Court Opinion

ID: 9880912
Source: CourtListenerOpinion
Date Created: 2023-09-28 23:03:30.051698+00
Date Added: 2024-06-11T13:58:01.491689
License: Public Domain

Filed 9/28/23 200 Kansas Owner v. Keenwawa CA1/3
                  NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or
ordered published for purposes of rule 8.1115.

          IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                      FIRST APPELLATE DISTRICT

                                                DIVISION THREE

 200 KANSAS OWNER, LLC,
           Plaintiff and Respondent,                                     A166470
 v.
 KEENWAWA, INC.                                                          (San Francisco City & County
           Defendant and Appellant.                                      Super. Ct. No. CPF-22-517812)

         Keenwawa, Inc., doing business as Brightloom (tenant) appeals from a
judgment confirming a final arbitration award in favor of 200 Kansas Owner,
LLC (landlord). We affirm.1
                                                  BACKGROUND
         In June 2015, tenant leased space in landlord’s office building on
Kansas Street in San Francisco. Section 29.20.2 of the lease — entitled
“waiver of trial by jury” — stated the parties waived their right to a jury trial

         1 We deny tenant’s request for judicial notice of, among other things,

the JAMS Comprehensive Arbitration Rules & Procedures, as these
documents are unnecessary to our decision. (Najarro v. Superior Court
(2021) 70 Cal.App.5th 871, 885, fn. 7.) In violation of California Rules of
Court, rule 8.124(b), tenant’s appellant’s appendix omits numerous essential
documents, including landlord’s arbitration demand and declarations
landlord offered in support of its petition to confirm the award. Landlord has
provided a respondent’s appendix supplying the missing documents. We
recite only those facts necessary to resolve the dispositive issues.
                                                               1
in any litigation arising out of, or connected to, the lease. (Capitalization
omitted.) Section 29.20.2 also provided that if the jury waiver is not
enforceable, “the following provisions shall apply. . . . [A]ny action,
proceeding or counterclaim brought by either party hereto against the
other . . . on any matters arising out of or in any way connected with this
Lease, Tenant’s use or occupancy of the Premises and/or any claim of injury
or damage . . . shall be heard and resolved by a referee under the provisions
of the California Code of Civil Procedure, Sections 638 – 645.1[.]”2
(Capitalization omitted.) Additionally, the provision stated that pursuant to
section 644, “[a]ny decision of the referee and/or judgment or other order
entered thereon shall be appealable to the same extent and in the same
manner that such decision, judgment, or order would be appealable if
rendered by a judge of the superior court in which venue is proper.”
      Tenant stopped paying rent in April 2020. Not long after, it decided to
“go ‘permanent remote,’ ” and it paid rent intermittently or not at all. In late
December, the parties entered into a “Surrender and Lease Termination
Agreement” (agreement). Under the agreement, tenant vacated the space;
the parties terminated the lease, and they acknowledged the existence of a
dispute over tenant’s nonpayment of rent and landlord’s entitlement to
damages (rent dispute). The parties also agreed the rent dispute would “be
resolved in accordance with the alternative dispute resolution mechanism set
forth in Section 29.20.2 of the Lease, as clarified and amended by the terms
and conditions” of the agreement. Section 7 of the agreement — entitled
“Agreement to Alternative Dispute Resolution” — provided that
“[n]otwithstanding anything in the Lease to the contrary, the Parties

      2 Undesignated statutory references are to the California Code of Civil

Procedure.
                                        2
acknowledge and agree that the Rent Dispute is and shall be subject to
arbitration pursuant to section 29.20.2 of the Lease, and agree to submit such
Rent Dispute to arbitration before JAMS.” (Italics added.) The agreement’s
integration clause stated the agreement was the parties’ “final, entire, and
exclusive agreement” and that all “understandings, discussions, proposals
and agreements [. . .] are merged.”
      Two months later, landlord demanded arbitration. It sought damages,
attorney fees, and costs. Tenant answered the demand. Thereafter, JAMS
confirmed the commencement of the arbitration. The parties selected an
arbitrator — who confirmed the claims were “arbitrable in this forum” — and
they arbitrated their claims in March 2022. In June, the arbitrator issued a
final award. The arbitrator first concluded the parties had “expressly
reserved” the rent dispute to arbitration and that landlord’s claims were
“arbitrable.” Next, the arbitrator determined tenant breached the lease, and
it rejected tenant’s affirmative defenses. The arbitrator ultimately awarded
landlord $3,813,866.72 in damages, attorney fees, and costs — a complete win
for landlord.
      Thereafter, landlord petitioned to confirm the arbitration award
pursuant to section 1285. Tenant did not move to correct or vacate the
award. Instead, it filed an opposition in which it argued the petition was not
“the appropriate procedural mechanism for attempting to enforce the award.”
Relying on the lease, tenant insisted the parties had agreed to resolve their
disputes by judicial reference and that any decision reached by the referee
would be appealable.3 It requested an “opportunity to appeal the award

      3 “ ‘Judicial reference involves sending a pending trial court action

to a referee for hearing, determination and a report back to the court.’ ”
(O’Donoghue v. Superior Court (2013) 219 Cal.App.4th 245, 255.) The referee

                                       3
pursuant to the parties’ agreement.” Tenant also suggested the arbitrator
“exceeded his authority in such a manner that the award [could not] be fairly
corrected” (§ 1286.2, subd. (a)(4)), but tenant did not seek to vacate the award
on that basis.
      In reply, landlord urged the trial court to confirm the award and enter
judgment in its favor because tenant had failed to contest the arbitration
award or oppose the petition on statutory grounds. Tenant filed a
supplemental response. Taking a new tack — and claiming the “only
question” before the court was the “nature of the judgment” — tenant
requested entry of judgment pursuant to section 644, which applies to
reference proceedings. (Capitalization omitted.) In light of this new theory,
the court granted tenant leave to file a petition to correct the arbitration
award. Instead of doing so, tenant moved to “enter judgment on the
reference.” (Capitalization omitted.) The motion rehashed the arguments
tenant made in response to landlord’s petition to confirm the arbitration
award. Landlord opposed the motion, arguing tenant could not convert an
arbitration award into a so-called judgment on the reference.
      In October 2022, the trial court granted landlord’s petition to confirm
the arbitration award, and it entered a judgment after arbitration. On the
same date, the court issued a separate order denying tenant’s motion to enter
judgment on the reference. It concluded no “judicial reference proceedings
ha[d] been initiated” under sections 638 and 639, and that the parties

tries “ ‘all issues in the action’ ” and “ ‘prepares a statement of decision that
stands as the decision of the court and is reviewable as if the court had
rendered it.’ ” (Ibid.) A judgment based on a referee’s statement of decision
is reviewed on appeal using the same rules that apply to a court’s statement
of decision. (§ 644.) There “are significant differences between a judicial
reference and a contractual arbitration.” (Sy First Family Ltd. Partnership v.
Cheung (1999) 70 Cal.App.4th 1334, 1341.)

                                        4
participated in an arbitration and availed “themselves of the benefits of such
proceedings without objection.” Tenant appealed from the judgment after
arbitration.
                                DISCUSSION
      Tenant urges us to review the merits of the arbitrator’s factual and
legal conclusions and to reduce landlord’s damages. We will not.
      To explain why this is so, we briefly review the relevant provisions of
the California Arbitration Act — section 1280 et seq. — “ ‘ “a comprehensive
statutory scheme regulating private arbitration in this state.” ’ ” (Law
Finance Group, LLC v. Key (2023) 14 Cal.5th 932, 945.) Section 1285
authorizes a party to an arbitration award to petition the trial court to
“confirm, correct or vacate” the award. A party’s response may ask “the court
to dismiss the petition or to confirm, correct or vacate the award.” (§ 1285.2.)
Sections 1286.2 and 1286.6 enumerate the grounds for vacating and
correcting the award. A party seeking to vacate the award bears the burden
of establishing the existence of a circumstance enumerated in section 1286.2,
“and that the party was prejudiced by the arbitrator’s error.” (Royal Alliance
Associates, Inc. v. Liebhaber (2016) 2 Cal.App.5th 1092, 1106.) In ruling on a
petition brought under the California Arbitration Act, the court’s powers are
circumscribed — it must confirm the award, correct the award and confirm it
as corrected, vacate the award, or dismiss the proceeding. (§ 1286; EHM
Productions, Inc. v. Starline Tours of Hollywood, Inc. (2018) 21 Cal.App.5th
1058, 1063.)
      If the trial court confirms the arbitration award, the judgment
entered on the award has the “same force and effect” as a civil judgment.
(§ 1287.4.) Such a judgment is appealable, but judicial review is limited.
(§ 1294, subd. (d); California Union Square L.P. v. Saks & Co. LLC (2020)

                                       5
50 Cal.App.5th 340, 348.) Appellate “courts will not review the merits of the
controversy, the validity of the arbitrator’s reasoning, or the sufficiency of the
evidence supporting the arbitrator’s award. [Citation.] Typically, an
arbitrator’s factual and legal errors are also not reviewable because the
arbitrator’s (as opposed to the court’s) resolution of the disputed issues
‘ “ ‘is what the parties bargained for in the arbitration agreement.’ ” ’ ”
(California Union Square, at p. 348; see also Moncharsh v. Heily & Blase
(1992) 3 Cal.4th 1, 12–13.)
      Having set forth this statutory background, we turn to tenant’s bid to
obtain a merits review of the arbitration award. Tenant participated —
without objection — in a contractual arbitration proceeding that resulted in a
complete win for landlord. Tenant did not seek to vacate the arbitration
award under the established procedure for doing so; indeed, it admitted the
only issue before the trial court was the “nature” of the judgment that should
be entered against it. The court entered judgment on the arbitration award,
a judgment that is subject to narrow appellate review. Acting as if this
history never happened, tenant offers one principal argument: it insists the
court erred by denying its motion to enter judgment on the reference because
the parties participated in a “reference hearing,” not an arbitration.4

      4 A notice of appeal “defines the scope of the appeal by identifying the

particular judgment or order being appealed.” (Morton v. Wagner (2007)
156 Cal.App.4th 963, 967.) An appellate court has no jurisdiction to
review an order not mentioned in the notice of appeal. (In re J.F. (2019)
39 Cal.App.5th 70, 75.) Here, the trial court issued two documents — a
judgment after arbitration and a separate order denying tenant’s motion to
enter judgment on the reference. Landlord correctly notes tenant appealed
only from the “Judgment after Arbitration.” A logical corollary supported by
the record is that tenant did not appeal from the separate order denying its
motion to enter judgment on the reference. (Morton, at pp. 967–968; Ellis v.

                                         6
      We are not persuaded. The record demonstrates both parties
consistently acted as if they were arbitrating their dispute. Indeed, tenant
acknowledges it failed to move for the appointment of a referee before the
arbitrator issued the final award — in fact, we see no evidence in the record
that tenant ever sought the appointment of a referee. (See Lovret v. Seyfarth
(1972) 22 Cal.App.3d. 841, 860.) Tellingly, tenant has failed to challenge the
trial court’s implied conclusion that it waived any right to enforce the judicial
reference provision in the lease by participating in the arbitration. (San
Francisco Print Media Co. v. The Hearst Corp. (2020) 44 Cal.App.5th 952,
967, fn. 10 [an “ ‘appellate court is not required to examine undeveloped
claims, nor to make arguments for parties’ ”].)
      We decline tenant’s eleventh hour invitation to recharacterize the
proceeding as a reference. Tenant’s reliance on National Union Fire Ins. Co.
v. Nationwide Ins. Co. (1999) 69 Cal.App.4th 709 is unavailing. In that case,
all parties agreed it was “their true intent to submit the dispute for a general
reference.” (Id. at p. 715.) Additionally, unlike that case, there was no
preexisting court case here that could be sent to a referee. (Id. at p. 714.)
The additional authorities mentioned in tenant’s reply brief, including
Cheng-Canindin v. Renaissance Hotel Associates (1996) 50 Cal.App.4th 676,
are similarly inapt.
      In the alternative, tenant contends the parties agreed to “preserve their
rights” to appellate review of the arbitration award. Not so. As a general

Ellis (2015) 235 Cal.App.4th 837, 846.) Because the notice of appeal “omits
any reference” to the order denying tenant’s motion for judgment on the
reference, it appears we have “no jurisdiction to review the propriety of that
[order].” (Norman I. Krug Real Estate Investments, Inc. v. Praszker (1990)
220 Cal.App.3d 35, 47.) As landlord does not contend we lack jurisdiction, we
merely observe the potential jurisdictional defect and do not rely on it to
resolve this matter.
                                        7
rule, the merits of an arbitration award are not subject to judicial review.
(Moncharsh v. Heily & Blase, supra, 3 Cal.4th at p. 11.) To remove
themselves from the ambit of “the general rule . . . , the parties must clearly
agree that legal errors are an excess of arbitral authority that is reviewable
by the courts.” (Cable Connection, Inc. v. DIRECTV, Inc. (2008) 44 Cal.4th
1334, 1360–1361.) Our high court has advised that “parties seeking to allow
judicial review of the merits” should “provide for that review explicitly and
unambiguously.” (Id. at p. 1361.)
      Neither the lease nor the agreement includes explicit and unambiguous
language authorizing judicial review of the merits of the arbitration award.
As tenant appears to concede, under the lease, the parties’ right to appeal is
conditional — if the jury trial waiver is unenforceable, and the parties have
participated in a reference proceeding, and the referee has issued a decision,
the judgment is “appealable to the same extent and in the same manner that
such decision, judgment, or order would be appealable if rendered by a judge
of the superior court in which venue is proper.” Tenant’s briefs conveniently
elide the fact that there has been no finding that the jury trial waiver is
unenforceable. Moreover, it is undisputed section 7 of the agreement is
completely silent on the issue of appealability of the arbitration award.5
(See Gravillis v. Coldwell Banker Residential Brokerage Co. (2010)
182 Cal.App.4th 503, 516–520.)
      In sum, we will not consider the merits of the arbitration award.

      5 The parties dispute whether the agreement supersedes the lease.    We
need not decide this question, as nothing in either document constitutes an
express agreement to authorize judicial review of the merits of the arbitration
award.

                                        8
                               DISPOSITION
      The judgment confirming the final arbitration award in favor of
landlord is affirmed. Landlord is entitled to costs on appeal. (Cal. Rules of
Court, rule 8.278(a)(2).)

                                       9
                                 _________________________
                                 Rodríguez, J.

WE CONCUR:

_________________________
Tucher, P. J.

_________________________
Petrou, J.

A166470

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