ERIK SYVERSON, Plaintiff and Appellant, v. BARBARA REEVES et al., Defendants and Respondents.
B312663
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA, SECOND APPELLATE DISTRICT, DIVISION ONE
April 25, 2022
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION ONE
ERIK SYVERSON,
Plaintiff and Appellant,
v.
BARBARA REEVES et al.,
Defendants and Respondents.
B312663
(Los Angeles County Super. Ct. No. 20STCV00592)
APPEAL from a judgment of the Superior Court of Los Angeles County, Steven J. Kleifield, Judge. Affirmed.
Pick & Boydston, Brian D. Boydston for Plaintiff and Appellant.
Long & Levit, Joseph P. McMonigle, Jessica R. MacGregor, and Nicola M. Till for Defendants and Respondents.
Syverson contends that Code of Civil Procedure section 430.41, subdivision (b) prohibited JAMS from raising arbitral immunity as a basis for demurrer for the first time in response to the second amended complaint.1 We need not determine whether Syverson’s contention has merit, however, because Syverson has not demonstrated that the trial court’s consideration of arbitral immunity was prejudicial. Absent prejudice, we must affirm.
BACKGROUND
In July 2018, Raines Feldman LLP submitted a demаnd for arbitration to JAMS along with a statement of claims against Syverson, a former Raines Feldman partner. In the statement of claims, Raines Feldman alleged that Syverson had breached a settlement agreement that contained an arbitration clause. JAMS commenced the arbitration based on Raines Feldman’s demand and statement of claims. Syverson declined to voluntarily arbitrate the matter, and Raines Feldman successfully moved the trial court for an order compelling arbitration.
In her initial disclosures to the parties, dated September 18, 2018, Reeves did not disclose that she was a part owner of JAMS.
On Octobеr 22, 2019, the United States Court of Appeals for the Ninth Circuit issued its opinion in Monster Energy Company v. City Beverages, LLC (2019) 940 F.3d 1130, holding that “before an arbitrator is officially engaged to perform an arbitration, to ensure that the parties’ acceptance of the arbitrator is informed, arbitrators must disclose their ownership interests, if any, in the arbitration organizations with whom they are affiliated in connection with the proposed arbitration, and those organizations’ nontrivial business dealings with the parties to the arbitration.” (Id. at p. 1138.) The Ninth Circuit vacated the arbitration award in that case because, it concluded, “the Arbitrator’s failure to disclose his ownership interest in JAMS . . . creates a reasonable impression of bias and supports vacatur of the arbitration award.” (Ibid.)
Syverson filed the original complaint in this matter on January 6, 2020, allеging causes of action against Reeves and JAMS for violations of the Consumers Legal Remedies Act (
Syverson filed his first amended complaint on June 1, 2020. In it, he alleged the same causes of action as in the original complaint. Reeves and JAMS again demurred. At a hearing on September 30, 2020, the trial court sustained JAMS’s demurrers and granted Syverson 15 days to file a second amended complaint—the complaint that is the subject of this appeal.
Syverson filed the second amended complaint on Oсtober 8, 2020, alleging the same five causes of action that he had alleged in the original and first amended complaints. On December 10, 2020, JAMS filed demurrers to the second amended complaint. In support of their demurrers to the second amended complaint, JAMS and Reeves arguеd that each of Syverson’s causes of action
The trial court heard the demurrers on January 29, 2021. The trial court concluded that each of the causes of action in the second amended complaint were barred by the arbitral immunity doctrine and sustained demurrers to the complaint without leave to amend. The trial court entered judgment for JAMS and Reeves on March 16, 2021.
Syverson filed a timely notice of appeal.
DISCUSSION
“The standard of review governing an order sustaining a demurrer without leave to amend is long-settled. [Citation.] ‘ “We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed.” [Citаtion.] Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. [Citation.] When a demurrer is sustained, we determine whether the complaint states facts sufficient to constitute a cause of action.’ [Citation.] We ‘ “determinе de novo whether the complaint alleges facts sufficient to state a cause of action or discloses a complete defense.” ’ ” (San Francisco CDC LLC v. Webcor Construction L.P. (2021) 62 Cal.App.5th 266, 276.)
“Although a general demurrer does not ordinarily reach affirmative defenses, it ‘will lie where the complaint “has included allegаtions that clearly disclose some defense or bar to recovery.” ’ [Citations.] ‘Thus, a demurrer based on an affirmative defense will be sustained only where the face of the complaint discloses that the action is necessarily barred by the
Syverson’s only contention on aрpeal is that the trial court was precluded from sustaining demurrers based on arbitral immunity by
The parties agree that arbitral immunity was not raised as an argument in support of demurrers to the originаl complaint or the first amended complaint, and that the first time the demurring parties made the argument was in support of demurrers to the second amended complaint. The trial court’s order on JAMS’s demurrers notes as much: “While the Court would have preferred that the arbitral immunity argument wаs made in support of the demurrer to the First Amended Complaint, Defendants are not precluded from doing so now.” The trial court appears to have reasoned, however, that JAMS’s inclusion in the demurrers to each complaint of a statutory ground for a demurrer—“‘[t]he pleading does not state facts sufficient to constitute a cause of action’”—satisfies
Ultimately, however, if Syverson has not demonstrated that he was somehow prejudiced by the trial court’s purported error, then we need not determine in the first instance whether it was error for the trial court to consider the arbitral immunity doctrine in connection with demurrers to Syverson’s second
Syverson declined to discuss the merits of the arbitral immunity doctrinе in his briefing in the trial court. In his opening brief here, his entire argument was that based on
Assuming without deciding thаt the trial court erred when it considered arbitral immunity when it was raised as an argument for the first time in demurrers to a second amended complaint, whether that error was prejudicial turns on whether arbitral immunity operates as a complete bar to Syverson’s complaint. If arbitral immunity does not bar the complaint’s causes of action, the trial court’s order has obviously prejudiced Syverson. If arbitral immunity does apply, however, then it could have been raised later in the proceedings and still would have operated as a complete bar to Syverson’s complaint. “A motion for judgment on the pleadings,” for example, “can be filed at any time (even if a demurrer cannot).” (Beames v. City of Visalia (2019) 43 Cal.App.5th 741, 785.) Indeed, “[t]he court may upon its own motion grant a motion for judgment on the pleadings.”
Because no party briefed the merits of the arbitral immunity doctrine in this court as it applies to this matter, we requested supplemental briefing from the parties.
“ ‘Arbitral immunity shields all functions which are “integrally related to the arbitral process.” . . . [A]rbitrators . . . are exempt from civil liability for fаilure to exercise care or skill in the performance of their arbitral functions.’ ” (Stasz v. Schwab (2004) 121 Cal.App.4th 420, 431-432.) “California courts have extended arbitral immunity to organizations that sponsor arbitrations . . . .” (Id. at p. 433.)
The trial court based its order on La Serena Properties, LLC v. Weisbach (2010) 186 Cal.App.4th 893 (Weisbach), concluding that it was directly on point. Weisbach explained that “[i]n determining whether absolute immunity applies to the conduct of a public or privatе arbitrator, ‘the courts look at “the nature of the duty performed [to determine] whether it is a judicial act—not the name or classification of the officer who performs it . . . .” ’ ” (Id. at p. 901.)
“Central to impartial decision-making by arbitrators and judges alike,” Weisbach explains, “is the need for them to make disclosures that may give rise to a challenge to the judge’s impartiality by one of the parties, even if the judge or arbitrator
A party’s remedy for an arbitrator’s or arbitration organization’s failure to disclose or improper disclosures, Weisbach explained, is not a civil suit, but rather is vacatur of an arbitration award. (Weisbach, supra, 186 Cal.App.4th at p. 904.)
Each of Syverson’s causes of action is based on the same basic set of allegations against JAMS and Reeves. Syverson alleged that both JAMS and Reeves knew that Reeves was a part owner of JAMS and that JAMS had been a repeat provider for Raines Feldman. He alleged that JAMS and Reeves omitted disclosure of those facts, which Syverson alleged were material, in initial disclosures to the parties. Syverson alleged that he would have included that information in his original objection to Reeves’s appointment. And he alleged that he was dаmaged by having to “endure the work, cost and annoyance of participating in the arbitration between August 13, 2019 and October 29, 2019”—the point at which the information that led to Reeves’s disqualification was disclosed to the parties.
Weisbach appears to squarely foreclose Syverson’s complaint.
Based on our conclusion that the arbitral immunity doctrine operates as a complete defense to the causes of action in Syverson’s second amended complaint, Syverson has not demonstrated that he was prejudiced by any trial court error. JAMS and Reeves would have been entitled to judgment as a matter of law whether the argument had been raised in demurrers to Syverson’s original or first amended complaint, or had it been raised later in the proceedings.
DISPOSITION
The judgment is affirmed. Respondents are awarded their costs on appeal.
NOT TO BE PUBLISHED
CHANEY, J.
We concur:
ROTHSCHILD, P. J. CRANDALL, J.*
* Judge of the San Luis Obispo County Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.