On 02/25/2016 DALLASWHITE CORPORATION filed a Contract - Other Contract lawsuit against 328 MAPLE LIMITED PARTNERSHIP. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judge overseeing this case is RICHARD E. RICO. The case status is Pending - Other Pending.
Pending - Other Pending
Los Angeles County Superior Courts
Stanley Mosk Courthouse
Los Angeles, California
RICHARD E. RICO
DOES 1 TO 10
328 MAPLE LIMITED PARTNERSHIP
CALIFORNIA CAPITAL INSURANCE
LAW OFFICES OF EDWARD H CROSS & ASSOC PC
IV ROBERT A. VON ESCH
PC SAUL REISS
WEISBERG GENE A. ESQ.
12/19/2017: ANSWER OF DEFENDANT 328 MAPLE LIMITED PARTNERSHIP TO PLAINTIFF DALLAS WHITE CORPORATION'S THIRD AMENDED COMPLAINT
1/4/2018: REPLY BY DEFENDANT/CROSS-COMPLAINT 328 MAPLE LIMITED PARTNERSHIP TO CROSS-DEFENDANT DALLAS WHITE CORPORATION'S OPPOSITION TO MOTION BY DEFENDANT/CROSS-COMPLAINT ETC.
1/12/2018: Minute Order
1/30/2018: NOTICE OF CONTINUANCE OF MOTION TO COMPEL RESPONSES TO AND COMPLIANCE WITH REQUEST FOR PRODUCTION OF DOCUMENTS ETC.
3/8/2018: PLAINTIFF, DALLASWHITE CORPORATION'S OPPOSITION TO DEFENDANT, CALIFORNIA CAPITAL INSURANCE COMPANY'S DEMURRER TO SECOND, THIRD, FOURTH, AND FIFTH CAUSES OF ACTION OF THIRD AMENDED COMPLAINT
3/27/2018: STIPULATION AND ORDER REGARDING RESPONSIVE PLEADING
5/25/2018: OPPOSITION BY PLAINTIFF AND CROSS-DEFENDANT DALLASWHITE CORPORATION TO DEFENDANT/CROSS-DEFENDANT CALIFORNIA CAPITAL INSURANCE COMPANY'S MOTION TO SEVER; ETC.
7/2/2018: NOTICE OF FILING OF NOTICE OF APPEAL (UNLIMITED JURISDICTION)
8/20/2018: NOTICE OF MOTION TO COMPEL CONTRACTUAL ARBITRATION (INSURANCE APPRAISAL) AND FOR APPOINTMENT OF UMPIRE; ETC
9/10/2018: Minute Order
2/25/2016: COMPLAINT: 1. TO FORECLOSE ON MECHANIC?S LIEN; ETC
7/28/2016: NOTICF OF RULING AT CASE MANAGIMENT CONFERENCE
3/21/2017: REQUEST FOR JUDICIAL NOTICE IN SUPPORT OF DEFENDANT CALIFORNIA CAPITAL INSURANCE COMPANY'S DEMURRER TO SECOND AMENDED COMPLAINT
3/21/2017: NOTICE OF MOTION AND MOTION TO STRIKE TO SECOND AND FIFTH CAUSES OF ACTION OF SECOND AMENDED COMPLAINT AND EACH; MEMORANDUM OF POINTS AND AUTHORITIES
8/30/2017: NOTICE OF MOTION AND MOTION TO COMPEL RESPONSES TO AND COMPLIANCE WITH REQUEST FOR PRODUCTION OF DOCUMENTS (SET ONE) AND; ETC.
11/8/2017: Minute Order
Supplemental Clerk's Transcript; Filed by ClerkRead MoreRead Less
at 08:30 AM in Department 17, Richard E. Rico, Presiding; Status Conference - Held - ContinuedRead MoreRead Less
Minute Order ( (Status Conference)); Filed by ClerkRead MoreRead Less
Notice (of Omission and Correction to the Clerk's Transcript for Appeal); Filed by DallasWhite Corporation (Plaintiff)Read MoreRead Less
at 00:00 AM in Department 17, Richard E. Rico, Presiding; Hearing on Motion to Compel ((Motion to Compel)) - Not Held - Advanced and VacatedRead MoreRead Less
at 08:30 AM in Department 17, Richard E. Rico, Presiding; Hearing on Motion for Summary Judgment - Not Held - Advanced and VacatedRead MoreRead Less
at 08:30 AM in Department 17, Richard E. Rico, Presiding; Hearing on Motion to Compel ((Motion to Compel)) - Not Held - Continued - StipulationRead MoreRead Less
at 08:30 AM in Department 17, Richard E. Rico, Presiding; Hearing on Motion to Compel Further Discovery Responses - Not Held - Advanced and VacatedRead MoreRead Less
at 08:30 AM in Department 17, Richard E. Rico, Presiding; Status Conference - Held - ContinuedRead MoreRead Less
Order (ORDER RE: JUDGMENT ON DEMURRER); Filed by ClerkRead MoreRead Less
PROOF OF SERVICE SUMMONSRead MoreRead Less
Proof-Service/Summons; Filed by DallasWhite Corporation (Plaintiff)Read MoreRead Less
NOTICE OF ACKNOWLEDGEMENT OF RECEIPT - CIVILRead MoreRead Less
Notice of Case Management Conference; Filed by ClerkRead MoreRead Less
OSC-Failure to File Proof of Serv; Filed by ClerkRead MoreRead Less
NOTICE OF CASE MANAGEMENT CONFERENCERead MoreRead Less
ORDER TO SHOW CAUSE HEARINGRead MoreRead Less
SUMMONSRead MoreRead Less
COMPLAINT: 1. TO FORECLOSE ON MECHANIC S LIEN; ETCRead MoreRead Less
Complaint; Filed by DallasWhite Corporation (Plaintiff)Read MoreRead Less
Case Number: BC611607 Hearing Date: August 14, 2020 Dept: 61
Defendant and Cross-Defendant California Capital Insurance Company’s Petition to Confirm Arbitration Award is DENIED.
Defendant and Cross-Complainant 328 Maple Limited Partnership’s Motion to Vacate Arbitration Award is GRANTED.
Cross-Complainant to provide notice.
CONTENTS OF THE PETITION
“Any party to an arbitration in which an award has been made may petition the court to confirm, correct or vacate the award. The petition shall name as respondents all parties to the arbitration and may name as respondents any other persons bound by the arbitration award.” (Code Civ. Proc., § 1285.) A petition must include (a) the substance of or have attached a copy of the agreement to arbitrate unless the petitioner denies the existence of such an agreement, (b) the names of the arbitrators, and (c) a copy of the award and the written opinion of the arbitrators, if any. (Code Civ. Proc., § 1285.4.)
The petition here includes a copy of the arbitration agreement, and on February 13, 2020, CCIC filed a copy of the award naming the umpires and appraisers.
“No petition may be served and filed under this chapter until at least 10 days after service of the signed copy of the award upon the petitioner.” (Code Civ. Proc., § 1288.4.) “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.” (Code Civ. Proc., § 1290.4, subd. (a).)
Subdivision (b) provides:
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.
(2) Service outside this State shall be made by mailing the copy of the petition and notice and other papers by registered or certified mail. Personal service is the equivalent of such service by mail. Proof of service by mail shall be made by affidavit showing such mailing together with the return receipt of the United States Post Office bearing the signature of the person on whom service was made. Notwithstanding any other provision of this title, if service is made in the manner provided in this paragraph, the petition may not be heard until at least 30 days after the date of such service.
(Code Civ. Proc., § 1290.4, subd. (b).)
The petition here includes a proof of service indicating that the award and petition were served upon Maple’s attorneys in this action.
Among the grounds for vacating an arbitrator’s award are the following: “The arbitrators exceeded their powers and the award cannot be corrected without affecting the merits of the decision upon the controversy submitted,” or an arbitrator “failed to disclose within the time required for disclosure a ground for disqualification of which the arbitrator was then aware.” (Code Civ. Proc. § 1286.2, subd. (a)(4), (6).) It is these two grounds upon which Maple seeks relief here.
Grounds for Disqualification
Maple argues that the petition to approve the award should be denied and the award should be vacated because CCIC’s appointed appraiser, Gary Halpin (Halpin) failed to disclose his prior relationship with CCIC. (Opposition at p. 5.) Specifically, Maple argues that Halpin failed to disclose that he had acted as CCIC’s appraiser in the case Lee v. California Capital Insurance Co. (2015) 237 Cal.App.4th 1154, after remand from the court of appeal decision, in the same year CCIC selected him as an appraiser in this action. (Motion at p. 5; Pugh Decl. Exh. 15.)
“[D]espite the appraiser's more limited function in these cases involving an insurance contract, he is held to a higher standard of impartiality than are arbitrators generally.” (Figi v. New Hampshire Ins. Co. (1980) 108 Cal.App.3d 772, 777.)
Maple points to the case Gebers v. State Farm Ins. Co. (1995) 38 Cal.App.4th 1648, in which the court held as follows:
When plaintiffs opposed confirmation of the award and sought to have it vacated they produced proof that, among other things, the appraiser selected by State Farm was currently retained by State Farm as an expert witness in two pending court actions. This ongoing litigation work is a direct pecuniary interest which casts considerable doubt on the appraiser's ability to act impartially. Plaintiffs' uncontradicted evidence on this point is more than ample to satisfy the “impression of possible bias” test. According to Figi, plaintiffs' proof establishes, as a matter of law, that State Farm's appraiser was not “disinterested” as required by Insurance Code section 2071.
. . .
An additional infirmity of equal magnitude to the compromised arbitrator is that the appraiser's current dealings with State Farm were not disclosed to plaintiffs. This omission is equally lethal to the award.
(Gebers, supra, 38 Cal.App.4th at pp. 1652–53, internal quotation marks and citations omitted.)
CCIC in response relies on the case Mahnke v. Superior Court (2009) 180 Cal.App.4th 565, in which the court held that the disclosure requirements of Code of Civil Procedure § 1289.1 applied only to neutral arbitrators, not party-appointed appraisers. (Opposition at p. 5.) The Mahnke court also held that a party appraiser could only be disqualified if the appraiser failed to disclose “significant and substantial relationships” that could cause a reasonable person to “fairly entertain doubts” concerning the appraiser’s impartiality. (Mahnke, supra, 180 Cal.App.4th at pp. 579–80.)
CCIC argues that Halpin was not obliged to disclose his retention as CCIC’s appraiser in the Lee matter because a single prior transaction does not create a substantial business relationship under the framework announced in Mahnke. (Opposition at p. 7.) CCIC argues that Galpin’s work with CCIC constitutes less than 2% of his fee income from the past five years, meaning no inference of partiality can be derived from the information. (Opposition at p. 7.)
The court disagrees. Although CCIC argues that the Mahnke holding relegated all prior cases addressing party-appraisers to irrelevance, that is not the attitude of the Mahnke court itself, which relied on those prior cases, including Gebers, to analyze whether the appraiser in that case had failed to disclose a significant and substantial relationship. (Mahnke, supra, 180 Cal.App.4th at p. 581.) The Mahnke court held that the appraiser before it, who had performed work for the same firm employed by one of the parties, but for a different client, did not need to disclose that work, because he was compensated by the different party and had other engagements rendering him independent of the firm’s influence. (Id. at pp. 581–82.) Likewise, in the case Michael v. Aetna Life & Casualty Co. (2001) 88 Cal.App.4th 925 [overruled on other grounds in Haworth v. Superior Court (2010) 50 Cal.4th 372] the court held the evidence insufficient to establish a substantial business relationship where a party-selected accountant’s national firm had performed work for the insurer, where the accountant had knowingly worked for the insurer only once before. (Id. at p. 943.)
Here, the evidence indicates that Halpin had at least two ongoing engagements with CCIC while acting as its appraiser in this very matter. Halpin was named as CCIC’s appraiser in this matter on December 30, 2015. (Pugh Decl. Exh. 1.) Halpin was simultaneously employed by CCIC in an identical capacity in the case Lee v. California Capital Insturance Company in Alameda County, Case No. RG11571734. (Pugh Decl. Exh. 15.) Halpin now presents a declaration testifying that, although CCIC comprised a mere 2% of his post-2015 fees, this work included yet another engagement “involving California Capital” as an expert. (Halpin Decl. ¶ 2.) This is an ongoing and substantial business relationship, requiring disclosure below, and vacatur presently.
Acting Beyond Scope of Authority
Maple also argues that the umpire was authorized to decide only the amount of money necessary to repair or replace property that the insured contends was damaged, not whether or not a particular event caused the particular damages. (Opposition at p. 11.) Maple contends, however, that Halpin influenced the panel to embrace an approach that determined the damages were not caused by a covered loss. (Opposition at pp. 11–12.)
Maple argues that Halpin’s appraisal submission did not constitute a valuation of claims so much as a request that claims be re-valued based on a new interpretation as to the causation of their damages. (Opposition at p. 11.)
In the underlying arbitration, Halpin submitted an appraisal stating that the “as was” building repair cost was given a replacement cost value of $455,946.10, or an actual cash value of $360,197.67. (Pugh Decl. Exh. 11 at p. 15.) At one point in Halpin’s analysis, he stated that the water damage to a third-floor hallway was from “a corroded pipe,” indicating it was not from the insured event. (Pugh Decl. Exh. 11 at p. 4.) Halpin concluded his analysis of damages by stating, “[T]his building has suffered immensely from prior water intrusions which contribute to mold and other water intrusion problems particularly by way of failed plumbing lines.” (Pugh Decl. Exh. 11 at p. 14.) In the final appraisal award, the umpire adopted Halpin’s conclusions, save to give the “as was” building repairs item an actual cash value of $402,017.69. (Pugh Decl. Exh. 13.) This fell far short of the evaluation of Maple’s appraiser, who offered a total valuation of the amount necessary to restore the property of $2,874,724.05. (Pugh Decl. Exh. 12.)
“[A]ppraisers have the power only to determine a specific question of fact, namely, the actual cash value of the insured [item].” (Kacha v. Allstate Ins. Co. (2006) 140 Cal.App.4th 1023, 1026.) “When an appraisal panel exceeds its powers by deciding coverage issues, and the award cannot be corrected without affecting the merits of the decision, the decision must be vacated.” (Kacha v. Allstate Ins. Co. (2006) 140 Cal.App.4th 1023, 1033.)
In Kacha, the court determined that a panel had exceeded its powers by noting that the panel had itself rendered its decision in reliance on a party’s purported waiver of the panel’s inability to make coverage decisions, as well as certain “zero” item valuations that were explicable only by the panel exceeding its authority into the realm of causation. (Id. at pp. 1035–36.)
Here, the case is different. Halpin’s appraisal contains statements as to the cause of the water intrusion, and he twice attributes the damage identified in photographs to pre-existing plumbing problems. However, there is no indication that these statements affected his ultimate valuation of the damages suffered, and unlike Kacha, Maple points to no items that were discounted based on these assertions. Although Maple argues that CCIC’s asserted valuation was less than what they had previously paid and relied on discounting the evaluations CCIC had relied upon when it previously made payment on the claim, Maple presents no authority for the proposition that an appraisal is cabined by amounts already paid. (Opposition at p. 10.)
Accordingly, the award cannot be vacated on the grounds that the panel exceeded its authority. However, it must be vacated because of Halpin’s failure to disclose his substantial business relationship with CCIC. The petition to confirm the award is therefore DENIED, and the petition to vacate the award is GRANTED.
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