Court Opinion

ID: 9564685
Source: CourtListenerOpinion
Date Created: 2023-08-21 19:05:27.846346+00
Date Added: 2024-06-11T09:18:36.682710
License: Public Domain

Filed 8/21/23 Roofco v. Hilbers CA3
                                           NOT TO BE PUBLISHED
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 This opinion has not been certified for publication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 8.1115.

              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
                                      THIRD APPELLATE DISTRICT
                                                     (Sacramento)
                                                            ----

ROOFCO, INC.,                                                                                 C095973

                   Plaintiff and Appellant,                                        (Super. Ct. No. 34-2021-
                                                                                   00309603-CU-PA-GDS)
         v.

HILBERS, INC.,

                   Defendant and Respondent.

         Plaintiff and appellant Roofco, Inc. (Roofco), appeals from a trial court order
denying its petition to vacate an arbitration award. The underlying dispute arose out of a
subcontract wherein Roofco agreed to construct a roof on a structure being built by
defendant and respondent Hilbers, Inc. (Hilbers). The owner of the building raised
concerns about the roof, and Roofco failed to adequately respond to Hilbers’s request that
it address those concerns. Hilbers subsequently settled with the owner to resolve the
owner’s concerns and tendered payment to Roofco for the contract price less the
settlement amount. Roofco rejected Hilbers’s tender and demanded arbitration; it sought

                                                             1
the full contract price. The arbitrator denied Roofco’s claim, and Roofco filed a petition
to vacate the award in the trial court on the basis that the arbitrator exceeded his powers.
(Code Civ. Proc., § 1286.2.)1 The trial court denied Roofco’s petition and granted
Hilbers’s request to confirm the award. (§ 1285.2.)
       Appealing from the trial court’s order, Roofco claims the court erred by not
vacating the arbitration award on the basis that the arbitrator exceeded his powers.
Specifically, Roofco contends the arbitrator was not authorized to deny its claim in its
entirety because the parties agreed to a “high-low” arbitration, which required the
arbitrator to issue an award between a floor and a ceiling. Relatedly, Roofco argues that
the arbitrator’s award “essentially remade the contract between the parties” by fashioning
a remedy not expressly provided for by a provision of the subcontract.
       We reject Roofco’s arguments. As we will explain, the parties did not agree to a
“high-low” arbitration, and the arbitrator’s choice of remedies was rationally related to
his implied interpretation of the contract and the breach. We will affirm the judgment.
                             FACTS AND PROCEEDINGS
       The Subcontract
       In August 2015, general contractor Hilbers and roofing subcontractor Roofco
entered into a written subcontract by which Roofco agreed to construct a five-layer roof
manufactured by GAF over a two-building shell being constructed by Hilbers for the
contract price of $107,135. An indemnity provision in the subcontract required Roofco
to “assume liability, hold harmless, defend and indemnify” Hilbers “from and against any
liability and all claims, liens, penalties, damages, including indirect, incidental and
consequential damages, and specifically including damages due to delay, losses and
expenses, including attorneys’ fees” arising out of Roofco’s performance of the contract.

1 Further undesignated statutory references are to the Code of Civil Procedure.

                                              2
The subcontract’s payment provision provided in relevant part: “In the event of any
breach by [Roofco] of any provision or obligation of this Subcontract, or in the event of
the assertion by other parties of any claim or lien against [Hilbers] arising out of
[Roofco’s] performance of this Contract, [Hilbers] shall have the right, but is not
required, to retain out of any payments due or to become due to [Roofco] an amount
sufficient to completely protect [Hilbers] from any and all loss, damage or expense
therefrom until the situation has been remedied or adjusted by [Roofco] to the satisfaction
of [Hilbers].”
       The subcontract also contained an arbitration provision requiring the parties to
submit to arbitration “[a]ny dispute arising out of this Subcontract or the Interpretation or
performance thereof, and which does not involve the Owner.” The arbitration provision
authorized the arbitrator to “award compensatory, consequential, punitive and such other
damages as the arbitrator deems proper,” and provided that “[t]he award rendered by the
arbitrator or arbitrators shall be final, and judgment may be entered upon it in accordance
with applicable law in any court having jurisdiction thereof.” The arbitration provision
did not provide for judicial review of the arbitrator’s factual findings or legal conclusions.
       Dispute Background2
       In March 2016, the owner observed water on the nearly completed roof, and its
roofing consultant, John Goveia, subsequently performed an investigation with Roofco
and Hilbers in attendance. On May 2, Goveia issued a report (Goveia report) concluding
the roof was defective and recommending that it be replaced.
       On May 3, pursuant to the requirements of the subcontract--and, as the arbitrator
later observed, perhaps in an effort to resolve the owner’s concerns following the

2 These facts are summarized from the arbitration award, which is generally not
reviewable for factual errors. (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 6
(Moncharsh).)

                                              3
investigation--Roofco submitted the GAF 10-year guarantee (manufacturer’s warranty),
which had been preceded by a visual roof inspection by a GAF representative who noted
that no roof work was required.
       The Goveia report was sent to Hilbers on May 31, who in turn sent the report to
Roofco on June 8. Hilbers stated its expectation that Roofco would investigate the
owner’s concerns, meet with the owner regarding the deficiencies, and perform necessary
repairs. Two days later, the owner’s attorney notified GAF of the roof’s deficiencies and
demanded corrective action.
       On June 9, Roofco submitted a 20-year guarantee, and a week later a GAF
representative performed a visual inspection of the roof and found no water leaks. The
GAF representative did not address the Goveia report’s concerns regarding the roof’s
deficiencies. In August, in response to the owner’s demand GAF fix the deficiencies,
GAF’s attorney replied that GAF’s guarantee covered only leaks.
       On August 30, Hilbers gave Roofco the option of setting up a third-party
inspection of the roof, or having Hilbers set it up. The next day, Roofco replied that it
was seeking information about the preferred method of examining the roof. Three weeks
later, Hilbers requested a status update, but the record did not show that Roofco
responded.
       On September 26, “[a]pparently out of exasperation,” the owner sent Hilbers a
letter with a bid for replacing the roof as a basis for withholding payment until the issues
were resolved; the letter suggested that repairs would be acceptable in lieu of
replacement. On October 4, Roofco requested access to the roof, but it did not respond
when Hilbers offered available dates in mid-October.
       On January 16, 2017, Hilbers conveyed to Roofco the owner’s offer to pay half of
Roofco’s subcontract balance of just over $60,000 to settle the dispute. The record did
not reflect that Roofco responded. Four days later, Hilbers again asked Roofco about

                                              4
hiring an expert to examine the roof and threatened to work out a settlement with the
owner and backcharge Roofco if it did not address the issue.
         In March, after Hilbers told Roofco that it was going to negotiate a settlement with
the owner on Roofco’s behalf, Roofco replied that it had an expert who wanted to see the
roof. Roofco’s expert examined the roof, and on March 28 Roofco told Hilbers that the
roof appeared to be fine, but that the expert would need to confer with Roofco’s attorney
before proceeding further. Roofco’s expert did not produce a report, and in June Roofco
stated it was not interested in conducting additional testing.
         In September, Hilbers and the owner reached a settlement agreement that provided
the owner would withhold half of the contract price otherwise due to Hilbers because of
defects in the roof.
         After Hilbers received final payment from the owner in March 2018--more than a
year after Hilbers conveyed the owner’s offer to pay half of Roofco’s contract price--
Hilbers sent Roofco a check for $58,936.50 in settlement of the dispute. Roofco never
cashed the check, which the arbitrator construed as a rejection of Hilbers’s settlement
offer.
         Arbitration Proceedings
         Pursuant to the subcontract’s arbitration provision, Roofco filed a demand with the
American Arbitration Association seeking damages for breach of contract in the amount
of $113,865, plus interest. Neither Roofco’s arbitration demand nor its arbitration brief
reflected an agreement between the parties that Roofco was entitled to a minimum award
or argued that Roofco was entitled to any minimum amount other than the amount it
demanded.
         Hilbers filed an answering statement, which stated in part: “Respondent denies
that it owes Roofco the amounts claimed because Respondent is entitled to an offset due
to defective work performed by Roofco.” Its statement of affirmative defenses denied
that its acts or omissions had damaged Roofco “in any way or in any sum whatsoever.” It

                                              5
asserted that Roofco’s work was defective, Roofco had failed or refused to defend it
against the owner’s concerns stated in the Goveia report, and Roofco’s conduct had
forced it to negotiate a settlement with the owner. Hilbers stated that it “properly
backcharged Roofco the damages incurred as a result of Roofco’s breach of contract and
negligence and tendered payment to Roofco for the balance due and owing after applying
said backcharge.” Hilbers raised other defenses generally arguing that Roofco should
recover nothing from its demand and praying for “such other and further relief as the
Arbitrator may deem just and proper.”
       Hilbers’s arbitration brief explained that it was forced to negotiate a settlement
with the owner after Roofco failed or refused to promptly defend and indemnify it against
the owner’s concerns. It argued that Roofco was not entitled to the full subcontract price
as it claimed, but rather was “entitled to no more than $51,094.50, which is less than the
amount previously tendered to Roofco by Hilbers and Hilbers is therefore entitled to an
award of attorneys’ fees as the prevailing party in this arbitration.”3 (Italics added,
underlining omitted.) Following the arbitration hearing, Hilbers again argued in its post-
hearing brief that Roofco was entitled to “no more than” $51,094.50.
       In its closing statement, Roofco argued that it was not objectively reasonable for
Hilbers and the owner to withhold half of the subcontract price for alleged roof defects,
and it was entitled to the full contract price offset by the $7,842 Hilbers had paid to
release a mechanic’s lien Roofco had placed on the property. Roofco did not argue that it
was entitled to “at least” $51,094.50 or even once mention that number.
       The arbitrator issued an interim award denying Roofco’s claim. After setting forth
the facts, summarized ante, the arbitrator noted that Roofco had attempted to satisfy the
owner’s concerns with the GAF 10- and 20-year guarantees but did not address the issues

3 On appeal, Roofco contends that this sentence constitutes Hilbers’s admission that
Roofco was entitled to no less than $51,094.50.

                                              6
raised by the Goveia report. The arbitrator observed that while Roofco had finally
retained an expert who inspected the roof after much back and forth, the expert did not
issue a report that could be reviewed by the owner and perhaps be used as the basis for a
settlement. Thus, Hilbers was forced to obtain the most favorable bargain it could with
the owner after notifying Roofco and giving it the opportunity to participate.
       The arbitrator noted it was “tempting” to treat the case as a battle of the experts
but observed that the “battle” was not held at a time when the Goveia report could have
been addressed. Instead, Roofco’s expert report was not provided until 2021, in
preparation for arbitration. The arbitrator observed that the outcome of the dispute might
have been different had Roofco “engaged in dialogue” with Hilbers regarding the Goveia
report; there might have been no need to arbitrate the dispute, or the result of arbitration
might have been different. The arbitrator concluded that “trying to evaluate whose expert
is correct now ignores the dynamics that occurred in 2016 when [Hilbers] was
desperately trying to obtain [Roofco’s] input so that the former’s dispute with the owner
could be resolved.”
       In accordance with its analysis, the arbitrator denied Roofco’s claim and did not
award it any further payment under the subcontract. The arbitrator concluded that
Hilbers was the prevailing party and awarded attorney fees as provided by the
subcontract. The arbitrator subsequently issued a final award specifying the amount of
attorney fees to which Hilbers was entitled.
       Trial Court Proceedings
       Roofco filed a petition to vacate the arbitration award in the trial court. (§ 1285
[“Any party to an arbitration in which an award has been made may petition the court to
confirm, correct or vacate the award”].) It contended the parties framed the issue as a
choice between awards to Roofco of $113,865 or $51,094.50, and therefore the arbitrator
exceeded his authority by denying Roofco’s claim in its entirety. Roofco further argued
that the arbitrator “in effect rewrote the contract between the parties” because no

                                               7
subcontract provision authorized him to “forfeit” amounts owed to it under the
subcontract.
       Hilbers opposed Roofco’s petition and requested that the trial court confirm the
award. (§ 1285.2 [“A response to a [petition to vacate an arbitration award] may request
the court to dismiss the petition or to confirm, correct or vacate the award”].) It argued
that the arbitrator’s award did not exceed the issues the parties submitted to arbitration,
because Hilbers had denied that Roofco had been damaged in any way and prayed that
Roofco took nothing by way of its demand. Hilbers contended the issue submitted to the
arbitrator was “what amount, if any, Roofco was entitled to from Hilbers.” Hilbers
argued the arbitrator did not “ ‘remake’ ” the contract because no evidence suggested he
drew the remedy from an extrinsic source rather than from the subcontract.
       The trial court issued a tentative ruling denying Roofco’s petition, and it affirmed
the tentative ruling following a hearing. The court reasoned there was no evidence to
suggest the arbitrator derived the award from an extrinsic source beyond the subcontract,
and it concluded that Roofco failed to meet its burden to show that the arbitrator rewrote
the contract or that the arbitrator exceeded the scope of the issues the parties submitted
for arbitration.
       The trial court entered a final order and judgment on January 14, 2022. Notice of
entry of judgment was mailed January 25, 2022. Plaintiff timely appealed. The case was
fully briefed in April 2023, and was assigned the current panel on April 28, 2023.
                                       DISCUSSION
                                              I
                                     Arbitration Award
       Roofco challenges the trial court’s decision to deny its petition to vacate the award
and to grant Hilbers’s request to confirm the award. As it did in the trial court, Roofco
argues the arbitrator exceeded the scope of the issues submitted to arbitration by
awarding it less than the minimum amount to which Hilbers acknowledged Roofco was

                                              8
entitled under the subcontract. Roofco also argues the arbitrator essentially remade the
subcontract by issuing an award that was not expressly authorized by a provision of the
subcontract. We disagree.
       A. Statutory Scheme and Standard of Review
       “The California Arbitration Act (CAA; § 1280 et seq.) ‘represents a
comprehensive statutory scheme regulating private arbitration in this state.’ ” (Cooper v.
Lavely & Singer Professional Corp. (2014) 230 Cal.App.4th 1, 10.) Under the California
Arbitration Act, “[t]he scope of judicial review of arbitration awards is extremely narrow
because of the strong public policy in favor of arbitration and according finality to
arbitration awards.” (Ahdout v. Hekmatjah (2013) 213 Cal.App.4th 21, 33.)
Accordingly, the merits of an arbitration award are not subject to judicial review on
questions of fact or law, “whether or not such error appears on the face of the award and
causes substantial injustice to the parties.” (Moncharsh, supra, 3 Cal.4th at p. 6.) Rather,
judicial review of an arbitration award is limited to “circumstances involving serious
problems with the award itself, or with the fairness of the arbitration process,” which are
set out in sections 1286.2 (vacating an arbitration award) and 1286.6 (correcting an
arbitration award). (Moncharsh, at p. 12.) As relevant here, section 1286.2, subdivision
(a)(4) provides that the trial court shall vacate an arbitration award if “[t]he arbitrators
exceeded their powers and the award cannot be corrected without affecting the merits of
the decision upon the controversy submitted.”
       The exception under section 1286.2, subdivision (a)(4) is narrowly construed.
(Emerald Aero, LLC v. Kaplan (2017) 9 Cal.App.5th 1125, 1138.) With respect to
reviewing an arbitrator’s determinations of arbitrability, our Supreme Court has
recognized that “courts should generally defer to an arbitrator’s finding that
determination of a particular question is within the scope of his or her contractual
authority,” and that “the deference due an arbitrator’s decision on the merits of the
controversy requires a court to refrain from substituting its judgment for the arbitrator’s

                                               9
in determining the contractual scope of those powers.” (Advanced Micro Devices, Inc. v.
Intel Corp. (1994) 9 Cal.4th 362, 372 (Advanced Micro Devices).) A similar standard
applies in the context of an arbitrator’s choice of remedy: arbitrators have “substantial
discretion to determine the scope of their contractual authority to fashion remedies, and
. . . judicial review of their awards must be correspondingly narrow and deferential.” (Id.
at p. 376.)
       However, “ ‘[t]he powers of an arbitrator derive from, and are limited by, the
agreement to arbitrate.’ ” (Gueyffier v. Ann Summers, Ltd. (2008) 43 Cal.4th 1179, 1185;
see O’Malley v. Petroleum Maintenance Co. (1957) 48 Cal.2d 107, 110 [“ ‘The powers
of an arbitrator are limited and circumscribed by the agreement or stipulation of
submission’ ”].) Accordingly, “[a]n exception to the general rule assigning broad powers
to the arbitrators arises when the parties have, in either the contract or an agreed
submission to arbitration, explicitly and unambiguously limited those powers.”
(Gueyffier, at p. 1185.) “The scope of an arbitrator’s authority is not so broad as to
include an award of remedies ‘expressly forbidden by the arbitration agreement or
submission,’ ” and such awards may be corrected or vacated by the court. (Ibid.; see
Advanced Micro Devices, supra, 9 Cal.4th at p. 383 [“arbitrators, unless expressly
restricted by the agreement of the parties, enjoy the authority to fashion relief they
consider just and fair under the circumstances existing at the time of arbitration, so long
as the remedy may be rationally derived from the contract and the breach” (italics
added)].) Consistently with the principle, our Supreme Court has cautioned: “[P]arties
entering into commercial contracts with arbitration clauses, if they wish the arbitrator’s
remedial authority to be specially restricted, would be well advised to set out such
limitations explicitly and unambiguously in the arbitration clause.” (Advanced Micro
Devices, at p. 383.)
       “[I]n the absence of more specific restrictions in the arbitration agreement, the
submission or the rules of arbitration, the remedy an arbitrator fashions does not exceed

                                             10
his or her powers if it bears a rational relationship to the underlying contract as
interpreted, expressly or impliedly, by the arbitrator and to the breach of contract found,
expressly or impliedly, by the arbitrator.” (Advanced Micro Devices, supra, 9 Cal.4th at
p. 367.) “Restated, the test asks ‘ “whether the arbitrator’s solution can be rationally
derived from some plausible theory of the general framework or intent of the
agreement.” ’ ” (Id. at p. 380.) The requisite rational relationship between the remedy
and the contract and the breach “may be to the contractual terms as actually interpreted
by the arbitrator (if the arbitrator has made that interpretation known), to an interpretation
implied in the award itself, or to a plausible theory of the contract’s general subject
matter, framework or intent. [Citation.] The award must be related in a rational manner
to the breach (as expressly or impliedly found by the arbitrator).” (Id. at p. 381.) “The
award will be upheld so long as it was even arguably based on the contract; it may be
vacated only if the reviewing court is compelled to infer the award was based on an
extrinsic source. [Citations.] In close cases the arbitrator’s decision must stand.” (Ibid.)
       As for the relevant standard of review, “[t]o the extent the trial court made
findings of fact in confirming the award, we affirm the findings if they are supported by
substantial evidence. [Citation.] To the extent the trial court resolved questions of law
on undisputed facts, we review the trial court’s rulings de novo. [Citation.] [¶] We
apply a highly deferential standard of review to the award itself, insofar as our inquiry
encompasses the arbitrator’s resolution of questions of law or fact. 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.” ’ ” (Cooper v. Lavely & Singer Professional Corp., supra, 230 Cal.App.4th at
pp. 11-12.)
       B. Scope of the Issues Submitted for Arbitration
       Roofco contends the arbitrator exceeded his authority by violating an
unambiguous limitation set by the parties in their submissions to arbitration. It argues

                                              11
that the parties agreed to a “high-low” arbitration, in which “[t]he dispute that was
submitted to arbitration was whether Hilbers owed Roofco not more than $51,094.50, or
whether it owed Roofco $106,023, or whether it owed Roofco some amount in between
the two.” But Roofco’s argument relies on the unsupported assertion that Hilbers’s
statements in its pleadings--as opposed to a submission agreement reached by the parties-
-could restrict the arbitrator’s authority to fashion a remedy. We conclude Roofco’s
argument lacks merit.
       In the context of arbitration, “ ‘[s]ubmission is the technical designation of the
contract by which parties agree to refer matters in dispute between them to be finally
decided by [arbitration].’ [Citation.] ‘If parties have agreed in an underlying contract
that their disputes shall be resolved by arbitration, the arbitration clause in the contract is
a written submission to arbitration.’ [Citation.] If parties have an existing controversy
over a matter not covered by a future dispute arbitration clause, they may jointly execute
a ‘submission agreement’ ‘describing the issue in dispute and affirming the parties’
intention to arbitrate and abide by the award.’ ” (Blatt v. Farley (1990) 226 Cal.App.3d
621, 626 (Blatt); see Greenspan v. LADT, LLC (2010) 185 Cal.App.4th 1413, 1437 [“A
submission agreement may restrict or broaden the issues contemplated by the arbitration
clause”].) Arbitration submissions are construed as broadly as possible. (Kennedy,
Cabot & Co., Inc. v. National Association of Securities Dealers, Inc. (1996) 41
Cal.App.4th 1167, 1175.)
       Conversely, a demand for arbitration is a “pleading analogous to a complaint in a
civil lawsuit.” (Blatt, supra, 226 Cal.App.3d at p. 627.) In Blatt, the court affirmed an
arbitrator’s award of damages greater than the amount requested in the arbitration
demand. (Id. at p. 629.) The court concluded that the arbitration clause in the parties’
contract, which did not limit damages, constituted an agreement by the parties to submit
all disputes to arbitration and authorized the arbitrator to make the award. (Id. at p. 628.)
The court rejected the argument that the arbitrator was limited by the dollar amount

                                              12
requested in the arbitration demand, which was “a unilateral communication, requiring no
agreement by the other side.” (Id. at p. 627; see also Grubb & Ellis Co. v. Bello (1993)
19 Cal.App.4th 231, 241 [award in excess of demand was proper because statute limiting
award to prayer has no application to arbitration proceedings]; Paramount Unified School
Dist. v. Teachers Assn. of Paramount (1994) 26 Cal.App.4th 1371, 1385 [award of
compensatory damages for termination of teacher’s employment was proper where
contract permitted remedy as arbitrator “judges to be proper” and award did not modify
or remake contract, or violate public policy].) In reaching its conclusion, the court in
Blatt distinguished William B. Logan & Associates v. Monogram Precision Industries
(1960) 184 Cal.App.2d 12 on the basis that the arbitrator in that case “made an award in
excess of the express limitations of the submission agreement.” (Blatt, at p. 629, citing
William B. Logan & Associates, at p. 17.)
       Here, the scope of the arbitrator’s ability to fashion a remedy was restricted only
by the subcontract’s arbitration provision, which broadly provided that the arbitrator may
resolve “[a]ny dispute arising out of this Subcontract or the interpretation or performance
thereof,” and authorized the arbitrator to “award compensatory, consequential, punitive
and such other damages as the arbitrator deems proper.” Roofco points us to no
superseding submission agreement jointly entered into by the parties.
       Despite the broadly worded arbitration provision providing no limitation on the
amount the arbitrator was authorized to award, Roofco contends the parties limited the
arbitrator’s authority to fashion a remedy by entering into a “ ‘high-low’ arbitration.”
Mave Enterprises, Inc. v. Travelers Indemnity Co. (2013) 219 Cal.App.4th 1408 and
Horath v. Hess (2014) 225 Cal.App.4th 456, 465 provide examples of such arbitrations,
and they are distinguishable from the instant case. In Mave, during jury selection for
their trial, the parties agreed to arbitrate their dispute and expressly agreed: “the
arbitration award would be limited to a low of $500,000 and a high of $7.5 million, but
the arbitrator would not be told about the ‘high low’ provision.” (Mave Enterprises, Inc.,

                                              13
at p. 1417.) Although not informed of the parties’ “ ‘high low’ ” agreement, the
arbitrator issued an award within the range agreed upon by the parties. (Id. at p. 1418.)
Similarly, in Horath, prior to trial the parties stipulated: “[The defendant] will pay the
award of the Arbitrator or $44,000[,] whichever is greater, and [the plaintiff] will accept
the award of the Arbitrator or $100,000, whichever is less but in no event less than
$44,000.” (Horath, at pp. 460-461, italics omitted.) There, the arbitrator was also not
told about the “ ‘high-low’ ” provision, and he issued a decision awarding Horath an
amount greater than the agreed-upon ceiling. (Id. at pp. 461, 465.) Horath filed a
petition to confirm the award, and Hess filed a motion to limit the award to an amount
reflecting the ceiling stipulated to by the parties. (Id. at p. 461.) On appeal, the court
concluded Horath was entitled to have the award entered as a judgment, but Hess could
satisfy the judgment by paying $100,000 plus costs, as the parties had agreed. (Id. at pp.
465-466.)
       Unlike Mave and Horath, where the parties expressly agreed to restrict the
arbitrator’s ability to issue an award outside of an agreed-upon range, Roofco points us to
no agreement or stipulation between the parties restricting the arbitrator’s authority to
issue an award. Instead, implicitly acknowledging that the parties did not stipulate to a
“high-low” arbitration, Roofco argues that Hilbers unilaterally restricted the arbitrator’s
authority to issue an award of less than $51,094.50 by arguing in its answering statement,
statement of affirmative defenses, and briefing that it was entitled to an “offset” and that
Roofco was “entitled to no more than $51,094.50.” Roofco offers no authority
supporting its argument that one party’s pleadings may restrict the arbitrator’s authority
to fashion a remedy. As we have explained, such restrictions are properly established
only by the arbitration agreement or superseding submission agreement. The parties’
arbitration demands and responses, by contrast, do not constitute an “agreement” between
the parties. (See Blatt, supra, 226 Cal.App.3d at pp. 626-627 [demand for arbitration is

                                              14
not a submission agreement; it is a unilateral communication requiring no agreement by
the other side].)
       We recognize that the parties to an arbitration may choose to agree to expand an
arbitrator’s authority by submitting issues for arbitration that the parties are not
contractually compelled to submit. In such a case, “we look both to the contract and to
the scope of the submissions to the arbitrator to determine the arbitrator’s authority.”
(Executone Information Systems, Inc. v. Davis (5th Cir. 1994) 26 F.3d 1314, 1323;
accord, Porter v. Golden Eagle Ins. Co. (1996) 43 Cal.App.4th 1282, 1291.) However,
this is not such a case.
       Moreover, even if Hilbers were able to unilaterally restrict the arbitrator’s
authority, it did not do so here. Roofco relies on a definition of “no more than” from the
online Collins English Dictionary: “You use no more than or not more than when you
want to emphasize how small a number or amount is,” providing as an example, “Each
box requires no more than a few hours of labor to build.” (Collins Dictionary Online
(2023) <https://www.collinsdictionary.com/english/no-more-than-not-more-than> [as of
May 24, 2023].) But assuming for argument only that Roofco’s definition of the phrase
“no more than” is a viable one, it is not the only one. “The ordinary meaning of ‘no more
than’ is ‘a stated number or fewer.’ (Merriam-Webster Dict. Online (2021)
<https://merriam-webster.com/dictionary/no more than> [as of July 19, 2021].)” (Cahill
Construction Co., Inc. v. Superior Court (2021) 66 Cal.App.5th 777, 787.) Thus,
Hilbers’s statement could reasonably be interpreted as arguing that Roofco was entitled to
$51,094.50 or less.
       Nor did Hilbers’s position statements during the arbitration expressly and
unequivocally restrict the issue submitted to arbitration to a “high-low” choice. Hilbers
generally denied that it owed Roofco the amounts Roofco claimed because it was entitled
to an offset due to Roofco’s deficient performance and that it properly “backcharged”
Roofco for damages incurred as a result of its breach. Hilbers’s prayer for relief

                                              15
requested that “Roofco takes nothing by way of its Demand.” (Italics added.) Its
arbitration brief concluded that it was “entitled to an offset of at least $57,428.50 and the
Arbitrator should order that Hilbers must pay Roofco the sum of no more than
$51,094.50 and that Hilbers is the prevailing party in this action.” (Italics added.) These
statements fall well short of expressly and unequivocally prohibiting the arbitrator from
issuing an award outside of the range between $51,094.50 and $106.023 (plus interest).
Finally, there is similarly no evidence that Roofco ever argued that the arbitrator was
restricted from issuing an award less than $51,094.50.
       Construing the parties’ submission to arbitration as broadly as possible, as we
must, here the parties agreed to arbitrate the issue of breach of the subcontract, and the
arbitration provision broadly authorized the arbitrator to determine the amount of
damages. In the absence of any express agreed-upon submission restricting or limiting
the arbitrator’s authority to award damages to a “high-low” choice, we have no power to
review the arbitrator’s decision. (See Advanced Micro Devices, supra, 9 Cal.4th at p. 383
[parties who intend that an arbitrator’s powers be restricted “would be well advised to set
out such limitations explicitly and unambiguously in the arbitration clause”].)
       We now turn to the issue of whether the award was rationally related to the
arbitrator’s interpretation of the subcontract and breach.
       C. Remedy’s Rational Relationship to the Subcontract and the Breach
       Roofco argues the arbitrator’s award was not authorized by a specific provision of
the subcontract, and thus he arbitrarily rewrote the subcontract by “forfeit[ing]” money
owed to Roofco under the subcontract. Roofco acknowledges the arbitrator’s finding that
it breached its obligation to defend Hilbers against claims arising out of its performance
under the subcontract and to indemnify Hilbers for damages incurred related to such a
breach, but argues the subcontract only authorized Hilbers to “retain out of any payments
due or to become due to [Roofco] an amount sufficient to completely protect [Hilbers]

                                             16
from any and all loss, damage or expense therefrom until the situation has been remedied
or adjusted by [Roofco] to the satisfaction of [Hilbers].”
       Roofco’s argument stems from several cases issued prior to Advanced Micro
Devices that determined an arbitrator exceeds their powers by issuing a decision “so
utterly irrational that it amounts to an arbitrary remaking of the contract between the
parties.” (Southern Cal. Rapid Transit Dist. v. United Transportation Union (1992) 5
Cal.App.4th 416, 423; Pacific Gas & Electric Co. v. Superior Court (1993) 15
Cal.App.4th 576, 592-593 [judicial review of arbitration award warranted where the
award “presents such an egregious mistake that it amounts to an arbitrary remaking of the
contract between the parties”].) In Advanced Micro Devices, our Supreme Court
questioned the continued validity of the “arbitrariness” test because arbitration awards
generally may not be vacated or corrected for errors of fact or law. (Advanced Micro
Devices, supra, 9 Cal.4th at p. 377, fn. 10; id. at p. 376.) However, the court did not
decide that issue conclusively because, to the extent the test remained valid, it pertained
to cases involving the interpretation of an agreement, whereas the issue before the court
in that case involved the arbitrator’s choice of remedies. (Id. at pp. 376-377.) The same
is true here, where the issue does not involve the arbitrator’s interpretation of the
agreement, but rather “the remedies fashioned by an arbitrator.” (Id. at p. 372.)
       In Advanced Micro Devices, our Supreme Court established the test for
determining whether the remedy an arbitrator fashions exceeds their powers, namely, that
a remedy does not exceed the arbitrator’s powers if it bears a rational relationship to the
arbitrator’s express or implied interpretation of the subcontract and to the breach found
by the arbitrator. In establishing and applying that test, the court rejected the sole
argument Roofco raises here: that an award must be vacated merely because the relief
granted was not authorized by a specific term in the contract. The court recognized that
“[a]rbitrators are not obliged to read contracts literally, and an award may not be vacated
merely because the court is unable to find the relief granted was authorized by a specific

                                              17
term of the contract.” (Advanced Micro Devices, supra, 9 Cal.4th at p. 381.) It added,
“No exact correspondence is required between the rights and obligations of a party had
the contract been performed and the remedy an arbitrator may provide for the other
party’s breach.” (Id. at p. 382.) Thus, an arbitrator may “award a party benefits different
from those the party could have acquired through performance of the contract.” (Id. at p.
382.) Arbitrators “enjoy the authority to fashion relief they consider just and fair under
the circumstances existing at the time of arbitration, so long as the remedy may be
rationally derived from the contract and the breach.” (Id. at p. 383.) This is because
parties to a private arbitration “have bargained for the relatively free exercise” of an
arbitrator’s “flexibility, creativity and sense of fairness” in selecting a particular remedy.
(Id. at p. 374.)
       The subcontract was not expressly interpreted by the arbitrator here, but it
generally required that Roofco indemnify Hilbers for damages and defend Hilbers against
claims arising out of Roofco’s performance. The subcontract’s arbitration provision
broadly authorized the arbitrator to “award compensatory, consequential, punitive and
other such damages as the arbitrator deems proper.” (Italics added.) Accordingly, the
arbitrator impliedly interpreted the broadly worded arbitration provision to authorize him
to decide the proper amount of damages that were “just and fair under the circumstances
existing at the time of arbitration.” (Advanced Micro Devices, supra, 9 Cal.4th at p. 383;
see Cohen v. TNP 2008 Participating Notes Program, LLC (2019) 31 Cal.App.5th 840,
874-876 [arbitrator did not exceed authority by failing to award attorney fees, despite
contractual provision entitling prevailing parties to attorney fees, where arbitrator
interpreted the agreements as giving him discretion to deny an attorney fee award]; Kelly
Sutherlin McLeod Architecture, Inc. v. Schneickert (2011) 194 Cal.App.4th 519, 530
[“ ‘Arbitrators have broad discretion in fashioning a remedy for the injustice which is
found to have occurred’ ”].)

                                              18
       In applying the broad arbitration provision, the arbitrator made multiple findings
about the nature of Roofco’s breach. He found that Roofco had persistently refused to
address the Goveia report, despite repeated requests that it do so, and when it finally
retained an expert, the expert did not issue a report that could be reviewed by the owner
or that could be the basis for a settlement. Accordingly, Hilbers was “forced to obtain the
best bargain it could with the owner to resolve the dispute after giving notice to [Roofco]
to participate.” Noting that Roofco sought to “turn back the clock” in the arbitration, the
arbitrator observed the dynamics as they existed in 2016 were such that Hilbers was left
“desperately trying to obtain [Roofco’s] input so that [Hilbers’] dispute with the owner
could be resolved.” Based on these findings and implied interpretation of the contract,
the arbitrator decided that it was “just and fair under the circumstances existing at the
time of arbitration” to deny Roofco’s claim. That remedy was undoubtedly rationally
related to “compensating for or alleviating the effects of the breach.” (Advanced Micro
Devices, supra, 9 Cal.4th at pp. 381, fn. 12; id. at p. 383.) Thus, we cannot say that the
arbitrator was not “ ‘even arguably construing or applying the contract and acting within
the scope of his authority.’ ” (Id. at p. 378; see also id. at p. 381, fn. 12.) Accordingly,
we conclude the remedy the arbitrator fashioned did not exceed his powers.
       We note that Roofco does not argue the arbitrator’s award was based on a source
extrinsic to the subcontract or that the award was expressly forbidden by the subcontract
(see O’Flaherty v. Belgum (2004) 115 Cal.App.4th 1044, 1057 [arbitrator acted in excess
of his power and jurisdiction by awarding a remedy expressly forbidden by the arbitration
agreement and state law]), nor does it raise any viable argument regarding the rational
relationship between the remedy, interpretation of the contract, and breach. At bottom,
Roofco’s contention amounts to no more than a disagreement with the merits of the
arbitrator’s decision, which is not subject to judicial review absent a contractual provision
(not present here) authorizing judicial review of the merits of the decision. (Moncharsh,

                                              19
supra, 3 Cal.4th at p. 6; Cable Connections, Inc. v. DIRECTV, Inc. (2008) 44 Cal.4th
1334, 1361).)4
                                      DISPOSITION
       The judgment is affirmed. Hilbers shall recover its costs on appeal. (Cal. Rules of
Court, rule 8.278(a).)

                                                       /s/
                                                  Duarte, Acting P. J.

We concur:

     /s/
Renner, J.

      /s/
Horst, J.

4 Roofco observes that a disposition reversing a judgment automatically vacates an
award of attorney fees (Ducoing Management, Inc. v. Superior Court (2015) 234
Cal.App.4th 306, 314), and argues that we should vacate the attorney fees award if we
reverse the judgment. Because we do not reverse the judgment, we do not vacate the
attorney fees award.
 Judge of the Placer County Superior Court, assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.

                                             20