Opinion
NOT TO BE PUBLISHED
ORIGINAL PROCEEDING; petition for writ of mandate. Soussan G. Bruguera, Judge., Super. Ct. No. BS085380.
Alschuler Grossman Stein & Kahan, Alschuler Grossman, Bingham McCutchen, Daniel Alberstone and Peter F. Smith for Petitioners.
No appearance for Respondent.
Overland Borenstein Scheper & Kim, Mark A. Borenstein and Jeanie Kim for Real Parties in Interest.
JOHNSON, J.
The trial court proceedings below commenced with cross petitions to confirm and vacate an arbitration award rendered in favor of Marcus & Millichap Real Estate Brokerage Investment Company (Marcus & Millichap). In the petition to vacate, Woodman Investment Group, LLC (Woodman) and Eli Sasson argued the arbitrator lacked jurisdiction over Sasson because he was not a signatory to the agreement between Marcus & Millichap and Woodman which included the arbitration clause. The trial court denied Marcus & Millichap’s petition to confirm and granted the petition to vacate the award on the ground the arbitrator exceeded her powers and the award could not be corrected without affecting the merits of the decision. The court did not issue an order for rehearing under Code of Civil Procedure section 1287 and Marcus & Millichap did not appeal the order vacating the award. Subsequently, Marcus & Millichap moved the trial court for an order compelling Sasson to arbitrate the dispute and also filed a new demand for arbitration against Woodman with the American Arbitration Association. The trial court granted Marcus & Millichap’s motion to compel arbitration, finding Sasson was the alter ego of Woodman. About a year and a half later, while the second arbitration was still pending, the trial court issued an unsigned minute order dismissing the trial court proceedings on the ground the proceedings were final and the court lacked jurisdiction to act further.
Further statutory references are to the Code of Civil Procedure.
As explained in greater detail below, the trial court made the decision to dismiss the proceedings after it reviewed this court’s opinion affirming an award of attorney fees and costs to Woodman and Sasson as the prevailing parties in the post-arbitration judicial proceeding. (Marcus & Millichap Real Estate Investment Brokerage Co. v. Woodman Investment Group (2005) 129 Cal.App.4th 508, 510.) In that prior appeal, this court concluded the judicial proceeding Marcus & Millichap initiated to confirm the arbitration award was final for purposes of an award of fees. (Id. at pages 514-516.)
Woodman and Sasson contend they should not have to arbitrate this dispute for a second time because the trial court did not order a rehearing at the time it made the order vacating the arbitration award or at any time before the order vacating the arbitration award became final. They challenge the order compelling Sasson to arbitration and a subsequent order in which the trial court concluded a rehearing in arbitration is not barred based on the fact the court did not specifically order a rehearing in conjunction with the order vacating the arbitration award. Woodman and Sasson attempted to obtain appellate review of these orders through an appeal from the order dismissing the trial court proceedings. As discussed below, an unsigned minute order dismissing an action is not an appealable order. Based on the unusual circumstances presented in this case, however, we have decided not to dismiss the appeal and instead to treat the improper appeal as a petition for writ of mandate. We conclude the trial court had jurisdiction to decide the motion to compel arbitration despite the fact there was no order for rehearing, and substantial evidence supports the court’s finding Sasson is the alter ego of Woodman. Accordingly, we deny the petition for writ of mandate.
FACTS AND PROCEEDINGS BELOW
In April 2001, Woodman and Marcus & Millichap entered into a representation agreement under which Woodman agreed to pay Marcus & Millichap a commission if Marcus & Millichap found a buyer who was ready, willing and able to buy the subject property (a shopping center) for $3,500,000 and also meet other specified terms and conditions of the sale. The agreement included an arbitration clause. Eli Sasson signed the representation agreement on behalf of Woodman. Tony Azzi signed on behalf of Marcus & Millichap.
In or about October 2001, a dispute arose regarding whether Woodman was obligated to pay Marcus & Millichap a commission under the terms of the representation agreement. In May 2002, Marcus & Millichap filed a demand for arbitration with the American Arbitration Association (AAA) against Woodman and Sasson, seeking payment of a commission in the amount of $210,000 plus other damages. Woodman and Sasson filed a cross-complaint in the arbitration against Marcus & Millichap and Azzi asserting breach of fiduciary duty and other claims. Thereafter, Sasson objected to the arbitrator’s jurisdiction over him based on the fact he was not a signatory to the arbitration agreement. Woodman filed a first amended cross-complaint to reflect Sasson was not asserting any cross-claims in the arbitration. Later, Woodman filed a second amended cross-complaint to reflect it was asserting its claims against John P. Walsh in addition to Marcus & Millichap and Tony Azzi.
In August 2003, after a hearing, the arbitrator rendered an award in favor of Marcus & Millichap, requiring Woodman and Sasson to pay the $210,000 commission plus attorney fees, costs and interest for a total amount of nearly $300,000. The arbitrator denied all of Woodman’s claims. Despite the fact Sasson had objected to the arbitrator’s jurisdiction over him, the arbitrator found him liable on the theory he was the alter ego of Woodman. The award included more than one-and-a-half pages of findings and analysis on the alter ego issue.
In late August 2003, Marcus & Millichap, Azzi and Walsh (who all are real parties in interest in this writ proceeding and henceforth will be referred to collectively as Marcus & Millichap) filed a petition to confirm the arbitration award. Woodman and Sasson filed a petition to vacate the arbitration award on the ground the arbitrator “exceeded her powers by determining the rights and obligations” of Sasson and finding he was the alter ego of Woodman. Woodman and Sasson argued the court, not an arbitrator, must decide whether Sasson is the alter ego of Woodman and thereby bound by the arbitration clause in the representation agreement between Woodman and Marcus & Millichap. Woodman and Sasson also argued the arbitration award had to be vacated because it could not be corrected without affecting the merits of the decision. At the hearing on the petitions to confirm and vacate the arbitration award, Woodman and Sasson asserted Marcus & Millichap’s “remedy” was a rehearing in arbitration.
Section 1286.2, subdivision (a)(4).
On December 10, 2003, the trial court issued an order denying the petition to confirm the arbitration award and granting the petition to vacate the award on the ground the arbitrator exceeded her authority. In connection with its petition to vacate the award, Marcus & Millichap did not specifically ask the trial court to order a rehearing under section 1287 and the court did not address the issue.
On December 19, 2003, Marcus & Millichap filed a motion for clarification stating it was unsure whether the trial court had vacated the arbitration award as to Sasson only or as to both Woodman and Sasson. At or around the same time, Woodman and Sasson filed a motion for attorney fees and costs as the prevailing parties in the post-arbitration judicial proceeding. On February 9, 2004, the trial court held a joint hearing on these two motions. Marcus & Millichap informed the court it planned to file a petition to compel Sasson to arbitration on the ground he was the alter ego of Woodman. Marcus & Millichap asserted Woodman and Sasson would be entitled to attorney fees and costs only if they prevailed on the merits at the second arbitration. Woodman and Sasson disagreed, arguing they were entitled to recover the attorney fees and costs they incurred in connection with the petitions to confirm and vacate the arbitration award under section 1293.2. They asserted the “next arbitration hearing” would be “a separate and distinct proceeding” at which the prevailing party also would be entitled to attorney fees and costs.
On March 29, 2004, the trial court issued an order denying Marcus & Millichap’s motion for clarification (making clear it had vacated the arbitration award as to both Woodman and Sasson). As part of the same order, the court awarded Woodman and Sasson $33,492.50 in attorney fees and costs they incurred in the “judicial proceeding to vacate the Arbitrator’s award.” On April 15 2004, Marcus & Millichap filed an appeal from the trial court’s March 29 order.
Also on April 15, 2004, Marcus & Millichap filed a motion to compel Sasson to arbitration on the ground he is the alter ego of Woodman. As evidence of Sasson’s relationship with Woodman, Marcus & Millichap relied on the arbitrator’s findings and analysis on the alter ego issue as set forth in the arbitration award. Woodman and Sasson opposed the motion to compel arbitration, arguing Marcus & Millichap could not rely on a vacated arbitration award as evidence of the alleged alter ego relationship. They also argued the trial court proceedings should be stayed based on Marcus & Millichap’s appeal from the trial court’s March 29, 2004 order denying the motion for clarification and awarding Woodman and Sasson attorney fees and costs.
Before the hearing on the motion to compel arbitration, Marcus & Millichap filed an amended motion. Marcus & Millichap attached a declaration from its general counsel setting forth facts Sasson purportedly testified to at the arbitration hearing concerning his relationship with Woodman. (Apparently, there is no reporter’s transcript from the arbitration hearing.) Marcus & Millichap also attached a declaration from one of its other attorneys stating Marcus & Millichap was appealing only from the March 29, 2004 order awarding Woodman and Sasson attorney fees and costs and not the order denying its motion for clarification of the order vacating the arbitration award. Therefore, there was no reason to stay the proceedings on its motion to compel arbitration. In opposition to the amended motion to compel arbitration, among other things, Woodman and Sasson argued Marcus & Millichap did not present sufficient evidence of an alter ego relationship between Sasson and Woodman.
In or about mid-May 2004, Marcus & Millichap filed with AAA a new demand for arbitration against Woodman. On May 24, 2004, the trial court held a hearing on Marcus & Millichap’s motion to compel Sasson to arbitration. The court informed the parties its tentative ruling was to grant the motion, stating it believed Marcus & Millichap had “made a showing of commingling of assets and exercise of control over the company sufficient to show Woodman is [sic] alter ego [of Sasson].” In addition to their substantive disagreements with the court’s tentative ruling, Woodman and Sasson argued they were entitled to a trial on the merits on the alter ego issue and urged the court not to resolve the matter in a summary fashion based on declarations alone. The trial court took the matter under submission.
Two days after the hearing, Woodman and Sasson filed an ex parte application seeking an order staying the proceedings on the motion to compel arbitration so they could file a summary judgment motion on the ground the trial court did not have jurisdiction to rule because Marcus & Millichap did not seek an order for a rehearing in arbitration before the order vacating the arbitration award became final. At the hearing, the trial court stated it was “shocked” when it read the ex parte application because, at the time Woodman and Sasson requested the court vacate the arbitration award, they themselves had stated there should be a rehearing in arbitration. The court believed “it was everybody’s intention” (including the court’s) to have a rehearing if the arbitration award was vacated. The trial court denied the ex parte application. The next day the court granted Marcus & Millichap’s motion to compel Sasson to arbitration.
On June 18, 2004, Woodman and Sasson filed a motion for judgment on the pleadings on the ground the trial court did not have jurisdiction to grant the motion to compel Sasson to arbitration once the order vacating the arbitration award became final. In opposition to this motion, Marcus & Millichap asserted, “when the time for [it] to appeal the order vacating the Award expired . . . the only thing that became final was the fact that the original Award was ‘vacated.’ Nothing in the court’s order or the parties’ arbitration agreement or any statute or case law, however, barred [Marcus & Millichap] from re-arbitrating the dispute, or from obtaining [the] Court’s order compelling Sasson to that arbitration.”
At the September 9, 2004 hearing on the motion for judgment on the pleadings, the trial court again expressed its surprise at the fact Woodman and Sasson were attempting to resist a second arbitration. The court also stated it was not aware of any authority providing Marcus & Millichap’s right to a rehearing in arbitration was waived because the court did not order a rehearing in conjunction with the order vacating the arbitration award. The trial court denied the motion for judgment on the pleadings.
This court summarily denied Woodman and Sasson’s petition for writ of mandate seeking reversal of the trial court’s order denying the motion for judgment on the pleadings. (Woodman Investment Group, LLC v. Superior Court (Sept. 30, 2004, B178196 [summary denial order].) We deny Marcus & Millichap’s May 9, 2007 motion to augment the record to include documents filed in the above-referenced writ proceeding.
In late-December 2004, Marcus & Millichap filed a motion for clarification, at the arbitrator’s request, seeking an order setting forth the authority for a rehearing in arbitration between Marcus & Millichap and Woodman, given the trial court’s order granting the motion to compel arbitration pertained to Sasson only. The arbitrator made this request in conjunction with his review of Woodman and Sasson’s motion to dismiss the arbitration, which they based on the same grounds asserted in the motion for judgment on the pleadings before the trial court. Woodman and Sasson opposed the motion for clarification and also requested a continuance of the hearing on the motion, stating they believed this court would decide “whether an order for rehearing is necessary to have the matter reheard” at the time it decided Marcus & Millichap’s appeal from the order awarding Woodman and Sasson attorney fees and costs as the prevailing parties in the post-arbitration judicial proceeding.
On February 28, 2005, the trial court held a hearing on Marcus & Millichap’s motion for clarification and took the matter under submission. On March 24, 2005, the trial court issued a minute order stating, in pertinent part: “The motion is granted, and the Court clarifies its December 10, 2003 order to reflect its intent that rehearing of the arbitration shall take place between all parties. In its December 10, 2003 order, the Court vacated the entire arbitration award. On May 27, 2004, the Court granted [Marcus & Millichap]’s motion to compel arbitration. The Court intended a rehearing of the arbitration between all parties, as reflected in the reporter’s transcript of the hearing on the motion to compel arbitration. On three separate occasions, the Court has rejected [Woodman and Sasson]’s argument that the lack of an order of rehearing bars any rehearing. [¶] The Court orders that the arbitration be completed within ninety days of this date.”
On May 17, 2005, this court issued its opinion affirming the order awarding Woodman and Sasson attorney fees and costs as the prevailing parties in the post-arbitration judicial proceeding. In connection with that decision, this court concluded the judicial proceeding Marcus & Millichap initiated to confirm the arbitration award was final for purposes of an award of fees. The opinion explains, “Because no rehearing of the arbitration was ordered and Marcus & Millichap did not appeal the order vacating the arbitration award in this case . . . no claim of either party remains before the court or otherwise subject to judicial determination: The trial court’s rulings are final.”
Marcus & Millichap Real Estate Investment Brokerage Co. v. Woodman Investment Group, supra, 129 Cal.App.4th at page 510.
Marcus & Millichap Real Estate Investment Brokerage Co. v. Woodman Investment Group, supra, 129 Cal.App.4th at pages 514-516.
Marcus & Millichap Real Estate Investment Brokerage Co. v. Woodman Investment Group, supra, 129 Cal.App.4th at page 516.
Armed with this court’s decision, Woodman and Sasson filed a motion for reconsideration of the trial court’s September 9, 2004 order denying their motion for judgment on the pleadings, contending the trial court had no jurisdiction to act on a motion to compel arbitration after the order vacating the arbitration award became final. In opposition to the motion for reconsideration, Marcus & Millichap pointed out this court had specifically stated in its opinion it expressed no view on whether Marcus & Millichap could initiate another arbitration proceeding absent an order for rehearing under section 1287.
Marcus & Millichap Real Estate Investment Brokerage Co. v. Woodman Investment Group, supra, 129 Cal.App.4th at page 514. The relevant language from our earlier opinion is quoted at pages 12-13 below.
On September 29, 2005, the trial court held a hearing on the motion for reconsideration and took the matter under submission. On November 10, 2005, the trial court issued an unsigned minute order stating: “The decision from the Honorable Court of Appeal is unequivocal that the proceedings before THIS court are final. The Honorable Court of Appeal expressed no view as to the initiation of another arbitration proceeding but the decision is clear that THIS court lacks jurisdiction to act further. Pursuant to and consistent with the May 17, 2005 decision by the Honorable Court of Appeal, this action is dismissed without prejudice.”
On January 3, 2006, Woodman and Sasson filed a notice of appeal from the “[o]rder dated November 10, 2005, dismissing the action (including all prior interlocutory orders).” At a subsequent hearing on a request for attorney fees and costs made by Woodman and Sasson, the parties informed the trial court the arbitrator intended to postpone the hearing until this court reviewed the order compelling arbitration. At the same hearing the trial court explained, when it issued its November 10, 2005 order dismissing the action, it did not intend to dismiss the “special proceeding” initiated by Marcus & Millichap to compel Sasson to arbitration.
This court granted Woodman and Sasson’s motion to augment the record to include the reporter’s transcript from this hearing.
Woodman and Sasson have asked this court to take judicial notice of Marcus & Millichap’s notice of appeal from the trial court’s June 15, 2006 order awarding attorney fees and costs to Woodman and Sasson. Because this document is not germane to the issues on appeal, we decline to take judicial notice.
DISCUSSION
I. THE UNSIGNED MINUTE ORDER DISMISSING THE TRIAL COURT PROCEEDINGS IS NOT APPEALABLE, BUT WE EXERCISE OUR DISCRETION TO TREAT THE IMPROPER APPEAL AS A PETITION FOR WRIT OF MANDATE.
By their appeal, Woodman and Sasson are challenging the order granting the motion to compel Sasson to arbitration and a subsequent order in which the trial court concluded a rehearing in arbitration is not barred based on the fact the court did not specifically order a rehearing in conjunction with the order vacating the arbitration award. An order granting a motion (or petition) to compel arbitration is not an appealable order, and neither is the other order they challenge. Woodman and Sasson have attempted to obtain appellate review of these orders through an appeal from the November 10, 2005 order dismissing the trial court proceedings. Marcus & Millichap contends Woodman and Sasson have appealed from a nonappealable order. We agree.
Section 1294; Muao v. Grosvenor Properties, Ltd. (2002) 99 Cal.App.4th 1085, 1088-1089.
See section 904.1.
An order of dismissal constitutes a judgment, and is effective for all purposes and appealable if it is “a written order signed by the court and filed in the action.” An unsigned minute order dismissing an action is not an appealable order. The November 10, 2005 order is an unsigned minute order dismissing the action. This court requested Woodman and Sasson provide a copy of a signed written order of dismissal or a judgment filed in the trial court. They responded to this court’s request with a letter stating the trial court has since refused to issue the written order of dismissal they presented to the trial court for signature. Thus, there is no appealable order from which this court can review Woodman and Sasson’s claims.
Munoz v. Florentine Gardens (1991) 235 Cal.App.3d 1730, 1731-1732; Adohr Milk Farms, Inc. v. Love (1967) 255 Cal.App.2d 366, 369.
Instead of dismissing the appeal, however, we have decided to exercise our discretion to treat the improper appeal from a nonappealable order as a petition for writ of mandate and to reach the merits of the controversy. The briefs and record before us “include in substance the elements necessary to a proceeding for writ of mandate.” Moreover, the fact the trial court has not been ordered to show cause why it should not be compelled to vacate the challenged orders “is not an insuperable obstacle since there is no indication that the court as respondent would appear separately or become more than a nominal party.”
Muao v. Grosvenor Properties, Ltd., supra, 99 Cal.App.4th at pages 1088-1089 (an order granting a petition to compel arbitration “is reviewed on appeal from the judgment entered after the arbitration is completed or in exceptional circumstances . . . by writ of mandate”).
Olson v. Cory (1983) 35 Cal.3d 390, 401.
Olson v. Cory, supra, 35 Cal.3d at page 401.
We recognize appellate courts should exercise their discretion to treat an improper appeal as a petition for writ of mandate only in “unusual” or “exceptional” circumstances. We believe such circumstances are present in this case. The arbitrator has expressed confusion on multiple occasions about whether the second arbitration can and/or should proceed. On one occasion, the arbitrator asked the trial court for clarification and, on another, the parties reported the arbitrator stated he was waiting for guidance from this court. We understand the arbitrator’s confusion, given the protracted and messy procedural history of this case. To avoid further confusion and delay, we believe it is appropriate -- and indeed necessary -- for this court to resolve Woodman and Sasson’s claims at this juncture. Otherwise, we fear they will attempt to find new and creative ways to litigate these same issues and avoid a second arbitration for years to come.
Olson v. Cory, supra, 35 Cal.3d at page 401; Muao v. Grosvenor Properties, Ltd., supra, 99 Cal.App.4th at pages 1088-1089.
II. THE TRIAL COURT HAD JURISDICTION TO COMPEL SASSON TO ARBITRATION.
Woodman and Sasson claim the trial court did not have jurisdiction to issue any orders, including the order granting the motion to compel arbitration, after the order vacating the arbitration award became final. They also claim a rehearing of the parties’ dispute in arbitration is barred based on the fact the trial court did not specifically order a rehearing at any time before the order vacating the arbitration award became final. Based on the particular facts and circumstance of this case, we reject both claims.
We begin our analysis with a discussion of this court’s opinion in the prior appeal between these parties concerning an award of attorney fees and costs to Woodman and Sasson as the prevailing parties in the post-arbitration judicial proceeding. This court concluded the judicial proceeding initiated by Marcus and Millichap to confirm its arbitration award became final for purposes of an award of fees after the trial court issued an order vacating the award without ordering a rehearing, and Marcus and Millichap did not appeal that order. In that opinion, this court expressly stated it was not resolving “[w]hether or not Marcus & Millichap . . . may initiate another arbitration proceeding to determine its right to a commission without an express order for rehearing pursuant to section 1287.” Thus, the prior decision on appeal did not resolve either of the claims Woodman and Sasson make in the present writ proceeding.
Marcus & Millichap Real Estate Investment Brokerage Co. v. Woodman Investment Group, supra, 129 Cal.App.4th at pages 514-516.
Marcus & Millichap Real Estate Investment Brokerage Co. v. Woodman Investment Group, supra, 129 Cal.App.4th at page 514.
The fact the order vacating the arbitration award became final does not mean the trial court did not have jurisdiction to hear and decide Marcus & Millichap’s motion to compel Sasson to arbitration. As this court explained in the prior appeal, the judicial proceeding Marcus & Millichap initiated to confirm the arbitration award became final. Marcus & Millichap subsequently filed a motion to compel arbitration, which could have and perhaps should have been filed as a petition in a new judicial proceeding with a new case number. Marcus & Millichap filed the motion to compel arbitration under the same case number as the petitions to confirm and vacate the arbitration award because it believed that was appropriate under section 1292.6, which provides: “After a petition has been filed under this title, the court in which such petition was filed retains jurisdiction to determine any subsequent petition involving the same agreement to arbitrate and the same controversy, and any such subsequent petition shall be filed in the same proceeding.”
Marcus & Millichap Real Estate Investment Brokerage Co. v. Woodman Investment Group, supra, 129 Cal.App.4th at pages 514-516.
Regardless of whether a petition to compel arbitration should have been filed under the old case number or a new one, the trial court had jurisdiction to hear it. A petition to compel arbitration would have commenced a judicial proceeding distinct and separate from the judicial proceeding involving the petitions to confirm and vacate the arbitration award which had since become final. We do not hold otherwise simply because Marcus & Millichap filed a motion to compel arbitration in a judicial proceeding it (and the trial court) believed was still pending. Our conclusion on this issue, however, does not answer the question whether the trial court was barred from granting the motion to compel arbitration based on the fact it did not specifically order a rehearing under section 1287 before the order vacating the arbitration award became final.
There is no language in section 1287 stating there may not be a rehearing in arbitration absent an express order for rehearing made in conjunction with a trial court’s order vacating an arbitration award. Section 1287 provides: “If the award is vacated, the court may order a rehearing before new arbitrators. If the award is vacated on the grounds set forth in subdivision (d) or (e) of Section 1286.2, the court with the consent of the parties to the court proceeding may order a rehearing before the original arbitrators. [¶] If the arbitration agreement requires that the award be made within a specified period of time, the rehearing may nevertheless be held and the award made within an equal period of time beginning with the date of the order for rehearing but only if the court determines that the purpose of the time limit agreed upon by the parties to the arbitration agreement will not be frustrated by the application of this provision.”
Section 1286.2 currently does not include a subdivision (d) or (e), but it does include (a)(4) and (5). Section 1286.2 states, in pertinent part: “(a) Subject to Section 1286.4, the court shall vacate the award if the court determines any of the following: [¶] (1) The award was procured by corruption, fraud or other undue means. [¶] (2) There was corruption in any of the arbitrators. [¶] (3) The rights of the party were substantially prejudiced by misconduct of a neutral arbitrator. [¶] (4) The arbitrators exceeded their powers and the award cannot be corrected without affecting the merits of the decision upon the controversy submitted. [¶] (5) The rights of the party were substantially prejudiced by the refusal of the arbitrators to postpone the hearing upon sufficient cause being shown therefor or by the refusal of the arbitrators to hear evidence material to the controversy or by other conduct of the arbitrators contrary to the provisions of this title. [¶] (6) An arbitrator making the award either: (A) failed to disclose within the time required for disclosure a ground for disqualification of which the arbitrator was then aware; or (B) was subject to disqualification upon grounds specified in Section 1281.91 but failed upon receipt of timely demand to disqualify himself or herself as required by that provision. However, this subdivision does not apply to arbitration proceedings conducted under a collective bargaining agreement between employers and employees or between their respective representatives.”
We read section 1287 as addressing specific questions which may arise concerning a rehearing and may require judicial resolution: whether the rehearing should take place before a different arbitrator and whether the rehearing can take place within the time frame agreed upon by the parties for completion of an arbitration. Neither of these issues was raised in this case. Section 1287 does not state the trial court must order a rehearing in order for there to be a rehearing in arbitration. Nor does it specify a deadline by which a party must seek a rehearing. Furthermore, there is no language in the arbitration statute stating a party must ask for a rehearing at the time the party petitions to vacate the arbitration award or that party waives the right to a rehearing. Woodman and Sasson have not cited any authority supporting their position on this issue and this court has not found any either.
The arbitration now pending is set to take place before a different arbitrator.
As the record makes perfectly clear, at the time the trial court issued its order vacating the arbitration award, the court and all of the parties believed a rehearing in arbitration would take place. Nothing in the trial court’s order foreclosed a second arbitration hearing between these parties on these claims. When the trial court vacated the arbitration award on the ground the arbitrator exceeded her authority in rendering an award against Sasson absent a judicial determination he should be bound by the arbitration agreement, the parties found themselves back at square one. Marcus & Millichap’s deadline to seek a rehearing in arbitration was not the date the order vacating the arbitration award became final. It was the date the statute of limitations ran on Marcus & Millichap’s claims.
In support of their position a rehearing in arbitration is barred unless a trial court specifically orders a rehearing before the order vacating the arbitration award becomes final, Woodman and Sasson cite section 1294, subdivision (c), which provides an order vacating an arbitration award is appealable unless the trial court has ordered a rehearing in arbitration. This just returns us to the issue of whether the trial court’s order vacating the arbitration award became final and appealable. We reiterate: It did. The fact the order vacating the arbitration award did not include an express order for rehearing and, therefore, became final and appealable, does not resolve the question whether Marcus & Millichap was barred from initiating another arbitration proceeding. Marcus & Millichap chose not to appeal the order vacating the arbitration award and instead chose to go straight to a rehearing of its claims in arbitration. We find Marcus & Millichap did not waive its right to a rehearing by waiting until two months after the order vacating the arbitration award became final to seek a rehearing.
We note Marcus & Millichap filed its petition to compel Sasson to arbitration about two weeks after the trial court denied its motion seeking clarification as to whether the order vacating the award applied only to Sasson or to both Woodman and Sasson. Marcus & Millichap asked the trial court for clarification only nine days after the court issued its order vacating the arbitration award.
For the foregoing reasons, we conclude the trial court had jurisdiction to hear and decide Marcus & Millichap’s motion to compel Sasson to arbitration. In addition, we find the trial court was correct when it concluded a rehearing in arbitration between these parties was not barred based on the fact the court did not specifically order a rehearing in conjunction with its order vacating the arbitration award.
III. THE TRIAL COURT’S ALTER EGO FINDING IS SUPPORTED BY SUBSTANTIAL EVIDENCE.
Woodman and Sasson contend the trial court’s finding Sasson is the alter ego of Woodman is not supported by substantial evidence. We disagree.
In order to establish Sasson is the alter ego of Woodman, Marcus & Millichap had to satisfy “‘two general requirements: “(1) that there be such a unity of interest and ownership that the separate personalities of the corporation and the individual no longer exist and (2) that, if the acts are treated as those of the corporation alone, an inequitable result will follow.” [Citation.]’” “‘“Before a corporation’s acts and obligations can be legally recognized as those of a particular person, and vice versa, it must be made to appear that the corporation is not only influenced and governed by that person, but that there is such a unity of interest and ownership that the individuality, or separateness, of such person and corporation has ceased, and that the facts are such that adherence to the fiction of the separate existence of the corporation would, under the particular circumstances, sanction a fraud or promote injustice.”’ [Citations.]”
Baize v. Eastridge Companies, LLC (2006) 142 Cal.App.4th 293, 302. Woodman is a limited liability company. As Woodman and Sasson point out, the same rules which apply to a finding of alter ego in the corporate context, apply to limited liability companies. (People v. Pacific Landmark, LLC (2005) 129 Cal.App.4th 1203, 1212 [members of limited liability company “are subject to liability under the same circumstances and to the same extent as corporate shareholders under common law principles governing alter ego liability”].)
Associated Vendors, Inc. v. Oakland Meat Co., Inc. (1962) 210 Cal.App.2d 825, 837.
“It is well established that the conditions under which the corporate entity may be disregarded vary according to the circumstances in each case and the matter is particularly within the province of the trial court.” A “variety of factors [may be] pertinent to the trial court’s determination under the particular circumstances of each case.” These factors include, but are not limited to, the commingling of funds and assets, undercapitalization of the business entity, “the use of a corporation as a mere shell, instrumentality or conduit for a single venture or the business of an individual” and “the concealment and misrepresentation of the identity of the responsible ownership, management and financial interest, or concealment of personal business activities.” So long as the two “general requirements” set forth above are satisfied, however, there really “‘is no litmus test to determine when the corporate veil will be pierced.’”
Alexander v. Abbey of the Chimes (1980) 104 Cal.App.3d 39, 46.
Associated Vendors, Inc. v. Oakland Meat Co., Inc., supra, 210 Cal.App.2d at page 838; See also Tomaselli v. Transamerica Insurance Company (1994) 25 Cal.App.4th 1269, 1285, footnote 13.
Associated Vendors, Inc. v. Oakland Meat Co., Inc., supra, 210 Cal.App.3d at pages 838-840.
Baize v. Eastridge Companies, LLC, supra, 142 Cal.App.4th at page 302.
Because the determination whether an individual is the alter ego of a corporation (or limited liability company) is a question of fact, we review the trial court’s alter ego finding under the substantial evidence standard. Accordingly, we resolve all conflicts in the evidence in favor of Marcus & Millichap and indulge all legitimate and reasonable inferences to uphold the trial court’s findings of fact.
Alexander v. Abbey of the Chimes, supra, 104 Cal.App.3d at pages 46-47.
Associated Vendors, Inc. v. Oakland Meat Co., Inc., supra, 210 Cal.App.2d at page 835.
In support of its assertion Sasson is the alter ego of Woodman, Marcus & Millichap submitted a declaration from its counsel setting forth certain facts Sasson purportedly testified to at the arbitration hearing. Marcus & Millichap originally tried to rely on the arbitrator’s findings set forth in the arbitration award as evidence in support of its petition to compel arbitration, but decided against it after Woodman and Sasson raised the fact the arbitration award had been vacated. On appeal, Woodman and Sasson do not challenge the competency of counsel’s declaration and, in fact, concede it constitutes “some evidence in support of [Marcus & Millichap’s] claim of a ‘unity of interest’ between Sasson and Woodman.” In opposition to the motion to compel arbitration, Sasson submitted his own declaration in which he attempted to refute the information set forth in the declaration of Marcus & Millichap’s counsel.
A trial court has the discretion to decide whether to allow live testimony or to resolve conflicts in the evidence submitted in connection with a petition to compel arbitration on the basis of declarations alone. (Rosenthal v. Great Western Financial Securities Corporation (1996) 14 Cal.4th 394, 402.) While we tend to agree with Woodman and Sasson’s assertion “the better course” in this case probably would have been to hear live testimony on the alter ego issue, we cannot find the trial court abused its discretion in declining to allow Woodman and Sasson to present such testimony. (Id. at page 414 [“There is simply no authority for the proposition that a trial court necessarily abuses its discretion, in a motion proceeding, by resolving evidentiary conflicts without hearing live testimony. Nonetheless, we agree that where . . . the enforceability of an arbitration clause may depend upon which of two sharply conflicting factual accounts is to be believed, the better course would normally be for the trial court to hear oral testimony and allow the parties the opportunity for cross-examination”].)
In counsel’s declaration, Marcus & Millichap set forth the following facts in support of its claim Sasson is the alter ego of Woodman: “(a) Sasson personally purchased the commercial real property at issue in this case in 1986. He later transferred it to a variety of different entities including, [sic] but most recently to Woodman. [¶] (b) Woodman is owned by a trust which Sasson formed for his personal estate planning purposes. The trust is fully revocable and Sasson is the trustor. [¶] (c) The sole asset of Woodman is the Property. [¶] (d) Sasson borrowed money against the Property for his personal investment purposes, without regard to the separate identity of Woodman. [¶] (e) The ‘manager’ of Woodman is Sasson’s 21-year old [sic] nephew who lives in Israel. Sasson’s nephew is completely ignorant of Woodman’s business. Sasson personally handled all of the business relating to the operation of the Property and its listing for sale. [¶] (f) There are liens against the Property in the amount of almost $3,500,000.”
In his own declaration, Sasson stated he purchased the subject property (a shopping center) with his former spouse in 1980. In 1985, his former spouse deeded the property to him in their divorce proceedings. In 1994, he “contributed the subject property” to a limited partnership “in exchange for an equity interest in that partnership.” In January 2000, the limited partnership sold the property to Woodman “for valuable consideration.”
Sasson explained: “Woodman was formed, in essence, as a ‘single purpose entity, ’ although it has other assets derived directly from its ownership of the subject property. The sole member of Woodman is The American Properties International Trust. Oren Ben Aharon is the manager of Woodman, having been appointed by The American Properties International Trust on March 9, 2000. Since Mr. Ben-Aharon [sic] resides in Israel, I was appointed his attorney in fact by written instrument.” Sasson denied testifying Ben-Aharon was “completely ignorant of Woodman’s business.” Sasson did not deny he formed the revocable trust for his own personal estate planning purposes or that he is the trustor.
Sasson stated, “The current value of the subject property is based, in large part, on the amount of the cash flow being generated.” He also represented, “The subject property generates sufficient gross revenue each month to pay the debts of the company as they accrue. In fact, the company is current on all of its legal debts and obligations.” Sasson also represented, “Woodman is capable of responding to a commission award in the unlikely event [Marcus & Millichap] prevail[s] at arbitration.” Sasson did not deny he has borrowed money from Woodman for his personal investment purposes, but asserted, “Each of the investments and loans that have been made by Woodman have been fully documented and represent assets of the company.”
Although Sasson denied testifying at the arbitration about the amount of liens on the subject property, he did not deny the approximate amount of the liens is $3,500,000. He argued, however, “this fact [assuming it is true] is simply of no consequence. The Representation Agreement reflects a listing price of $3,500,000 in 2000. Marcus & Millichap even claims to have had a buyer willing to pay that price in that year. Since that time, it is universally known that real estate prices in Southern California have skyrocketed, such that it cannot be disputed that the value of the subject property has dramatically increased in the last four years. In fact, it is my opinion that the subject property has a current value that well exceeds the amount of liens against it.”
Based on the facts set forth in these declarations and inferences which can be drawn from these facts, we find the trial court’s finding Sasson is the alter ego of Woodman is supported by substantial evidence. The revocable trust Sasson formed for his own personal estate planning purposes is the sole member of Woodman. Sasson purchased the property he describes as the “purpose” of this “‘single purpose entity.’” Sasson controls Woodman although he attempts to hide this fact by having his nephew in Israel act as the appointed manager of Woodman. Sasson borrows money from Woodman for his own personal investment purposes. Although Sasson declined to state the value of the subject property in May 2004, he did not deny liens on the property equaled the listing price of the property set forth in the April 2001 representation agreement. With this evidence Marcus & Millichap established, where Woodman’s business is concerned, Woodman and Sasson are essentially one and the same (there is a unity of interest). Moreover, in his exercise of control over Woodman, Sasson drains cash from Woodman (indicating an inequitable result would follow if Sasson were not held liable for Woodman’s debts). Thus, there is substantial evidence demonstrating the two general requirements of alter ego liability were met. Accordingly, the trial court did not err in granting the motion to compel Sasson to arbitration.
DISPOSITION
The petition for writ of mandate is denied. Real parties in interest are entitled to recover their costs on appeal.
We concur: PERLUSS, P. J., WOODS, J.