Kaiser Foundation Health Plan v. Super. Ct. ( 2017 )

Filed 7/31/17
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
KAISER FOUNDATION HEALTH B272284
PLAN, INC., et al.,
(Los Angeles County
Petitioners, Super. Ct. No. BS158615)
v.
THE SUPERIOR COURT OF LOS
ANGELES COUNTY,
Respondent;
PRIME HEALTHCARE LA
PALMA, LLC, et al.,
Real Parties in Interest.
ORIGINAL PROCEEDINGS in mandate. Jane L. Johnson,
Judge. Petition granted to direct that judgment be vacated for
lack of jurisdiction.
Manatt, Phelps & Phillips, Gregory N. Pimstone and
Joanna S. McCallum for Petitioners.
No appearance for Respondent.
King & Spalding, Marcia Augsburger and W. Scott
Cameron for Real Parties in Interest.
________________________
INTRODUCTION
Prime Healthcare La Palma, LLC and affiliated hospitals
(collectively, Prime)1 sued Kaiser Foundation Health Plan, Inc.
(Kaiser)2 in superior court under California law, alleging that
Kaiser failed to reimburse Prime for emergency medical services
Prime provided to Kaiser members. A portion of Prime‘s claims
relate to emergency medical services Prime provided to enrollees
in a Medicare Advantage plan administered by Kaiser pursuant
to Part C of the Medicare Act (42 U.S.C. § 1395w-21 et seq.) (the
Medicare Advantage claims).
After a rather convoluted multi-year path, the parties
agreed to arbitration in lieu of the superior court litigation. After
1 The other hospitals in the group are Alvarado Hospital,
LLC; Prime Healthcare Centinela, LLC; Veritas Health Services,
Inc.; Desert Valley Hospital, Inc.; Prime Healthcare Services–
Garden Grove, LLC; Prime Healthcare Paradise Valley, LLC;
Prime Healthcare Services–San Dimas, LLC; Prime Healthcare
Anaheim, LLC; Prime Healthcare Services-Encino, LLC; Prime
Healthcare Huntington Beach, LLC; Prime Healthcare Services–
Montclair, LLC; and Prime Healthcare Services-Sherman Oaks,
LLC. Each of these hospitals was, at relevant times, owned and
operated by Prime Healthcare, Inc. or an affiliated entity.
2 Two other Kaiser entities were named as defendants:
Kaiser Foundation Hospitals and Southern California
Permanente Medical Group.
2
Prime filed an arbitration demand, Kaiser moved in the
arbitration proceedings to dismiss Prime‘s Medicare Advantage
claims on the ground that they are preempted by the Medicare
Act and subject to that Act‘s requirement that claimants exhaust
administrative remedies before resorting to litigation or
arbitration. The arbitration panel denied Kaiser‘s motion and
memorialized its ruling in what it labeled as a ―Partial Final
Award Re Medicare Advantage Claims‖ (the partial final award).
Kaiser petitioned the trial court to vacate the award. The court
denied the petition and entered a judgment confirming the
award. The case is before us on Kaiser‘s appeal from that
judgment. Kaiser contends that the panel‘s ruling on the
Medicare Act preemption and exhaustion issues memorialized in
the partial final award was wrong as a matter of law and that the
court thus erred in entering a judgment confirming the award.
Prime defends the legal basis of the rulings by the panel and the
court on those issues.
Prior to oral argument, we asked the parties to address
whether the judgment was appealable, and, if not, whether we
could review the judgment by treating Kaiser‘s appeal as a
petition for writ of mandate. At oral argument and in
supplemental briefs, Kaiser and Prime joined forces and
answered yes to both questions. We have concluded otherwise,
however. The merits of the confirmation of the panel‘s award on
the Medicare Act preemption and exhaustion issues are not
reviewable, either by appeal or by writ.
3
Code of Civil Procedure3 section 1294, subdivision (d)
(section 1294(d)), authorizes appeals from judgments confirming
arbitration awards. To be appealable under section 1294(d),
however, a judgment confirming an arbitration award must be
final—that is, it must embody a final determination of the
parties‘ rights, just like an appealable judgment in a civil case
that did not go to arbitration (§§ 577, 904, 1287.4). The judgment
confirming the partial final award here does not meet that
standard. The judgment is final only as to the determination
that the Medicare Advantage claims are neither preempted by
the Medicare Act nor subject to exhaustion under that Act. It
resolved nothing more than that. Whether Kaiser is liable to
Prime on the Medicare Advantage claims remains to be resolved
in the arbitration and then in subsequent proceedings in the trial
court. The same is true of all of Prime‘s other claims (the
Medicare Advantage claims constitute just one piece of Prime‘s
claims), as well as cross-claims that Kaiser has submitted to
arbitration. Because the judgment is not a final judgment, it is
nonappealable.
Our ability to review by writ the merits of the judgment
confirming the partial final award on the Medicare Act
preemption and exhaustion issues depends on whether the trial
court had jurisdiction to confirm the award in the first place. The
court lacked jurisdiction if the ―award‖ did not meet the section
1283.4 standards for an award. To qualify under section 1283.4,
an award must ―include a determination of all the questions
submitted to the arbitrators the decision of which is necessary in
3 All undesignated statutory references are to the Code of
Civil Procedure.
4
order to determine the controversy‖ (§ 1283.4). Based on the
reasoning of our decision in Judge v. Nijjar Realty, Inc. (2014)
232 Cal.App.4th 619 (Judge), the partial final award the court
confirmed fails to satisfy that requirement because it determined
only the questions of Medicare Act preemption and exhaustion.
It left unresolved all of the other questions the arbitrators will
have to decide in order to determine the parties‘ controversy.
Because the ―award‖ is not an award, we cannot review by writ
the merits of the confirmation of the panel‘s Medicare Act
preemption and exhaustion rulings.
We are, however, treating Kaiser‘s appeal as a petition for
writ of mandate for the purpose of directing the trial court to
vacate its judgment confirming the partial final award and enter
a new order dismissing Kaiser‘s petition to vacate the award. We
do so on the ground that the failure of the partial final award to
qualify as an ―award‖ under section 1283.4 deprived the court of
jurisdiction to confirm or vacate it.
Parties generally have broad leeway to structure an
arbitration as they see fit, free from statutory constraints. They
may, for example, conduct the arbitration in phases and ask the
arbitrators, as Kaiser and Prime did here, to issue phase-specific,
interim awards. Parties‘ requests for judicial approval or
disapproval of arbitration awards are, however, subject to
statutory constraints that limit when and under what
circumstances courts may review arbitrators‘ rulings. Those
restrictions deprive trial courts of jurisdiction to review an award
that does not qualify as an award under section 1283.4, and
appellate courts of jurisdiction to review on appeal a judgment
that does not qualify as a final judgment under section 1294(d).
5
The request of Kaiser and Prime for judicial intervention into
their arbitration at this stage founders on these shoals.
FACTUAL AND PROCEDURAL BACKGROUND
A. The State Court Litigation
In January 2008, Prime filed five separate state court
actions against Kaiser in different counties throughout
California. Prime‘s claims arose from its provision of emergency
medical services to Kaiser members, including to enrollees in
Kaiser‘s Medicare Advantage plan.4
4 By way of background, Congress established the Medicare
Advantage program in 1997 as Part C of the Medicare Act. (42
U.S.C. §§ 1395w-21 – 1395w-29.) Unlike Medicare Parts A and
B, the Medicare Advantage program allows Medicare enrollees to
receive Medicare benefits through private health insurance
plans, known as Medicare Advantage Organizations (MAOs),
rather than from the federal government. (Id., §§ 1395w-21 –
1395w-22.) MAOs must contract with health care providers for
the provision of medical services to their enrollees. (42 C.F.R.
§ 422.2.) These providers are known as ―contract providers.‖
Medicare Part C also requires MAOs to cover emergency services
that health care providers with whom the MAO does not contract,
known as ―non-contracted providers,‖ render to enrollees in the
MAO‘s plan. MAOs therefore must pay non-contracted providers
for those emergency services (42 U.S.C. § 1395w-22(d)(1)(E); 42
C.F.R. § 422.113), even though non-emergency services that such
providers furnish to the MAO‘s enrollees generally are not
covered by Medicare Advantage plans. (42 C.F.R. § 422.100(b).)
Kaiser is a MAO. It did not contract with Prime for the
provision of medical services to enrollees in Kaiser‘s Medicare
Advantage plan. However, Prime provided emergency medical
services to Kaiser enrollees as a non-contracted provider.
6
Kaiser removed the actions to federal district court based,
in part, on the argument that the Medicare Act preempted the
Medicare Advantage claims. The district court rejected Kaiser‘s
preemption argument. Although it dismissed some of Prime‘s
claims, the court declined to exercise supplemental jurisdiction
over the remaining claims and remanded the actions to state
court.
In June 2009, Prime‘s state court actions were coordinated
as a complex case in the Los Angeles County Superior Court.
Prime‘s January 2010 complaint in the coordinated actions
divided Prime‘s claims into two categories. First, Prime alleged
that Kaiser had contracted with Multiplan, Inc. (Multiplan), a
preferred provider organization that established a network of
providers, including Prime, through which Kaiser members could
seek emergency medical services, and that Kaiser had failed to
pay Prime the contractually-negotiated rates for those services.
Second, Prime alleged that Kaiser failed to fully reimburse Prime
for emergency medical services Prime provided to enrollees in
Kaiser‘s Medicare Advantage plan. This second category of
claims embodied the Medicare Advantage claims.
Kaiser demurred to the Medicare Advantage claims,
asserting that they were preempted by the Medicare Act and
subject to the Act‘s requirement of exhaustion of administrative
remedies. Kaiser demurred on different grounds to Prime‘s other
claims as well. The trial court overruled the demurrer in its
entirety in April 2010.
More than three years later, Kaiser again argued, this time
in a motion for summary adjudication before a different trial
court judge, that Prime‘s Medicare Advantage claims were
preempted by the Medicare Act and subject to that Act‘s
7
exhaustion requirement. Whereas Kaiser‘s demurrer failed, its
summary adjudication motion succeeded: in January 2014, the
trial court granted the motion on both preemption and
exhaustion grounds. Prime filed a petition for writ of mandate
seeking to overturn the trial court‘s decision. We summarily
denied the petition. (Prime Healthcare Cases (Mar. 5, 2014,
No. B254632).)
While Kaiser‘s summary adjudication motion was pending,
the trial court consolidated with the coordinated action additional
law suits that Prime had filed against Kaiser in California. In
April 2014, Prime filed its first consolidated complaint in the
coordinated action. The complaint stated that the parties‘
dispute arose from Kaiser‘s unlawful efforts to force Kaiser
members who had the right to seek emergency medical services
at Prime hospitals to obtain those services at Kaiser hospitals.
Prime alleged that, as part of this scheme, Kaiser did not pay, or
underpaid, Prime‘s claims for reimbursement from Kaiser for the
provision of emergency medical services to Kaiser members.
According to Prime, Kaiser owed it more than $150,000,000 as of
the date of the first consolidated complaint.
Prime‘s claims in the first consolidated complaint fell into
the following four categories: (1) claims for breach of contract and
the implied covenant of good faith and fair dealing based on
Kaiser‘s alleged failure to reimburse Prime in accordance with
the payment schedule in the Multiplan contract; (2) claims for
breach of contract and the implied covenant of good faith and fair
dealing based on Kaiser‘s alleged failure to reimburse Prime in
accordance with the payment schedule in Kaiser‘s contract with
Beech Street Corporation (Beech Street), another preferred
provider organization; (3) claims for breach of an implied-in-law
8
contract based on Kaiser‘s alleged failure to fully reimburse
Prime for emergency medical services provided to Kaiser‘s
commercial members (i.e., employer groups that purchase Kaiser
plans); and (4) the Medicare Advantage claims, which Prime
described in the complaint as claims for breach of an implied-in-
law and implied-in-fact contract based on Kaiser‘s alleged failure
to fully reimburse Prime for emergency medical services provided
to enrollees in Kaiser‘s Medicare Advantage plan.5 Prime
presented its Medicare Advantage claims in the first consolidated
complaint, notwithstanding the fact the trial court had ruled just
a few months earlier that the claims were preempted and thus
had to be brought in federal court.6
5 Prime asserted causes of action for an open book account,
violation of the California unfair competition law (Bus. & Prof.
Code, § 17200 et seq.), and declaratory relief. These causes of
action apply to each of the four categories of claims.
6 In May 2014, a month after it filed the first consolidated
complaint in the state court, Prime sued Kaiser in federal court,
raising the Medicare Advantage claims only. Prime stated in the
federal complaint that while it believed the state trial court‘s
ruling that the Medicare Advantage claims were preempted was
incorrect, it filed the federal court action ―to protect [its] rights
and interests‖ in those claims. (Prime Healthcare La Palma, LLC
et al. v. Kaiser Foundation Health Plan, Inc. (C.D.Cal. No. CV-14-
3835 SVW (JPRx)). Kaiser moved to dismiss the federal
complaint on the ground that Prime had failed to exhaust its
remedies with respect to the Medicare Advantage claims, as the
state trial court had said it must do before suing. The federal
court never ruled on Kaiser‘s motion because the parties agreed
to stay the federal action pending resolution of the state court
litigation.
9
Kaiser filed cross-claims against Prime, including Medicare
Advantage-related cross-claims.
On December 31, 2014, Prime filed another state court
action against Kaiser (Prime Healthcare La Palma, LLC v. Kaiser
Foundation (Super. Ct. L.A. County, No. BC568336)). This case
was deemed ―related‖ to the coordinated action. The related case
addressed Prime‘s claims against Kaiser that arose in 2013 and
2014.
B. The Parties Agree To Arbitrate Their Disputes and
Relitigate in the Arbitration Whether the Medicare
Advantage Claims Are Preempted and Subject to
Exhaustion of Administrative Remedies
On February 7, 2015, the parties agreed to ―binding
arbitration‖ of their disputes, including Prime‘s Medicare
Advantage claims and Kaiser‘s Medicare Advantage-related
cross-claims, before a panel of JAMS arbitrators and under JAMS
rules and procedures, ―in lieu of . . . [¶] the consolidated [state
court] proceeding [and] [¶] the related case.‖ The arbitration
agreement specified that the panel would not be bound by the
trial court‘s ruling that the Medicare Advantage claims were
preempted by the Medicare Act and subject to that Act‘s
exhaustion requirement. Rather, the agreement authorized
relitigation of the preemption and exhaustion questions before
the panel and ―empowered‖ the panel to resolve them,
independent of the trial court‘s ruling.
In a paragraph captioned ―Decision and Final Award,‖ the
agreement states that the panel ―shall issue a Final Award
within forty-five (45) days of the conclusion of the arbitration
hearing. . . . [¶] The Final Award . . . may be confirmed
10
thereafter as a judgment by the Superior Court of the State of
California, subject only to challenge on the grounds set forth in
. . . [s]ection 1285 et seq. or on the grounds that the [panel]
exceeded . . . [its] powers by making a mistake of law or legal
reasoning.‖ The agreement provides for de novo judicial review of
the panel‘s legal conclusions and legal reasoning.
The agreement does not expressly refer to the panel‘s
possible issuance of a partial final award or any other
interlocutory award. However, the JAMS rules that govern the
parties‘ arbitration provide that JAMS arbitrators can ―render a
Final Award or a Partial Final Award.‖ (JAMS Comprehensive
Arbitration Rules & Procedures, rule 24(a).) The JAMS rules
also contemplate judicial ―[p]roceedings to enforce, confirm,
modify or vacate an Award,‖ be it final or partial. (Id., rule 25.)
The rules state that such proceedings ―will be controlled by and
conducted in conformity with the Federal Arbitration Act . . . or
applicable state law.‖ (Ibid.)
Following the parties‘ execution of the arbitration
agreement, Prime initiated an arbitration demand against
Kaiser. The demand presented all of Prime‘s claims against
Kaiser that it had asserted in the superior court litigation.7
C. The Panel’s Partial Final Award Regarding the Medicare
Advantage Claims
In May 2015, Kaiser filed a motion for summary
adjudication asking the arbitration panel to dismiss Prime‘s
Medicare Advantage claims on the ground that they were
7 After initiating its arbitration demand, Prime dismissed
the federal action that had been stayed. (See fn. 6, ante.)
11
preempted by the Medicare Act and subject to that Act‘s
exhaustion requirement, just as the trial court had ruled before
the parties agreed to arbitrate their disputes. The panel ruled
the opposite way, however, on both the preemption and
exhaustion questions and thus denied Kaiser‘s motion. On
September 8, 2015, the panel memorialized its preemption and
exhaustion rulings in the partial final award.
D. The Trial Court Enters a Judgment Confirming the
Partial Final Award
On October 15, 2015, Kaiser filed a petition in the trial
court to vacate the partial final award. Kaiser argued that the
award should be vacated on the ground that the panel exceeded
its powers by making a mistake of law or legal reasoning in
concluding that Prime‘s Medicare Advantage claims were neither
preempted by the Medicare Act nor subject to the Act‘s
exhaustion requirement.
Kaiser‘s petition was assigned to the same trial court judge
who had granted Kaiser‘s motion for summary adjudication on
the Medicare Advantage claims on preemption and exhaustion
grounds prior to the parties‘ submission of their disputes to
arbitration. The second time around, however, the court changed
its view. It sided with the arbitration panel on the preemption
and exhaustion questions and denied Kaiser‘s petition. On April
29, 2016, the court entered a judgment confirming the partial
final award.
E. Kaiser’s Appeal and Writ Petition
On May 12, 2016, Kaiser filed a notice of appeal from the
judgment confirming the partial final award. Kaiser stated in
12
the notice that it was appealing under sections 904,
subdivision (a)(1), and 1294(d).
While its appeal was pending, Kaiser filed a petition for a
writ of mandate (Kaiser Foundation Health Plan, Inc. et al. v.
Superior Court, No. B275985). Kaiser stated that it filed the
petition because ―it was not clear whether the judgment
[confirming the partial final award] was a final judgment
appealable under . . . sections 904.1[, subdivision] (a)[,] and
1294(d).‖ Kaiser thus asked us to review the judgment by way of
a writ if we concluded that it was not appealable. We denied the
petition, stating that ―[Kaiser‘s] proper remedy is by way of their
pending appeal . . . from the judgment . . . confirming an
arbitration award.‖
In preparing for oral argument, however, we became
concerned that the judgment confirming the partial final award
might not be appealable after all. We also became concerned that
we might not be able to review the merits of the confirmation of
the award by way of a petition for writ of mandate either.
Accordingly, we asked the parties to address at oral argument
(1) whether we had jurisdiction to hear the appeal; (2) if not,
whether we could treat the appeal as a petition for a writ of
mandate; and (3) if the issue is properly reached, whether the
trial court had jurisdiction to confirm the partial final award.
Following oral argument, we requested that the parties submit
supplemental briefs on these questions. At oral argument and in
their supplemental briefs, both sides contended that the
judgment confirming the partial final award is appealable and
that, in any event, the trial court had jurisdiction to confirm the
award and we thus could treat the appeal as a petition for a writ
13
of mandate and review the merits of the confirmation of the
award through that vehicle.
After the supplemental briefs were filed, the parties
submitted for our consideration an April 3, 2017 amendment to
their arbitration agreement. The amendment recites that the
parties intended all along for the arbitrators to adjudicate in the
first phase of the arbitration whether the Medicare Advantage
claims were preempted and/or subject to exhaustion, and to issue
a partial final award on those questions. The amendment further
recites that if the arbitrators ruled that the Medicare Advantage
claims were not preempted and subject to exhaustion, then the
parties intended for the arbitrators to adjudicate the merits of
those claims in a subsequent phase. The amendment states that,
―[i]n essence‖ the adjudication of the preemption and exhaustion
questions in ―Phase 1 of the arbitration would be the equivalent
of a separate action for declaratory relief.‖
DISCUSSION
A. Relevant Statutory Provisions
The provisions of the California Arbitration Act governing
the issuance of arbitration awards, trial court review of awards,
and appellate court review of trial court orders and judgments
approving or disapproving awards are housed in chapters 3, 4,
and 5 of part 3, title 9, of the Code of Civil Procedure (§ 1282 et
seq.). We summarize the provisions that are relevant here.
Section 1283.4 specifies the form and contents of an award.
It provides, ―The award shall be in writing and signed by the
arbitrators concurring therein. It shall include a determination
14
of all the questions submitted to the arbitrators the decision of
which is necessary in order to determine the controversy.‖ (Ibid.)
Section 1285 authorizes ―[a]ny party to an arbitration in
which an award has been made [to] petition the [trial] court to
confirm, correct or vacate the award. . . .‖ In turn, section 1286
provides that, in disposing of such a petition, the court ―shall
confirm the award as made . . . unless . . . it corrects the award
and confirms it as corrected, vacates the award or dismisses the
proceeding.‖8 If the court confirms the award, then section
1287.4 requires that ―judgment shall be entered in conformity
therewith.‖ Section 1287.4 further provides that ―[t]he judgment
so entered . . . is subject to all the provisions of law relating to[] a
judgment in a civil action . . . .‖
8 The grounds for vacating an award are set forth in section
1286.2; they are narrow. (Cable Connection, Inc. v. DIRECTV,
Inc. (2008) 44 Cal.4th 1334, 1344 (Cable Connection).) Among
the listed grounds is that the arbitrators ―‗exceeded their
powers.‘‖ (Id. at p. 1366.) The parties to an arbitration
agreement may, as Prime and Kaiser did, specify that arbitrators
exceed their powers if they ―make [a] mistake[] of law or legal
reasoning,‖ and that arbitrators‘ legal rulings are subject to de
novo judicial review. (Id. at p. 1355.) ―If the parties constrain
the arbitrators‘ authority by requiring a dispute to be decided
according to the rule of law, and make plain their intention that
the award is reviewable for legal error, the general rule of limited
review [of arbitration awards] has been displaced by the parties‘
agreement.‖ (Ibid.) Kaiser argues that the panel exceeded its
authority, and thus the partial final award should be vacated,
because the ruling that Prime‘s Medicare Advantage claims are
neither preempted by the Medicare Act nor subject to that Act‘s
exhaustion requirement constitutes a mistake of law or legal
reasoning.
15
Section 1294 ―lists the types of orders associated with [an]
arbitration that may be appealed.‖ (Sunnyvale Unified School
Dist. v. Jacobs (2009) 171 Cal.App.4th 168, 174.) It provides, ―An
aggrieved party may appeal from: [¶] (a) An order dismissing or
denying a petition to compel arbitration. [¶] (b) An order
dismissing a petition to confirm, correct or vacate an award. [¶]
(c) An order vacating an award unless a rehearing in arbitration
is ordered. [¶] (d) A judgment entered pursuant to this title. [¶]
(e) A special order after final judgment.‖9 (§ 1294.)
B. The Judgment Confirming the Partial Final Award Is
Not Appealable Because It Is Not a Final Judgment
Section 904.1, subdivision (a), governs the right to appeal
in civil actions. It codifies the ―one final judgment rule,‖ which
provides that an ―‗―an appeal may be taken only from the final
judgment in an entire action.‖‘ [Citation.]‖ (In re Baycol Cases I
9 Section 1294‘s list of appealable orders does not include
orders denying petitions to confirm, correct, or vacate an award;
orders dismissing such petitions, which are appealable under
section 1294, subdivision (c), are not the same as orders denying
them. (Mid-Wilshire Associates v. O’Leary (1992) 7 Cal.App.4th
1450, 1453-1454.) This gap in section 1294 is explained by the
fact that ―[i]f the trial court . . . does not dismiss the petition[,
but] also does not correct or vacate an arbitration award, it must
confirm the award. Entry of judgment in conformity therewith is
required [citation], resulting in an appealable judgment under . . .
section 1294[(d)]. Similarly, if the nondismissing trial court does
not confirm the award (or confirm [it] as corrected), the court
must vacate it, resulting in an appealable order under . . . section
1294, subdivision (c).‖ (Law Offices of David S. Karton v. Segreto
(2009) 176 Cal.App.4th 1, 9.)
16
& II (2011) 51 Cal.4th 751, 756.) A judgment is final, and
therefore appealable, when it embodies ―the final determination
of the rights of the parties in an action or proceeding‖ (§ 577). A
judgment constitutes the final determination of the parties‘
rights ―‗where no issue is left for future consideration except the
fact of compliance or noncompliance with [its] terms . . . .‘
[Citation.]‖ (Olson v. Cory (1983) 35 Cal.3d 390, 399.) It is a
judgment‘s substance, not its form or label, which determines
whether it is final. (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695,
698-699.) If a judgment is not appealable, an appellate court
lacks jurisdiction to hear a purported appeal from it. (Griset v.
Fair Political Practices Com. (2001) 25 Cal.4th 688, 696.)
Under the one final judgment rule, interlocutory judgments
generally are not appealable. (In re Baycol Cases I & II, supra,51 Cal.4th at pp. 754, 756.) This prohibition is in keeping with
the premise of the one final judgment rule ―‗―that piecemeal
disposition and multiple appeals in a single action would be
oppressive and costly, and that a review of intermediate rulings
should await the final disposition of the case.‖‘ [Citations.]‖ (Id.
at p. 756.)
The one final judgment rule applies to judgments
confirming arbitration awards. (Rubin v. Western Mutual Ins.
Co. (1999) 71 Cal.App.4th 1539, 1547-1548 (Rubin).) This is
manifested in the terms of section 1287.4, which, as indicated
above, governs the entry of judgments confirming arbitration
awards. Section 1287.4 states that any such judgment ―has the
same force and effect as, and is subject to all the provisions of law
relating to, a judgment in a civil action of the same jurisdictional
classification.‖ The one final judgment rule is a ―provision[] of
law‖ relating to a civil judgment. Judgments confirming
17
arbitration awards thus are ―subject to‖ the one final judgment
rule. Because the one final judgment rule is incorporated into the
California Arbitration Act through section 1287.4, a judgment
under section 1294(d) confirming an arbitration award must be a
final judgment for it to be appealable. Nothing in the California
Arbitration Act suggests that judgments confirming arbitration
awards should be treated differently for purposes of appealability
than judgments in civil cases that did not go to arbitration.
(Rubin, supra, at p. 1547.)
In Rubin, the court held that a judgment confirming an
arbitration award against an insurer appraising the amount of
earthquake damage to its insured‘s house did not satisfy the one
final judgment rule, and thus was nonappealable, because the
award was not a final determination of the parties‘ rights. Left
unresolved by the award, and remaining to be tried in
arbitration, were the merits of all four of the insured‘s causes of
action. The court thus dismissed the insured‘s appeal for lack of
jurisdiction to hear it. (Rubin, supra, 71 Cal.App.4th at pp. 1547-
1548.)
Rubin did not address whether the one final judgment rule
applies to the orders listed in section 1294. It held only that
section 1294 judgments are subject to the rule. (Rubin, supra, 71
Cal.App.4th at p. 1548.) In Judge, we answered the question left
open in Rubin and held that ―a finality requirement [applies] to
[the] orders listed in section 1294,‖ not just to judgments entered
under subdivision (d) of that section. (Judge, supra, 232
Cal.App.4th at p. 634.) Applying the finality requirement, we
concluded that an order vacating an arbitration award that
determined only, ―as a threshold matter, that [the plaintiff‘s]
class and representative claims were subject to arbitration,‖ was
18
nonappealable because the ―award did not rule on the merits of
those claims,‖ just as the award in Rubin left unaddressed the
merits of the claims in that case. (Id. at p. 622.)
The judgment confirming the panel‘s partial final award in
this case suffers from the same lack of finality as the judgment
confirming the award in Rubin and the order vacating the award
in Judge. The partial final award was confined to the resolution
of the questions of Medicare Act preemption and exhaustion. It is
―final‖ as to those questions. But as its name highlights, it was
only ―partially final‖ as to the arbitration as a whole. The award
and the judgment confirming it did not decide the merits of
Prime‘s Medicare Advantage claims, let alone the merits of
Prime‘s various other claims (which do not implicate Prime‘s
provision of services to Kaiser‘s Medicare Advantage enrollees),
plus Kaiser‘s cross-claims to boot. All of those claims must still
be resolved in the arbitration, culminating in a final award. That
will be followed by further proceedings in the trial court, initiated
by petitions to confirm or vacate the award, culminating in a final
judgment or order that determines the parties‘ rights. Because
the judgment confirming the partial final award is not a final
judgment, it is not appealable under section 1294(d); therefore we
lack jurisdiction to hear Kaiser‘s appeal.
The trial court could not have simply entered an order
confirming the partial final award and bypassed entry of
judgment. Because the court confirmed the award, it was
required by section 1287 to enter judgment in conformity
therewith. Indeed, section 1294‘s list of appealable orders does
not include orders confirming awards; such orders must be
incorporated into judgments. (See Law Offices of David S.
Karton v. Segreto, supra, 176 Cal.App.4th at p. 9.) And to be
19
appealable, those judgments must be final, in accordance with
the one final judgment rule. In any event, under Judge, supra,
232 Cal.App.4th at page 634, orders related to arbitration awards
are not appealable under section 1294 unless they are final.
Thus, even if the trial court could have labeled its confirmation of
the partial final award as just an ―order,‖ without folding it into a
judgment, the finality problem still would not have been solved.
In the face of the finality requirement and its application to
the arbitration setting in Rubin and Judge, Kaiser and Prime
nevertheless argue that the judgment confirming the partial final
award‘s ruling on the Medicare Act preemption and exhaustion
questions is appealable. Their arguments are unavailing.
Prime‘s principal contention regarding appealability is that
the partial final award was akin to a declaratory judgment on the
questions of Medicare Act preemption and exhaustion, which the
trial court then confirmed. Because declaratory judgments are
appealable, Prime asserts that the partial final award and the
attendant judgment confirming it are appealable. To support
this argument, Prime refers to the April 3, 2017 amendment to
the parties‘ arbitration agreement, which states that Kaiser and
Prime intended that, ―[i]n essence,‖ the adjudication of the
preemption and exhaustion issues in an initial phase of the
arbitration ―would be the equivalent of a separate action for
declaratory relief.‖ The problem is that the parties did not
submit the preemption and exhaustion issues to the panel in a
separate, stand-alone arbitration. Rather, they submitted all of
their disputed issues to arbitration in one fell swoop. Under
these circumstances, the parties‘ request that the panel decide
the Medicare Act preemption and exhaustion issues before
proceeding to the other issues does not render the partial final
20
award the equivalent of an appealable final order in a declaratory
judgment action in civil litigation. It renders the partial final
award the equivalent of a nonappealable interlocutory order in
civil litigation.
For its part, Kaiser‘s principal contention regarding
appealability is that the California Supreme Court‘s decision in
Cable Connection supports the proposition that appellate review
of an order confirming or vacating a partial final arbitration
award ―does not conflict with the one final judgment rule for
appealability.‖ We rejected that very argument in Judge. Like
Judge, ―Cable Connection involved an appeal from an order
vacating an arbitration award that concluded that an arbitration
provision allowed for class arbitration.‖ (Judge, supra, 232
Cal.App.4th at p. 637.) As Kaiser does here, the defendants in
Judge asserted that ―because in Cable Connection the Court of
Appeal heard the appeal and the Supreme Court granted review,
both courts impliedly found that the order was appealable.‖
(Ibid.) We disagreed, stating that no such implied finding can be
derived from Cable Connection because ―[a] case . . . ‗is authority
only for an issue actually considered and decided,‘‖ and Cable
Connection did not consider and decide whether the order was
appealable. (Judge, supra, at p. 637.) The issue was
unaddressed. (See Cable Connection, supra, 44 Cal.4th at p. 1367
(conc. opn. of Baxter, J.) [―[I]t is questionable whether parties to
an arbitration agreement may contract to obtain premature
judicial merit review of arbitral decisions that are labeled as
‗awards,‘ but which in substance merely resolve one or more legal
or factual issues pertaining to only a portion of the controversy
submitted to the arbitrators for their determination. Our court
21
has not addressed this issue, and it has not been raised or
litigated in the instant case‖].)
Kaiser contends that what we said in Judge about Cable
Connection was wrong because (according to Kaiser) subject
matter jurisdiction (including appellate jurisdiction) ―is always
an issue that is necessarily considered and decided‖ when
another jurisdictional issue is considered and decided, and in
Cable Connection, the Supreme Court considered and decided
that the trial court had jurisdiction to review de novo the legal
basis of the arbitrator‘s award.10 Thus, Kaiser asserts, the
Supreme Court in Cable Connection necessarily also considered
whether the order at issue was appealable and decided that it
was. As a result, Kaiser says, Cable Connection constitutes
precedent for our exercise of jurisdiction over Kaiser‘s appeal.
Kaiser is mistaken about Cable Connection‘s precedential
force. When an appellate decision does not expressly address a
jurisdictional issue, courts confronting the same issue in a
subsequent case should not construe the failure of the court in
the previous case to address it as a pronouncement on
jurisdiction. Jurisdictional precedent is not established by
silence. (Gage v. Atwater (1902) 136 Cal. 170, 174 [―No objection
has been made to the hearing of the appeal herein, and we have
considered it as if the order [substituting attorneys] were
appealable. We do not, however, wish our silence upon that
question to be taken as indicating any opinion upon the question,
10 As indicated above (fn. 8, ante), in Cable Connection, the
Supreme Court held that parties to an arbitration may provide in
their agreement that arbitrators exceed their authority if their
awards are based on erroneous legal conclusions or legal
reasoning.
22
or as a precedent to be hereafter relied upon‖]; Edlund v. Los
Altos Builders (1951) 106 Cal.App.2d 350, 356-357 [deciding
jurisdictional issue that was unaddressed and thus ―left open‖ in
Gage and holding that order substituting attorneys was not
appealable]; see also Lewis v. Casey (1996) 518 U.S. 343, 352, fn.
2 [116 S. Ct. 2174, 135 L.Ed.2d 606] [―we have repeatedly held
that the existence of unaddressed jurisdictional defects has no
precedential effect‖].)
The two cases that Kaiser cites are not to the contrary.
Haden v. Haden (1953) 120 Cal.App.2d 722, 726, says that ―[a]
judgment presumes jurisdiction over the subject matter and over
the persons.‖ It does not say that an appellate court can create
precedent on appealability by simply not addressing
appealability. Kaiser‘s second case, Barry v. State Bar of
California (2017) 2 Cal.5th 318, is far afield. It was an anti-
SLAPP (strategic lawsuit against public participation) case,
which held that a court lacking subject matter jurisdiction over a
claim may grant a special motion to strike under section 425.16
based on that lack of jurisdiction. (Barry, at pp. 320-321.) It has
no bearing on the appealability of the trial court‘s confirmation of
the partial final award in this case.
C. The Partial Final Award Is Not an Award Under Section
1283.4, Thus Depriving the Trial Court of Jurisdiction To
Confirm It
Section 1283.4 specifies the requirements for an arbitration
award. It provides that an award must ―include a determination
of all the questions submitted to the arbitrators the decision of
which is necessary in order to determine the controversy.‖ (Ibid.)
An arbitrator‘s designation of his or her ruling as an ―award‖
23
does not make it one under section 1283.4. Likewise, an award‘s
qualification as an award under the rules of arbitration bodies,
such as JAMS and similar entities, does not control the
section 1283.4 inquiry. (Judge, supra, 232 Cal.App.4th at p. 636
[American Arbitration Association rules providing for partial
awards do not confer jurisdiction on courts to review such
awards].) It is instead incumbent on the trial court, before
confirming or vacating what has been deemed an award, ―to
ensure that the . . . ‗award‘ is an ‗award‘ within the meaning of
[section 1283.4].‖ (Cinel v. Christopher (2012) 203 Cal.App.4th
759, 767.) If the ―award‖ does not qualify as an award under
section 1283.4, then the court is deprived of jurisdiction to
confirm or vacate it. (See Judge, supra, 232 Cal.App.4th at
p. 634, fn. 12.)
1. Like the Clause Construction Award in Judge, the
Partial Final Award Decided a Threshold Issue, and
No More
As indicated above, in Judge, we held that an order
vacating an arbitration award construing the arbitration clause
in the parties‘ agreement to authorize arbitration of the plaintiff‘s
class and representative claims was nonappealable under section
1294 because it was not final. That holding was bound up in our
separate conclusion that the award did not meet the section
1283.4 specifications for an award because it did not ―determine
all of the questions that are necessary for the arbitrator to decide
in order to determine the controversy. Rather, the clause
construction award only resolved what the arbitrator described
as the ‗threshold matter‘ of ‗whether the applicable arbitration
clause permits the arbitration to proceed on behalf of or against a
24
class‖ and allowed the class claims to continue. Because the
clause construction award does not qualify as an ‗award‘ under
section 1283.4, the trial court‘s order is not an order vacating an
arbitration award, and it is not appealable.‖ (Judge, supra, 232
Cal.App.4th at pp. 633-634.) We did not decide in Judge whether
the trial court had jurisdiction to confirm or vacate the award in
the first place because that issue was not before us. We
admonished, however, that it was ―highly unlikely‖ that the court
had jurisdiction precisely because the award did not resolve all of
the questions necessary to determine the controversy. We thus
invited the plaintiff to file in the trial court a motion for
reconsideration of the order vacating the award, based on the
absence of jurisdiction. (Id. at p. 634, fn.12.)
Whether the trial court had jurisdiction to confirm or
vacate the partial final award in this case is before us now
because we asked the parties to address it. We asked that
question because if the court lacked jurisdiction, then we cannot
review the merits of the judgment confirming the partial final
award by treating Kaiser‘s appeal as a petition for a writ of
mandate to vacate the judgment. (People v. Chlad (1992) 6
Cal.App.4th 1719, 1726, fn. 7.) Both Kaiser and Prime argue the
trial court had jurisdiction because the partial final award meets
the section 1283.4 criteria for an award.
We disagree. Like the clause construction award in Judge,
the partial final award did not ―determin[e] . . . all the questions
submitted to the arbitrators the decision of which is necessary in
order to determine the controversy‖ (§ 1283.4). The controversy
between Kaiser and Prime encompasses a wide range of
questions. The sole question the partial final award determined
was whether Prime‘s Medicare Advantage claims are preempted
25
by the Medicare Act and subject to that Act‘s exhaustion
requirement. The partial final award did not resolve all of the
other questions necessary to determine the parties‘ controversy.
These other questions entail not just whether Kaiser is liable to
Prime on the Medicare Advantage claims, but also whether
Kaiser is liable on Prime‘s other claims and whether Prime is
liable on Kaiser‘s cross-claims. These questions are pending
before the panel through Prime‘s arbitration demand. The
parties have yet to ask the panel to rule on them. They are,
however, in controversy in the arbitration. Thus, like the clause
construction award in Judge, the partial final award here is not
an award.
Prime contends that Judge is distinguishable because the
clause construction award there addressed just a threshold
matter, whereas the partial final award here did not. Prime is
wrong. The partial final award is as equally a threshold ruling as
the clause construction award in Judge. The partial final award
determined that Prime‘s Medicare Advantage claims could
proceed in the arbitration because they are not preempted and
subject to exhaustion. That is no different than the Judge clause
construction award‘s determination that the plaintiff‘s class and
representative claims in that case could proceed in the
arbitration. Prime is right that the partial final award ―left
nothing to be decided‖ on the issues of Medicare Act preemption
and exhaustion. But it left everything else in the arbitration to
be decided, just like the clause construction award in Judge did.
Prime fares no better in its attempt to distinguish Judge on
the ground that the parties in that case did not submit the clause
construction issue to the arbitrator, whereas here, the parties
submitted the Medicare Act preemption and exhaustion issues to
26
the panel. It is true that the arbitrator in Judge reached out and
decided the clause construction issue. That played no role,
however, in our conclusion that the clause construction award
was not an award under section 1283.4. What mattered is that
the clause construction award left the merits of plaintiff‘s claims
unresolved.
It also is correct, as Prime points out, that in Judge, the
trial court vacated the arbitration award, whereas here, the court
confirmed the award. But this, too, is irrelevant. An award must
be an ―award‖ under section 1283.4 before it can be either
confirmed or vacated. How a trial court disposes of a petition to
confirm or vacate a putative award has no bearing on whether
the award satisfies section 1283.4‘s strictures.
2. Compliance With Section 1283.4’s Award
Requirement Prevents Piecemeal Judicial
Review of Arbitrators’ Rulings
In Judge, we observed that if section 1294 were construed
to permit appeals from nonfinal judgments and orders associated
with arbitration awards, then ―[a]ggrieved parties could appeal
orders vacating interim arbitration orders resolving discovery
disputes, sustaining or overruling demurrers, granting summary
adjudication on certain claims, ruling on liability but not
damages in a bifurcated proceeding, and denying motions for a
new arbitration hearing. It would be anomalous to allow parties
participating in an arbitration to appeal orders vacating interim
arbitration awards when the underlying orders are not
appealable in nonarbitration cases.‖ (Judge, supra, 232
Cal.App.4th at pp. 634-635.) Permitting appellate review of
interlocutory orders approving or disapproving arbitration
27
awards, we cautioned, ―would interfere with the ‗―efficient,
streamlined procedure[]‖‘ that is supposed to be arbitration‘s
‗fundamental attribute.‘‖ (Id. at p. 634.) This attribute of
arbitration ―requires that judicial intervention in the arbitration
process be minimized.‖ (Moncharsh v. Heily & Blase (1992) 3
Cal.4th 1, 10.)
Concerns about piecemeal judicial review of arbitration
rulings also informed our conclusion in Judge that the clause
construction award at issue there did not qualify as a section
1283.4 award. Judge recognized that compliance with the award
requirement ensures that judicial approval or disapproval of an
award is timed to the Legislature‘s specifications, not the parties‘
preferences.
In arguing that the partial final award is a section 1283.4
award because it left nothing to be decided on the Medicare Act
preemption and exhaustion questions, Kaiser and Prime fail to
offer a limiting principle that would distinguish arbitrator
rulings that meet section 1283.4 requirements and those that do
not. Under their approach, anything and everything would
qualify as an award. If the partial final award allowing the
Medicare Advantage claims to proceed in arbitration is a section
1283.4 award, then so too would be an interim award
determining liability on the Medicare Advantage claims. The
trial court thus would have jurisdiction to confirm or vacate the
liability award on those claims, even if all the other claims
remained pending in the arbitration. Similarly, an award on
liability on Prime‘s claims related to the Multiplan contract
would be an award that the court could confirm or vacate, even if
the resolution of damages on those claims, as well as the
28
resolution of liability and damages on Prime‘s claims related to
the Beech Street contract, remained pending in the arbitration.
In short, if Kaiser and Prime are right and the partial final
award is an award, then nothing would prevent parties to an
arbitration from jumping back and forth between the arbitration
forum and courtrooms. They could obtain an award from
arbitrators one day, seek judicial approval or disapproval of the
award the next day, only to return to arbitration the day after
that to resume arbitrating what remains in their dispute.
Arbitrator determinations of discrete questions within a
controversy would be blurred with determination of the
controversy itself, thereby rendering the section 1283.4
requirements meaningless.
The text of section 1283.4 is clear: It specifies that an
award must resolve the parties‘ controversy, not a question
within the controversy. Our conclusion that the partial final
award is not an award hews to that command.
Kaiser claims that our reading of section 1283.4 to foreclose
judicial review of the partial final award in this case would force
parties ―to go through [the] wasteful procedural formalit[y]‖ of
filing separate, but related arbitrations ―in complex, multi-
dispute matters,‖ instead of presenting all of their disputes in one
arbitration and seeking ―timely review‖ of awards on discrete
disputes. This contention overlooks that the tack of sporadic
judicial intrusion into ongoing arbitrations that Kaiser and Prime
are advocating would be highly inefficient in its own right
because it would disrupt the ―streamlined process‖ that, as we
noted above, is a hallmark of arbitration. (Judge, supra, 232
Cal.App.4th at p. 634.)
29
3. Section 1283.4 Does Not Bar Judicial Review of All
Interim Awards
We recognize that there is significant overlap between our
conclusion that the trial court‘s judgment confirming the partial
final award is not appealable under section 1294 because it was
not a final judgment and our conclusion that the court lacked
jurisdiction in the first place because the partial final award does
not qualify as a section 1283.4 award. Underpinning both
conclusions is that the partial final award resolved only the
questions of Medicare Act preemption and exhaustion, and
nothing more. Whether an award is an award and whether a
judgment or order confirming the award is appealable are not
always coterminous inquiries, however. In some cases, an
interim award will meet the section 1283.4 requirements for an
award, thus giving the trial court jurisdiction to confirm or vacate
it and enabling the appellate court to review by writ the merits of
the order confirming or vacating an award, even if the order is
not appealable under section 1294.
Hightower v. Superior Court (2001) 86 Cal.App.4th 1415(Hightower) is such a case. The question presented in that writ
proceeding was ―whether an arbitrator, in order to provide a
proper remedy for the prevailing party, may resolve certain
critical areas of a dispute in a ‗partial final award‘ but reserve
jurisdiction to later decide, by a ‗final award,‘ issues which will
likely arise as a result of the implementation of that remedy,‖
without offending section 1283.4. (Hightower, at p. 1420.) The
court ―answere[d] that question in the affirmative,‖ based on the
―specific factual context of [the] case‖ (id. at p. 1419), stating that
neither section 1283.4 nor case law ―foreclose[s] the utilization of
a multiple incremental or successive award process as a means,
30
in an appropriate case, of finally deciding all submitted issues.‖
(Hightower, at p. 1434.) We have no quarrel with that answer
based on the facts of Hightower. The approval of the partial final
award in Hightower does not, however, furnish section 1283.4
cover to the partial final award in this case. The ―specific factual
context‖ on which the Court of Appeal‘s section 1283.4 ruling in
Hightower rests is quite different from the factual context here.
Hightower arose out of a shareholder dispute between two
individuals, Hightower and O‘Dowd, each of whom owned one-
half of a company they jointly formed. Their shareholder
agreement contained a ―buy-sell provision,‖ which allowed either
party to offer to sell his shares to the other at a specified price.
The other party then had 90 days either to sell his shares to the
offeror at that price or to buy the offeror‘s shares for that same
price. (Hightower, supra, 86 Cal.App.4th at pp. 1420-1421.)
O‘Dowd decided to buy Hightower‘s shares; so, he sought and
obtained the necessary financing, and offered to purchase
Hightower‘s shares for $47 million. In response, Hightower
sought to obtain his own financing to buy O‘Dowd‘s shares at that
price, consistent with his rights under the buy-sell provision.
Hightower was unable to secure financing, however. At that
point, Hightower was obligated to sell his shares to O‘Dowd, as
contemplated by the buy-sell provision. Hightower did not do
that, however. Instead, he attributed his inability to get
financing to purchase O‘Dowd‘s shares to alleged wrongdoing by
O‘Dowd. Hightower demanded arbitration under the shareholder
agreement‘s arbitration clause. In the demand, Hightower
alleged that O‘Dowd breached his fiduciary duty to Hightower
and the covenant of good faith and fair dealing. O‘Dowd
counterclaimed, alleging Hightower breached the shareholder
31
agreement by not selling his shares to O‘Dowd once he failed to
secure financing to purchase O‘Dowd‘s shares. (Id. at pp. 1421-
1423.)
The arbitrator rejected Hightower‘s claims, concluding that
O‘Dowd was not responsible for Hightower‘s inability to secure
financing and that Hightower breached the shareholder
agreement by blocking O‘Dowd from completing his purchase of
Hightower‘s shares. The arbitrator faced a problem in fashioning
a remedy for O‘Dowd, however, because the 90-day period during
which Hightower either had to sell his shares to O‘Dowd for $47
million or buy O‘Dowd‘s shares at that price had long since
lapsed; and with the passage of time, the financiers who had
committed to back O‘Dowd‘s purchase had pulled out due to the
uncertainty caused by Hightower‘s initiation of the arbitration.
It thus was impossible for the arbitrator to provide O‘Dowd the
full benefit of the bargain from the now-collapsed transaction.
Seeking to approximate that benefit as closely as possible
notwithstanding the changed circumstances, the arbitrator
issued a ―partial final award‖ that gave O‘Dowd the option to
obtain new financing for the purchase of Hightower‘s shares
within six months from the date of the award. The arbitrator
reserved jurisdiction to determine issues that might arise
depending on whether O‘Dowd exercised the option or not. Those
issues included (1) the amount of costs, unknown as of the date of
the award, O‘Dowd might incur to obtain the new financing to
purchase Hightower‘s shares if he exercised that option; and
(2) the amount of damages in the form of attorney‘s fees and the
recoupment of financing charges, both of which also were
unknown as of the date of the award, if O‘Dowd did not exercise
the option. (Hightower, supra, 86 Cal.App.4th at pp. 1424-1428.)
32
Hightower petitioned the trial court to vacate the award.
The court denied the petition but did not enter an order or
judgment confirming the award. Hightower then filed a petition
for a writ of mandate asking the Court of Appeal to direct the
trial court either to vacate the order denying his petition to
vacate the award and enter a new order granting the petition, or
enter an order and judgment confirming the award. He argued
that section 1283.4 mandates that arbitrators issue ―a single final
award which resolves all issues placed in dispute by the parties
and thus an arbitrator is without power to issue partial or
‗piecemeal‘ awards . . . .‖ (Hightower, supra, 86 Cal.App.4th at
pp. 1428-1431.)
The Court of Appeal disagreed. It held that section 1283.4
does not impose a blanket prohibition on interim awards that
otherwise meet that provision‘s specifications for an award.
(Hightower, supra, 86 Cal.App.4th at pp. 1439, 1441.) The court
concluded that the partial final award for O‘Dowd satisfied those
standards because it did ―not improperly [leave] undecided issues
‗necessary in order to determine the controversy.‘ Rather, [the
award] determined all issues that [were] necessary to the
resolution of the essential dispute arising from Hightower‘s
breach. . . . [Citations.] Nothing remains to be resolved except
those potential and conditional issues that necessarily could not
have been determined . . . when the [award] was issued.‖ (Id. at
p. 1439, italics added, fn. omitted.) Those issues, the court
stressed, were ―not capable of resolution until after O‘Dowd had
exercised his option and completed the necessary preparations to
complete the purchase of Hightower‘s shares.‖ (Ibid.) The court
also reasoned that the partial final award was necessary to give
meaning to the option right the arbitrator conferred on O‘Dowd.
33
It stated, ―this option would be of no value to O‘Dowd unless it
were a firm and final right,‖ embodied in an award; ―[w]ithout
assurance that [this] . . . right . . . was finally resolved, it would
be difficult [for O‘Dowd] to obtain the new financing, and
enforcement of the option right would be subject to continuing
uncertainty.‖ (Id. at p. 1438.) The court concluded that, under
those unique and particular circumstances, the arbitrator‘s use of
an ―incremental process‖ and the reservation of jurisdiction to
make a final award did not offend section 1283.4. (Hightower, at
p. 1439.) The court also rejected Hightower‘s argument that
―sanction[ing] such an incremental award process‖ would prevent
appellate review of interim awards. It indicated that partial
awards satisfying section 1283.4 would be subject to
confirmation, and the interlocutory judgment of confirmation
would be subject to review by writ. (Hightower, at p. 1440.)11
We devote much attention to Hightower because Kaiser and
Prime place great weight on it. They assert that if the partial
final award in that case was an award, then so too is the partial
final award in this case. They are wrong. The arbitrator in
Hightower resolved all the issues necessary as of the date of the
award to determine the parties‘ controversy regarding the breach
of the shareholder agreement and the appropriate remedy for the
breach. The issues left open for resolution in a subsequent award
simply could not have been decided as part of the partial final
award because their nature and scope were uncertain as of the
11 As to writ relief in Hightower itself, the court issued a writ
of mandate directing the trial court to enter an order and
interlocutory judgment confirming the partial final award (which,
as indicated above, it had not done when denying the petition to
vacate). (Hightower, supra, 86 Cal.App.4th at p. 1441.)
34
award date. Those issues would take shape based on contingent
events that might, or might not, occur during and after the option
period. By contrast here, the issues left open by the partial final
award were not potential and conditional ones that would spring
into existence based on events that had yet to transpire. Those
issues were known and capable of being resolved simultaneously
with the Medicare Act preemption and exhaustion issues.12 The
parties simply chose to present the remaining issues to the panel
at a later time. This is a far cry from what happened in
Hightower.13
12 Similarly in Judge, we pointed out that, unlike the partial
final award in Hightower, the clause construction award in Judge
did not ―merely reserve potential or conditional issues relating to
implementation of a remedy.‖ (Judge, supra, 232 Cal.App.4th at
p. 636.)
13 Kaiser and Prime both argue that Roehl v. Ritchie (2007)
147 Cal.App.4th 338 supports their contention that the partial
final award constitutes a section 1283.4 award. It does not.
Roehl involved an appeal from a judgment confirming a second
arbitration award in a trust dispute. The arbitrator had reserved
jurisdiction in the first award to issue the second one. The first
award was confirmed in a judgment, which, in turn, was affirmed
in an initial appeal. In the second appeal, the appellant argued
that the arbitrator‘s issuance of incremental awards was
prohibited by section 1283.4. Citing Hightower, the Court of
Appeal rejected that argument. (Roehl, at p. 351.) Most relevant
to the issues here, the appellant in Roehl also argued, that unlike
in Hightower, the arbitrator could have resolved all the issues
initially submitted to him in the first arbitration award. The
court did not consider that argument because the appellant
forfeited it; ―[t]he time to make that challenge,‖ the court said,
―was in the first appeal, where the first arbitration award was [at
issue],‖ but the appellant failed to raise it at that time. (Roehl, at
35
In sum, because the partial final award is not an award,
the trial court lacked jurisdiction to confirm it. And because of
the trial court‘s lack of jurisdiction, we cannot review the merits
of the confirmation of the partial final award by treating Kaiser‘s
appeal as a petition for writ of mandate.
Kaiser contends that our shutting off of writ review of the
merits of the partial final award in this case will make parties in
other cases ―less inclined to arbitrate‖ and thus conflicts with
California‘s policy that encourages arbitration. Kaiser is correct
that California‘s policy is to promote arbitration as an alternative
to litigation. (See Serpa v. California Surety Investigations, Inc.
(2013) 215 Cal.App.4th 695, 701.) The availability of judicial
review has never been a selling point of arbitration, however. To
the contrary, it has long been recognized that parties typically
choose arbitration precisely to avoid ―the complications of
traditional judicial review.‖ (Cable Connection, supra, 44 Cal.4th
at p. 1358.) As our Supreme Court put it, ―the decision to
arbitrate grievances evinces the parties‘ intent to bypass the
judicial system and thus avoid potential delays at the trial and
appellate levels . . . .‖ (Moncharsh v. Heily & Blase, supra, 3
Cal.4th at p. 10; see Vandenberg v. Superior Court (1999) 21
Cal.4th 815, 831 [―Limited judicial review is a well-understood
feature of private arbitration, inherent in the nature of the
arbitral forum as an informal, expeditious, and efficient
alternative means of dispute resolution‖].) Our decision denying
p. 352.) Because Roehl was decided on forfeiture grounds, it did
not address whether the second arbitration award was consistent
with section 1283.4. Roehl thus sheds no light on whether the
partial final award in this case qualifies as a section 1283.4
award.
36
review of the merits of the partial final award by writ thus does
not frustrate the policy favoring arbitration—it promotes that
policy.
We are, however, treating Kaiser‘s appeal as a petition for
writ of mandate for the limited purpose of directing the trial
court to vacate its judgment confirming the partial final award on
account of its lack of jurisdiction to confirm it, and to enter a new
order dismissing Kaiser‘s petition to vacate the award. We are
not, as was done in Judge, supra, 232 Cal.App.4th at page 634,
footnote 12, simply inviting the filing of a motion for
reconsideration of the order denying Kaiser‘s petition to vacate
the partial final award. We have the power in this case to direct
the trial court to vacate its judgment confirming the award and
are exercising that power.14
14 We recognize appellate courts should exercise their
discretion to treat an improper appeal as a petition for writ of
mandate only in ―unusual circumstances.‖ (Olson v. Cory (1983)
35 Cal.3d 390, 401.) Such circumstances are present in this case.
The issue of appealability was not clear. (Ibid. [―that the issue of
appealability was far from clear in advance‖ was an ―unusual
circumstance‖ justifying the Supreme Court‘s decision ―to treat
the purported appeal as a petition for writ of mandate‖].) For
this reason, Kaiser filed a petition for writ of mandate as a
protective matter. As discussed, this court summarily denied
that petition before it reached the appealability issue. Once the
issue of appealability was squarely confronted by this court, we
requested supplemental briefing. As a result, whether the trial
court had jurisdiction to confirm the partial final award has been
fully briefed, and the existing record includes in substance the
elements necessary for a proceeding for a writ of mandate in this
court. (Ibid.; see Hall v. Superior Court (2016) 3 Cal.App.5th
792, 807-808.)
37
DISPOSITION
Let a preemptory writ of mandate issue, directing the trial
court to vacate its judgment confirming the ―Partial Final Award
Re Medicare Advantage Claims‖ that the arbitration panel
issued, and to enter a new and different order dismissing Kaiser‘s
petition to vacate that award. The parties shall bear their own
costs in this proceeding.
SMALL, J.*
We concur:
PERLUSS, P. J.
ZELON, J.
* Judge of the Los Angeles Superior Court, assigned by the
Chief Justice pursuant to article VI, section 6 of the California
Constitution.
38