Opinion
NOT TO BE PUBLISHED
Appeal from a judgment of the Superior Court of Orange County No. 07CC03864, William M. Monroe, Judge.
Greines, Martin, Stein & Richland, Cynthia E. Tobisman; Law Office of Harry S. Carmack and Harry S. Carmack for Defendant and Appellant.
Ford, Walker, Haggerty & Behar, Maxine J. Lebowitz; Friedman, Stroffe & Gerard and Eoin L. Kreditor for Plaintiff and Respondent.
OPINION
FYBEL, J.
INTRODUCTION
Defendant Calvada Development, Inc. (Calvada), appeals from a judgment confirming an arbitration award in favor of plaintiff PacificaWest General Contracting, Inc. (PacificaWest). Calvada contends the trial court erred by denying its request to vacate the arbitration award because the arbitrator (1) failed to disclose his participation in Orange County Bar Association activities with one of PacificaWest’s attorneys and to disqualify himself on that basis; (2) exceeded his powers by conducting the arbitration hearing while Calvada’s request to disqualify him was pending before the American Arbitration Association (AAA) and Calvada’s petition to disqualify the arbitrator was pending before the trial court; and (3) “substantially prejudiced” Calvada’s rights within the meaning of Code of Civil Procedure section 1286.2, subdivision (a)(5), by denying Calvada’s request to further postpone the arbitration hearing. (All further statutory references are to the Code of Civil Procedure unless otherwise specified.) In the alternative, Calvada argues the trial court erred by denying its application to correct the arbitrator’s award to eliminate the award of attorney fees under Civil Code sections 3260.1, subdivision (b) and 3260, subdivision (g), and to eliminate $57,875.69 in expert witness fees provided PacificaWest in the award.
We affirm the judgment except as to the trial court’s order denying Calvada’s request to correct the final award to exclude all expert witness fees. As we discuss in detail post, the arbitrator’s participation in the same Orange County Bar Association activities as one of PacificaWest’s attorneys is not a matter that the arbitrator was required to disclose and is not a basis for the arbitrator’s disqualification. The arbitrator did not exceed his powers by proceeding with the arbitration hearing after providing Calvada an opportunity to secure a court order staying the hearing pending resolution of Calvada’s petition to disqualify the arbitrator. As Calvada’s petition to disqualify the arbitrator was without even colorable merit, Calvada failed to demonstrate sufficient cause to support a further postponement of the arbitration hearing and Calvada’s rights were not substantially prejudiced by the denial of the postponement request. Furthermore, the arbitrator did not exceed his jurisdiction by awarding PacificaWest attorney fees under Civil Code sections 3260.1, subdivision (b) and 3260, subdivision (g).
We reverse the judgment solely on the ground the trial court erred by failing to correct the final award to eliminate $57,875.69 in expert witness fees. In the final award, the arbitrator stated that expert witness fees were not recoverable and refused to award them to PacificaWest. Although some of the expert witness fees requested by PacificaWest were not awarded, $57,875.69 in expert witness fees were included in the final award. Based on our review of the record, the inclusion of such expert witness fees constituted an evident miscalculation of figures within the meaning of section 1286.6, subdivision (a). Therefore, the trial court erred by refusing to correct the final award and, on remand, shall correct the final award to eliminate the expert witness fees in issue.
This background section is primarily based on the declarations and exhibits produced by the parties in connection with PacificaWest’s petition to confirm the arbitrator’s final award and Calvada’s request that the trial court vacate the award or, alternatively, that the court correct it.
PacificaWest, a commercial general contractor, entered into a contract with Calvada and Shawn Danesh, both identified in the contract as owners of real property located in Anaheim, to construct “the site and shell building of an approximately 4, 000 square foot commercial retail center at the Property” (the contract). In November 2006, PacificaWest filed an arbitration demand with the AAA pursuant to the arbitration provision contained in the contract.
Danesh is not a party to this appeal and judgment was ultimately entered against Calvada only. As the only parties to this appeal are PacificaWest and Calvada, this background section focuses on their involvement in this case.
In December 2006, the AAA provided PacificaWest and Calvada the names of possible arbitrators and requested that the parties submit responses regarding their preferences. PacificaWest submitted a response to the AAA’s request. Calvada did not respond to the AAA’s request because it took the position “the initial arbitration demand, filed by [PacificaWest] on November 29, 2006, did not confer jurisdiction on the AAA because Pacifica[W]est had not satisfied the prerequisites for mediation and arbitration, i.e., notice of claim and decision of the architect.” On March 16, 2007, the parties received notice that Thomas A. Pistone had been appointed as the arbitrator in the case.
After Calvada refused to participate in the arbitration, in March 2007, PacificaWest filed a complaint against Calvada and others in superior court. In April, Calvada filed a motion to compel arbitration of PacificaWest’s claims; Calvada’s motion was denied.
In July 2007, PacificaWest filed a first amended complaint alleging claims against Calvada for breach of contract, foreclosure on a mechanic’s lien, violation of Civil Code section 3260.1, promissory fraud, and conspiracy to commit fraud. The first amended complaint alleged damages “in no event less than $624,832.13.” As to the violation of Civil Code section 3260.1 claim, the first amended complaint prayed for an award of attorney fees and costs “pursuant to the Contract and statute.”
The first amended complaint also named Danesh, Megan Beatrice, Hasz Fund Control, Inc., and Pacific Western Bank as defendants.
Calvada filed a second motion to compel arbitration, which the trial court granted in September 2007. PacificaWest thereafter sent a letter to the AAA, stating that the parties had been ordered to arbitration by the court and requesting that the AAA “take this matter out of suspension and proceed with the preliminary hearing.” Over Calvada’s objections, the AAA reopened the case where it had left off with Pistone assigned as the arbitrator.
In January 2008, after learning Calvada objected to his appointment, Pistone advised Calvada that it could bring a motion for his disqualification. Calvada decided not to move to disqualify Pistone as arbitrator and does not contend in this appeal that Pistone’s original assignment to this case was in error.
After several continuances, the arbitration hearing was scheduled for December 16, 2008. When the parties and their attorneys arrived for the arbitration hearing on December 16, Calvada’s attorney and Danesh heard one of PacificaWest’s attorneys, Robert Gerard, greet the arbitrator by saying: “Hi Tom. How are you doing?” to which the arbitrator replied: “Hi Bob. Good to see you.” Calvada’s attorney described the greeting in a declaration as “casual and friendly” and such that “[a]nyone hearing the tone of this exchange would be left with the impression these gentlemen knew each other well, and that their relationship was more than as mere acquaintances.”
Calvada confronted the arbitrator regarding his failure to disclose his contacts with Gerard. The arbitrator stated that he knew Gerard because he had served on a bar association committee with him and Gerard had also acted as a mediator in one of the arbitrator’s cases “many years ago.” The arbitrator further explained: “I know Mr. Gerard because we have been in Bar Associations and know each other like that. I don’t think that I ever had lunch or dinner with him. I have never socialized with him. I have never had a case with him that I am aware of.” He added, “I am telling you I don’t know what I would disclose” and “I can’t disclose everybody in the Orange County Bar Association that I say hello to at Bar functions, and to me that’s really-that is the extent of my association with Mr. Gerard unless I am missing something.”
Gerard’s law firm did not assume representation for PacificaWest until May 2007-after Pistone had been appointed arbitrator in this case. Gerard participated in two or three prearbitration hearing conference calls with the arbitrator in November 2008.
Gerard confirmed, “I know Mr. Pistone exclusively through a couple of at least maybe two Bar committees that we have served on together. I don’t know what city that he lives in. I have never been to his home. I don’t know whether he’s married, single, has children. There is no social relationship. He’s never been to my home, and it’s true, in fact, I had forgotten about that that I did serve as a mediator in a case once that he was involved in. It was actually over ten years ago.”
It appears Pistone and Gerard both served on the Orange County Bar Association’s Judiciary Committee from 1994 1999. Calvada contends that committee met as many as 72 times during that six year period and that Pistone and Gerard might have attended those meetings together with other committee members. Even if Pistone and Gerard had both participated in that number of meetings over 10 years ago, that fact does not change our analysis or conclusion.
The arbitrator refused to disqualify himself as arbitrator, but (on December 16, 2008) postponed the arbitration hearing to January 12, 2009, to provide Calvada the opportunity to file a motion to disqualify him and obtain a court order staying the arbitration hearing pending resolution of such a motion. The arbitrator offered to postpone the arbitration hearing to three days in February, but Calvada’s counsel stated he was unavailable on those dates. After Calvada’s counsel objected to the January dates on the ground he did not have enough time, Pistone suggested he seek relief ex parte and further stated, “[o]therwise, you’re saying no to February, no to January. You are saying no to today.”
On December 16, 2008, the arbitrator also cautioned Calvada’s counsel: “I just want you to understand if there is not a court order saying ‘Don’t go forward, ’ we are going forward on the 12th, 13th, 14th, whatever, and I don’t want to do it with just one party here. I want you to understand this is your chance to catch up, remedy the prejudice that you said existed, make a motion if you want but I want to go forward on January 12th.” After Calvada’s counsel expressed a doubt whether Calvada would appear for the arbitration hearing, the arbitrator reiterated: “We are going forward then on continuing this to January 12th, 13th, 14th and 15. [Calvada’s counsel] will have the opportunity to go in and either try to stop the arbitration, ... have the arbitrator replaced but if there is no order stopping us from going forward, we will be going forward on those days.”
On December 16, 17, and 23, 2008, Calvada sent written demands to the AAA and to the arbitrator, requesting that the arbitrator either disqualify himself or be removed from the case for his failure to disclose his contacts with Gerard. On December 18, the arbitrator sent a letter to the AAA, explaining that he was on an Orange County Bar Association committee with Gerard “many years ago” between 1994 and 1999. The arbitrator further stated, “I have been a co member of Orange County Bar Association committees with hundreds of other attorneys over the years. Other than this, the only other professional or social dealings I have ever had with Mr. Gerard involved a matter in which Mr. Gerard served as a mediator in a pending lawsuit in which my firm represented a party, more than 10 years ago. I do not remember the name of the case, only that Mr. Gerard served as a mediator and that the case did not settle at the mediation.”
On December 23, 2008, the AAA sent a letter to the parties, enclosing the arbitrator’s December 18 letter and offering them the opportunity to advise the AAA of any objection to his appointment by December 30. The letter stated the AAA “will make a determination regarding the arbitrator’s continued service, in accordance with the Rules.” The AAA confirmed that the arbitration was scheduled for January 12 through 15, 2009.
On December 30, 2008, Calvada again requested that the AAA disqualify the arbitrator. Four days before the arbitration hearing, on January 8, 2009, Calvada filed a petition to disqualify the arbitrator in the trial court, which was set for a February 10 hearing. On January 8, Calvada submitted an ex parte application seeking a stay of the January 12, 2009 arbitration hearing, which was denied by the trial court.
On January 9, Calvada sent a written request to the AAA and the arbitrator, seeking a continuance of the arbitration hearing date. On the day of the arbitration hearing, Calvada again asked for a continuance of the hearing. The arbitrator refused to disqualify himself and further postpone the arbitration hearing. Responding to Calvada’s threat it would not participate in the arbitration hearing, the arbitrator warned Calvada’s counsel, “if you leave, there [are] no defaults in these proceedings. So they are going to have to prove their case. [¶] If you are not here to contest the evidence or to put on your own evidence, I have to decide whether they have carried the burden of proof. [¶] Without any cross examination or counter evidence, that becomes a much lighter burden on their part. [¶] So are you sure you want to leave and take the chance that if a Court or the Association later says there was no problem, we have now had a hearing, not a default? [¶] And based on the evidence, I may or may not rule in favor of Pacifica[West], but the problem is, you have made their burden a lot easier if you are not here to cross examine or present any contrary evidence. [¶] I will have nothing in opposition of their evidence. Again, it is not a default. It is a matter of carrying the burden of proof. And if you are not here, it is a lot easier for them. [¶] Are you really willing to do that?” Calvada’s counsel responded, “[w]e are aware of all of that, ” stated he did not think the arbitrator had authority to proceed without a ruling from either the court or the AAA, and left. He never returned.
The arbitration hearing started on January 12 and ended at noon on January 14, 2009, during which time PacificaWest presented its case in chief. On January 13, the AAA provided the parties a letter that stated the arbitrator’s appointment had been reaffirmed.
The arbitrator issued the interim decision, dated February 4, 2009, in which PacificaWest was awarded $245,763.09 in damages against Calvada. The arbitrator stated PacificaWest was entitled to interest and attorney fees under Civil Code sections 3260.1 and 3260, subdivision (g), and PacificaWest was invited to file and serve an application seeking an award of costs and attorney fees, to which Calvada was invited to file an opposition.
On February 10, 2009, the trial court denied Calvada’s petition to disqualify the arbitrator.
On February 16, 2009, PacificaWest filed a motion for an award of attorney fees and costs; Calvada did not file an opposition. The arbitrator issued the final award, dated April 1, 2009, which incorporated the interim decision and further awarded PacificaWest $342,360 in attorney fees and $91,227.58 in costs.
Calvada submitted an application to the arbitrator, seeking correction of the final award to exclude attorney fees and $57,875.69 in expert fees which the arbitrator had indicated he would not award. The arbitrator denied Calvada’s application to correct, stating: “Independent of the issues of whether grounds for correction of the Award exist, as required by Code of Civil Procedure Section 1286.6 (i.e., evident miscalculation or mistake), and independent of whether such alleged miscalculation or mistake could be the basis for correction under Code of Civil Procedure [section] 1286.6, the Arbitrator also notes that no opposition was filed by Calvada with respect to any part of the request for an award of costs and attorneys fees, and therefore, for purposes of an award of costs and attorneys fees, the request was deemed unopposed.”
PacificaWest filed a petition to confirm the final award. Calvada filed a response to the petition to confirm and requested that the court vacate the final award because the arbitrator should have been disqualified, lacked the authority to conduct the arbitration hearing pending decision by the trial court or the AAA on Calvada’s requests to disqualify him, and substantially prejudiced Calvada’s rights by refusing to postpone the hearing. Calvada also requested, in the alternative, that the final award be corrected to eliminate the attorney fees and expert witness fees.
The court granted the petition to confirm the final award and denied Calvada’s request to vacate or correct the final award. Pursuant to Calvada’s request, the court issued a statement of decision on the attorney fees and costs issues. Judgment was entered and Calvada appealed.
REQUESTS FOR JUDICIAL NOTICE
Calvada filed a request that this court take judicial notice of documents reflecting (1) the AAA’s Construction Industry Arbitration Rules “which were incorporated by reference into the parties’ construction contact”; (2) “a table, certain invoices and a declaration that Pacificawest General Contracting, Inc.... submitted in support of its application to the arbitrator of an award of costs (collectively, the ‘Cost Documents’)”; and (3) “the easily verified facts that noticed motions in the trial court (Department C16 of the Orange County Superior Court) are heard on Tuesdays, and that there were not sixteen court days between December 16, 2008 and January 6, 2009.” PacificaWest did not oppose Calvada’s request. Calvada’s request is granted. (Evid. Code, §§ 452, subds. (d), (h), 459.)
Shortly before oral argument, Calvada filed a second request for judicial notice as to certain documents relating to the legislative history of Civil Code section 3260.1, which PacificaWest has not opposed. Calvada’s second request is granted as well. (Evid. Code, §§ 452, subd. (c), 459; see Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 279, fn. 9 [“The legislative history in this case is relatively brief and our citation to it is limited to various versions of the legislation and committee reports, all of which are indisputably proper subjects of judicial notice”]; Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 842, fn. 3 [judicial notice of Attorney General’s report on gasoline pricing proper as an official act of executive department].)
DISCUSSION
I.
The Trial Court Did Not Err by Confirming the Arbitrator’s Final Award.
Calvada argues the final award should have been vacated because the arbitrator (1) failed to disclose his participation in Orange County Bar Association activities with Gerard and to disqualify himself on that basis; (2) exceeded his powers by conducting the arbitration hearing before the disqualification issue had been resolved; and (3) “substantially prejudiced” Calvada’s rights within the meaning of section 1286.2, subdivision (a)(5), by denying its request to further postpone the arbitration hearing. As we explain in detail post, each of Calvada’s arguments lacks merit.
A.
The Arbitrator Was Not Required to Disclose His Participation in Bar Activities with Gerard and Such Activity Is Not a Ground for Disqualification.
“The California Arbitration Act (§ 1280 et seq.) ‘represents a comprehensive statutory scheme regulating private arbitration in this state.’” (Haworth v. Superior Court (2010) 50 Cal.4th 372, 380.) “The statutory scheme, in seeking to ensure that a neutral arbitrator serves as an impartial decision maker, requires the arbitrator to disclose to the parties any grounds for disqualification. Within 10 days of receiving notice of his or her nomination to serve as a neutral arbitrator, the proposed arbitrator is required, generally, to ‘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.’ (§ 1281.9, subd. (a).) Based upon these disclosures, the parties are afforded an opportunity to disqualify the proposed neutral arbitrator. (§ 1281.91, subds. (b), (d).) If an arbitrator ‘failed to disclose within the time required for disclosure a ground for disqualification of which the arbitrator was then aware, ’ the trial court must vacate the arbitration award. (§ 1286.2, subd. (a)(6)(A).) [¶] The applicable statute [section 1281.9] and standards enumerate specific matters that must be disclosed.” (Id. at p. 381, fn. omitted.) Calvada’s challenge to the final award on the ground the arbitrator had failed to disclose his participation in bar activities with Gerard presents a mixed question of law and fact. (See id. at pp. 384 385.) Our review is de novo. (Id. at pp. 384 388.)
California Rules of Court, Ethics Standards for Neutral Arbitrators in Contractual Arbitration (Ethics Standards).
The record does not show that the arbitrator failed to disclose any matter required to be disclosed under either section 1281.9 or the Ethics Standards. Calvada contends the arbitrator’s participation in the same bar activities as Gerard constituted a professional relationship within the meaning of section 1281.9, subdivision (a)(6). Section 1281.9, subdivision (a)(6) provides that “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, ” which includes “[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.” Section 1281.9, subdivision (a)(2) also requires disclosure of “[a]ny matters required to be disclosed by the ethics standards for neutral arbitrators adopted by the Judicial Council pursuant to this chapter.” Standard 7(d)(8) of the Ethics Standards requires the disclosure of “[a]ny other professional relationship not already disclosed under paragraphs (2) (7).” Neither section 1281.9 nor standard 7 defines the term “professional relationship.” (Luce, Forward, Hamilton & Scripps, LLP v. Koch (2008) 162 Cal.App.4th 720, 729 (Luce, Forward).)
An arbitrator’s participation in bar activities with one party’s attorney-standing alone- does not create a professional relationship with the meaning of section 1281.9, subdivision (a)(6) or standard 7 of the Ethics Standards or otherwise create a doubt as to the arbitrator’s impartiality. In Luce, Forward, supra, 162 Cal.App.4th at pages 725 726, 732 734, the appellate court rejected the defendants’ argument that the arbitrator was required to disclose he served on a board of directors of a professional organization with a lawyer of one of the parties, and served on another board of directors of a professional organization with a witness. The appellate court observed: “[T]he evidence shows a reasonable person would not have had an impression of bias under the facts. There was no indication Judge Haden had a personal relationship, or close friendship, with either [the lawyer] or [the witness]. Further, there was no indication of any business relationship between or among them. Rather, the contact was limited to serving with each other on the boards of directors of two professional organizations, and standing alone, that is insufficient. There is no disclosure requirement when ‘there has been some contact between the arbitrator and counsel, particularly when the contact is slight or attenuated.’” (Id. at p. 734.) The appellate court further stated, “‘arbitrators cannot sever all their ties with the business world’ [citation], and the same is true of professional obligations involving service to the legal community and the public, continuing education for bar members, and mentoring for new lawyers.” (Ibid.)
In Ray Wilson Co. v. Anaheim Memorial Hospital Assn. (1985) 166 Cal.App.3d 1081, 1088 (Ray Wilson Co.), the appellate court stated: “The fact that an arbitrator and a party to the arbitration are members of the same professional organization ‘is in itself hardly a credible basis for inferring even an impression of bias.’” In Michael v. Aetna Life & Causalty Ins. Co. (2001) 88 Cal.App.4th 925, 939 940, the appellate court explained: “Social acquaintance, even of long duration and of a personal nature, without a substantial business relationship does not create an impression of possible bias. [Citations.] Membership in a professional organization does not provide a credible basis for inferring an impression of bias. [Citations.] [¶] Moreover, to create an impression of possible bias that therefore requires disclosure, a business relationship must be substantial and involve financial consideration.”
The conclusion that an arbitrator’s participation in bar activities with a party’s attorney does not constitute a professional relationship finds further support in standard 7(d)(8) of the Ethics Standards, which requires an arbitrator to disclose “[a]ny other professional relationship not already disclosed under paragraphs (2) (7), ” including “(A) The arbitrator was associated in the private practice of law with a lawyer in the arbitration within the last two years; [¶] (B) The arbitrator or a member of the arbitrator’s immediate family is or, within the preceding two years, was an employee of or an expert witness or a consultant for a party; and [¶] (C) The arbitrator or a member of the arbitrator’s immediate family is or, within the preceding two years, was an employee of or an expert witness or a consultant for a lawyer in the arbitration.” As stated by the appellate court in Luce, Forward, supra, 162 Cal.App.4th at pages 733 734, “[a]lthough this list is not exclusive, it fairly indicates an intent to limit the definition of ‘professional relationships’ to ones involving economic relationships. [Citation.] Had the drafters intended to include membership in professional organizations (or their managing boards), in which lawyers who act as arbitrators are commonly involved, they could easily have said so.”
Furthermore, section 1281.9, subdivision (a)(1) requires an arbitrator to disclose “[t]he existence of any ground specified in Section 170.1 for disqualification of a judge.” Nothing in section 170.1 provides a judge’s and an attorney’s common participation in bar activities as a ground for disqualification. In fact, “[w]here a judge serves with an attorney in a professional legal organization and, outside the courtroom only has professional contacts with that attorney, the judge need neither disclose nor recuse when the attorney appears before the judge.” (Cal. Judges Assn., Jud. Ethics Com., Judicial Ethics Update (Mar. 2003) p. 2, citing canon 3E(1), (2); see Rothman, Cal. Jud. Conduct Handbook (3d ed. 2007) § 7.32, p. 328 [“The fact that a judge and an attorney serve together in a professional legal organization or the judge has only a professional relationship with the attorney, does not normally require the judge to either recuse or disclose when the attorney appears before the court”].)
Canon 3E(1) of the California Code of Judicial Ethics provides: “A judge shall disqualify himself or herself in any proceeding in which disqualification is required by law.” Canon 3E(2) provides: “In all trial court proceedings, a judge shall disclose on the record information that is reasonably relevant to the question of disqualification under Code of Civil Procedure section 170.1, even if the judge believes there is no actual basis for disqualification.”
Because the arbitrator’s contacts with Gerard in the instant case were not statutorily or otherwise required to be disclosed, they could not constitute a basis for the arbitrator’s disqualification. In Luce, Forward, supra, 162 Cal.App.4th at page 735, the appellate court rejected the defendants’ argument that vacatur of the arbitrator’s award was required because the arbitrator refused to disqualify himself based on disclosures he was not legally required to make. The court held that when read together, sections 1286.2, subdivision (a)(6)(B), 1281.91, subdivision (b)(1), and 1281.9, subdivision (a) “mean that disqualification based on a disclosure is an absolute right only when the disclosure is legally required.” (Luce, Forward, supra, at p. 735.) The appellate court stated: “Section 1281.91 does not indicate that when an arbitrator makes additional oral disclosures at the arbitration that he was not required to make, as here, disqualification is a matter of right. Under defendants’ theory, an arbitrator could be disqualified during arbitration for orally revealing even the most attenuated contact with a party’s counsel or witness, such as occasionally shopping at the same grocery store. We may not interpret statutes in a manner that results in absurd and unintended consequences. [Citation.] We cannot attribute to the Legislature an intent to upset arbitration awards based on disclosures not legally required, but made out of an abundance of caution, given this state’s strong public policy in favor of finality of arbitration awards.” (Ibid.)
In Haworth v. Superior Court, supra, 50 Cal.4th at page 393, citing Luce, Forward, supra, 162 Cal.App.4th at pages 734 735, the California Supreme Court stated: “There are many reasons why a party might, reasonably or unreasonably, prefer not to have a particular arbitrator hear his or her case-including the arbitrator’s prior experience, competence, and attitudes and viewpoints on a variety of matters. The disclosure requirements, however, are intended only to ensure the impartiality of the neutral arbitrator. [Citation.] They are not intended to mandate disclosure of all matters that a party might wish to consider in deciding whether to oppose or accept the selection of an arbitrator.”
We agree with all of the authorities holding that an arbitrator need not disclose bar association activities. To hold otherwise would be to ignore the public benefit achieved by the active participation of lawyers in bar associations. Indeed, Calvada’s position amounts to inexplicable and unwarranted discouragement of such important participation.
B.
The Arbitrator Did Not Exceed His Powers by Proceeding with the Arbitration Hearing While Resolution of the Disqualification Issue Was Pending.
Calvada argues the award must be vacated based on the following argument: “Regardless of the ultimate success of Calvada’s efforts to disqualify the arbitrator, one thing is certain: While Calvada’s petitions for disqualification were pending before the AAA and the trial court, the arbitrator had no power to act. By holding hearings before the question of his disqualification was resolved, the arbitrator exceeded his powers and engaged in misconduct.” The question whether an arbitrator has exceeded his or her powers is a question of law, which is reviewed de novo on appeal. (California Faculty Assn. v. Superior Court (1998) 63 Cal.App.4th 935, 945.) Calvada’s argument is without merit.
The only legal authority Calvada cites in support of its argument an arbitrator is prohibited from conducting an arbitration hearing while an objection to his or her appointment is pending is section 170.4, which addresses, inter alia, what a judge who has been disqualified or is the subject of an unresolved statement of disqualification may do. Calvada also cites former rule R 18, subdivision (b) of the AAA Construction Industry Arbitration Rules, but that rule solely states: “Upon objection of a party to the continued service of an arbitrator, or on its own initiative, the AAA shall determine whether the arbitrator should be disqualified under the grounds set out above, and shall inform the parties of its decision, which decision shall be conclusive.” Calvada cites no AAA rule prohibiting an arbitrator from proceeding with a hearing while a disqualification request is pending. Indeed, the AAA’s December 23, 2008 letter inviting the parties to advise the AAA of any objections to the arbitrator’s appointment confirmed that the arbitration was scheduled to go forward on January 12, 2009.
Calvada admits in its opening brief that there is no statute applying section 170.4 to contractual arbitration. Even assuming this statute applies here, it does not assist Calvada. Section 170.4, subdivision (d) provides: “Except as provided in this section, a disqualified judge shall have no power to act in any proceeding after his or her disqualification or after the filing of a statement of disqualification until the question of his or her disqualification has been determined.” (Italics added.) Subdivision (b) of section 170.4 provides, however, that “if a statement of disqualification is untimely filed or if on its face it discloses no legal grounds for disqualification, the trial judge against whom it was filed may order it stricken.” (Italics added.) The logic of this rule is evident-it prevents a party from delaying proceedings by asserting a frivolous basis for disqualifying the assigned judge.
For the reasons discussed ante, the ground asserted by Calvada to the AAA and to the trial court for the disqualification of the arbitrator was without even colorable merit. In Luce, Forward, supra, 162 Cal.App.4th at page 732, the appellate court observed: “Defendants cite no authority for the proposition that an arbitrator’s duty of disclosure arises when he or she has served on a board of directors of a professional organization with a party, a party’s attorney or an expert witness.” The dearth of authority in support of Calvada’s position is starkly contrasted with the published cases, including Luce, Forward, discussed ante, which support the opposite conclusion-that, here, the arbitrator was not required to disclose his participation in the bar activities he had in common with Gerard and any such voluntary disclosure on the subject would not have served as the basis for his disqualification.
The arbitrator proceeded to conduct the arbitration hearing only after (1) he continued the hearing from December 16, 2008 to January 12, 2009 (and would have further postponed the hearing to certain dates in February but Calvada’s counsel was unavailable) to enable Calvada to seek court intervention; (2) Calvada requested that the AAA disqualify the arbitrator; (3) the trial court denied Calvada’s ex parte petition seeking a stay of the arbitration hearing; and (4) Calvada filed a petition to disqualify the arbitrator in the trial court on January 8, only four days before the arbitration hearing date. The arbitrator did not did not exceed his authority in proceeding with the arbitration hearing.
C.
Calvada’s Rights Were Not Substantially Prejudiced by the Arbitrator’s Refusal to Further Postpone the Arbitration Hearing Within the Meaning of Section 1286.2, Subdivision (a)(5).
Citing section 1286.2, subdivision (a)(5), Calvada argues, “[a]t the very least, the arbitrator should have granted Calvada’s request for a continuance pending resolution of the disqualification issue. His failure to do so mandates reversal, too.” Section 1286.2, subdivision (a)(5) provides, in relevant part, that the trial court shall vacate an arbitration award if the court determines “[t]he rights of the party were substantially prejudiced by the refusal of the arbitrators to postpone the hearing upon sufficient cause being shown therefor.” (Italics added.) In SWAB Financial, LLC v. E*Trade Securities, LLC (2007) 150 Cal.App.4th 1181, 1196, the appellate court stated: “The Courts of Appeal have held, ‘[Section 1286.2, subdivision (a)(5) is] a safety valve in private arbitration that permits a court to intercede when an arbitrator has prevented a party from fairly presenting its case.’”
In the circumstance in which “an arbitrator exercises discretion in denying a continuance request, there are two issues to be resolved in vacatur proceedings. First, the trial court must determine whether the arbitrator abused his or her discretion by refusing to postpone the hearing upon sufficient cause being shown. Second, if there was an abuse of discretion, the trial court must determine whether the moving party suffered substantial prejudice as a result. Moreover, on appeal from the trial court’s order granting or denying a request to vacate the arbitration award, our review is de novo. In other words, in this case, we must consider whether the arbitrators abused their discretion and there was substantial prejudice in denying plaintiff’s continuance motion. Only if the arbitrators abused their discretion and there was resulting prejudice could the trial court properly vacate the arbitration award.” (SWAB Financial, LLC v. E*Trade Securities, LLC, supra, 150 Cal.App.4th at p. 1198, italics omitted.) We thus review the trial court’s refusal to vacate the award on this ground de novo as Calvada’s continuance request “rested on the undisputed procedural history of the case” (id. at p. 1196).
The arbitrator did not abuse his discretion in determining Calvada failed to show sufficient cause supporting its request for a further postponement of the arbitration hearing date pending resolution of the disqualification issue by the AAA and the court. As discussed ante, the arbitrator had already postponed the December 16, 2008 arbitration hearing date to January 12, 2009, to provide Calvada the opportunity to obtain AAA or court intervention to stop the arbitration hearing from going forward; both the AAA and the court had refused to stay the arbitration hearing. As discussed ante, Calvada’s argument in support of disqualification lacked facial merit and Calvada’s request for postponement was entirely based on that meritless argument. Under these circumstances, the arbitrator did not abuse his discretion in determining Calvada failed to show sufficient cause in support of further postponement of the hearing.
Citing Ray Wilson Co., supra, 166 Cal.App.3d at pages 1089 1090, Bayscene Resident Negotiators v. Bayscene Mobilehome Park (1993) 15 Cal.App.4th 119, 129, and Redevelopment Agency v. City of Berkeley (1978) 80 Cal.App.3d 158, 166, footnote 3, Calvada contends it showed sufficient cause for postponement of the arbitration hearing because “[a]mple case law suggests that if a party wants to challenge the validity of the arbitration process, he must not participate in the arbitration or he risks waiving his challenge.”
None of the cited cases supports Calvada’s position. In Bayscene Resident Negotiators v. Bayscene Mobilehome Park, supra, 15 Cal.App.4th at page 129, the appellate court stated that a party which first questions the validity of an arbitration agreement but then proceeds to arbitrate a dispute without being compelled to do so will be precluded, as a general rule, from challenging an adverse arbitration award on the ground the arbitration agreement was invalid. In Bayscene Resident Negotiators, however, the appellate court found an exception to the rule because a city ordinance required the parties to participate in binding arbitration under threat of criminal prosecution and the parties opposing arbitration “objected to the arbitration proceedings repeatedly, continually raising the constitutional challenge both before and during proceedings.” (Ibid.) The same is true here: Calvada preserved its objection and could have participated in the arbitration without waiver.
In Ray Wilson Co., supra, 166 Cal.App.3d at page 1089, the governing AAA rules in that case included the rule that “‘[a]ny party who proceeds with the arbitration after knowledge that any provision or requirement of these Rules has not been complied with and who fails to state an objection thereto in writing, shall be deemed to have waived the right to object.’” The defendant’s attorney objected to an arbitrator, but not on the ground the arbitrator’s appointment was in disregard of the arbitration rules. (Ibid.) After his objection was overruled, the attorney stipulated to payment of arbitrators’ fees and participated in the arbitration hearings without again objecting on any ground, either orally or in writing, to the arbitrator. (Ibid.) Consequently, the defendant waived the objection the arbitrator was neither appointed nor qualified to serve in accord the rule. (Ibid.)
Calvada does not cite any rule that would suggest it risked waiver by participating in the arbitration hearing after lodging its objection. Calvada repeatedly asserted its objection to the arbitrator both orally and in writing. Hence, even under the rationale of the cases it cites, Calvada’s objection to the arbitrator would not have been waived by Calvada’s participation in the arbitration hearing.
Finally, Calvada cites footnote 3 in Redevelopment Agency v. City of Berkeley, supra, 80 Cal.App.3d at page 166, which states: “Appellant did not appear at trial. It did, however, file a declaration challenging the jurisdiction of the court to hear the case in view of merging of identities between plaintiff and defendant. The declaration was ‘in lieu of intervener’s appearance and presentation at trial.’ This course of action was chosen so as to avoid any appearance of consent to what appellant regarded as a collusive and sham trial.” Nothing in this footnote suggests that even when a party presents an appropriate written objection, participation in the trial would constitute waiver of the contested issue.
The denial of Calvada’s request to postpone the arbitration hearing date therefore does not constitute grounds for vacatur under section 1286.2, subdivision (a)(5). Prejudice suffered by Calvada as a result of the arbitrator’s rendering of the award based solely on PacificaWest’s evidence and argument was caused by Calvada’s own calculated refusal to participate in the arbitration hearing, not by anything else.
II.
Calvada’s Request to Correct the Final Award
Calvada argues the trial court erred by denying its application to correct the award to exclude attorney fees and all expert witness fees. Section 1286.6 provides: “Subject to Section 1286.8, the court, unless it vacates the award pursuant to Section 1286.2, shall correct the award and confirm it as corrected if the court determines that: [¶] (a) There was an evident miscalculation of figures or an evident mistake in the description of any person, thing or property referred to in the award; [¶] (b) The arbitrators exceeded their powers but the award may be corrected without affecting the merits of the decision upon the controversy submitted; or [¶] (c) The award is imperfect in a matter of form, not affecting the merits of the controversy.”
A.
Attorney Fees
Calvada argues the arbitrator acted in excess of his powers within the meaning of section 1286.6, subdivision (b) by including in the award prevailing party attorney fees in favor of PacificaWest under Civil Code sections 3260.1, subdivision (b) and 3260, subdivision (g). Even if the arbitrator incorrectly interpreted or applied Civil Code sections 3260.1, subdivision (b) and 3260, subdivision (g), any such error “would have amounted to an error of law, not an act exceeding his powers” and an attorney fees award based on such error would not be subject to judicial review. (Taylor v. Van Catlin Construction (2005) 130 Cal.App.4th 1061, 1068.) Even assuming judicial review were appropriate, Calvada’s argument fails on its merits.
It is undisputed PacificaWest sought recovery of attorney fees at arbitration. The first amended complaint contained, inter alia, a claim for violation of Civil Code section 3260.1 and prayed specifically for recovery of attorney fees as to that claim. PacificaWest and Calvada submitted a stipulation to the arbitrator, entitled “Stipulation Regarding Claims in Arbitration, ” which reiterated that PacificaWest claimed Calvada violated Civil Code section 3260.1.
Calvada contends PacificaWest was not entitled to an attorney fees award because Civil Code section 3260.1, subdivision (b)’s reference to “the penalty specified in subdivision (g) of Section 3260” does not include attorney fees. Civil Code section 3260.1 provides: “(a) This section is applicable with respect to all contracts entered into on or after January 1, 1992, relating to the construction of any private work of improvement. [¶] (b) Except as otherwise agreed in writing, the owner shall pay to the contractor, within 30 days following receipt of a demand for payment in accordance with the contract, any progress payment due thereunder as to which there is no good faith dispute between the parties. In the event of a dispute between the owner and the contractor, the owner may withhold from the progress payment an amount not to exceed 150 percent of the disputed amount. If any amount is wrongfully withheld in violation of this subdivision, the contractor shall be entitled to the penalty specified in subdivision (g) of Section 3260 .” (Italics added.)
Civil Code section 3260, subdivision (g) provides: “In the event that retention payments are not made within the time periods required by this section, the owner or original contractor withholding the unpaid amounts shall be subject to a charge of 2 percent per month on the improperly withheld amount, in lieu of any interest otherwise due. Additionally, in any action for the collection of funds wrongfully withheld, the prevailing party shall be entitled to his or her attorney’s fees and costs.” (Italics added.)
Civil Code section 3260 does not use the term “penalty, ” and neither section 3260 nor 3260.1 defines that term. In Hinerfeld Ward, Inc. v. Lipian (2010) 188 Cal.App.4th 86, 99 100 (Hinerfeld Ward), the appellate court interpreted Civil Code section 3260.1, subdivision (b)’s reference to the penalty contained in section 3260, subdivision (g) as including an award of attorney fees.
In Hinerfeld Ward, supra, 188 Cal.App.4th at pages 96 97, the defendant argued, “unlike the 2 percent monthly charge in [Civil Code] section 3260, subdivision (g), an award of attorney fees is not a ‘penalty’ under that statute and therefore is not authorized by section 3260.1.” The appellate court stated: “Neither of the remedies provided in section 3260, subdivision (g) is within the ordinary use of the term ‘penalty’” (id. at p. 98) and that “[t]he statute is ambiguous as to the extent of remedy provided and, based on the language alone, reasonable arguments may be made for both positions” (id. at p. 99).
In light of Civil Code section 3260.1, subdivision (b)’s ambiguity as to the term “penalty, ” the court granted the plaintiff’s motion to take judicial notice of the legislative history of that statute. (Hinerfeld Ward, supra, 188 Cal.App.4th at p. 99.) The appellate court stated the legislative history “demonstrates a consistent legislative intent that both the 2 percent charge and attorney fees would be available under section 3260.1 in cases involving a homeowner’s late progress payments to a contractor. The staff analysis of Assembly Bill No. 1608 (19911992) Reg. Sess.) for the Assembly Committee on Consumer Protection, Governmental Efficiency and Economic Development in May 1991 noted that while existing law provided for an award of 2 percent per month and attorney fees to the prevailing party for retention payments withheld (§ 3260, subd. (g)), ‘This bill would provide that for private works of improvement the owner shall pay to the prime contractor the amount of progress payments due within 30 days following receipt of a demand for payment. The penalty for nonpayment is 2% per month of the wrongfully held amount plus attorney’s fees and costs.’ (Assem. Com. on Consumer Protection, Governmental Efficiency and Economic Development, Rep. on Assem. Bill No. 1608 (19911992 Reg. Sess.) as amended May 15, 1991, p. 1, italics [omitted].)” (Ibid.)
The appellate court further stated: “An analysis of Assembly Bill No. 1608 (19911992 Reg. Sess.) prepared for the Senate Rules Committee by the Office of Senate Floor Analyses is similar. It also states that attorney fees would be available under [Civil Code] section 3260.1: ‘If a collection action is required, the prevailing party would be entitled to his or her attorney’s fees and costs.’ The same language appears in the analysis prepared for the Senate Committee on Judiciary in July 1991. (Sen. Com. on Judiciary, Report on Assem. Bill No. 1608 (19911992 Reg. Sess.) as amended May 15, 1991, p. 2.) Neither party has cited, nor have we found, legislative history to the contrary.” (Hinerfeld Ward, supra, 188 Cal.App.4th at p. 99.)
The Hinerfeld Ward court concluded: “We are persuaded by this history that by allowing a contractor to recover the ‘penalty’ provided in [Civil Code] section 3260, subdivision (g) in an action under section 3260.1, the Legislature intended to authorize both the 2 percent charge in lieu of interest and attorney fees to the prevailing party.” (Hinerfeld Ward, supra, 188 Cal.App.4th at p. 99.) The court explained the ambiguous use of the term “penalty” in section 3260.1, subdivision (b) “lends support to our determination that resort to the legislative history is necessary in order to determine whether the Legislature intended attorney fees to be available under section 3260.1, subdivision (b). As we have discussed, the legislative history of section 3260.1 demonstrates a legislative intent that both the monthly 2 percent charge and reasonable attorney fees are available to a party prevailing on an action under that statute. As the prevailing party, [the plaintiff] was entitled to an award of fees under section 3260.1” (Hinerfeld Ward, supra, at pp. 101102.)
At oral argument, Calvada’s counsel argued the legislative history as to Civil Code section 3260.1, subdivision (b) is inconsistent. As discussed ante, we granted Calvada’s second request for judicial notice seeking our consideration of additional legislative history. Contrary to Calvada’s counsel’s argument, the proffered legislative history is not inconsistent with the appellate court’s reasoning in Hinerfeld Ward, supra, 188 Cal.App.4th 86.
We find the analysis of Hinerfeld Ward persuasive and conclude the trial court did not err by refusing to correct the final award to eliminate the prevailing party attorney fees in favor of PacificaWest.
B.
Expert Witness Fees
Calvada contends the trial court erred by failing to correct the final award to account for the arbitrator’s “evident miscalculation of figures” within the meaning of section 1286.6, subdivision (a). Calvada argues, “in response to Pacificawest’s request for its costs, the arbitrator expressly disallowed any reimbursement for expert witness fees. Yet it is undisputed that $57,875.69 of the cost award is for expert witness fees. Those inadvertently included amounts should be subtracted from the cost award.”
Calvada’s argument is based on the following language of the arbitrator’s final award: “Pacificawest requests total costs of $176,391.47. Again, in the absence of any opposition, it might be permissible to allow the award of costs in that total amount. However, a review of the cost request indicates certain items that the Arbitrator feels are not allowable. Specifically, [¶] 1. Although Code of Civil Procedure Section 1033.[]5[, subdivision (a)](8) allows an award of expert witness fees where the expert is ordered by the Court, that was not the case here, and such fees are therefore recoverable only in the context of an Offer of Compromise under Code of Civil Procedure Section 998. No evidence was presented of such an Offer of Compromise, and therefore the expert witness fees (Leis $22,492.44, Stenger $10,049.50, Tarlos $11,700, and ‘accounting’ $7,640) are disallowed. The award of expert fees where the expert is not ordered by the Court is only allowed when expressly authorized by law, as with Code of Civil Procedure Section 998.”
The final award reflects the arbitrator’s intent not to award PacificaWest any expert witness fees. PacificaWest does not dispute that, notwithstanding the arbitrator’s expressed intent, the final award includes $57,875.69 in expert witness fees. It does not argue on appeal that it was entitled to recover any expert witness fees in the final award. Instead, it argues Calvada waived the right to make this argument by failing to file an opposition to PacificWest’s motion for attorney fees and costs to the arbitrator.
As discussed ante, section 1286.6, subdivision (a) provides that the trial court shall correct an arbitration award if it determines the award contained an “evident miscalculation of figures.” Calvada therefore did not forfeit its right to request that the trial court correct the final award solely because Calvada failed to submit to the arbitrator an opposition to PacificaWest’s motion for attorney fees and costs.
In light of the arbitrator’s statements in the final award that no expert witness fees should be awarded to PacificaWest, the inclusion of $57,875.69 in expert witness fees in the award constituted an “evident miscalculation of figures.” The trial court therefore erred by denying Calvada’s request to correct the final award by subtracting $57,875.69 from the award of costs.
DISPOSITION
The judgment is reversed only as to the order denying Calvada’s request to correct the final award to exclude all expert witness fees. We remand to the trial court to correct the final award by reducing the amount of costs awarded by $57,875.69, and enter judgment accordingly. We otherwise affirm the judgment in all other respects. In the interests of justice, neither party shall recover costs on appeal.
WE CONCUR: BEDSWORTH, ACTING P. J., MOORE, J.