Lerner v. Masterson CA2/5

Filed 7/27/21 Lerner v. Masterson CA2/5
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FIVE
KIMBERLY LERNER et al., B297323
Plaintiffs and Appellants, (Los Angeles County
Super. Ct. No. BC680797)
v.
LISA M. MASTERSON, M.D. et al.,
Defendants and Respondents.
APPEAL from a judgment of the Superior Court of Los
Angeles County, William F. Fahey, Judge. Reversed, with
directions.
Humphrey + Law, J. Scott Humphrey, for Plaintiffs and
Appellants Kimberly Lerner and Jacob Lerner.
Watkins & Letofsky, Daniel R. Watkins, for Plaintiff and
Appellant Bruce Lerner.
La Follette, Johnson, DeHaas, Fesler & Ames, Louis H.
DeHass, David J. Ozeran, for Defendant and Respondent Lisa M.
Masterson, M.D.
Taylor DeMacro, N. Denise Taylor, Julianne M. DeMarco,
for Defendant and Respondent Clifford J. Bochner, M.D.
__________________________
Plaintiffs and appellants Kimberly Lerner, individually and
as guardian ad litem for minor Jacob Lerner, and Bruce Lerner
appeal from a summary judgment in favor of defendants and
respondents Lisa M. Masterson, M.D., and Clifford J. Bochner,
M.D. (collectively referred to as the doctors), in this action for
breach of arbitration agreements.1 Arbitration between the
parties commenced in 2008 based on a stipulated order to
arbitrate in a prior medical malpractice action. After the parties
failed to appoint a successor arbitrator, the doctors refused to
participate further in the arbitration. The Lerners filed the
current action for specific performance of the agreement to
arbitrate, then filed a petition in this action to appoint an
arbitrator. The trial court denied the petition to appoint an
arbitrator on the ground that the Lerners had unreasonably
delayed the arbitration proceeding. The court later granted
summary judgment of the action on the same ground.
On appeal, the Lerners contend the trial court was required
to appoint an arbitrator under Code of Civil Procedure section
1281.6, and could not grant summary judgment based on a
factual finding that the Lerners had engaged in unreasonable
1 Because several parties share the last name Lerner, they
will be referred to individually by their first names for ease of
reference. No disrespect is intended.
2
delay.2 We conclude that the order denying the petition to
appoint an arbitrator was not directly appealable, but is properly
reviewed in connection with the appeal from the judgment.
Under section 1281.6, the trial court was required to assist with
the appointment of an arbitrator. Section 1281.6 did not permit
the trial court to find that the petitioner had waived the right to
have the court appoint an arbitrator through unreasonable delay
in the arbitration proceedings. Whether there has been
unreasonable delay in the arbitration proceedings here is an
issue to be brought before the arbitrator. We reverse the
judgment with directions.
FACTUAL AND PROCEDURAL HISTORY
Lerner I
In September 2006, Kimberly began receiving care for her
pregnancy from Masterson, who is a specialist in obstetrics and
gynecology, and Bochner, who is a specialist in perinatology.
Kimberly signed arbitration agreements with each doctor
containing identical terms. Article 1 of the agreement stated that
any dispute as to medical malpractice would be determined by
submission to arbitration as provided by California law. Article 2
stated that the parties intended the agreement to bind all parties
whose claims may arise out of the treatment or service provided
by the physician, including spouses or heirs. Article 3 provided
for the selection of arbitrators as follows in pertinent part: “Each
party shall select an arbitrator (party arbitrator) within thirty
2All further statutory references are to the Code of Civil
Procedure, unless otherwise stated.
3
days and a third arbitrator (neutral arbitrator) shall be selected
by the arbitrators appointed by the parties within thirty days of a
demand for a neutral arbitrator by either party.” Article 4
provided in pertinent part, “A claim shall be waived and forever
barred if (1) on the date notice [of the claim] is received, the
claim, if asserted in a civil action, would be barred by the
applicable California statute of limitations, or (2) the claimant
fails to pursue the arbitration claim in accordance with the
procedures prescribed herein with reasonable diligence.”
During an ultrasound in February 2007, when the fetus
was already viable, Bochner detected for the first time that the
fetus had extremely serious physical defects. Jacob was born on
March 23, 2007, with severe physical defects requiring multiple
surgeries, including a lack of a connection between his esophagus
and stomach, an extra pouch on his trachea, a missing kidney, an
arachnoid cyst on his brain, scoliosis, and the lack of an
articulable thumb on his left hand. Most of these conditions are
symptoms of VATER or VACTERL association, which is a
combination of certain birth defects that may be diagnosed
during fetal prenatal ultrasounds.
In May 2008, the Lerners brought an action for wrongful
life and wrongful birth against several defendants, including the
doctors, Cedars-Sinai Medical Center, and another individual
physician (Lerner, et al. v. Masterson, et al. (Super. Ct. L.A.
County, 2008, No. BC390280 (Lerner I)). The Lerners alleged
that Jacob suffered serious physical defects which the defendants
failed to detect prior to viability. The matter was assigned to
Judge William F. Fahey.
In the fall of 2008, after the arbitration agreements with
the doctors were brought to their attention, the Lerners
4
stipulated to binding arbitration. The parties stipulated “to stay
further proceedings in this action as to the arbitrating parties
only, until binding contractual arbitration of the claims and
controversies alleged herein has been completed in accordance
with the procedures for arbitration as set forth in the contractual
agreements between [Kimberly] and [the doctors and another
physician].”
In December 2008, the trial court ordered the action stayed
as to the arbitrating parties only, pursuant to section 1280 et
seq., pending binding arbitration in accordance with the parties’
contract. The trial court’s order also stated: “The court retains
jurisdiction to handle subsequent petitions filed by any party
pursuant to Title 9, California Code of Civil Procedure §§1280-
1294.2, including petitions to correct, confirm, or vacate an
arbitration award, and a petition to appoint a neutral arbitrator
should the method set forth in the agreement fail.”
Arbitration Proceedings
The Lerners selected Richard Thomas as their party
arbitrator. The defendants selected P. Theodore Hammond. The
parties agreed to appointment of Hon. Alan B. Haber (Ret.) as the
neutral arbitrator. Kimberly was deposed in March 2009; Bruce
was deposed in April 2009. Masterson filed a motion for
summary judgment in the arbitration proceedings in April 2009.
The trial court held a “Status Conference re: Binding
Arbitration” in Lerner I on June 24, 2009. There was no
appearance by the Lerners. Counsel for the defense advised the
court on the status of arbitration. The trial court dismissed the
5
case without prejudice and ordered the defendant to give notice.
The appellate record does not contain a notice of the ruling.
At an arbitration conference in July 2009, the Lerners’
attorney Scott Humphrey stated that he needed to depose the
doctors to oppose Masterson’s motion for summary judgment. He
represented that there was a good possibility Masterson would be
dismissed following the deposition, causing her motion for
summary judgment to be unnecessary. The motion for summary
judgment was taken off calendar in the arbitration pending the
depositions.
Further discovery was completed. Bochner’s deposition
was completed in October 2009. An independent medical
evaluation (IME) of Jacob was conducted in November 2009,
when he was two and a half years old. Masterson’s deposition
was completed in May 2010. The Lerners propounded form
interrogatories and requests for the production of documents
from Bochner, but did not serve any discovery requests on
Masterson.
More than a year after the completion of Masterson’s
deposition, in August 2011, the arbitration organization informed
the parties that arbitrator Haber was withdrawing from the
matter because he was no longer handling arbitrations. The
parties could not agree on a neutral arbitrator to replace
arbitrator Haber.
A year later, in August 2012, the Lerners filed a petition in
the trial court to have the court appoint a neutral arbitrator. The
petition was taken off calendar, and the parties agreed to the
appointment of Jay Horton in November 2012.3 Arbitrator
3The reason for taking the petition off calendar is not clear
from the appellate record. In the Lerners’ opening brief on
6
Horton was employed by Judicate West. He ruled on several
motions and conducted hearings prior to the arbitration date.
In February 2013, the parties and the arbitrators agreed to
schedule the arbitration for the following year in February 2014.
The arbitration was expected to require a minimum of 7 or 8 days
for testimony and argument. The next month, in March 2013,
the doctors’ party arbitrator Hammond died. The doctors
selected James Nichols in his place.
In November 2013, five years after the parties had agreed
to proceed in arbitration, Bochner’s attorney Denise Taylor
realized that she could not attend the scheduled arbitration
dates. An organization of which she was the president was
holding an annual seminar on dates in February 2014 that
conflicted with the arbitration. She informed the arbitrators and
the Lerners’ counsel that she was not available for the scheduled
dates. In addition, the doctors sought to conduct a second IME to
update the prior discovery. Although five years had passed, the
doctors did not bring a motion to dismiss the arbitration on the
ground that the Lerners waived their claims by failing to pursue
them diligently.
The Lerners cooperated with the doctors’ request to
reschedule the arbitration dates and conduct an updated IME.
Based on the availability of the arbitrators, the parties, and the
appeal, they state that in the process of exchanging pleadings
listing acceptable arbitrators, they agreed to select arbitrator
Horton, so the petition became moot. A trial court order in the
current action states that the 2012 petition was taken off
calendar because the underlying case had been dismissed and the
Lerners did not appeal. In the respondents’ brief, the doctors
merely state that after the Lerners filed the 2012 petition, the
parties agreed to select arbitrator Horton.
7
expert witnesses, the arbitration was continued for a year to
March 2015. The doctors scheduled a second IME to be
performed on January 16, 2014.
On January 10, 2014, the Lerners cancelled the second
IME. When the parties could not agree on a new date for the
IME, Bochner’s attorney contacted the neutral arbitrator. A
conference call was held with the arbitrator in May 2014. The
arbitrator ordered the Lerners to submit Jacob for the second
IME by July 1, 2014. If Jacob failed to submit to the second IME,
the arbitrator would entertain a motion for relief by the doctors
for reimbursement of the costs of coordinating and scheduling the
defense experts.
The doctors scheduled an IME to be performed on January
5 and 6, 2015. It is not clear from the record whether this is the
same IME that the arbitrator ordered to be completed by July 1,
2014, or a different IME. The doctors obtained an order
compelling the examination on the scheduled dates. The order
advised that the parents were required to attend and participate
as necessary, including providing data from a prior examination
conducted by the Lerners’ expert, but the parents would not be
permitted in the examination room while the standardized
evaluation was performed.
Jacob could not attend the evaluation on the scheduled
dates due to illness and the examination was rescheduled for
later dates in January 2015. According to the declaration of the
expert who conducted the examination, Bruce refused to allow
any testing outside of his presence. The parents refused to
participate in the clinical interview or answer questions about
Jacob, such as questions about the medications that he was
taking, but agreed to take the questionnaire with them and mail
8
it back. Bruce did not assist his son with the tests, but his
presence as an observer in the room was a distraction.
Bochner’s counsel described the events to the neutral
arbitrator in a conference call on January 23, 2015. Attorney
Humphrey stated that he would be filing a motion to withdraw as
counsel for Bruce. Humphrey requested a stay of the arbitration
to allow for this. The arbitration panel vacated the March 2015
arbitration dates.
The Lerners filed a second action in the trial court on
March 23, 2015, alleging wrongful life, but the complaint was not
served on any defendant (Lerner II). In January 2016, a year
after Humphrey notified the neutral arbitrator that he would be
withdrawing as Bruce’s counsel, attorney Dan Watkins
substituted into the arbitration matter on behalf of Bruce. The
arbitration panel ruled on multiple motions, including a motion
for summary adjudication, and the arbitration was rescheduled to
commence on September 19, 2016.
The parties filed arbitration briefs and were present for
arbitration to begin on September 19, 2016. Although eight years
had passed since the arbitration commenced, there is no evidence
in the record that the doctors sought to dismiss the arbitration
for failure to pursue claims with reasonable diligence.
Prior to opening statements, arbitrator Horton disclosed to
the parties’ counsel that he had a close family member born with
the some of the factors associated with Jacob’s medical condition.
There had been no issue in his family member’s circumstance
about whether the condition should have been diagnosed prior to
birth. The defects required surgery within 12 hours of birth, but
after extensive treatment, the child had thrived. Until he read
the specific term VATER or VACTERL in the arbitration brief,
9
arbitrator Horton had not realized that Jacob’s physical
conditions were associated with the issues that arbitrator
Horton’s family member had, because the complications and the
surgeries were different. Although he did not feel it would affect
his judgment and was not recusing himself, he wanted to make a
complete disclosure and give the parties an opportunity to
request recusal. The doctors indicated that they wanted to
proceed, but the Lerners requested recusal. Horton ordered that
there would be no further discovery and the Lerners must
present a list of acceptable neutral arbitrators by September 23,
2016.
On September 23, 2016, Humphrey sent an email
proposing five arbitrators to the doctors’ counsel that were
acceptable to the Lerners, and copied Watkins on the message.
The five arbitrators listed included Hon. Patricia M. Schnegg and
Hon. Michael Latin (Ret.). That same day, the trial court
dismissed Lerner II for failure to appear and failure to prosecute.
Bochner’s attorney Taylor sent an email to Humphrey and
Watkins dated September 30, 2016, confirming an earlier
telephone conversation. She had been willing to accept arbitrator
Schnegg, but the arbitration organization had advised Taylor
that Schnegg was no longer accepting arbitrations. Taylor
proposed two additional names and the Lerners’ counsel agreed
to consider Joe Thielen. Taylor asked the Lerners’ counsel to let
her know if Thielen was acceptable. If not, Taylor would consider
someone else from the Lerners’ list or suggest additional names.
She added, “Our carrier and clients would very much like to get
the arbitration back on calendar for some time in 2017 . . . .”
Bochner’s counsel sent another email a month later asking if
Thielen was acceptable, so as to begin scheduling.
10
On November 14, 2016, the Lerners rejected arbitrator
Thielen and suggested names of two additional arbitrators to
consider. Bochner’s counsel discussed the arbitrators proposed
by the Lerners with her clients and notified Humphrey on
November 21, 2016, that the doctors had agreed to select
arbitrator Latin from the original list provided by the Lerners.
Humphrey responded by email that day, requesting Bochner’s
counsel wait a few days to notify arbitrator Latin, because Bruce
was getting separate counsel again and Humphrey could not
speak for Bruce.
On November 26, 2016, Bochner’s counsel sent an email to
Humphrey asking if she could contact arbitrator Latin the
following week to retain him. She also asked for information as
to Bruce’s new counsel, and added, “We cannot wait for another
several months for him to find someone like last time. We need
to get this case back on schedule for arbitration.”
On November 30, 2016, and again on December 16, 2016,
Watkins notified Taylor by email that he was withdrawing as
Bruce’s counsel and promised to send documentation shortly.
Bruce tried to call Taylor directly on December 13, 2016, leaving
his phone number for a return call. Taylor was uncomfortable
communicating directly with a party who continued to be
represented by counsel of record, so she informed Watkins and
Humphrey of the call and requested a notice of withdrawal or
substitution of attorney. Taylor made multiple requests by
telephone and email for substitution of new counsel or selection
of a new arbitrator without receiving a response.
On May 30, 2017, Bochner filed a petition in Lerner I to
appoint a neutral arbitrator pursuant to section 1281.6. The
petition alleged that the doctors had demanded participation
11
from the Lerners to select a new arbitrator as provided in the
parties’ arbitration agreement, but the Lerners had failed to
respond so that a new arbitrator could be selected. Masterson
joined in the petition. Humphrey filed a response on behalf of
Kimberly and Jacob, stating that they did not oppose the court’s
intervention to select a neutral arbitrator. No response was filed
on behalf of Bruce.
On June 21, 2017, the trial court denied the petition on the
ground that the court lacked jurisdiction to rule on the matter,
because the case had been dismissed and there was no action
pending before the court. The parties did not seek
reconsideration of the ruling, seek to set aside the dismissal of
the case, or appeal the ruling. The doctors refused to participate
further in the arbitration proceeding.
Lerner III
Four months later, on October 31, 2017, the Lerners filed
the current matter against the doctors and Judicate West seeking
specific performance of the arbitration agreements and the
stipulation. Humphrey signed the complaint on behalf of Jacob
and Kimberly, while Watkins signed the complaint on behalf of
Bruce.4 Lerner III was related to Lerner I and transferred to
Judge Fahey on March 6, 2018.
4 On May 16, 2019, the Lerners filed a petition for
appointment of a neutral arbitrator, but the petition was
defective because it was not verified, not supported by a
declaration, and failed to provide a hearing date. The petition
was not heard.
12
On May 31, 2018, the Lerners filed an amended breach of
contract complaint seeking specific performance and injunctive
relief against the doctors only. They alleged that after arbitrator
Horton’s recusal, the parties and their counsel were unable to
agree on an appropriate neutral arbitrator, despite several
attempts over the course of six months. The Lerners sought
assistance from arbitrator Horton and Judicate West to select a
neutral arbitrator, but they refused to assist. When Bochner
filed a petition to appoint a neutral arbitrator in Lerner I without
filing a motion to reopen the action, although the parties
submitted names of arbitrators, the trial court refused to rule on
the petition. The court concluded that it lacked jurisdiction
because no action was currently pending before the court. After
the court’s ruling, the doctors refused to select a neutral or
participate in the arbitration process. The refusal to participate
further in the arbitration was a breach of the terms of the
arbitration agreements, as well as a breach of the terms of the
stipulation to submit the matter to binding contractual
arbitration until completed. The Lerners performed all of the
conditions required of them under the arbitration agreements
and the stipulation, and they were ready and able to participate
in the arbitration process to select a neutral arbitrator. The
complaint demanded specific performance of the parties’
agreements by requiring the doctors to participate in the
selection of a neutral arbitrator or that the trial court simply
select a neutral arbitrator. They also requested an injunction
mandating that the doctors participate in the selection of a
neutral arbitrator. They attached copies of the physician-patient
arbitration agreements that Kimberly had signed with the
doctors.
13
On June 27, 2018, the Lerners filed a petition in Lerner III
for appointment of a neutral arbitrator. Masterson opposed the
petition on the ground that it was not the proper forum. She
argued that the Lerners’ remedy had to be obtained in Lerner I,
where the issue of appointment had been fully and fairly
litigated, and had not been appealed. In addition, the action was
barred by the statute of limitations, and there was no sufficient
evidence to support granting the petition. Bochner opposed the
petition on the ground that the Lerners had unreasonably
delayed in participating in the selection of a neutral arbitrator,
an eight-year delay in the prosecution of the arbitration based on
a court action filed over ten years earlier was unreasonable, and
the petition was an improper motion for reconsideration of the
June 21, 2017 order denying appointment of a neutral arbitrator
in Lerner I. No reply brief was filed.
On July 25, 2018, a hearing was held on the petition for
appointment of a neutral arbitrator. The trial court took the
matter under submission and denied the petition on July 27,
2018. The court found there was no explanation for the Lerners’
multiple delays, including their failure to prosecute Lerner II,
their delay in filing the third lawsuit, a four month delay in
serving the third lawsuit, and an eight month delay in properly
noticing a hearing on the petition to appoint an arbitrator. The
court found the Lerners had made no effort to bring the matter to
arbitration in the three years prior to arbitrator Haber’s
withdrawal or the four years following his replacement with
arbitrator Horton. In the absence of a showing of reasonable
14
diligence to bring the matter to arbitration, the trial court denied
the petition.5
Motion for Summary Judgment in Lerner III
On November 8, 2018, the doctors filed a motion for
summary judgment on the ground that they did not breach the
arbitration agreement after Horton’s recusal. The doctors argued
that they fulfilled their duty under the arbitration agreement by
following the procedures required to select a neutral arbitrator
and the Lerners had unreasonably delayed the proceeding. In
addition, the lawsuit was an untimely and inappropriate motion
for reconsideration of the 2017 denial of the petition to appoint a
neutral arbitrator. The action based on the stipulation to
arbitrate was also barred by the statute of limitations. The
doctors submitted Bochner’s counsel’s declaration in support of
the motion for summary judgment. They also submitted copies of
emails, pleadings, discovery, a portion of the reporter’s transcript
from the arbitration, and trial court orders to establish the facts
above.
The Lerners filed an opposition to the motion for summary
judgment. They argued that the doctors, after participating in
the arbitration process for many years, and after delays caused
by the arbitrators and all of the parties involved, had refused to
choose another arbitrator or participate further in the arbitration
5 The doctors also filed a demurrer to the wrongful life
cause of action which was heard and ruled on by the trial court at
the same time as the petition to appoint an arbitrator. The trial
court overruled the demurrer on the ground that factual issues
existed which were not suitable for resolution on demurrer.
15
process after arbitrator Horton’s recusal. The Lerners’
performance was not a condition precedent to performance by the
doctors, but the Lerners had performed under the contract.
Humphrey had sought assistance from arbitrator Horton and
Judicate West, which had been refused. Following the trial
court’s denial of the doctors’ petition in Lerner I, the doctors
refused to select a new neutral arbitrator. Lerner III was based
on the doctors’ refusal to select a new arbitrator after the trial
court’s denial of the petition to appoint an arbitrator. The doctors
lack of performance was a material breach of their obligations
under the arbitration agreements. The Lerners were not seeking
reconsideration of the ruling on the petition, but rather, a remedy
based on the doctors’ inaction. The complaint was not time
barred, because the breach did not occur until after the trial court
denied the petition to appoint an arbitrator in Lerner I.
The Lerners submitted Humphrey’s declaration in
opposition to the motion for summary judgment to establish the
following. Jacob’s condition required more than 100 surgeries, so
the number of physicians and medical experts required to
evaluate his medical condition and his potential damages had
continually shifted and required significant time and expense to
coordinate. Hearings required significant advance time for
preparation due to the schedules of three arbitrators and several
counsel. The Lerners provided names of five neutral arbitrators
as ordered by arbitrator Horton, but the doctors did not accept
any of them and proposed two or three additional names, which
the Lerners did not accept. The Lerners proposed a second set of
five completely different names. Taylor eventually told
Humphrey that the doctors would agree to arbitrator Latin from
the original list. Latin continued to be acceptable to Kimberly
16
and Jacob, but at that point, Bruce wished to retain separate
counsel before selecting a neutral arbitrator.
Humphrey made several attempts to have arbitrator
Horton or the arbitration organization facilitate the selection of a
new arbitrator, but they refused. Humphrey noted that the
doctors brought a petition to compel arbitration in the trial court
without reopening the underlying case or opening any case. In
anticipation of the hearing date, Humphrey called Bochner’s
counsel concerning the need to reopen the original underlying
case, but Bochner’s counsel did not believe it would be necessary.
The Lerners did not bring the petition in Lerner I, but had been
in favor of the trial court aiding the selection of a new neutral
arbitrator. The trial court determined it did not have
jurisdiction, because the case had not been reopened.
Following the trial court’s ruling denying the petition, the
doctors refused to select a new neutral. A few days after the
hearing, Humphrey called Taylor to resume discussion regarding
selection of a new arbitrator. Taylor stated that she would check
with the client, but in her view, the matter was concluded and
they had no further obligation to arbitrate. On at least two
subsequent occasions, Taylor specifically represented that the
doctors refused to select another arbitrator and were “done” with
the matter.
The doctors filed a reply arguing that there was no triable
issue of fact as to breach of contract. The doctors went beyond
the legal requirements to facilitate selection of a neutral
arbitrator, but the Lerners engaged in delays and refused to
meaningfully participate. Lerner III was an impermissible
motion for reconsideration of the denial of the petition in the
prior action, and the action was time barred as a result of the
17
Lerners’ extraordinary delay. The parties had agreed to binding
arbitration in a stipulation filed more than nine years earlier, on
December 22, 2008. Article 4 of the arbitration agreements
provided that a claim was waived and forever barred if the
claimant failed to pursue it in accordance with the procedures
proscribed with reasonable diligence.
A hearing was held on February 22, 2019. Humphrey
explained that the Lerners did not intend to prove that the
doctors unnecessarily delayed the process during the course of
the arbitration proceedings. There was extensive discussion as to
whether the five-year rule requiring diligent prosecution of an
action applied to the arbitration. The doctors argued that no
breach of the arbitration agreements had been identified and the
Lerners had not complied with the agreements by acting with
reasonable diligence.
On February 28, 2019, the trial court entered an order
granting the motion for summary judgment and dismissing the
case with prejudice. The court found that the separate statement
of facts did not reveal a material factual dispute between the
parties. The Lerners provided no evidence that the doctors
breached the arbitration agreement. Instead, the record in
Lerner I showed there was a 10-year delay in bringing the matter
to arbitration primarily due to the actions of two arbitrators and
delays by the Lerners. There was no evidence that the Lerners
requested an arbitration date, or the doctors refused one, before
arbitrator Haber retired. When the parties initially could not
agree on a new arbitrator, the Lerners’ petition to the trial court
to select an arbitrator was taken off calendar because the
underlying case had been dismissed. The Lerners did not seek to
set aside the dismissal or appeal the ruling. After arbitrator
18
Horton made a personal disclosure, it was the Lerners who
requested his recusal. The doctors agreed to an arbitrator
proposed by the Lerners, but Humphrey requested another delay
because Bruce was seeking new counsel. Ultimately, Bruce did
not hire new counsel and attorney Watkins continued to
represent him.
There is no evidence that the Lerners took action to move
the case forward in the next six months. In May 2017, it was the
doctors who petitioned the trial court in Lerner I for appointment
of a neutral arbitrator, which was denied for lack of jurisdiction.
Although Humphrey believed the underlying case had to be
reopened first, the Lerners did nothing to reopen the case and did
not appeal the ruling on the petition. After the Lerners filed
Lerner III, they delayed serving the doctors and waited several
months before filing a motion requesting the court appoint an
arbitrator, which the court denied. The record does not show any
breach by the doctors, and the separate statements showed no
material factual dispute between the parties. The excessive
delays in bringing the matter to arbitration warranted denial of
the requested relief. The arbitration process had not been
expeditious, through no fault of the defendants. The motion for
summary judgment was granted and a judgment of dismissal of
Lerner III was entered.
On March 5, 2019, the doctors provided notice of entry of
judgment. On April 18, 2019, Watkins filed a notice of appeal on
behalf of Bruce from the judgment, although the notice
erroneously stated the judgment was entered March 5, 2019. On
May 1, 2019, Humphrey filed a timely notice of appeal on behalf
of Kimberly and Jacob from the judgment entered February 28,
2019.
19
DISCUSSION
Statutory Scheme and Procedural Posture
The California Arbitration Act (CAA) (§ 1280 et seq.)
embodies a strong public policy supporting private arbitration as
a relatively quick and inexpensive method to resolve disputes.
(Sheppard, Mullin, Richter & Hampton, LLP v. J-M
Manufacturing Co., Inc. (2018) 6 Cal.5th 59, 72.) A written
agreement to submit disputes to arbitration is a valid,
enforceable, and irrevocable contract, except on the grounds that
apply to the revocation of any contract. (§ 1281.) Proceedings
under the CAA to assist contractual arbitration are commenced
by filing a petition (§ 1290) and determined under the summary
procedures that apply to motions (§ 1290.2).
A. Proceedings to Initiate Arbitration
No judicial proceedings are required to commence
arbitration between willing participants. (Brock v. Kaiser
Foundation Hospitals (1992) 10 Cal.App.4th 1790, 1795, fn. 3
(Brock).)
When a party refuses to arbitrate, the party seeking to
arbitrate may file a petition to compel arbitration with the court
alleging that a party to a written arbitration agreement refuses
to arbitrate. (§ 1281.2.) If the court finds an agreement to
arbitrate the controversy exists, the court must order the parties
to arbitrate, unless the court finds: (1) the petitioner waived the
right to compel arbitration, (2) there are grounds for rescission,
(3) there is a pending proceeding with a third party and rulings
20
could conflict, or (4) the petitioner is a financial institution under
certain circumstances. (§ 1281.2.)
When there is no pending action or proceeding involving
the parties’ dispute, the party seeking to compel arbitration can
simply file a petition to compel arbitration under section 1281.2
as an independent lawsuit. (Frog Creek Partners, LLC v. Vance
Brown, Inc. (2012) 206 Cal.App.4th 515, 521, fn. 4 (Frog Creek).)
A petition to compel arbitration is essentially a suit in equity to
compel specific performance of the parties’ arbitration agreement.
(Brock, supra, 10 Cal.App.4th at p. 1795; Frog Creek, supra, 206
Cal.App.4th at p. 532.)
If there is a pending action or proceeding involving the
dispute, the petition for an order to arbitrate must be filed within
the action or proceeding. (§ 1292.4.) A petition to compel
arbitration that is filed within a pending lawsuit is considered
part of the legal action, not a separate, distinct proceeding. (Frog
Creek, supra, 206 Cal.App.4th at pp. 515, 537.) In addition, if the
court orders arbitration in a pending action or proceeding, upon
the motion of a party, the court must stay the action or
proceeding until the arbitration is held or an earlier time
specified by the court. (§§ 1281.4, 1292.8; Gaines v. Fidelity
National Title Ins. Co. (2016) 62 Cal.4th 1081, 1096 (Gaines) [a
party seeking to enforce contractual arbitration is entitled to a
stay of pending legal actions].)
An action at law and a contractual arbitration proceeding
based on the same controversy are independent remedies.
(Brock, supra, 10 Cal.App.4th at pp. 1792–1793.) Once the court
grants a petition to compel arbitration in a pending action and
stays the action at law, the court has limited jurisdiction over the
two separate proceedings. (Id. at p. 1796.) “[T]he action at law
21
sits in the twilight zone of abatement with the trial court
retaining merely a vestigial jurisdiction over matters submitted
to arbitration. This vestigial jurisdiction over the action at law
consists solely of making the determination, upon conclusion of
the arbitration proceedings, of whether there was an award on
the merits (in which case the action at law should be dismissed
because of the res judicata effects of the arbitration award
[citations]) or not (at which point the action at law may resume to
determine the rights of the parties). [Citations.]” (Ibid.)
The court also has continuing jurisdiction to provide
limited judicial assistance with the arbitration: “After a petition
has been filed under [the CAA], 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.” (§ 1292.6.)
B. Jurisdiction after Dismissal of Lerner I
Although the Lerners originally filed an action in the trial
court for medical malpractice, the doctors did not have to file a
petition to compel arbitration in that case because the Lerners
willingly agreed to arbitrate once the arbitration agreements
were brought to their attention. The trial court ordered the
proceedings in Lerner I stayed pending arbitration, and the
parties commenced arbitration. The order based on the parties’
stipulation was effectively an order staying the legal proceedings
and ordering the parties to arbitration. (Cf. Mileikowsky v. Tenet
Healthsystem (2005) 128 Cal.App.4th 262, 279 [stipulation
designed to avoid the trouble and expense of a motion to compel
22
discovery deemed equivalent to a court order compelling
discovery], overruled on other grounds in Mileikowsky v. West
Hills Hospital & Medical Center (2009) 45 Cal.4th 1259, 1273.)
The trial court’s authority to dismiss the entire action
without prejudice one year later, while the action was stayed and
arbitration was pending, is not clear from the record, statutes, or
case law, but the order dismissing the action without prejudice
was not appealed. The order dismissing Lerner I did not
terminate the arbitration proceeding, however, which continued
as a separate, independent proceeding. (Brock, supra, 10
Cal.App.4th at p. 1793 [dismissal of the action at law does not
terminate the arbitration proceeding].)
Pursuant to the court’s order to arbitrate, the court
retained jurisdiction to determine any subsequent petition under
the CAA filed within the action. (See Dodd v. Ford (1984) 153
Cal.App.3d 426, 431–432 (Dodd).) When the doctors filed a
petition to appoint an arbitrator within the action, however, the
court determined that it lacked jurisdiction to rule on the petition
because Lerner I had been dismissed and no action was pending.
The court’s ruling that it did not have jurisdiction to rule on the
petition within Lerner I was not appealed and became final.
We note that the parties’ written stipulation to stay the
legal proceedings in order to pursue arbitration was also legally
enforceable. (Porreco v. Red Top RV Center (1989) 216
Cal.App.3d 113, 130–132 (Porreco).) Dismissal of the action at
law did not bar independent enforcement of the stipulation to
stay proceedings in the malpractice action and pursue
arbitration. (See Dodd, supra, 153 Cal.App.3d at pp. 431–432.)
23
C. Remedies for Delay and Failure to Prosecute
Arbitration
Remedies for delay are available in an arbitration
proceeding and through limited proceedings in court under the
CAA, depending on the circumstances of the case.
1. Petition to Appoint an Arbitrator
If a party to arbitration engages in dilatory conduct and an
arbitrator has not been appointed, the other party may petition
the trial court to appoint an arbitrator under section 1281.6. “In
the absence of an agreed method [to appoint an arbitrator], or if
the agreed method fails or for any reason cannot be followed, or
when an arbitrator appointed fails to act and his or her successor
has not been appointed, the court, on petition of a party to the
arbitration agreement, shall appoint the arbitrator.” (§ 1281.6.)
Once an arbitrator has been appointed, the arbitration may
proceed even without the participation of one of the parties: “If a
court has ordered a person to arbitrate a controversy, the
arbitrators may hear and determine the controversy upon the
evidence produced notwithstanding the failure of a party ordered
to arbitrate, who has been duly notified, to appear.” (§ 1282.2,
subd. (e).)
2. Dismissal of Arbitration for Unreasonable
Delay
A malpractice claimant in arbitration, like a plaintiff in
litigation, is responsible for exercising diligence to advance the
24
matter to resolution. (Engalla v. Permanente Medical Group, Inc.
(1997) 15 Cal.4th 951, 980 (Engalla).) “An arbitrator has
discretion to dismiss a proceeding due to unreasonable delay by
the claimant in bringing the matter to a hearing.” (Burgess v.
Kaiser Foundation Hospitals (1993) 16 Cal.App.4th 1077, 1081
(Burgess).) Section 583.310, which requires dismissal of an
action if it is not brought to trial within five years, applies
directly only to actions at law. (Brock, supra, 10 Cal.App.4th at
p. 1793, citing Young v. Ross–Loos Medical Group, Inc. (1982) 135
Cal.App.3d 669, 673 [former section 583].) The concepts and
limits of section 583.310, however, “have been imported into the
test of reasonable diligence in bringing a claim to arbitration.
Thus, if a matter is not brought to arbitration within five years,
the arbitrator may dismiss the matter for failure to proceed with
reasonable diligence. [Citations.]” (Burgess, supra, 16
Cal.App.4th at p. 1081.)
Once an arbitrator has been appointed by the parties or by
the court pursuant to section 1281.6, a party can apply to the
arbitrator for dismissal of the arbitration proceedings based on a
delay in discovery or failure to pursue the arbitration claim with
reasonable diligence. (Brock, supra, 10 Cal. App.4th at pp. 1804,
1808.) “[T]he arbitrator (once appointed) has authority to
determine whether a party should take nothing because of that
party’s unwarranted delay in prosecuting the arbitration
proceedings. [Citation.]” (Id. at p. 1804, italics omitted.)
The trial court has no power to dismiss a contractual
arbitration proceeding for unreasonable delay in prosecution.
(Brock, supra, 10 Cal.App.4th at p. 1793.) There is no provision
under the CAA that allows filing a petition in the trial court to
dismiss an arbitration. (Id. at p. 1805.) The Brock court
25
persuasively rejected contrary reasoning found in earlier
decisions, including Lockhart-Mummery v. Kaiser Foundation
Hospitals (1980) 103 Cal.App.3d 891, 898 (Lockhart-Mummery)
and Preston v. Kaiser Foundation Hospitals (1981) 126
Cal.App.3d 402, 406 (Preston). (Brock, supra, 10 Cal.App.4th at
pp. 1799–1800, 1803–1805.)6 Based on our review of the
judgment and the record, the trial court in this case did not
purport to dismiss the arbitration proceeding, which the court did
not have power to dismiss, when the court entered judgment
dismissing Lerner III.
6 We note that the trial court also cannot dismiss an action
at law that has been stayed pending arbitration for failure to
prosecute. The calculation of the five-year period to bring an
action to trial under section 583.310 excludes any time during
which prosecution of the action was stayed (§ 583.340, subd. (b)),
so an action which is stayed pending arbitration cannot be
dismissed for failing to bring it to trial within five years. (Brock,
supra, 10 Cal.App.4th at p. 1793.) It is impossible for the
plaintiff to proceed in the legal action when a stay pending
arbitration is in effect. (Ibid.) A party’s level of diligence in
arbitration has no bearing on the five-year requirement to bring
the action at law to trial. (Id. at p. 1800.) The Brock court
persuasively rejected the reasoning of Lockhart-Mummery, supra,
103 Cal.App.3d at pages 896–897 (Lockhart-Mummery), which
was decided prior to amendment of section 583.340, subdivision
(b). (Brock, supra, 10 Cal.App.4th at pp. 1797–1799; cf. Gaines,
supra, 62 Cal.4th at pp. 1095–1096 [approving but distinguishing
Brock].)
26
3. Compare: Waiver of Right to Compel
Arbitration
In comparison, in the context of a petition to compel
arbitration, the trial court has jurisdiction to decide whether a
party’s dilatory conduct has waived the right to compel
arbitration.7 (Engalla, supra, 15 Cal.4th at p. 982 & fn. 14.)
Although a petition to compel arbitration is typically filed prior to
initiating arbitration, after arbitration has voluntarily
commenced, a petition to compel arbitration may be appropriate
in a subsequent legal action for claims governed by the
arbitration agreement. In Engalla, the claimants abandoned on-
going arbitration proceedings and filed a medical malpractice
action in superior court, causing the defendant health care
organization to file a petition in court to compel arbitration. (Id.
at pp. 669–970.) The claimants opposed the petition on the
ground that the defendant waived the right to compel arbitration
7 A party petitioning to compel arbitration has the burden
to prove a valid arbitration agreement exists that covers the
dispute. (Engalla, supra, 15 Cal.4th at p. 972.) If that burden is
met, the party opposing arbitration has the burden to prove any
defense to the petition or motion to compel arbitration. (Ibid.)
Unlike summary judgment, in summary proceedings to compel
arbitration under sections 1281.2 and 1290.2, “the trial court sits
as a trier of fact, weighing all the affidavits, declarations, and
other documentary evidence, as well as oral testimony received at
the court’s discretion, to reach a final determination. [Citation.]”
(Ibid.) Waiver of the right to arbitrate is usually a question of
fact, which the appellate court reviews for substantial evidence to
support the finding. (Id. at p. 983.)
27
through dilatory conduct in the arbitration proceedings.8 (Id. at
pp. 982–983.) The California Supreme Court concluded the trial
court had jurisdiction under section 1281.2, subdivision (a), to
determine within the context of a petition to compel arbitration
whether the petitioning party waived the right to compel
arbitration through delay or other conduct. (Id. at pp. 982–983.)9
8 The claimants in Engalla were a health care patient and
his family members, who initiated arbitration with the defendant
through a timely demand to arbitrate. (Engalla, supra, 15
Cal.4th at pp. 961–962.) There was evidence that despite diligent
effort by the claimants, the defendant delayed in selecting
arbitrators and scheduling depositions, and widespread delays
were endemic to the defendant’s arbitration program. (Id. at
pp. 963–968.) The patient died and his spouse lost a significant
claim. (Id. at p. 969.) The family members abandoned the
arbitration proceeding, filed an action in the trial court, and
refused to continue the arbitration process. (Id. at pp. 969–970.)
The defendant filed a petition in the trial court action to compel
arbitration and stay the court proceeding. (Id. at p. 970.) The
California Supreme Court concluded there were facts to support
the defenses of rescission and waiver, so remanded the matter to
the trial court to resolve conflicting evidence. (Id. at pp. 981–982,
983–984.)
9 No single test describes the conduct that constitutes a
waiver of the right to compel arbitration (Engalla, supra, 15
Cal.4th at p. 983), but the Supreme Court has affirmed that the
following factors are properly considered when assessing waiver
claims: “‘“(1) whether the party’s actions are inconsistent with the
right to arbitrate; (2) whether ‘the litigation machinery has been
substantially invoked’ and the parties ‘were well into preparation
of a lawsuit’ before the party notified the opposing party of an
intent to arbitrate; (3) whether a party either requested
28
The Engalla court concluded a trier of fact could find that
the defendant’s pattern of delay, which was arguably
unreasonable or conducted in bad faith, waived the arbitration
agreement and allowed the claimants to proceed in court.
(Engalla, supra, 15 Cal.4th at p. 984.) The court emphasized
that “the delay must be substantial, unreasonable, and in spite of
the claimant’s own reasonable diligence. When delay in choosing
arbitrators is the result of reasonable and good faith
disagreements between the parties, the remedy for such delay is
a petition to the court to choose arbitrators under section 1281.6,
rather than evasion of the contractual agreement to arbitrate.
The burden is on the one opposing the arbitration agreement to
prove to the trial court that the other party’s dilatory conduct
rises to such a level of misfeasance as to constitute a waiver
[citation], and such waiver ‘is not to be lightly inferred’
[citation].” (Id. at p. 984.)
arbitration enforcement close to the trial date or delayed for a
long period before seeking a stay; (4) whether a defendant
seeking arbitration filed a counterclaim without asking for a stay
of the proceedings; (5) ‘whether important intervening steps [e.g.,
taking advantage of judicial discovery procedures not available in
arbitration] had taken place’; and (6) whether the delay ‘affected,
misled, or prejudiced’ the opposing party.”’ [Citations.]” (St.
Agnes Medical Center v. PacifiCare of California (2003) 31
Cal.4th 1187, 1196 (St. Agnes).) California’s strong public policy
favoring arbitration agreements requires close scrutiny of waiver
claims. (Id. at p. 1195.) “Although a court may deny a petition to
compel arbitration on the ground of waiver (§ 1281.2, subd. (a)),
waivers are not to be lightly inferred and the party seeking to
establish a waiver bears a heavy burden of proof. [Citations.]”
(Ibid.)
29
Appealability
The doctors contend that the order denying the petition to
appoint an arbitrator was directly appealable, either because it
was a final judgment in an independent proceeding or because it
was the functional equivalent of an order denying a petition to
compel arbitration. As a result, they contend, the appeal from
the judgment more than eight months later was untimely. We
conclude that under the circumstances of this case, the order
denying the petition was not directly appealable, but is
reviewable in connection with the appeal from the judgment.
An appeal can be taken from an appealable order or
judgment only, as provided by statute and developed in the case
law. (J.H. Boyd Enterprises, Inc. v. Boyd (2019) 39 Cal.App.5th
802, 810 (J.H. Boyd); Aixtron, Inc. v. Veeco Instruments Inc.
(2020) 52 Cal.App.5th 360, 384 (Aixtron).) Section 904.1 provides
the general list of appealable judgments and orders in civil
actions, which stems from the “one final judgment rule.”
(Aixtron, supra, at p. 384.) A judgment that is a final
determination of the rights of the parties in an action or
proceeding, with no issue left for future consideration except
compliance, is appealable. (Ibid.)
The proceedings authorized under the CAA are considered
special proceedings.10 (Bagration v. Superior Court (2003) 110
10 “Judicial remedies are divided into two classes: actions
and special proceedings. (Code Civ. Proc., § 21.) ‘An action is an
ordinary proceeding in a court of justice by which one party
prosecutes another for the declaration, enforcement, or protection
of a right, the redress or prevention of a wrong, or the
punishment of a public offense.’ (Code Civ. Proc., § 22.) ‘Every
other remedy is a special proceeding.’ (Code Civ. Proc., § 23.) As
30
Cal.App.4th 1677, 1685, fn. 7 (Bagration); 3 Witkin, Cal.
Procedure (5th ed. 2020) Actions, § 65.) Unless a statute provides
otherwise, a final judgment in a special proceeding is also
appealable under section 904.1. (9 Witkin, Cal. Procedure (5th
ed. 2020) Appeal, § 139.)
Pursuant to the one final judgment rule, an appellate court
cannot review intermediate rulings until the final resolution of
the case. (Aixtron, supra, 52 Cal.App.5th at p. 384.) An order or
judgment that fails to dispose of all causes of action between the
parties is not appealable, and an appeal from a non-appealable
order or judgment must be dismissed. (Ibid.) On appeal from a
final judgment, however, in addition to reviewing the verdict or
decision, the appellate court may review “any intermediate
ruling, proceeding, order or decision which involves the merits or
necessarily affects the judgment or order appealed from or which
substantially affects the rights of a party.” (§ 906.) The appellate
court cannot review, however, an order which the parties could
have appealed directly. (Sy First Family Ltd. Partnership v.
Cheung (1999) 70 Cal.App.4th 1334, 1344–1345.)
Section 1294 confers a direct right to appeal from the
following orders under the CAA: “(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.” (§ 1294.)
a general rule, a special proceeding is statutory in origin and does
not proceed according to common law. [Citation.]” (Bagration,
supra, 110 Cal.App.4th at pp. 1684–1685, fns. omitted.)
31
“The appeal shall be taken in the same manner as an
appeal from an order or judgment in a civil action. Upon an
appeal from any order or judgment under this title, the court may
review the decision and any intermediate ruling, proceeding,
order or decision which involves the merits or necessarily affects
the order or judgment appealed from, or which substantially
affects the rights of a party. The court may also on such appeal
review any order on motion for a new trial. The respondent on
the appeal, or party in whose favor the judgment or order was
given may, without appealing from such judgment, request the
court to and it may review any of the foregoing matters for the
purpose of determining whether or not the appellant was
prejudiced by the error or errors upon which he relies for reversal
or modification of the judgment or order from which the appeal is
taken. The provisions of this section do not authorize the court to
review any decision or order from which an appeal might have
been taken.” (§ 1294.2.)
An order denying a petition to appoint an arbitrator is not
one of the rulings that section 1294 makes directly appealable. A
petition to appoint an arbitrator may be filed as an independent
proceeding or within an action at law. In this case, the Lerners’
petition was filed within their action to enforce the parties’
stipulation. The order denying the petition was not a final
determination of the parties’ rights under the stipulation to
arbitrate; it was an intermediate proceeding involving the merits
of the action and necessarily affecting the judgment, and thus
reviewable on appeal from the final judgment of dismissal.
The doctors contend on appeal that the order denying the
petition was the functional equivalent of an order dismissing an
independent proceeding, because there was no issue remaining
32
for trial. The petition was not brought as an independent
proceeding, however, but within the context of a pending action
related to the arbitration agreements. A judgment dismissing
the matter was not entered until eight months later, after the
trial court granted the doctors’ summary judgment motion. The
Lerners timely appealed from the judgment of dismissal.
The doctors also contend that the order denying the
petition to appoint an arbitrator was effectively an order denying
a petition to compel arbitration, and therefore, directly
appealable under section 1294, subdivision (a). This is incorrect.
First, a petition to compel arbitration under section 1281.2 and a
petition to appoint an arbitrator under 1281.6 are distinct
procedures under the CAA with different purposes. The
Legislature decided an order denying a petition to compel
arbitration should be directly appealable under section 1294, but
did not include an order denying a petition to appoint an
arbitrator on the same list of appealable orders.
Second, the petition to appoint an arbitrator in this case
was not substantively a petition to compel arbitration. The
purpose of a petition to compel arbitration is to determine
whether an enforceable arbitration agreement exists, and if so, to
order the parties to litigate their dispute before an arbitrator. In
this case, the trial court had already ordered the parties to
arbitrate based on the parties’ stipulation, and the parties had
submitted their dispute to the jurisdiction of the arbitrators by
commencing arbitration proceedings. The Lerners’ petition
sought assistance selecting an arbitrator for the pending
arbitration. Appointment of an arbitrator enables the arbitration
to proceed regardless of whether all of the parties participate in
the arbitration. The petition to appoint an arbitrator was not the
33
equivalent of a petition to compel arbitration, because it did not
seek to submit the controversy to arbitration and did not compel
the doctors to participate in the arbitration. The order denying
the Lerners’ petition to appoint an arbitrator was not
substantively an order denying a petition to compel arbitration.
The cases relied on by the doctors are distinguishable. In
Young v. Ross–Loos Medical Group, Inc., supra, 135 Cal.App.3d
at pages 671–672, an arbitrator dismissed arbitration
proceedings for failing to prosecute within five years, but the trial
court granted a motion to vacate the arbitrator’s order of
dismissal. On appeal, the appellate court found the arbitrator’s
order was effectively an “award,” so the trial court’s order was
directly appealable under section 1294 as an order vacating an
award. No award has been made in the instant case, and as
explained above, the order denying the petition to appoint an
arbitrator was not the functional equivalent of an order denying a
petition to compel arbitration.
In Maggio v. Windward Capital Management Co. (2000) 80
Cal.App.4th 1210, 1211–1212, the parties filed competing
petitions in the trial court to compel arbitration before different
alternative dispute resolution providers. The trial court denied
the defendants’ petition to compel arbitration, and the defendants
appealed. The appellate court reviewed the trial court’s authority
under section 1281.6 to compel compliance with the agreed
method for selecting an arbitrator as part of the defendants’
appeal from an order denying a petition to compel arbitration,
which is an appealable order under section 1294. In the instant
case, the order denying the petition to appoint an arbitrator was
not issued as part of an order made appealable by the statute. It
34
was reviewable in connection with the appeal from the final
judgment in the action.
The trial court did not vacate the order to arbitrate issued
in Lerner I, so the order denying the petition to appoint an
arbitrator cannot be characterized as an order denying a petition
to compel arbitration for that reason either. (Cf. CPI Builders,
Inc. v. Impco Technologies, Inc. (2001) 94 Cal.App.4th 1167, 1171
[order vacating prior order compelling arbitration was, in effect,
an order denying a petition to compel arbitration appealable
under section 1294, subdivision (a)].)
Denial of Petition to Appoint an Arbitrator
The Lerners contend that the trial court did not have
discretion under section 1281.6 to deny their petition to appoint
an arbitrator based on a determination that they unreasonably
delayed in the arbitration proceedings. We agree.
Section 1281.6 provides in full: “If the arbitration
agreement provides a method of appointing an arbitrator, that
method shall be followed. If the arbitration agreement does not
provide a method for appointing an arbitrator, the parties to the
agreement who seek arbitration and against whom arbitration is
sought may agree on a method of appointing an arbitrator and
that method shall be followed. In the absence of an agreed
method, or if the agreed method fails or for any reason cannot be
followed, or when an arbitrator appointed fails to act and his or
her successor has not been appointed, the court, on petition of a
party to the arbitration agreement, shall appoint the arbitrator.
[¶] When a petition is made to the court to appoint a neutral
arbitrator, the court shall nominate five persons from lists of
35
persons supplied jointly by the parties to the arbitration or
obtained from a governmental agency concerned with arbitration
or private disinterested association concerned with arbitration.
The parties to the agreement who seek arbitration and against
whom arbitration is sought may within five days of receipt of
notice of the nominees from the court jointly select the arbitrator
whether or not the arbitrator is among the nominees. If the
parties fail to select an arbitrator within the five-day period, the
court shall appoint the arbitrator from the nominees.” (§ 1281.6.)
Whether section 1281.6 permits a trial court to deny a
petition to appoint an arbitrator based on finding unreasonable
delay in the arbitration proceedings is an issue of statutory
interpretation which we review de novo. (See MKJA, Inc. v. 123
Fit Franchising, LLC (2011) 191 Cal.App.4th 643, 657 [trial
court’s discretion under section 1281.4 to lift stay of litigation
pending arbitration on the ground that party could not afford
arbitration costs was an issue of statutory interpretation subject
to de novo review].) “‘In construing any statute, “[w]ell-
established rules of statutory construction require us to ascertain
the intent of the enacting legislative body so that we may adopt
the construction that best effectuates the purpose of the law.”
[Citation.] “We first examine the words themselves because the
statutory language is generally the most reliable indicator of
legislative intent. [Citation.] The words of the statute should be
given their ordinary and usual meaning and should be construed
in their statutory context.” [Citation.] If the statutory language
is unambiguous, “we presume the Legislature meant what it said,
and the plain meaning of the statute governs.” [Citation.]’
[Citation.]” (Doe v. Brown (2009) 177 Cal.App.4th 408, 417.)
36
The plain language of the statute states that the trial court
must appoint an arbitrator if the parties’ agreed method fails or
cannot be followed. Unlike section 1281.2, which allows the trial
court to deny a petition to compel arbitration if the court finds a
party has waived the right to compel arbitration, the provisions
of section 1281.6 are mandatory and do not authorize the court to
deny a petition based on waiver of the right to appointment of an
arbitrator. In this case, the court did not find that the parties
could follow the agreed method for selection of an arbitrator
without assistance from the court. Under the circumstances, the
statute required the trial court to nominate arbitrators from lists
supplied by the parties, an appropriate agency, or a dispute
resolution association.
Based on our conclusion that the trial court was required to
expedite the arbitration by appointing an arbitrator, the order
denying the petition to appoint an arbitrator, as well as the order
granting summary judgment and the judgment of dismissal must
be reversed to allow the trial court to appoint an arbitrator.
Additional Procedural Requirements
The doctors raise a variety of additional procedural
contentions on appeal which we reject.
A. Continuing Jurisdiction
The doctors contend that the Lerners’ petition to appoint an
arbitrator was properly denied, because under the continuing
jurisdiction provisions of section 1292.6, all subsequent petitions
37
were required to have been filed within Lerner I. We conclude
that the petition may not be denied on this basis.
First, the language of the statute requiring that subsequent
petitions be filed in the same proceeding does not address the
circumstances of this case. After a petition has been filed under
the CAA, the court in which the petition is filed retains
jurisdiction to determine subsequent petitions related to the
same arbitration agreement and dispute, and any subsequent
petition must be filed in the same proceeding. (§ 1292.6.) But in
this case, no petition under the CAA was filed in Lerner I before
the court dismissed the action. Based on the language of the
statute, section 1292.6 did not apply. The trial court ordered the
action stayed pending arbitration based on the parties’
stipulation. The stipulation and the trial court order provided for
the court to retain jurisdiction over subsequent petitions under
the CAA, but did not require that subsequent petitions be filed in
the same proceeding.
In addition, the doctors brought a petition to appoint an
arbitrator within Lerner I and the trial court concluded that it
did not have jurisdiction to consider the petition because the
action was no longer pending. The doctors did not appeal the
ruling and the decision became final. The doctors cannot now
argue that the trial court had jurisdiction in the prior matter.
We note that no prejudice to the doctors has been shown as
a result of the Lerners filing their petition to appoint an
arbitrator within Lerner III. (Cal. Const., art. VI, § 13 [“No
judgment shall be set aside, or a new trial granted, in any cause
. . . for any error as to any matter of procedure, unless, after an
examination of the entire cause, including the evidence, the court
shall be of the opinion that the error complained of has resulted
38
in a miscarriage of justice.”]) The Lerners’ petition invoked the
court’s jurisdiction to assist with the ongoing arbitration
proceeding, which was independent of the prior action. The
matters were related and transferred so that the petition was
heard by the same trial court judge who oversaw the prior
proceeding. We decline to find error where the trial court judge
who determined the petition could not be heard in Lerner I
concluded that the petition could be considered in Lerner III.
B. Motion for Reconsideration
The doctors also contend that the Lerners’ petition to
appoint an arbitrator in Lerner III was an untimely and improper
motion for reconsideration of the denial of the doctors’ petition to
appoint an arbitrator in Lerner I. We disagree. More than one
petition to appoint an arbitrator may be filed during the course of
an arbitration. With respect to the prior petition, the trial court
concluded that it lacked jurisdiction to appoint an arbitrator
within Lerner I because the case had been dismissed. The trial
court did not rule on the merits of the petition that the court
could not appoint an arbitrator under any circumstances, even if
the petition were properly presented. Indeed, the trial court’s
decision to take up the petition in Lerner III makes clear that its
prior refusal to take up the matter in Lerner I was not a ruling on
the merits. The doctors’ contention that the Lerners’ petition was
barred by the doctrines of claim and issue preclusion is also
incorrect; the trial court order denying the prior petition was not
a final judgment on the merits of the issue.
39
C. Adequacy of Petition
The doctors also contend that the Lerners petition was
properly denied because it was inadequate. Specifically, the
petition failed to supply a list of arbitrators required under
section 1281.6. However, section 1281.6 allows the court to
nominate arbitrators from lists obtained from certain government
agencies as an acceptable alternative to lists supplied by the
parties.
DISPOSITION
The judgment, the order granting summary judgment, and
the order denying the petition to appoint an arbitrator are
reversed. The trial court is directed to enter a new and different
order granting the petition to appoint an arbitrator. Appellants
Bruce and Kimberly Lerner, individually and as guardian ad
litem for Jacob Lerner, are awarded their costs on appeal.
MOOR, J.
I concur:
RUBIN, P. J.
40
Kimberly Lerner et al. v. Lisa Masterson et al.
B297323
BAKER, J., Concurring
The majority opinion holds the trial court must assist the parties in
appointing an arbitrator (and the arbitrator appointed can then address—if
asked to do so—the question this court does not: whether the more-than-a-
decade delay in bringing the matter to an arbitration hearing is unreasonable
and warrants dismissal of the arbitration). I agree with that narrow holding
and therefore do not have an occasion at this time to set forth my own views
as to whether the arbitration proceedings should be dismissed for prejudicial
delay.
BAKER, J.