EHM Prods., Inc. v. Starline Tours of Hollywood, Inc., B281594

• Decision Date: 28 March 2018
• Docket Number: B281594
• Court: California Court of Appeals Court of Appeals
• Parties: EHM PRODUCTIONS, INC., Plaintiff and Respondent, v. STARLINE TOURS OF HOLLYWOOD, INC., Defendant and Appellant.

21 Cal.App.5th 1058

230 Cal.Rptr.3d 862

EHM PRODUCTIONS, INC., Plaintiff and Respondent,

v.STARLINE TOURS OF HOLLYWOOD, INC., Defendant and Appellant.

B281594

Court of Appeal, Second District, Division 2, California.

Filed March 28, 2018

Lex Opus, Mohammed K. Ghods, Jeremy A. Rhyne, and Lori Speak, for Defendant and Appellant.

Boies Schiller Flexner, Linda M. Burrow and Kelly L. Perigoe, Los Angeles, for Plaintiff and Respondent.

CHAVEZ, J.

Starline Tours of Hollywood, Inc. (appellant) appeals from a judgment confirming an arbitration award. The arbitration involved a contract dispute between appellant and EHM Productions, Inc. doing business as TMZ (respondent) regarding appellant's duty to defend respondent in a lawsuit brought by appellant's bus drivers. Respondent obtained an award requiring appellant to defend respondent in the bus driver action. Following arbitration, the award was confirmed by a JAMS appellate panel. Respondent filed a petition to confirm the award, which was granted. Appellant appealed, and this court affirmed the award on October 4, 2017.¹

After respondent filed its petition to confirm the arbitration award, the JAMS appellate panel determined that appellant owed respondent $41,429.92 in costs. Following confirmation of the initial arbitration award, respondent sought, and received, confirmation of the cost award. Appellant now appeals from the second judgment granting respondent's petition to confirm the cost award. Appellant's sole contention on appeal is that the trial court erred by entering two consecutive judgments resulting from the same arbitration. We find that appellant has failed to demonstrate error, therefore we affirm the second award.

BACKGROUND

In August 2012, appellant and respondent entered into a written contractual agreement captioned "TMZ-Starline Tour Bus Agreement." The agreement solidified the parties' intent to run a "TMZ branded, multi-media Hollywood bus tour in Southern California."

In December 2012, several bus drivers filed a putative class action against appellant alleging that it had violated certain wage and hour laws. The named plaintiffs sought to represent all similarly situated employees regardless of whether they worked in connection with the TMZ tour or one of appellant's other tours. On June 14, 2013, the putative class action complaint was amended to add TMZ Productions, Inc. (TMZ Productions) as a defendant.

Respondent tendered its defense to appellant. Appellant responded that it had no duty to indemnify TMZ Productions, but offered to indemnify under certain conditions.

In August 2013, respondent retained counsel to represent respondent and TMZ Productions. Between June 2013 and January 2014, respondent voluntarily agreed with the plaintiffs in the underlying lawsuit to be added as a defendant in order to secure the dismissal of TMZ Productions. The plaintiffs added respondent as a defendant in January 2014 and voluntarily dismissed TMZ Productions in April 2014.

PROCEDURAL HISTORY

The arbitration

On June 2, 2014, respondent filed a demand for arbitration, alleging breach of contract by appellant arising from its refusal to defend respondent in the underlying lawsuit. Respondent sought a declaration that appellant was required to defend TMZ Productions and respondent. Respondent sought an award of its costs and fees incurred through January 31, 2015, and a declaration that appellant is required to pay respondent's reasonable attorney fees as they are incurred going forward.

The partial final award

On June 8, 2015, the arbitrator issued a "partial final award." The arbitrator found that appellant was obligated to defend TMZ Productions and respondent in the underlying lawsuit. The arbitrator ordered appellant to pay respondent $185,725 for its attorney fees and $15,836.83 for its costs incurred in the underlying action through January 31, 2015. The arbitrator further ordered appellant to pay respondent's reasonable attorney fees and costs in the underlying action going forward. The arbitrator expressly reserved jurisdiction over the matter "to ensure enforcement of [appellant's] defense obligation, payment of [respondent's] reasonable attorneys' fees and costs, and to resolve any dispute regarding indemnity, if necessary."

Appellant appealed the award under the JAMS Optional Appeal Procedure, as permitted in the parties' agreement. The appellate panel affirmed the arbitrator's partial final award in its entirety. The determination of costs on appeal was reserved for further decision.

On May 9, 2016, respondent filed a petition to confirm the partial final award in Superior Court. Starline opposed the petition on numerous grounds. On June 21, 2016, the trial court granted the petition, ordering respondent to give notice and prepare and serve a proposed order. Appellant objected to the proposed order. The court held a hearing on July 27, 2016. At the conclusion of the hearing, the court signed an amended judgment confirming the arbitration award.

On August 26, 2016, appellant filed an appeal from the judgment. On October 4, 2017, this court filed an opinion affirming the judgment in full.

Award of costs for the JAMS appeal

On May 12, 2016, three days after respondent filed its petition to confirm the partial final award, the JAMS appellate panel issued its "Final Award on Appeal" (cost award), determining respondent's costs for the JAMS appeal.² The cost award granted respondent $41,429.92 in costs.

On August 22, 2016, respondent petitioned for confirmation of the cost award. Appellant opposed the petition, arguing, among other things, that respondent waived its right to obtain confirmation of the cost award by failing to present it for confirmation prior to the entry of the first judgment.

The trial court rejected appellant's arguments and entered a judgment confirming the cost award on January 23, 2017. The court ordered appellant to pay respondent $41,429.92 in accordance with the cost award. The court cited Hightower v. Superior Court (2001) 86 Cal.App.4th 1415, 1434, 104 Cal.Rptr.2d 209 ( Hightower ), for the proposition that " 'utilization of a multiple incremental or successive award process' may be appropriate."

Appeal of the cost award

Appellant filed a timely notice of appeal of the cost award on March 20, 2017.

DISCUSSION

I. Standard of review

The trial court's decision granting respondent's petition to confirm the cost award is reviewed de novo. ( Advanced Micro Devices, Inc. v. Intel Corp. (1994) 9 Cal.4th 362, 376, fn. 9, 36 Cal.Rptr.2d 581, 885 P.2d 994.) If the trial court's ruling relies on a determination of disputed factual issues, we apply the substantial evidence test on those particular issues. ( Toal v. Tardif (2009) 178 Cal.App.4th 1208, 1217, 101 Cal.Rptr.3d 97.) Where error is shown, this court may not set aside the order unless the error prejudiced the appellant. ( Cal. Const. art. VI, § 13 ; Code Civ. Proc., § 475.)

We briefly review the procedures leading up to confirmation of an arbitration award. Pursuant to Code of Civil Procedure section 1285, any party to an arbitration in which an award has been made may petition the court to "confirm, correct or vacate the award."³ Once a petition to confirm an award is filed, the superior court must select one of only four courses of action: it may confirm the award, correct and confirm it, vacate it, or dismiss the petition. ( Cooper v. Lavely & Singer Professional Corp. (2014) 230 Cal.App.4th 1, 11, 178 Cal.Rptr.3d 322.) "[I]t is the general rule that, with narrow exceptions, an arbitrator's decision cannot be reviewed for errors of fact or law." ( Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 11, 10 Cal.Rptr.2d 183, 832 P.2d 899.) Under section 1286.2, the court may vacate the award only under " 'very limited circumstances.' " ( Roehl v. Ritchie (2007) 147 Cal.App.4th 338, 347, 54 Cal.Rptr.3d 185.) Neither the trial court, nor the appellate court, may "review the merits of the dispute, the sufficiency of the evidence, or the arbitrator's reasoning, nor may we correct or review an award because of an arbitrator's legal or factual error, even if it appears on the award's face. Instead, we restrict our review to whether the award should be vacated under the grounds listed in section 1286.2. [Citations.]"⁴ ( Ibid. )

II. Appellant has failed to show that the one final judgment rule precludes confirmation of the cost award

Appellant argues that the incremental judgments entered in this case violate the one final judgment rule. ( Fleuret v. Hale Constr. Co. (1970) 12 Cal.App.3d 227, 230, 90 Cal.Rptr. 557 ( Fleuret ) ["[o]rdinarily there may be but one final judgment in an action"].) Appellant argues that " ' "[p]iecemeal disposition[s]" ' " in a single action are " ' "oppressive and costly" ' " and may result in multiple appeals. ( Kurwa v. Kislinger (2013) 57 Cal.4th 1097, 1101, 162 Cal.Rptr.3d 516, 309 P.3d 838 ( Kurwa ).) Appellant argues that no case sanctions the entering of multiple independent judgments on an arbitration award and its subsequent cost award arising from a single arbitration.

The authority cited by appellant does not support appellant's position that the one final judgment rule prevented the trial court from confirming the cost award in this case. Fleuret involved a direct action and a cross-action. The trial court found in favor of the cross-defendants on the cross-complaint and entered a judgment that the cross-plaintiff take nothing on his cross-complaint. However, the issues raised in the direct action, and the resulting damages, had not been determined, and no judgment had been entered on the original complaint. Under those circumstances, the court determined that "[a] cross-complaint is not considered sufficiently independent to allow a separate final judgment to be entered upon it. [Citation.]" ( Fleuret, supra, 12 Cal.App.3d at p. 230, 90 Cal.Rptr. 557.) The case does not address a situation where, as here, a cost award is entered subsequent to the entry of a partial final...