Tentative Rulings

Case Number: 19STCP03975    Hearing Date: January 21, 2020    Dept: 25

PETITION TO CONFIRM ARBITRATION AWARD

(CCP § 1285)

TENTATIVE RULING:

Petitioner Isidro Miramontes’ Petition to Confirm of Arbitration Award is CONTINUED TO MARCH 4, 2020 at 10:30 a.m. in DEPT.25. AT LEAST 16 COURT DAYS PRIOR TO THE NEW HEARING DATE, PETITIONER IS TO FILE SUPPLEMENTAL PAPERS CORRECTING THE DEFICIENCIES DISCUSSED HEREIN. FAILURE TO DO SO MAY RESULT IN THE PETITION BEING PLACED OFF CALENDAR OR DENIED.

ANALYSIS:

I. Background

The arbitration underlying this petition arose from allegations of breach of contract, breach of fiduciary duty, unsuitability, switching, fraud, negligent misrepresentation, negligence, and failure to supervise by Respondent Salvador Marroquin (“Respondent Marroquin”) against Petitioner Isidro Miramontes (“Petitioner”) and Respondent Morgan Stanley & Co. (“Respondent Morgan Stanley”) formerly known as Morgan Stanley DW, Inc. (Pet., Exh. 1, p. 1.)

While the parties did not sign an arbitration agreement, the Financial Industry Regulatory Authority (“FINRA”) rules require arbitration in certain circumstances. Specifically, FINRA Rule 12200 requires all disputes to be arbitrated when requested by a customer. Here, Respondent Marroquin, a customer, requested arbitration and thus arbitration was mandatory on Petitioner and Respondent Morgan Stanley. (Pet., ¶ 3, 6.) The FINRA three-member Arbitration Panel’s (the “Panel”) Award consisted of a dismissal of the claims against Petitioner and against Respondent Morgan Stanley with prejudice. (Id., ¶ 7, Exh. 1, p. 3.) In addition, the Panel recommended expungement of the reference to the breach of contract claim from Petitioner’s registration records maintained with the Central Registration Depository (“CRD”). (Id.) The CRD is a database maintained by FINRA for firms and individuals involved in the U.S. securities industry. The Award was signed separately by the members of the Panel, on November 30, 2007, December 1, 2007, and December 3, 2007 (Id., ¶ 7, Exh. 1, pp. 6-8.)

On September 16, 2019, Petitioner filed the instant Petition to Confirm Arbitration (the “Petition”).

On January 15, 2020, Petitioner’s counsel filed a declaration stating he received correspondence from FINRA on November 27, 2019 which states it would not object to the instant Petition. (Harrison Decl., Exh. 1.)

To date, no opposition or reply briefs have been filed.

II. Legal Standard

“Regardless of the particular relief granted, any arbitrator’s award is enforceable only when confirmed as a judgment of the superior court.” (O’Hare v. Municipal Resource Consultants (2003) 107 Cal.App.4th 267, 278.) “Once a petition to confirm an award is filed, the superior court must select one of only four courses of action: it may confirm the award, correct and confirm it, vacate it, or dismiss the petition.” (EHM Productions, Inc. v. Starline Tours of Hollywood, Inc. (2018) 21 Cal.App.5th 1058, 1063.) “It is well settled that the scope of judicial review of arbitration awards is extremely narrow.” (California Faculty Assn. v. Superior Court (1998) 63 Cal.App.4th 935, 943.) “Neither the trial court, nor the appellate court, may ‘review the merits of the dispute, the sufficiency of the evidence, or the arbitrator’s reasoning, nor may we correct or review an award because of an arbitrator’s legal or factual error, even if it appears on the award’s face.” (EHM Productions at p. 1063-64.)

III. Discussion

A.

CCP § 1285.4 states: “A petition under this chapter shall:

1. Set forth the substance of or have attached a copy of the agreement to arbitrate unless the petitioner denies the existence of such an agreement.

2. Set forth the names of the arbitrators.

(c) Set forth or have attached a copy of the award and the written opinion of the arbitrators, if any.”

Petitioner has submitted a copy of the Award (Pet., Exh. 1.), the identities of the arbitrators (Id), and provided copies of the relevant FINRA rules that demonstrate arbitration in this instance was required (Id., Exh. 2-4). Accordingly, Petitioner has satisfied subs. (a)-(c) of Section 1285.4.

B. Service of the Arbitration Award, Petition, and Notice of Hearing (Code Civ. Proc., §§ 1283.6, 1290.4)

Code of Civil Procedure, section 1283.6 provides that “[t]he neutral arbitrator shall serve a signed copy of the award on each party to the arbitration personally or by registered or certified mail or as provided in the agreement.”  (Italics added.)

Code of Civil Procedure, section 1290.4 states, in pertinent part:

“(a) A copy of the petition and a written notice of the time and place of the hearing thereof and any other papers upon which the petition is based shall be served in the manner provided in the arbitration agreement for the service of such petition and notice.

(b) If the arbitration agreement does not provide the manner in which such service shall be made and the person upon whom service is to be made has not previously appeared in the proceeding and has not previously been served in accordance with this subdivision: ¶ (1) Service within this State shall be made in the manner provided by law for the service of summons in an action.

Here, a signed arbitration agreement does not exist, so service of this petition must be made in the same manner as service of summons. Petitioner has filed proofs of service demonstrating that Respondent Marroquin was personally served with the Petition on November 26, 2019, that Respondent Morgan Stanley was personally served through its registered agent on October 31, 2019, and that FINRA was personally served through its registered agent on October 31, 2019. (12/3/19 POS; 12/5/19 POS; 12/5/19 POS.) Thus, Petitioner has satisfied Code of Civil Procedure, section 1290.4.

However, Petitioner has not provided proof to show that FINRA served a copy of the Award on Petitioner and Respondents as required by Code of Civil Procedure, section 1283.6. The signature pages in the Award include a line that states “Date of Service 12/05/2007.” However, it is not clear that both Petitioner and Respondents were served. Thus, Petitioner has failed to satisfy Code of Civil Procedure section 1283.6.

C. Timeliness of Petition (Code Civ. Proc., §§ 1288, 1288.4)

A party may seek a court judgment confirming an arbitration award by filing and serving a petition at least 10 days, but no more than four years after the award is served on Respondents and Petitioners.  (Code Civ. Proc., §§ 1288, 1288.4.) (Italics added.)

Because there is no proof to show when FINRA served the arbitration Award on Respondent and Petitioner, the Court cannot determine if this Petition is timely under Code of Civil Procedure sections 1288 and 1288.4. Indeed, if the Award was served on Petitioner and Respondents on the December 5, 2007 date printed on the signature pages, this Petition would be untimely.

IV. Conclusion & Order

In light of the foregoing, Petitioner Isidro Miramontes’ Petition to Confirm of Arbitration Award is CONTINUED TO MARCH 4, 2020

Moving party is ordered to give notice.

Parties who intend to submit on this tentative must send an email to the Court at SMCdept94@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.