This case was last updated from Los Angeles County Superior Courts on 04/05/2021 at 23:32:26 (UTC).

ROSE DIPLOMAT LLC VS MARY NELSON ET AL

Case Summary

On 12/18/2017 ROSE DIPLOMAT LLC filed a Property - Other Real Property lawsuit against MARY NELSON. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judge overseeing this case is LAURA A. SEIGLE. The case status is Pending - Other Pending.
Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****7057

  • Filing Date:

    12/18/2017

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Property - Other Real Property

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judge

LAURA A. SEIGLE

 

Party Details

Plaintiff

ROSE DIPLOMAT LLC

Defendants

WEAMER RAYMOND

PAINE FRANKLIN

WEAMER JOAN

HANOVER PAMELA M.

NELSON MARY

STRATTON DONALD

FRITZ JULIANNA PAINE

PAINE EMILY

STRATTON CHRISTINE

CRESTA PROPERTIES LLC

PARKER MARGARET

HANOVER PATRICIA

BANNING WILLIAM L.

BANNING THOMAS JR.

PARKER GARY W.

FORGUES NORAH GAIL

PARKER TERRY R.

Attorney/Law Firm Details

Plaintiff Attorney

ROCHMAN HARVEY L.

Defendant Attorneys

SHAFRON SHELLY JAY ESQ.

HANOVER PAMELA

LEIPZIG SCOTT J. ESQ.

 

Court Documents

Notice of Ruling

5/13/2019: Notice of Ruling

Reply - REPLY BRIEF IN SUPPORT OF PLAINTIFF ROSE DIPLOMAT, LLCS MOTION FOR (1) ATTORNEYS FEES AND COSTS PURSUANT TO COURT ORDER DATED NOVEMBER 23, 2020 AND (2) MONETARY SANCTIONS; SUPPLEMENTAL DECLA

1/5/2021: Reply - REPLY BRIEF IN SUPPORT OF PLAINTIFF ROSE DIPLOMAT, LLCS MOTION FOR (1) ATTORNEYS FEES AND COSTS PURSUANT TO COURT ORDER DATED NOVEMBER 23, 2020 AND (2) MONETARY SANCTIONS; SUPPLEMENTAL DECLA

Objection - OBJECTION TO THE DECLARATIONS OF SHELLY JAY SHAFRON AND PAMELA M. HANOVER IN SUPPORT OF OPPOSITION TO PLAINTIFFS MOTION FOR ATTORNEYS FEES, COSTS, AND SANCTIONS

1/5/2021: Objection - OBJECTION TO THE DECLARATIONS OF SHELLY JAY SHAFRON AND PAMELA M. HANOVER IN SUPPORT OF OPPOSITION TO PLAINTIFFS MOTION FOR ATTORNEYS FEES, COSTS, AND SANCTIONS

Objection - OBJECTION OF DEFENDANTS AND THEIR COUNSEL TO PROPOSED ORDER

1/7/2021: Objection - OBJECTION OF DEFENDANTS AND THEIR COUNSEL TO PROPOSED ORDER

Certificate of Mailing for - CERTIFICATE OF MAILING FOR (HEARING ON MOTION FOR ATTORNEY FEES) OF 01/12/2021

1/12/2021: Certificate of Mailing for - CERTIFICATE OF MAILING FOR (HEARING ON MOTION FOR ATTORNEY FEES) OF 01/12/2021

Minute Order - MINUTE ORDER (HEARING ON MOTION FOR ATTORNEY FEES)

1/12/2021: Minute Order - MINUTE ORDER (HEARING ON MOTION FOR ATTORNEY FEES)

Order Appointing Court Approved Reporter as Official Reporter Pro Tempore - ORDER APPOINTING COURT APPROVED REPORTER AS OFFICIAL REPORTER PRO TEMPORE (KEVIN ANDREW ROLDAN, CSR #13463)

1/12/2021: Order Appointing Court Approved Reporter as Official Reporter Pro Tempore - ORDER APPOINTING COURT APPROVED REPORTER AS OFFICIAL REPORTER PRO TEMPORE (KEVIN ANDREW ROLDAN, CSR #13463)

Notice of Ruling

1/19/2021: Notice of Ruling

Notice - NOTICE OF WITHDRAWAL OF ATTORNEY OF RECORD

3/3/2021: Notice - NOTICE OF WITHDRAWAL OF ATTORNEY OF RECORD

Motion for Attorney Fees

12/17/2020: Motion for Attorney Fees

Declaration - DECLARATION DECLARATION OF SHELLY JAY SHAFRON IN SUPPORT OF OPPOSITION TO MOTION FOR ATTORNEYS FEES, COSTS AND SANCTIONS

12/28/2020: Declaration - DECLARATION DECLARATION OF SHELLY JAY SHAFRON IN SUPPORT OF OPPOSITION TO MOTION FOR ATTORNEYS FEES, COSTS AND SANCTIONS

Opposition - OPPOSITION OPPOSITION OF DEFENDANTS TO PLAINTIFF ROSE DIPLOMATS MOTION FOR ATTORNEYS FEES FOR VACATING THE INTERIM AWARD, DECLARATIONS OF PAMELA HANOVER, SHELLY JAY SHAFRON, DAVID GRIBIN

12/28/2020: Opposition - OPPOSITION OPPOSITION OF DEFENDANTS TO PLAINTIFF ROSE DIPLOMATS MOTION FOR ATTORNEYS FEES FOR VACATING THE INTERIM AWARD, DECLARATIONS OF PAMELA HANOVER, SHELLY JAY SHAFRON, DAVID GRIBIN

Objection - OBJECTION OBJECTIONS TO DECLARATION OF HARVEY L. ROCHMAN

12/28/2020: Objection - OBJECTION OBJECTIONS TO DECLARATION OF HARVEY L. ROCHMAN

Declaration - DECLARATION DECLARATION OF PAMELA M. HANOVER IN SUPPORT OF OPPOSITION TO MOTION FOR ATTORNEYS FEES, COSTS AND SANCTIONS

12/28/2020: Declaration - DECLARATION DECLARATION OF PAMELA M. HANOVER IN SUPPORT OF OPPOSITION TO MOTION FOR ATTORNEYS FEES, COSTS AND SANCTIONS

Notice - NOTICE OF INCORPORATION OF DECLARATION OF DAVID GRIBIN IN SUPPORT OF OPPOSITION TO MOTION FOR ATTORNEYS FEES, COSTS AND SANCTIONS

12/29/2020: Notice - NOTICE OF INCORPORATION OF DECLARATION OF DAVID GRIBIN IN SUPPORT OF OPPOSITION TO MOTION FOR ATTORNEYS FEES, COSTS AND SANCTIONS

Reply - REPLY BRIEF IN SUPPORT OF PLAINTIFF ROSE DIPLOMAT, LLCS MOTION TO VACATE ARBITRATION AWARD

11/13/2020: Reply - REPLY BRIEF IN SUPPORT OF PLAINTIFF ROSE DIPLOMAT, LLCS MOTION TO VACATE ARBITRATION AWARD

Minute Order - MINUTE ORDER (HEARING ON MOTION TO VACATE PETITION TO VACATE OR ALTER ARBIT...)

11/23/2020: Minute Order - MINUTE ORDER (HEARING ON MOTION TO VACATE PETITION TO VACATE OR ALTER ARBIT...)

Certificate of Mailing for - CERTIFICATE OF MAILING FOR (HEARING ON MOTION TO VACATE PETITION TO VACATE OR ALTER ARBIT...) OF 11/23/2020

11/23/2020: Certificate of Mailing for - CERTIFICATE OF MAILING FOR (HEARING ON MOTION TO VACATE PETITION TO VACATE OR ALTER ARBIT...) OF 11/23/2020

162 More Documents Available

 

Docket Entries

  • 05/18/2021
  • Hearing05/18/2021 at 08:30 AM in Department 48 at 111 North Hill Street, Los Angeles, CA 90012; Status Conference

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  • 03/03/2021
  • DocketNotice (of Withdrawal of Attorney of Record); Filed by Mary Nelsen Erroneously Sued As Mary Nelson (Defendant)

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  • 01/20/2021
  • Docketat 08:30 AM in Department 48, Laura A. Seigle, Presiding; Status Conference (ReArbitration) - Not Held - Continued - Court's Motion

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  • 01/19/2021
  • DocketNotice of Ruling; Filed by Rose Diplomat, LLC (Plaintiff)

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  • 01/12/2021
  • Docketat 08:30 AM in Department 48, Laura A. Seigle, Presiding; Hearing on Motion for Attorney Fees - Held - Motion Granted

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  • 01/12/2021
  • DocketCertificate of Mailing for ((Hearing on Motion for Attorney Fees) of 01/12/2021); Filed by Clerk

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  • 01/12/2021
  • DocketOrder Appointing Court Approved Reporter as Official Reporter Pro Tempore ((Kevin Andrew Roldan, CSR #13463)); Filed by Rose Diplomat, LLC (Plaintiff)

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  • 01/12/2021
  • DocketMinute Order ( (Hearing on Motion for Attorney Fees)); Filed by Clerk

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  • 01/07/2021
  • DocketObjection (of Defendants and Their Counsel to Proposed Order); Filed by Mary Nelsen Erroneously Sued As Mary Nelson (Defendant)

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  • 01/05/2021
  • DocketReply (BRIEF IN SUPPORT OF PLAINTIFF ROSE DIPLOMAT, LLC?S MOTION FOR (1) ATTORNEYS? FEES AND COSTS PURSUANT TO COURT ORDER DATED NOVEMBER 23, 2020 AND (2) MONETARY SANCTIONS; SUPPLEMENTAL DECLARATION OF HARVEY L. ROCHMAN IN SUPPORT THEREOF); Filed by Rose Diplomat, LLC (Plaintiff)

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219 More Docket Entries
  • 01/05/2018
  • DocketFirst Amended Complaint; Filed by Rose Diplomat, LLC (Plaintiff)

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  • 01/05/2018
  • DocketSummons; Filed by Rose Diplomat, LLC (Plaintiff)

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  • 01/02/2018
  • DocketNOTICE OF CASE MANAGEMENT CONFERENCE

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  • 01/02/2018
  • DocketNotice of Case Management Conference; Filed by Clerk

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  • 12/21/2017
  • DocketNOTICE OF PENDENCY OF ACTION (LIS PENDENS)

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  • 12/21/2017
  • DocketNotice; Filed by Rose Diplomat, LLC (Plaintiff)

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  • 12/20/2017
  • DocketSUMMONS

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  • 12/20/2017
  • DocketSummons; Filed by Rose Diplomat, LLC (Plaintiff)

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  • 12/18/2017
  • DocketCOMPLAINT FOR DECLARATORY RELIEF

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  • 12/18/2017
  • DocketComplaint; Filed by Rose Diplomat, LLC (Plaintiff)

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Tentative Rulings

Case Number: ****7057 Hearing Date: January 19, 2022 Dept: 48

[TENTATIVE] ORDER RE: MOTION FOR CLARIFICATION OF ORDER

On December 18, 2017, Plaintiff Rose Diplomat, LLC (“Plaintiff”) filed this action against Defendants Mary Nelsen, Emily Paine, Franklin Paine, Julianna Paine Fritz, Donald Stratton, Christine Stratton, Raymond Weamer, Joan Weamer, Pamela Hanover, Thomas Banning, Jr., William L. Banning, Patricia Hanover, Margaret Parker, Norah Gail Forgues, Terry R. Parker, and Gary W. Parker (collectively, “Defendants”) regarding rent readjustment to be determined by three appraisers.

On April 29, 2019, the Court granted in part and denied in part Plaintiff’s motion for summary adjudication. The Court ruled in part that under the arbitration agreement, the Court had the jurisdiction to resolve the question of law presented, and “the arbitrators’ valuation is to take into consideration the applicable ordinances and statutes which might proscribe or render financially unfeasible a change of use of the property, including the current zoning of the leased property as well as the current rent control laws impacting any redevelopment of the property to its highest and best use and any other legal impediments to future development.” (April 29, 2019 minute order at pp. 2-3.)

On June 5, 2019, the Court granted Plaintiff’s motion to compel arbitration. On October 22, 2020, Plaintiff filed a motion to vacate the arbitration award based on alleged undisclosed conflicts and ex parte communications. On November 23, 2020, the Court granted the motion, vacated the interim arbitration award, and ordered the parties to arbitrate this matter before a new panel. The parties conducted a new arbitration in October 2021, and the arbitrator issued an interim award on November 29, 2021. The interim award stated the market value of the land was $9,975,000 before deducting $1,790,000 relating to the removal of existing tenants, for a final evaluation of $8,185,000. (Motion, Ex. 13 at pp. 6, 8.)

On December 21, 2021, Defendants filed a motion for clarification of the Court’s April 29, 2019 ruling on Plaintiff’s motion for summary adjudication. Defendants state they do not move for reconsideration but rather seek clarification under the Court’s power “[t]o amend and control its process and orders so as to make them conform to law and justice.” (Motion at pp. 16-17; Code Civ. Proc., 128, subd. (a)(8).) Defendants want the Court “to clarify [the ruling] and, in particular, to say whether the Ruling was, or was not, intended to require the Arbitrator to do what he did, which was value the Land as it actually was on July 1, 2019 – i.e., as improved with 118 Units with tenants occupying the Units – as opposed to unimproved and vacant, which by its very nature precludes a reduction for the costs of : (1) removing the tenants; and (2) any loss of income during the eviction process.” (Motion at p. 18.)

As an initial matter, generally one trial judge cannot change the ruling of another trial judge, even if the original decision was wrong. “‘For one superior court judge, no matter how well intended, even if correct as a matter of law, to nullify a duly made, erroneous ruling of another superior court judge places the second judge in the role of a one-judge appellate court.’ [Citation.]” (Marriage of Oliverez (2015) 238 Cal.App.4th 1242, 1248.) Here, a different trial judge made the April 29, 2019 ruling. Defendants do not cite legal authority allowing a new trial judge to clarify or modify the prior trial judge’s summary adjudication ruling.

Defendants argue this Court can clarify the April 29, 2019 ruling pursuant to Code of Civil Procedure section 128, subdivision (a)(8), which gives a court the power “[t]o amend and control its process and orders so as to make them conform to law and justice.” (Motion at p. 16.) Defendants cite Chinn v. KMR Property Management (2008) 166 Cal.App.4th 175, Garriott Crop Dusting Co. v. Superior Court (1990) 221 Cal.App.3d 783, Bobele v. Superior Court (1988) 199 Cal.App.3d 708. Those cases do not mention section 128 and do not make any holdings or discuss any law about modifying or amending orders.

Defendants also cite Bernstein v. Consolidated American Ins. Co. (1995) 37 Cal.App.4th 763. There the trial court, in denying a motion for summary adjudication, did not comply with Code of Civil Procedure section 437c, subdivision (g) and therefore, in response to a motion for clarification, issued a memorandum of decision granting the motion. (Id. at pp. 773-774.) This was appropriate because the denial of summary adjudication was deficient, and the court had the power to change its erroneous decision. (Id. at p. 774.) Here, the prior trial judge complied with section 437c and stated the basis for the April 29, 2019 ruling. And, as noted above, even if the April 29, 2019 ruling is wrong, Defendants do not cite legal authority allowing a new trial judge to revise a different trial judge’s decision.

Defendants cite Lopez v. Larson (1979) 91 Cal.App.3d 383, where the trial court denied a motion to dismiss the action for failure to prosecute and then clarified it had intended the denial to be without prejudice. (Id. at p. 391.) Here, this Court cannot say what a different trial court intended almost three years ago in issuing the April 29, 2019 except by pointing to the language of the April 29, 2019 ruling. This Court cannot assume the prior trial court intended something other than what the April 29, 2019 ruling expressly states. If Defendants believed the April 29, 2019 ruling did not adequately express that trial court’s intent, they should have raised the issue immediately after the ruling so that trial court could adequately express the intended ruling. In effect, by asking this trial court to determine the prior trial court’s intent in issuing the April 29, 2019 ruling, Defendants would require this trial court to redecide the motion for summary adjudication, which it does not have the authority to do.

Further, Defendants do not ask that any particular vague or missing language in the April 29, 2019 ruling be clarified, as in Lopez. Rather, they want this Court to say the arbitrator got it wrong. Defendants state, “The Arbitrator’s conclusion is expressly based on his erroneous understanding . . .” (Motion at p. 6), the arbitrator “seriously misconstrued the Ruling” (Motion at p. 19), “The Arbitrator Seriously Misconstrued And Misapplied the Ruling,” (Reply at p. 6), and “the Arbitrator seriously misconstrued the Ruling.” (Reply at p. 7.) Defendants want the Court to “direct the Arbitrator to deduct from the value of the Land the cost of relocation payments to the tenants residing at the Land on July 1, 2019, and loss of operating income during the eviction process.” (Motion at p. 20.)

“[I]t is the general rule that, with narrow exceptions, an arbitrator’s decision cannot be reviewed for errors of fact or law.” (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 11.) “Courts do not review the validity of an arbitrator’s reasoning, and while Code of Civil Procedure sections 1286.2 and 1286.6 set forth grounds for vacating or correcting an arbitration award, ‘ “[an] error of law is not one of those grounds.” [Citation.]’ [Citation.]” (Bacall v. Shumway (2021) 61 Cal.App.5th 950, 957.) Defendants have not stated any legal authority allowing this Court to review the arbitrator’s decision for errors or wrongful reasoning. Defendants do not cite any legal authority allowing a court to determine that an arbitrator misapplied the law or facts or for a court to tell the arbitrator to change his decision.

Accordingly, the motion for clarification is DENIED.

Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. Parties intending to appear are STRONGLY encouraged to appear remotely.



Case Number: ****7057    Hearing Date: January 12, 2021    Dept: 48

[TENTATIVE] ORDER RE: MOTION FOR ATTORNEY FEES AND COSTS; MONETARY SANCTIONS

On December 18, 2017, Plaintiff Rose Diplomat, LLC (“Plaintiff”) filed this action against Defendants Mary Nelsen, Emily Paine, Franklin Paine, Julianna Paine Fritz, Donald Stratton, Christine Stratton, Raymond Weamer, Joan Weamer, Pamela Hanover, Thomas Banning, Jr., William L. Banning, Patricia Hanover, Margaret Parker, Norah Gail Forgues, Terry R. Parker, and Gary W. Parker (collectively, “Defendants”) regarding rent readjustment to be determined by three appraisers pursuant to the rules of the American Arbitration Association (“AAA”). The parties conducted the arbitration, and the arbitrators issued an award. Plaintiff then filed a motion to vacate the arbitration award based on alleged misconduct by one of the three arbitrators.

On November 23, 2020, the Court granted the motion, vacated the interim arbitration award, and ordered the parties to arbitrate this matter before a new panel. The Court also awarded Plaintiff its costs and contractual attorney fees incurred in connection with the motion to vacate the arbitration award, subject to the filing of a noticed fee motion. (Code Civ. Proc., ; 1293.2.) On December 17, 2020, Plaintiff filed this motion for attorney fees and monetary sanctions.

The Court does not rule on Defendants’ objections to the Rochman Declaration and Plaintiff’s objections to the Shafron and Hanover Declarations, as the material objected to is not relevant to this decision.

Plaintiff requests a total of $667,991.47 in fees and costs, consisting of (1) $425,046.15 in attorney fees; $26,955.31 in costs; $125,818.75 in expert fees; and $63,171.26 in neutral compensation and AAA expenses. (Motion at p. 8.) These fees and costs represent work done since January 2020 in connection with the first arbitration, as well as fees and costs incurred in connection with the motion to vacate the arbitration award. (Id. at ¶ 7; Rochman Decl. ¶¶ 18-22 & Ex. D.) Plaintiff also requests an additional $43,936.20 in attorney fees for this motion. (Reply at p. 10; Rochman Suppl. Decl. ¶ 6.)

Code of Civil Procedure section 1293.2 states, “The court shall award costs upon any judicial proceeding under this title as provided in Chapter 6 (commencing with Section 1021) of Title 14 of Part 2 of this code.” (Code Civ. Proc., ; 1293.2.) The referenced “judicial proceedings” include a motion to vacate an arbitration award. (Corona v. Amherst Partners (2003) 107 Cal.App.4th 701, 707.) “The award of costs pursuant to section 1293.2, including attorney fees when authorized by contract, is mandatory.” (Marcus & Millichap Real Estate Investment Brokerage Co. v. Woodman Investment Group (2005) 129 Cal.App.4th 508, 513.)

Plaintiff argues that the Court’s ability to award fees and costs under section 1293.2 includes not only fees and costs in post-arbitration judicial proceedings, but also fees and costs incurred during the arbitration. There are at least three problems with this argument.

First, section 1293.2 does not state that a court has the authority to award fees and costs incurred during the arbitration. By its own terms, the statute refers to an award of costs “upon any judicial proceeding.” An arbitration is not a judicial proceed. If the legislature had intended to give a court the authority under this statute to award fees and costs incurred during the arbitration, it would have stated so. (Austin v. Allstate Ins. Co. (1993) 16 Cal.App.4th 1812, 1815-1816 [“It is apparent that the Legislature has distinguished between costs incurred in an arbitration proceeding and costs incurred in superior court to enforce an arbitration award, allowing costs to the prevailing party only in the latter”].)

Second, an award of attorney fees and costs incurred in the arbitration depends on the contents of the arbitration agreement and the disputes the parties submit to arbitration. (Corona v. Amherst Partners (2003) 107 Cal.App.4th 701, 705 [“Where parties have agreed to submit their dispute to private arbitration, scope of the arbitration and the powers of the arbitrator are defined in accordance with the agreement”].) “Although the parties, by agreement, can certainly exclude specific questions from arbitration, in the absence of such restriction an arbitrator has the power to decide the submitted matter on any legal or factual basis, whether or not any party has relied upon that particular basis.” (Moshono v. Walsh (2000) 22 Cal.4th 771, 777.) If the parties’ arbitration agreement does not exclude the question of attorney fees from arbitration, then the arbitrator’s decision about awarding fees based on the arbitrator’s interpretation of the parties’ agreement is not subject to correction by the court. (Id. at p. 778; see also Corona, supra, 107 Cal.App.4th at p. 706 [“because the parties’ stipulation did not limit the issues to be resolved through arbitration, the issue of [a party’s] entitlement to attorney fees and costs, as requested in his complaint, was subject to determination in arbitration proceeds”].) When the parties have agreed their dispute will be resolved by arbitration, the parties cannot “recover an award of fees and costs incurred in the arbitration in the judicial proceedings that followed the arbitration.” (Corona, supra, 107 Cal.App.4th at pp. 706-707.)

Plaintiff contends the arbitration agreement “only provides that the appraised value of the Property is to be arbitrated, nothing else.” (Reply at p. 6 n.3.) That conclusion is not readily apparent. The parties’ agreement states that if the parties cannot agree on the value of the premises, “the value shall be determined by arbitration.” (Lease at p. 23.) “In the event that it becomes necessary by the terms of this lease to make any determination by arbitration or in the event that any controversy arises between the Landlord and the Tenant which by the terms of this lease is to be determined by arbitration, then the same shall . . . be referred for decision by arbitration.” (Lease at p. 24.) The attorney fees provision states, “In the event that either party to the herein lease shall institute and prevail in any action or suit for the enforcement of any of its rights hereto, the party not prevailing will pay to the prevailing party a reasonable attorney fee on account thereof.” (Lease a p. 28.) Here, the parties apparently interpreted these provisions to include the prevailing party’s fees as a matter submitted to the arbitrators because they filed fee applications with the arbitrators. (Rochman Decl., ¶ 13.) Indeed, Plaintiff learned the basis for its motion to vacate the arbitration award when Plaintiff saw Defendants’ time entries in Defendants’ fee application to the arbitrators. (Ibid.) If the parties had not intended to submit the issue of prevailing party fees to the arbitrators, they would not have submitted the fee applications in the arbitration. Therefore, the Court cannot conclude that it, rather than the arbitrators, has the authority to award fees and costs incurred during the arbitration.

Third, the arbitration is not yet completed. The Court vacated the arbitration award and ordered the parties back to arbitration. Therefore there is not yet a prevailing party in the arbitration on the issue of the value of the premises.

All that being said, Plaintiff is entitled to an award under section 1293.2 for the fees and costs incurred in making the motion to vacate. But Plaintiff did not break out the amount of fees and costs incurred for the motion to vacate. Therefore, the Court calculated the amount from Plaintiff’s billing records. Plaintiff filed the motion to vacate on October 22, 2020, and based on the billing records, Plaintiff’s counsel started working on the motion on October 10, 2020. The entries from that date through November 23, 2020 show approximately $45,381 in fees billed in connection with the motion to vacate. The motion, reply, and accompanying papers were lengthy, detailed, and well-argued and researched. The Court finds the time billed was reasonable.

Defendant argues that Plaintiff’s attorneys’ rates are too high and need to be discounted by a third. Defendant cites no evidentiary basis for this assertion. Based on the evidence presented by Plaintiff’s counsel and the 10% discount applied to the bills, the Court finds the rates are reasonable given Plaintiff’s counsel’s background and expertise and the complicated and specialized issues in dispute.

Plaintiff’s list of costs shows approximately $1,000.00 in costs billed during this time, but because the list includes little if any description of the costs, the Court cannot identify if the costs are allowable. The parties’ agreement contains a provision awarding the prevailing party attorney fees, but does not mention costs. (Lease at p. 28.) Therefore, Plaintiff is limited to its statutory costs. Plaintiff did not show which costs are allowable under Code of Civil Procedure section 1033.5.

Accordingly, the Court awards $45,381.00 to Plaintiff for fees incurred in making the motion to vacate.

Plaintiff also requests that the fees and costs be awarded as sanctions under Code of Civil Procedure section 128.5 due to Defendants’ misconduct in the first arbitration, arguing that Plaintiff now has to pay twice for the same arbitration. (Motion at pp. 10, .) “A trial court may order a party, the party’s attorney, or both, to pay the reasonable expenses, including attorney’s fees, incurred by another party as a result of actions or tactics, made in bad faith, that are frivolous or solely intended to cause unnecessary delay.” (Code Civ. Proc., ; 128.5, subd. (a).) “ ‘Frivolous’ means totally and completely without merit or for the sole purpose of harassing an opposing party.” (Code Civ. Proc., ; 128.5, subd. (b)(2).)

In its order granting the motion to vacate, the Court concluded that one of the arbitrators had not disclosed grounds for disqualification. Those ground were accepting employment on other matters with defense counsel’s firm while the arbitration was pending without disclosing the financial relationship, as well as ex parte communications between defense counsel and the arbitrator, which the arbitrator did not disclose.

The arbitrator’s accepting of employment on other matters with defense counsel’s firm and then not disclosing those matters was not conduct by Defendants or defense counsel done in bad faith that was frivolous or solely intended to cause unnecessary delay. The defense counsel’s ex parte communications were not done solely to cause unnecessary delay, and the arbitrator’s failure to disclose the communications was not an act of defense counsel or Defendants. Therefore, to support sanctions, defense counsel must have made the ex parte communications in bad faith and they must be frivolous. As detailed in the November 23, 2020 order, some of the ex parte communications were administrative matters (e.g., setting the time and place of hearings). There is no evidence defense counsel made those communications in bad faith or that they were frivolous. Defense counsel also sent a list of substantive questions to the arbitrator to ask during the hearing, which was improper, and the arbitrator failed to disclose this substantive communication.

This improper ex parte communication was not similar to the situation in Sherman v. Kinetic Concepts, Inc. (1998) 67 Cal.App.4th 1152, where the defense counsel intentionally concealed material information in discovery and in the testimony of its corporate witnesses, depriving the plaintiffs of their ability to obtain evidence for trial. (Id. at p. 1162.) Here, defense counsel did not conceal material information in discovery. The problem with the ex parte communication was not that it concealed material evidence that would have helped Plaintiff prove its case. Rather, the list of questions to ask during the arbitration raised questions about the arbitrator’s impartiality. Nor did Plaintiff submit evidence that defense counsel acted in bad faith in sending the list. Defense counsel admits he made a mistake, but not every mistake is done in bad faith.

In sum, there were multiple reasons necessitating vacation of the arbitration award, most of which were the fault of the arbitrator, not acts of defense counsel. Also, it is not correct to say that all of the fees incurred in the first arbitration were for naught. For example, the discovery, preparation for the arbitration hearing, and testimony from the first arbitration will be useful in the second arbitration. If Plaintiff is ultimately the prevailing party, Plaintiff will be able to recover its reasonable fees incurred in the arbitration under the parties’ agreement. Therefore, the request for sanctions under section 128.5 is denied.

Accordingly, Plaintiff’s motion for attorney fees and costs is GRANTED IN PART, in the amount of $45,381.00 in fees.

Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. Parties intending to appear are STRONGLY encouraged to appear remotely.



Case Number: ****7057    Hearing Date: November 23, 2020    Dept: 48

[TENTATIVE] ORDER RE: MOTION TO VACATE ARBITRATION AWARD

On December 18, 2017, Plaintiff Rose Diplomat, LLC (“Plaintiff”) filed this action against Defendants Mary Nelsen, Emily Paine, Franklin Paine, Julianna Paine Fritz, Donald Stratton, Christine Stratton, Raymond Weamer, Joan Weamer, Pamela Hanover, Thomas Banning, Jr., William L. Banning, Patricia Hanover, Margaret Parker, Norah Gail Forgues, Terry R. Parker, and Gary W. Parker (collectively, “Defendants”) regarding rent readjustment to be determined by three appraisers pursuant to the rules of the American Arbitration Association (“AAA”). The parties conducted the arbitration. Plaintiff then filed this motion to vacate the arbitration award based on alleged misconduct by one of the three arbitrators.

BACKGROUND FACTS

On January 22, 2018, a representative of AAA notified the parties that David Gribin was invited to serve as a neutral in the matter. (Rochman Decl., Ex. 2.) On January 25, 2018, the parties received a Notice of Appointment directed to Gribin and containing his disclosures and sworn oath. (Rochman Decl. ¶ 6, Ex. 3.) The Notice of Appointment stated he had a continuing obligation to disclose past or present relationships with the parties or counsel. Gribin accepted the appointment.

On March 9, 2018, the parties agreed to stay the arbitration until the Court decided the governing method of appraisal. (Rochman Decl. ¶ 7, Ex. 4.) On April 29, 2019, the Court granted Plaintiff’s motion for summary adjudication and concluded that Humphries Investments, Inc. v. Walsh (1988) 202 Cal.App.3d 766 controlled the appraisal. On June 5, 2019, the Court granted Plaintiff’s motion to compel arbitration, ordered Plaintiff and Defendants to resume arbitration, and stayed the action pending the completion of arbitration.

During this time, from January 12, 2018 through October 7, 2019, Shelly Jay Shafron, counsel for Defendants, communicated with Gribin via telephone and email regarding Gribin’s acceptance of the arbitration position and the selection of other arbitrators. (Shafron Decl. ¶ 5 and Ex. 10; Defendants’ Compendium of Exhibits, Ex. 2 at pp. 1-2.) Shafron sent lease papers to Gribin on February 22, 2018. (Defendants’ Compendium of Exhibits, Ex. 2 at p. 1.) Also, in October 2019, Shafron’s firm retained Gribin’s appraisal firm to determine the fair market value of a property on Fountain Avenue. (Gribin Decl. ¶ 9.) Shafron’s client paid Gribin’s firm $2,500.00, of which Gribin received $362.50. (Id. at ¶ 10.)

On January 7, 2020, AAA issued a Report of Preliminary Hearing and Scheduling Order that included the provision, “There will be no ex-parte communications with the arbitrator.” (Rochman Decl., Ex. 8.)

On January 21, 2020 and May 22, 2020, Shafron spoke with Gribin about the status of arbitration and a forthcoming decision about whether experts could testify and provide reports. (Shafron Decl. ¶ 6, Ex. 10; Defendants’ Compendium of Exhibits, Ex. 2 at p. 3.)

In April 2020, Shafron’s firm retained Gribin to be the sole arbitrator for a determination of fair market rental value of a dental space at 3000 Whittier Boulevard. (Gribin Decl. ¶¶ 6-7.) Shafron’s client paid Gribin’s firm $2,500.00, of which Gribin received $812.50. (Id. at ¶ 7.)

On July 14, 2020, Shafron sent an email to Gribin with a copy of Defendants’ arbitration brief. (Rochman Decl., Exs. 12 [Exhibit 6], 13.)

On July 17, 2020, Shafron sent an email to Gribin stating, “Pursuant to our conversation, attached please find a list of questions for the arbitration panel.” On July 20, 2020, Shafron sent another email to Gribin with a corrected list of questions. The attachments contained substantive questions for the arbitrators to ask about the issues in dispute. (Rochman Decl., Ex. 12 [Exhibits 7, 7A]; Defendants’ Compendium of Exhibits, Ex. 2 at p. 3.)

The arbitration hearing was conducted on July 27-29, 2020, and AAA served an interim award on September 9, 2020. (Rochman Decl. ¶¶ 13-14 & Ex. 9.) On September 21, 2020, the parties filed applications for attorney fees before the issuance of a final award. (Id. at ¶ 15.) Through Defendants’ application, Plaintiff learned of Shafron’s ex parte communications with Gribin. (Id. at ¶ 15.) Plaintiff informed AAA, and Defendants submitted a response and evidence to AAA. (Id. at ¶¶ 15-17.) On October 2, 2020, AAA gave the parties Gribin’s supplemental disclosures, which contained information about Gribin’s two appraisals for Shafron’s firm and a few of the ex parte communications. (Id. at ¶ 18 & Ex. 13.) Plaintiff objected, and on October 9, 2020, AAA informed that parties that it had removed Gribin as an arbitrator. (Id. at ¶¶ 19-20 & Exs. 14-15.) AAA stated that pursuant to Rule 20 regarding vacancies, the remaining arbitrators would proceed with the determination of attorney fees and costs. (Id., Ex. 15.) Plaintiff objected to this process. (Id., Ex. 16.)

On October 22, 2020, Plaintiff filed this motion to vacate the arbitration award. On October 28, 2020, the remaining panel stayed the arbitration matter pending this Court’s decision. (Defendants’ Compendium of Exhibits, Ex. 18.)

DISCUSSION

The Court shall vacate an arbitration award if an arbitrator making the award “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)(6).) A proposed arbitrator must disclose “all matters that could cause a person aware of the facts to reasonably entertain a doubt that the proposed neutral arbitrator would be able to be impartial,” including “[a]ny matters required to be disclosed by the ethics standards for neutral arbitrators adopted by the Judicial Council pursuant to this chapter.” (Code Civ. Proc., ; 1281.9, subd (a)(2).)

Under the Judicial Council’s Ethics Standards for Neutral Arbitrators in Contractual Arbitration, “[a] proposed arbitrator or arbitrator must disclose all matters that could cause a person aware of the facts to reasonably entertain a doubt that the arbitrator would be able to be impartial, including, but not limited to . . . [if the] arbitrator or a member of the arbitrator’s immediate family is or, within the preceding two years, was an employee of or an expert witness or a consultant for a party or for a lawyer in the arbitration . . . [a]ny other professional relationship not already disclosed under [prior sections] that the arbitrator or a member of the arbitrator’s immediate family has or has had with a party or lawyer for a party,” and any other matter that “[m]ight cause a person aware of the facts to reasonably entertain a doubt that the arbitrator would be able to be impartial.” (California Rules of Court, Ethics Standards for Neutral Arbitrators, Standard 7(d)(8), (d)(9), (d)(15).) This duty to disclose is a continuing duty from service of the notice of the arbitrator’s proposed nomination or appointment until the conclusion of the arbitration proceeding. (California Rules of Court, Ethics Standards for Neutral Arbitrators, Standard 7(f).) An arbitrator must disclose any matters within 10 calendar days after he becomes aware of the matter. (Id., Standard 7(c)(2).) Additionally, “[f]rom the time of appointment until the conclusion of the arbitration, an arbitrator must not entertain or accept any offers of employment or new professional relationships as a lawyer, an expert witness, or a consultant from a party or a lawyer for a party in the pending arbitration.” (Id., Standard 12(a).)

Plaintiff contends that Gribin violated ethical standards: (1) by accepting employment with Shafron’s firm during the time the arbitration was pending; (2) not disclosing his financial relationship with Shafron’s firm; and (3) conducing ex parte communications with Shafron, including emails about questions for the hearing, and not disclosing the communications. (Motion at pp. 10-11.)

Defendants do not deny these events. Instead, Defendants first argue that the remaining arbitrators have the jurisdiction to decide if the interim award should be vacated and how to proceed, pursuant to AAA Rules 7(a) and 20. (Opposition at p. 8.) AAA Rules 7(a) and 20 do not address vacating arbitration awards and do not state that the remaining arbitrators rather than the court decides whether to vacate. Codes of Civil Procedure section 1286.2, subdivision (a) (6)expressly states that “the court shall vacate the award if the court determines” an arbitrator failed to make required disclosures. Defendants cite no law that Rules 7(a) and 20 supersede section 1286.2.

Next Defendants argue Gribin did not have actual awareness that he was required to disclose what Defendants describe as minor involvement in the unrelated projects with minimal indirect compensation. (Opposition at p. 10.) That is not the standard. “A proposed neutral arbitrator must timely disclose to the parties ‘all matters that could cause a person aware of the facts to reasonably entertain a doubt that the proposed neutral arbitrator would be able to be impartial,’ including, without limitation, specified information.” (Mt. Holyoke Homes, L.P. v. Jeffer Mangels Butler & Mitchell, LLP (2013) 219 Cal.App.4th 1299, 1310.) The Notice of Appointment informed him of his continuing disclosure obligation and attached sections of the Ethics Standards for Neutral Arbitrators (including sections 7 and 12). (Rochman Decl., Ex. 3.) In his disclosures, Gribin circled “No” in response to the question, “While the instant arbitration is pending, will you entertain offers of employment or new professional relationships in any capacity other than as a lawyer, expert witness, or consultant from a party or a lawyer for a party, including offers to serve as a dispute resolution neutral in another case?” (Ibid.) Thereafter Gribin accept an offer from Shafron’s firm to serve as an arbitrator in another case, which he did not disclose.

Defendants argue that Gribin’s business relationships were not significant enough to disclose. (Opposition at p. 11.) Defendants’ cases do not support their position. In Casden Park La Brea Retail LLC v. Ross Dress for Less, Inc. (2008) 162 Cal.App.4th 468, an arbitrator’s $500.00 donation to the 2001 political campaign of the defendant’s party arbitrator did not require disclosure during a 2005 arbitration proceeding. (Id. at pp. 474, 477.) The arbitrator also had no duty to disclose his employer’s dealings with the other arbitrator because he had “no pecuniary interest in profits generated by his employer’s business relationship with a party or a party’s representative.” (Id. at p. 478.) In Michael v. Aetna Life & Cas. Ins. Co. (2001) 88 Cal.App.4th 925, the appraiser did not know that the defendant was the source of funds for his services in another matter. (Id. at pp. 941.) In Howev Guseinov v. Burns (2006) 145 Cal.App.4th 944, the arbitrator was not required to disclose that he previously served as a volunteer mediator in another unrelated matter in which the plaintiff’s counsel represented someone else. (Id. at p. 958.) In Ray Wilson Co. v. Anaheim Memorial Hospital Assn. (1985) 166 Cal.App.3d 1081, the defendant objected to the arbitrator due to the arbitrator’s disclosed relationship with the plaintiff’s subcontractor. (Id. at pp. 1086-1087.) The arbitrator remained on the panel, but the court later granted the defendant’s motion to vacate the award. (Id. at pp. 10-84-1085.) The appellate court reversed and found that an acquaintance relationship between an arbitrator and a party did not require vacating the award and membership in the same professional organization was not a credible basis for inferring bias. (Id. at pp. 1087-1088; see San Luis Obispo Bay Properties, Inc. v. Pacific Gas & Elec. Co. (1972) 28 Cal.App.3d 556, 567.) In Comerica Bank v. Howsam (2012) 208 Cal.App.4th 790, the court addressed whether the award should be vacated as secured through corruption, fraud, or other undue means pursuant to section 1286.2, subdivision (a)(1), not due to failure to disclose pursuant to section 1286.2, subdivision (a)(6). (Id. at p 824-825.)

Defendants then argue that the communications with Gribin before the January 7, 2020 Preliminary Hearing Order were harmless and permitted, and later communications were courtesy and administrative matters that did not prejudice Plaintiff. (Opposition at p. 14.) Although some ex parte communications about “administrative matters, such as setting the time and place of hearings or making other arrangements for the conduct of the proceedings” are permitted, the arbitrator must promptly inform the other parties and give them an opportunity to respond. (California Rules of Court, Ethics Standards for Neutral Arbitrators, Standard 14(b).) Even if some of the ex parte communications were purely administrative, Gribin’s failure to disclose them was a violation. Shafron’s list of substantive questions to ask during the arbitration hearing was not purely administrative and is certainly the type of matter that could cause a person to reasonably doubt that the arbitrator would be able to be impartial. (See Code Civ. Proc., ; 1281.9, subd (a)(2).)

Because Gribin did not timely disclose grounds for disqualification and matters required to be disclosed by ethics standards, the interim arbitration award must be vacated. (Code Civ. Proc., ;; 1281.9, subd (a)(2), ; 1286.2, subd. (a)(6).)

Finally, Defendants contend that if the Court vacates the award, the other two arbitrators on the panel should not be prevented from participating in future proceedings because AAA Rule 20 provides for their continued involvement. (Opposition at pp. 5-6, 15.) Upon vacating an award, a court may order rehearing before a new panel. (Code Civ. Proc., ; 1287.) Because the Court cannot determine that Gribin’s potential bias and ex parte communications did not unfairly impact the arbitration proceedings, deliberations with the other arbitrators, and interim award, rehearing before a new panel is appropriate. (Wheeler v. St. Joseph Hospital (1976) 63 Cal.App.3d 345, 372.)

Accordingly, the motion to vacate arbitration award is GRANTED. The interim arbitration award issued on September 9, 2020 is VACATED. Plaintiff and Defendants are ordered to arbitrate this matter before a new panel. The Court sets a status conference re arbitration for January 20, 2021 at 8:30 a.m.

Plaintiff is awarded its costs and contractual attorney fees incurred in connection with this motion, subject to the filing of a noticed fee motion. (Code Civ. Proc., ; 1293.2.)

Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. Parties intending to appear are STRONGLY encouraged to appear remotely.



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