Some Stuff About Arbitration Awards

EHM Prods., Inc. v. Starline Tours of Hollywood, Inc., No. B281594 (Mar. 28, 2018)

This short opinion about arbitration awards seems pretty straightforward. But when you scratch the surface there’s a bunch of interesting stuff going on.

A agreed to indemnify B under the terms of a contract. It has an arbitration clause. B won the arbitration. It prevailed before an appellate arbitration panel as well. B then got the award confirmed by the superior court, which was upheld by the Court of Appeal. After the confirmation petition was filed, the arbitration appeal panel issued belated a cost award to B. Instead of amending the petition to confirm the first award, B got the cost award separately confirmed in superior court. A now appeals.
The issue is whether confirmation of the arbitration appeal cost award violates Code of Civil Procedure § 1283.4. As I discussed sometime last year in my post on the Kaiser Foundation case, § 1283.4 requires an arbitration award to “include a determination of all the questions submitted to the arbitrators the decision of which is necessary in order to determine the controversy.” Kaiser Foundation read that to preclude piecemeal or interim awards in most situations—it’s basically a one final judgment rule applied to arbitration awards.

But the Court here says § 1283.4 doesn’t bar confirmation of the later cost award under the facts of this case. Interestingly, the Court doesn’t go where I’d expect—drawing an analogy to the way costs are awarded in a regular civil case. That is a post-judgment procedure, see Cal. R. Ct. 3.1701(a). And it often results in a separate appeal under § 904.1(2), which makes post judgment orders appealable. (The cost appeal frequently gets consolidated with the earlier merits appeal some time later, as a matter of administrative convenience.)

Instead, the Court relies upon Hightower v. Superior Court, 86 Cal. App. 4th 1415, 1434 (2001), which is reads to permit an “incremental or successive award process,” including successive monetary awards. That, however, seems to read Hightower so broadly that it eats the general point of § 1283.4. It is also in some tension with the way Kaiser Foundation addressed Hightower, which it did at considerable length.

Hightower had complicated facts. It involved a contract under which one party was to issue the other an option to purchase some stock. The parties first arbitrated specifically performance of issuance of the option, which the arbitration granted, and issued an award saying so. But the remaining issues in the case—whether the winning party would also be entitled to damages—depended on a bunch of events that had yet to occur. Like whether or not the option was actually exercised to buy the stock, which depended on whether that party could line up financing. The trial court confirmed the specific performance award. And on writ review, Court of Appeal held that the specific performance award was an “award” under § 1283.4. It reasoned that even if further relief was potentially possible, it was contingent on the occurrence of future events that had yet to happen, the order was a final enough determination of the controversy to be confirmed.

That’s not really what’s going on in this case. There’s no issue that practically required to arbitrator to award piecemeal costs. And there doesn’t seem to have been any risk of harm if B just waited for the cost award to seek confirmation, or modified its petition to include it afterwards. But while A tried to distinguish Hightower on that ground, the court says there’s no authority to do so. Of course, nobody cites Kaiser Foundation. So there is now an (unacknowledged) ssplit on this issue.


The Court goes on to reject A's argument that because the award was rendered while the confirmation petition was pending before the superior court, principles of waiver or estoppel bar the subsequent confirmation. That generally makes sense. But if A framed this question as the confirmation of first award having effectively been a final judgment, so enforcement of this subsequent award is precluded under claim preclusion/res judicata principles? (Principles that sometimes get confused with estoppel and waiver, FWIW.) It seems like that’s a better way to argue it. But I haven’t fully researched the question, so who knows.

Affirmed.