Glidden v. NanoSmart Pharmaceuticals CA4/3 ( 2015 )


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  • Filed 6/25/15 Glidden v. NanoSmart Pharmaceuticals CA4/3
    NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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.
    IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
    FOURTH APPELLATE DISTRICT
    DIVISION THREE
    PAUL F. GLIDDEN,
    Plaintiff and Respondent,                                         G050165
    v.                                                             (Super. Ct. No. 30-2013-00652467)
    NANOSMART PHARMACEUTICALS,                                             OPINION
    INC.,
    Defendant and Appellant.
    Appeal from a judgment of the Superior Court of Orange County,
    Franz E. Miller, Judge. Affirmed. Motion to strike. Granted.
    The Perry Law Firm, Michael R. Perry, Larry M. Roberts and Michelle A.
    Hoskinson for Defendant and Appellant.
    Caldarelli Hejmanowski & Page, David H. Lichtenstein; Calderelli
    Hejmanowski Page & Leer and Marisa Janine-Page for Plaintiff and Respondent.
    *                  *                  *
    INTRODUCTION
    Defendant NanoSmart Pharmaceuticals, Inc. (NanoSmart), appeals from the
    judgment entered after the trial court granted plaintiff Paul F. Glidden’s petition to
    confirm the arbitration award (the petition to confirm). The arbitration concerned
    Glidden’s and NanoSmart’s employment- and intellectual property-related claims against
    each other. NanoSmart opposed the petition to confirm on the grounds the petition was
    prematurely filed and was filed in the wrong trial court. NanoSmart argued that Glidden
    should have filed his petition in a new superior court action instead of filing it in the same
    case in which the prearbitration motions had been filed and resolved. In addition to
    arguments asserted in its opposition to the petition to confirm, in this appeal, NanoSmart
    raises substantive challenges to the arbitration award itself.
    We affirm. The petition to confirm was timely filed 12 days after service of
    the arbitration award, in compliance with Code of Civil Procedure sections 1288 and
    1288.4. (All further statutory references are to the Code of Civil Procedure unless
    otherwise specified.) NanoSmart argues that its request to modify the award submitted to
    the arbitrator altered the statutory timeframe. The arbitrator denied NanoSmart’s
    purported request to modify the award, not on its merits, but on the ground it did not
    constitute a request to modify the award within the meaning of rule R-46 of the
    governing Commercial Arbitration Rules and Mediation Procedures of the American
    Arbitration Association (AAA). Hence, NanoSmart’s submission did not alter the
    requisite statutory timeframe. Even if the petition to confirm had been granted
    prematurely, NanoSmart has failed to explain how it was prejudiced; it never sought a
    continuance of the hearing on the petition to confirm or the opportunity to file a petition
    to modify or vacate the arbitration award in this action, or to present a more substantive
    opposition to the petition to confirm.
    2
    Pursuant to section 1292.6, the petition to confirm was properly filed in the
    same superior court case in which Glidden had filed his prearbitration motions, including
    a motion to compel arbitration regarding his claims against individual defendants.
    NanoSmart has not cited any legal authority showing otherwise.
    In its appellate briefs, NanoSmart argues the arbitrator made legal errors
    and exceeded his authority in rendering the award. NanoSmart did not raise any
    substantive challenges to the arbitrator’s award to the trial court in this case.
    Consequently, none of those challenges is before this court in this appeal. We note that
    after Glidden filed the petition to confirm, and shortly after NanoSmart filed its
    opposition to the petition to confirm in this case, NanoSmart initiated a new lawsuit
    (NanoSmart Pharmaceuticals, Inc. v. Glidden (Super. Ct. Orange County,
    No. 30-2014-00712127)) (the 2014 action), in which it filed a petition to vacate the
    arbitration award. NanoSmart’s petition to vacate the arbitration award in the 2014
    action was based on several substantive challenges to the award itself. The trial court has
    not ruled on the petition to vacate filed in the 2014 action, but instead has stayed the
    proceedings in that case pending resolution of the appeal in this case. The instant action
    and the 2014 action have not been consolidated. Hence, no ruling on the 2014 action by
    a trial court is before us in this appeal.
    BACKGROUND
    I.
    GLIDDEN INITIATES ARBITRATION THROUGH THE AAA PURSUANT TO THE
    ARBITRATION PROVISION CONTAINED IN HIS EMPLOYMENT AGREEMENT.
    In March 2013, Glidden served a demand for arbitration and submitted a
    complaint to the AAA, naming, as defendants, NanoSmart, Target Pharmaceuticals, Inc.,
    James R. Smith, Henry J. Smith, Daniel Thiel, and Sarath Kanekal. The complaint
    alleged that in November 2011, Glidden was hired by NanoSmart to perform
    3
    pharmaceutical-related research and development and that he “imagined, created,
    developed, and invented methods and formulations of nanoparticle-sized emulsion
    delivery systems, including more than 60 methods and formulations of such systems, and
    performed other research and development.”
    The complaint further alleged that in January 2012, Glidden entered into an
    employment agreement with NanoSmart, which NanoSmart later breached. That
    employment agreement included a binding arbitration provision, stating: “Any dispute
    arising under this Agreement will be resolved in the United States by arbitration pursuant
    to the American Arbitration Association and will be governed by the laws of the State of
    California. Any dispute under this Agreement shall be settled by arbitration in Orange
    County, State of California, pursuant to the Commercial Rules, then existing, of the
    American Arbitration Association. The decision of the arbitrator shall be final and
    binding on the parties as to issue of fact, but either party may appeal all issues of law to
    an appropriate court of law.”
    The complaint asserted NanoSmart also engaged in unfair competition and
    violated Labor Code sections 201, 203, 204, 206, 208, 226, 227, 227.3, and 1174. The
    complaint stated that the named defendants breached the implied covenant of good faith
    and fair dealing, and engaged in fraud and deceit. Glidden sought recovery of damages,
    penalties, equitable relief, and declaratory relief.
    In April 2013, the named defendants filed an answering statement and
    counterclaim consisting of claims for breach of contract, fraud, misappropriation, and
    injunctive relief against Glidden. The individual defendants filed an objection to the
    AAA’s jurisdiction because they were not signatories to the arbitration agreement
    between Glidden and NanoSmart. The arbitrator overruled the objection without
    prejudice.
    4
    II.
    GLIDDEN INITIATES THIS ACTION IN THE TRIAL COURT BY FILING A
    PETITION FOR A PRELIMINARY INJUNCTION AND LATER FILES A
    MOTION TO COMPEL INDIVIDUAL DEFENDANTS TO ARBITRATE.
    In May 2013, Glidden initiated this case in the trial court by filing a petition
    for a preliminary injunction. In November 2013, Glidden filed a motion to compel the
    1
    individually named defendants to arbitrate Glidden’s claims against them. The trial
    court in this case denied Glidden’s motion to compel on procedural and substantive
    grounds. Neither the ruling on the petition for a preliminary injunction nor the ruling on
    the motion to compel is before us.
    III.
    THE ARBITRATION AWARD; GLIDDEN FILES THE PETITION TO CONFIRM IN THIS ACTION.
    The arbitration of Glidden’s and NanoSmart’s claims was held on
    November 6, 7, and 12, 2013. The arbitrator’s decision, dated January 21, 2014, was
    served on the parties via e-mail on January 22, 2014. The arbitrator found there was no
    legal or factual basis for retaining jurisdiction over the individually named defendants;
    they were therefore dismissed from the arbitration without prejudice to Glidden’s right to
    pursue any claims he might have against them in another forum.
    The arbitrator found that Glidden and NanoSmart entered into an
    employment agreement in February 2012 and the agreement was terminated on
    December 31, 2012. The arbitrator found that neither party was liable for fraud,
    misrepresentation, or deceit and that NanoSmart did not engage in unlawful, unfair, or
    fraudulent business acts or practices. As to Glidden’s breach of contract claim and
    claims for violations of the Labor Code, the arbitrator found NanoSmart owed Glidden:
    (1) $61,024 for lost wages; (2) a bonus constituting 28,000 shares of NanoSmart common
    1
    Kanekal had been previously dismissed from the action with prejudice by Glidden.
    5
    stock, which the arbitrator valued in the amount of $84,000 as of the date of the
    termination of Glidden’s employment; (3) reimbursement for a hospital bill in the amount
    of $2,814.77; (4) $9,231 for vacation pay; and (5) $20,000 in penalties. The arbitrator
    denied Glidden’s claims for the recovery of an annual bonus and severance pay, and
    rejected his claim that NanoSmart violated the implied covenant of good faith and fair
    dealing.
    The arbitrator also found in favor of Glidden and against NanoSmart on all
    of NanoSmart’s counterclaims. The arbitrator awarded Glidden a total amount of
    $195,513.77, plus interest, for damages, $23,000 for costs, and $210,000 for attorney
    fees. The arbitrator held that AAA’s administrative fees and expenses, totaling $12,200,
    and the compensation and expenses of the arbitrator, totaling $33,525, would be borne by
    NanoSmart.
    On February 3, 2014, Glidden filed the petition to confirm and enter
    judgment upon it in this action. The petition to confirm was verified.
    IV.
    NANOSMART SUBMITS A PURPORTED REQUEST TO MODIFY THE ARBITRATION AWARD
    TO THE AAA, FILES AN OPPOSITION TO THE PETITION TO CONFIRM, AND AFTER THE
    ARBITRATOR REJECTS THE MODIFICATION REQUEST, INITIATES A NEW CASE IN THE
    TRIAL COURT BY FILING A PETITION TO VACATE THE ARBITRATION AWARD.
    On February 10, 2014, NanoSmart submitted to the AAA a request to
    modify the arbitration award. On February 18, NanoSmart filed an opposition to the
    petition to confirm based on the grounds that (1) the petition to confirm was premature
    under sections 1288.4 and 1288.8 because at the time of NanoSmart’s opposition, a
    request to the AAA to modify the award was pending; (2) NanoSmart “reserves its right
    to further challenge the arbitration award” following the arbitrator’s ruling on the request
    to modify the award and NanoSmart has 100 days from the date of the ruling to do so;
    and (3) the petition to confirm filed in this case was “procedurally” improper because this
    6
    action was complete “through the court’s ruling on petitioner’s previous petition for an
    injunction.” (Capitalization, boldface, & underscoring omitted.)
    On March 18, 2014, the arbitrator denied NanoSmart’s request to modify
    the arbitration award because it did not constitute a request to modify the award, stating:
    “[R]espondent’s request to modify the arbitration award was not one to correct any
    clerical, typographical, technical, or computational errors in the award. Accordingly,
    respondent’s request is denied.”
    On March 21, 2014, NanoSmart initiated a new case in the trial court, the
    2014 action, in which it filed a verified petition to vacate the arbitration award. Our
    record does not show that NanoSmart filed a notice of related cases as required by
    2
    rule 3.300 of the California Rules of Court.
    V.
    THE TRIAL COURT GRANTS THE PETITION TO CONFIRM.
    On March 24, 2014, the petition to confirm came on for hearing. At the
    hearing, NanoSmart’s counsel acknowledged that the arbitrator had denied NanoSmart’s
    request for a modification of the award, and stated: “We plan to challenge it going
    forward. And so I just want to point out the validity of the request is not in front of Your
    2
    Rule 3.330(b) of the California Rules of Court states: “Whenever a party in a civil
    action knows or learns that the action or proceeding is related to another action or
    proceeding pending, dismissed, or disposed of by judgment in any state or federal court
    in California, the party must serve and file a Notice of Related Case.” Rule 3.330(a)
    states: “A pending civil case is related to another pending civil case, or to a civil case
    that was dismissed with or without prejudice, or to a civil case that was disposed of by
    judgment, if the cases: [¶] (1) Involve the same parties and are based on the same or
    similar claims; [¶] (2) Arise from the same or substantially identical transactions,
    incidents, or events requiring the determination of the same or substantially identical
    questions of law or fact; [¶] (3) Involve claims against, title to, possession of, or damages
    to the same property; or [¶] (4) Are likely for other reasons to require substantial
    duplication of judicial resources if heard by different judges.”
    7
    Honor.” NanoSmart’s counsel argued that the date of service of the arbitration award, for
    the purpose of calculating timeframes for filing petitions to confirm, correct, or vacate,
    had changed to the date on which the arbitrator denied its request to modify the award.
    NanoSmart’s counsel further argued: “And from that date, we determine when
    subsequent petitions may be filed. [¶] So in this case, Your Honor, the denial order was
    issued on March 18, 2014. This was only six days ago. So we are still premature in
    filing a petition to confirm. The earliest date we could file and serve a petition to confirm
    would be March 28th.” Referencing the petition to vacate the arbitration award that
    NanoSmart had recently filed in the 2014 action, NanoSmart’s counsel stated: “[I]n an
    effort to actually follow the procedural time lines, petitioner NanoSmart waited to file its
    petition to vacate the award. This was just filed on Friday. And we planned to timely
    serve it, utilizing the ten-day rule, waiting until March 28th to complete our filing and
    service of our petition.”
    At no time during the hearing, did NanoSmart ask that the hearing on the
    petition to confirm be continued to enable it to seek leave to file a late petition to modify
    or vacate the award on any grounds, under section 473 or otherwise. At no time did
    NanoSmart assert substantive challenges to the arbitration award in this action or seek the
    opportunity to supplement its opposition to the petition to confirm. At the end of the
    March 24 hearing, the court granted the petition to confirm.
    VI.
    NANOSMART FILED A NOTICED MOTION TO VACATE THE ARBITRATION
    AWARD IN THE 2014 ACTION AND FILED A NOTICE OF APPEAL FROM THE
    ORDER CONFIRMING THE ARBITRATION AWARD IN THIS ACTION.
    On May 1, 2014, NanoSmart filed a noticed motion to vacate the arbitration
    award in the 2014 action. In its motion, NanoSmart argued, inter alia, the arbitrator
    exceeded his powers by arbitrarily remaking the parties’ contract in certain respects, by
    8
    refusing to postpone the hearing upon sufficient cause being shown, by awarding stock
    value unsupported by law or contract, and by awarding Glidden the amount of a hospital
    bill. NanoSmart also argued that the arbitrator lacked due diligence and competence.
    On May 20, 2014, NanoSmart filed a notice of appeal from the trial court’s
    3
    March 24, 2014 order confirming the arbitration award.
    VII.
    THE TRIAL COURT STAYS THE 2014 ACTION, PENDING
    RESOLUTION OF THE APPEAL IN THIS ACTION.
    On June 2, 2014, in the 2014 action, the trial court entertained Glidden’s
    ex parte application seeking relief from his obligation to respond to NanoSmart’s petition
    to vacate the arbitration award. Glidden cited “[j]urisdictional [d]efects,” given the order
    confirming the same arbitration award in the instant case. The court granted the ex parte
    application and stayed the proceedings in the 2014 action, pending the resolution of
    NanoSmart’s appeal in the instant case.
    The trial court explained its ruling as follows: “Nov ’13 arbitration before
    Wenke [(the arbitrator)]; 1/21/14 Wenke issues decision; 2/3/14 Glidden filed petition to
    confirm (652467); 2/10 Nano filed request for modification with Wenke; 2/18 Nano filed
    opposition to petition to confirm; 3/19 Wenke denies request for modification; 3/21 Nano
    files petition to vacate (712127; this case) but did not file notice of related case and did
    not seek to continue hearing on petition to confirm in 652467; 3/24 court grants petition
    to confirm and judgment is entered; 5/13 Glidden files this motion; Nano appeals 652467
    ruling confirming arbitration; court has no jurisdiction to consider petition to vacate
    (712127) after it grants petition to confirm and enters judgment (652467)—there can only
    3
    As discussed post, in June 2014, the trial court entered judgment, in accordance with its
    order granting the petition to confirm, which NanoSmart states was to be effective
    March 24, 2014, nunc pro tunc.
    9
    be one judgment from arbitration proceeding (CCP 1286; petition to vacate was timely in
    the s[e]n[s]e it was filed with[in] 100 days of order denying modification of award but
    not in the sense it was not heard before judgment confirming the award was entered;
    perfecting of appeal stays proceedings ‘embraced in’ or [‘]affected by’ the issue on
    appeal (CCP 916(a)), and a decision on petition to vacate would impact the overall
    effectiveness of the appeal (Varian Med[ical] Syst[em]s[, Inc. v. Delfino (2005)] 35
    C[al.]4[th ]180, 189).”
    VIII.
    THE TRIAL COURT IN THIS ACTION SIGNS AN AMENDED ORDER
    CONFIRMING THE ARBITRATION AWARD AND ENTERS JUDGMENT
    ACCORDINGLY, EFFECTIVE MARCH 24, 2014, NUNC PRO TUNC; THIS
    COURT DENIES NANOSMART’S PETITION FOR WRIT OF SUPERSEDEAS.
    On June 2, 2014, the trial court signed an amended order confirming the
    arbitration award and entered judgment awarding Glidden $433,651.27 together with
    interest at the rate of 10 percent. NanoSmart asserts the judgment, dated June 2, 2014,
    was ordered effective March 24, 2014.
    In June 2014, NanoSmart filed a petition for a writ of supersedeas and
    request for immediate temporary stay of enforcement of the judgment in this case. On
    July 3, 2014, this court summarily denied the petition and request for an immediate
    temporary stay.
    MOTION TO STRIKE AND JUDICIAL NOTICE
    Glidden filed a motion to strike a significant portion of the appellant’s
    appendix (specifically, appellant’s appendix tabs 1 through 7, 9 through 12, 18 through
    32, 36, 38, and 39, and pages 16 through 24 of tab 8), on the ground “these documents
    were never lodged, filed, or considered by the Trial Court” in this case. Glidden has
    moved to strike appellant’s appendix tab 39 on the additional ground it “appears to
    10
    [contain] altered copies of exhibits from the underlying arbitration.” Many of the
    documents that are the subject of Glidden’s motion to strike were those filed in the 2014
    action.
    Pursuant to rule 8.124 of the California Rules of Court, we grant Glidden’s
    motion to strike in its entirety. NanoSmart has failed to show that any of the subject
    documents was part of the trial court record in this case.
    In NanoSmart’s opposition to the motion to strike, it argues that this court
    should take judicial notice of appellant’s appendix tabs 1 through 7 and 9 through 12
    because they are “judicially noticeable” as “each and every exhibit is a record of the
    Court.” Those documents were filed in the 2014 action, not in this case. NanoSmart’s
    request does not comply with rule 8.252(a)(1) of the California Rules of Court, which
    states: “To obtain judicial notice by a reviewing court under Evidence Code section 459,
    a party must serve and file a separate motion with a proposed order.”
    Pursuant to Evidence Code sections 459, subdivision (a) and 452,
    subdivision (d), on our own motion, we take judicial notice of appellant’s appendix tabs 1
    through 7 and 9 through 12, for the purpose of providing additional procedural
    background in the resolution of the issues presented in this appeal.
    DISCUSSION
    NanoSmart argues the judgment entered after the trial court granted the
    petition to confirm should be vacated because (1) the petition to confirm was
    “prematurely granted, which greatly prejudiced NanoSmart, preventing it from having a
    Petition/Motion to Vacate heard”; (2) the petition to confirm was filed in the wrong court;
    and (3) “the resulting judgment is based on an award that is replete with misapplications
    of law, including irrational findings as to provisions of the contract, improper application
    of procedural rules, baseless findings of bad faith, and an irrational award of attorney’s
    fees, to name a few examples.”
    11
    For the reasons we will explain, the petition to confirm was not prematurely
    granted. Even if we were to assume it had been granted prematurely, NanoSmart has
    failed to show it suffered any prejudice as a result. NanoSmart’s opposition to the
    petition to confirm did not include any request to correct, modify, or vacate the award.
    At no time in this action, did NanoSmart request a continuance on the hearing or decision
    of the petition to confirm, or otherwise request the opportunity to file a petition to correct,
    modify, or vacate the award, before judgment was entered, nunc pro tunc, effective
    March 24, 2014, and NanoSmart filed its appeal from that judgment.
    In our resolution of this appeal, we only address the arguments that
    NanoSmart raised in opposition to the petition to confirm. As the substantive challenges
    to the award presented in NanoSmart’s appellate briefs (and asserted in the 2014 action)
    were not before the trial court in this action, much less decided by any trial court, they are
    not before this court in this appeal. We therefore do not address them.
    I.
    THE PETITION TO CONFIRM WAS NEITHER PREMATURELY FILED BY
    GLIDDEN NOR PREMATURELY GRANTED BY THE TRIAL COURT, AND
    WAS NOT FILED IN THE WRONG COURT.
    A party may petition a trial court to confirm, correct, or vacate an
    arbitration award. (§ 1285.) A party may also seek to have the award corrected or
    vacated by filing an opposition to a petition to confirm an arbitration award. (§ 1285.2.)
    A petition to confirm an arbitration award must be filed within four years of the date the
    petitioner was served a signed copy of the arbitration award (§ 1288), but no petition, of
    any kind—whether to confirm, correct, or vacate an award—may be served and filed
    until at least 10 days after service of the signed copy of the award upon the petitioner
    (§ 1288.4). A petition to vacate or correct an arbitration award must be filed within
    100 days of the petitioner being served with a signed copy of the arbitration award.
    (§ 1288.) An opposition requesting an award be vacated or corrected must be served and
    12
    filed within 100 days of the respondent being served with a signed copy of the arbitration
    award. (§ 1288.2, subd. (a).)
    The filing of a petition to confirm an arbitration award, however, changes
    the statutory timeline. “When one side files a petition to confirm the award, the other
    side must respond within 10 days”—even if the opposition seeks to vacate or confirm the
    award. (Oaktree Capital Management, L.P. v. Bernard (2010) 
    182 Cal. App. 4th 60
    , 66;
    see § 1290.6.) Therefore, “‘[w]hen [a] party petitions the court to confirm the award . . . ,
    [the opposing party] may seek vacation . . . of the award by way of response only if he
    serves and files his response within 10 days after the service of the petition [citation].
    Unless the response is duly served and filed, under section 1290 the allegations of the
    petition are deemed to be admitted by [the other side].’” (Oaktree Capital Management,
    L.P. v. 
    Bernard, supra
    , at p. 64, fn. omitted.) “[T]he proper interpretation of
    section 1288.2 is that the 100-day limit applies only when the other party to the
    arbitration does not file a petition to confirm the award. When such petition is filed a
    response must be filed within the time limit set forth in section 1290.6.” (Coordinated
    Construction, Inc. v. Canoga Big “A,” Inc. (1965) 
    238 Cal. App. 2d 313
    , 317.)
    Here, the arbitration award was served by e-mail on January 22, 2014.
    Rule R-45 of the governing AAA’s Commercial Arbitration Rules and Mediation
    Procedures, which NanoSmart asserts the parties’ contractually agreed would govern the
    resolution of the parties’ dispute, provided that electronic service was acceptable. (See
    § 1283.6 [“The 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
    4
    agreement.”].) NanoSmart does not challenge the manner or date of service of the
    arbitration award.
    4
    Rule R-45 of the AAA’s Commercial Arbitration Rules and Mediation Procedures (eff.
    June 1, 2009), available at  (as of
    June 25, 2015), provided: “Parties shall accept as notice and delivery of the award the
    13
    On February 3, 2014, 12 days later, and thus more than 10 days after
    service of a copy of the arbitration award, Glidden filed the petition to confirm.
    NanoSmart argues the petition to confirm is invalid because Glidden’s proof of service
    shows that it was served on NanoSmart by overnight mail on January 31, 2014—only
    9 days after a copy of the award was served. Section 1288.4 provides that “[n]o 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.” (Italics added.) Although the petition to
    confirm might have been served on NanoSmart a day early, it was not filed until
    February 3, 2014. NanoSmart does not address how being served early in any way
    prejudiced it.
    On February 18, 2014, NanoSmart filed an “Opposition to Petitioner’s
    Motion to Confirm Arbitration Award.” NanoSmart’s opposition was untimely as it was
    not filed within the 10-day response period required by section 1290.6. Consequently,
    “[t]he allegations of a petition are deemed to be admitted by [the] respondent duly served
    therewith.” (§ 1290; see Ruiz v. Moss Bros. Auto Group, Inc. (2014) 
    232 Cal. App. 4th 836
    , 846-847.)
    Although section 1290.6 provides that the deadline to respond to a petition
    to confirm an arbitration award “may be extended . . . for good cause, by order of the
    court,” NanoSmart never requested any extension of time to respond to the petition to
    confirm, or otherwise, in this action. Notwithstanding NanoSmart’s failure to timely
    respond, the trial court did not strike NanoSmart’s opposition to the petition to confirm
    and entertained the arguments contained in it. (See Ruiz v. Moss Bros. Auto Group, 
    Inc., supra
    , 232 Cal.App.4th at p. 847 [“Courts have long acknowledged that the trial court
    placing of the award or a true copy thereof in the mail addressed to the parties or their
    representatives at the last known addresses, personal or electronic service of the award, or
    the filing of the award in any other manner that is permitted by law.” Citations to the
    Commercial Arbitration Rules and Mediation Procedures rules in this opinion refer to the
    rule numbers in effect at the relevant times, not to the current rule numbers.
    14
    may consider untimely filed and served response papers, when no prejudice to the
    petitioner is shown, without an order extending the 10-day time period of
    section 1290.6.”].)
    In NanoSmart’s four-page opposition to the petition to confirm, NanoSmart
    did not request that the arbitration award be corrected or vacated. In fact, NanoSmart
    never offered any substantive challenges to the arbitration award to the trial court in this
    action. Instead, NanoSmart argued (1) the petition to confirm was premature, not only
    because it was served on NanoSmart one day earlier than permitted by section 1288.4
    (which, for the reasons discussed ante, was without consequence), but also because
    NanoSmart had submitted to the AAA a request for modification of the award, pursuant
    to rule R-46 of the applicable AAA’s Commercial Arbitration Rules and Mediation
    Procedures; (2) the petition to confirm was improperly filed “under the same case number
    [Glidden] utilized for his petition for an injunction action and motion to compel
    arbitration”; and (3) NanoSmart “reserves its right to further challenge the arbitration
    award . . . if the AAA does not grant all or part of NanoSmart’s pending request to
    modify,” pursuant to sections 1286.6 and 1286.8. We address each of these arguments in
    turn, and conclude none has merit.
    First, NanoSmart argued that the trial court erred by granting the petition to
    confirm because on February 10, 2014, NanoSmart had submitted a request to modify the
    arbitration award to the AAA. In its opening brief, NanoSmart argues, “[p]er California
    Code of Civil Procedure § 1288.8, the award’s service date ceased to be January 22, 2014
    effectively extinguishing any start to the timeline under California Code of [C]ivil
    Procedure § 1288.4 that would allow Glidden to file a motion to Confirm no earlier than
    10 days after the date of the award’s service.” Section 1288.8 provides: “If an
    application is made to the arbitrators for correction of the award, the date of service of the
    award for the purposes of this article shall be deemed to be whichever of the following
    dates is the earlier: [¶] (a) The date of service upon the petitioner of a signed copy of the
    15
    correction of the award or of the denial of the application. [¶] (b) The date that such
    application is deemed to be denied under Section 1284.” NanoSmart’s argument,
    therefore, is that because it filed a modification request with the AAA, the “date of
    service” of the arbitration award for purposes of calculating deadlines for seeking
    confirmation of, modification to, or vacation of the arbitration award in the trial court
    changed to whatever date the arbitrator ruled on the modification request or the date the
    request was deemed denied.
    NanoSmart’s purported request to modify the arbitration award was not
    timely under section 1284 because it was submitted on February 10, more than 10 days
    after service of a signed copy of the arbitration award. Section 1284 provides in part:
    “The arbitrators, upon written application of a party to the arbitration, may correct the
    award upon any of the grounds set forth in subdivisions (a) and (c) of Section 1286.6 not
    later than 30 days after service of a signed copy of the award on the applicant. [¶]
    Application for such correction shall be made not later than 10 days after service of a
    signed copy of the award on the applicant.” (Italics added.)
    NanoSmart argues the parties contractually agreed to a longer timeframe
    for seeking correction of the arbitration award by agreeing to rule R-46 of the AAA’s
    Commercial Arbitration Rules and Mediation 
    Procedures, supra
    ,  (as of June 25, 2015), which provided in part: “Within 20
    days after the transmittal of an award, any party, upon notice to the other parties, may
    request the arbitrator, through the AAA, to correct any clerical, typographical, or
    computational errors in the award. The arbitrator is not empowered to redetermine the
    merits of any claim already decided.” (Italics added.) Hence, NanoSmart argues, its
    request under rule R-46 served to reset the clock on challenging the arbitration award,
    pursuant to section 1288.8.
    The problem with NanoSmart’s argument is that by the time of the
    March 24, 2014 hearing on the petition to confirm, the arbitrator had resolved
    16
    NanoSmart’s request to modify the award. He did so, not by deciding the request on its
    merits, but by concluding it did not constitute a request to modify the award. In the
    March 18, 2014 ruling, the arbitrator stated: “The arbitrator finds that respondent’s
    request to modify the arbitration award was not one to correct any clerical, typographical,
    technical, or computational errors in the award. Accordingly, respondent’s request is
    denied.” If NanoSmart’s request to modify did not seek to correct “any clerical,
    typographical, or computational errors,” rule R-46 of the AAA’s Commercial Arbitration
    Rules and Mediation 
    Procedures, supra
    ,  (as of June 25, 2015), did not apply, and section 1288.8 was therefore never
    triggered to reset the date of service of the arbitration award.
    NanoSmart did not argue in the trial court that the arbitrator wrongly
    concluded NanoSmart’s request failed to constitute a request to modify or correct the
    arbitration award within the meaning of rule R-46 of the AAA’s Commercial Arbitration
    Rules and Mediation 
    Procedures, supra
    ,  (as of June 25, 2015). NanoSmart never requested that the trial court make
    any corrections to the award. (See § 1286.8, subd. (a) [“The court may not correct an
    award unless: [¶] (a) A petition or response requesting that the award be corrected has
    been duly served and filed . . . .”].) Our record does not show the trial court in this
    action, before ruling on the petition to confirm, ever saw the request to modify the
    arbitration award that NanoSmart submitted to the AAA. At the hearing on the petition
    to confirm, NanoSmart’s counsel stated: “[T]he validity of the request to modify is not in
    front of Your Honor. Now, the arbitrator has, of course, made a ruling on the request to
    modify. Of course, petitioner NanoSmart does not agree, does not simply fall to this
    decision or agree to it. We plan to challenge it going forward. And so I just want to
    5
    point out the validity of the request is not in front of Your Honor.”
    5
    At oral argument on appeal, NanoSmart’s counsel argued that NanoSmart’s request to
    modify the arbitration award that it submitted to the AAA was indeed a request to correct
    17
    Even if we were to assume NanoSmart timely filed a proper request to
    modify the arbitration award to correct any clerical, typographical, or computational
    errors in the award, which was denied by the arbitrator on March 18, 2014, the trial
    court’s decision to grant the petition to confirm six days later did not prejudice
    NanoSmart. At no time did NanoSmart request a continuance of the hearing on the
    petition to confirm in order for it to file a petition to correct or vacate the arbitration
    award in this action. At no time has NanoSmart sought relief of any kind in the trial
    court in this action, based on section 473, or otherwise.
    clerical, typographical, or computational errors in the award, within the meaning of
    rule R-46 of the AAA’s Commercial Arbitration Rules and Mediation 
    Procedures, supra
    ,
     (as of June 25, 2015), which
    consequently reset the clock on challenging the award in the trial court under
    section 1288.8. Counsel argued the arbitrator erred by concluding the request did not
    constitute such a request within the meaning of rule R-46. As discussed ante, although
    NanoSmart expressed its disagreement with the arbitrator’s ruling, it did not ask the trial
    court to review it in this case; to the contrary, NanoSmart repeatedly informed the court
    that the arbitrator’s ruling was not before it. NanoSmart’s request to modify was not filed
    in the trial court in this case. It was filed in the 2014 action, and, as discussed ante, we
    have taken judicial notice of documents from the 2014 action, which include a copy of
    NanoSmart’s request to modify that it submitted to the AAA.
    We conclude that even if the trial court had reviewed the request to modify, it would
    have determined the arbitrator was correct in ruling that the request did not constitute a
    request to correct clerical, typographical, or computational errors in the arbitration award,
    within the meaning of rule R-46 of the AAA’s Commercial Arbitration Rules and
    Mediation 
    Procedures, supra
    ,  (as of
    June 25, 2015). Although styled as a request for modification of “clerical errors” (not
    computational errors) contained in the arbitration award, the request constituted
    NanoSmart’s attempt to reargue that NanoSmart (1) did not owe Glidden 10 vacation
    days; (2) owed Glidden vacation pay, if at all, at a lower daily rate; (3) did not owe
    Glidden the value of bonus stock because Glidden prevented issuance of the shares, and
    even if NanoSmart did owe him the value of such stock, the arbitrator should have
    accepted NanoSmart’s evidence regarding a lower value of the shares of stock; (4) never
    promised to pay Glidden’s hospital bill and should not be required to pay it; and (5) was
    entitled to a detailed calculation of the awarded costs, expenses, and attorney fees.
    Consequently, NanoSmart has failed to establish that the arbitrator’s denial of its request
    changed the timeline for challenging the arbitration award in this action under
    section 1288.8.
    18
    Finally, NanoSmart argues the petition to confirm is essentially void
    because Glidden filed the petition in the same superior court case in which prior petitions
    had been filed before the arbitration. Without citing authority, NanoSmart argues
    Glidden was required to initiate a new action in the trial court to file the petition to
    confirm. We disagree. Section 1292.6 provides: “After a petition has been filed under
    [6]
    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.” On
    November 12, 2013, Glidden filed a motion to compel arbitration as to the individual
    defendants, which would qualify as a petition brought under section 1281.2, which is
    within title 9 of part 3 of the Code of Civil Procedure—thus within the same title as
    section 1292.6. Glidden therefore properly filed the petition to confirm in this case,
    Glidden v. NanoSmart Pharmaceuticals, Inc., Orange County Superior Court, case
    No. 30-2013-00652467.
    II.
    WE DO NOT ADDRESS NANOSMART’S SUBSTANTIVE CHALLENGES
    TO THE ARBITRATION AWARD BECAUSE THEY WERE NEVER
    PRESENTED TO THE TRIAL COURT IN THIS CASE.
    Much of the argument contained in NanoSmart’s appellate briefs is devoted
    to challenging the arbitration award. NanoSmart, argues, inter alia, that the arbitrator
    (1) arbitrarily remade the parties’ contract in several respects; (2) improperly awarded
    Glidden “full attorney’s fees . . . without regard to improperly forcing Individual
    Respondents to participate in litigation as parties”; (3) refused to postpone the arbitration
    hearing; (4) violated the California Rules of Court, Ethics Standards for Neutral
    6
    Section 1292.6 is in title 9 of part 3 of the Code of Civil Procedure, spanning
    sections 1280 through 1294.2.
    19
    Arbitrators in Contractual Arbitration; and (5) was inattentive during proceedings. None
    of these arguments was presented in this action to the trial court in response to the
    petition to confirm. Therefore, they were never considered by the trial court before the
    petition to confirm was granted. NanoSmart had the full opportunity to present its
    arguments in response to the petition to confirm, and should have, but did not.
    (§ 1285.2.)
    We therefore do not decide NanoSmart’s substantive challenges to the
    arbitration award because they are not before us. We do not express any opinion on the
    viability of the 2014 action, or the res judicata or collateral estoppel effect our opinion
    has on that case.
    DISPOSITION
    The judgment is affirmed. Respondent shall recover costs on appeal.
    FYBEL, J.
    WE CONCUR:
    ARONSON, ACTING P. J.
    IKOLA, J.
    20
    

Document Info

Docket Number: G050165

Filed Date: 6/25/2015

Precedential Status: Non-Precedential

Modified Date: 4/17/2021