Can't Give a Half-Consent to Arbitrate.

Douglas v. Serenivision, Inc., No. B277574 (D2d2 Feb. 8, 2018)

The law’s pretty clear that unless a contract spells it out clearly otherwise, a court, not the arbitrator, determines the gateway issue of arbitrability. The contract in this case didn’t specify that the arbitrator was to make that decision. But that isn’t dispositive here, because the parties consented by their conduct the arbitrator making that decision.

Without petitioning to compel with a court, an Internet Advertiser instituted an arbitration to collect on unpaid bills against one of its Customers and Customer’s Guarantor by making an arbitration demand. Guarantor answered the demand, on the merits, without objecting to the arbitrator’s jurisdiction. He proceeded to participate in the arbitration, to a significant extent. For a while.

But when the arbitrator declined to require Advertiser to post a bond for a potential attorney fee judgment, Guarantor purported to withdraw his consent to the arbitration and refused to appear further. Advertiser proceeded anyway. After a prove up, the arbitrator found that Guarantor had consented to have the arbitrator determine arbitrability, that the matter was arbitrable, and that Guarantor was liable for a total award of $1.8 million.

125 days after being served with the award, Guarantor petitioned the L.A. Superior  to vacate it. Advertiser then filed several petitions to confirm the award. After everything got consolidated, the superior court denied Guarantor’s petition and confirmed the award on Advertiser’s petition.

On a threshold issue, the Court finds that the petition to vacate was untimely. Under Code of Civil Procedure § 1288, a petition to vacate needs to be filed within 100 days of the service of the award. Guarantor says that his request is nonetheless timely because he also asked for vacation in response to Advertiser’s petition to confirm. But although § 1285.2 says you can make a request to vacate in response to a petition to confirm, § 1288.2 nonetheless says such a response is timely only if served within 100 days of service of the award. 

And then on the appeal of the motion to confirm, the court holds that: (1) Guarantor tacitly consented to the arbitrator’s deciding arbitrability or waived any challenge to it by participating in the Arbitration; (2) Guarantor was correctly required to arbitrate; and (3) the arbitrator didn’t exceed his powers by finding that Guarantor could be held to pay on Customer’s obligation.

Affirmed.