Stermer v. Modiano Constr. Co.

• Decision Date: 02 January 1975
• Citation: 44 Cal.App.3d 264,118 Cal.Rptr. 309
• Court: California Court of Appeals Court of Appeals
• Parties: Rudolph H. STERMER, D.D.S., Petitioner and Appellant, v. MODIANO CONSTRUCTION COMPANY, INC., a California Corporation, Respondent and Appellant. Civ. 42964.

Page 309

118 Cal.Rptr. 309

44 Cal.App.3d 264

Rudolph H. STERMER, D.D.S., Petitioner and Appellant, v. MODIANO CONSTRUCTION COMPANY, INC., a California Corporation, Respondent and Appellant.

Civ. 42964.

Court of Appeal, Second District, Division 5, California.

Jan. 2, 1975.

Hearing Denied Feb. 26, 1975.

[44 Cal.App.3d 265] Kenneth P. Scholtz, Beverly Hills, for petitioner and appellant.

Melvin S. Lebe, Los Angeles, for respondent and appellant.

ASHBY, Associate Justice.

This is an appeal by petitioner and appellant Rudolph H. Stermer, D.D.S. (Stermer), from a judgment of the superior court confirming an award in arbitration in favor of respondent and appellant Modiano Construction Company, Inc. (Modiano). Modiano also appeals from that portion of the judgment which denies the award of attorney's fees to Modiano.

On March 9, 1973, Stermer filed the petition in this case (superior court No. C 51947) to vacate an award of arbitrator Jordan A. Dreifus of November 29, 1972. The award arose out of a dispute over a written building construction contract between Stermer and Modiano of April 4, 1970, which was submitted to arbitration pursuant to the contract. The arbitrator had determined that Modiano was entitled to the balance due on the construction contract, less certain credits in favor of Stermer, for a net award to Modiano of $3,131.

The petition urged the following grounds for vacating the award: (1) The award was procured by undue means in that the arbitrator had informed himself of the results of a previous arbitration of the same dispute rendering it impossible for Stermer to obtain a fair hearing; (2) the award in the prior arbitration had been vacated on September 8, 1971, and the order vacating that award was improperly amended Nunc pro tunc on November 17, 1971, to read that a rehearing before a neutral arbitrator was ordered; (3) the arbitrator had no authority to act because of the pendency of another case in superior court, case number C 14854, which was erroneously stayed pending the arbitration and (4) the arbitrator was arbitrary in limiting Stermer to a credit of $500.

A hearing on the petition to vacate the award was set for March 23, 1973, and subsequently continued to April 6, 1973. Modiano submitted a response to the petition on March 19, 1973, including declarations of Melvin S. Lebe (Modiano's counsel) and of Jordan A. Dreifus (the arbitrator) in opposition to the petition.

The award of the arbitrator was confirmed by order of the court on April 6, 1973, and judgment was entered on May 4, 1973. Findings of fact and conclusions of law were not made because they were not requested. ¹ Judgment was entered for Modiano for $3,131, plus costs of $26. The judgment also provided that the parties would equally bear the administrative fees of the American Arbitration Association and that neither party was entitled to attorney's fees.

CONTENTIONS

Stermer urges two grounds on appeal for reversing the judgment confirming the award of the arbitrator: (1) Arbitrator Dreifus was without jurisdiction because the Nunc pro tunc order of November 17, 1971, amending the previous order of September 8, 1971, to provide for a rehearing in arbitration, was invalid, there being an insufficient showing that the failure of the September 8 order to provide for a rehearing was clerical rather than judicial error, and (2) findings of fact and conclusions of law were required by Code of Civil Procedure section 1291, notwithstanding Stermer's failure to request them, and Code of Civil Procedure section 632 is not applicable to an order confirming an arbitration award. On its part, Modiano contends that it was entitled to an award of attorney's fees pursuant to a clause of the contract between the parties. We conclude that Stermer's contentions are without merit and that Modiano is entitled to an award of attorney's fees.

PREVIOUS HISTORY OF THIS DISPUTE

In order to comprehend the specific contentions raised on this appeal it is necessary to understand the previous history of this dispute. We derive this history from the record in the instant case (superior court No. C 51947), the briefs, and from the superior court files in two related actions, superior court number C 6733 and superior court number C 14854, of which both parties request that we take judicial notice.

On April 4, 1970, Stermer entered into a written contract with Modiano for the construction of a dental office. A dispute subsequently arose, Stermer claiming that the office had not been constructed according to specifications and had not been completed on time. Pursuant to the arbitration agreement in the contract the case went to arbitration before arbitrator R. Thomas Davidson. On June 8, 1971, arbitrator Davidson found that Modiano was due $3,600 on the contract and he denied Stermer's counterclaim.

Modiano filed a petition in superior court case number C 6733 to confirm the award. In opposition, Stermer petitioned to vacate the award on the ground that he had been denied a fair arbitration hearing because he had been denied sufficient time for discovery and preparation. Stermer requested that the award be vacated and rescheduled for a hearing before a neutral arbitrator after proper discovery.

On September 8, 1971, the superior court denied the petition to confirm and ordered the award vacated. The court's minute order stated: 'Petition denied. The award is ordered vacated. Respondent (Stermer) to serve notice.' Although ordered to serve notice, Stermer did not do so until November 2, 1971.

Subsequent to the order vacating the award and prior to the serving of notice thereof, Stermer filed an action for damages in superior court number C 14854 against Modiano and Sterling Smith, a contractor working for Modiano. The complaint was for money damages based upon the same dispute. It alleged four counts: (1) Failure to perform to specifications; (2) failure to perform on time; (3) conspiracy to fail to perform to specifications, and (4) misrepresentation that an attic would be provided.

On November 17, 1971, in case number C 6733, Modiano made an ex parte application for an order correcting the minute order of September 8, 1971. Modiano moved that the September 8 order be amended Nunc pro tunc to add: 'A rehearing of this matter in arbitration before a neutral arbitrator is hereby ordered.' In a declaration by Modiano's counsel it was pointed out that in requesting vacation of said award Stermer had prayed that a rehearing before a neutral arbitrator be ordered, and Modiano's counsel further declared that 'at the hearing of said matters, on September 8, 1971, this court vacated said award, and declarant believed that this court ordered a rehearing before a neutral arbitrator.' The declaration further stated that counsel had not discovered that the September 8 minute order failed to order a rehearing, because he had not been served with notice of the ruling until after November 2, 1971. Counsel for Modiano also declared that he had informed Stermer's counsel that he would appear to request said correction of the minute order and that counsel for Stermer indicated he would not appear.

On November 17, 1971, the court in number C 6733 made the following order: 'Nunc pro tunc. Pursuant to ex parte application of petitioner and order thereon, and it appearing to the court that the minute order of September 8, 1971, does not properly reflect the order of the court said minute order is amended nunc pro tunc as of said date of September 8, 1971, by adding the following, to wit: 'A rehearing of this matter in arbitration before a neutral arbitrator is hereby ordered."

On November 24, 1971, in number C 14854, Modiano informed the court of the existence of the order for a rehearing in arbitration in number C 6733 and requested a stay of the proceedings. On December 23, 1971, the court in number C 14854 ordered the proceedings stayed pending final arbitration, it appearing that the complaint in number C 14854 involved the same dispute which was subject to an order compelling arbitration in number C 6733.

The arbitration rehearing in number C 6733 was held before arbitrator Dreifus on November 11, 1972, resulting in an award in favor of Modiano on November 29, 1972. Stermer then filed this action, number C 51947, to vacate arbitrator Dreifus' award. It is conceded that in light of Code of Civil Procedure section 1292.6 ² Stermer should have filed this petition in number C 6733 instead of filing a new petition, number C 51947.

NUNC PRO TUNC ORDER FOR REHEARING IN ARBITRATION

Stermer contends that the Nunc pro tunc order of November 17, 1971, ordering a rehearing in arbitration, was invalid, and that therefore the subsequent award in arbitration was also invalid and should not have been confirmed by the trial court below. He contends that the record is not sufficiently clear that the failure of the September 8, 1971, minute order to provide for a rehearing in arbitration was merely clerical error rather than judicial error. We find this contention to be without merit.

Preliminarily, however, Modiano contends that Stermer should not be permitted to raise this argument on appeal because he did not question the arbitrator's jurisdiction on this basis at the arbitration hearing. Modiano contends that Stermer willingly participated in the arbitration hearing on the merits, and that he may not now raise jurisdictional arguments for the first time on appeal from an unfavorable award, citing Forrest v. Hotel Conquistador, Inc., 193 Cal.App.2d 503, 509, 14 Cal.Rptr. 349, and Dugan v. Phillips, 77 Cal.App. 268, 277, 246 P. 566. The cases cited by Modiano are inapposite. In this case the superior court had ordered a rehearing in arbitration. Stermer could not reasonably be expected to argue to the arbitrator that the superior court had made an invalid order, because the arbitrator had no jurisdiction to reverse an order of the superior court. An order...