63 Cal.App.5th 1142
Cal. Ct. App.2021Background
- Four business partners (Alper and Ballou vs. Insomniac and Rotella) arbitrated a partnership dispute arising from alleged competition with the HSII festival; retired federal judge served as arbitrator.
- A nine-day arbitration (May–June 2017) produced a preliminary award for defendants and a consolidated final award (Nov. 2018) largely for defendants, including a restrictive injunction.
- During the hearing the arbitrator openly took prescription pain medication and made remarks about its potency; plaintiffs claim this impaired his ability to perceive evidence and conduct the proceeding.
- Plaintiffs did not object or demand disqualification during the arbitration; they completed the hearing and later (Feb. 2019) petitioned the trial court to vacate the award alleging impairment, nondisclosure, corruption, undue means, and prejudicial misconduct.
- The trial court denied the petition, concluding plaintiffs forfeited the right to challenge disqualification and failed to meet the burden for vacatur; it confirmed the award.
- The Court of Appeal affirmed, applying forfeiture principles and substantial-evidence review to the trial court’s factual findings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether arbitrator was disqualified by impairment under §170.1(a)(7) | Arbitrator’s opioid use impaired his perception and ability to conduct the hearing | Arbitrator remained engaged, asked questions, ruled appropriately; plaintiffs never sought disqualification during the hearing | Forfeited; substantial evidence supports that arbitrator properly perceived evidence and conducted proceedings |
| Whether arbitrator failed to make required disclosures (§1281.9 / ethics standards) | Repeated on-the-record medication use required written disclosure and timely objection | Plaintiffs knew of the medication use and therefore could have objected; no timely demand was made | Forfeited; failure to object at the earliest practicable opportunity defeats vacatur claim |
| Whether award should be vacated for corruption, undue means, or prejudicial misconduct (§1286.2) | Alleged impairment and nondisclosure amounted to corruption/undue means and prejudicial misconduct | Those allegations rest on the disclosure/impairement claims; without timely objection there is no basis for vacatur | Rejected; because disclosure/impairement claims were forfeited, corruption/undue-means claims fail |
Key Cases Cited
- Moncharsh v. Heily & Blase, 3 Cal.4th 1 (1992) (arbitral awards generally not subject to judicial review on the merits)
- Malek v. Blue Cross of California, 121 Cal.App.4th 44 (2004) (standard of review for appeals from trial-court orders vacating or confirming arbitration awards)
- Cox v. Bonni, 30 Cal.App.5th 287 (2018) (party aware of nondisclosed matter cannot reserve the disclosure issue until after arbitration concludes)
- North Beverly Park Homeowners Assn. v. Bisno, 147 Cal.App.4th 762 (2007) (disqualification scheme targets pending proceedings; not for collateral post-proceeding attack)
- United States v. Olano, 507 U.S. 725 (1993) (distinction between forfeiture and waiver)