Perez v. Kaiser Foundation Health Plan

Filed 5/16/23
CERTIFIED FOR PARTIAL PUBLICATION*
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION THREE
MARIA PEREZ et al.,
Plaintiffs and Appellants, A165140
v.
KAISER FOUNDATION HEALTH (Sonoma County Super. Ct. No.
PLAN, INC., et al., SCV-261649)
Defendants and Respondents.
Vicente and Maria Perez1 appeal from a judgment confirming an
arbitration award for Kaiser Foundation Health Plan, Inc. (KFHP), Kaiser
Foundation Hospitals, and The Permanente Medical Group, Inc. (collectively
Kaiser). The Perezes contend there was no valid arbitration agreement, and
therefore the trial court erred by granting Kaiser’s motion to compel
arbitration. They also argue the award must be vacated because the
arbitrator failed to comply with his continuing duty to disclose the results of
other cases involving Kaiser — cases initially disclosed as pending when the
*Pursuant to California Rules of Court, rules 8.1105(b) and 8.1110, this
opinion is certified for publication with the exception of Discussion, sections I,
II, and IV.
1For clarity, and intending no disrespect, we use first names when
referring to the Perezes individually. Andrea Perez — the Perezes’ 22-year-
old daughter — initially filed suit, but she tragically passed away in June
2018, and her parents continued the underlying proceedings as a wrongful
death and survival action.
1
arbitrator was appointed but that resolved during the Perezes’ arbitration.
Unpersuaded by the arguments adequately raised and supported in plaintiffs’
briefs (Reyes v. Kosha (1998) 65 Cal.App.4th 451, 466, fn. 6), we affirm.
BACKGROUND
Kaiser is a licensed health care service plan that provides or arranges
hospital and professional health care services for plan members. Employers
who offer Kaiser’s health care services must distribute a document titled
“Evidence of Coverage” each year to Kaiser subscribers. The document
provides enrollees or subscribers with information regarding their benefits,
rights, and obligations as Kaiser members. The Evidence of Coverage
includes an arbitration clause, stating “Any dispute shall be submitted to
binding arbitration if,” as relevant here, the claim “arises from or is related to
an alleged violation of any duty incident to or arising out of or relating to this
Evidence of Coverage or a Member Party’s relationship to [Kaiser], including
any claim for medical or hospital malpractice.” The clause further explains
members — including a member’s relative — enrolled in Kaiser’s Evidence of
Coverage “thus give up their right to a court or jury trial” unless the claim
falls within certain exceptions not relevant here.
Francis Coppola Winery, LLC (Coppola) employees may select Kaiser
health care coverage through Coppola’s online benefits enrollment process.
Employees selecting the Kaiser plan are instructed, “you must agree to the
authorization agreement by clicking on the ‘Save’ button.” The agreement
allows Coppola to enroll employees in the Kaiser plan and to deduct
premiums from their paychecks. It also confirms the length of health care
coverage and circumstances for paying for coverage if employees terminate
coverage.
2
In a separate section of the authorization agreement — titled “Kaiser
Foundation Health Plan, Inc., and Kaiser Permanente Insurance
Company Arbitration Agreement” — Kaiser notifies enrollees of
a mandatory arbitration requirement. (Fn. omitted.) The disclosure states,
in relevant part: “I understand . . . any dispute between myself, my
heirs, relatives . . . on the one hand and [KFHP], Kaiser Permanente
Insurance Company (KPIC), any contracted health care
providers . . . on the other hand, for alleged violation of any duty
arising out of or related to . . . any claim for medical or hospital
malpractice” — such as a claim medical services “were improperly,
negligently, or incompetently rendered” — “must be decided by
binding arbitration under California law and not by lawsuit or
resort to court process.” (Fn. omitted.) It continues, “I agree to give up
our right to a jury trial and accept the use of binding arbitration.
I understand that the full arbitration provision is contained in the
Evidence of Coverage and in the Certificate of Insurance.” The clause
also identifies certain disputes that are not subject to binding arbitration,
such as ones involving dental plans.
Under the disclosure is a notice advising employees that “By clicking
the SAVE button below, I understand that this action will serve as my
electronic signature of agreement to the conditions provided in the [KFHP]
and [KPIC] Arbitration Agreement (above).” Immediately below this notice,
the web page includes a note stating, “If you do not wish to accept the
arbitration agreement above you must click on the CANCEL button below.”
Doing so returns the employee to the plan selection screen to select
a different health plan. At the bottom of the web page are three buttons,
“BACK,” “SAVE,” and “CANCEL.”
3
I.
Coppola purchased a winery in March 2014 and hired some of the
winery’s employees, including Maria. Coppola wanted to quickly enroll the
employees in its benefits program to prevent any lapse in benefits. New
Coppola employees had an orientation where they learned about available
benefit programs. Eligible employees received a welcome letter containing
a summary of benefits and identifying their first-time usernames and log in
information required for using the online enrollment system.
During the orientation, employees chose and signed up for benefits
using Coppola laptops. Two to four employees shared one to two laptops per
table. When employees logged into the online site, they could view their own
basic information, select benefits, and add any dependents they wanted to
cover. Three members of Coppola’s human resources team were present and
available to answer questions as people went through the process. Pursuant
to the company’s best practice, human resources employees weren’t to sit at
a computer and act on behalf of an employee. Records reflect Maria and
Andrea were enrolled as Kaiser members as of April 1, 2014.
II.
In 2017, Andrea filed a complaint against Kaiser alleging negligence
and fraud arising out of its failure to timely diagnose and treat her
aggressive cancer. Kaiser, citing Maria’s membership agreement, petitioned
to compel arbitration and stay the lawsuit. In her opposition, Andrea argued
Kaiser failed to comply with Health and Safety Code section 1363.1, which
sets forth specific requirements for disclosing arbitration agreements with
health care service plans like Kaiser’s. She also disputed Maria agreed to
arbitrate. Maria declared she was unaware of ever signing an agreement
waiving rights to a jury trial and being bound to arbitration. No one
4
explained the arbitration agreement to her. She further did not understand
that clicking a “SAVE” button constituted an agreement to arbitrate claims.
Although Maria admitted she had a fairly good understanding of English, she
was not a native speaker and declared she could not read English well
enough to understand she was agreeing to arbitration. Maria also stated she
did not operate the computer; it was solely operated by a Coppola human
resources employee.
During a hearing on the motion to compel arbitration, Coppola’s
director of people operations testified regarding the online enrollment system
and benefits orientation. To start the process, employees were given
a temporary password by the human resources department. To continue
beyond the home page, employees needed to immediately change the
temporary password to a password of their own choosing. The director
assumed Maria logged into the benefit system — a screenshot of Maria’s
benefits page has a date and time stamp with Maria’s name, the criteria for
logging into the system. The director did not fill out forms on behalf of the
employees; moreover, while she did not know if anyone personally assisted
Maria in completing forms, she was in the room and did not see any of the
other human resources team fill out the forms on behalf of employees.
Rather than testifying she did not sign up for benefits, Maria testified
she did not remember working on one of the laptops to enroll for benefits. She
noted she did not know how to use the computer. Instead, she asked an
employee for assistance. She did recall she was “there signing in. And we
had to sign because — because Francis Coppola wanted to help previous
workers to continue so that we didn’t stay without coverage.”
After hearing testimony and assessing credibility, the trial court found
the weight of the evidence supported the conclusion that Maria operated
5
a computer and personally selected the “SAVE” button to secure health
insurance, thereby also indicating her agreement to arbitration. The court
determined an arbitration notice would have displayed on the computer
screen, and Maria would have had to click “SAVE” to enroll herself and
Andrea for Kaiser benefits. And Maria did click “SAVE” because both she
and Andrea were successfully enrolled in Kaiser. The court concluded Kaiser
proved the existence of an agreement to arbitrate by a preponderance of the
evidence and granted Kaiser’s motion to compel arbitration.
III.
In May 2018, the Perezes and Kaiser selected an arbitrator from a list
of 12 potential candidates. Both parties were sent a disclosure statement
listing the arbitrator’s prior and pending cases involving Kaiser, those in
which he had served or was currently serving as arbitrator. In May and
August 2020, the arbitrator sent notices informing the parties he had agreed
to arbitrate additional cases involving Kaiser. Although these additional
cases resolved during the Perezes’ arbitration, the arbitrator did not disclose
the outcomes to the Perezes. After an arbitration in February 2021, the
arbitrator concluded Kaiser was not liable for Andrea’s death.
The Perezes moved to vacate the arbitration award, arguing it was
infected by bias, corruption, or fraud. According to the Perezes, the
arbitrator’s failure to disclose the results of previously pending cases — all
resolved in favor of Kaiser — reasonably would cause a person to question his
impartiality. The Perezes also argued the arbitrator engaged in ex parte
communications with Kaiser during their arbitration. The trial court denied
the motion, concluding the arbitrator had an initial obligation to disclose he
had pending cases involving Kaiser; he was not, however, obligated to
disclose their subsequent outcome. Moreover, the court determined that the
6
fact the arbitrator had decided three cases in Kaiser’s favor during the
pendency of the Perezes’ arbitration would not cause a person aware of the
facts to reasonably entertain a doubt the arbitrator would be impartial.
DISCUSSION
The Perezes challenge the trial court’s order compelling arbitration,
arguing Kaiser’s arbitration disclosure did not comply with statutory
requirements. In addition, they contend we must vacate the arbitration
award because the arbitrator did not disclose a ground for disqualification in
violation of mandatory disclosure requirements.
I.
The Perezes contend Kaiser’s arbitration agreement is unenforceable
because it does not comply with Health and Safety Code section 1363.1’s
requirements for health care service plan arbitration disclosures. (Cox v.
Bonni (2018) 30 Cal.App.5th 287, 299 [“An order granting a petition to
compel arbitration may be reviewed on appeal from a subsequent judgment
on the award”].) Indeed, violation of Health and Safety Code section 1363.1
“renders a contractually binding arbitration provision in a health service plan
enrollment form unenforceable.” (Malek v. Blue Cross of California (2004)
121 Cal.App.4th 44, 50.) Thus, the Perezes argue we must reverse the order
compelling arbitration because Kaiser has not demonstrated the existence of
a valid arbitration agreement. (Flores v. Evergreen at San Diego, LLC (2007)
148 Cal.App.4th 581, 586.) After considering the arguments adequately
raised and supported in the Perezes’ briefs, we conclude none provide a basis
to reverse. (Reyes v. Kosha, supra, 65 Cal.App.4th at p. 466, fn. 6 [even when
review is de novo, “it is limited to issues which have been adequately raised
and supported”].)
7
The Perezes initially assert the disclosure was “not written in the clear
and understandable language required by [Health and Safety Code section
1363.1].” We consider an attack on the language of the disclosure to be
forfeited for failure to offer reasoned argument. (Benach v. County of Los
Angeles (2007) 149 Cal.App.4th 836, 852 [“It is not our place to construct
theories or arguments to undermine the judgment . . . . When an appellant
fails to raise a point, or asserts it but fails to support it with reasoned
argument and citations to authority, we treat the point as waived.”].) Other
than quoting the statutory language and asserting the disclosure was not
written in clear and understandable language, the opening brief fails to
support the point. To the extent they provide arguments for the first time in
their reply brief, we will not consider them. (Las Lomas Land Co., LLC v.
City of Los Angeles (2009) 177 Cal.App.4th 837, 855.)
Indeed, much of the opening brief merely quotes the relevant statutory
language or recites the purpose of Health and Safety Code section 1363.1.
Or it asserts violations of a statute which it concedes is inapplicable. For
example, the brief sets forth requirements contained in Code of Civil
Procedure section 1295 — such as the obligation to have the arbitration
clause be contained in the first article of a contract, prescribing the exact
language to be used in the disclosure, and requiring that additional language
appear in all capital letters and be in 10-point bold red type — only to
acknowledge that statute, which applies to contracts for medical services
rather than health service plans, does not govern here.
The primary argument developed in the opening brief is whether the
disclosure appears “immediately before the signature line . . . provided for the
individual enrolling in the health care service plan.” (Health & Saf. Code,
§ 1363.1, subd. (d).) “ ‘[I]mmediately before’ means that the arbitration
8
agreement must be typed in directly before the signature line provided for the
individual on the enrollment form without any intervening language.”
(Robertson v. Health Net of California, Inc. (2005) 132 Cal.App.4th 1419,
1426.) The disclosure here is typed directly before the sentences explaining
that clicking the “SAVE” button serves as an electronic signature on the
arbitration agreement, i.e., a functional signature line. (Kuntz v. Kaiser
Foundation Hospital (2021) 62 Cal.App.5th 1135, 1149.) While there is
a separate paragraph identifying exceptions to the arbitration provision, such
as claims related to dental services and out-of-area indemnity, this is part of
the arbitration disclosure itself. Thus, the disclosure is unlike the one
disapproved of in Robertson — there the arbitration disclosure was directly
followed by paragraphs prohibiting HIV testing as a precondition for
insurance and notifying enrollees about presenting fraudulent claims.
(Robertson, at p. 1423; see also Malek v. Blue Cross of California, supra,
121 Cal.App.4th at p. 62 [arbitration disclosure violated Health & Saf. Code,
§ 1363.1, subd. (d) where signature line was immediately after a paragraph
authorizing release of medical information].) Thus, we are unpersuaded by
this argument.
The Perezes also argue the disclosure is not “prominently displayed on
the enrollment form.” (Health and Saf. Code, § 1363.1, subd. (b).) The
Perezes’ contend the disclosure “does not ‘stand out from its surroundings’ ”
and that it “is in the same typeface as the rest of the page,” “not highlighted,
italicized, or bolded. It was therefore not ‘prominent.’ ” This argument is
unavailing. The quality of the copy of the disclosure in the record is rather
poor. Nevertheless, we can discern it is set off from the prior section on the
enrollment page, with the title “Kaiser Foundation Health Plan, Inc.,
and Kaiser Permanente Insurance Company Arbitration Agreement,”
9
in bold, underlined text. (Fn. omitted.) Moreover, the remaining text of the
arbitration disclosure is in bold type in contrast to the rest of the text on the
page, which is in regular type. (Imbler v. PacifiCare of Cal., Inc. (2002)
103 Cal.App.4th 567, 579 [indicating bold, underlined, or italicized text may
be considered prominent].) By using a different typeface, the disclosure
stands out from the remainder of the enrollment agreement. (See Robertson
v. Health Net of California, Inc., supra, 132 Cal.App.4th at p. 1429.)
Our opinion should not be read as endorsing Kaiser’s complicated and
prolix arbitration disclosure, but we cannot conclude that any of the issues
adequately raised and supported in plaintiffs’ briefs warrants reversal.
(Reyes v. Kosha, supra, 65 Cal.App.4th at p. 466, fn. 6.)
II.
The Perezes contend Maria did not manifest assent to Kaiser’s
arbitration agreement by clicking the “SAVE” button during Coppola’s online
benefit enrollment. According to the Perezes, a Coppola employee clicked the
button, and Kaiser thus failed to demonstrate the existence of an arbitration
agreement. We disagree. Substantial evidence supported the trial court’s
finding Maria agreed to the arbitration clause.
“Petitions to compel arbitration are resolved by a summary procedure
that allows the parties to submit declarations and other documentary
testimony and, at the trial court’s discretion, to provide oral testimony.”
(Flores v. Evergreen at San Diego, LLC, supra, 148 Cal.App.4th at p. 586.)
If the facts are undisputed, we independently review the court’s ruling that
a valid arbitration agreement exists. (Ibid.) But where more than one
reasonable inference may be drawn from the facts — as is the case here given
the factual dispute about whether Maria signed the arbitration agreement —
we review the court’s ruling for substantial evidence. (Cox v. Bonni, supra,
10
30 Cal.App.5th at p. 299; Davis v. Continental Airlines, Inc. (1997)
59 Cal.App.4th 205, 211.) We do not reweigh the evidence and instead
construe all reasonable inferences in favor of the judgment and resolve
evidentiary conflicts in favor of the prevailing party. (Cox, at pp. 299–300;
Fabian v. Renovate America, Inc. (2019) 42 Cal.App.5th 1062, 1067.)
At the outset, we reject the Perezes’ suggestion there was no contract
between Maria and Kaiser because there was no paper contract or actual
signature line on the enrollment agreement. “A contract may not be denied
legal effect or enforceability solely because an electronic record was used in
its formation.” (Civ. Code, § 1633.7, subd. (b).) And an electronic signature is
attributable to a person if it was the act of the person. (Id., § 1633.9, subd.
(a).) “The act of the person may be shown in any manner, including
a showing of the efficacy of any security procedure applied to determine
the person to which the electronic record or electronic signature was
attributable.” (Id., § 1633.9, subd. (a), italics added.) Here, there was no
dispute that Maria enrolled and received Kaiser benefits. Rather, the
relevant issue here is whether substantial evidence established the
authenticity of Maria’s electronic signature on the arbitration agreement —
that is, whether she clicked the “SAVE” button or any other method
demonstrating the electronic signature was attributable to Maria. (Fabian v.
Renovate America, Inc., supra, 42 Cal.App.5th at p. 1068.) Substantial
evidence supports the trial court’s conclusion Maria electronically signed the
arbitration agreement.
The trial court’s finding that Maria personally operated the computer
and clicked the “SAVE” button is a “classic example of a trial court drawing
a conclusion from conflicting evidence.” (Bannister v. Marinidence Opco, LLC
(2021) 64 Cal.App.5th 541, 545 (Bannister).) Coppola’s director of people
11
operations explained employees were provided a temporary password to
access the benefit enrollment system but were required to immediately
choose their own unique passwords to continue through the enrollment
process. (Id. at p. 547 [assignment of “a unique, private user name and
password” was evidence employee was the only person who could have
accessed an onboarding portal and signed an arbitration agreement].)
Employees could not continue past the home page if they did not set up their
own individual passwords.
The director noted the last screen of the online benefits enrollment
process for Kaiser coverage displays the arbitration disclosure on the
employee/subscriber’s computer screen. To continue with the enrollment
process, employees must click the “SAVE” button immediately underneath
the arbitration notice. If the subscriber fails to click “SAVE,” the enrollment
process does not continue. Because Maria and Andrea were successfully
enrolled as Kaiser members, the director noted Maria “would have had to
click ‘SAVE.’ ” The director stated she did not observe any Coppola human
resources employees operating the computers on behalf of any employees.
(Compare with Bannister, supra, 64 Cal.App.5th at pp. 546–547 [plaintiff did
not operate the computer during the onboarding process and the employer
remotely signed the agreement for employees who were not physically
present].)
Although Maria initially declared she did not have a computer, did not
log in, and a Coppola employee pressed the computer buttons, Maria later
testified she was unable to remember whether she operated a computer or
pushed any buttons to sign up for Kaiser benefits. She further admitted
being in the room for the benefits orientation, noting “we were there signing
in.” She continued, “And we had to sign because — because Francis Coppola
12
wanted to help previous workers to continue so that we didn’t stay without
coverage.” (Italics added.) And while Maria declared she could not read
English well enough to understand she was agreeing to arbitration,
substantial evidence supports the trial court’s conclusion that clicking the
“SAVE” button was “the act of” Maria and “it is not our role to second guess
the trial court’s factual determinations.” (Civ. Code, § 1633.9, subd. (a);
Bannister, supra, 64 Cal.App.5th at p. 545.)
The cases cited by the Perezes do not compel a different result. The
cases are distinguishable from the facts of this case; in some instances, for
example, the trial court found the plaintiff did not sign the arbitration
agreement. (See, e.g., Nelson v. Dual Diagnosis Treatment Center, Inc. (2022)
77 Cal.App.5th 643, 650 [finding the arbitration agreement unconscionable
mooted any question regarding whether plaintiff actually signed it]; Fabian
v. Renovate America, Inc., supra, 42 Cal.App.5th at p. 1069 [finding
defendant’s assertion plaintiff signed arbitration agreement unsupported
where defendant did not present any evidence regarding how the contract
was presented to the plaintiff, how plaintiff’s signature was placed on the
contract, or the process used to verify plaintiff’s electronic signature];
Mendoza v. Trans Valley Transport (2022) 75 Cal.App.5th 748, 788 [no
express agreement to arbitrate where plaintiff employee signed an
acknowledgement that he received an employee handbook and other
documents, but did not sign the employee handbook which contained the
arbitration provision].)
To the extent the Perezes, relying on Berman v. Freedom Financial
Network, LLC (9th Cir. 2022) 30 F.4th 849, argue clicking a “SAVE” button
cannot be considered a signature expressing consent, we disagree. Berman —
13
addressing the manifestation of assent to terms and conditions in the context
of a “browsewrap” agreement2 — noted the plaintiffs’ act of clicking on
a large, green “continue” button alone does not indicate assent. (Id. at
p. 858.) Rather, the user must be “explicitly advised that the act of clicking
will constitute assent to the terms and conditions of an agreement.” (Id.
at p. 857.) Here, Maria was so informed. The notice stated, “By clicking the
‘Save’ button, you are hereby acknowledging your acceptance of this
authorization agreement.” (Id. at p. 858 [notice defect remedied by including
language “By clicking the Continue>> button, you agree to the Terms &
Conditions”].) We do observe, however, Maria’s assent might have been more
easily determined had the button read, “I agree,” rather than, “Save.”
The Perezes fail to persuade there was not an enforceable arbitration
agreement or that the trial court erred by granting Kaiser’s motion to compel
arbitration.
III.
The Perezes contend we must vacate the arbitration award because the
arbitrator failed to disclose the outcome of other Kaiser cases he was
simultaneously arbitrating that were resolved in Kaiser’s favor after his
appointment. As the Perezes correctly state, the failure to disclose a ground
for disqualification on a timely basis is a ground for vacating an arbitration
award. (Code Civ. Proc.,3 §§ 1281.9, subd. (a), 1286.2, subd. (a)(6)(A);
Haworth v. Superior Court (2010) 50 Cal.4th 372, 381 (Haworth).) But after
independently reviewing the disclosure statute, we conclude the arbitrator
2 Browsewrap agreements involve websites that offer “terms that are
disclosed only through a hyperlink and the user supposedly manifests assent
to those terms simply by continuing to use the website.” (Berman v. Freedom
Financial Network, LLC, supra, 30 F.4th at p. 856.)
3 Undesignated statutory references are to the Code of Civil Procedure.
14
did not have a duty to disclose the postappointment results of arbitration
cases that were pending at the time of his appointment. (Haworth, at p. 383
[de novo review on issues concerning arbitrator disclosures].)
Arbitrators must “disclose to the parties any grounds for
disqualification” to “ensure that a neutral arbitrator serves as an impartial
decision maker.” (Haworth, supra, 50 Cal.4th at p. 381, fn. omitted.) Within
10 days of receiving notice of an arbitrator’s proposed nomination or
appointment, the proposed arbitrator must “disclose all matters that could
cause a person aware of the facts to reasonably entertain a doubt that the
proposed neutral arbitrator would be able to be impartial.” (§ 1281.9,
subds. (a)–(b).) Section 1281.9 identifies a list of potentially disqualifying
information that must be disclosed. Among other things, proposed
arbitrators must disclose “any ground specified in Section 170.1 for
disqualification of a judge” and “matters required to be disclosed by the ethics
standards for neutral arbitrators adopted by the Judicial Council.” (§ 1281.9,
subd. (a)(1), (2).) “Based upon these disclosures, the parties are afforded an
opportunity to disqualify the proposed neutral arbitrator.” (Haworth, at
p. 381; § 1281.91, subds. (b), (d).)
Relevant here, proposed arbitrators must disclose “all prior or
pending . . . cases involving any party to the arbitration or lawyer for a party
for which the proposed neutral arbitrator served or is serving as neutral
arbitrator, and the results of each case arbitrated to conclusion.” (§ 1281.9,
subd. (a)(4).) “Prior cases” are those “in which an arbitration award was
rendered within five years prior to the date of the proposed nomination or
appointment.” (Id., subd. (d).) By definition, prior cases — rather than
pending cases — are the only types of cases that are resolved prior to the date
of appointment. Thus, under the plain terms of the statute, within 10 days of
15
their appointment or nomination, proposed arbitrators must disclose their
services as a neutral arbitrator involving a party or lawyer for a party to the
current arbitration in pending cases, prior cases, and the results for the
resolved prior cases. The proposed arbitrator cannot disclose the results of
a pending case — those cases are unresolved prior to the date of
appointment.
The California Rules of Court, Ethics Standards for Neutral Arbitrators
in Contractual Arbitration, standard 7 addresses the same initial disclosure
duties as section 1281.9. (Undesignated references to standards are to the
Ethics Standards for Neutral Arbitrators; see also § 1281.85, subd. (a)
[requiring neutral arbitrators to comply with ethics standards adopted by the
Judicial Council].) Contrary to the Perezes’ assertions, standard 7 imposes
no requirement that the arbitrator disclose the resolution of separate cases
that were pending at the time of the arbitrator’s appointment and completed
during the current arbitration. Like section 1281.9, standard 7 mandates
disclosure of certain information if “the arbitrator is serving or has served” as
a neutral or party-appointed arbitrator in a prior or pending case “involving
a party to the current arbitration or a lawyer for a party.” (Std. 7(d)(4)(A)–
(B).) Arbitrators must disclose the names of the parties and attorneys in
each prior or pending case. (Std. 7(d)(4)(B)(i).) But they are only required
to disclose the “results of each prior case arbitrated to conclusion.” (Std.
7(d)(4)(B)(ii), italics added.)
Although standard 7 does not define “prior cases” for disclosures
related to service as an arbitrator for a party, it expressly incorporates the
statutory disclosure requirements. (Std. 7(a), (d)(5)(A) [defining “prior case”
only for required disclosures regarding a proposed arbitrator’s compensated
16
service as a dispute resolution neutral other than an arbitrator].)4
Specifically, it states, “[t]o the extent . . . [standard 7] addresses matters that
are also addressed by statute, it is intended to include those statutory
disclosure requirements, not to eliminate, reduce, or otherwise limit them.”
(Std. 7(a).) Indeed, aside from noting several areas that standard 7 expands
upon or clarifies that are not relevant here, standard 7 “simply consolidates
and integrates those existing statutory disclosure requirements [in section
1281.9] by topic area.” (Com. to std. 7.) Incorporating section 1281.9’s
definition of “prior cases,” standard 7 requires disclosing cases in which “an
arbitration award was rendered within five years prior to the date of the
proposed nomination or appointment.” (§ 1281.9, subd. (d), italics added.)
Contrary to the Perezes’ assertions, such a reading does not render
superfluous the requirement that an arbitrator must disclose case
information regarding prior or pending cases in which the arbitrator “is
serving or has served.” (Std. 7(d)(4)(B).) Read together, the provisions
require disclosing case information on pending cases — in which the
arbitrator “is serving” — and prior cases — in which the arbitrator has
served — as a neutral or party-appointed arbitrator.
Relying on a dictionary definition of the word “prior,” the Perezes argue
that once a pending case concludes, it becomes a “ ‘prior’ case” and the results
4 Standard 7, subdivision (d)(5)(A) defines “ ‘prior case’ ” as one
“in which the arbitrator concluded his or her service as a dispute resolution
neutral within two years before the date of the arbitrator’s proposed
nomination or appointment.” While the time period set forth in this
provision — applicable to service as a dispute resolution neutral other than
an arbitrator — is shorter than the time period set forth in section 1281.9,
subdivision (d) — applicable to service as an arbitrator — in both, the period
of time runs up to, and stops at, “the date of the arbitrator’s proposed
nomination or appointment.” (Std. 7(d)(5)(A); see § 1281.9, subd. (d).)
17
must be disclosed. “But we do not start and end statutory interpretation with
dictionary definitions.” (Department of Finance v. Commission on State
Mandates (2022) 85 Cal.App.5th 535, 567.) Rather, the “meaning of a statute
may not be determined from a single word or sentence; the words must be
construed in context, and provisions relating to the same subject matter must
be harmonized to the extent possible.” (Lungren v. Deukmejian (1988)
45 Cal.3d 727, 735.) Here, the Legislature expressly defined “prior cases” —
cases “in which an arbitration award was rendered within five years prior to
the date of the proposed nomination or appointment” (§ 1281.9, subd. (d),
italics added) — and the standards incorporated that definition for required
disclosures. We apply that definition here.
The fact that — under standard 7, subdivision (f) — arbitrators have
a continuing duty to disclose disqualification grounds until the conclusion of
the arbitration proceeding does not compel a different result. (See Gray v.
Chiu (2013) 212 Cal.App.4th 1355, 1363.) “An arbitrator’s duty to disclose
the matters described in subdivisions (d)” — addressing among other things,
service as an arbitrator for a party or lawyer for a party — “and (e)” of
standard 7 — addressing among other things, professional discipline — “is
a continuing duty, applying from service of the notice of the arbitrator’s
proposed nomination or appointment until the conclusion of the arbitration
proceeding.” (Std. 7(f); Honeycutt v. JPMorgan Chase Bank, N.A. (2018)
25 Cal.App.5th 909, 922.) Arbitrators must disclose such a matter within
10 calendar days after becoming aware of it. (Std. 7(c)(2).) But again,
the standards do not contain language regarding a duty to disclose the
outcome of previously pending cases. None of the cases the Perezes cite
involve disclosing the later results of arbitrations that were pending — and
disclosed — at the time of the proposed nomination or appointment. (See,
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e.g., Honeycutt, at p. 927 [violation of ethical standards where arbitrator
accepted offers to serve as a neutral in eight new cases involving defendant’s
counsel, but only disclosed four of the cases]; Jolie v. Superior Court (2021)
66 Cal.App.5th 1025, 1043 [temporary judge failed to comply with continuing
ethical obligation to disclose professional relationship with parties or
counsel].) And none of the Perezes’ additional arguments alter this
conclusion.
IV.
Finally, the Perezes contend we must vacate the arbitration award
based on the arbitrator’s bias. According to the Perezes, the arbitrator was
required to disclose the results of the three previously pending cases because
they were matters falling under section 1281.9’s broad disclosure
requirement — something that could cause a person aware of the facts to
reasonably entertain a doubt the arbitrator would be impartial. (§ 1281.9,
subd. (a).) We disagree.
An arbitrator’s disclosure obligations are not limited to the grounds
identified in section 1281.9, subdivision (a)(1) through (6). (Benjamin, Weill
& Mazer v. Kors (2011) 195 Cal.App.4th 40, 62–63.) A person appointed as
an arbitrator must disclose “any matter that reasonably could create the
appearance of partiality.” (Haworth, supra, 50 Cal.4th at p. 381; § 1281.9,
subd. (a).) Determining whether a matter must be disclosed requires
focusing on a reasonable person’s perception of bias — an objective test.
(Haworth, at pp. 385–386.) Actual bias is not required. (Ibid.) “An
impression of possible bias in the arbitration context means that one could
reasonably form a belief that an arbitrator was biased for or against a party
for a particular reason.” (Betz v. Pankow (1995) 31 Cal.App.4th 1503, 1511.)
Clearly establishing the appearance of bias is a heavy burden, and we review
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the issue de novo. (Haworth, at pp. 385–386, 389 [whether an arbitrator was
required to disclose a particular matter is a mixed question of fact and law].)
On the facts here, a person aware of the results of the three cases in
favor of Kaiser could not reasonably believe the arbitrator was biased against
the Perezes. The cases — all addressing allegations of medical malpractice
against Kaiser — involved application of case law to the facts. In one of the
decisions, in which the physician ordered an immediate CT scan and physical
examination after certain symptoms were reported, the arbitrator found the
testimony of the claimant’s expert equivocal on whether the standard of care
required ordering an MRI, the critical issue in the case. In another case, the
arbitrator noted the claimant failed to demonstrate her injury resulted from
Kaiser’s violation of the standard of care. Specifically, she did not object to
any testimony from Kaiser’s expert regarding a surgical procedure, challenge
evidence regarding the procedure, offer any expert evidence regarding the
standard of care related to the procedure, or offer evidence showing how the
standard of care was violated. In the third case, after reviewing the facts, the
arbitrator determined the claimant’s condition was not caused by
professional negligence, but instead by prior history of chronic pain and
postsurgery calcification. There is no indication that these decisions lacked
merit or were based on factors beyond the evidence. (Haworth, supra,
50 Cal.4th at p. 389 [“ ‘Impartiality’ entails the ‘absence of bias or prejudice
in favor of, or against, particular parties or classes of parties, as well as
maintenance of an open mind’ ”].) The Perezes’ conclusory statements that
cases in favor of a party indicates partiality do not demonstrate otherwise.
We reject the Perezes’ remaining arguments. First, in conclusory
fashion, they state the results of the pending cases demonstrate the
arbitrator’s ongoing, financial relationship with Kaiser and is indicative of
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bias. But the initial disclosures notified the Perezes about the arbitrator’s
previous involvement in matters concerning Kaiser, yet the Perezes did not
disqualify the arbitrator at that time. This appears to be a search “for
potential disqualifying information only after an adverse decision has been
made.” (Haworth, supra, 50 Cal.4th at p. 395.) Second, we reject the novel
argument the arbitrator engaged in ex parte communications with Kaiser
because the arbitrator rendered the other awards in Kaiser’s favor without
notifying the Perezes. The Perezes have not identified any ex parte
communications the arbitrator initiated, permitted, or considered outside the
presence of all the parties concerning the Perezes’ arbitration. (Std. 14(a);
compare with Grabowski v. Kaiser Foundation Health Plan, Inc. (2021)
64 Cal.App.5th 67, 72, 79 [vacating arbitration award where arbitrator’s ex
parte joke with defense counsel about a plaintiff’s inability to effectively
represent herself could result in a reasonable belief the arbitrator was biased
against self-represented litigants].)
The trial court did not err when it denied the motion to set aside the
arbitration award for bias.
DISPOSITION
The judgment is affirmed. In the interest of justice, the parties are to
bear their own costs.
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_________________________
Rodríguez, J.
WE CONCUR:
_________________________
Tucher, P. J.
_________________________
Petrou, J.
A165140
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Superior Court of Sonoma County, Hon. Jennifer V. Dollard.
Law Office of Douglas C. Fladseth and Douglas C. Fladseth; Evans
Kingsbury and Noreen M. Evans, for Appellants.
Rankin, Shuey, Ranucci, Mintz, Lampasona & Reynolds, S. Bradford Harper;
Marion’s Inn, Mark Palley and Yvonne M. Pierrou, for Respondents.
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