Wednesday, June 20, 2018
Court of Appeal:
Two Arbitration Awards—One in Favor of Each Party—Must Be Entered as Single Judgment
By a MetNews Staff Writer
Arbitration awards granting opposing parties monetary damages must be offset by the court and entered as a single judgment, the Court of Appeal for this district has held.
Its unpublished opinion, filed Monday, was written by Justice John L. Segal of Div. Seven. He was joined by Presiding Justice Dennis M. Perluss and Los Angeles Superior Court Judge Gail R. Feuer, who is sitting on assignment in the division until her June 1 appointment to that seat is confirmed.
The opinion reversed an action by Los Angeles Superior Court Judge Ruth Kwan who had confirmed the arbitrator’s awards and ordered them entered it as two separate judgments.
An arbitrator awarded plaintiff BRG $1.26 million, plus interest, against Chris Zimmerman, and $500,000, plus interest, to Zimmerman from BRG.
“The proper course, as suggested by the cases BRG cites as well as other cases, was to enter a net judgment in favor of the party owed the greater amount to avoid what the United States Supreme Court has called, in an analogous context, ‘the absurdity of making A pay B when B owes A,’ ” Segal said, citing the 1995 case of Citizens Bank v. Strumpf.
The jurist went on to say:
“Zimmerman does not cite any case holding entry of a net judgment is improper. Instead, he attempts to distinguish the cases BRG cites on the ground they concerned netting amounts owed on claims and counterclaims, whereas this case involves netting amounts owed on different components of an arbitration award. But Zimmerman does not explain why that distinction should make any difference. ‘Making A pay B when B owes A’ is equally absurd in both situations. Moreover, courts in other jurisdictions have approved netting in the context of confirming arbitration awards.”
Claim of Misconduct
The opinion rejects Zimmerman’s claim of misconduct by the arbitrator. The arbitrator did not refuse to hear evidence on the basis of a person on the plaintiff’s witness list, James Shillito, not testifying, Segal said, explaining:
“[T]he arbitrator did not refuse to allow Shillito to testify. Instead, the arbitrator observed that, as a practical matter, Shillito was not available when Zimmerman (belatedly) made it known he wanted to call him as a witness in the arbitration, asked counsel for Zimmerman what he wanted to do about it, then gave Zimmerman exactly what his attorney asked for: an opportunity to argue the arbitrator should draw a negative inference from Shillito’s absence. Other than declining to draw that negative inference, which Zimmerman rightly does not suggest constituted a refusal to hear evidence, the arbitrator did not refuse to allow Shillito to testify or make any other ruling adverse to Zimmerman regarding Shillito’s testifying (or not testifying) at the hearing.”
The case is BRG Sports v. Zimmerman, B282161.
Attorneys on appeal were Erik B. von Zeipel, P. Shawn Wood, and William I. Goldberg of Seyfarth Shaw, for BRG Sports and Kennedy Berg, Gabriel Berg, and Charles J. Matays, along with Wayne E. Beaudoin of Beaudoin & Krause-Leemon, for Zimmerman.
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