG in an adverse position to Storeim and had then presided at the arbitration proceeding and gave "assistance/advice to the arbitrators" thereby tainting them, "whether they knew it or not, by [Vartian's] contrary position taken in that earlier proceeding."
After hearing further argument, the trial judge confirmed his tentative ruling, stating,
"There is an interesting question of why PNG took an active part in that jurisdictional question. I mean, what did they really care? [¶] If, in fact, there had been some affirmative relief requested against them, then that makes sense. But to a certain extent, it's only a red herring. [¶] The important part of that is that the attorney took a position contrary to Mr. Storeim here. And then he appears at an arbitration hearing where he's case manager, whatever you want to call him, providing assistance and advice -- whatever -- to the arbitrators, and he tainted the whole proceedings. [¶] I can give you a possibly lay interpretation of all of that, which is: At the jurisdictional hearing, PNG is so concerned about getting their fees, because they -- as an institution or an organization, they live off the fees, much like AAA does. So to protect their fees, they show up and say, 'It's our case. Make him come to arbitration. Make him pay the fee,' whatever the ratio is. [¶] And so having taken that position, a layperson could say, 'Oh, now they're against us.' Mr. Storeim could say, 'Now they're against us,' and at the arbitration, 'here's that lawyer. He's trying to finish the job he started against me in the jurisdictional hearing.' [¶] I mean, that's the sort of logic that lay people have. And it doesn't look good. It doesn't smell good. It could have been fixed. This is not a huge, landmark decision. It's on the facts."
Mercer timely appealed from the judgment entered July 14, 2006, denying his petition to confirm the arbitration award and granting Storeim's petition to vacate the award.
DISCUSSION
Mercer essentially contends the trial court should have confirmed the arbitrators' award and not vacated it because the court misconstrued the facts and misapplied the law in this matter to find that the arbitrators failed to make a disclosure under section 1286.2, subdivision (a)(6)(A) of which they were then aware and on the impression of possible bias under section 1281.9 et seq. We agree.
1. Pertinent Law
Generally, an award by an arbitrator decided under a contractual agreement to arbitrate, as in this case, is only subject to judicial review on grounds set forth in sections 1286.2 (to vacate) and 1286.6 (for correction). (Malek v. Blue Cross of California (2004) 121 Cal.App.4th 44, 55 (Malek).) Although Storeim's petition to vacate the arbitration award was made on the grounds set forth in section 1286.2, subdivisions (a)(1) (the award was procured by corruption, fraud or other undue means), (a)(3) (the rights of the party were substantially prejudiced by misconduct of the neutral arbitrator), and subdivision (a)(6)(A) (the arbitrator failed to disclose within the time required for disclosure a ground for disqualification of which the arbitrator was then aware), the court based its ruling to vacate the award on the latter ground and section 1281.9.
Section 1281.9 governs the disclosure required of a proposed nominee in arbitration proceedings and disqualification as neutral arbitrator and provides in pertinent part that "[i]n any arbitration pursuant to an arbitration agreement, when a person is to serve as a neutral arbitrator, the proposed 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 . . . . "
"On appeal from an order vacating an arbitration award, we review the trial court's order (not the arbitration award) under a de novo standard. [Citation.]" (Malek, supra, 121 Cal.App.4th at p. 55.) We also independently review whether a trial court has correctly construed and applied the relevant statutes, which in this case pertain to the disqualification of an arbitrator. (Michael v. Aetna Life & Cas. Ins. Co. (2001) 88 Cal.App.4th 925, 933 (Michael).) "To the extent that the trial court's ruling rests upon a determination of disputed factual issues, we apply the substantial evidence test to those issues [Citations.]" (Malek, supra, 121 Cal.App.4th at pp. 55-56.) This includes the issue of whether a particular relationship requires disclosure of potential conflicts in a specific case. (Michael, supra, 88 Cal.App.4th at p. 933.)
With regard to such issue, the United States Supreme Court has held that arbitrators must "disclose to the parties any dealings that might create an impression of possible bias." (Commonwealth Coatings Corp. v. Continental Casualty Co.(1968) 393 U.S. 145, 149.) Similarly, under California law an arbitrator has "a legal duty to 'disclose to the parties any dealings that might create an impression of possible bias' at the outset of the hearings." (Johnston v. Security Ins. Co. (1970)6 Cal.App.3d 839, 843-844; Betz v. Pankow (1995) 31 Cal.App.4th 1503, 1508 (Betz); see §§ 170.1, 1281.9 et seq., 1286.2, subd. (a)(6).) "A frequent cause for an impression of possible bias is the existence of a present or past business relationship between the arbitrator and a party, its counsel or a witness. [Citations.] Such a relationship suggests a pecuniary interest on the part of the arbitrator or that the arbitrator will place unusual trust or confidence in the party with whom the relationship existed, thus giving the arbitrator reason to favor the party for reasons wholly unrelated to the merits of the arbitration. [Citation.]" (Betz, supra, 31 Cal.App.4th at pp. 1508-1509.)
In determining whether an award must be vacated on the ground the arbitrator was subject to disqualification, the court looks to whether the record reveals specific facts, based on the particular circumstances of each case, which might create an impression of possible bias. (Betz, supra, 31 Cal.App.4th at p. 1508; see also Ceriale v. AMCO Ins. Co. (1996) 48 Cal.App.4th 500, 506.) "The test is an objective one -- whether such an impression is created in the eyes of the hypothetical reasonable person." (Betz, supra, 31 Cal.App.4th at p. 1508.) Thus, unless "a reasonable member of the public at large, aware of all of the facts, would fairly entertain doubts concerning the [arbitrator's] impartiality," the arbitrator is not subject to disqualification. (Flier v. Superior Court (1994) 23 Cal.App.4th 165, 170 (Flier); Guseinov v. Burns (2006) 145 Cal.App.4th 944, 957 (Guseinov).) And even when the case does not involve a typical disqualifying relationship and essentially rests solely upon the appearance of bias, the same objective test is used to determine whether the judicial officer or the arbitrator, as in this case, maintains the necessary impartiality to rule upon a given matter, within the meaning of section 170.1, subdivision (a)(6)(A)(iii) (a person aware of the facts might reasonably doubt the judge's impartiality). (United Farm Workers of America v. Superior Court (Maggio) (1985) 170 Cal.App.3d 97, 103-104 (UFW).)
Further, the facts and circumstances prompting the challenge must be evaluated at the time the motion is brought and must show the arbitrator would not be able to be impartial toward a particular party. (Flier, supra, 23 Cal.App.4th at pp. 171-172.) If, however, the arbitrator failed to disclose a matter that required disclosure and the party later discovers that disclosure should have been made, that failure to disclose may constitute a form of "corruption" in the proceeding for purposes of satisfying the grounds under section 1286.2 for vacating an award. (Michael, supra, 88 Cal.App.4th at p. 937.)
The bottom line is that each case depends on its own facts and that disclosure will only be necessary "where the circumstances create a reasonable impression of possible bias." (Banwait v. Hernandez (1988) 205 Cal.App.3d 823, 829; San Luis Obispo Bay Properties, Inc. v. Pacific Gas & Elec. Co. (1972) 28 Cal.App.3d 556, 568 (San Luis Obispo).)
"If the impression of possible bias rule is not to emasculate the policy of the law in favor of the finality of arbitration, the impression must be a reasonable one." (San Luis Obispo, supra, 28 Cal.App.3d at p. 568.)
With the above law in mind, we turn to the facts of this appeal.
2. Analysis
Here, the evidence is undisputed that none of the three arbitrators had any relationship with either Mercer or Storeim, or their attorneys, that would require disqualification or disclosure at the beginning of the arbitration and neither party objected to those arbitrators adjudicating their dispute. Generally, where there is no ground for disqualification on the basis of a conflict of interest, then disclosure of the nonconflict is not required, and nondisclosure is not a basis for vacating the arbitration award. (See Guseinov, supra, 145 Cal.App.4th at pp. 955-957.)
The trial court's concern, however, was not with the arbitrators, but with the fact that Vartian, the arbitral organization's attorney, was present at the arbitration in any type of role because he had earlier appeared for PNG in a somewhat adversarial position to Storeim in the state court action regarding the organization's jurisdiction to arbitrate this matter between Mercer and Storeim, and then answered a procedural question for the arbitrators regarding PNG's arbitration rules on the admission of evidence at the actual arbitration. That concern, however, is not sufficient on this record to support the trial court's ruling to vacate the award.
Although the trial court seemed to rely on section 1281.91, subdivisions (a) and (b)(1), to find fatal the failure of disclosing to the parties at the beginning of the arbitration the information about Vartian's earlier role in the state court action, such subsections do not apply "after a hearing of any contested issue of fact relating to the merits of the claim or after any ruling by the arbitrator regarding any contested matter." (§ 1281.91, subd. (c).) Rather, it appears the court was attempting to utilize the appearance of possible bias ground in the atypical situation noted above where a party later discovers that disclosure should have been made because a person aware of the facts might reasonably doubt the arbitrators' impartiality. (Michael, supra, 88 Cal.App.4th at p. 937; UFW, supra, 170 Cal.App.3d at pp. 103-104.) Having reviewed the entire record de novo to see if objective grounds for disqualifying the arbitrators were apparent to a reasonable person "aware of all the facts," we conclude there were none.
Section 1281.91, subdivision (a) provides that: "A proposed neutral arbitrator shall be disqualified if he or she fails to comply with Section 1281.9 and any party entitled to receive the disclosure serves a notice of disqualification within 15 calendar days after the proposed nominee or appointee fails to comply with Section 1281.9." Subdivision (b)(1) of section 1281.91 provides that: "If the proposed neutral arbitrator complies with Section 1281.9, the proposed neutral arbitrator shall be disqualified on the basis of the disclosure statement after any party entitled to receive the disclosure serves a notice of disqualification within 15 calendar days after service of the disclosure statement."
The above factual and procedural summary shows that Storeim had both actual and constructive knowledge of Vartian's role as PNG's attorney in the state court action as evidenced by his emails to PNG's executive director, which were also copied to Vartian after that proceeding, during the discovery period for the materials Storeim needed for the arbitration. Storeim had additionally received documents from his attorney addressed to Vartian about the on-going discovery process for the arbitration, which was one reason Storeim had challenged PNG's jurisdiction to proceed with the arbitration in the state court action; i.e., to have more time for the discovery of documents for his defense. Storeim's attorney appeared at the state court action and his knowledge is also imputed to Storeim. (See Wittenbrock v. Parker (1894) 102 Cal. 93, 101-102; Freeman v. Superior Court (1955) 44 Cal.2d 533, 537-538; People v. Amerson (1984) 151 Cal.App.3d 165, 169.) The trial court completely ignored this record evidence which clearly shows Storeim's knowledge of Vartian's role in the state court action before the actual arbitration took place. We therefore cannot find that substantial evidence supports the court's finding that Storeim "was not made aware of the grounds for disclosure until some time after the conclusion of the proceedings."
Moreover, the fact that Storeim had declared he "never focused on the fact that . . . Vartian might have represented PNG in the related [state court action]," at the time of the arbitration, does not change our conclusion. Such a self-serving declaration completely belies the record which shows Storeim and his attorneys had numerous contacts with PNG and its attorney Vartian regarding the upcoming arbitration and the state court action which derailed the originally scheduled arbitration, and reasonably reveals that Storeim was not all that concerned about Vartian being at the arbitration.
Further, there is no evidence in the record to support the trial court's finding that Vartian was sitting in a position of authority on the merits of the matter before the arbitrators during the arbitration. Nor is there any evidence in the record to show that Vartian was an attorney for any of the arbitrators who presided over the matter. The arbitrators were not directors or board members of PNG, but rather just regular members of PNG like Mercer and Storeim. There was no evidence presented to show that any of the arbitrators had any knowledge of the state court action or Vartian's role in that proceeding. That Vartian filled in at the arbitration for the executive director of PNG as an administrator to give advice on procedural matters concerning PNG rules simply is not the same as giving legal advice which could effect a decision or impute knowledge of the state court action to the arbitrators. That Vartian actually gave such advice on a procedural matter under the rules does not show prejudging of the merits or demonstrate any bias against Storeim.
In addition to making several factual determinations that are not supported by substantial evidence in this record, it appears that the trial court also did not apply the appropriate objective test as to whether a hypothetical reasonable person who was aware of all the above facts would entertain doubts about the arbitrators' impartiality. (See Betz, supra, 31 Cal.App.4th at p. 1508.) We believe that properly applied, a reasonable person knowing all the facts about Storeim's knowledge of Vartian's involvement in the state court action, as well as Vartian's strictly limited administrative role at the arbitration, would not believe the arbitrators, who had no disqualifying relationships with the parties and no knowledge of the state court action, could not be fair and impartial toward Storeim. (Flier, supra, 23 Cal.App.4th at p. 171.) In other words, after independently reviewing the entire record, we conclude that the circumstances presented do not create a reasonable impression of possible bias such that a "corruption" in the arbitration proceeding occurred for the failure to disclose Vartian's appearance in the state court action. (Michael, supra, 88 Cal.App.4th at p. 937; San Luis Obispo, supra, 28 Cal.App.3d at p. 568.)
In sum, because there is nothing in the record to show a failure to disclose that constitutes "corruption" in the arbitration proceeding under the objective standard for determining bias, the trial court erred in granting the petition to vacate the award, and it should have granted the petition to confirm the award.
In light of our conclusion, we need not expressly address Mercer's other claims regarding waiver, estoppel and arbitral immunity.
DISPOSITION
The judgment denying Mercer's petition to confirm the arbitration award and granting Storeim's petition to vacate the arbitration award is reversed, and the trial court is directed to enter a different order granting the petition to confirm the award, in accordance with the views set forth in this opinion. Mercer shall recover his costs on appeal.
WE CONCUR: BENKE, Acting P. J., IRION, J.