LAW FINANCE GROUP, LLC, Plaintiff and Appellant, v. SARAH PLOTT KEY, Defendant and Respondent.
B305790
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION TWO
Filed 7/30/21
CERTIFIED FOR PUBLICATION; (Los Angeles County Super. Ct. No. 19STCP04251)
APPEAL from an order of the Superior Court of Los Angeles County. Rafael A. Ongkeko, Judge. Reversed and remanded with directions.
Eisner, Christopher L. Frost, Taylor S. Simeone; Greines, Martin, Stein & Richland, Cynthia E. Tobisman and Alana H. Rotter for Plaintiff and Appellant.
Grignon Law Firm, Margaret M. Grignon and Anne M. Grignon for Defendant
Law Finance Group (LFG) appeals from an order of the superior court denying its motion to confirm an arbitration award against respondent Sarah Plott Key. Key borrowed $2.4 million from LFG to help finance a probate action alleging that Key‘s sister, Elizabeth Plott Tyler, exercised undue influence over their mother in orchestrating changes to a trust (the Probate Action). Key ultimately prevailed in that action, winning the right to a third of the parents’ estate. This court previously affirmed the order of the probate court awarding that relief. (See Key v. Tyler (June 27, 2016, B258055) [nonpub. opn.] [2016 Cal.App.Unpub.LEXIS 4757].)1
A panel of three arbitrators found that some of the loan terms were invalid but otherwise enforced the loan agreement, awarding LFG $778,351 in simple interest along with attorney fees and costs. The panel issued a modified award on September 18, 2019.
Less than two weeks later, on October 1, 2019, LFG filed a petition in superior court to confirm the award. Nearly four months after that, and 130 days after service of the modified arbitration award, Key filed a motion to vacate the award. Her motion claimed that the arbitrators exceeded their authority by finding that the loan from LFG was a consumer loan but nevertheless enforcing some of the terms of the loan agreement rather than finding it void. Nine days later, Key filed a response to LFG‘s petition raising the same arguments.
The superior court agreed with Key and vacated the arbitration award.
On appeal, LFG argues that the trial court should have independently considered the evidence underlying the arbitrators’ conclusion that the litigation loan it made to Key was a consumer loan rather than a commercial loan. LFG also argues that Key‘s requests to vacate the arbitration award were untimely. We do not reach the substantive issue because we agree with LFG that Key did not timely request that the arbitration award be vacated.
BACKGROUND
1. The Loan Agreement
In 2013, Key needed money to pay her ongoing legal fees in the Probate Action. Her counsel in that action referred her to LFG.
Key borrowed approximately $2.4 million from LFG pursuant to a Loan and Security Agreement (Loan Agreement) that permitted her to borrow up to a maximum of $3 million. In addition to repayment of the principal, the Loan Agreement required Key to pay interest at a rate of 1.53 percent per month, compounded monthly, along with an origination fee (calculated as 2 percent of the maximum loan availability), a due diligence fee, and a servicing fee (calculated as 0.25 percent of the total amount that Key owed at the end of each month). Absent a default, LFG‘s right to repayment was limited to Key‘s recovery in the Probate Action and her interest in the trust that was the subject of that action.
The Loan Agreement contained an arbitration provision. That provision required that “any dispute between the Parties arising out of the transaction provided for in this Agreement” would be decided by a three-member arbitration panel under the Commercial Arbitration Rules of the American Arbitration Association. The provision also entitled the prevailing party to attorney fees.
2. The Arbitration
Key prevailed in the Probate Action, winning the right to a third of her parents’ estate which, at the time, was equivalent to about $20 million. She repaid the principal amount of the $2.4 million loan from LFG, but did not pay any interest or other fees.
LFG demanded arbitration, seeking about $1.45 million that it claimed Key still owed under the Loan Agreement. In defense, Key argued that the Loan Agreement was unconscionable and that the various fees in the agreement violated provisions of the California Financing Law applicable to consumer loans.
On August 6, 2019, the three-arbitrator panel served its final arbitration award. At the request of the parties, the arbitrators later modified the award to reduce the amount of costs awarded to LFG. The modification was served on September 19, 2019.
The arbitrators found that the Loan Agreement was binding and enforceable. However, the arbitrators also found that the loan from LFG was a
3. LFG‘s Petition to Confirm the Arbitration Award and Key‘s Requests to Vacate
LFG filed a petition to confirm the arbitration award on October 1, 2019, less than two weeks after the modified arbitration award was served. The parties then communicated about coordinating the timing for the hearing on LFG‘s petition and for the petition to vacate that Key intended to file.
Key‘s counsel agreed to accept service of LFG‘s petition and to file a challenge under
Over the next few months, the parties discussed setting a hearing date, and finally agreed on a hearing date of February 20, 2020. On December 12, 2019, counsel for LFG sent an e-mail to Key‘s counsel asking, “Do you know when your substantive petition is due? I know we talked conceptually about timelines way back. I just don‘t know with the hearing date set for 2/20 whether we need to revisit that or, just go according to standard timing.” Key apparently did not respond to that e-mail.
The parties then communicated further about the details of filing and service. They agreed to accept electronic service, and Key‘s counsel informed LFG‘s counsel that Key intended to serve her petition to vacate on January 27, 2020.
As promised, Key filed her petition to vacate with supporting documents on January 27, 2020 (130 days after service of the modified arbitration award). On February 5, 2020, Key filed her response to LFG‘s petition to confirm. Key‘s response also requested that the arbitration award be vacated.
Both Key‘s petition to vacate and her response to LFG‘s petition to confirm argued that the arbitrators exceeded their powers by finding that the
4. The Trial Court‘s Ruling
In a written order, the trial court ruled that Key‘s petition to vacate was untimely under the 100-day deadline of
On the merits, the trial court found that “the arbitrators exceeded their powers by issuing an award that violates a party‘s unwaivable statutory rights or that contravenes an explicit legislative expression of public policy.” The court cited
DISCUSSION
1. The Governing Statutes Require that a Request to Vacate an Arbitration Award Be Served and Filed Within 100 Days of Service of the Award
A request to vacate an arbitration award may be included in a party‘s response to a petition to confirm. (
Title 9 also contains a separate chapter entitled, “General Provisions Relating to Judicial Proceedings,” which, among other things, addresses the procedures applicable to petitions and responses.
Key argues that when, as here, a petition to confirm an arbitration award is filed within 100 days of service of the award, the time limit for filing a response to the petition requesting that the award be vacated is governed by
This argument requires us to interpret the governing statutes. We therefore review the issue de novo. (Apple, Inc. v. Superior Court (2013) 56 Cal.4th 128, 135 (Apple); Santa Monica, supra, 243 Cal.App.4th at p. 544.)
In analyzing the statutes, we are guided by well-known principles. Our analysis starts with the language of the statutes, giving the words their usual and ordinary meaning. (Apple, supra, 56 Cal.4th at p. 135.) If statutory language is not ambiguous, “we presume the lawmakers meant what they said, and the plain meaning of the language governs.” (Day v. City of Fontana (2001) 25 Cal.4th 268, 272.) The words of a statute are “construed in context, and provisions relating to the same subject matter must be harmonized to the extent possible.” (Lungren v. Deukmejian (1988) 45 Cal.3d 727, 735.) “It is a basic canon of statutory construction that statutes in pari materia should be construed together so that all parts of the statutory scheme are given effect.” (Lexin v. Superior Court (2010) 47 Cal.4th 1050, 1090–1091.)
Key‘s interpretation of the governing statutes founders on these principles.
In Douglass, this court rejected the argument that a response requesting vacation of an arbitration award filed after the 100-day period has expired is nevertheless timely if it complies with the time period for filing a response to a petition. Citing the plain language of
The same reasoning applies here. Key‘s interpretation of
Key‘s interpretation is also inconsistent with the broader statutory scheme.
Moreover, we must give effect to both statutes if possible. (
Courts have consistently applied the two statutes in this manner. As discussed above, this court and others have held that a request to vacate is untimely if filed beyond 100 days even if it responds to a petition to confirm. (See Douglass, supra, 20 Cal.App.5th at p. 385; Soni v. Simplelayers, Inc. (2019) 42 Cal.App.5th 1071, 1093; Eternity Investments, supra, 151 Cal.App.4th at pp. 743, 745–746.) And courts have held that a response requesting vacation that is filed within the 100-day deadline is nevertheless untimely if it fails to comply with the 10-day filing deadline of
In
Our prior decision in Santa Monica, supra, 243 Cal.App.4th 538, is not to the contrary. Although in that case we stated that, “[a]s a general matter, a party seeking to vacate an arbitration award must either (1) file and
2. Key‘s Late Filing Cannot Be Excused Under the Doctrines of Estoppel or Waiver
Key argues that LFG “expressly agreed in writing that the parties would not adhere to the statutory timeframes for arbitration proceedings, but instead would obtain a simultaneous hearing date for the competing petitions.” She further claims that LFG knew that Key intended to file a timely petition to vacate and that she delayed doing so because of the parties’ agreement. Key argues that, based on this conduct, LFG is equitably estopped from relying on the statutory 100-day filing deadline. Alternatively, she argues that LFG waived the right to assert that deadline.
We reject both arguments. Even assuming (without deciding) that there could be situations in which a party‘s failure to comply with the 100-day rule may be excused on equitable grounds, this is not one of them.
Key‘s estoppel and waiver arguments both depend upon the assumption that the parties could alter the 100-day deadline by agreement. But neither
Key argues that the 100-day rule is not jurisdictional, but is like other filing deadlines that parties may expressly or impliedly waive. The cases she cites in support of that argument either do not stand for that proposition or are unpersuasive.
For example, Key cites Abers and Southern Cal. Pipe Trades Dist. Council No. 16 v. Merritt (1981) 126 Cal.App.3d 530 (So. Cal. Pipe Trades) for the principle that a party may be equitably estopped from asserting the 100-day limitations period. But those cases both concerned questions of proper service, not a purported agreement to extend the 100-day deadline. In So. Cal. Pipe Trades, the court ruled that an individual was not a party to the arbitration and that it would therefore be “fundamentally unfair” to conclude that service on him on behalf of a corporation was adequate. (126 Cal.App.3d at p. 541.) And in Abers, the court rejected the argument that a party was estopped from contesting whether a petition was properly served, finding that there was “no basis in equity to estop the [party] from demanding compliance with legal requirements for service of process.” (Abers, supra, 217 Cal.App.4th at p. 1209.)
Parties may generally agree to personal jurisdiction by accepting service of process or appearing in an action. (See Rockefeller, supra, 9 Cal.5th at pp. 138–139 [“Cases have recognized that one may waive both personal jurisdiction and notice aspects of service”].) In contrast, as discussed above, parties may not circumvent statutory jurisdictional deadlines. (Ibid.) Abers and So. Cal. Pipe Trades therefore do not support the conclusion that Key and LFG could just agree to extend the jurisdictional deadline in
Whatever else they might stand for, none of the cases that Key cites holds that parties are free to extend the 100-day deadline in
In sum, Key might have been misled about LFG‘s intention to waive the 100-day deadline, but Key could not have reasonably believed that LFG had the legal authority to do so. Key was represented by counsel. For purposes of estoppel claims, “ ‘attorneys are “charged with knowledge of the law in California.” ’ ” (Abers, supra, 217 Cal.App.4th at p. 1210, quoting Steinhart v. County of Los Angeles (2010) 47 Cal.4th 1298, 1316.) Key was therefore charged with the knowledge that the 100-day deadline is jurisdictional and could not be waived or extended by agreement. Thus, LFG could not waive the deadline and was not estopped from asserting it as a ground for disregarding Key‘s untimely request to vacate.
3. LFG‘s Petition to Confirm Must Be Granted
Key‘s request to vacate was untimely, and she did not request any correction (which, in any event, would also have been untimely under
DISPOSITION
The trial court‘s order is reversed. On remand, the trial court shall enter an order confirming the arbitration award. Appellant Law Finance Group is entitled to its costs on appeal.
CERTIFIED FOR PUBLICATION.
LUI, P. J.
We concur:
ASHMANN-GERST, J.
HOFFSTADT, J.
Notes
In Oaktree Capital, the appellant argued that his request to vacate was timely because it was filed within 100 days of the arbitration award, even though there was a dispute about whether he had complied with the 10-day deadline under
