Court Opinion

ID: 2641132
Source: CourtListenerOpinion
Date Created: 2013-11-05 01:05:22.06104+00
Date Added: 2024-06-11T12:59:50.475406
License: Public Domain

Filed 11/4/13 Diamond Mfg. & Engineering Co. v. Equipment Parts Wholesale CA5

                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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 8.1115.

              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                       FIFTH APPELLATE DISTRICT

DIAMOND MANUFACTURING &
ENGINEERING CO.,                                                                           F064701

         Plaintiff, Cross-defendant and                                    (Super. Ct. No. 05CECG02942)
         Respondent,

                   v.                                                                    OPINION
EQUIPMENT PARTS WHOLESALE, LLC et
al.

         Defendants, Cross-complainants and
         Appellants.

         APPEAL from a judgment of the Superior Court of Fresno County. Alan M.
Simpson, Judge.
         Perkins, Mann & Everett and Douglas V. Thornton for Defendants, Cross-
complainants and Appellants.
         Peel/Garcia, Chester E. Walls and Manuel Garcia for Plaintiff, Cross-defendant
and Respondent.
                                                        -ooOoo-
       Plaintiff Diamond Manufacturing & Engineering Co. (Diamond) entered into a
contract with defendant Equipment Parts Wholesale, LLC (EPW) under the terms of
which Diamond was to manufacture certain quantities of a machine known as a scissor
lift, which would be purchased by EPW for resale. After delays and other problems
occurred in Diamond’s manufacturing efforts, EPW elected to terminate the contract.
Diamond then sued for damages based on alleged breach of contract and related causes of
action, and EPW filed a cross-complaint against Diamond. The parties agreed to resolve
their dispute in binding arbitration. Arbitration proceedings were held and, after
considering the evidence and arguments presented by the parties, the arbitrator issued an
award in favor of Diamond in the sum of $386,847.14. Diamond petitioned the trial court
to confirm the arbitration award pursuant to Code of Civil Procedure section 1285.1 In
response, EPW requested that the trial court either (i) vacate the award since the
arbitrator allegedly failed to disclose a potential conflict creating an appearance of bias or
(ii) correct the amount of the award based on an alleged evident miscalculation of figures.
The trial court denied both of EPW’s requests, confirmed the arbitration award and
entered judgment in favor of Diamond. EPW timely appealed.2 We conclude that the
trial court properly confirmed the arbitration award. Therefore, the judgment is affirmed.
                       FACTS AND PROCEDURAL HISTORY
       In 2003, EPW decided to expand its business from being a seller of replacement
parts in the lift industry to selling completely manufactured scissor lifts. To effectuate

1     Unless otherwise indicated, all further statutory references are to the Code of Civil
Procedure.
2       EPW’s affiliate, defendant California Manufacturing & Engineering Co. (CMEC),
is a co-appellant with EPW, named with EPW on the opening and reply briefs filed
herein and represented by the same counsel. For convenience and ease of expression, we
follow the parties’ approach and treat EPW as the principal appellant in our discussion of
this case. We do so with the understanding that CMEC is likewise an appellant, whose
arguments are identical to EPW’s.

                                              2.
this goal, EPW purchased the assets and design plans of a former scissor lift
manufacturer. However, EPW needed to find a company that would undertake the
manufacturing process. After other prospects fell through, EPW settled on using
Diamond as the manufacturer. EPW was aware that Diamond did not have any
experience in manufacturing scissor lifts.
       In 2004, EPW and Diamond reached contractual terms for the manufacture of
scissor lifts by Diamond that would be purchased by EPW for resale. Diamond was to
manufacture a total of 700 scissor lifts under the terms of two purchase orders. The first
purchase order (dated April 27, 2004) called for Diamond to manufacture and EPW to
purchase 350 model No. 2633 lifts at a unit price of $5,400, for a total purchase price of
$1,890,000, with payments due “net thirty days.” The second purchase order (dated
May 5, 2004) called for the manufacture and purchase of 350 model No. 1932 lifts at a
unit price of $3,600, for a total purchase price of $1,260,000, also with payment terms of
“net thirty days.” The purchase order for the model No. 2633 lifts included a delivery
schedule.
       Production was much slower than either party anticipated, but each side had
differing explanations for what caused the delayed output. Diamond contended the
delays were due to unexpected problems such as inability to secure parts within needed
time frames, problems with the platforms on lifts that were partially built by a third party
before Diamond became the manufacturer, nonpayment by EPW of its invoices, and
normal problems in learning and implementing a new manufacturing system. On the
other hand, EPW claimed that the problems were due to the fact that Diamond failed to
adequately staff its facility with personnel qualified to manage the production lines and
meet inventory demands. EPW also referred to Diamond’s nonpayment of vendors,
which created delivery delays and required EPW to step in and pay delinquent accounts
to vendors to make sure the parts kept coming. EPW also expressed concerns regarding
quality and safety issues.

                                             3.
        On September 24, 2004, shortly after Diamond moved to a bigger production
facility in Selma that was shared by EPW, EPW notified Diamond that their contractual
relationship was terminated. EPW also informed Diamond that EPW’s new affiliate,
CMEC, would be taking over the production. At the time EPW terminated the contract,
Diamond had completed approximately 51 of the model No. 2633 lifts and 60 of the
model No. 1932 lifts, although additional lifts were finished before Diamond left the
premises.
        One year later, on September 16, 2005, Diamond filed its complaint against EPW,
asserting causes of action for breach of contract, common counts and fraud. The
complaint also named EPW’s related entity, CMEC, as a defendant. EPW filed a cross-
complaint against Diamond. By the time of the arbitration proceedings, EPW’s operative
pleading was its first amended cross-complaint, setting forth causes of action against
Diamond for breach of contract, breach of implied covenant of good faith and fair
dealing, negligent misrepresentation and fraud.
        The parties entered a stipulation for binding arbitration of their dispute. On
June 14, 2010, the trial court appointed Timothy J. Buchanan, an attorney with the law
firm of McCormick Barstow et al., to serve as the neutral arbitrator to conduct the
arbitration of the case. The arbitration hearings, including presentation of evidence, were
held on May 9, 10, 11, 12, 13, 16, 17, 18, 19 and 20, 2011. On June 29, 2011, the
arbitrator issued and served his written arbitration award. After considering all the
offsetting and/or conflicting claims between the parties, the arbitrator awarded to
Diamond the sum of $386,847.14 in damages, payable jointly and severally by EPW and
CMEC. The award also held that Diamond was entitled to statutory costs under section
1032, upon a proper application to the trial court for such costs, except that the costs of
the arbitration and the attorney fees of each party would be borne by the party incurring
them.

                                              4.
       On September 20, 2011, Diamond filed a motion in the trial court to confirm the
arbitration award. On October 5, 2011, EPW filed its response thereto, seeking to have
the award vacated due to the arbitrator’s alleged failure to make a required disclosure.
Specifically, EPW argued the arbitrator was required to disclose that, in a recently filed
federal court action involving unrelated parties and claims, the arbitrator was serving as
the attorney for the plaintiff therein, while, at the same time, one of the attorneys in the
law firm that represented EPW was representing the defendants in that same federal
action. According to EPW, this situation had to be disclosed because it might cause a
reasonable person to doubt whether the arbitrator would be impartial in the arbitration.
Alternatively, EPW’s response to Diamond’s motion to confirm requested that the trial
court correct the amount of the arbitration award due to an alleged damage calculation
error. After a reply by Diamond and a surreply by EPW, the trial court confirmed the
arbitration award on December 15, 2011. Judgment was entered based on the confirmed
arbitration award. EPW appealed, arguing that its request to vacate or correct the award
should have been granted.
                                       DISCUSSION
I.     Questions Presented and Standard of Review
       Preliminarily, we observe that the grounds for challenging a contractual arbitration
award are exceptionally limited. Courts may not review the merits of the controversy, the
arbitrator’s reasoning, or the sufficiency of the evidence supporting the award.
(Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 11 (Moncharsh).) Even “an error of
law apparent on the face of the award that causes substantial injustice does not provide
grounds for judicial review.” (Id. at p. 33.) The sole grounds for challenging an
arbitration award are those set forth in sections 1286.2 and 1286.6, which provide that an
award shall be vacated or corrected in certain limited circumstances. (Moncharsh, supra,
at p. 33.) “Although the parties to an arbitration agreement accept some risk of an
erroneous decision by the arbitrator, ‘the Legislature has reduced the risk to the parties of

                                              5.
such a decision by providing for judicial review in circumstances involving serious
problems with the award itself, or with the fairness of the arbitration process.’
[Citations.]” (Haworth v. Superior Court (2010) 50 Cal.4th 372, 380 (Haworth)
[referring to §§ 1286.2 & 1286.6].)
       Under section 1286.2, one of the grounds for vacating an arbitration award is that
the arbitrator “failed to disclose within the time required for disclosure a ground for
disqualification of which the arbitrator was then aware .…” (§ 1286.2, subd. (a)(6).) A
person appointed to serve as a neutral arbitrator is required to disclose “all matters that
could cause a person aware of the facts to reasonably entertain a doubt that the proposed
neutral arbitrator would be able to be impartial .…” (§ 1281.9, subd. (a).) Following
such disclosures, the parties are afforded a window of time in which to disqualify the
proposed neutral arbitrator by serving a timely notice or demand. (§ 1281.91, subds. (b)
& (d).) However, if the arbitrator failed to make the required disclosures, “the court shall
vacate the award.” (§ 1286.2, subd. (a)(6).) In the present appeal, EPW argues the trial
court should have vacated the arbitration award because, according to EPW, the arbitrator
failed to disclose a disqualifying relationship.
       The parties dispute the standard of review that is applicable where an arbitration
award was challenged in the trial court on the ground that the arbitrator failed to disclose
circumstances creating an appearance of partiality. The recent case of Haworth has
clarified the applicable standard of review. (Haworth, supra, 50 Cal.4th at p. 383.) In
Haworth, the Supreme Court held that the issue of whether an arbitrator was required to
disclose a particular matter is “a mixed question of fact and law that should be reviewed
de novo.” (Id. at p. 385, italics added.) That is, where the underlying facts are not in
dispute, the question of whether, under the given circumstances, an objective reasonable
person would entertain doubts about the arbitrator’s ability to be impartial is reviewed de
novo. (Id. at pp. 385-386.) In so holding, the Supreme Court noted that concerns of
judicial administration militate in favor of de novo review in such cases. (Id. at p. 386.)

                                              6.
Post-Haworth appellate decisions have routinely applied the de novo standard of review
to cases such as ours. (See, e.g., Gray v. Chiu (2013) 212 Cal.App.4th 1355, 1362
[appeal from judgment confirming arbitration award—disclosure issue reviewed de
novo]; Nemecek & Cole v. Horn (2012) 208 Cal.App.4th 641, 647 (Nemecek) [same];
Benjamin, Weill & Mazer v. Kors (2011) 195 Cal.App.4th 40, 52 [same].)
       In the Haworth case, the underlying facts were not in dispute (Haworth, supra, 50
Cal.4th at p. 383), which is also the case here. To the extent that the trial court’s ruling
rests upon a determination of disputed factual issues, we apply the substantial evidence
test to those underlying factual issues. (See Maaso v. Signer (2012) 203 Cal.App.4th
362, 371; Malek v. Blue Cross of California (2004) 121 Cal.App.4th 44, 55-56.)
       The other issue before us stems from the fact that, in confirming the arbitration
award and entering judgment, the trial court rejected EPW’s request to correct alleged
miscalculations in the award. EPW contends on appeal that the trial court should have
corrected the amount of the award because, allegedly, “[t]here was an evident
miscalculation of figures or an evident mistake in the description of any person, thing or
property referred to in the award .…” (§ 1286.6, subd. (a).) As with the disclosure issue,
the parties dispute the applicable standard of review we should apply to this question.
We conclude that the same de novo standard is applicable to our review of the trial
court’s order, which concurrently confirmed the award and denied EPW’s request that the
award be corrected under section 1286.6. In this regard, we simply follow the general
rule in appeals such as this: “‘On appeal from an order confirming an arbitration award,
we review the trial court’s order (not the arbitration award) under a de novo standard.
[Citations.] To the extent that the trial court’s ruling rests upon a determination of
disputed factual issues, we apply the substantial evidence test to those issues.’
[Citation.]” (Toal v. Tardif (2009) 178 Cal.App.4th 1208, 1217; Lindenstadt v. Staff
Builders, Inc. (1997) 55 Cal.App.4th 882, 892, fn. 7; accord, Giorgianni v. Crowley

                                              7.
(2011) 197 Cal.App.4th 1462, 1471, citing Advanced Micro Devices, Inc. v. Intel Corp.
(1994) 9 Cal.4th 362, 376, fn. 9.)

II.    Trial Court Properly Denied EPW’s Challenge to Award Based on Alleged
       Nondisclosure by Arbitrator
       As noted above, EPW sought to vacate the arbitration award on the ground that the
arbitrator failed to disclose a potential conflict. The purported conflict stemmed from the
arbitrator’s legal representation of a client in a federal action where the opposing party in
the action was represented by Attorney John Branch of the law firm representing EPW,
Perkins, Mann & Everett (PME). The federal action was filed on April 12, 2011, by the
arbitrator, Mr. Buchanan, acting as local counsel for the plaintiff in the federal action,
Interplexus Corporation. The federal action was based on alleged trademark
infringement and misappropriation of trade secrets. Mr. Branch represented a defendant
in the federal action, T.E. Neesby, Inc. EPW argued that this relationship had to be
disclosed by the arbitrator because it created an appearance of bias; that is, according to
EPW, a reasonable person would entertain doubts that the arbitrator would be able to be
impartial. The trial court disagreed, finding the purported conflict was not a matter that
had to be disclosed since there was no appearance of bias or partiality created by it under
the circumstances.
       In reaching that conclusion, the trial court summarized the underlying chronology
of events, as follows: “[O]n January 11, 2011, Mr. Branch of PME sent notice to an
attorney in Washington state, Mr. [Frank] Siderius, that PME would be representing the
defendants in that dispute. There is nothing on the face of that letter that would indicate
that Mr. Siderius had yet associated in the McCormick Barstow LLP firm or
Mr. Buchanan.… [¶] The federal action was filed by Mr. Buchanan on April 12,
2011.… Service of the complaint in the federal action was effectuated on May 9, 2011,
the same date the arbitration in this action commenced.… [¶] Before the federal action
was initiated and served, Mr. Branch’s only communications had been with Mr. Siderius,

                                              8.
the Washington attorney.… [¶] On or about May 25, 2011, Mr. Branch contacted
Mr. Buchanan to request an extension of time to respond to the federal action.… There is
nothing to indicate that Mr. Buchanan knew before that date that Mr. Branch or PME was
representing Neesby and that he should disclose the purported conflict. Certainly, it
seems Mr. Branch and Mr. Thornton[3] did not know that Mr. Siderius had associated in
McCormick Barstow LLP.… [¶] … [¶] It was not until May 25, 2011, that [EPW] knew
that the arbitrator in this action, Mr. Buchanan, allegedly had a conflict he had failed to
disclose, when Mr. Branch contacted Mr. Buchanan to request an extension of time to
respond to the federal action, five days after the arbitration ha[d] been concluded.”
       Based on all of the circumstances, including the fact that there was no evidence
the arbitrator or the parties knew of the purported conflict until May 25, 2011, five days
after the arbitration hearings had concluded, the trial court concluded that a reasonable
person would not entertain a doubt that the arbitrator would be able to be impartial. The
trial court also noted, in language strongly suggesting but not explicitly referring to a
waiver, that EPW waited until October 5, 2011, “some 98 days after service of the
arbitrator’s award” to seek to vacate the award. That is, rather than promptly moving to
disqualify the arbitrator after it learned of the purported conflict on May 25, 2011, EPW
waited. The award was issued on June 29, 2011. EPW did not move to vacate the award
until the time of its response to Diamond’s petition to confirm. The trial court noted
further that EPW’s discussion of the nondisclosure issue was perfunctory at best: EPW
devoted only two paragraphs to that issue, while the vast majority of the motion
concerned the matter of possible correction of the amount of the award.
       We now must take a closer look at the disclosure requirements to evaluate the
issue of whether the trial court was correct that the arbitrator was not obliged to disclose
the purported conflict.
3      Douglas Thornton was and is the PME attorney representing EPW herein.

                                              9.
       A.     Overview of Arbitrator’s Duty to Disclose
       Section 1281.9, subdivision (a), sets forth the general requirement that a proposed
neutral arbitrator “shall disclose all matters that could cause a person aware of the facts to
reasonably entertain a doubt that the proposed neutral arbitrator would be able to be
impartial .…” Thereafter, the subdivision (i) provides a nonexclusive list of specific
matters that must be disclosed under this general requirement and (ii) incorporates other
standards from other sources requiring disclosure of any matters that would have to be
disclosed under those other standards. (Agri-Systems, Inc. v. Foster Poultry Farms
(2008) 168 Cal.App.4th 1128, 1136.) The specific matters listed in the subdivision that
must be disclosed include, among other things, “(4) The names of the parties to all prior
or pending … cases involving any party to the arbitration or lawyer for a party for which
the proposed neutral arbitrator served or is serving as neutral arbitrator .… [¶] (5) Any
attorney-client relationship the proposed neutral arbitrator has or had with any party or
lawyer for a party to the arbitration proceeding. [¶] (6) Any professional or significant
personal relationship the proposed neutral arbitrator … has or has had with any party to
the arbitration proceeding or lawyer for a party.” (§ 1281.9, subd. (a).) The incorporated
disclosure standards include “(1) The existence of any ground specified in
Section 170.1[4] for disqualification of a judge.… [¶] (2) Any matters required to be
disclosed by the ethics standards for neutral arbitrators adopted by the Judicial Council
pursuant to this chapter.”5 (§ 1281.9, subd. (a).)

4       We note that section 170.1, subdivision (a)(6)(A), provides that a judge shall be
disqualified if “[f]or any reason: [¶] (i) The judge believes his or her recusal would
further the interests of justice. [¶] (ii) The judge believes there is a substantial doubt as
to his or her capacity to be impartial. [¶] (iii) A person aware of the facts might
reasonably entertain a doubt that the judge would be able to be impartial.”
5      The Judicial Council adopted the California Rules of Court, Ethics Standards for
Neutral Arbitrators in Contractual Arbitrations (Ethics Standards), of which standard 7
specifies disclosure requirements. (Haworth, supra, 50 Cal.4th at p. 381.) Standard 7(d)

                                              10.
       In Haworth, our Supreme Court provided the following synopsis of the above
requirements: “The applicable statute and standards enumerate specific matters that must
be disclosed. The arbitrator must disclose specified relationships between the arbitrator
and the parties to the arbitration, including involvement in prior arbitrations, an attorney-
client relationship with any attorney involved in the arbitration, and any significant
personal or professional relationship with a party or an attorney involved in the
arbitration. (§ 1281.9, subd. (a)(3)-(6).) The arbitrator also must disclose ‘any ground
specified in Section 170.1 for disqualification of a judge,’ as well as ‘matters required to
be disclosed by the ethics standards for neutral arbitrators adopted by the Judicial
Council.’ (§ 1281.9, subd. (a)(1), (2); see Cal. Rules of Court, Ethics Stds. for Neutral
Arbitrators in Contractual Arbitration .…) The Ethics Standards require the disclosure of
‘specific interests, relationships, or affiliations’ and other ‘common matters that could
cause a person aware of the facts to reasonably entertain a doubt that the arbitrator would
be able to be impartial.’ (Ethics Stds., com. to std. 7.) Specific matters that must be
disclosed include, for example, the arbitrator’s financial interest in a party or the subject
of the arbitration, the arbitrator’s knowledge of disputed facts relevant to the arbitration,
and the arbitrator’s ‘membership in any organization that practices invidious
discrimination on the basis of race, sex, religion, national origin, or sexual orientation.’

states, in language mirroring section 1281.9, subdivision (a), that: “A person who is
nominated or appointed must disclose all matters that could cause a person aware of the
facts to reasonably entertain a doubt that the proposed arbitrator would be able to be
impartial .…” It then specifies particular relationships and interests that must be
disclosed under this rule. (Ethics Stds., std. 7(d).) The catchall provision at the end of
standard 7(d) states, in terms virtually identical to section 170.1 (see fn. 4, ante) that the
arbitrator must disclose “[a]ny other matter that: [¶] (A) Might cause a person aware of
the facts to reasonably entertain a doubt that the arbitrator would be able to be impartial;
[¶] (B) Leads the proposed arbitrator to believe there is a substantial doubt as to his …
capacity to be impartial …; or [¶] (C) Otherwise leads the arbitrator to believe that his …
disqualification will further the interests of justice.” (Ethics Stds., std. 7(d)(14).)

                                             11.
(Ethics Stds., std. 7(d)(13); see id., std. 7(d)(9), (10), (12).)” (Haworth, supra, 50 Cal.4th
at p. 381.)
       The statutory scheme requires an arbitrator to make the disclosures at the very
outset—within 10 calendar days of his or her proposed appointment (§ 1281.9, subd. (b)).
After the disclosures are made, the parties would then have an opportunity to disqualify
the arbitrator by serving a timely demand (§ 1281.91, subd. (b)(1) [disqualification based
on disclosed matters must be requested within 15 calendar days after service of disclosure
statement]). An arbitrator’s disclosure obligations continue until the conclusion of the
arbitration proceedings. (§ 1281.91, subd. (d).)6 Standard 7(f) of the Ethics Standards
clearly affirms: “An arbitrator’s duty to disclose the matters described in
subdivision[s] (d) and (e) of … standard [7] is a continuing duty, applying from service
of the notice of the arbitrator’s proposed nomination or appointment until the conclusion
of the arbitration proceeding.”
       B.     Analysis of Disclosure Issue
       Here, the purported conflict did not come within any of the specifically listed
matters that must be disclosed under the above provisions. As the trial court correctly
concluded, “the purported conflict [was] not a recognizable conflict under the conflict
rules applicable to arbitrators,” and EPW does not argue otherwise. EPW’s sole
contention is that the arbitrator’s representation of a client in the federal action had to be
disclosed under the general requirement that a neutral arbitrator must “disclose all matters
that could cause a person aware of the facts to reasonably entertain a doubt that the …

6      Section 1281.91, subdivision (d), provides that if any ground specified in
section 170.1 exists, a neutral arbitrator shall disqualify himself or herself upon the
demand of any party made before the conclusion of the arbitration proceedings.

                                              12.
arbitrator would be able to be impartial .…” (§ 1281.9, subd. (a); see also Ethics Stds.,
std. 7(d) & § 170.1, subd. (a)(6)(A)(iii) [stating same general requirement]j.)7
       In deciding whether disclosure is required under that standard, “[t]he question …
is how an objective, reasonable person would view [the arbitrator’s] ability to be
impartial” under the circumstances. (Haworth, supra, 50 Cal.4th at p. 385.) “The test is
an objective one—whether the facts might create an impression of possible bias in the
eyes of the hypothetical reasonable person.” (Ceriale v. AMCO Ins. Co. (1996) 48
Cal.App.4th 500, 506.) “An impression of possible bias in the arbitration context means
that one could reasonably form a belief that an arbitrator was biased for or against a
party for a particular reason.” (Betz v. Pankow (1995) 31 Cal.App.4th 1503, 1511,
italics added.)
       In considering this question, we keep in mind that arbitrators often have dealings
and experience in the legal or business community, and their familiarity with such
matters is often the reason they were selected to serve; they are not expected to be free of
business contacts or professional relationships in their particular field of practice.
(Nemecek & Cole v. Horn, supra, 208 Cal.App.4th at pp. 646-647.) Judges and
arbitrators, “‘like all human beings, have widely varying experiences and backgrounds.
Except perhaps in extreme circumstances, those not directly related to the case or the
parties do not disqualify them.’ [Citation.]” (Haworth, supra, 50 Cal.4th at p. 389.) The
disclosure requirements are only intended to ensure the impartiality of the arbitrator, not
to mandate disclosure of “all matters that a party might wish to consider in deciding
whether to oppose or accept selection of an arbitrator.” (Id. at p. 393.) Moreover, an
overly broad interpretation of the appearance of partiality “could subject arbitration

7      “‘Impartiality’ entails the ‘absence of bias or prejudice in favor of, or against,
particular parties or classes of parties, as well as maintenance of an open mind.’
[Citation.]” (Haworth, supra, 50 Cal.4th at p. 389.)

                                             13.
awards to after-the-fact attacks by losing parties searching for potential disqualifying
information only after an adverse decision has been made.” (Id. at pp. 394-395.) “‘If the
impression of possible bias is not to emasculate the policy of the law in favor of the
finality of arbitration, the impression must be a reasonable one.’ [Citation.]” (Id. at
p. 394.)
       Applying the reasonable person test to the matter before us, we fail to see how the
relationship at issue would lead a reasonably objective person to doubt the arbitrator’s
ability to be impartial. There was no evidence or finding that either party to the federal
action had any legal or financial interest to any of the parties to the arbitration or to the
arbitrator. The two cases, and the parties involved, were entirely unrelated. The mere
fact that the arbitrator provided legal representation to a client—the plaintiff in the
federal action—while an attorney in the law firm representing EPW provided legal
representation to one or more of the defendants in that same federal action does not by
itself create a reasonable basis for doubting the arbitrator’s ability to be impartial in the
arbitration. Therefore, the trial court correctly concluded that the arbitrator was not
required to disclose that matter. (See, e.g., Luce, Forward, Hamilton & Scripps, LLP v.
Koch (2008) 162 Cal.App.4th 720, 734-735 [arbitrator was not required to disclose
service on board of professional organization with the plaintiff’s counsel, even if the
defendants asserted they were uncomfortable with that relationship]; Guseinov v. Burns
(2006) 145 Cal.App.4th 944, 959 [the arbitrator’s prior service as uncompensated
mediator on case handled by an attorney in the arbitration did not create impression of
bias]; Gonzales v. Interinsurance Exchange (1978) 84 Cal.App.3d 58, 66 [friendly
acquaintance between arbitrator and senior partner of a party’s law firm insufficient to
give impression of bias]; Agri-Systems, Inc. v. Foster Poultry Farms, supra, 168
Cal.App.4th at pp. 1139-1143 [affirming trial court’s holding that prior representation by
arbitrator’s law firm of a company that was financially adverse to a party to arbitration

                                              14.
did not create reasonable doubt as to the arbitrator’s ability to be impartial where the
representation was attenuated and apparently unknown to arbitrator].)
       Although what we have said above is sufficient to conclude the matter, we note
that two additional factors in this case tend to further support our conclusion. First, the
purported conflict in this case was somewhat attenuated by the fact that different
attorneys from the PME law firm were involved in each matter: the individual attorney
representing EPW in the arbitration was Douglas Thornton, but the individual attorney
representing the defendants in the federal action was someone else, John Branch.
Second, the parties and the arbitrator did not learn of the purported conflict until May 25,
2011, after the arbitration hearings were over and the arbitration process was relatively
close to completion. On the record before us, these factors comport with our conclusion
that a reasonably objective person learning of the alleged conflict, after consideration of
all of the facts and circumstances, would not have an impression of possible bias or
entertain a doubt about the arbitrator’s ability to be impartial.
       C.     Waiver
       An additional ground for upholding the trial court’s confirmation of the arbitration
award and denial of EPW’s request to vacate the award is that of waiver or forfeiture.
The trial court’s finding, supported by substantial evidence, was that EPW knew of the
purported conflict on May 25, 2011, when Mr. Branch contacted the arbitrator to request
an extension of time to respond to the federal action. “Upon learning of the purported
failure to disclose, [EPW] did not file [its] petition to vacate the award under … section
1286.2; instead, they waited until … October 5, 2011.” Implicitly, the trial court was
emphasizing such facts to indicate a waiver on the part of EPW. We quite agree. A party
who knows of a purported conflict, but unreasonably waits until after the arbitrator’s
award to bring it up should be found to have waived the matter. (See, e.g., Fininen v.
Barlow (2006) 142 Cal.App.4th 185, 190-191 [motion to vacate award properly denied
where a party to arbitration recognized arbitrator from a prior settled case, but the party

                                              15.
failed to investigate or raise the issue until after the award was issued in favor of his
opponents]; Woolley v. Superior Court (1937) 19 Cal.App.2d 611, 619 [“Courts must
guard against the possibility of a party, who claims the trial judge is biased or prejudiced,
refraining from raising that question, trusting to get a favorable verdict, and thereafter
raise the question”]; Caminetti v. Pac. Mutual L. Ins. Co. (1943) 22 Cal.2d 386, 392 [“‘It
would seem … intolerable to permit a party to play fast and loose with the administration
of justice by deliberately standing by without making an objection of which he is aware
and thereby permitting the proceedings to go to a conclusion which he may acquiesce in,
if favorable, and which he may avoid, if not.’”]; cf. § 170.3, subd. (b)(2) [waiver
prohibited as to certain grounds for disqualification not present here].)
III.   Trial Court Properly Denied Request for Correction of Award
       Section 1286.6 sets forth the grounds for correction of an arbitration award, which
include the following: “(a) There was an evident miscalculation of figures or an evident
mistake in the description of any person, thing or property referred to in the award;
[¶] … [¶] (c) The award is imperfect in a matter of form, not affecting the merits of the
controversy.” The miscalculation, “to be evident, must appear on the face of the award
[citation] or be so readily apparent from the documentation in the case that explanation
by proofs is not necessary.” (Severtson v. Williams Construction Co. (1985) 173
Cal.App.3d 86, 94.)
       In denying EPW’s request for correction of the award, the trial court explained:
“If there was an evident miscalculation of the figures, any such miscalculation has not
been demonstrated by way of admissible evidence. This court does not have the power to
review the arbitrator’s award and his reasoning used to arrive at that award in the guise of
reviewing it for a miscalculation or imperfection that is not clear on its face or is
demonstrated to the court by way of admissible evidence.” EPW contends the trial court
erred because the award allegedly credited incorrect amounts for inventory and advances
and used inconsistent dates for computing such amounts. We reject EPW’s argument.

                                              16.
There is nothing on the face of the award or otherwise readily apparent that demonstrates
there was an evident mathematical or calculation error. EPW is, instead, asking us to
remedy the arbitrator’s allegedly flawed reasoning and/or factual determinations—
something we may not do. (Moncharsh, supra, 3 Cal.4th at p. 11.) We conclude the trial
court correctly denied the request for a correction of the award.
IV.    Motion for Sanctions
       During the pendency of this appeal, Diamond filed a motion asking that we
impose sanctions against EPW on the ground that EPW’s appeal was allegedly frivolous
or for the sole purpose of delay. (See In re Marriage of Flaherty (1982) 31 Cal.3d 637,
649-650.) Diamond asserts that EPW’s appeal was frivolous because of EPW’s position
that our standard of review herein is de novo. Contrary to Diamond’s argument,
however, EPW was essentially correct in regard to the appropriate standard of review.
Additionally, we do not believe EPW’s appeal concerning the disclosure issue was
frivolous. Therefore, Diamond’s motion for sanctions is denied.8
                                     DISPOSITION
       The judgment confirming the arbitration award is affirmed. Costs on appeal are
awarded to Diamond.
                                                                    _____________________
                                                                           Kane, Acting P.J.
WE CONCUR:

 _____________________
Detjen, J.

 _____________________
Franson, J.

8      In light of the court’s decision denying sanctions, EPW’s request to file documents
in opposition to the motion for sanctions and Diamond’s objection thereto are rendered
moot.

                                            17.