Filed 7/18/23 Huang v. Henry Global Consulting CA2/4

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FOUR

JUNYANG HUANG et al.,

Plaintiffs and Appellants,

v.

HENRY GLOBAL CONSULTING et 

al.,

Defendants and Respondents.

 B317537

 (Los Angeles County

Super. Ct. Nos.BC685035, 

19STCV37446)

APPEAL from a judgment of the Superior Court of 

Los Angeles County, Barbara M. Scheper, Judge. Affirmed.

Law Offices of Jeffrey T. Bell and Jeffrey T. Bell for 

Plaintiffs and Appellants.

Venable, Belinda M. Vega, Witt W. Chang for Defendant 

and Respondent Las Vegas Resort Holdings, LLC.
2

Appellants Junyang Huang, Shenghong Cheng, and Xiaole 

Chen challenge the confirmation of an arbitration award in favor 

of respondent Las Vegas Resort Holdings, LLC (Holdings) and 

other parties not involved in this appeal. Appellants contend the 

award should be vacated because the arbitrators exceeded their 

authority by determining the arbitrability of and adjudicating 

claims against non-signatories to the arbitration agreement, 

adjudicating claims that sought punitive damages, unreasonably 

limiting the scope of discovery, and resolving the matter without 

an evidentiary hearing. We reject these contentions and affirm.

FACTUAL BACKGROUND

The underlying facts of this case stem from Holdings’s 

renovation and rebranding of the Sahara Hotel and Casino in Las 

Vegas into the SLS Las Vegas Hotel (the project).1 Because the 

facts are complex and of limited relevance to the issues presented 

on appeal, we provide only a brief overview here, drawn primarily 

from appellants’ second revised statement of claims (SRSOC) and 

the final arbitration award. 

To obtain some of the funding necessary for the costly 

project, Holdings participated in the United States Citizenship 

and Immigration Service’s EB-5 Immigrant Investor Pilot

Program, which provides a path to permanent U.S. residency for 

foreign nationals who invest at least $500,000 in approved jobcreating projects and meet other criteria. It is operated through 

1 Holdings’s predecessors in interest acquired ownership of 

the hotel in 2007 and operated the hotel and oversaw the project

for several years before ownership transferred to Holdings. 

Because there is no dispute about Holdings’s interest, we use the 

term “Holdings” to refer to the predecessors in interest as well as 

Holdings. 
3

various “regional centers” across the country; American Dream 

Fund, LLC (ADF), operates the Las Vegas Regional Center 

relevant to this case. 

To facilitate investment by foreign nationals, Holdings

created a new business entity, SLS Lender, LLC, for the purpose 

of making a $115 million loan to the project. Holdings also paid 

for the preparation of a lengthy business plan for SLS Lender, 

LLC. The business plan included detailed information about the 

project and its financing, as well as the EB-5 program. It was 

translated into Chinese and promoted in China along with other 

marketing documents that contained information provided by 

Holdings. 

After the project commenced, Holdings created a second 

business entity, SLS Tranche I Lender, LLC (Tranche I), for the 

purpose of loaning up to an additional $200 million to the project. 

Holdings prepared an addendum to the business plan as well as a

lengthy “confidential private placement memorandum” with 

additional information about the project and the investment risks 

it posed. These additional materials were also provided to 

potential Chinese investors, including appellants. Appellants 

allege that the materials failed to disclose agreements that 

Holdings made to pay “finder fees” and “migration agent fees” to 

marketer Henry Global Consulting Group and other entities.2

2 In their briefing here, appellants concede that the private 

placement memorandum “did state that finder fees would be paid 

to the marketers of the project by SLS Tranche 1 Lender, LLC 

and Holdings.” They assert, however, that the private placement 

memorandum “did not state the total amount of the fees, who 

was receiving the fees, the terms of the fee agreements and did 

not identify the risk associated with the fees to the viability of the 

project.” 
4

To invest in the project, appellants each purchased one 

class B “membership unit” in Tranche I for $500,000, and paid an 

additional administration fee of $45,000. They also each signed a 

“subscription agreement” prepared by Holdings but signed by 

Tranche I. Appellants and Tranche I also signed a one-page 

“member joinder agreement” indicating their willingness to be 

bound by Tranche I’s “operating agreement,” including an 

arbitration provision in the operating agreement and expressly 

incorporated into the member joinder agreement. 

By signing the member joinder agreement, each appellant 

signed and agreed to be bound by the operating agreement. ADF, 

the sole class A member of Tranche I, also signed the operating 

agreement. Holdings did not sign the operating agreement. 

The operating agreement provided that “[t]he remedies 

under this Agreement are cumulative and shall not exclude any 

other remedies to which any Person may be lawfully entitled.” It 

also contained an arbitration provision, which we excerpt below

in our discussion of the petition to compel arbitration.

Appellants signed the agreements and made their 

investments in 2013 (Chen), 2014 (Huang), and 2015 (Cheng). 

After the renovated and rebranded hotel opened in 2014, it failed 

to generate revenue as expected and struggled financially; 

appellants allege this, too, was concealed from them. In June 

2017, appellants were informed that the hotel was going to be 

sold. The class B members of Tranche I twice refused to approve 

the sale. Appellants allege that the sale ultimately was approved 

without a vote, and that the terms were concealed from them and 

were unfavorable both financially and with respect to their 

efforts to secure permanent U.S. residency. 
5

PROCEDURAL HISTORY

I. Complaint 

On November 30, 2017, appellants and 57 other class B 

members of Tranche I filed suit against Holdings and numerous 

other entities involved in the project, including ADF, the Las 

Vegas Regional Center, Henry Global Consulting, and 200 Doe 

defendants. The suit asserted seven causes of action. The first 

cause of action for fraud sounded against “All Defendants” and 

alleged fraud in the inception, concealment, and false promises. 

The second cause of action for breach of fiduciary duty and third 

cause of action for breach of contract-third party beneficiary 

sounded against Henry Global Consulting, ADF, the Las Vegas 

Regional Center, and other defendants (but not Holdings). The 

fourth cause of action for permanent injunction sought to stop the 

sale of the hotel and sounded against Tranche I; ADF; the Las 

Vegas Regional Center; and Celona Asset Management (USA) 

Limited, the class A manager of Tranche I. The fifth cause of 

action for accounting and sixth cause of action for failure to 

release records named the same defendants as the fourth cause of 

action. The seventh cause of action for violation of Business and 

Professional Code section 17200 sounded against ADF and Henry 

Global Consulting. Plaintiffs prayed for relief including 

compensatory damages, punitive damages, attorney fees, and 

injunctive relief. 

II. Petition to Compel Arbitration

On January 31, 2018, all defendants who had been served, 

including Holdings, jointly filed a petition to compel arbitration. 

They asserted that the arbitration provision in the operating 

agreement required arbitration of plaintiffs’ claims. The 

arbitration provision states, in pertinent part: 
6

“Any controversy, dispute, or claim between the parties to 

this Agreement arising out of, in connection with, or in relation to 

the formation, negotiation, interpretation, performance, or breach 

of this Agreement shall be submitted to JAMS (hereafter, the 

‘Arbitration Service’) and shall be settled exclusively by 

arbitration, before a three-member arbitration panel, in 

accordance with this Section 10.9. This agreement to resolve any 

disputes by binding arbitration shall extend to claims against any 

parent, subsidiary, or Affiliate of each party, and, when acting 

within such capacity, any officer, director, member, employee or 

agent of each party, or any of the above, and shall apply as well 

to claims arising out of state and federal statutes and local 

ordinances as well as to claims arising under the common law. 

Arbitration shall be the exclusive remedy for determining any 

such dispute, whether in tort, contract, or otherwise, regardless 

of its nature. Arbitration shall be governed by the 

Comprehensive Arbitration Rules and Procedures and 

International Arbitration Rules (or similar commercial 

arbitration rules) of the Arbitration Service. In the event of a 

conflict between the applicable rules of the Arbitration Service 

and these procedures, the provisions of these procedures shall 

govern. . . .

“In the event of a dispute subject to this Section 10.9, (a) 

the parties shall be entitled to reasonable discovery subject to the 

discretion of the arbitrator, (b) all testimony of witnesses shall be 

taken under oath, and the admission of evidence shall be

governed by the rules of evidence applicable to civil proceedings 

under applicable law, and (c) a stenographic record shall be kept 

of all oral hearings. The remedial authority of the arbitrator 

shall be the same as, but no greater than, would be the remedial 
7

power of a court having jurisdiction over the parties and their 

dispute; provided, however, that the arbitrator shall have no 

power or authority under this Agreement or otherwise to award 

or provide for the award of punitive or consequential damages 

against any party. The arbitrator shall, upon an appropriate 

motion, dismiss any claim without an evidentiary hearing if the 

party bringing the motion establishes that he or it would be 

entitled to summary judgment if the matter had been pursued in 

court litigation. . . .

“In interpreting this Agreement, the arbitrator shall be 

bound by and follow the substantive law of the State of Delaware. 

To the extent applicable and not inconsistent with this Section 

10.9, the arbitrator shall apply the Federal Rules of Civil 

Procedure and the Federal Rules of Evidence. 

“. . . The prevailing party in such arbitration, as 

determined by the arbitrator, and in any enforcement or other 

court proceedings, shall be entitled to reimbursement from the 

other party for all of the prevailing party's costs (including but 

not limited to the arbitrator’ s compensation), expenses, and 

attorneys’ fees.

“The arbitrator shall render an award and written opinion, 

and the award shall be final and binding upon the parties. 

Judgment upon any award rendered by the arbitrators may be 

entered by any state or federal court having jurisdiction thereof, 

in accordance with the terms of the Convention on the 

Recognition and Enforcement of Foreign Arbitral Awards. . . .”

Plaintiffs opposed the petition, and defendants filed a reply. 

The trial court held a hearing, at which it granted the petition on 

the ground that “questions of arbitrability are properly reserved 
8

for the arbitrators.” The court stayed the matter as to the 

moving defendants. 

III. Arbitration 

A. Arbitrability

A panel of three JAMS arbitrators received briefing and 

held a hearing before ruling on arbitrability. As relevant here, 

the arbitrators concluded that the parties agreed to arbitrate the 

pending claims and that parties such as Holdings who were not 

signatories could participate in the arbitration because “[a]ll 

causes of action are intertwined with the Operating Agreement, 

and multiple causes of action name and seek recovery against all 

Respondents.”3 The arbitrators deferred ruling on the question of 

whether the arbitration provision’s limitation on the their power 

to award consequential and punitive damages limited the scope of 

their authority over claims pursuant to which plaintiffs could 

seek those damages. 

B. Initial Dispositive Motions 

According to the final arbitration award, plaintiffs’ initial 

statement of claims (SOC) in the arbitration “contained claims for 

alleged violations of federal and state securities laws, breach of 

fiduciary duty, breach of contract, and claims ancillary to those 

violations. The SOC was the subject of a dispositive motion 

which the Panel granted in large part with leave to amend as to 

some claims, but with prejudice as to others.” After these 

3 By this point in the proceedings, appellants (along with the 

other plaintiffs participating in the arbitration) had filed a 

statement of claims against Holdings and others that differed 

from and expanded upon the complaint filed in the trial court. 

Notably, they not only retained but also added causes of action 

against defendants, including Holdings, who had not signed the 

operating agreement. 
9

rulings, plaintiffs dismissed their claims with prejudice against 

six defendants. 

Plaintiffs subsequently filed a revised statement of claims 

(RSOC) that winnowed their 10 causes of action down to four: 

fraud, breach of fiduciary duty, accounting, and release of books 

and records. Defendants again sought summary disposition. 

After the motions were briefed and orally argued, the arbitrators 

requested and received additional documents from defendants 

and supplemental briefing from plaintiffs. The arbitrators 

granted the motion in part, dismissing most of plaintiffs’ claims.4

However, the arbitrators gave plaintiffs leave to amend certain 

aspects of their claims, including their allegations that 

defendants failed to disclose various fee arrangements in the 

project documents. Because it is relevant to appellants’ 

argument here, we quote a portion of the ruling:

“Claimants argue (although their allegations are not nearly 

so specific) that Respondents obligated themselves by early 2013 

to pay exorbitant fees to Henry Global and its alter egos that 

were not reflected in the project cost data. The most recently

submitted documents sew [sic] additional confusion as additional 

parties, who were apparently receiving fees from the Claimants’ 

capital, have now been identified. Moreover, . . . Claimants 

alleged that Henry Global (possibly in the guise of other alter ego 

entities) were [sic] entitled to $100 million (20% of loan amount 

per year over five years), which is not identified in any project 

4 Later, the arbitrators also dismissed with prejudice all 

claims against Henry Global Consulting, Celona Asset 

Management (USA) Limited, and Goldstone Advisors Limited, 

due to plaintiffs’ failure to serve and bring those parties into the 

arbitration. 
10

cost data and, by implication, undermined the safety and value of 

the investment. Moreover, the RSOC indicates that the

concealment of such fees was particularly egregious because the 

Claimants were misled into thinking that the administrative fee 

included [in] their investment, totaling $18 million, would cover 

such fees. The Panel is not satisfied that this issue can be

resolved on the merits based on the RSOC, the parties [sic] 

briefing, and the face of the relevant project documents. In the 

Panel’s view, it seems likely that these issues can only be 

resolved with testimony from participants in the transactions 

who can provide insight into the structure and operation of the 

transaction, and the reasons for the loan’s ultimate failure. 

Thus, the Panel concludes that it would be prudent to allow 

Claimants an opportunity to amend to more particularly spell out 

this claim, including facts that would preclude the application of 

the statute of limitations.” 

C. Final Dispositive Motion

1. Second Amended Revised Statement of 

Claims

Plaintiffs filed their SRSOC, which included only three 

causes of action: fraud, breach of fiduciary duty, and accounting. 

The arbitrators ordered the three remaining defendants, 

Holdings, ADF, and Tranche I, to answer the claims. 

2. Dismissal of Claims and Discovery Orders

on Remaining Claim

During a status conference with the arbitrators, the 

remaining defendants argued that the breach of fiduciary duty 

and accounting claims could not proceed due to Henry Global 

Consulting’s dismissal from the matter. They further argued 

that the fraud claim against them was untimely, and requested 
11

the opportunity to resolve the timeliness issue via dispositive 

motion. Plaintiffs asserted that the applicable statute of 

limitations had been tolled, and “argued that a motion could not 

proceed unless and until discovery was completed on that issue.” 

The arbitrators subsequently issued an order dismissing 

the breach of fiduciary duty and accounting claims as defendants 

requested. They “further agreed that a dispositive motion could 

be presented and that Claimants were entitled to discovery” on 

the statute of limitations issue for the fraud claim. They ordered 

“expedited, targeted discovery of documentary evidence bearing 

on the statute of limitations/tolling question.” 

Plaintiffs served a request for document production that 

included requests for “All communications between any Claimant 

and any Respondent related to: a. EB-5 funding costs[,] b. The KT 

loan[,] c. The SBE/Stockbridge Loan,” “[a]ll documents related to” 

those same topics, and “[a]ll communications between 

Respondents and anyone regarding any public filings that 

reasonably put Claimants on notice of their right to sue in this 

matter.” Defendants objected to plaintiffs’ requests and the 

parties were unable to compromise, so the arbitrators issued a 

written “Ruling Re: Panel Ordered Document Production.” 

In that ruling, the arbitrators characterized the document 

requests as “extremely broad” requests “that exceed the objective 

identified by the Panel.” They observed that “[t]he scope of the 

requested discovery must be evaluated within the context of the 

issue to be decided – the applicability of the statute of 

limitations.” They further observed that plaintiffs were seeking 

to establish tolling due to fraudulent concealment, which

“presents a high bar.” The arbitrators continued: “Whether 

relevant information was concealed ultimately depends on the 
12

substance of the alleged fraud. More specifically, did the 

Respondents actively conceal information relevant to the 

statement or statements that Claimants contend were false and 

misleading. The scope of the claim has been the subject of prior 

motions made by Respondents and orders issued by the Panel

. . . . [T]he Panel concluded that the case could proceed on the 

theory that certain project costs, known to the Respondents, were 

not disclosed to the Claimants and that they would not have

invested had they known of these costs, including an alleged fee 

arrangement with Henry Global. The requests at issue must be 

assessed in the context of the Claimant’s [sic] fraud theory.” The 

arbitrators reviewed each of plaintiffs’ requests and significantly 

narrowed them. 

3. Final Arbitration Award 

After discovery, the remaining defendants moved for 

summary disposition of the final fraud claim on statute of 

limitations grounds. According to the final arbitration award, 

after the matter was fully briefed, “the Panel conducted a lengthy 

hearing on the motion” and issued a written ruling granting it. 

In the final arbitration award, the arbitrators concluded that the 

statute of limitations on fraud claims had run absent tolling, and 

plaintiffs failed to meet their burden of establishing the claims 

were tolled. The arbitrators concluded that the declarations 

plaintiffs proffered to support their tolling argument “were 

conclusory and lacking in sufficient detail to be given any 

weight,” and that plaintiffs’ expert declaration contained 

“improper opinion testimony” and “offered no relevant evidence 

on the issue to be decided.” They therefore found “undisputed” 

that the project documents “contained information disclosing that 

various marketing agents were being used to raise financing 
13

through the EB-5 program for the renovation and development of 

the SLS Hotel”; that “the marketing agents would be paid 

substantial fees for services rendered, including fees from both 

SLS Tranche I Lender from funds collected for administrative 

fees, and additional fees paid by the project developer”; that the 

business plan and addendum “disclosed the payment of financing 

fees in the range of $64 million to $69 million”; and that SEC 

filings made in 2014 “disclose information regarding the payment 

of marketing fees, and the financial failure of the project.” “For 

those reasons,” the arbitrators concluded that the “cause of action 

for ‘project cost fraud’ based on the payment of excessive 

marketing fees accrued before November 30, 2014” and that the 

fraud claims were time-barred by the applicable three-year 

statute of limitations. 

The arbitrators denied plaintiffs’ motion for reconsideration

of their ruling on the final dispositive motion. The parties then 

briefed the issues of fees and costs. The arbitrators ultimately 

awarded full attorney fees and costs to ADF and Tranche I, and 

ordered plaintiffs to reimburse Holdings for a portion of the 

arbitration fees.

IV. Petitions to Confirm and Vacate

Holdings, ADF, and Tranche I filed a petition to confirm 

the final arbitration award. Plaintiffs countered with a petition 

to vacate the final arbitration award. The parties filed briefs 

opposing each other’s petitions, and replies in support of their 

own. In addition to other arguments they have since abandoned, 

plaintiffs contended the arbitrators exceeded their authority in a 

variety of ways and dispensed unfair “industrial justice” by 

limiting discovery and denying plaintiffs a fair hearing. 
14

The trial court held a hearing on the dueling petitions and 

rendered an oral ruling granting the petition to confirm and 

denying the petition to vacate. The appellate record does not 

contain a reporter’s transcript of the hearing, and no party 

requested a statement of decision. The court entered judgment in 

favor of Holdings, ADF, the Las Vegas Regional Center, and 

Tranche I and against appellants and the 57 other plaintiffs who 

initially filed the court action. 

Appellants timely appealed. 

DISCUSSION 

I. Standard of Review 

Judicial review of private arbitration awards is generally 

limited to the statutory grounds for vacating an award under 

Code of Civil Procedure section 1286.2 and correcting an award 

under Code of Civil Procedure section 1286.6. (ECC Capital 

Corp. v. Manatt, Phelps & Phillips, LLP (2017) 9 Cal.App.5th 

885, 899-900 (ECC Capital); see also Moshonov v. Walsh (2000) 

22 Cal.4th 771, 775.) As relevant here, statutory grounds for 

vacating an arbitration award exist where “[t]he arbitrators 

exceeded their powers and the award cannot be corrected without 

affecting the merits of the decision upon the controversy 

submitted,” or where the arbitrators refused “to hear evidence 

material to the controversy” or engaged in “other conduct . . . 

contrary to the provisions of this title.” (Code Civ. Proc., 

§ 1286.2, subds. (a)(4), (a)(5).) 

On appeal from an order confirming an arbitration award, 

we review the trial court’s order de novo. (ECC Capital, supra, 9 

Cal.App.5th at p. 900.) “Where, as here, neither side asked for, 

and the trial court did not issue, a statement of decision, ‘the 

appellate court will infer the trial court made implied factual 
15

findings favorable to the prevailing party on all issues necessary 

to support the judgment, including the omitted or ambiguously 

resolved issues. [Citations.] The appellate court then reviews 

the implied factual findings under the substantial evidence 

standard.’” (Id. at pp. 900-901.) 

We review the specific question of whether the arbitrators 

exceeded their authority de novo. (ECC Capital, supra, 9 

Cal.App.5th at p. 900.) “Arbitrators may exceed their powers 

when they act in a manner not authorized by the contract or by 

law, act without subject matter jurisdiction, decide an issue that 

was not submitted to arbitration, arbitrarily remake the contract, 

uphold an illegal contract, issue an award that violates a welldefined public policy, issue an award that violates a statutory 

right, fashion a remedy that is not rationally related to the 

contract, or select a remedy not authorized by law.” (Cohen v. 

TNP 2008 Participating Notes Program, LLC (2019) 31 

Cal.App.5th 840, 868.) They generally do not exceed their 

authority by reaching an erroneous conclusion of fact or law. (Id.

at p. 869.) 

II. Analysis 

Appellants contend the arbitrators exceeded their authority 

in four primary ways. First, they argue the arbitrators had no 

authority to determine the arbitrability of or adjudicate claims 

against non-signatories to the arbitration agreement. Second, 

appellants contend the arbitrators “did not have the right to hear 

claims where the Appellants were seeking or could seek punitive 

or consequential damages.” Third, appellants contend the 

arbitrators exceeded their authority by denying appellants the 

right to conduct “reasonable discovery” as required by the 

arbitration provision, and thus violated appellants’ right to a fair 
16

hearing. Finally, they argue the arbitrators exceeded their 

authority by resolving the matter on dispositive motions and 

making factual findings unsupported by evidence. We consider 

these arguments in turn.

A. Arbitration of Claims Against Nonsignatories 

Appellants argue that both federal and state arbitration 

law require the trial court, not the arbitrator, to decide whether a 

nonsignatory to an arbitration agreement may be ordered to 

arbitration. We agree. “[N]otwithstanding an arbitrator’s broad 

authority to resolve questions presented by a controversy, an 

arbitrator has no power to determine the rights and obligations of 

one who is not a party to the arbitration agreement.” (American 

Builder’s Association v. Au-Yang (1990) 226 Cal.App.3d 170, 179.) 

Thus, “[t]he question of whether a nonsignatory is a party to an 

arbitration agreement is one for the trial court in the first 

instance.” (Ibid.; see also Benaroya v. Willis (2018) 23 

Cal.App.5th 462, 469-470.) 

However, we also agree with Holdings that below, 

appellants “agreed that all arbitrability issues – including ‘who 

are proper parties to the Arbitration’ – should be heard by the 

Panel, and that is what happened here.” Under the doctrine of 

invited error, this is fatal to appellants’ claim of error. “The 

doctrine of invited error provides that a party may not assert as a 

ground for reversal an error that he or she induced the trial court 

to commit.” (Maureen K. v. Tuschka (2013) 215 Cal.App.4th 519, 

530; see also Mary M. v. City of Los Angeles (1991) 54 Cal.3d 202, 

212 [“Under the doctrine of invited error, when a party by its own 

conduct induces the commission of error, it may not claim on 

appeal that the judgment should be reversed because of that 

error.”].) The logic behind this rule is that a party may not 
17

mislead the trial court and then “profit[ ] therefrom in the 

appellate court.” (Norgart v. Upjohn Co. (1999) 21 Cal.4th 383,

403.) 

During the hearing on the petition to compel arbitration, at 

which the parties litigated the questions of arbitrability and 

equitable estoppel,5 plaintiffs specifically argued, “if we’re going 

with the International Rules, it’s the arbitrator’s decisions [sic] 

whether to allow third parties. . . . The defendants made the 

argument that they should be able to join. The court said JAMS 

arbitration rules says the arbitrator makes that decision. The 

court can’t make it.” Plaintiffs later reiterated, “under the rules, 

if we’re going to go by the JAMS rules govern, the JAMS 

arbitrator makes that decision, not this court,” and explicitly 

contended, “the arbitrator is the only one that has the right to do 

it.” 

Appellants’ attempts to make the opposite argument now 

are not well-taken. This is particularly so in light of appellants’ 

immediate filing of an SOC naming Holdings and other 

nonsignatories as respondents in additional causes of action 

beyond those asserted in their trial court complaint, before the 

arbitrators even resolved the issue of whether those parties could 

5 The doctrine of equitable estoppel allows a nonsignatory to 

enforce an arbitration provision where “the claims the plaintiffs 

asserts [are] dependent upon, or founded in and inextricably 

intertwined with, the underlying contractual obligations of the 

agreement containing the arbitration clause.” (Goldman v. 

KPMG, LLP (2009) 173 Cal.App.4th 209, 217-218.) There are 

other bases on which a nonsignatory may enforce an arbitration 

agreement, but equitable estoppel is the only one the 

nonsignatories argued in this case. 
18

properly be joined, and failure to challenge the arbitrators’ 

authority to decide the equitable estoppel issue. 

Our conclusion that the invited error doctrine forecloses the 

arbitrability argument also forecloses appellants’ subsidiary 

arguments that “Holdings should have never been permitted to 

join the arbitration on equitable estoppel principles,” and the 

arbitrators exceeded their authority by “allowing Holdings to 

benefit from the contractual rights afforded to the parties to the 

contract.” We therefore do not address appellants’ contentions 

that the arbitrators erred by concluding equitable estoppel 

applied, either by misapplying the law or making an erroneous 

finding of fact. (See Moshonov v. Walsh, supra, 22 Cal.4th at p. 

775-776.)

B. Arbitration of Claims Seeking Punitive or 

Consequential Damages

Appellants next argue the arbitrators exceeded their 

authority by adjudicating claims for which punitive or 

consequential damages were an available remedy, including their 

fraud and securities law causes of action. We disagree.

The arbitration provision states, in relevant part, that the 

“remedial authority of the arbitrator shall be the same as, but no 

greater than, would be the remedial power of a court having 

jurisdiction over the parties and their dispute; provided, however, 

that the arbitrator shall have no power or authority under this 

Agreement or otherwise to award or provide for the award of 

punitive or consequential damages against any party.” 

Appellants assert that “the parties did not want the arbitrators to 

hear or decide any issues that involve consequential damages,” 

and that this language limited the arbitrators’ authority to hear 

claims “where the Appellants were seeking or could seek punitive 
19

or consequential damages.” The arbitrators deferred ruling on 

the meaning of this language until after dispositive motions were 

resolved. Due to the outcome of those motions, the issue was 

never addressed. Appellants contend that “decision to wait and 

see was in complete contradiction to the party’s [sic] agreement 

and was not rationally related to the agreement.” 

Holdings contends, and we agree, that the plain language 

of the arbitration provision restricts the arbitrators’ authority to 

award particular remedies but “provides no support for the 

notion that the parties intended to limit the claims that the 

Arbitrators are permitted to hear.” Indeed, the expansive 

arbitration provision applies to “[a]ny controversy, dispute, or 

claim between the parties to this Agreement arising out of, in 

connection with, or in relation to the formation, negotiation, 

interpretation, performance or breach of this Agreement” 

regardless of the remedies associated with such claims. As the 

trial court observed in its tentative ruling on the petition to 

compel arbitration, “the arbitration simply caps [defendants’] 

liability at the total amount of the loss and states that an 

arbitrator cannot impose punitive damages on top of that 

amount.” Appellants agreed to this limitation by signing the 

operating agreement, and we see no error in the arbitrators’ 

decision to defer an express ruling until necessary.

Appellants alternatively point to another provision in the 

operating agreement that states, “remedies under this 

Agreement are cumulative and shall not exclude any other 

remedies to which any Person may be lawfully entitled.” They 

contend that provision, plus a provision from the separate 

subscription agreement stating that “the undersigned does not . . 

. waive any right granted to the undersigned under U.S. federal 
20

or state securities law,” together allowed appellants to seek 

punitive remedies “outside of the arbitration.” Appellants assert 

it was not “rationale [sic] or reasonable” for the arbitrators to 

“force the Appellants to litigate this costly matter before 

arbitrators that could not award Appellant [sic] damages, but for 

which it was still contractually permitted to seek those damages 

outside of the arbitration.” This argument is not persuasive on 

the question of what remedies the arbitrators were authorized to 

award. Moreover, whether appellants were contractually 

permitted to pursue certain remedies is not relevant in light of 

the fact that they have not demonstrated an entitlement to any 

remedies at all. 

C. Discovery Limitations 

As outlined above, the arbitrators limited the scope of 

plaintiffs’ discovery requests on the tolling issue. Appellants 

contend this “‘targeted discovery’ did not allow Appellants to 

obtain the testimony that the arbitrators themselves 

acknowledged was needed to address the true nature of the fraud 

in the case.”6 They assert that because the defendants used the 

6 The alleged “acknowledgement” was made in the 

arbitrators’ award on one of the initial dispositive motions, which 

is also quoted above: “The Panel is not satisfied that this issue 

can be resolved on the merits based on the RSOC, the parties 

[sic] briefing, and the face of the relevant project documents. In 

the Panel’s view, it seems likely that these issues can only be 

resolved with testimony from participants in the transactions 

who can provide insight into the structure and operation of the 

transaction, and the reasons for the loan’s ultimate failure. 

Thus, the Panel concludes that it would be prudent to allow 

Claimants an opportunity to amend to more particularly spell out 

this claim, including facts that would preclude the application of 

the statute of limitations.” 
21

project documents in support of the final dispositive motion on 

the statute of limitations, the arbitrators should have allowed 

appellants “to dispose [sic] someone with knowledge of their 

content.” They further contend that the discovery limitations 

prevented them from obtaining “the hard data and records that 

were used to compile the financial tables that were presented to 

the Appellants,” which in turn prevented them from establishing 

how the defendants “committed the fraud through their own 

financial documents.” Appellants also claim that the discovery 

limitations deprived them of a fair hearing by limiting their 

ability “to develop the circumstantial evidence necessary to prove 

their fraud claim or successfully oppose the final dispositive 

motion.” 

The arbitration provision states that “the parties shall be 

entitled to reasonable discovery subject to the discretion of the 

arbitrator.” It also requires the arbitrators to “apply the Federal 

Rules of Civil Procedure and the Federal Rules of Evidence” “[t]o 

the extent applicable and not inconsistent with” the arbitration 

provision. Appellants essentially contend the arbitrators violated 

the Federal Rules of Civil Procedure and abused their discretion 

by depriving appellants of reasonable discovery. We disagree. 

Appellants selectively quote Federal Rule of Civil 

Procedure Rule 26(b)(1) for the proposition that “[p]arties may 

obtain discovery regarding any nonprivileged matter that is 

relevant to any party’s claim or defense and proportional to the 

needs of the case.” (Fed. Rules Civ. Proc., rule 26(b)(1), 28 

U.S.C.) However, they ignore the first clause of that rule, which 

states that it describes the scope of discovery “[u]nless otherwise 

limited by court order.” (Ibid.) The rule expressly contemplates 

that a court may limit discovery. That is precisely what the 
22

arbitrators did here; they were authorized to do so both by the 

rule and the arbitration provision. “[A]rbitration is meant to be a 

streamlined procedure. Limitations on discovery. . . is one of the 

ways streamlining is achieved.” (Dotson v. Amgen, Inc. (2010)

181 Cal.App.4th 975, 983.) The arbitrators’ discovery order did 

not exceed their authority. The written order addressed each of 

plaintiffs’ document requests individually and “in the context of 

the Claimant’s [sic] fraud theory.” The arbitrators’ previous 

statement that “it seems likely that these issues can only be 

resolved with testimony from participants in the transactions” 

did not commit them to authorizing depositions or witness 

testimony to resolve claims that had since been amended. 

Moreover, arbitration procedures violate the common law right to 

a fair hearing “‘“only in the clearest of cases, i.e., when the 

applicable procedures essentially preclude the possibility of a fair 

hearing.” [Citation.]’” (Hoso Foods, Inc. v. Columbus Club, Inc. 

(2010) 190 Cal.App.4th 881, 888-889.) Appellants have not 

demonstrated that the discovery limitations crossed that high 

threshold. 

D. Reliance on Dispositive Motions 

Appellants finally contend that the arbitrators overstepped 

their authority by resolving the matter on dispositive motions, 

which did not meet the standard of proof required by the 

arbitration provision. They again point to the arbitrators’ order 

stating that it “seems likely” that an evidentiary hearing would 

be required, asserting that this statement “essentially foreclosed . 

. . that the matter could not be resolved without an evidentiary 

hearing.” They also argue the arbitrators erroneously concluded 

that certain factual matters were undisputed. 
23

The arbitration provision states, “The arbitrator shall, upon 

an appropriate motion, dismiss any claim without an evidentiary 

hearing if the party bringing the motion establishes that he or it

[sic] would be entitled to summary judgment if the matter had 

been pursued in court litigation.” The applicable JAMS rule 

similarly provides, “The Arbitrator may permit any Party to file a 

Motion for Summary Disposition of a particular claim or issue, 

either by agreement of all interested Parties or at the request of 

one Party, provided the other interested Parties have reasonable

notice to respond to the request.” The arbitrators had authority 

under these provisions to resolve the matter on dispositive 

motions. 

As previously discussed, the arbitrators’ statement about 

the possible need for a hearing was made in the context of 

resolving a dispositive motion, and granting plaintiffs leave to 

amend their fraud claim. It did not preclude the subsequent use 

of dispositive motions. Appellants assert that “[a]t this point, the 

arbitrators should have transferred into allow [sic] full 

reasonable discovery and scheduling a trial on the merits.” 

However, after the arbitrators’ statement, plaintiffs filed the 

SRSOC, thus amending their claims. The arbitrators provided 

plaintiffs with an opportunity to conduct discovery, file briefing, 

and make arguments at a hearing before resolving the final 

dispositive motion. They were not required to do more.

As appellants observe, the Federal Rules of Civil 

Procedure, which apply here per the arbitration provision, 

authorize summary judgment where “the movant shows that 

there is no genuine dispute as to any material fact and the 

movant is entitled to judgment as a matter of law.” (Fed. Rules 

Civ. Proc., rule 56(a), 28 U.S.C.) Appellants contend various 
24

material facts remained in dispute, citing testimony from their 

expert. However, as noted above, the arbitrators rejected 

plaintiffs’ declarations and that of their expert, rendering 

undisputed the contrary evidence proffered by defendants. 

Appellants’ dissatisfaction with the arbitrators’ evidentiary 

rulings and resultant conclusions that certain facts were 

undisputed is not relevant to whether the arbitrators exceeded 

their authority. 

Appellants have not demonstrated that the arbitrators 

exceeded their authority. We thus find no basis to conclude that 

the trial court erred in confirming the final arbitration award. 

DISPOSITION

The judgment is affirmed. Respondent Holdings may 

recover its costs on appeal. 

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

COLLINS, J.

We concur:

CURREY, P.J.

MORI, J.