Monday, March 11, 2002
Judge May Not Conduct Private Arbitration Proceeding, C.A. Rules
By KENNETH OFGANG, Staff Writer/Appellate Courts
An Orange Superior Court procedure in which parties to a lawsuit agreed to waive their rights to trial and appeal and appoint a sitting judge as arbitrator pursuant to the California Arbitration Act violates state law, the Fourth District Court of Appeal has ruled.
Div. Three Thursday overturned an order by Superior Court Commissioner F. Latimer Gould confirming an arbitration award issued by Orange Superior Court Judge David McEachen.
“There is nothing to be confirmed except this bedrock principle: Public judges must engage in public judging,” Presiding Justice David K. Sills wrote for the appellate panel.
The unusual ruling arose from a dispute between Seal Beach homeowners Robert and Mary Heenan and general contractor Mansour Sobati over what Sills characterized as “a nightmare” of a remodeling.
The Heenans fired Sobati, then sued him. Sobati cross-complained for $100,000 in unpaid fees, and the case was ultimately assigned to Judge H. Warren Siegel for trial. The parties answered ready for trial with a 10-day time estimate.
After what Sills described as “some prodding by the court,” including a warning to cut into the trial time for delays occasioned by lack of preparedness, the parties stipulated to “court binding arbitration by a judicial officer” to be selected by the master calendar judge.
The case was assigned to Judge David McEachen, who after six days of testimony, awarded the Heenans $70,000. The Heenans then moved to confirm the arbitration award and for more than $80,000 in attorney fees under Business and Professions Code Sec. 7160 which allows such an award to a party which sues a contractor for “false or fraudulent representations of false statements knowingly made.”
Gould confirmed the award, but denied attorney fees on the ground that the request should have been directed to McEachen. Failure to do so, by way of motion to correct or clarify the award, constituted waiver, the commissioner concluded.
The Heenans appealed. After none of the parties questioned McEachen’s jurisdiction to sit as arbitrator, the Court of Appeal requested supplemental briefing.
Sills, writing Thursday for the court, derided “judicial binding arbitration” as “a fictional creature that appears as often as reports of the Loch Ness monster” but doesn’t exist according to statute.
California, he explained, recognizes only non-binding judicial arbitration and binding contractual arbitration. The former, he explained, “is not arbitration at all, since it does not result in a final decision, there is full and complete discovery, the arbitrator is required to follow the facts and the law, and the parties may ask for a trial de novo.”
As for the Heenans and Sobati, Sills said, they didn’t stipulate to judicial arbitration and could not have stipulated to contractual arbitration because a judge cannot be a contractual arbitrator.
“As a sitting judge, Judge McEachen cannot conduct a contractual arbitration,” Sills declared. “Public judging operates in the public eye, with reported proceedings and under appellate review, to both dispense justice and ‘satisfy the appearance of justice.’ ”
Judges, he elaborated, differ from arbitrators in that their salaries are paid by the state, they work in public courthouses, and they must “follow established rules of law” and “justify their decisions by reason, evidence, and precedent.”
To satisfy that distinction, Sills went on to say, the proceedings before McEachen must be characterized as a bench trial with a waiver of a court reporter and right of appeal.
The proceedings before Gould, he concluded, are a nullity because “there was no ‘arbitration’ award for Commissioner Gould to confirm.” Gould cannot be considered a “successor judge” to McEachen, Sills said, because McEachen was not “unavailable,” a prerequisite to having one judge hear post-trial proceedings where another judge tried the case, and because Gould’s purported authority derives from a “universal misperception” that McEachen heard the cases as an arbitrator rather than a judge.
McEachen, Sills said, is entitled to “the last judicial word” on all remaining issues, including whether the Heenans are entitled to attorney fees and whether Sobati can still challenge the damage award or waived any such challenge by not appealing.
The case is Heenan v. Sobati, 02 S.O.S. 1282.
Copyright 2002, Metropolitan News Company