Opinion
B229625
01-18-2012
HOWARD ZISBLATT, Plaintiff and Respondent, v. GERRY BURK, Defendant and Appellant.
No appearance for Plaintiff and Respondent. Gerry Burk, in pro. per., for Defendant and Appellant.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Los Angeles County Super. Ct. No. BS127836)
APPEAL from orders of the Superior Court of Los Angeles County, Richard Rico, Judge. Affirmed.
No appearance for Plaintiff and Respondent.
Gerry Burk, in pro. per., for Defendant and Appellant.
Appellant Gerry Burk ("Burk"), appeals the order of the trial court confirming an arbitration award in favor of respondent Howard Zisblatt ("Zisblatt") and the denial of his motion to reconsider the order. Burk contends the trial court erred by failing to either "vacate" or "correct" the arbitration award for various reasons. As we shall explain, the trial court properly confirmed the contractual arbitration award in favor of Zisblatt. Accordingly, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Burk started working regularly as an independent contractor for Zisblatt in October 2006. By mid-January 2007, Zisblatt owed Burk several thousands of dollars for the work Burk performed on various projects for Zisblatt. Zisblatt was unable to pay Burk the money owed, but Zisblatt did offer Burk an apartment to live in because Burk needed to find a new residence. Burk claims that the apartment offered by Zisblatt was in violation of the warranty of habitability. However, Burk and Zisblatt did not execute a rental agreement for the apartment located at 1625 S. Shenandoah Street, Los Angeles, California 90035.
The absence of a formalized tenant-landlord relationship between Burk and Zisblatt precludes review of Burk's warranty of habitability claim. (Green v. Superior Court (1974) 10 Cal.3d 616.)
Zisblatt offered Burk occupancy of the apartment at no rent and free utilities until the apartment was fully refurbished. Burk and Zisblatt orally agreed that Zisblatt would complete refurbishing within three months and Zisblatt would first offer the apartment to Burk upon refurbishment. Zisblatt could at any time request that Burk vacate the apartment, but Burk would have 90 days to vacate after Zisblatt first paid all money owed to Burk. Based on their oral agreement, Burk occupied the apartment and began residing there in February 2007.
Zisblatt made some repairs to the apartment through May 2007 and had kitchen cabinets installed in August 2007. However, no further changes were made to improve the condition of the apartment. As a result, the relationship between Burk and Zisblatt deteriorated. Burk stopped working for Zisblatt and controversy ensued. They ultimately agreed to resolve their issues through arbitration with Rabbi Yehuda Bukspan serving as the arbitrator. Burk and Zisblatt signed an agreement to submit to arbitration on November 24, 2008. The scope of the arbitration was a dispute "regarding salary, rent and tenancy and all other matters between [Zisblatt and Burk]. Money owed for services rendered, rent & tenancy of premises located at 1625 S. Shenandoah St., Los Angeles, CA 90035." The parties did not incorporate the American Arbitration Association ("AAA") rules into their arbitration agreement.
Before this court, Burk argues that the arbitration failed to comply with the "AAA" rules. However, the parties did not agree in writing to incorporate the "AAA" rules in the arbitration agreement. Accordingly, Burk's argument that the arbitration proceedings did not comply with the "AAA" rules has no merit.
Within a week of signing the arbitration agreement, Burk submitted his first compensation claim. Because Zisblatt did not respond, Burk wrote a letter to Rabbi Bukspan on December 16, 2008, requesting to depose Zisblatt. In the letter, Burk also stated, "Zisblatt and I have given you broad powers to handle this matter, to speed things up...[and] we are allowing you to communicate with people and parties about this case outside the confines of a formal hearing and you can do your own investigations." Rabbi Bukspan allowed Zisblatt to postpone his response until May 2010.
The record does not disclose what, if anything, occurred in the arbitration proceedings between December 2008 and April 2010. Nevertheless, during that time period, it appears, Burk continued his occupancy of the apartment.
In April 2010, Burk informed Rabbi Bukspan that he would be unavailable to deal with the case until mid-August for professional and personal reasons. Burk also expressed to Rabbi Bukspan that he would need a lot of time to answer Zisblatt's reply to his first claim. In May 2010, Zisblatt responded by challenging Burk's first claim that he owed Burk compensation for services rendered. Zisblatt also included in his response a claim against Burk for rent and tenancy of the apartment.
In June 2010, Rabbi Bukspan contacted Burk to express that he received Zisblatt's response, reviewed it, and wanted to get the parties together. Rabbi Bukspan informed Burk that he would not allow a certain witness to testify regarding the compensation claim. Rabbi Bukspan also informed Burk that he was investigating the matter on his own and planned on contacting a witness who had knowledge about the compensation claim. Burk told Rabbi Bukspan that he would be unable to proceed in the arbitration until mid-August.
About four weeks after that conversation, Rabbi Bukspan issued an arbitration award on July 5, 2010. Rabbi Bukspan rejected Burk's claims, with the exception of an award of $2,680.32. Zisblatt was awarded $95,000 and possession of the apartment. Burk was ordered to vacate the premises by 5:00 p.m. on July 12, 2010, and deliver possession to Zisblatt.
After Burk refused to vacate the apartment, Zisblatt filed a petition with the trial court to confirm the arbitration award. On October 19, 2010, the trial court confirmed the arbitration award. Burk filed a motion for reconsideration; the court denied the motion in December 2010. Burk filed a timely notice of appeal on December 17, 2010.
On appeal, Burk complains, in passing, that the lower court failed to consider his "new evidence," and thus should have granted the motion to reconsider. As the trial court correctly pointed out, however, reconsideration under Code of Civil Procedure section 1008 is only warranted where the "new" evidence is material to the original order. (In re Marriage of Oropallo (1998) 68 Cal.App.4th 997, 1002.) Here, the evidence Burk sought to present concerned the underlying merits of the arbitrator's decision. The lower court had previously ruled that similar evidence going to the merits of the arbitrator's decision could not be used to undermine the arbitration award, and thus, Burk's new evidence, like the evidence he presented in opposition to the motion to confirm the award, was not sufficient.
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DISCUSSION
Burk argues that the arbitration award must be corrected because the arbitrator exceeded his authority by awarding rent and the arbitrator created and enforced an illegal contract. Burk also argues that the arbitration award must be vacated because there was (1) no notice given of a meeting on July 5, 2010, (2) the absence of a formal final hearing resulted in substantial prejudice and gross misconduct, (3) the arbitrator failed to allow discovery, (4) the arbitrator failed to hear evidence, and (5) the arbitrator failed to disclose information from outside sources. However, Burk is fundamentally misguided.
The parties agree that Code of Civil Procedure section 1286.6 provides for "correction" of an arbitration award only when the arbitrator exceeded his power, and only to the extent that the correction does not affect the merits of the arbitrator's decision. (Taylor v. Van-Catlin Const. (2005) 130 Cal.App.4th 1061, 1065-1066; see Code Civ. Proc., § 1286.6, subd. (b); see also Code Civ. Proc., § 1286.2 [vacating awards].) Thus, "the deference due an arbitrator's decision on the merits of the controversy requires a court to refrain from substituting its judgment for the arbitrator's in determining the contractual scope of those powers." (Advanced Micro Devices, Inc. v. Intel Corp. (1994) 9 Cal.4th 362, 372; see Taylor v. Van-Catlin Const., supra, 130 Cal.App.4th at pp. 1065-1066.) In particular, arbitrators do not exceed their powers "merely by rendering an erroneous decision on a legal or factual issue, so long as the issue was within the scope of the controversy submitted to the arbitrators." (Moshonov v. Walsh (2000) 22 Cal.4th 771, 775; see Taylor v. Van-Catlin Const., supra, 130 Cal.App.4th at pp. 1065-1066.)
In the present case, there is no applicable ground for correction of the arbitration award under Code of Civil Procedure section 1286.6. The arbitration award issued by Rabbi Bukspan resolved the scope of the dispute agreed to by both parties. The scope of the arbitration was a dispute "regarding salary, rent and tenancy and all other matters between [Zisblatt and Burk]. Money owed for services rendered, rent & tenancy of premises located at 1625 S. Shenandoah St., Los Angeles, CA 90035." The decision rendered by Rabbi Bukspan clearly resolved the dispute by awarding Burk with $2,680.32 for wages owed, Zisblatt $95,000 for rent owed, and ordering Burk to vacate the apartment. Burk attempts to characterize his arguments so they fall within the scope of Code of Civil Procedure section 1286.6, but his arguments cannot overcome the substantial discretion given to arbitrators and the narrow, deferential judicial review of their awards.
Arbitrators, unless expressly restricted by the agreement or the submission to arbitration, have substantial discretion to determine the scope of their contractual authority to fashion remedies, and judicial review of their awards must be correspondingly narrow and deferential. (Taylor v. Van-Catlin Const., supra, 130 Cal.App.4th at p. 1066.) Judicial review of an arbitration award is severely limited because that result vindicates the intentions of the parties that the award be final, and because an arbitrator is not ordinarily constrained to decide according to the rule of law. (Harris v. Sandro (2002) 96 Cal.App.4th 1310.) In the present case, as previously discussed, Zisblatt and Burk granted Rabbi Bukspan broad powers to issue an award "regarding salary, rent, and tenancy and all other matters between them." In addition, Burk clearly expressed intent to grant Rabbi Bukspan broad authority when he stated in a letter to the Rabbi, "Zisblatt and I have given you broad powers to handle this matter, to speed things up . . . [and] we are allowing you to communicate with people and parties about this case outside the confines of a formal hearing and you can do your own investigations." It is clear based on this evidence that both parties intended the arbitrator to have broad discretion during the arbitration. Accordingly, the arguments advanced by Burk to correct the award must fail. (Trabuco Highlands Ass'n v. Head (2002) 96 Cal.App.4th 1183, 1188 [courts will indulge every reasonable intendment to give effect to arbitration proceedings].)
With respect to Burk's claim that the award must be vacated because he did not get notice of a "meeting," we note that a private arbitrator's award does not constitute state action; thus, there is no due process right to judicial review of the award: "[A]n arbitration award is not a product of public law or state proceedings, but rather is a private arrangement, governed by rules of the parties' own making or selection . . . [and] is not constrained by due process." (Rifkind & Sterling, Inc. v. Rifkind (1994) 28 Cal.App.4th 1282, 1292; see Bosack v. Soward (9th Cir. 2009) 586 F.3d 1096, 1105 (en banc).) Accordingly, state due process requirements do not apply to Burk's argument that the award should be vacated because there was no notice of a meeting. Instead, the guiding requirements are found within the arbitration agreement itself, which provided Rabbi Bukspan with "broad powers" to solve "all matters" between the parties.
Burk also argues, under Code of Civil Procedure section 1286.2, subdivision (a)(5), that his rights were "substantially prejudiced by refusal of the arbitrator to postpone the hearing." (Code Civ. Proc., § 1286.2, subd. (a)(5).) To vacate an award on this ground, the moving party must show that his or her rights were "substantially prejudiced" and, "if any reasonable basis exists for the arbitrator's decision not to postpone a hearing," the refusal to postpone will not result in vacation of the award. (El Dorado School Dist. No. 15 v. Continental Cas. Co. (8th Cir. 2001) 247 F.3d 843, 847-848.) For example, in El Dorado School Dist. No. 15, an arbitrator denied a party's motion for a continuance of the arbitration hearing without giving reasons for the denial. The party requesting the continuance did not appear at the hearing, resulting in an award against that party. The court held that the arbitrator was not guilty of misconduct in refusing to postpone the hearing because there were a number of possible reasonable explanations for the denial (e.g., parties had expended considerable time, effort and money based on the hearing date, arbitrator's own schedule, insufficient showing of reasons for postponement, etc.). (El Dorado School Dist. No. 15, supra, 247 F.3d at pp. 847-48.) In the present case, four weeks before issuing the award, Rabbi Bukspan actually contacted Burk to express that he received Zisblatt's response, reviewed it, and wanted to get the parties together. Rabbi Bukspan waited those four weeks and issued the award when he was ready, which was agreed to by both parties under the broad powers given to him. As a result, Rabbi Bukspan had a reasonable basis not to postpone the hearing because the arbitration agreement and subsequent communications with Burk confirmed his broad powers. Burk has not shown, given the discretion assigned to the arbitrator, that Rabbi Bukspan's conduct of the proceedings was unreasonable or substantially prejudiced Burk's rights and has thus not demonstrated that the arbitration award should be vacated under Code of Civil Procedure, section 1286.2, subdivision (a)(5).
Burk also claims that Rabbi Bukspan's failure to allow discovery and failure to hear evidence require the award to be vacated. However, an arbitrator can independently decide not to impose a particular sanction required by the discovery statutes, and whether that decision was correct is not an issue that is subject to judicial review. (Alexander v. Blue Cross of California (2001) 88 Cal.App.4th 1082, 1089; emphasis added.) With respect to the "failure to hear evidence" claim, Burk contends that because Rabbi Bukspan did not consider certain evidence, the award must be vacated for a failure to hear evidence under Code of Civil Procedure section 1286.2. However, the failure to "consider evidence" is not the same as the "failure to hear evidence." Indeed the admission of evidence is "to hear" it, while the weighing of evidence is "to consider" it; failure to consider evidence is not ground to vacate the award. (Gonzales v. Interinsurance Exchange (1978) 84 Cal.App.3d 58, 63.).
In view of all the foregoing, none of the reasons presented in Burk's brief presents a sufficient basis to reverse the lower court's order confirming the arbitration award or the order denying his motion for reconsideration.
DISPOSITION
The orders are affirmed. No costs are awarded on appeal.
WOODS , J.
We concur:
PERLUSS, P. J.
JACKSON, J.