Court Opinion

ID: 8444722
Source: CourtListenerOpinion
Date Created: 2022-11-04 21:02:25.965096+00
Date Added: 2024-06-11T16:48:53.200712
License: Public Domain

Filed 11/4/22
                      CERTIFIED FOR PUBLICATION

       IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                        FIRST APPELLATE DISTRICT

                                DIVISION FIVE

 ELIZABETH TASKA,
         Plaintiff and Respondent,            A164130
 v.
 THE REALREAL, INC.,                          (City & County of San Francisco
         Defendant and Appellant.             Super. Ct. No. CPF20517255)

       This is an appeal from judgment in a wrongful termination and
retaliation lawsuit. An arbitrator initially resolved the dispute in favor of
defendant The RealReal, Inc. (TRR), and against its former employee,
plaintiff Elizabeth Taska, but denied the parties’ respective requests for
attorney fees and costs (April 3, 2020 Award). However, the arbitrator then
issued a revised award that added an award of approximately $73,000 in
attorney fees and costs to TRR (June 29, 2020 Corrected Final Award).
Taska petitioned the trial court only to vacate the newly rendered attorney
fees and costs award. TRR, in turn, petitioned the court to confirm the
June 29, 2020 Corrected Final Award in full.
       The trial court sided with Taska and struck the award of attorney fees
and costs, reasoning the arbitrator exceeded her authority by making
substantive changes to the April 3, 2020 Award. The court otherwise
confirmed the arbitrator’s award and entered judgment in favor of TRR.

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      TRR contends the court’s order to strike the award of attorney fees and
costs was legally and factually wrong. We disagree and affirm.
             FACTUAL AND PROCEDURAL BACKGROUND
      TRR is an online consignment company that sells luxury fashion goods,
including clothing, fine jewelry, watches, art and other home accessory items,
that have been consigned to it. Taska was hired as TRR’s senior vice
president of human resources in 2017. Taska worked directly under TRR’s
chief executive officer (CEO), Julie Wainwright. Wainwright terminated
Taska in August 2018.
      Taska alleged her termination was based on two unlawful reasons:
(1) she protested against Wainwright’s discriminatory comments and (2) she
reported workplace-related legal violations. Taska’s claims were referred to
an arbitrator under an arbitration agreement executed by the parties that
required Taska to arbitrate disputes relating to the terms of her employment
or termination.
      A 15-day arbitration hearing began January 27, 2020. At the close of
evidence, TRR unsuccessfully moved for a directed verdict and for attorney
fees and costs, arguing that Taska’s case was vexatious and without merit.
      After the hearing ended, both parties filed posthearing briefs. In her
brief, Taska stated her intent to file a petition for attorney fees and costs
under Government Code section 12965, subdivision (b), “upon a liability
finding.” TRR also sought fees and costs in its brief, arguing Taska’s lawsuit
should be deemed unreasonable, frivolous, meritless or vexatious given the
extent of her “fabricated evidence and false testimony . . . .” In doing so, TRR
provided a legal argument to support its fees and costs request but did not
ask for any specific amount or offer supporting evidence.

                                        2
      After considering the posthearing briefing, the arbitrator issued a 12-
page decision entitled “Award” on April 3, 2020. (All capitalization and
boldface omitted.) She determined that (1) Taska failed to meet her burden
of proof as to her unlawful termination and retaliation claims and, as such,
was not entitled to an award of attorney fees or costs; and (2) TRR was not
entitled to attorney fees and costs under Williams v. Chino Valley
Independent Fire Dist. (2015) 61 Cal.4th 97, 115 (Williams) because Taska’s
claims were not frivolous or meritless. The arbitrator thus dismissed Taska’s
claims against TRR.
      On April 15, 2018, TRR filed a motion for a partial attorney fees and
costs award, attaching a memorandum of legal fees and costs and supporting
evidence. In doing so, TRR acknowledged its “preliminary request” for
attorney fees and costs in its posthearing brief, which the arbitrator denied.
TRR then explained that the present, stand-alone motion addressed facts
established by the arbitrator that were not available at the time of
posthearing briefing. Taska objected on the grounds that the arbitrator
lacked authority to substantively change the April 3, 2020 Award.
      On June 11, 2020, the arbitrator issued a new written decision, entitled
“Final Award.” (All capitalization and boldface omitted.) This time, the
arbitrator found TRR was entitled to recover a portion of its attorney fees and
costs because “the repeated and substantial failure of [Taska] to testify
truthfully” rendered the conduct of the arbitration “unreasonable, meritless,
frivolous and vexatious . . . .” Accordingly, the arbitrator awarded TRR a
total of $53,705.43.
      The arbitrator then issued the June 29, 2020 Corrected Final Award
addressing a calculation error relating to reporter’s transcript costs. Due to

                                       3
this error, the arbitrator increased the award of attorney fees and costs from
$53,705.43 to $73,756.43.
      On October 6, 2020, Taska petitioned the court to vacate a portion of
the June 29, 2020 Corrected Final Award, arguing the arbitrator exceeded
her powers by modifying the April 3, 2020 Award, in which she denied TRR’s
request for attorney fees and costs. TRR opposed this petition and filed its
own petition to confirm the June 29, 2020 Corrected Final Award, including
the attorney fees and costs award. The court partially granted TRR’s petition
by confirming the liability determination. However, the court agreed with
Taska that the arbitrator exceeded her authority by amending the April 3,
2020 Award to add a new award of fees and costs. The court then entered
judgment in favor of TRR and against Taska, with each side to bear its own
fees and costs.
      On November 15, 2021, TRR timely appealed.
                                DISCUSSION
      TRR contends no basis exists for the trial court’s decision to strike the
award of $73,756.43 in attorney fees and costs in the June 29, 2020 Corrected
Final Award. Taska responds that the arbitrator lacked authority under
Code of Civil Procedure1 section 1283.4 to issue the June 29, 2020 Corrected
Final Award because her initial April 3, 2020 Award was the final arbitration
award and after its issuance, she lost jurisdiction. The following rules
govern.
      “California has a long-established and well-settled policy favoring
arbitration as a speedy and inexpensive means of settling disputes.
[Citation.] This policy is reflected in the comprehensive statutory scheme set

      1Unless otherwise specified, all statutory citations herein are to the
Code of Civil Procedure.

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out in the California Arbitration Act. (§ 1280 et seq.) The purpose of the act
is to promote contractual arbitration, in accordance with this policy, as a
more expeditious and less expensive means of resolving disputes than by
litigation in court. [Citation.] ‘Typically, those who enter into arbitration
agreements expect that their dispute will be resolved without necessity for
any contact with the courts.’ [Citation.] [¶] Thus, it is clearly the expectation
of the parties to an arbitration agreement that the arbitrator’s decision will
be both binding and final.” (Hightower v. Superior Court (2001) 86
Cal.App.4th 1415, 1431–1432 (Hightower).)
        The provisions of the California Arbitration Act (CAA) (§ 1280 et seq.)
“set forth procedures for the enforcement of agreements to arbitrate (id.,
§§ 1281.2–1281.95), establish rules for the conduct of arbitration proceedings
except as the parties otherwise agree (id., §§ 1282–1284.2), describe the
circumstances in which arbitrators’ awards may be judicially vacated,
corrected, confirmed, and enforced (id., §§ 1285–1288.8), and specify where,
when, and how court proceedings relating to arbitration matters shall occur
(id., §§ 1290–1294.2).” (Vandenberg v. Superior Court (1999) 21 Cal.4th 815,
830.)
        Relevant here, an arbitration award “shall be in writing and signed by
the arbitrators concurring therein. It shall include a determination of all the
questions submitted to the arbitrators the decision of which is necessary in
order to determine the controversy.” (§ 1283.4.) An arbitrator, “upon written
application of a party to the arbitration, may correct the award upon any of
the grounds set forth in subdivisions (a) and (c) of Section 1286.6 not later
than 30 days after service of a signed copy of the award on the applicant.”
(§ 1284.) Thus, “an arbitrator’s ‘power . . . to correct an award after it has
been issued to the parties is limited to evident miscalculations of figures or

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descriptions of persons, things or property (§ 1286.6, subd. (a)) and
nonsubstantive matters of form that do not affect the merits of the
controversy. (§ 1286.6, subd. (c).)’ ” (Landis v. Pinkertons, Inc. (2004) 122
Cal.App.4th 985, 992 (Landis).)2
      Once the 30-day period for correction under section 1284 runs, the
award is final and the arbitrator’s jurisdiction ends. (Lonky v. Patel (2020) 51
Cal.App.5th 831, 843 (Lonky) [“issuance of an ‘award’ is what passes the
torch of jurisdiction from the arbitrator to the trial court”].) At this point,
any party “may petition the court to confirm, correct or vacate the
[arbitration] award.” (§ 1285.) The trial court then assumes jurisdiction to
act. (§ 1286.) If, however, an arbitrator’s ruling does not qualify as an
“award” under section 1283.4, the court does not acquire jurisdiction to
confirm or vacate it. (Kaiser Foundation Health Plan, Inc. v. Superior Court
(2017) 13 Cal.App.5th 1125, 1143.)
      To “enforce the finality of arbitration, the CAA minimizes judicial
intervention. [Citation.] Once a petition to confirm an award is filed, the
superior court has only four courses of conduct: to confirm the award, to
correct and confirm it, to vacate it, or to dismiss the petition. [Citation.] The
trial court is empowered to correct or vacate the award, or dismiss the
petition, upon the grounds set out in the pertinent statutes; ‘[o]therwise
courts may not interfere with arbitration awards.’ [Citations.]” (Cooper v.
Lavely & Singer Professional Corp. (2014) 230 Cal.App.4th 1, 11 (Cooper).)

      2 An arbitrator may also “issue an amended or supplemental award if
he or she inadvertently omitted a ruling on a submitted issue in the original
award.” (Landis, supra, 122 Cal.App.4th at p. 992.) There is no contention
here that the arbitrator omitted the attorney fees and costs issue in her
original April 3, 2020 Award.

                                         6
Relevant here, an “award” shall be vacated if the “arbitrators exceeded their
powers.” (§ 1286.2, subd. (a)(4).)
      On appeal, we review de novo a trial court’s decision on undisputed
facts to confirm, correct or vacate an arbitration award.3 (Branches
Neighborhood Corp. v. CalAtlantic Group, Inc. (2018) 26 Cal.App.5th 743,
751; Rivera v. Shivers (2020) 54 Cal.App.5th 82, 89.)
      Here, the trial court partially granted TRR’s petition to confirm yet
struck TRR’s award of attorney fees and costs. The court concluded that
section 1284 prohibited a substantive amendment to the April 3, 2020 Award
to include a new award of attorney fees and costs, citing Cooper, supra, 230
Cal.App.4th at page 14.
      In Cooper, the arbitrator issued a “final award” that denied the
prevailing party’s request for attorney fees and costs. The prevailing party
sought reconsideration under section 1008, after which the arbitrator
changed course and issued a new final award that included a fees award.
(Cooper, supra, 230 Cal.App.4th at pp. 8–10.) On appeal, our colleagues
reversed, holding the arbitrator lacked authority to modify the final award.
(Id. at p. 10.) Our colleagues reasoned, “Nothing in the JAMS Rules or the
record suggests that the final award was not final for purposes of correction
under section 1284,” noting that, inter alia, the final award was “in writing
and was served on the parties; it resolved all the issues reserved in the
interim award, including the questions related to attorney fees and costs; and
it included determinations on all the issues submitted in the arbitration.”
(Id. at pp. 18–19; cf. Elliott & Ten Eyck Partnership v. City of Long Beach

      3While we generally review a trial court’s factual findings for
substantial evidence (Cooper, supra, 230 Cal.App.4th at pp. 11–12), here the
court made none.

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(1997) 57 Cal.App.4th 495, 502–503 (Elliott) [“ ‘if it appears upon the face of
the award that [the arbitrators] have not disposed of the whole matter but
have left a part open: or if the terms of the award be such as to render a
further inquiry necessary to ascertain a sum of money to be paid, or some act
to be done, it is void and will be set aside’ ”].)
      TRR attempts to distinguish Cooper, claiming the April 3, 2020 Award
was not “final” because the issue of attorney fees and costs “did not become
ripe until [the arbitrator] first determined the question of liability . . . .”
(Italics omitted.) TRR points out Taska, in her posthearing brief, stated that
she intended to file a separate fees and costs motion if she prevailed on the
merits. And while TRR admittedly requested fees and costs in its own
posthearing brief, TRR argues that it was unable to support its request with
citations to any liability findings because the arbitrator had not yet ruled.
TRR thus insists its posthearing request was merely a “ ‘placeholder’ ” in
anticipation of a more formal fees and costs request after the arbitrator ruled
on liability.
      Below, the arbitrator ultimately agreed with TRR’s “ ‘placeholder’ ”
argument. TRR filed a motion for partial fees and costs after the arbitrator
issued her April 3, 2020 Award, which Taska opposed on the grounds that the
arbitrator no longer had jurisdiction. Granting TRR’s motion, the arbitrator
ruled that the April 3, 2020 Award was final only as to liability, as evidence
relating to TRR’s fees and costs was not yet before her. TRR argues this
ruling is entitled to “substantial deference.” We disagree.
      Specifically, we agree with TRR that an arbitrator’s determinations,
including those related to whether a particular question is within the scope of
his or her contractual authority, are generally entitled to substantial
deference. (Advanced Micro Devices, Inc. v. Intel Corp. (1994) 9 Cal.4th 362,

                                          8
372–373.) However, as stated, an arbitrator’s determinations are subject to
correction or vacation if a court finds the arbitrator exceeded his or her
authority. (Id. at p. 372, citing § 1286.2.) The issue here is whether the
arbitrator had authority after she issued the April 3, 2020 Award to change
course and issue the June 29, 2020 Corrected Final Award that added the
award of attorney fees and costs. We conclude, under sections 1284 and
1286.6, that the arbitrator did not.
      “Section 1284 codifies the rule against changes in the award. Some
amelioration from the stringency of the rule is provided in a referenced
provision of section 1286.6, which allows correction of an award, but in very
narrow terms. A court may correct and confirm an award as corrected for
evident miscalculation of figures or evident mistake in a description, where
the award exceeds the powers of the arbitrator (if the correction does not
affect the merits of the decision on the controversy submitted), and for
nonsubstantive matters of form.” (Elliott, supra, 57 Cal.App.4th at pp. 501–
502, fns. omitted.) However, “ ‘apart from those statutory exceptions, an
arbitrator may not correct an award that he or she intended on the ground
that he or she later determined a factual or legal error had been made in the
award.’ (Italics omitted.) The arbitrator may not reconsider the merits of the
original award and make a new award under the guise of correction of the
award. [Citation.]” (Landis, supra, 122 Cal.App.4th at p. 992.)
      As TRR observes, nothing prevents an arbitrator from making a final
disposition of a submitted matter in more than one award. However, it
remains true under the statutory rules described ante that once the
arbitrator “has determined all issues that are necessary to the resolution of
the essential dispute,” the arbitrator’s ruling constitutes a final award under
section 1283.4. (Hightower, supra, 57 Cal.App.4th at p. 1439.) In other

                                        9
words, “whether any particular ruling constitutes an ‘award’ turns on
whether that ruling satisfies the statutory definition of an ‘award.’ And in
the context of a series of rulings, this means that a particular ruling is an
‘award’ only if that ruling (1) ‘determine[s] all issues that are necessary to the
resolution’ of ‘ “the controversy” ’ being subjected to arbitration, and
(2) leaves unresolved only those ‘issues’ that are ‘potential,’ ‘conditional’ or
that otherwise ‘could not have been determined’ at the time of that ruling.”
(Lonky, supra, 51 Cal.App.5th at p. 845.)
      Here, the April 3, 2020 Award met all of the statutory requirements to
be deemed a final award. With respect to attorney fees and costs, this award
stated: “[TRR] seeks its fees and costs pursuant to Williams v. Chino Valley
Independent Fire District (2015) 61 Cal.4th 97, 115. In order to enter such an
order, the Arbitrator would need to find that Claimant’s claims were
unreasonable, frivolous, meritless and/or vexatious. Christiansburg Garment
Co. v. EEOC (1978) 434 U.S. 412, 420–424. Such was not the case here.
Although Taska did not carry her burdens of proof, her claims were not
frivolous or meritless. The request for fees and costs is denied.” (Italics
added.) Thus, as this language makes clear, the April 3, 2020 Award was in
writing and was served on the parties; it resolved all the issues reserved in
the interim award, including the questions related to attorney fees and costs;
and it included determinations on all the issues submitted in the arbitration.
(Cooper, supra, 230 Cal.App.4th at p. 19; §§ 1283.4, 1283.6.) Despite TRR’s
claim that its attorney fees and costs request in posthearing briefing was
merely intended to preserve the issue for later, the arbitrator, in denying
TRR’s request in the April 3, 2020 Award, made a final determination on the
issue, as submitted to her, that was predicated on substantive
determinations of law and fact. The April 3, 2020 Award was therefore

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subject to section 1284, which precluded any subsequent change or correction,
whether her legal determinations were correct or not. (Cooper, at pp. 19, 21;
cf. Lonky, supra, 51 Cal.App.5th at p. 848 [“the Second Interim Ruling is
preliminary to the full resolution of the issues to be decided because it had
yet to fix the amount of the attorney fees and costs to which it had already
determined plaintiffs were entitled”].)
      Finally, TRR argues the April 3, 2020 Award was not labeled a “ ‘Final
Award.’ ” Nor was it labeled an interim award. The label was therefore
ambiguous. And, moreover, even if it were not, “the arbitrator’s choice of
label is not dispositive.” (Lonky, supra, 51 Cal.App.5th at p. 848.) Rather, we
look to the actual substance of the award to determine whether, under
section 1283.4, it meets the requirements of a final award. (Lonky, at p. 848.)
      Accordingly, for the reasons stated, we agree with the trial court that
the arbitrator had no authority to amend the April 3, 2020 Award to add an
award of attorney fees and costs to TRR. The judgment therefore stands.
                               DISPOSITION
      The judgment is affirmed.

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                                            _________________________
                                            Jackson, P. J.

WE CONCUR:

_________________________
Burns, J.

_________________________
Wiseman, J.*

A164130/Taska v. The RealReal, Inc.

       *Retired Associate Justice of the Court of Appeal, Fifth Appellate
District, assigned by the Chief Justice pursuant to article VI, section 6 of the
California Constitution.

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A164130/Taska v. The RealReal, Inc.

Trial Court:      Superior Court of the City and County of San Francisco

Trial Judge:      Ethan P. Schulman

Counsel:          Rudy, Exelrod, Zieff & Lowe, David A. Lowe and Meghan
                       F. Loisel, for Plaintiff and Respondent.

                  Faegre Drinker Biddle & Reath, Kristopher S. Davis and
                       Matthew J. Adler for Defendant and Appellant.

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