Opinion
Editorial Note:
This opinion appears in the Federal reporter in a table titled "Table of Decisions Without Reported Opinions". (See FI CTA9 Rule 36-3 regarding use of unpublished opinions)
Argued and Submitted Feb. 11, 1999.
Appeal from the United States District Court for the Northern District of California James Ware, District Judge, Presiding.
Before SCHROEDER, FERNANDEZ, and SILVERMAN, Circuit Judges.
This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir. R. 36-3.
Allstate Insurance Company appeals from the district court's vacation of an arbitration decision regarding the amount that it owed for repairs to Peter and Basia Wasowski's fire damaged home. We reverse and remand.
We take judicial notice of certain documents as requested by the parties.
1. Allstate first contends that there was no subject matter jurisdiction because it was not served with the complaint to vacate within 100 days after the Wasowskis received a copy of the arbitrators' decision. See Cal.Civ.Proc.Code § 1288. It cites no authority for the proposition that there was no jurisdiction, even though it received notice of the complaint and made a general appearance in the action. Certainly it subjected itself to the jurisdiction of the court when it made that appearance, see Moffett v. Barclay, 32 Cal.App. 4th 980, 983, 38 Cal.Rptr.2d 546, 548 (1995). We are aware of no authority holding that a party's failure to meet the time limits deprives the court of subject matter jurisdiction.
Allstate also claims that the whole issue is moot because the Wasowskis have now sold the property in question, but it points to no persuasive authority that the sale of the property relieved it of its obligation to pay for the fire loss that the Wasowskis suffered. Generally speaking, Allstate could be expected to pay for the value of the property prior to the fire, up to the cost of repairs. See Jefferson Ins. Co. v. Superior Court, 3 Cal.3d 398, 402, 475 P.2d 880, 882-83, 90 Cal.Rptr. 608, 610-11 (1970).
There was, and is, jurisdiction.
2. The parties spill a great deal of ink over whether arbitration proceedings commenced before or after January 1, 1995. That was the date that California Civil Procedure Code § 1281.9 became effective. We think, however, that for this case nothing turns on the answer to that question. Nothing in the section suggests that it has no application whatever to proceedings commenced before January 1, 1995. For what it is worth, we distinguish between arbitration proceedings and the arbitration hearing itself.
See Boys Club of San Fernando Valley, Inc. v. Fidelity & Deposit Co., 6 Cal.App. 4th 1266, 1274, 8 Cal.Rptr.2d 587, 591 (1992); Pacific Indem. Co. v. Superior Court, 246 Cal.App.2d 63, 70, 54 Cal.Rptr. 470, 474-75 (1966); Blatt v. Farley, 226 Cal.App.3d 621, 626, 276 Cal.Rptr. 612, 615 (1990); Downer Corp. v. Union Paving Co. ( In re Downer Corp.), 146 Cal.App.2d 708, 714, 304 P.2d 756, 760 (1956).
See Wright v. Ripley, 65 Cal.App. 4th 1189, 1192, 77 Cal.Rptr.2d 334, 336 (1998); Ray Wilson Co. v. Anaheim Memorial Hosp. Ass'n, 166 Cal.App.3d 1081, 1089, 213 Cal.Rptr. 62, 67 (1985), disapproved on other grounds, Moncharsh v. Heily & Blase, 3 Cal.4th 1, 27, 832 P.2d 899, 915, 10 Cal.Rptr.2d 183, 199 (1992).
At any rate, it is beyond dispute that the Wasowskis did not make any objection to the neutral arbitrator until long after the arbitration hearing had taken place. Thus, by its own terms, § 1281.9 does not affect this case. See Cal.Civ.Proc.Code § 1281.9(d).
3. Even though § 1281.9 does not apply, the district court could still vacate the arbitration award, if it were shown that the award was "procured by corruption, fraud, or other undue means," or if there was "corruption in any of the arbitrators." See Cal.Civ.Proc.Code § 1286.2(a) & (b). That can be found if an arbitrator has not disclosed prior dealings with one of the parties to the arbitration. See Johnston v. Security Ins. Co., 6 Cal.App.3d 839, 842-43, 86 Cal.Rptr. 133, 134-36 (1970); see also Commonwealth Coatings Corp. v. Continental Cas. Co., 393 U.S. 145, 148-49, 89 S.Ct. 337, 339, 21 L.Ed.2d 301 (1968). But only an objectively reasonable impression of bias will permit vacating an award on that ground. See Ceriale v. Amco Ins. Co., 48 Cal.App. 4th 500, 506, 55 Cal.Rptr.2d 685, 689 (1996); Betz v. Pankow, 31 Cal.App. 4th 1503, 1508, 38 Cal.Rptr.2d 107, 110 (1995); Banwait v. Hernandez, 205 Cal.App.3d 823, 828-29, 252 Cal.Rptr. 647, 650 (1988); San Luis Obispo Bay Properties, Inc. v. Pacific Gas & Elec. Co., 28 Cal.App.3d 556, 568, 104 Cal.Rptr. 733, 741-42 (1972). A failure to disclose past contacts can lead to a reasonable impression of bias, regardless of who proposed the neutral arbitrator. See, e.g., Kaiser Found, Hosps., Inc. v. Superior Court, 19 Cal.App. 4th 513, 517, 23 Cal.Rptr.2d 431, 433 (1993); Johnston, 6 Cal.App.3d at 843, 86 Cal.Rptr. at 136. In all events, a decision on the issue depends on the specific facts of the case. See Betz, 31 Cal.App. 4th at 1507, 38 Cal.Rptr.2d at 109.
In the case at hand, the neutral arbitrator did, in fact, disclose his relationships with Allstate in a document that would have alerted the Wasowskis, or anyone else who wished to con it. It is true that he did not give the exquisite detail required by § 1281 .9, a statute that had just become effective two days before. But that itself is far from the kind of failure to disclose that could reasonably lead to an impression of bias.
The district court erred when it decided that the neutral arbitrator's failure to disclose the detailed information required by § 1281.9(a) led, ipso facto, to a showing of fraud or corruption under § 1206.2. Therefore, we must reverse. However, due to the district court's error, which led to an early truncation of its consideration of this case, we hesitate to hold that there was no bias or reasonable impression thereof, although on the record we have seen it is highly doubtful that there was. We leave that decision to the district court in the first instance.
Allstate also asks us to hold against Wasowski on the basis of an alleged accord and satisfaction. See Cal. Civ.Code §§ 1525, 1526. That, too, is a fact intensive inquiry. See Conderback, Inc. v. Standard Oil Co., 239 Cal.App.2d 664, 680-81, 48 Cal.Rptr. 901, 912-13 (1966). We decline to undertake it.
4. The Wasowskis assert that we should uphold the district court because the arbitrators acted beyond the scope of their authority. We decline to do so. It is apparent that what the arbitrators did was determine the amount of damage in the form of a dollar value for the repairs. That was within the proper scope of an appraisal. See Hughes v. Potomac Ins. Co. Inc, 199 Cal.App.2d 239, 252-53, 18 Cal.Rptr. 650, 657-58 (1962), disapproved on other grounds, Sabella v. Wisler, 59 Cal.2d 21, 34, 377 P.2d 889, 896, 27 Cal.Rptr. 689, 697 (1963).
REVERSED and REMANDED. The Wasowskis shall bear the costs on appeal.