Court Opinion

ID: 5134964
Source: CourtListenerOpinion
Date Created: 2021-12-15 01:02:33.283253+00
Date Added: 2024-06-11T08:23:46.891593
License: Public Domain

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

                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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                IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     FOURTH APPELLATE DISTRICT

                                                DIVISION THREE

 ODYSSEY ENGINEERING Inc., et. al.,

      Plaintiffs and Appellants,                                       G059242

           v.                                                          (Super. Ct. No. 30-2018-01038748)

 VINCENT LONGO et. al.,                                                OPINION

      Defendants and Respondents.

                   Appeal from an order of the Superior Court of Orange County, Craig
Griffin, Judge. Affirmed. Motion to supplement record denied.
                   Dracup & Patterson, Jeffrey A. Dracup and Terry Bell for Plaintiffs and
Appellants.
                   Ropers Majeski, Andrew S. Hollins, Ethan A. Reimers; Messner Reeves
and Andrew S. Hollins for Defendants and Respondents Vincent Longo, Wesrae
Holdings, Inc., and Alex Marinescu.
              Loeb & Loeb, W. Allan Edmiston and Saul D. Brenner for Respondents
Stradling Yocca Carlson & Rauth and Mark Skaist.
                                   *          *          *
              Anthony Longo, Teresa Longo, and their company Odyssey Engineering
Inc, (collectively Odyssey) appeal from an order denying their petition to vacate an
arbitrator’s dismissal of their case against the law firm of Stradling Yocca Carlson &
Rauth, P.C. and one of its attorneys, Mark Skaist (collectively Stradling).
              Odyssey argues the dismissal order should be vacated for two reasons.
First, because the decision to dismiss the case against Stradling, rather than issue a stay
that would preserve Odyssey’s right to develop additional evidence, amounted to an
improper refusal to hear evidence material to the controversy as set forth in Code of Civil
Procedure section 1286.2, subdivision (a)(5).1 And second, because the arbitrator, retired
Superior Court Judge Gail Andler, failed to disclose that her “economic interest” in the
ADR provider, JAMS, was an ownership interest—which in the circumstances of this
case amounted to a ground for disqualification as set forth in section 1284.6,
subdivision (a)(6).
              Odyssey has also moved to supplement the record by asking to unredact a
document it agreed to submit to the trial court in redacted form. Odyssey filed its motion
to supplement after the respondents filed their briefs arguing that the lack of evidence
establishing the extent to which any respondent or its counsel has done business with
JAMS undermines Odyssey’s position on the disqualification issue.
              We deny Odyssey’s motion to supplement the record. Our review is of the
trial court’s decision, and except in extraordinary circumstances, appellate rules require
that our decision be based on the same evidence considered by the trial court.

       1      All further statutory references are to this code.

                                              2
“‘It is an elementary rule of appellate procedure that, when reviewing the correctness of
a trial court’s judgment, an appellate court will consider only matters which were part of
the record at the time the judgment was entered. [Citation.] This rule preserves an orderly
system of [litigation] by preventing litigants from circumventing the normal sequence of
litigation.’” (Haworth v. Superior Court (2010) 50 Cal.4th 372, 379, fn. 2 (Haworth);
People v. Brooks (1980) 26 Cal.3d 471, 484 [“Augmentation is not available . . . for the
purpose of adding material that was not a proper part of the record in the trial court”].) A
request to augment after the opposing parties have filed their briefs is also untimely.
(People v. Preslie (1977) 70 Cal.App.3d 486, 492 [requests for augmentation of the
record “made after a reasonable time has expired from receiving the record on appeal,
and particularly as late as those contained in briefs, will be denied absent a strong
showing of unusual or unavoidable circumstances giving rise to the delay”].)
               Here, Odyssey does not contend the omitted evidence was unavailable to it
during the trial court proceedings, only that it apparently considered the evidence
unnecessary until it reviewed the respondents’ briefs on appeal. Those are not the
extraordinary circumstances that will justify augmentation of the record.
               We reject Odyssey’s substantive arguments as well. The arbitrator
considered Odyssey’s evidence and arguments in opposition to Stradling’s motion to
dismiss before ruling on its merits. The fact that her ruling may have been legally
incorrect is not a basis to vacate the ruling under section 1286.2, subdivision (a)(5), even
if its effect was to limit the issues or evidence in the arbitration.
               And the fact that an arbitrator’s disclosed financial interest in JAMS was
based on an ownership stake, rather than a profit sharing or other interest in the company,
is not a ground for disqualification under section 1286.2, subdivision (a)(6). Even if it
were, Odyssey was free to seek additional information about the nature of the arbitrator’s
economic interest at the time it was disclosed; its failure to do so forfeited the issue.
               The order is affirmed.

                                                3
                                           FACTS
              Odyssey became embroiled in a dispute with Anthony Longo’s brother,
Vincent Longo, and his company, Wesrae Holdings, Inc. (collectively Wesrae), over
allegations that Wesrae had embezzled funds from a third company, Futures Fins, LLC
(Futures), which is jointly owned by Odyssey and Wesrae. Odyssey also claimed that
Stradling, in its capacity as Futures’s legal counsel, aided and abetted Wesrae’s
embezzlement.
              Odyssey initiated a private arbitration of the dispute against both Wesrae
and Stradling through ADR provider JAMS. 2 In April 2019, the JAMS arbitrator
selected by the parties provided them with her initial disclosures, including that, within
the preceding five years, she had served as a neutral arbitrator in other matters involving
a party, a lawyer for a party, or law firm for a party to the current arbitration. At the
same time, JAMS provided the parties with reports listing the arbitration matters handled
by the arbitrator within the last five years (and mediation matters handled within the past
two years) that included any party or any lawyer or law firm representing a party to the
present arbitration.
              JAMS’s April disclosures also informed the parties that the arbitrator
“practices in association with JAMS. Each JAMS neutral, including the neutral in this
case, has an economic interest in the overall financial success of JAMS. In addition,
because of the nature and size of JAMS, the parties should assume that one or more of the
other neutrals who practice with JAMS has participated in an arbitration, mediation or
other dispute resolution proceeding with the parties, counsel or insurers in this case and
may do so in the future.” In connection with those disclosures, the parties were invited to
make further inquiries related to them.

       2
             Odyssey also asserted a claim against Alex Marinescu, who is alleged to
have aided and abetted Wesrae’s misconduct.

                                              4
              In July 2019, Stradling moved to dismiss the claim against it, relying on
McDermott, Will & Emery v. Superior Court (2000) 83 Cal.App.4th 378 for the
proposition that dismissal is proper in cases where a law firm is unable to meaningfully
defend itself due to the strictures of the attorney client privilege. In its opposition,
Odyssey relied on Favila v. Katten Muchin Rosenman LLP (2010) 188 Cal.App.4th 189
(Favila), to argue the court should stay the action rather than dismiss it because there was
a realistic possibility that further litigation would result in either a waiver of the privilege
or the discovery of evidence supporting an exception to it. In a decision that explained at
some length why she concluded Favila was inapposite, the arbitrator granted Stradling’s
motion to dismiss.
              Approximately two months after the arbitrator’s ruling, the Ninth Circuit
Court of Appeals issued a decision, Monster Energy Co. v. City Beverages, LLC,
940 F.3d 1130 (9th Cir. 2019) (“Monster Energy”), which vacated an arbitration decision
on the basis that a JAMS arbitrator had failed to disclose (1) that he had an ownership
interest in JAMS, and (2) that one of the parties to the case had a substantial, ongoing
business relationship with JAMS.
              Apparently in response to the Monster Energy decision, the arbitrator in
this case issued an additional disclosure in November 2019 stating she had “an equal
share ownership interest” in JAMS, that she had “never received a profit distribution of
more than .1% of JAMS total revenue in a given year,” and that she was “not privy to
information regarding the number of cases or revenue related to cases assigned to other
panelists.”
              Also, in November 2019, JAMS sent the parties supplemental information
regarding JAMS and its cases. The report identified the number of cases that JAMS—
broadly defined to include all JAMS neutrals in all the company’s offices—had
administered during the preceding five years that had involved a “party, lawyer, or law
firm in the present case.” The numbers revealed in the report were redacted in the trial

                                               5
court filing and are not included in the record before us. This is the information
appellants now ask us to consider.
                The materials provided to the parties in November 2019 also noted that
“JAMS administers approximately 13,000 cases per year,” and further stated “JAMS has
approximately 400 neutrals on its panel, and a little over one quarter of JAMS neutrals
have an equal ownership share in the company. Owners are not privy to information
regarding the number of cases or revenue related to cases assigned to other panelists. No
shareholder’s distribution has ever exceeded 0.1% of JAMS total revenue in a given year.
Shareholders are not informed about how their profit distributions are impacted by any
particular client, lawyer or law firm and shareholders do not receive credit for the
creation or retention of client relationships.” The report also informed the parties that
“[t]his report is not provided to JAMS neutrals and will not be provided to the neutral in
this matter.”
                Based upon the arbitrator’s additional disclosure, Odyssey submitted a
request to JAMS to disqualify Judge Andler as the case neutral and “restart the arbitration
with a neutral arbitrator who holds no JAMS ownership.” It then filed a challenge for
cause. JAMS denied both the request and the challenge. Odyssey also submitted a
request directly to Judge Andler that she disqualify herself. She declined.
                In December 2019, Odyssey filed a petition to vacate the arbitration
decision dismissing Stradling, pursuant to section 1284.2. As grounds for the petition,
Odyssey claimed (1) the arbitrator engaged in misconduct that substantially prejudiced its
rights; (2) the arbitrator unfairly refused to postpone the hearing or hear evidence to settle
the dispute; and (3) the arbitrator failed to disclose within the time for disclosure a
ground for disqualification of which the arbitrator was then aware.
                In support of the disqualification argument, Odyssey’s counsel declared
that “[f]ollowing the November 1, 2019 disclosure of Judge Andler’s ownership in
JAMS, Claimants, by their legal counsel, timely filed a challenge to the continued service

                                              6
of arbitrator Andler in this matter . . . . [¶] Had this critical disclosure been made at the
initial disclosure, I would have demanded JAMS provide the case load given to JAMS by
Stradling. Seeing the case load Stradling provides to JAMS, (as JAMS disclosed on
November 12, 2019), I would have moved to disqualify Judge Andler not only on the
automatic disqualification permitted by Code Civ. Proc. § 1281.91 but based on the large
firm bias her ownership in JAMS brings to this arbitration.”
              Odyssey then filed a motion to disqualify Judge Andler from further
participation in the case concurrently with its petition to vacate the contractual arbitration
award.
              Stradling and Wesrae opposed the petition and motion, arguing the
arbitrator had sufficiently disclosed her financial interest in the economic success of
JAMS and that Odyssey waived any objection by failing to make a timely inquiry about
the issue. They also claimed Odyssey was belatedly raising the issue solely because it
disagreed with her ruling.
              The trial court denied the petition and denied the motion to disqualify the
arbitrator.

                                       DISCUSSION
         1.   Governing Principles
              Odyssey seeks to vacate a binding arbitration award. Section 1286.2 allows
the courts to vacate such awards only in very limited circumstances because “it is the
general rule that parties to a private arbitration impliedly agree that the arbitrator’s
decision will be both binding and final.” (Moncharsh v. Heily & Blase (1992) 3 Cal.4th
1, 9.)
              As explained by our Supreme Court, “Most legal errors in arbitration are
not reviewable. [Citations.] An award may be vacated only for fraud, corruption,
misconduct, an undisclosed conflict, or similar “circumstances involving serious

                                               7
problems with the award itself, or with the fairness of the arbitration process.” [Citation.]
Otherwise, judicial corrections are limited to remedying ‘obvious and easily correctable
mistake[s]’ ‘technical problem[s],’ and actions in excess of authority so long as the
correction leaves the merits of the decision unaffected. [Citation.] ‘[B]y voluntarily
submitting to arbitration, the parties have agreed to bear the risk [of uncorrectable legal
or factual error] in return for a quick, inexpensive, and conclusive resolution to their
dispute.’” (Heimlich v. Shivji (2019) 7 Cal.5th 350, 367, fn. omitted (Heimlich).)
       2.     Arbitrator’s Failure to Allow Odyssey to Present Its Case Against Stradling
              One of the limited grounds for vacating an arbitration award is that the
arbitrator prevented a party from fairly presenting its case. (§ 1286.2, subd. (a)(5)
(subdivision (a)(5)) [“[t]he rights of the party were substantially prejudiced by . . . the
refusal of the arbitrators to hear evidence material to the controversy”].)
              Odyssey argues the arbitrator in this case improperly refused to hear
material evidence because she erroneously granted a request for dismissal by Stradling,
rather than conditionally staying the proceeding against it pursuant to Favila, as
advocated by Odyssey. Odyssey argues that ruling is reviewable under subdivision (a)(5)
because its effect was to unfairly deny Odyssey the opportunity to present material
evidence it hoped to later develop in support of maintaining its claim for damages against
Stradling.
              We disagree. As explained by our Supreme Court in Heimlich,
subdivision (a)(5) cannot be spun into a justification for reviewing the merits of an
arbitrator’s ruling, even in cases where the ruling had the effect of eliminating a party’s
claim. In Heimlich, the arbitrator concluded—incorrectly as it turns out—that he lacked
jurisdiction to award costs. Although the appellant argued the award could be vacated
under subdivision (a)(5) because the erroneous ruling amounted to an unfair refusal to
consider his evidence of costs, the Supreme Court concluded “[t]his analysis fails.”
(Heimlich, supra, 7 Cal.5th at p. 368.)

                                               8
              As the Supreme Court pointed out, “[t]he provision is not ‘a back door to
Moncharsh through which parties may routinely test the validity of legal theories of
arbitrators.’ [Citation.] Instead, it was designed as a ‘safety valve in private arbitration
that permits a court to intercede when an arbitrator has prevented a party from fairly
presenting its case.’ [Citation.] It comes into play, for example, when an arbitrator,
without justification, permits only one side to present evidence on a disputed material
issue. . . . [Citation.] . . . To conduct an arbitration without abiding by that principle
evinces bias, constituting misconduct. [¶] . . . [¶] In contrast, section 1286.2,
subdivision (a)(5) does not contemplate vacation of an award merely because arbitrators
refuse to consider evidence they find legally irrelevant, even if the irrelevance
determination rests upon an incorrect legal foundation.” (Heimlich, supra, 7 Cal.5th at
pp. 368-369, italics added.)
              The Supreme Court then reached this conclusion: “There is a difference
between a legal conclusion that jurisdiction is lacking and an arbitrary refusal to hear
relevant evidence on an issue properly before the arbitrator. [The appellant’s] complaint
is with the underlying jurisdictional determination. Neither that determination nor the
resulting refusal to consider evidence erroneously deemed irrelevant is misconduct under
the evidentiary prong of section 1286.2, subdivision (a)(5).” (Heimlich, supra, 7 Cal.5th
at p. 369.)
              On a more practical level, the Supreme Court observed that “[t]o allow an
arbitration award to be set aside under section 1286.2, subdivision (a)(5), whenever an
erroneous legal ruling results in the exclusion of evidence deemed important would
undermine a foundation of the Arbitration Act, that an arbitrator’s legal error ordinarily is
not judicially reviewable.” (Heimlich, supra, 7 Cal.5th. at p. 370.)
              This case cannot be materially distinguished from Heimlich. The arbitrator
here considered Odyssey’s opposition to Stradling’s motion, and she explained in some

                                               9
detail why she disagreed with Odyssey’s assertion that Favila justified a stay, rather than
an outright dismissal, of its claim against Stradling.
              Odyssey’s complaint is that the arbitrator “failed to apply Favila properly,”
not that the arbitrator reached her decision in a procedurally unfair manner. It may be
true that the arbitrator erred in her analysis of Favila, but for purposes of our review, it
does not matter. Pursuant to Heimlich, Odyssey’s complaint does not warrant vacation of
the award under subdivision (a)(5).
       3.     Arbitrator’s Failure to Disclose Ownership Interest in JAMS
              Odyssey also argues the arbitrator’s decision must be vacated under
subdivision (a)(6) of section 1286.2 (subdivision (a)(6)) because the arbitrator failed to
disclose that she had an ownership interest in JAMS. Relying on the Ninth Circuit
decision in Monster Energy, Odyssey contends the arbitrator’s ownership interest in the
company would cause “a person aware of the facts to reasonably entertain a doubt that
the proposed neutral arbitrator would be able to be impartial.” (Quoting section 1281.9,
subd. (a).)
              In Monster Energy, the majority considered whether an arbitration award
should be vacated because the arbitrator’s disclosure of “‘an economic interest in the
overall financial success of JAMS’”—the same disclosure made in this case—was an
insufficient disclosure of the arbitrator’s ownership interest in the provider. (Monster
Energy, supra, 940 F.3d. at pp. 1133-1134, 1136.) However, the Monster Energy
majority analyzed that issue under the Federal Arbitration Act (FAA), rather than under
section 1286.2. 3 The majority concluded that an arbitrator’s ownership interest must be

       3
               The Monster Energy majority does acknowledge California’s requirement
that arbitrators disclose “‘any known facts that a reasonable person would consider likely
to affect the impartiality of the arbitrator’” (Monster Energy, supra, 940 F.3d at p. 1137),
as an “example” of the disclosure rules enacted by “states within our circuit” (id. at
p. 1136), but the case does not apply that standard.

                                              10
disclosed in any case where a party has “nontrivial business dealings” with the provider.
(Id. at p. 1136.)
                The majority made clear that its conclusion was based in part on the need to
ensure transparency in cases involving inexperienced litigants. Although it
acknowledged that the participants in the arbitration before it were “sophisticated
companies,” the Monster Energy majority noted that arbitrations often involve “every
day” disputes “including in employment-related disputes, consumer transactions, housing
issues, and beyond [which] means that arbitration will often take place between unequal
parties.” (Monster Energy, supra, 940 F.3d. at p. 1137.) As a result, the majority
reasoned the better rule would be to require more explicit disclosure when an arbitrator
holds an ownership interest in the ADR provider.
                However, as pointed out by another panel of this court in Speier v. The
Advantage Fund, LLC (2021) 63 Cal.App.5th 134 (Speier), the disclosure rules are more
explicit and detailed under California law, and they distinguish between different types of
cases. Thus, “in a consumer arbitration, the arbitrator must disclose ‘[a]ny significant
past, present, or currently expected financial or professional relationship or affiliation
between the administering dispute resolution provider organization and a party or lawyer
in the arbitration.’ In consumer arbitrations, standard 8(c) [of the California Rules of
Court Ethics Standards for Neutral Arbitrators in Contractual Arbitration] further requires
the arbitrator also to provide information regarding ‘[a]ny financial relationship or
affiliation the arbitrator has with the provider organization other than receiving referrals
of cases, including whether the arbitrator has a financial interest in the provider
organization or is an employee of the provider organization.’” (Speier, supra, at p. 149,
fn. omitted.)
                Speier also notes the same rule states “‘[a]n arbitrator is not required to
make the disclosures required by this standard if he or she reasonably believes that the
arbitration is not a consumer arbitration based on reasonable reliance on a consumer

                                               11
party’s representation that the arbitration is not a consumer arbitration.’” (Speier, supra,
63 Cal.App.5th at p. 149.)
               Given California’s more nuanced disclosure rules, we are not persuaded
that Monster Energy’s one-size-fits-all disclosure standard applies here. Instead, we
concur with the analysis in Speier, which addressed the same disqualification argument
made here by Odyssey, in essentially the same factual circumstances. After pointing out
that under California law, an arbitrator in a commercial dispute is not required to disclose
an ownership interest in the ADR provider, Speier considered whether such a disclosure
was “nevertheless required because, under the specific facts and circumstances of this
case, the information could reasonably raise a doubt in a person aware of the facts about
the arbitrator’s impartiality.” (Speier, supra, 63 Cal.App.5th at p. 150; see § 170.1, subd.
(a)(6)(A)(iii).)
               Speier observed that “‘“The ‘reasonable person’ is not someone who is
‘hypersensitive or unduly suspicious,’ but rather is a ‘well-informed, thoughtful
observer’”’” and that “‘[t]he partisan litigant emotionally involved in the controversy
underlying the lawsuit is not the disinterested objective observer whose doubts
concerning the judge’s impartiality provide the governing standard.’” (Speier, supra,
63 Cal.App.5th at p. 147.) The Speier panel then concluded that, because the parties’
attorneys were from law firms that had identical numbers of cases before JAMS in the
five-year period preceding the arbitration, the arbitrator’s ownership interest in JAMS did
not reasonably raise a doubt about the arbitrator’s impartiality. (Id. at p. 150.)
               This case is distinguishable from Speier in that we do not know the number
of matters each side (including their respective counsel) has had before JAMS in the five
years preceding the arbitration. But neither did the arbitrator. JAMS’s disclosure made
clear the total number of cases a particular party, attorney, or law firm brings to JAMS is
not shared with its neutrals. Because the arbitrator had no knowledge of those case

                                             12
numbers, we cannot see how they would be pertinent in assessing her impartiality in a
particular case.4
              Rather than arguing specific numbers, Odyssey relies on the assertion that
Stradling itself is a large law firm, and both Stradling and Wesrae were represented by
other large law firms, while Odyssey is represented by a small law firm.5 According to
Odyssey, these ‘“BigLaw”’ firms would naturally be viewed as “‘“a source or potential
source of . . . additional income, for the arbitrator”’” based upon her ownership interest in
JAMS, and thus a reasonable person would consider that ownership interest to be a
reason to doubt her impartiality.
              What Odyssey’s argument ignores is the fact that prior to this arbitration,
JAMS had disclosed to the parties that “[e]ach JAMS neutral, including the neutral in
this case, has an economic interest in the overall financial success of JAMS” (original
italics). The disclosure did not use the word “ownership,” but it conveyed that the
individual neutrals would somehow share in JAMS’s “financial success”; it thus
suggested that if JAMS did well financially so too would they. Given that disclosure, we
see little difference between an “economic interest” and an “ownership interest,” as either
might raise some concern about an arbitrator’s impartiality.
              The dissenting judge in Monster Energy made a similar point: “The
majority reasons . . . that the Arbitrator’s interest as a JAMS owner should have been

       4
               Monster Energy is distinguishable on this point. In that case, Monster (a
large soft drink company) had inserted a provision in its form franchise agreements that
required any disputes to be arbitrated by JAMS in its Orange County, California,
location. (Monster Energy, supra, 940 F.3d at p. 1136.) That arbitration provision would
suggest to any individual arbitrator handling one of the Monster cases that Monster was
responsible for providing a steady stream of business to JAMS’s Orange County office.
       5
                Wesrae argues that Odyssey’s characterization of the size of these law firms
is not supported by evidence in the record. The point is well-taken, but we will assume,
for purposes of evaluating the argument, that they are among the many large law firms
that utilize the services of ADR providers, including JAMS.

                                             13
specifically disclosed because it ‘greatly exceeds the general economic interest that all
JAMS neutrals naturally have in the organization.’ [Citation.] I do not see how this
information would have made a material difference in Olympic Eagle’s evaluation of the
Arbitrator. Owners of JAMS have an interest in maximizing JAMS’s amount of
business, because they share in JAMS’s profits. Likewise, non-owner arbitrators have an
interest in advancing their professional careers and maintaining their status with JAMS,
which creates similar incentives to decide cases in a way that is acceptable to repeat
player customers—otherwise, JAMS might terminate the non-owner’s JAMS affiliation.
[¶] . . . Because both types of arbitrators would have at least some incentive to keep
repeat customers of JAMS such as Monster happy, it is unclear why knowing the details
of the financial relationship between any specific potential arbitrator and JAMS would
make a material difference . . . . That an arbitrator has an ownership interest in the
arbitration firm, not just a financial interest in that firm more generally, is hardly the sort
of ‘real’ and ‘not trivial’ undisclosed conflict that our court has held requires vacatur.”
(Monster Energy, supra, 940 F.3d at pp. 1140-1141 (dis. opn. of Friedland, J.).)6

       6
                The Monster Energy majority notes that while JAMS’ initial disclosure
revealed that all JAMS neutrals have an “economic interest” in the company’s financial
success, only about one-third of those neutrals actually have an ownership interest in the
company. (Monster Energy, supra, 940 F.3d. at p. 1136, fn. 2.) Based on that difference,
the majority seems to assume, without explanation, that the initial “economic interest”
disclosure made by JAMS refers only to “the general economic interest that all JAMS
neutrals naturally have in the organization,” while the undisclosed ownership interest of
some neutrals “greatly exceeds” that general interest. (Ibid.) We find this reasoning
difficult to follow. There are various ways in which a neutral could directly share in
JAMS’s financial success—e.g., a profit-sharing agreement—that are distinct from an
ownership interest. And a significant profit-sharing agreement could be even more
lucrative than a small ownership interest. We assume JAMS’s initial disclosure was
intended to put the parties on notice that a potential arbitrator had some sort of financial
stake in the success of the company; the disclosure then left it to the parties to decide
whether further inquiry on the subject was required.

                                              14
              We believe the initial JAMS disclosure, which informed the parties that
each of its neutrals has an “economic interest” in the financial success of the entity
overall, was sufficient to trigger an obligation in any party to seek clarification if the
issue raised a concern. (See Dornbirer v. Kaiser Foundation Health Plan, Inc. (2008)
166 Cal.App.4th 831, 841 (Dornbirer) [“although Adelman’s disclosure letter may be
ambiguous with regard to the precise number of cases he had previously arbitrated in
which Kaiser was a party, the disclosure was sufficient to put Dornbirer on notice that
Adelman had served as an arbitrator in a large number of such cases. If Dornbirer was
concerned about the number of times Adelman had served as an arbitrator for Kaiser, she
had the opportunity to ask for clarification”].)
              A party cannot ignore an issue that is disclosed by the arbitrator before the
arbitration, and later seek to overturn the result based on that same issue. As stated in
Dornbirer, a party’s remedy when an arbitrator has failed to make required disclosures
under section 1281.9, or has made incomplete disclosures, is to seek disqualification
under section 1281.91, subdivision (a), before the arbitration takes place. 7 (Dornbirer,
supra, 166 Cal.App.4th at p. 846.) A party’s failure to do so results in a forfeiture of the
right to disqualify the arbitrator.8 (§ 1281.91, subd. (c).)
              Odyssey argues that it did in fact challenge Judge Andler as soon as it could
after JAMS provided its “ownership interest” disclosure in November 2019, and that this

       7
               Section 1281.91, subdivision (a), states: “A proposed neutral arbitrator
shall be disqualified if he or she fails to comply with Section 1281.9 and any party
entitled to receive the disclosure serves a notice of disqualification within 15 calendar
days after the proposed nominee or appointee fails to comply with Section 1281.9.”
       8
               Section 1281.91, subdivision (c), states in pertinent part: “The right of a
party to disqualify a proposed neutral arbitrator pursuant to this section shall be waived if
the party fails to serve the notice pursuant to the times set forth in this section, unless the
proposed nominee or appointee makes a material omission or material misrepresentation
in his or her disclosure.”

                                              15
challenge satisfied the requirements of section 1281.91. We are not persuaded. Odyssey
was on notice well before the arbitration commenced of Judge Andler’s “financial
interest” in JAMS. As discussed in Dornbirer, once Odyssey became aware of the
arbitrator’s economic interest in JAMS, it had an obligation to either make further inquiry
about the subject or proceed with the arbitration and accept its outcome.

                                     DISPOSITION
              The order is affirmed. Stradling is entitled to its costs on appeal.

                                                  GOETHALS, J.

WE CONCUR:

O’LEARY, P. J.

MARKS, J.*

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

                                             16