Court Opinion

ID: 9751341
Source: CourtListenerOpinion
Date Created: 2023-08-28 16:21:21.98364+00
Date Added: 2024-06-11T07:26:42.901823
License: Public Domain

NICHOLSON, J.
I respectfully dissent from the decision of the majority because we lack jurisdiction to review the merits of this case. I disagree with the majority that, despite the parties’ obvious failure to obtain an appealable judgment, the appeal should be rescued.
Embroiled in a dispute concerning the formation of a new city and the consequential sharing of revenue, the plaintiffs (City of Shasta Lake and the Shasta Lake Redevelopment Agency) and defendants (the County of Shasta and the Shasta County Redevelopment Agency) agreed to binding arbitration. When arbitration was completed, the arbitrator’s decision was filed in the trial court. The defendants attempt to appeal from that nonappealable decision. Since we have no jurisdiction to hear the matter, we should dismiss the appeal.
The parties entered into a stipulation for binding arbitration, using retired Judge James E. Kleaver as the arbitrator, and obtained the signature of Judge Richard A. McEachen ordering the case to “arbitration pursuant to the stipulation!].” The stipulation stated: “[T]he decision of Judge Kleaver will be binding on all parties and filed with the Superior Court and will be treated as a judgment and will have the same force and effect as a Superior Court judgment and will be appealable as such.”
During arbitration, the parties filed case management statements apprising the trial court of the status of the case. When arbitration was completed, the *20plaintiffs filed a document entitled “Judgment Following Arbitration.” This document was signed by Judge Kleaver. The defendants filed a notice of appeal, specifying the document filed over Judge Kleaver’s signature as the judgment from which the appeal was taken.
The right to appeal is purely statutory. (Jackson v. Jackson (1945) 71 Cal.App.2d 837, 839 [163 P.2d 780].) The parties cannot create appellate jurisdiction by stipulation where none exists statutorily. (See Four Point Entertainment, Inc. v. New World Entertainment, Ltd. (1997) 60 Cal.App.4th 79, 82 [70 Cal.Rptr.2d 82].)
“There is no such creature as ‘binding arbitration with a right to appeal.’ Arbitrations provide an alternative method of dispute resolution to legal proceedings. They follow different rules and serve different ends. They are as distinct in their elementary structure as dirt is to water. Mixing the two only produces mud—not the sort of stuff we willingly tread in.” (National Union Fire Ins. Co. v. Nationwide Ins. Co. (1999) 69 Cal.App.4th 709, 715 [82 Cal.Rptr.2d 16], italics in original (hereafter National Union).)
In their supplemental briefing, the parties assert the document filed over the signature of Judge Kleaver is an appealable judgment. They do this, however, only by characterizing the stipulation to arbitrate as something it is not.
A similar situation arose recently in the Fourth District. (Old Republic Ins. Co. v. St. Paul Fire & Marine Ins. Co. (1996) 45 Cal.App.4th 631 [53 Cal.Rptr.2d 50] (hereafter Old Republic).) The Old Republic court introduced the appellate jurisdiction issue as follows:
“Several alternative dispute resolution procedures result in decisions by quasi-judicial officers which are subject to varying scopes of judicial and appellate review. Depending upon the nature of the procedure adopted, these range from no judicial review to plenary review.
“Common alternative dispute resolution procedures are judicial and contractual arbitration and references to a special master. Judicial arbitrations are governed by Code of Civil Procedure section 1141.10 et seq. [this and other unspecified code references are to the Code of Civil Procedure] and California Rules of Court, rule 1600 et seq.; contractual arbitrations by section 1280 et seq.; and references by section 638 et seq. Although not usually categorized as alternative dispute resolution, we need also consider whether [Judge Kleaver] acted as a ‘temporary judge.’ Such judicial officers are authorized to perform judicial functions pursuant to California Constitution, article VI, section 21 and their powers are governed by California Rules *21of Court, rule 244. Such, a temporary judge has the power to render a judgment which is appealable in the same manner as one rendered by a constitutional judge. [Citation.]
“After a judicial arbitration, a dissatisfied litigant is entitled to a trial de novo. (§ 1141.20, subd. (b).) Following such a trial on the merits, parties have the same rights of appeal as in all other cases tried in the superior court. However, absent a timely request for a trial de novo, the arbitration award constitutes a final, nonappealable judgment. (§ 1141.20, subd. (a).)
“The scope of judicial review of the decisions of contractual arbitrators is delimited in Moncharsh v. Heily & Blase [(1992)] 3 Cal.4th 1 [10 Cal.Rptr.2d 183, 832 P.2d 899]: “The merits of the controversy between the parties are not subject to judicial review.” ’ (Id. at p. 11, quoting O'Malley v. Petroleum Maintenance Co. (1957) 48 Cal.2d 107, 111 [308 P.2d 9].) Since one of the reasons for this rule is that ‘it vindicates the intentions of the parties’ (Moncharsh v. Heily & Blase, supra, 3 Cal.4th at p. 11), the issue arises whether a contrary intention of the parties, as expressed in the stipulation herein, overrides the general rule. We consider this issue below.
“Review of the decision of a referee or special master [following a reference] is governed by section 644. The decision of the referee, unless objected to under section 645, is treated as a decision of the court, and ‘judgment may be entered thereon in the same manner as if the action had been tried by the court.’ (§ 644.) Such a judgment is subject to appeal in the same manner as any other judgment.
“We therefore need to determine whether the stipulation constituted an agreement for the appointment of a temporary judge, for judicial or contractual arbitration, or for reference by a special master.” (Old Republic, supra, 45 Cal.App.4th at pp. 635-636, fn. omitted.)
In Old Republic, the parties filed a document entitled, “Stipulation For Binding Arbitration Before Special Master.” However, the terms “arbitration” and “special master” were mutually inconsistent. Accordingly, the trial court inspected the remainder of the document to determine what type of dispute resolution resulted from the stipulation. (45 Cal.App.4th at p. 636.) Viewing the stipulation as a whole, the Old Republic court determined that the parties intended that the dispute be resolved by arbitration. (Id. at p. 638.)
The stipulation presented in this proceeding is different from the stipulation in Old Republic in several ways. The title unambiguously states the *22dispute is to be resolved in binding arbitration. There are only two types of arbitration: contractual and judicial. If it was contractual arbitration, we cannot review directly the arbitrator’s decision. We would review only the trial court’s decision concerning the award (for example, confirming, modifying, or vacating the award). (Code Civ. Proc., § 1286 et seq.; further unspecified code references are also to the Code of Civil Procedure.) If it was judicial arbitration, no review is available. The defendants had to request a trial de novo to preserve review rights. (§ 1141.20, subd. (a).)
The majority concedes “[a]n arbitration award is not a judgment; one must petition the court to confirm the award in order to obtain a judgment. (See Code Civ. Proc., §§ 1285, 1287.4.)” (Maj. opn., ante, at p. 10.) I agree. Such an award is never a judgment until it is reduced to a judgment following the statutory procedure summarized above. (See Rubin v. Western Mutual Ins. Co. (1999) 71 Cal.App.4th 1539, 1545 [84 Cal.Rptr.2d 648].) The statutory procedure was not utilized here. Thus, there is no judgment.
The only statement in the parties’ stipulation calling into doubt their intention to arbitrate this case is found in the statement that the decision of the arbitrator would be “filed with the Superior Court and will be treated as a judgment and will have the same force and effect as a Superior Court judgment and will be appealable as such.” In all other respects, the stipulation is a common agreement to arbitrate.
Faced with a similar situation, the parties in another case recognized the ineffectiveness of their agreement that an arbitration award would be appeal-able. (National Union, supra, 69 Cal.App.4th at pp. 715-716.) Instead of urging the appellate court to rescue the appeal, the parties acted in the trial court to modify the agreement nunc pro tunc to be a reference agreement. The trial court entered the agreement as an order, treated the arbitration as a reference proceeding, and entered judgment on the arbitration order as if it had been a statement of decision from a referee. Even though the parties and trial court went to such effort, the Court of Appeal was still hesitant to acknowledge appellate jurisdiction. However, since the arbitration had effectively become a reference proceeding, the court decided the appeal on the merits. (Ibid.) Blatantly missing in the proceeding at bar is any effort to transform the arbitration into anything other than an arbitration. Instead, the parties ask us to extend our jurisdiction to hear the matter.
The parties make three arguments in favor of appealability. They argue: (1) the arbitration agreement conferred appellate jurisdiction on this court, (2) the arbitration agreement was, in reality, a reference under section 638, and (3) the arbitration agreement was, in reality, an appointment of a *23temporary judge. None of these arguments is supported by the facts of this case. Instead, it is clear the parties entered into an agreement for binding arbitration, as the agreement states.
First, the parties claim that, since the arbitration agreement provides for a final judgment and appeal from the final judgment, this court has appellate jurisdiction. As stated above, however, the parties cannot create appellate jurisdiction by stipulation where none exists statutorily. (See Four Point Entertainment, Inc. v. New World Entertainment, Ltd., supra, 60 Cal.App.4th at p. 82.) The only ways to obtain review of an arbitrator’s decision are after vacation, modification, or confirmation by the trial court (in the case of contractual arbitration) or after a trial de novo (in the case of judicial arbitration).
The parties argue that the arbitration agreement resulted in a reference proceeding under section 638. Under that section, “[a] reference may be ordered upon the agreement of the parties filed with the clerk, or judge, or entered in the minutes or in the docket, or upon the motion of a party to a written contract or lease which provides that any controversy arising therefrom shall be heard by a reference if the court finds a reference agreement exists between the parties . . . .” (Ibid.) At oral argument, the appellants indicated this was their preferred method for rescuing the appeal.
There is no mention of a reference proceeding anywhere in the parties’ stipulation, in the other filings, or in the interactions between the court and the parties. As noted, it was agreed that the dispute was to be resolved through arbitration.
The parties argue that finding this was an arbitration agreement exalts form over substance. The remainder of the record, however, belies this argument.
The trial court did not appoint Judge Kleaver as a referee. (§ 640.) While in the arbitration agreement, the parties “agree [d] to use” Judge Kleaver, the trial court did not enter an order appointing Judge Kleaver. This is consistent with an arbitration agreement because in arbitration it is unnecessary for the court to appoint an arbitrator when one is chosen by the parties.
Furthermore, the trial court did not enter judgment on the arbitrator’s decision. “The decision of the referee or commissioner upon the whole issue must stand as the decision of the court, and upon the filing of the statement of decision with the clerk of the court, or with the judge where there is no clerk, judgment may be entered thereon in the same manner as if the action had been tried by the court.” (§ 644.)
*24Here, the decision of the arbitrator was filed under the title, “Judgment Following Arbitration,” over Judge Kleaver’s signature. Even if this was a reference proceeding, however, Judge Kleaver did not have authority to enter a judgment. If this had been a reference proceeding, his filing would have been, at most, a statement of decision, upon which the trial court could have entered judgment. (See Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 1999) ¶ 1:488, p. 1-117 [“The court, rather than the referee, renders judgment.”]; see also Modica v. Merin (1991) 234 Cal.App.3d 1072 [285 Cal.Rptr. 673] [decision of court not appealable if no final judgment entered].) No such judgment was entered. This was. not a reference and no attempt was made to follow statutory reference procedure.
The parties assert we must look to the intent of the parties. “The stipulation must be ' “interpreted as to give effect to the mutual intention of the parties as it existed at the time of contracting, so far as the same is ascertainable and lawful.” . . . The intention of the parties must be first determined from the.language of the contract itself. . . . However, where the language of the contract is ambiguous, it is the duty of the court to resolve the ambiguity by taking into account all the facts, circumstances and conditions surrounding the execution of the contract . . . (Frankel v. Board of Dental Examiners (1996) 46 Cal.App.4th 534, 544 [54 Cal.Rptr.2d 128].)
Here, the agreement exudes an intent to enter into an arbitration agreement, not a reference agreement. There were and continue to be on both sides experienced lawyers. I necessarily assume they knew the law and pertinent terms of art. I also assume they meant what they said. If they had intended this document to be a reference or, as discussed below, an appointment of a temporary judge, they would have said so. Now that they know their expression of their desires has missed the legal mark, they assert this court should stretch the law to suit their interests. This we may not do.
Throughout the agreement, the parties refer to “binding arbitration” and the “arbitrator.” They agree to an Informal procedure with respect to documentary evidence and subpoena of witnesses. Despite the well-known differences between arbitration, reference, and other types of proceedings, they make no attempt to identify this proceeding as anything other than an arbitration proceeding. While the parties’ stated intent to have the arbitrator’s decision “be treated as a judgment” is inconsistent with an arbitration agreement, it is also inconsistent with a reference agreement, because in a reference proceeding the referee’s decision serves as the decision of the *25court, not the judgment. It is apparent that the parties would not have us consider their intent as of the time they entered into the agreement. Instead, they want us to find the intent they wish now they had then. By all indications of the parties’ intent at the time they entered into the arbitration agreement, they did not intend a reference proceeding.
The parties urge us to find Judge Kleaver was appointed a temporary judge in this proceeding and therefore to find his decision appealable. (Cal. Const., art. VI, § 21; Cal. Rules of Court, rule 244.) This is the fiction the majority adopts to reach the merits. The record, however, does not reflect an intent to agree to a hearing before a temporary judge. Nor does it show intent or action on the part of the trial court to appoint Judge Kleaver as a temporary judge in this action.
To appoint a temporary judge the Constitution requires the judge to take an oath of office (Cal. Const., art. VI, § 21) and the rules of court require the oath of office to be attached to the stipulation and order designating the temporary judge (Cal. Rules of Court, rule 244). The majority notes Judge Kleaver had previously taken the oath of office, because he was a judge. (Maj. opn., ante, at p. 11, fn. 6.) That does little to show the parties and the court intended to appoint a temporary judge. It is nothing more than a coincidence that Judge Kleaver was a judge when the parties agreed to arbitrate their dispute with him acting as arbitrator.
The parties, and apparently the majority, assert the failure to conform to all of the technical requirements does not defeat the appointment of a temporary judge. (See In re Richard S. (1991) 54 Cal.3d 857, 865 [2 Cal.Rptr.2d 2, 819 P.2d 843].) They miss the point. The total lack of intent to appoint a temporary judge in this action defeats their argument, not a technical failure to conform to all of the requirements. Judge Kleaver was not a temporary judge in this .matter. It is nothing but a fiction the parties (and the majority) seek to impose in retrospect. Instead, it is clear Judge Kleaver knew he was acting as an arbitrator. He signed the judgment following arbitration as “arbitrator.”
In effect, the parties argue we should ignore the fact they entered into an arbitration agreement and thereby subvert the statutory procedure for obtaining review of an arbitrator’s decision. The majority capitulates. There is inherent danger in this strategy. “ ‘[Arbitrators, unless specifically required to act in conformity with rules of law, may base their decision upon broad principles of justice and equity, and in doing so may expressly or impliedly reject a claim that a party might successfully have asserted in a judicial *26action.’ . . .” (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 10-11 [10 Cal.Rptr.2d 183, 832 P.2d 899], citation omitted.) While the parties agreed concerning what issues the arbitrator would decide and agreed to have the arbitration proceed under the rules of evidence, they did not prohibit the arbitrator from applying “principles of justice and equity,” possibly inconsistent with positions “a party might successfully have asserted in a judicial action.”
The effect of the parties’ strategy is to allow Judge Kleaver, as an arbitrator, to base his decision upon broad principles of justice and equity in ways perhaps inconsistent with strictly legal principles, while preserving the possibility of obtaining judicial review applying strictly legal principles if the result obtained is undesirable. This strategy is contrary to existing, well-established law. You cannot tell Judge Kleaver he is an arbitrator and then treat him on review as if he were a judge in this proceeding. Accordingly, we cannot revise the arbitration agreement to be a reference agreement or the appointment of a temporary judge. As a result, Judge Kleaver’s decision was an arbitrator’s decision and is not subject to direct review on appeal without intervening proceedings in the trial court. (See § 1280 et seq.)
Finally, it is bad policy and contrary to this court’s practice to rescue an appeal when the parties have failed to obtain an appealable judgment. Tolerance for sloppy and ineffectual lawyering breeds further carelessness and incompetence. “[T]he proper role of an appellate court is to adhere to and apply Code of Civil Procedure section 904.1, not to devise and employ strategies for its wholesale avoidance. As a practical matter, experience teaches that far from solving the problem, the latter approach only exacerbates it.” (Modica v. Merin, supra, 234 Cal.App.3d at p. 1075.)
As the court in National Union warned: “[W]e spend too much time trying to make sense out of arbitration agreements precisely because litigants spend too little time in drafting them. Increasingly, we have been presented with incoherent hybrids and bizarre mutations of supposed agreements for judicial or contractual arbitration. Oftentimes the ‘remedy’ is worse than the disease. We can only warn: Read the label before applying.” (69 Cal.App.4th at p. 716.) Here, it is apparent the remedy was worse than the disease. Except for the relatively trivial matter, discussed in the unpublished portion of the majority opinion, of interest on a certain sum, the majority, after expending precious judicial resources, has concluded the arbitrator accurately resolved *27the disputes between the parties. This case was especially suited for binding arbitration. The public would have been better served if it had been restricted to that venue.
I would dismiss the appeal.