Filed 3/14/22 Med Tech/Med Care v. Hemosure CA2/7

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

MED TECH/MED CARE, LLC,

Plaintiff and Respondent,

v.

HEMOSURE, INC.,

Defendant and Appellant.

 B301519

 (Los Angeles County

 Super. Ct. 

No. 19PSCP00279)

APPEAL from a judgment of the Superior Court of Los 

Angeles County, Gloria White-Brown, Judge. Affirmed.

Blair & Ramirez, Oscar Ramirez, Matthew P. Blair and 

Kirill Lavinski for Defendant and Appellant.

Schneiders & Associates and Kathleen Smith; Schoenberg 

Finkel Beederman Bell Glazer and Richard M. Goldwasser for 

Plaintiff and Respondent.

___________________________
2

Hemosure, Inc. appeals from a judgment confirming an

arbitration award in favor of Med Tech/Med Care, LLC (Med 

Tech). Hemosure contends the arbitrator exceeded the scope of 

his powers when he failed to issue a “reasoned award” as 

requested by the parties under the American Arbitration 

Association’s (AAA) Commercial Arbitration Rules. We affirm. 

BACKGROUND AND PROCEDURAL HISTORY

A. The Agreement 

On December 1, 2016 Hemosure and Med Tech entered into 

a one-year independent sales representative agreement. Med 

Tech agreed to “aggressively promote the sale of [Hemosure’s] 

products, to service the customers and the distributors of the 

company . . . , and to make regular calls and in-person visits to 

these customers and on these distributors at acceptable intervals 

of time.” Hemosure agreed to pay Med Tech a commission on all 

net sales to medical distributors of Hemosure’s products upon 

invoice payments and verified tracings as provided by the 

distributors. The agreement contained an arbitration provision 

that stated, “Any dispute or disagreement arising out of or 

relating to this agreement or the relationship of the parties shall 

be settled by arbitration, according to the American Arbitration

Association Rules, in Los Angeles, CA.” 

B. The Arbitration 

In January 2018 Med Tech filed an arbitration demand

asserting claims for breach of contract, violation of the California 

Independent Wholesale Sales Representatives Contractual 

Relations Act of 1990 (Civ. Code, § 1738.10 et seq.; the Act), 
3

unjust enrichment, and quantum meruit based on Hemosure’s

failure to pay commissions to Med Tech for January and 

February 2017. The arbitrator was appointed on February 8, 

2018. In a March 23, 2018 scheduling order following a 

preliminary hearing, the arbitrator set an agreed-upon schedule 

for the arbitration. The order stated, “The parties have requested 

a reasoned award and have reserved the right to utilize the 

services of a court reporter.”

The arbitration hearing was held on December 7, 2018 and 

February 25, 2019. Hemosure argued Med Tech was not entitled 

to commissions because it materially breached the contract by

failing to promote and solicit sales of Hemosure’s products. 

Further, Hemosure asserted the Act did not apply because Med 

Tech was not a “person” or “‘[w]holesale sales representative’”

covered by the Act and did not engage in “soliciting wholesale 

orders.” (See Civ. Code, § 1738.12, subd. (e).) Thus, treble 

damages were not available. Alternatively, Med Tech was not 

entitled to treble damages because it failed to show Hemosure’s 

willful failure to pay commissions. 

C. The Arbitration Award 

On May 20, 2019 the arbitrator issued a two-page 

arbitration award. The award stated,“The Arbitrator agrees 

with Claimant [Med Tech] that this is a straightforward case. 

Claimant seeks to recover the statutorily mandated treble 

damages on the $64,629.09 in sales commissions (or $193,887.27) 

that Respondent Hemosure has refused to pay, plus attorney’s 

fees and costs, and prejudgment interest of 10%. Claimant has 

proved its case in a very persuasive manner. Respondent’s novel 

defense that it can withhold [Med Tech’s] commissions because it 
4

decided after entering into a new contract with [Med Tech] that 

[Med Tech’s] performance under the parties’ prior agreement was 

not satisfactory is not persuasive and must fail. [¶] The 

Arbitrator specifically finds that the words and actions of 

Hemosure’s president, Dr. Wan, were unambiguously willful 

(“[‘]I’m not going to fucking pay those guys’”), thereby triggering 

the trebling provisions of the Independent Wholesale [Sales] 

Representative[s] Act, as briefed thoroughly and persuasively by 

Claimant’s counsel. The Arbitrator further finds that Claimant 

is entitled to 10% annual prejudgment interest on the 

outstanding commissions pursuant to Cal. Civ. Code [s]ection 

3289(b). [¶] Finally, the Arbitrator finds that the attorney’s fees 

and costs sought by Claimant’s counsel, in the amount of 

$85,606.09, are reasonable.” The arbitrator awarded Med Tech a 

total of approximately $293,000, comprised of treble damages, 

prejudgment interest, and attorneys’ fees and costs. 

D. Confirmation of the Arbitration Award 

On June 21, 2019 Med Tech filed a petition to confirm the 

arbitration award. On July 22 Hemosure filed a response and 

petition to correct and vacate the arbitration award.

1 Hemosure 

argued the arbitrator exceeded his authority because he did not 

issue a reasoned award.

At the August 2, 2019 hearing, Hemosure’s attorney 

confirmed that the parties did not request the arbitrator make 

findings of fact and conclusions of law. After hearing argument, 

the trial court granted Med Tech’s petition to confirm and denied 

1 The trial court ruled Hemosure’s response was untimely 

under Code of Civil Procedure section 1290.6, but the court 

“elect[ed] to consider Hemosure’s belated response.” 
5

Hemosure’s petition to vacate the arbitration award. The court 

rejected Hemosure’s contention the arbitrator “exceeded his 

authority because his award was not ‘reasoned.’’’ As to the 

applicability of the Act, the court explained that the arbitrator,

by awarding treble damages under the Act, “necessarily rejected 

Hemosure’s arguments against [the Act’s] application.” 

Hemosure timely appealed. 

DISCUSSION

A. Governing Law and Standard of Review 

“California law favors alternative dispute resolution as a 

viable means of resolving legal conflicts. ‘Because the decision to 

arbitrate grievances evinces the parties’ intent to bypass the 

judicial system and thus avoid potential delays at the trial and 

appellate levels, arbitral finality is a core component of the 

parties’ agreement to submit to arbitration.’ [Citation.] 

Generally, courts cannot review arbitration awards for errors of 

fact or law, even when those errors appear on the face of the 

award or cause substantial injustice to the parties.” (Richey v. 

AutoNation, Inc. (2015) 60 Cal.4th 909, 916; accord, Haworth v. 

Superior Court (2010) 50 Cal.4th 372, 380; Branches 

Neighborhood Corp. v. CalAtlantic Group, Inc. (2018) 

26 Cal.App.5th 743, 750-751 [“‘Because the finality of arbitration 

awards is rooted in the parties’ agreement to bypass the judicial 

system, ordinarily “‘[t]he merits of the controversy between the 

parties are not subject to judicial review.’”’”].) 

“The exclusive grounds for vacating an arbitration award 

are provided in Code of Civil Procedure section 1286.2.” (Soni v. 

SimpleLayers, Inc. (2019) 42 Cal.App.5th 1071, 1085; see 
6

Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 28 [“we adhere to 

the . . . line of cases that limit judicial review of private 

arbitration awards to those cases in which there exists a 

statutory ground to vacate or correct the award”].) As relevant 

here, Code of Civil Procedure section 1286.2, subdivision (a)(4),

2

provides that “the court shall vacate the award if the court 

determines” that “[t]he arbitrators exceeded their powers and the 

award cannot be corrected without affecting the merits of the 

decision upon the controversy submitted.” 

In determining whether the arbitrators exceeded their 

powers within the meaning of the section 1286.2, 

subdivision (a)(4), we give “substantial deference to the 

arbitrators’ own assessments of their contractual authority . . . .” 

(Advanced Micro Devices, Inc. v. Intel Corp. (1994) 9 Cal.4th 362, 

373.) Whether the arbitrator exceeded his or her powers is a 

legal question we review de novo. (Richey v. AutoNation, Inc.,

supra, 60 Cal.4th at p. 918, fn. 1; Branches Neighborhood Corp. v. 

CalAtlantic Group, Inc., supra, 60 Cal.4th at p. 751.) 

B. Hemosure Was Entitled to a Reasoned Award

Med Tech contends Hemosure was not entitled to a

reasoned award under the AAA Commercial Arbitration Rules,

R-46(b) (Rule R-46(b)) because Hemosure failed to request a 

reasoned award prior to the appointment of the arbitrator, and 

thus, its request was not timely. This contention lacks merit.

As Med Tech points out, Rule R-46(b) provides, “The 

arbitrator need not render a reasoned award unless the parties 

request such an award in writing prior to the appointment of the 

2 Further undesignated statutory references are to the Code 

of Civil Procedure. 
7

arbitrator or unless the arbitrator determines that a reasoned 

award is appropriate.” However, Med Tech ignores Rule R-1(a) of 

the AAA Commercial Arbitration Rules, which allows the parties 

to modify the arbitration procedures by agreement with the 

consent of the arbitrator. Rule R-1(a) provides,“[T]he parties, by 

written agreement, may vary the procedures set forth in these 

rules. After appointment of the arbitrator, such modifications 

may be made only with the consent of the arbitrator.” The 

arbitrator’s March 23, 2018 scheduling order stated the order was 

made “[b]y agreement of the parties and Order of the Arbitrator,”

and “[t]he parties have requested a reasoned award.” Because 

the parties agreed to extend the deadline to request a reasoned 

award and the arbitrator consented to this modification of the 

procedural rules, the parties’ request was timely. (See Cat 

Charter, LLC v. Schurtenberger (11th Cir. 2011) 646 F.3d 836, 

840, fn. 6 (Cat Charter) [arbitrators’ scheduling order stating 

“‘[t]he form of the award also will be determined by agreement of 

the parties’” was “sufficient ‘consent’ within the meaning of 

Arbitration Rule R-1(a)” to allow the parties to “validly alter[]the 

procedures to require a reasoned award when they subsequently 

communicated with the [arbitrators]”]; see also Leeward Constr. 

Co. v. Am. Univ. of Antigua-College of Med. (2d Cir. 2016) 826 

F.3d 634, 638 (Leeward Construction) [“once the arbitrators 

stated in the preliminary hearing order that they would provide a 

reasoned award and neither party objected, a reasoned award 

was required”].) Thus, the arbitrator was obligated to issue a 

reasoned award based on the parties’ timely request. 
8

C. The Arbitrator Did Not Exceed His Powers

The AAA Commercial Arbitration Rules do not specify what 

constitutes “a reasoned award.” Hemosure contends a reasoned 

award requires findings of fact and conclusions of law pursuant 

to the standard articulated in Armendariz v. Foundation Health 

Psychcare Services, Inc. (2000) 24 Cal.4th 83, 107. In 

Armendariz,the Supreme Court held that “an arbitrator in a 

FEHA[3] case must issue a written arbitration decision that will 

reveal, however briefly, the essential findings and conclusions on 

which the award is based.” (Armendariz, at p. 107; accord, 

Pearson Dental Supplies, Inc. v. Superior Court (2010) 48 Cal.4th 

665, 679.) Armendariz does not assist Hemosure because the 

Supreme Court limited its holding to statutory FEHA claims and 

did not address the required findings for an award in an 

arbitration of a contract dispute between two companies. 

Because no California court has defined a reasoned award

under the AAA Commercial Arbitration Rules, we look to federal 

and other state courts for guidance. The Eleventh Circuit Court 

of Appeals in Cat Charter, supra, 646 F.3d at page 844 observed 

as to a reasoned award under the AAA, “Generally, an arbitrator 

need not explain her decision; thus, in a typical arbitration where 

no specific form of award is requested, arbitrators may provide a 

‘standard award’ and simply announce a result.” (Quoting United 

Steelworkers of America v. Enterprise Wheel & Car Corp. (1996) 

363 U.S. 593, 598.) The Cat Charter court explained, “[T]he 

varying forms of awards may be considered along a ‘spectrum of 

increasingly reasoned awards,’ with a ‘standard award’ requiring 

the least explanation and ‘findings of fact and conclusions of law’

3 California Fair Employment and Housing Act (Gov. Code, 

§ 12900 et seq.). 
9

requiring the most. [Citation.] In this light, therefore, a 

‘reasoned award is something short of findings and conclusions 

but more than a simple result.’” (Cat Charter, at p. 844.) The 

court relied on the dictionary definition of the term “reasoned” (as 

“‘based on or marked by reasoning’” and “‘provided with or 

marked by the detailed listing or mention of reasons’”) to 

conclude a reasoned award is one “provided with or marked by 

the detailed listing or mention of . . . statements offered as a 

justification of an act—the ‘act’ here being, of course, the decision 

of the [arbitrators].” (Ibid., quoting Webster’s 3d New Internat.

Dict. (1993) p. 1892.) 

In Cat Charter, a panel of three arbitrators (the Panel)

issued a unanimous arbitration award finding the plaintiffs had 

proven their claims arising from their payment of $2 million for a 

yacht that was never delivered, prevailing on their claims for 

unfair trade practices and breach of contract “by the greater 

weight of the evidence.” (Cat Charter, supra, 646 F.3d at pp. 840-

841.) The Eleventh Circuit found this constituted a reasoned 

award because the controversy turned on the Panel’s credibility 

determinations.

4

 (Id. at p. 844.) The court explained, “The 

statement that “[o]n the claim of the [Plaintiffs] . . . for breach of 

contract . . . we find that [Plaintiff] . . . has proven its claim 

4 The Eleventh Circuit in Cat Charter considered whether 

the district court properly vacated the arbitration award under 

section 10(a)(4) of the Federal Arbitration Act (9 U.S.C. § 10),

which provides for vacatur where “the arbitrators exceeded their 

powers.” (Cat Charter, supra, 646 F.3d at p. 842; see Leeward 

Construction, supra, 826 F.3d at p. 638.) Although we review the 

arbitration award under section 1286.2, subdivision (a)(4), it 

similarly provides for vacatur where “[t]he arbitrators exceeded 

their powers.”
10

against [Defendant] by the greater weight of the evidence” is 

easily understood to mean that, in the swearing match between 

the Plaintiffs and the Defendants, the Panel found the Plaintiffs’

witnesses to be more credible.” (Id. at pp. 844-845.) The court 

noted the Panel “could have provided more,” but had the parties 

wanted a more detailed explanation, they should have requested 

the Panel provide findings of fact and conclusions of law. (Id. at 

p. 845.) 

The Second Circuit Court of Appeals in Leeward 

Construction, supra, 826 F.3d at page 640 agreed with Cat 

Charter, explaining, “[A] reasoned award is something more than 

a line or two of unexplained conclusions, but something less than 

full findings of fact and conclusions of law on each issue raised 

before the panel. A reasoned award sets forth the basic 

reasoning of the arbitral panel on the central issue or issues 

raised before it. It need not delve into every argument made by 

the parties.” The court considered whether an arbitration award

that awarded separate amounts of damages for work performed 

by petitioner under the parties’ construction contract and work 

not specified by the contract was a reasoned award where the 

award found the parties had waived the requirement for formal 

change orders and the amounts awarded were based on the 

“‘evidence presented at trial.’” (Id. at p. 637.) The Second Circuit 

held the arbitration award was a reasoned award because “while 

it does not provide a detailed rationale for each and every line of 

damages awarded, it does set forth the relevant facts, as well as 

the key factual findings supporting its conclusions.” (Id. at 

p. 640; see Rain CII Carbon, LLC v. ConocoPhillips Co. (5th Cir. 

2012) 674 F.3d 469, 474 (Rain) [arbitration award resolving 

dispute over price formula under long-term supply agreement 
11

was reasoned award because “the arbitrator laid out the facts, 

described the contentions of the parties, and decided which of the 

two proposals should prevail”].)

We agree with Cat Charter, Leeward Construction, and 

Rain that, as articulated by Leeward Construction, a reasoned 

award must set forth the basic reasoning of the arbitrator on the 

central issues, but it does not need to “delve into” every argument 

raised by the parties or provide findings of fact and conclusions of 

law on each issue raised in the arbitration. (Leeward 

Construction, supra, 826 F.3d at p. 640; see Rain, supra, 674 F.3d 

at p. 474; Cat Charter, supra, 646 F.3d at p. 844.) 

In its closing brief in the arbitration, Hemosure argued 

that the witness testimony and exhibits showed that Med Tech 

was not following up on leads and taking the necessary steps to 

sell Hemosure’s products. Hemosure pointed to an investigation 

it launched in February 2016 into Med Tech’s performance and 

Hemosure’s conclusion based on that investigation that Med Tech 

had not been performing under the contract. According to 

Hemosure, it terminated its contract with Med Tech and refused 

to pay commissions for January and February 2017 because of 

this poor performance that resulted in a loss of sales to 

Hemosure. The arbitrator rejected Hemosure’s defense, finding it 

was based on Med Tech’s asserted poor performance on a prior 

agreement. The arbitrator explained in the arbitration award 

that Hemosure’s “novel defense that it can withhold [Med Tech’s] 

commissions because it decided after entering into a new contract 

with [Med Tech] that [Med Tech’s] performance under the 

parties’ prior agreement was not satisfactory is not persuasive 

and must fail.” Further, the arbitrator explained his finding that 

Hemosure had acted willfully, justifying treble damages under 
12

the Act, citing Dr. Wan’s statement, “I’m not going to fucking pay 

those guys.” The arbitrator’s explanations are sufficient for a 

reasoned award. Whether the arbitrator provided a reasoned 

award as to Hemosure’s legal arguments that the Act did not 

apply to Med Tech is a closer call. By awarding treble damages 

under the Act, the arbitrator impliedly found the Act applied to 

Med Tech, rejecting Hemosure’s arguments that Med Tech was 

not a “person” or a “‘wholesale sales representative’” and did not 

“solicit[]” wholesale orders, as required for the Act to apply. 

Further, in concluding the treble damages provision under the 

Act was “trigger[ed],” the arbitration award noted the issue had 

been “briefed thoroughly and persuasively by [Med Tech’s] 

counsel.” A reasoned award, unlike more detailed findings of fact 

and conclusions of law, need not go into detail as to every 

argument raised by the parties. (Leeward Construction, supra,

826 F.3d at p. 640.) Further, we cannot tell from the record on 

appeal whether the issues raised by Hemosure in its closing brief 

on the applicability of the Act were central issues in the 

arbitration. Hemosure has failed to include in the appellate 

record any briefing by Med Tech or the transcript of the 

arbitration hearing. The “appellant ‘has the burden of providing 

an adequate record. [Citation.] Failure to provide an adequate 

record on an issue requires that the issue be resolved against [the 

appellant].’” (Blue Mountain Enterprises, LLC. v. Owen (2022) 74 

Cal.App.5th 537, 557; accord, Ketchum v. Moses (2001) 24 Cal.4th 

1122, 1141 [“‘Because [the appellant] failed to furnish an 

adequate record of the attorney fee proceedings, [the appellant’s] 

claim must be resolved against [him].’”].)

The Fifth Circuit’s decision in Rain, supra, 674 F.3d 469 is 

on point. There, the Court of Appeals found an arbitration award 
13

that articulated and then rejected a party’s proposal for a price

formula but did not provide a further explanation, was a 

reasoned award. The Fifth Circuit explained rejection of the 

award would be “inconsistent with the deference owed to arbitral 

awards and the congressional policy favoring arbitration of 

commercial disputes, and is also contrary to the interest of 

finality.” (Id., at p. 474.) We likewise conclude the arbitrator’s

consideration and rejection of Hemosure’s legal arguments as to 

why the Act did not apply were sufficient for a reasoned award.

Stage Stores, Inc. v. Gunnerson (Tex.Ct.App. 2015) 

477 S.W.3d 848, 860, relied on by Hemosure, is not to the 

contrary. There, the Texas Court of Appeals applied the 

standard for a reasoned award under Cat Charter and Rain and 

concluded the arbitration award was not a reasoned award 

because the arbitrator “failed to address one of [the employer’s] 

key defenses: that [the employee] failed to provide the requisite 

notice and opportunity to cure in order to avail himself of the 

good-cause termination provision.” (Ibid.) Further, although the 

arbitration award provided reasoning as to its other conclusions, 

the failure to identify or address one of the employer’s three 

defenses required vacatur. (Id. at p. 863.) In contrast to Stage 

Stores, the arbitration award made clear the arbitrator

considered but rejected Hemosure’s arguments that the Act did 

not apply. Although certainly the better practice would have 

been for the arbitrator to provide his analysis of why the Act 

applied, in light of the deference we give to arbitration awards, 

we affirm the trial court’s order confirming the award.
14

DISPOSITION

We affirm the judgment. Med Tech is entitled to recover its

costs on appeal.

FEUER, J.

We concur:

SEGAL, Acting P. J.

WISE, J.*

* Judge of the Alameda County Superior Court, assigned by 

the Chief Justice pursuant to article VI, section 6 of the 

California Constitution.