Turnber v. Layton CA2/6 ( 2013 )

Filed 12/31/13 Turnber v. Layton CA2/6
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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
SECOND APPELLATE DISTRICT
DIVISION SIX
THOMAS C. TURNER, INC., 2d Civil Nos. B241809, B246400
(Super. Ct. No. EC045171)
Plaintiff and Respondent, (Los Angeles County)
v.
THOMAS R. LAYTON et al.,
Defendants and Appellants.
Thomas R. and Rose M. Layton (the Laytons) appeal a judgment after
orders confirming an arbitration award in favor of Thomas C. Turner, Inc., doing
business as T&T Construction (Turner) and awarding Turner post-arbitration attorney fee
and costs. We affirm.
FACTS AND PROCEDURAL HISTORY
The Laytons hired Turner, a general contractor, to remodel their house.
During construction, the scope of work changed as did the timeline for completion.
Turner prepared change orders, some of which the Laytons signed and some of which
they paid. Before Turner completed the project, the Laytons replaced him.
In 2007, Turner brought an action against the Laytons to recover an
unpaid balance on the contract price in the amount of $20,833, and to recover about
$122,222 in unpaid work orders. He also requested contractual attorney fees. The
Laytons cross-complained. They alleged that Turner's work was negligent and that he
engaged in fraudulent practices.
The construction contract between the parties required "neutral arbitration
as provided by California law" and authorized an award of attorneys fees to the
prevailing party. In the trial court, the parties stipulated to stay the action and to submit
the dispute to "binding arbitration in accordance with the provisions of California Code
of Civil Procedure, sections 1280, et seq. [the California Arbitration Act (CAA)] before
JAMS." The parties and the arbitrator relied exclusively on JAMS Comprehensive
Arbitration Rules & Procedures (JAMS rules) during the arbitration and no party objected
to the JAMS rules. The arbitrator later stated in orders and awards that "Pursuant to the
Stipulation, this is [a] private, contractual arbitration . . . . Further, JAMS
Comprehensive Arbitration Rules and Procedures govern this proceeding." The record
does not include a written agreement to be governed by JAMS rules.
In 2010, the arbitrator issued a "Partial Award" in which he decided that
Turner had committed no negligence or fraud, and that the Laytons had breached the
contract by not paying the balance due. He decided that the unpaid change orders were
void for failure to comply with statutory requirements. The arbitrator awarded Turner
$20,833 for the unpaid contract balance but nothing for the unpaid change orders. He
determined there was no prevailing party and did not award attorneys fees in the Partial
Award. He awarded interest to Turner, and set a briefing schedule for calculating the
amount. The arbitrator invited Turner to submit a calculation of statutory interest by
October 22, and the Laytons to submit a calculation by October 29. The arbitrator wrote,
"This partial award disposes of each and every issue and cause of action raised by the
parties. However, the arbitrator reserves jurisdiction to await a calculation of the
statutory interest due clamant Turner."
Turner submitted his calculation of interest on the date set by the briefing
schedule. He also asked the arbitrator to reconsider the prevailing party determination
because Turner had recovered the full contract price. The Laytons did not respond on the
date set by the briefing schedule. They filed a response 16 days after their response was
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due, but by then the arbitrator had already issued a "Final Award." In their late response,
the Laytons did not cite to the CAA or question the arbitrator's power to reconsider the
prevailing party determination. Instead, they sought affirmative relief. They argued, "If
any party prevailed during the course of arbitration it was Layton and not Turner," and
"to the extent a redetermination is made by the arbitrator and Turner is found to be the
prevailing party, Turner can only recover reasonable attorneys' fees."
The arbitrator issued a Final Award on November 17, 2010, setting the
amount of interest and deciding that Turner was the prevailing party on the contract
because he recovered the full amount he sought on the contract price. "From this
assessment," the arbitrator wrote, "it would be an abuse of discretion to not award
attorneys fees and costs." He relied on DiMarco v. Chaney (1995) 31 Cal.App.4th 1809,
1815 [arbitrator exceeds his powers by denying attorney fees to the prevailing party
where issue is within the scope of contractual arbitration provision and attorney fees
clause]. The arbitrator awarded Turner $114,728.20 in attorney's fees, together with
$82,902.99 in other costs and $7,512.03 in interest.
Again, the Laytons sought affirmative relief. They moved for
reconsideration, asking the arbitrator to "reconsider its Final Award and issue a new
award declaring Layton the prevailing party." In their motion they did not challenge the
arbitrator's power to reconsider his prevailing party determination. They did not raise
that issue until their reply to Turner's opposition.
The arbitrator denied the Laytons' motion for reconsideration. In doing so,
the arbitrator stated, "Under JAMS Comprehensive Arbitration Rule 24(d), the Partial
Award is like an Interim Award; it allows for reconsideration or modification before
issuing a Final Award."
The Laytons moved the trial court for an order vacating or correcting the
arbitrator's Final Award on the ground that he exceeded his powers under the JAMS rules
by reconsidering the prevailing party determination. Turner simultaneously moved to
affirm the award, and the Laytons opposed on the same grounds. The Laytons relied
exclusively on the JAMS rules for their argument that the arbitrator exceeded his powers.
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The trial court denied the Laytons' motion, affirmed the arbitrator's award,
awarded post-arbitration attorneys fees and costs to Turner in an amount to be
determined, and entered judgment. The Laytons appealed from the April 19, 2012
judgment. (2nd Civil No. B241809.) The trial court then entered an order awarding
Turner $6,615 for fees incurred post-arbitration. The Laytons appealed from the July 16
order setting the amount of post-arbitration fees. (2nd Civil No. B246400.) We granted
the Laytons' request to consolidate those appeals.
DISCUSSION
The Laytons contend that the arbitrator exceeded his powers under the
CAA and the JAMS rules by reconsidering his prevailing party determination. We agree,
but conclude that the Laytons are not entitled to relief because they invited the error when
they acquiesced in the request for reconsideration and urged the arbitrator to "issue a new
award declaring Layton the prevailing party."
A prime objective of an agreement to arbitrate is to achieve streamlined
proceedings and expeditious results. (Sonic-Calabasas A, Inc. v. Moreno (2013) 57
Cal.4th 1109, 1140.) Consistent with this objective, an arbitrator's decision cannot be
reviewed for errors of fact or law, with only narrow exceptions. (Moncharsch v. Heily &
Blase (1992) 3 Cal.4th 1, 11.) A trial court has the limited power to vacate or correct an
arbitration award if "the arbitrators have exceeded their powers." (Code Civ. Proc.,
§§ 1286.2, subd. (a)(4), 1286.6, subd. (b).) A trial court shall vacate an arbitration award
if the arbitrators "exceeded their powers and the award cannot be corrected without
affecting the merits of the decision upon the controversy submitted." (Id., § 1286.2,
subd. (a)(4).) If the award can be corrected without affecting the merits of the decision,
the trial court may correct it. (Id., § 1286.6.)
The trial court's determination as to whether an arbitrator exceeded his or
her powers is an issue of law that we review de novo. (Advanced Micro Devices, Inc. v.
Intel Corp. (1994) 9 Cal.4th 362, 376, fn. 9.) "[W]e review the superior court's decision
de novo, but we 'pay substantial deference to an arbitrator's determination of his own
authority.' [Citation.] Any doubts about the arbitrator's power to decide these issues
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must be resolved in his favor. [Citation.]" (Roehl v. Ritchie (2007) 147 Cal.App.4th 338,
347-348.) The powers of an arbitrator derive from and are limited by the agreement to
arbitrate. (Gueyffier v. Ann Summers, Ltd. (2008) 43 Cal.4th 1179, 1185.)
Under the CAA, an arbitrator has the power to issue an "incremental
award" but may not substantively correct the original award. (Code Civ. Proc., §§ 1284,
1286.6 [arbitrator may correct an award only for "evident miscalculation of figures or . . .
mistake in the description" or a "matter of form, not affecting the merits"]; Roehl v
Ritchie, supra, 147 Cal.App.4th at p. 341 [An arbitrator is "free to conduct an incremental
or multistep process as part of his choice or a remedy, and to issue a second award,"
where the arbitrator does "not revisit previously determined matters"].)
Under either the CAA or the JAMS rules, the arbitrator exceeded his
powers as a matter of law when he modified the Partial Award to change his prevailing
party determination. In his Final Award, the arbitrator characterized his "Partial Award"
as an "Interim Award" that "allows for reconsideration or modification before issuing a
Final Award." The JAMS rule upon which he relied gives an arbitrator the power to
issue an interim ruling, but does not authorize substantive corrections to an award.
(JAMS rule 24(a), (d) ["In addition to a Final Award or Partial Final Award, the
Arbitrator may make other decisions, including interim or partial rulings, order and
Awards"]; JAMS rule 24(j) [The arbitrator may only "correct any computational,
typographical or other similar error in an Award (including the reallocation of
[Arbitrator's] fees pursuant to Rule 31(c))"].)
In Banks v. Milwaukee Ins. Co. (1966) 247 Cal.App.2d 34, 37 an arbitrator
exceeded his powers when he made a correction that "was no mere recalculation, but a
revision in substance, adding an element of damages not covered . . . in the [original]
award as rendered." Similarly, in Elliott & Ten Eyck Partnership v. City of Long Beach
(1997) 57 Cal.App.4th 495, 501, "[t]here [was] no doubt but that, if Judge Charvat was
acting as a contract arbitrator subject to all of the restrictions of the [CAA], his
supplement to decision [with substantive revisions] was void."
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But the Laytons induced the arbitrator to modify his prevailing party
determination when they did not timely object to Turner's request for reconsideration, and
when they later urged the arbitrator to "reconsider its Final Award and issue a new award
declaring Layton the prevailing party." The doctrine of invited error is an application of
the estoppel principle. (Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 403.) Where a
party by his or her conduct induces the commission of error, he or she is estopped from
asserting it as a ground for reversal. (Ibid.) The purpose of the doctrine is to "prevent[] a
party from misleading the trial court and then profiting therefrom in the appellate court.
[Citations.]" (Ibid.) "'An appellate court will ordinarily not consider procedural defects
or erroneous rulings, in connection with relief sought or defenses asserted, where an
objection could have been but was not presented to the lower court by some appropriate
method . . . .'" (Doers v. Golden Gate Bridge (1979) 23 Cal.3d 180, 185, fn. 1.)
The doctrine of invited error has been applied in the arbitration context.
(Harris v. Sandro (2002) 96 Cal.App.4h 1310, 1314 [Any error in awarding fees was
invited because both parties requested an award of fees in the arbitration]; Taranow v.
Brokstein (1982) 135 Cal.App.3d 662, 667 [Even if the arbitrator did not have power to
award attorney's fees, the aggrieved party "voluntarily joined in the arbitration of the
dispute" and "may therefore not now complain"]; Lovret v. Seyfarth (1972) 22
Cal.App.3d 841, 860 [A claimant may not voluntarily submit a claim to arbitration, and,
if the decision is unfavorable, then challenge the authority of the arbitrators to act].) The
Laytons voluntarily joined in reconsideration of the prevailing party determination and,
under the invited error doctrine, cannot now complain of the error. They did eventually
question the arbitrator's power to reconsider, but did so only belatedly in a reply to
Turner's opposition to their own motion to reconsider the final award in which they had
asked the arbitrator to "reconsider its Final Award and issue a new award declaring
Layton the prevailing party." Their delay was a method of submitting the issue of
reconsideration to the arbitrator and waiting to see if the outcome would be favorable
before challenging his authority by an appropriate method. Having voluntarily submitted
reconsideration to the arbitrator they cannot now complain.
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DISPOSITION
The judgment is affirmed. Turner shall recover his costs on appeal.
NOT TO BE PUBLISHED.
O’DONNELL, J.*
We concur:
YEGAN, A. P. J.
PERREN, J.
*
(Judge of the Superior Court of Los Angeles County, assigned by the
Chief Justice pursuant to art. 6, § 6 of the Cal. Const.)
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Laura A. Matz, Judge
Superior Court County of Los Angeles
______________________________
Law Offices of Martin N. Buchanan, Martin N. Buchanan, Girardi &
Keese, Thomas V. Girardi ad Christopher Terrence Aumais for Defendants and
Appellants.
Manning & Kass, Ellrod, Ramirez, Trester, Darin L. Wessel; Builders Law
Group, Nick Campbell, for Plaintiff and Respondent.