Filed 12/14/21 Odyssey Engineering v. Longo CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a) , prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.11 15.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

ODYSSEY ENGINEERING Inc., et. al.,

Plaintiff s and Appellant s ,

v.
VINCENT LONGO et. al., Defendants and Respondents. G059242
(Super. Ct. No. 30

- 2018

- 01038748)

O P I N I O N

Appeal from a n order of the Superior Court of Orange County, Craig Griffin, Judge. Affirmed. Motion to supplement record d enied.

Dracup & Patterson, Jeff

r ey A. Dracup and Terry Bell for Plaintiffs and Appellants. Ropers Majeski, Andrew S. Hollins , Ethan A. Reimers ; Messner Reeves
and Andrew S. Hollins for Defendants and Respondents Vincent Longo , W esrae Holdings, Inc., and A lex M arinescu.2 Loeb & Loeb, W. All a n Edmiston and Saul D. Bre nn er for Respondents Stradling Yocca Carlson & Rauth and Mark Skaist.
* * * Anthony Longo, Teresa Longo, and their company Odyssey Enginee ring Inc, (collectively Odyssey) appeal from an order denying their petition to vacate a n arbitrator ’ s dismiss al of their case against the law firm of Stradling Yocca Carlson & Rauth, P.C. and one of its attorneys, Mark Skaist (collectively Stradling)

.

Od yssey argues the d ismissal order should be vacated for two reasons. First, because the decision to dismiss the case against Stradling, rather than issue a stay that would preserve Odyssey ’ s right to develop additional evidence , amounted to a n improper refusal to hear evi dence material to the controversy as set forth in Code of Civil
Procedure section 12 86.2, subdivision (a)(5). 1 And second, because the arbitrator , retired Superior Court Judge Gail Andler, failed to disclos e that her “ economic interes t ” in the ADR provider, JAMS , was an ow nership interest

— which i n the circumstances of this

case amounted to a ground for disqualification as set forth in section 1284.6,
subdivision (a)(6).

Odyssey has also moved to supplement the record by asking to unr edact a document it agreed to submit to the trial court in redacted form. Odyssey filed its motion to supplement after the respondents filed their briefs arguing that the lack of evidence establishing the extent to which any respondent or its counsel has done business with JAMS undermines Odyssey ’ s position on the disqualification issue

.

We deny Odyssey ’ s motion to supplement the record

. O ur review is of the
trial court ’ s decision, and except in extraordinary circumstances , appellate rules require
that our decision be based on the same evidence considered by the trial court.

1 All further statutory references are to this code.3

“ ‘ It is an elementary rule of appellate procedure that, when reviewing the correctness of
a trial court ’ s judgment, an appellate court will consider only matters which were part of the record at the time the judgment was entered. [Citation.] This rule preserves an orderly system of [ litigation ] by preventing litigants from circumventing the normal sequence o f litigation. ’ ” ( Haworth v. Superior Court (2010) 50 Cal.4th 372, 379, fn. 2 ( Haworth ) ; People v. Brooks (1980) 26 Cal.3d 471, 484 [ “ Augmentation is not available

. . . for the purpose of adding material that was not a proper part of the record in the tri al court ” ].) A request to augment after the opposing parties have filed their briefs is also untimely. ( People v. Preslie (1977) 70 Cal.App.3d 486, 492 [requests for augmentation of the
record “ made after a reasonable time has expired from receiving the record on appeal, and particularly as late as those contained in briefs, will be denied absent a strong showing of unusual or unavoidable circumstances giving rise to the delay ” ].)

Here, Odyssey does not contend the omitted evidence was unavailable to it during the trial court proceedings, only that it apparently considered the evidence
unnecessary until it reviewed the respondents ’ briefs on appeal. Those are not the extraordinary circumstances that will justify augmentation of the record

.

We reject O dyssey ’ s substantive arguments as well. The arbit rator considered Odyssey ’ s evidence and arguments in opposition to Stradling ’ s motion to
dismiss before ruling on its merits

. The fact that her ruling may have been legally
incorrect is not a basis to vacate the ruling under section 1286.2, subdivision (a)(5) , even if its effect was to limit the issues or evidence in the arbitration.

And the fact that an arbitrator ’ s disclosed financial interest in JAMS was based on an ownership sta ke, rather than a profit sharing or other interest in the company , is not a ground for disqualification under section 1286.2 , sub division (a) (6). E ven if it

were, Odyssey was free to seek additional information about the nature of the arbitrator ’ s economic interest at the time it was disclosed ; its failure to do so forfeited the issue.

The order is affirmed.4 FACTS Odyssey became embroiled in a dispute with Anth ony Longo ’ s brother , Vincent Longo , and his company , Wesrae Holdings, Inc. (collectively Wesrae) , over allegations that Wesrae had embe zzled funds from a third company , Futures Fins , LLC (Futures) , which is jointly owned by Odyssey and Wesrae. Odyssey also claimed th at Stradling, in its capacity as Futures ’ s legal counsel, aided and abetted Wesrae ’ s embezzlement.

Odyssey initiated a private arbitration of the dispute against both Wesrae and Stradling through ADR provider JAMS. 2 In April 2019, the JAMS arbitrator
sel ected by the parties provided the m with her initial disclosures , including that, within the preceding five years, she had served as a neutral arbitrator in other matters involving a party, a lawyer for a party, or law firm for a party to the current arbitr ation. At the same time, JAMS provided the parties with reports listing the arbitration matters handle d by the arbitrator within the last five years ( and mediation matters handled with in the past two years) that included any party or any lawyer or law firm representing a par ty to the present arbitration

.

JAMS ’ s April disclosures also informed the parties that the arbitrator

“ practice s in association with JAMS. Each JAMS neutral, including the neutral in this

case, has an economic in terest in the overall financial success of JAMS. In addition, because of the nature and size of JAMS, the parties should assume that one or more of the other neutrals who practice with JAMS has participated in an arbitration, mediation or other dispute re solution proceeding with the parties, counsel or insurers in this case and may do so in the future. ” In connection with those disclosures, the parties were invited to make further inquiries related to them

.

2 Odyssey also asserted a claim against Alex Marinescu , who is alleged to have aided and abetted Wesrae ’ s misconduct.5 In July 2019, Stradling moved to dismiss the cl aim against it, relying on McDermott, Will & Emery v. Superior Court (2000) 83 Cal.App.4th 378 for the proposition that dismissal is proper in cases where a law firm is unable to meaningfully
defend itself due to the strictures of the attorney client privilege. In its opposition, Odyssey relied on Favila v. Katten Muchin Rosenman LLP (2010) 188 Cal.App.4th 189 ( Favila ), to argue the court should stay the action rather than dismiss it because there was

a rea listic possibility that further liti g ation would result in either a waiver of the privilege

or the d iscovery of evidence supporting an exception to it. In a decision that explain ed at some length why s he concluded Favila was inapposite, t he arbitrator gra nted Stradling’s
motion to dismiss

.

Approximately two months after the arbitrator ’ s ruling, the Ninth Circuit Court of Appeals issued a decision , Monster Energy Co. v. City Beverages, LLC , 940 F.3d 1130 (9th Cir. 2019) ( “ Monster Energy ” ) , which vacated an arbitration decision
on the basis that a JAMS arbitrator had failed to disclose (1) that he had an ownership
interest in JAMS , and (2) that one of the parties to the case had a substantial, ongoing business relationship with JAMS.

Appar ently in response to the Monster Energy decision , the arbitrator in
this case issued an additional disclosure in November 2019 stating she had “ an equal share ownership interest ” in JAMS , that she had “ never received a profit distribution of
more than .1% of JAMS total revenue in a given year , ” and that she was “ not privy to information regarding the number of cases or revenue related to cases assigned to other panelists. ”
Also , in November 2019, JAMS sent the parties supplemental information regarding JAMS and its cases. The report identified the number of cases that JAMS

— broadly defined to include all JAMS neutrals in all the company’s offices

—had
administered during the preceding five years that had involved a “ party, lawyer, or law
firm in the present case. ” Th e numbers revealed in the report were redacted in the trial6

court filing and are not included in the record before us. This is the information appellants now ask us to consider.

The materials provided to the parties in November 201 9 also noted that

“ JAMS administers approximately 13,000 cases per year, ” and further stated “ JAMS has approximately 400 neutrals on its panel, and a little over one quarter of JAMS neutrals
have an equal ownership share in the company. Owners are not pri vy to information regarding the number of cases or revenue related to cases assigned to other panelists. No
shareholder ’ s distribution has ever exceeded 0.1% of JAMS total revenue in a given year. Shareholders are not informed about how their profit dist ributions are impacted by any particular client, lawyer or law firm and shareholders do not receive credit for the creation or retention of client relationships. ” The report also informed the parties that

“ [t]his report is not provided to JAMS neutrals and will not be provided to the neutral in
this matter. ” Based upon th e arbitrator’s additional disclosure, Odyssey submitted a request to JAMS to disqualify Judge Andler as the case neutral and “ restart the arbitration
with a neutral arbitrator who holds no JAMS ownership

. ” It then filed a challenge for

cause. JAMS denied both the request and the challenge. Odyssey also submitted a request directly to Judge Andler that she disqualify herself. She declined.

In December 2019, Odysse y filed a petition to vacate the arbitration decision dismissing Stradling , pursuant to section 1284.2. As grounds for the petition,
O dyssey claimed (1) the arbitrator engaged in misconduct that substantially prejudiced its rights; (2) the arbitrator unfa irly refused to postpone the hearing or hear evidence to settle the dispute; and (3) the arbitrator f a ile d to disclose within the time for disclo s ure a ground for disqualification of which the arbitrator was then aware.

In support of the disqualification argument, Odyssey ’ s counsel declared
that “ [f]ollowing the November 1, 2019 disclosure of Judge Andler ’ s ownership in JAMS, Claimants, by their legal counsel, timely filed a challenge to the continued service7

of arbitrator Andler in this matter . . . . [¶] Had this critical disclosure been made at the initial disclosure, I would have demanded JAMS provide the case load given to JAMS by Stradling. Seeing the case load Stradling provides to JAMS, (as JAMS disclosed on November 12, 2019), I would have mov ed to disqualify Judge Andler not only on the automatic disqualification permitted by Code Civ. Proc. § 1281

. 91 but based on the large firm bias her ownership in JAMS brings to this arbitration. ”

Odyssey then filed a motion to disqualify Judge Andler fro m further participation in the case concurrently with its petition to vacate the contractual arbitration
award

. Stradling and Wesrae opposed the petition and motion, arguing the
arbitrator had sufficiently disclosed her financial interest in the economic success of
JAMS and that Odyssey waived any objection by failing to make a timely inquir y about
the issue . They also claim ed Odyssey was belatedly raising the issue solely because it disagreed with her ruling

.

The trial court denied the petition and denied the motion to disqualify the
arbitrator.

DISCUSSION
1. Governing Principles Odyssey seeks to vacate a binding arbitration award

. Se ction 128 6 .2 allows
the courts to vacate such awards only in very limited circumstances because “ i t is the
ge neral rule that parties to a private arbitration impliedly agree that the arbitrator ’ s decision will be both binding and final. ” ( Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 9.) As explained by our Supreme Court, “ Most legal errors in arbitration ar e not reviewable. [Citations.] An award may be vacated only for fraud, corruption, misconduct, an undisclosed conflict, or similar “ circumstances involving serious8

problems with the award itself, or with the fairness of the arbitration process. ” [Citati on.] Otherwise, judicial corrections are limited to remedying ‘ obvious and easily correctable mistake[s] ’ ‘ technical problem[s], ’ and actions in excess of authority so long as the
correction leaves the merits of the decision unaffected. [Citation.] ‘ [B]y voluntarily submitting to arbitration, the parties have agreed to bear the risk [of uncorrectable legal or factual error] in return for a quick, inexpensive, and conclusive resolution to their dispute. ’ ” ( Heimlich v. Shivji (2019) 7 Cal.5th 350, 367 , fn. omitted ( Heimlich ) .)
2

. Arbitrator ’

s Failure to Allow Odyssey to Present I ts Case Against Stradling
O ne of the limited grounds for vacating an arbitration award is that t he
arbitrator prevented a party from fairly presenting its case. (§ 1286.2, s ubd. (a)(5) (subdivision (a) (5)) [ “ [t]he rights of the party were substantially prejudiced by

. . . the refusal of the arbitrators to hear evidence material to the controversy ” ] .)

Odyssey argu es the arbitrator in this case improperly refused to hear
material evidence because she erroneously granted a request for di smissal by Stradling , rather than conditionally staying the proceeding against it pursuant to Favila , as advocated by Odyssey

. Odyssey argues that ruling is revie wable under subdivision (a)(5)
because it s effect was to unfairly deny Odyssey the opportunity to present material
evidence it hoped to later develop i n support of maintaining its claim for damages against Stradling.
We disagree

. As explained by our S upreme Court in Heimlich ,

s ubdivision (a)(5) cannot be spun into a justification for reviewing the merits of an
arbitrator ’ s ruling , even in cases where the ruling had the effect of eliminating a party ’ s claim

. In Heimlich , the arbitrator concluded

— incorrectly as it turns out

— that he lacked jurisdic tion to award costs

. Although t he appellant argued the award could be vacated
under subdivision (a)(5) because the erroneous ruling amounted to an unfair refusal to
consider his evidence of cost s, the Supreme Court concluded “ [t]his analysis fails. ” ( Heimlich, supra, 7 Cal.5th at p. 368.)9 As the Supreme Court pointed out, “ [t] he provision is not ‘ a back door to
Moncharsh through which parties may routinely test the validity of legal theories of
arbitrators. ’ [Citation.] Instead, it was designed as a ‘ safety valve in private arbitration that permits a court to intercede when an arbitrator has prevented a party from fairly presenting its case. ’ [Citation.] It comes into play, for example, when an arbitrator, without justification, permits only one side to present evidence on a disputed material
issue.

. . . [Citation.]

. . . To conduct an arbitration without abiding by th at principle evinces bias, constituting misconduct. [¶] . . . [¶] In contrast, section 1286.2,
subdivision (a)(5) does not contemplate vacation of an award merely because arbitrators refuse to consider evidence they find legally irrelevant, even if the ir relevance determination rests upon an incorrect legal foundation

. ” ( Heimlich, supra, 7 Cal.5th at
pp. 368

- 369 , italics added.)

The Supreme Court then reached this conclusion : “ There is a difference between a legal conclusion that jurisdiction is lacking and an arbitrary refusal to hear relevant evidence on an issue properly before the arbitrator. [ The a ppellant ’ s ] complaint is with the underlying jurisdictional determination. Neither that determination nor the resulting refusal to consider evidence erroneously deemed irrelevant is misconduct under the evidentiary prong of section 1286.2, subdivision (a)(5)

. ” ( Heimlich, supra, 7 Cal.5th at p. 369.)
O n a more practical level, the Supreme Court observ ed that “ [t] o allow an arbitration award to be set aside under section 1286.2, subdivision (a)(5), whenever an erroneous legal ruling results in the exclusion of evidence deemed important would
undermine a foundation of the Arbitra tion Act, that an arbitrator ’ s legal error ordinarily is not judicially reviewable. ” ( Heimlich, supra, 7 Cal.5th . at p. 370.)

This case cannot be materially distinguished from Heimlich . The arbitrator
here considered Odyssey ’ s opposition to Stradling ’ s motion , and she explained in some10

detail why she disagreed with Odyssey ’ s assertion that Favila justified a stay , rather than an outright dismissal, of its claim against Stradling.

Odyssey ’ s complaint is that the arbitrator “ failed to apply Favila prop erly , ”
not that the arbitrator reached her decision in a procedurally unfair manner. I t may be
true that the arbitrator erred in her analysis of Favila , but for purposes of our review, it
does not matter. Pursuant to Heimlich , Odyssey ’ s complaint does n ot warrant vacation of
the award under subdivision (a)(5)

. 3. Arbitrator ’

s Failure to Disclose Ownership Interest in JAMS Odyssey also argues the arbitrator ’ s decision must be vacated under subdivision (a)(6) of section 12 86.2 (subdivision (a)(6)) because the arbitrator failed to
disclose that she ha d a n ownership interest in JAMS. Relying on t he Ninth Circuit
decision in Monster Energy , Odyssey contends the arbitrator ’ s ownership interest in the company would cause “ a person aware of the f acts to reasonably entertain a doubt that the proposed neutral arbitrator would be able to be impartial. ” (Quoting section 1281.9, subd. (a).)
In Monster Energy , the majority considered whether an arbitration award
should be vacated because the arbitrator’s disclos ure of “ ‘ an economic interest in the
overall financial success of JAMS ’ ”

— the same disclosure made in this case

— was an insufficient disclosure of the arb it r ator ’ s owners hip interest in the provider . ( Monster Energy , supra , 940 F.3d. at pp. 1133

- 1134 , 1136.) However, the Monster Energy majority analyzed that issue under the Federal Arbitration Act (FAA), rather than under
section 1286.2

. 3 The majority concluded that an arbitrator’s ownership interest must be

3 The Monster Energy majority does acknowledge Cal i fornia ’s requirement that arbitrators disclose “‘ any known facts that a reasonable person would consider likely to affect the impartiality of the arbitrator ’” ( Monster Energy, supra , 940 F.3d at p. 1137),
a s an “ example ” of the disclosure rules enacted by “ states within our circuit ” ( id. at p

. 1 136 ), but the case does not apply that standard.11

disclosed in any case where a party has “ non trivial business dealings ” with the provider. ( Id. at p. 1136.)

The majority made clear that its conclusion was based in part on the need to ensure transparency in cases involving inexperienced litigants. A lthough it acknowledged that the participants in the arbitration before it were “ sophisticated companies, ” the Monster Energy majority noted that arbitrations often involve “ every day ” disputes “ including in employment

- related disputes, consumer transactions, housing issues, and beyond [which] m eans that arbitration will often take place between unequal parties. ” (

Monster Energy , supra , 940 F.3d. at p. 1137.) As a result , the majority reasoned the better rule would be to require more explicit di sclosure when an arbitrator holds an ownership interest in the ADR provider.

However, as pointed out by another panel of this court in Speier v. The Advantage Fund, LLC (2021) 63 Cal.App.5th 134 ( Speier) , the disclosure rules are more explicit and detail ed under California law, and they distinguish between different types of

cases . Thus , “ in a consumer arbitration , the arbitrator must disclose ‘ [a]ny significant past, present, or currently expected financial or professional relationship or affiliation
be tween the administering dispute resolution provider organization and a party or lawyer
in the arbitration. ’ In consumer arbitrations, standard 8(c) [of the California Rules of
Court Ethics Standards for Neutral Arbitrators in Contractual Arbitration ] further requires the arbitrator also to provide information regarding ‘ [a]ny financial relationship or affiliation the arbitrator has with the provider organization other than receiving referrals of cases, including whether the arbitrator has a financial i nterest in the provider organization or is an employee of the provider organization. ’ ” ( Speier, supra , at p. 149,
f n. omitted.) Speier also notes the same rule states “ ‘ [a] n arbitrator is not required to make the disclosures required by this standard if he or she reasonably believes that the
arbitration is not a consumer arbitration based on reasonable reliance on a consumer12

party ’ s representation that the arbitration is not a consumer arbitration. ’ ” ( Speier, supra , 63 Cal.App.5th at p. 149 .)

Given Cal ifornia’s more nuanced disclosure rules, we are not persuaded
that Monster Energy ’

s one

- size

- fits

- all disclosure standard applies here

. Instead, we

c o nc ur with the analysis in Speier , which addressed the same disqualification argument
made here by Odyssey , in essentially the same factual circumstances

. A fter pointing out
that under California law , an arbitrator in a commercial dispute is not required to disclose an ownership interest in the ADR provider, Speie r considered whether such a disclosure

was “ n ever

theless required because, under the specific facts and circumstances of this case, the information could reasonably raise a doubt in a person aware of the facts about
the arbitrator ’ s impartiality. ” ( Speier , supra, 63 Cal.App.5th at p. 150 ; see § 170.1, subd. ( a)(6)(A)(iii) .)

Speier observed that “ ‘ “ The ‘ reasonable person ’ is not someone who is

‘ hypersensitive or unduly suspicious , ’ but rather is a ‘ well

- informed, thoughtful
observe r ’ ” ’” and that “ ‘ [ t ] he partisan litigant emotionally involved in the controversy underlying the lawsuit is not the disinterested objective observer whose doubts concerning the judge ’ s impartiality provide the governing standard. ’ ” ( Speier, supra , 63 Cal.App.5t h at p. 14 7. ) T he Speier panel then concluded that , becaus e the parties ’ attorneys were from law firms that had iden tical numbers of cases before JAMS in the
five

- year period preceding the arbitration , the arbitrator’s ownership interest in JAMS did

not reasonably raise a doubt about the arbitrator’s impartiality

. ( Id. at p. 150.)

This case is distinguishable from Speier in that we do not know the number
of matters each side (including their respective cou nsel) ha s had before JAMS in the five
years preceding the arbitration. But neither did the arbitrator. JAMS ’ s disclosure made
clear th e total number of cases a particular party, attorney, or law firm brings to JAMS is

n ot shared with its neutrals. Because the arbitrator ha d no knowledge of th os e case13

numbers , we can not see how th ey would be pertine nt in assessing her impartiality in a particular case

. 4

Rather than arguing specific numbers, Odyssey relies on the assertion that
Stradli ng itself is a large law firm, and both Stradling and Wesrae were represented by other large law firms, while Odyssey is represented by a small law firm. 5 According to Odyssey, these ‘ “ BigLaw ” ’ firms would naturally be viewed as “ ‘ “ a source or potential
source of

. . . additional income, for the arbitrator ” ’” based upon her ownership interest in JAMS, and thus a reasonable person would consider that ownership interest to be a reason to doub t her impartiality

.

What Odyssey ’ s argument ignores is the fact that prior to this arbitration,
JAMS had disclosed to the parties that “ [e]ach JAMS neutral, including the neutral in this case, has an economic interest in the overall financial success of JAMS ” ( original
i talics)

. Th e disclosure did not use the word “ owner ship , ” but it conveyed that the
individual neutrals w ould somehow share in JAMS ’ s “ financial succes s ” ; it thus suggested that if JAMS did well financially so too would they

. Given that disclosure, we see little difference between an “economic interest” and an “ownership interest,” as either might raise some concern about an arbitrator’s impartiality

.

The dissenting judge in Monste r Energy made a similar point: “ The majority reasons . . . that the Arbitrator ’ s interest as a JAMS owner should have been

4 Monster Energy is dist i nguishable on this point. In that case, Monster ( a large soft drink company ) had ins erted a provision in its form franchise agreements that required any disputes to be arbitrated by JAMS in its Orange County, California , location. (

Monster Energy , supra , 940 F.3d at p

. 1136.) Th at arbitration provision would suggest to a ny individual arbitrator handling one of the Monster cases that Monster was responsible for providing a ste ady s tream of business to JAMS ’s Orange County office

.

5 Wesrae argues that Odyssey ’ s characterization of the size of these law firms is no t supported by evidence in the record. The point is well

- taken, but we will assume, for purposes of evaluating the argument, that they are among the many large law firms that utilize the services of ADR providers, including JAMS.14

specifically disclosed because it ‘ greatly exceeds the general economic interest that all JAMS neutrals naturally have in the organization. ’ [Citation.] I do not see how this
information would have made a material difference in Olympic Eagle ’ s evaluation of the
Arbitrator. Owners of JAMS have an interest in maximizing JAM S ’ s amount of business, because they share in JAMS ’ s profits. Likewise, non

- owner arbitrators have an interest in advancing their professional careers and maintaining their status with JAMS, which creates similar incentives to decide cases in a way that is acceptable to repeat player customers

— otherwise, JAMS might terminate the non

- owner ’ s JAMS affiliation. [¶] . . . Because both types of arbitrators would have at least some incentive to keep repeat customers of JAMS such as Monster happy, it is unclear why knowing the details of the financial relationship between any specific potential arbitrator and JAMS would
make a material difference . . . . That an arb itrator has an ownership interest in the arbitration firm, not just a financial interest in that firm more generally, is hardly the sort
of ‘ real ’ and ‘ not trivial ’ undisclosed conflict that our court has held requires vacatur. ” ( Monster Energy , supra , 940 F.3d at pp. 1140

- 1141 ( dis. opn. of Friedland , J .) .) 6

6 The Monster Energy majority notes that while JAMS ’ initial disclosure revealed that all JAMS neutrals have an “ economic interest ” in the company ’ s financial success, only about one

- third of th ose neutrals actually have an own ership interest in the company

. (

Monster Energy , supra , 940 F.3d. at p. 1136 , fn. 2 .) Based on that difference, the majority seems to assume , without explanation, that the initial “economic interest” disclosure made by JAMS refers only to “ the general economic interest that all JAMS neutrals naturally have in the organization, ” while the undisclosed ownership interest of some neutrals “ greatly exceeds ” that general interest. ( Ibid. ) We find this reasoning difficult to follow. There are various ways in which a neutral could directly share in JAMS ’ s financial success

— e.g., a profit

- sharing agreement

— that are distinct from an ownership interest. And a significant profit

- sharing agreeme nt could be even more lucrative than a small ownership interest. W e assume JAMS ’ s in itial disclosure was in tend ed to put the parties on notice that a potential arbitrator ha d some sort of financial stake in the success of the company ; the disclosure then left it to the parties to decide whether furthe r inquiry on the subject was required

.15 We believe t he initial JAMS disclosure, which inform ed the parties that
each of its neutrals ha s an “ economic interest ” in the fi nancial success of the entity
overall , wa s sufficient to trigger a n obligation in any party to seek clarification if the
issue raised a concern. (See Dornbi r er v. Kaiser Foundation Health Plan, Inc. (2008) 166 Cal.App.4th 831, 84 1 ( Dornbirer ) [ “ although Adelman ’ s disclosure letter may be ambiguous with regard to the precise number of cases he had previously arbitrated in which Kaiser was a party, the disclosur e was sufficient to put Dornbirer on notice that Adelman had served as an arbitrator in a large number of such cases. If Dornbirer was concerned about the number of times Adelman had served as an arbitrator for Kaiser, she had the opportunity to ask for c larification ” ].)

A party cannot ignore a n issue that is disclosed by the arbitrator before the arbitration, and later seek to overturn the result based on th at same issue

. As stated in
Dornbirer , a party ’ s r emedy when an arbitrator has failed to make re quired disclosures
under section 1281.9 , or ha s made incomplete disclosures, is to seek disqualification
under section 1281.91, subdivision (a) , before the arbitration takes place. 7 ( Dornbirer,

supra, 166 Cal.App.4th at p. 846.) A party ’ s failure to do so results in a fo r feiture of the right to disqualify the arb i trator. 8 ( § 1281.91, subd

. (c).)

Odyssey argues that it did in fact challenge Judge Andler as soon as it could after JAMS provided its “o wnership interest” disclosure in November 2019, and that this

7 Section 1281.91, subdivision ( a ) , states: “ A proposed neutral arbitrator shall be disqualified if he or she fails to comply with Section 1281.9 and any party entitled to receive the disclosure serves a notice of disqualification within 15 calendar days after the proposed nominee or appointee fails to comply with Section 1281.9. ”

8 Section 1281.91, subdivision (c) , states in pertinent part : “The right of a party to disqualify a proposed neutral arbitrator pursuant to this section shall be waived if the party fails to serve the notice pursuant to the times set forth in this section, unless the proposed nominee or appointee makes a material omission or material misrepresentation in his or her disclosure. ”16

challenge satisfied the requirements of section 1281.91. W e are not persuaded. Odyssey was on notice well before the arbitration commenced of Judge Andler’s “financial interest” in JAMS. As d iscussed in Dornbirer , once Odyssey became aware of the arbitrator’s economic interest in JAMS, it had an obligation to either make further inquiry about the subject or proceed with the arbitration and accept its outcome.

DISPOSITION
The order is affirmed

. Stradling is entitled to its costs on appeal.

GOETHALS, J.

WE CONCUR:

O’LEARY, P. J.

M ARKS , J.* *Judge of the Orange County Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.