Court Opinion

ID: 8207624
Source: CourtListenerOpinion
Date Created: 2022-09-20 17:02:57.607+00
Date Added: 2024-06-11T16:41:11.642713
License: Public Domain

Filed 9/20/22 ParPro Technologies v. Rogerson Kratos Corp. 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                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS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
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 This opinion has not been certified for publication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

                                     FOURTH APPELLATE DISTRICT

                                                DIVISION THREE

 PARPRO TECHNOLOGIES, INC.,

      Plaintiff and Respondent,                                        G060176

           v.                                                          (Super. Ct. No. 30-2019-01101416)

 ROGERSON KRATOS                                                       OPI NION
 CORPORATION,

      Defendant and Appellant.

                   Appeal from a judgment and order of the Superior Court of Orange County,
Charles Margines, Judge. Affirmed.
                   Small Law, William F. Small and Kelly Ann Tran for Defendant and
Appellant.
                   Solomon Ward Seidenwurm & Smith, Daniel E. Gardenswartz and
Matthew T. Arvizu for Plaintiff and Respondent.
                                    INTRODUCTION
               Rogerson Kratos Corporation (Rogerson) appeals from an order confirming
an arbitration award and from the ensuing judgment in favor of ParPro Technologies, Inc.
(ParPro), on the ground that Rogerson did not consent to arbitration. Rogerson maintains
that consent to arbitration was based on a provision in ParPro’s terms and conditions,
which Rogerson never signed. When it opposed ParPro’s petition to confirm the
arbitration award, it also asked the court to vacate the award or dismiss the petition on the
same ground.
               We affirm the order denying the motion to vacate the arbitration award and
the judgment. Because both ParPro and Rogerson are merchants, the California Uniform
Commercial Code (Commercial Code) governs their contractual dealings. The code
provides exceptions to common-law contract rules that would otherwise apply and
supports the formation of a contract in this case. Even more importantly, however,
Rogerson fully participated in the underlying arbitration without ever objecting that it did
not consent to arbitrate. It is now estopped from arguing lack of consent.
               As for Rogerson’s motion to vacate, it was filed too late, and the trial court
did not have jurisdiction to hear it. Rogerson had no explanation for its tardiness, and we
cannot find the court abused its discretion in finding no good cause to extend the time to
respond.
                                           FACTS
               We take these facts from the arbitrator’s award:
               Beginning in early 2016, Rogerson placed orders with ParPro to
manufacture and procure aerospace electronics. The routine appears to have been that
Rogerson would tell ParPro what it wanted, ParPro would issue a written quote, and

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Rogerson would then send a purchase order. The relevant quotes and purchase orders
were exhibits at the arbitration. We do not have any purchase orders in the record.
On November 1, 2018, the parties executed a memorandum of agreement (MOA), after
Rogerson fell behind on its payments. The MOA allowed Rogerson to pay a past due
receivable of more than $400,000 in installments, constituting the amount owing on
shipments of goods that Rogerson had already received. Pursuant to the MOA, Rogerson
paid down the amount owing to $165,473. Then it stopped making payments.
                 During this time, Rogerson continued to order goods from ParPro, and
ParPro continued to fulfill the orders. When Rogerson refused to pay for these as well,
ParPro was left with $89,000 in excess inventory and $85,000 in work in progress, none
of which it could sell to other customers. The total amount owing, which Rogerson did
not dispute, was $340,308.
                 The record contains a document entitled ParPro “Standard Terms and
Conditions.” The document appears to be a form one, and it does not mention Rogerson.
The second page of the document in the record includes an arbitration provision and an
attorney fee provision. It also has a signature block, which, in the document in the
record, is blank. The last paragraph provides, “All purchases are subject to all the terms
and conditions set forth above, unless otherwise agree [sic] by both parties in a written
agreement signed by an officer, director or managing agent for both parties.”
                 ParPro filed a request for arbitration with JAMS in August 2019. There
was a preliminary hearing on January 8, 2020, with the JAMS arbitrator. Rogerson was
not represented by counsel at this hearing; instead Rogerson’s CFO appeared to represent
it. The preliminary hearing covered several housekeeping matters, such as discovery and
bifurcation. The record of the hearing also recited that “the parties” had appointed an

        1
                 How Rogerson conveyed its requests to ParPro was not specified, but given that the subject matter
was aerospace electronics, it is reasonable to infer that the requests were in writing. We have no examples of any
requests.

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arbitrator and “the parties” are parties to ParPro terms and conditions, which included an
arbitration clause and an attorney fee clause. No objection by Rogerson’s representative
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to any aspect of the arbitration is recorded.
                 The arbitration hearing took place on April 13, 2020. The arbitrator noted
that “[a]t the preliminary hearing, [Rogerson] agreed, and the Arbitrator ordered, that
[Rogerson] would have until January 15, 2020, to file its Answer.” Rogerson did not file
an answer, and the arbitrator deemed it to have denied the claims.
                  ParPro was represented by counsel, and Rogerson appeared again through
its CFO. Three witnesses testified for ParPro. Rogerson did not offer any witnesses, but
the CFO made an opening and a closing statement and cross-examined ParPro’s
witnesses.
                 The arbitrator awarded ParPro $165,473 for breach of the MOA, $174,834
for nonpayment of the purchase orders, $65,234 in interest, and $50,342 in attorney fees
and costs, for a total award of $455,885. The arbitration award was served on May 8,
2020.
                 ParPro filed its petition to confirm the arbitration award on May 26, 2020.
Rogerson filed an opposition to the petition on December 1, 2020, and a supplemental
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opposition on January 13, 2021. The oppositions included requests to vacate the award.
                 The court held a hearing on the petition and the oppositions on January 27,
2021. The court confirmed the award and held it could not rule on Rogerson’s request to

         2
                   We grant ParPro’s request to take judicial notice of the record of the January 2020 preliminary
hearing. The JAMS rules, for which ParPro also requests judicial notice, are not necessary to the resolution of this
appeal, and the request for judicial notice of that document is denied. (See Michaels v. State Personnel Bd. (2022)
76 Cal.App.5th 560, 575, fn. 7.)
          3
                   Rogerson’s second opposition included for the first time an argument that the court should dismiss
the petition under Code of Civil Procedure section 1285.2. On appeal, it argues that the petition should have been
dismissed pursuant to Code of Civil Procedure section 1287.2, which provides, “The court shall dismiss the
proceeding under this chapter as to any person named as a respondent if the court determines that such person was
not bound by the arbitration award and was not a party to the arbitration.” “[T]he . . . alternative of dismissal is
available only after the court determines that such person was not bound by the arbitration award and was not a
party to the arbitration. [Citations.] Obviously, appellant here, having admitted submission of the dispute, is not
such a person.” (Horn v. Gurewitz (1968) 261 Cal.App.2d 255, 260.)

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vacate the award because it was untimely. It also refused to order an extension of time
under Code of Civil Procedure section 1290.6 for good cause because Rogerson had not
shown any good cause for its late filing. It entered judgment in ParPro’s favor for the
amount of the award.
                                       DISCUSSION
              On appeal, Rogerson makes two main arguments. First it argues the
judgment must be reversed because Rogerson never agreed to arbitrate ParPro’s claims
against it. Second, the court should have granted an extension of time for good cause to
file the opposition under Code of Civil Procedure section 1290.6, instead of refusing to
rule because of untimeliness.
I.            Agreement to Arbitrate
              Rogerson contends it never consented to or signed an agreement to
arbitrate, so the arbitrator never had jurisdiction over it. The arbitrator therefore
exceeded her powers by adjudicating the dispute.
              There are two categories of agreements at issue here. First is the MOA, a
copy of which is not in the record. We therefore do not know whether it included an
arbitration provision. Second are the quotes/purchase orders. We have an exemplar of
the terms and conditions, and that exemplar is not signed. From the arbitrator’s
comments, we infer that the terms and conditions accompanied each quote.
              ParPro and Rogerson are both merchants, and so the Commercial Code
governs their contractual relationship. Commercial Code section 2204, subdivision (1),
provides: “A contract for sale of goods may be made in any manner sufficient to show
agreement, including conduct by both parties which recognizes the existence of such a
contract.” It is undisputed that ParPro and Rogerson had contracts for the sale of goods.
The question before us is what the terms of the contract were – specifically, did it include
arbitration and attorney fee provisions?

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                 The trial court relied on Commercial Code section 2207, which provides:
                 “(1) A definite and seasonable expression of acceptance or a written
confirmation which is sent within a reasonable time operates as an acceptance even
though it states terms additional to or different from those offered or agreed upon, unless
acceptance is expressly made conditional on assent to the additional or different terms.
                 “(2) The additional terms are to be construed as proposals for addition to
the contract. Between merchants such terms become part of the contract unless:
                 “(a) The offer expressly limits acceptance to the terms of the offer;
                 “(b) They materially alter it; or
                 “(c) Notification of objection to them has already been given or is given
within a reasonable time after notice of them is received.
                 “(3) Conduct by both parties which recognizes the existence of a contract is
sufficient to establish a contract for sale although the writings of the parties do not
otherwise establish a contract. In such case the terms of the particular contract consist of
those terms on which the writings of the parties agree, together with any supplementary
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terms incorporated under any other provisions of this code.”
                 As prior courts have recognized, this code section was enacted to reject the
common-law rule of “mirror-image” offer and acceptance. Under the common law, an
acceptance must precisely mirror the offer; otherwise the “acceptance” was a counter-
offer, and no contract was formed. (See Apablasa v. Merritt & Co. (1959) 176
Cal.App.2d 719, 726 [“[T]erms proposed in an offer must be met exactly, precisely and
unequivocally for its acceptance to result in the formation of a binding contract [citations]
and a qualified acceptance amounts to a new proposal or counteroffer putting an end to
the original offer.”]; Civ. Code, § 1588 [qualified acceptance is new proposal].)

        4
                 Commercial Code section 2207 must be read in conjunction with section 2206, subdivision (1)(a),
which provides: “(1) Unless otherwise unambiguously indicated by the language or circumstances [¶] (a) An offer
to make a contract shall be construed as inviting acceptance in any manner and by any medium reasonable in the
circumstance[s].”

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              “In place of the mirror-image rule, [Commercial Code] section 2207
inquires as to whether the parties intended to complete an agreement: ‘Under this Article
a proposed deal which in commercial understanding has in fact been closed is recognized
as a contract.’ [Citation.] If the parties intend to contract, but the terms of their offer and
acceptance differ, section 2207 authorizes a court to determine which terms are part of
the contract, either by reference to the parties’ own dealings (see [Cal. U. Com. Code,] §
2207, subds. (1), (2)), or by reference to other provisions of the code. (See [Cal. U. Com.
Code,] § 2207, subd. (3).)” (Steiner v. Mobil Oil Corp. (1977) 20 Cal.3d 90, 99-100.)
              Toal v. Tardif (2009) 178 Cal.App.4th 1208 (Toal), on which Rogerson
heavily relies, is inapposite. The primary issue in that case was whether an attorney had
the authority to bind a client to arbitrate. The court held that a client must expressly
authorize counsel to agree to arbitrate (e.g., by signature) or the client must ratify the
agreement. (Id. at p. 1222.) The court also held that merely allowing the arbitration to
proceed to an award does not constitute client ratification. (Ibid.)
              In this case, however, there is no issue regarding an attorney’s authority to
consent to arbitration. Indeed, Rogerson’s thoroughgoing abjuration of the assistance of
counsel throughout this transaction rather conclusively removes this case from the ambit
of Toal. Moreover, unlike the court in Toal (Toal, supra, 178 Cal.App.4th at p. 1223),
the court in this case did make a finding regarding consent to arbitrate. It found that
Rogerson’s conduct supplied the element of consent. There is no need, as there was in
Toal, to send the matter back to the trial court for a hearing on this issue. (Ibid.)
              On this record, we conclude that Rogerson accepted ParPro’s terms and
conditions as they applied to the quotes by making a definite and seasonable expression
of acceptance, i.e., by sending purchase orders pursuant to ParPro’s quotes. We do not
have an exemplar of Rogerson’s purchase order, so we do not know whether the purchase
orders “state[d] terms additional to or different from those offered or agreed upon” in
ParPro’s quotes. No one ever said that they did, and Rogerson does not point us to any

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evidence that the purchase orders contained different terms and conditions. It is the
appellant’s duty to provide an adequate record to support its claims of error. (See Maria
P. v. Riles (1987) 43 Cal.3d 1281, 1295.)
                  To sum up, there is no evidence in the record that the MOA did or did not
have an arbitration provision. The quotes were evidently accompanied by the terms and
conditions, including arbitration and attorney fee provisions, and there is no evidence of
additional or different terms that would preclude a finding of acceptance by performance
on Rogerson’s part.
                  Our conclusion that the arbitrator had jurisdiction over Rogerson,
notwithstanding the lack of a signature on a written arbitration agreement, does not rest
solely on the Commercial Code. Overwhelming evidence in the record supports the trial
court’s finding that Rogerson did not register any objection to arbitration until it filed its
opposition to ParPro’s petition to confirm the award. Neither the record of the
preliminary hearing with the arbitrator nor the award itself records any such objection.
On the contrary, the arbitrator’s comments that Rogerson’s CFO represented it at the
hearing and that, while Rogerson did not offer any witnesses itself, the CFO made
opening and closing statements and cross-examined witnesses establish that Rogerson
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participated fully in the proceeding. Rogerson is therefore estopped from denying the
arbitrator’s authority to decide the dispute.
                  “‘The doctrine of equitable estoppel is founded on concepts of equity and
fair dealing. It provides that a person may not deny the existence of a state of facts if he
intentionally led another to believe a particular circumstance to be true and to rely upon

         5
                   In its oppositions to ParPro’s petition to confirm, Rogerson stated that it “repeatedly insisted that it
never agreed to arbitrate its claims with ParPro[.]” There is no evidence in the record of even one prepetition
insistence, let alone repeated ones.
                   The CFO, who represented Rogerson at the arbitration hearing, stated in an opposition declaration
that he attended the April 2020 hearing “with the intent of reiterating Rogerson’s lack of consent to arbitration.” As
stated above, there is no evidence that this lack of consent was ever expressed once, and it appears from the record
that the CFO’s “intent” was never made manifest to anyone else.

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such belief to his detriment. The elements of the doctrine are that (1) the party to be
estopped must be apprised of the facts; (2) he must intend that his conduct shall be acted
upon, or must so act that the party asserting the estoppel has a right to believe it was so
intended; (3) the other party must be ignorant of the true state of facts; and (4) he must
rely upon the conduct to his injury.’ [Citation.]” (City of Goleta v. Superior Court
(2006) 40 Cal.4th 270, 279.) Appearing at and participating in an arbitration without
objection up to the point of submitting the matter for decision estops a party from
claiming it did not consent to arbitration. (Douglass v. Serenivision, Inc. (2018) 20
Cal.App.5th 376, 387-388; Cabrera v. Plager (1987) 195 Cal.App.3d 606, 612, fn. 8;
Dugan v. Phillips (1926) 77 Cal.App. 268, 276-277 [“Had the award been in
[defendant’s] favor he doubtless would have insisted that the plaintiff was bound by it. A
party cannot be allowed thus to speculate upon the action of the arbitrators and then
refuse to be bound by an adverse award.”].)
                   If Rogerson had ever objected to the arbitrator that it did not consent to
arbitration, it defies belief that the arbitrator would not have recorded this objection
               6
somewhere. Both the record of the preliminary hearing and the award itself reflect a
process that unfolded seamlessly, without any hitches over jurisdiction. Likewise,
Rogerson points to nothing in the record indicating it ever expressed an objection to
arbitration to opposing counsel on any grounds. The attorneys who represented ParPro
during the arbitration proceedings confirmed that Rogerson never at any point raised lack
of jurisdiction, and the court clearly believed them.
                   It would be highly inequitable to allow Rogerson to participate fully in the
arbitration and to present its case to the arbitrator and then, when the award goes against
it, to maintain that it never consented to arbitration. There is not a whisper of evidence in

         6
                  Rogerson stated in its second opposition that because it “disputed the arbitrator’s jurisdiction, it
did not file an answer[.]” Rogerson did not file an answer, but it never indicated that it did not do so because it
disputed jurisdiction.

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this record that Rogerson ever objected to arbitration until it filed its opposition to
ParPro’s petition to confirm the award. We conclude Rogerson is estopped to maintain it
did not consent to arbitration.
II.               Motion to Vacate Award
                  A motion to vacate an arbitration award may take two forms. It can be
included in an opposition to a petition to confirm an award. (Code Civ. Proc., § 1285.2.)
Or it can be a separate, stand-alone motion. (Code Civ. Proc., § 1285.) If it is filed as
part of an opposition, it must be filed within 10 days of the service of the petition. (Code
Civ. Proc., § 1290.6.) A stand-alone motion must be filed no later than 100 days after
service of a signed copy of the arbitration award itself. (Code Civ. Proc., § 1288.) Even
if the request to vacate is included in an opposition to a petition to confirm, it must still
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be filed within the 100-day deadline.
                  The petition to confirm the award was filed on May 26, 2020. Rogerson
did not file its first opposition, which included a request to vacate, until December 1,
2020, well outside the 10-day window. It was also well outside the 100-day window.
The court therefore lacked jurisdiction to consider it. (See Rivera v. Shivers (2020) 54
Cal.App.5th 82, 93-94.)
                  Rogerson argues here, as it did in its even tardier supplemental opposition,
filed in January 2021, that the court should have retroactively ordered the time for the
opposition to be extended for good cause. (Code Civ. Proc., § 1290.6.) The trial court
refused to do so because Rogerson had not shown any evidence of a good cause for
failing to file its opposition on time.
                  “Where the standard requires ‘good cause’ only, it has been ‘“‘equated to a
good reason for a party’s failure to perform that specific requirement [of the statute] from

         7
                  This means that if the petitioner does not file a petition to confirm the award soon enough, the
respondent must file a separate motion in order to meet the 100-day deadline. The winner has four years to file a
petition to confirm (Code Civ. Proc., § 1288), but the loser must file within 100 days or lose the chance to vacate.
(See Rivera v. Shivers, supra, 54 Cal.App.5th at p. 93.)

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which he seeks to be excused.’”’ [Citation.] In the context of a motion to extend time
. . ., we should pay special deference to the trial court’s view, which was informed by its
personal interactions with counsel. Accordingly, a trial court’s finding of ‘good cause’ is
generally reviewed deferentially, solely for abuse of discretion.” (Robinson v. U-Haul
Co. of California (2016) 4 Cal.App.5th 304, 327.)
                 In this case, we cannot find that the trial court abused its discretion in
refusing to grant a retroactive blessing of Rogerson’s untimely filing. As the court noted,
Rogerson did not explain why it was late. Its good cause argument was the same as its
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vacation argument: it did not consent to arbitration. It gave no reason for waiting almost
seven months before filing its request to vacate. The reasons it gives now, on appeal, we
cannot consider because they were not raised first in the trial court. (See Johnson v.
Greenelsh (2009) 47 Cal.4th 598, 603.)

        8
                 Since the trial court found that Rogerson had consented, through conduct, to arbitration, an
extension of time to argue it had not consented would have availed it nothing.

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                                     DISPOSITION
              The judgment and order denying the motion to vacate are affirmed. The
request of Respondent ParPro Technologies, Inc., for judicial notice of the record of the
arbitration preliminary hearing is granted; the request for judicial notice of the JAMS
rules is denied. Respondent is to recover its costs on appeal.

                                                 BEDSWORTH, ACTING P. J.
WE CONCUR:

SANCHEZ, J.

MOTOIKE, J.

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