Hoso Foods, Inc. v. Columbus Club, Inc.
190 Cal. App. 4th 881
| Cal. Ct. App. | 2010Background
- Columbus Club owns a Glendale Hall; Hoso Foods leases it under a 2002 lease and addenda with guaranty and rent concessions.
- Hoso planned catered events but Glendale municipal code restricted banquet use and post-midnight operation; liquor license issues arose.
- Hoso alleged Columbus hid restrictions and made misrepresentations contrary to lease provisions; they agreed to arbitrate in 2007.
- Arbitrator Richard Hubbell heard four days of testimony in 2008; only Rodela represented Columbus during arbitration; Tefft was excluded except as a witness.
- Award in 2009 favored Hoso on most claims with about $1.263 million; Columbus sought to vacate; trial court confirmed the award.
- Appellate court reversed, concluding arbitrator exceeded powers by limiting Columbus to a single representative, violating fairness; remanded to vacate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did arbitrator exceed powers by restricting Columbus to one representative? | Hoso argues restriction was proper under arbitration but unfairly precluded Columbus from a full defense. | Columbus contends rule 23 and statutory rights require allowing its independent representative. | Yes, exceeded powers; deprived Columbus of fair hearing; vacate award. |
| Was the arbitration process fundamentally unfair due to representative restriction? | Hoso asserts procedure allowed a fair hearing notwithstanding some limitations. | Columbus asserts exclusion of other representatives violated due process and AAArules. | Yes, procedure deprived fair hearing; vacate award. |
| Should the award be vacated under CCP 1286.2(a)(4) for excess of powers? | Columbus argues arbitrator acted beyond contractual/statutory authority in limiting representation. | Hoso maintains powers were within arbitration scope and misapplications do not amount to excess. | Yes, vacate under CCP 1286.2(a)(4). |
Key Cases Cited
- Moncharsh v. Heily & Blase, 3 Cal.4th 1 (Cal. 1992) (narrow review of arbitration merits; arbitrators may err)
- Azteca Construction, Inc. v. ADR Consulting, Inc., 121 Cal.App.4th 1156 (Cal. Dist. Ct. App. 2004) (distinguishes judicial review of fairness vs merits)
- Sanchez v. Western Pizza Enterprises, Inc., 172 Cal.App.4th 154 (Cal. Dist. Ct. App. 2009) (arbitral fairness; improper exclusion may violate rights)
- Curtis v. Peters, 143 Cal.App.3d 597 (Cal. Dist. Ct. App. 1983) (public entity representation and prejudice presumption)
- Advanced Micro Devices, Inc. v. Intel Corp., 9 Cal.4th 362 (Cal. 1994) (review of whether arbitrator exceeded powers; de novo standard)