Filed 4/28/14 Kaufman v. Diskeeper CA2/4
               NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
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           IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                   SECOND APPELLATE DISTRICT

                                                DIVISION FOUR


BARRY B. KAUFMAN et al.,                                             B247315
                                                                     (Los Angeles County
                Plaintiffs and Appellants,                           Super. Ct. No. BS137215)

v.

DISKEEPER CORPORATION,

              Defendant and Respondent.


         APPEAL from a judgment of the Superior Court of Los Angeles, Kevin C.
Brazile, Judge. Affirmed.
         Wilson Elser Moskowitz Edelman & Dicker, Patrick M. Kelly and David S.
Eisen; Law Offices of Barry B. Kaufman and Barry B. Kaufman for Plaintiffs and
Appellants.
         Jeffer Mangels Butler & Mitchell, Louise Ann Fernandez, Dan P. Sedor and
An Nguyen Ruda; Jones Day, Elwood Lui and Peter E. Davids for Defendant and
Respondent.
      Appellants Barry B. Kaufman and Alexander Godelman challenge the trial
court’s confirmation of an arbitration award in favor of respondent Diskeeper
Corporation (Diskeeper). They maintain the award must be vacated because the
arbitrator refused to hear material evidence and exceeded his powers in fashioning
the award; in addition, they argue the award contravenes fundamental public
policies. We reject their contentions and affirm.


                RELEVANT FACTUAL AND PROCEDURAL
                                 BACKGROUND
      A. Prior Litigation and Settlement Agreement
      Diskeeper is a software company located in Burbank. In 2006, Diskeeper
hired Godelman as its Chief Information Officer, and also hired Marc LeShay,
who worked as Godelman’s subordinate. After LeShay resigned from his position,
Diskeeper terminated Godelman. Upon leaving Diskeeper’s employment,
Godelman and LeShay requested inspections of their personnel records.
Diskeeper permitted them to review their records, and gave them copies of
documents they had signed relating to their employment.
      In July 2007, Godelman and LeShay initiated a lawsuit against Diskeeper in
which Godelman asserted claims for wrongful termination. Kaufman, an attorney,
represented Godelman and LeShay in the action. Kaufman later represented other
former or then-current Diskeeper employees in separate suits against Diskeeper.
      In June 2009, Godelman and LeShay entered into a settlement of their
action against Diskeeper. The settlement agreement contained several terms
pertinent here. Paragraph 8, entitled “Return of Property,” obliged Godelman and
LeShay to return “all property of [Diskeeper] . . . in their possession including,
without limitation, e-mails, memoranda, documents, files and instruction


                                          2
manuals.” Paragraph 8 encompassed documents that Godelman and LeShay found
after the execution of the settlement agreement, as well as documents Diskeeper
produced during the action.
      Paragraph 9, entitled “Confidentiality,” set forth several interrelated
obligations. Subparagraph A of paragraph 9 (paragraph 9(A)) obliged Godelman
and LeShay not to “disclose, disseminate or publicize to any other persons the
terms and conditions of this [a]greement or the facts or allegations underlying [it]
or the [l]awsuit,” with the exception of certain specified persons, including
“wives, financial advisors and attorneys.”
      Under paragraph 9(B), Godelman and LeShay agreed not to disclose
information to any such person before obtaining that person’s written assurance
that he or she would abide by “the terms of Paragraph 9.” Paragraph 9(B) further
stated that with respect to disclosures to attorney Kaufman, he was “exempt from
this requirement” because his signature on the settlement agreement itself
represented his consent “to be bound by the non-disclosure terms of this
[a]greement.”
      Paragraph 9(C) required Godelman and LeShay to notify Diskeeper’s
counsel whenever disclosure of the settlement agreement was sought in legal
proceedings. Paragraph 9(C) further provided that Godelman, LeShay, and “any
other person who agree[d] to abide by this pledge of confidentiality” were barred
from disclosing information regarding the settlement agreement to Diskeeper’s
former or then-current employees.
      Paragraph 9(D) authorized Kaufman to continue his representation of
certain former and then-current Diskeeper employees, stating: “Nothing contained
herein is intended to restrict or limit Kaufman’s ability to represent these persons.”
Paragraph 9(D) nonetheless specified that Kaufman was obliged to engage in


                                          3
mediation on behalf of those individuals before initiating any litigation against
Diskeeper. Paragraph 9(D) also imposed a limit on the maximum initial demand
that Kaufman could assert during any mediation, and stated: “Notwithstanding
this [p]aragraph, Kaufman shall agree not to disclose the amounts paid,
consideration or any terms and conditions of this [a]greement.”
      Paragraph 9(E) provided: “[Godelman and LeShay] agree that the sum of
$35,000 will be deemed reasonable liquidated damages for each breach of
[paragraph 9], except that each . . . will only be responsible for the liquidated
damages amount attributable to his disclosure, or any disclosure by the third party
who received information from him . . . .”
      Under other terms of the settlement agreement, the parties agreed to submit
disputes to binding arbitration “before a retired state or federal judge affiliated
with JAMS.” The agreement also contained an attorney fee provision, which
provided for a fee award to the prevailing party in any such arbitration.


      B. Underlying Proceedings
             1. Events Preceding Arbitration
      In June 2009, Kaufman delivered three boxes of documents to Diskeeper’s
counsel on behalf of Godelman and LeShay. When asked whether the boxes
contained “everything,” Kaufman replied in the affirmative. After receiving the
boxes and that assurance, Diskeeper gave Kaufman the funds required under the
settlement agreement.
      Later, while representing other parties in an unrelated wage and hour
lawsuit against Diskeeper, Kaufman propounded discovery regarding documents
related to Diskeeper’s training courses. When Diskeeper opposed the discovery
and filed a motion for a protective order, Kaufman filed a motion to compel. In


                                           4
September 2010, while the motions were pending, Kaufman conducted the
deposition of Brad Pitler, a former Diskeeper employee. During the deposition,
Kaufman used three training documents Godelman had obtained from Diskeeper;
in addition, Kaufman showed the documents to his co-counsel in the action.
Diskeeper objected to Kaufman’s use of the documents and asked Kaufman to
return them, but Kaufman declined to do so. Later, in November 2010, Diskeeper
produced redacted versions of the three documents, subject to a protective order.


             2. Arbitration
      In January 2011, Diskeeper commenced an arbitration by filing a complaint
and demand for arbitration. Diskeeper asserted claims against appellants for
breach of the settlement agreement, breach of the implied covenant of good faith
and fair dealing, unjust enrichment, intentional misrepresentation, negligent
misrepresentation, and civil conspiracy. The matter was submitted to arbitration
before retired Superior Court Judge Haley J. Fromholz.


                   a. Evidentiary Hearing
      The arbitrator set an evidentiary hearing for September 7, 2011. According
to the arbitrator’s procedural order, the hearing was expected to take two days.
During the hearing, Kaufman represented Godelman, and other attorneys
represented Kaufman.
      Godelman was served with a notice to appear on September 7, 2011. On
that date, at the beginning of the hearing, Kaufman announced that he had
received an e-mail from Godelman stating that he did not intend to appear.
According to the e-mail, Godelman had several reasons for his decision, including
that he did not wish to relive “all of the crap that Diskeeper threw at [him] before,”


                                          5
that Diskeeper’s claims were “about [Kaufman], not [him],” that he was dealing
with his wife’s surgery and “slow recovery,” and that he had “responsibilities at
work.” Kaufman did not request a continuance to obtain Godelman’s testimony;
rather, he proposed that Godelman’s deposition testimony be received into
evidence, and opposed Diskeeper’s proposal that Godelman testify by telephone.
The arbitrator ruled that because Godelman had failed to comply with the notice to
appear, Diskeeper could “use [Godelman’s] deposition for any purpose.”
      The next morning, shortly before the close of the presentation of evidence,
Kaufman told the arbitrator that Godelman had agreed to testify by telephone at
1:30 p.m. The arbitrator declined to permit Godelman to testify, stating: “If there
were to be an effort to postpone the hearing or postpone his testimony or have him
appear by some alternatives, the time to do that was when he failed to appear.”


                   b. Interim Award
      On January 16, 2012, the arbitrator issued his interim award. The arbitrator
found that Godelman breached his obligations under paragraph 8 of the settlement
agreement by failing to return all of Diskeeper’s documents. The arbitrator further
found that Kaufman breached his duty of confidentiality under paragraph 9(A) of
the settlement agreement by using Diskeeper’s training documents during the
Pitler deposition and showing them to his co-counsel; in addition, the arbitrator
determined that Kaufman made a negligent misrepresentation when he told
Diskeeper that Godelman and LeShay had returned all the documents required
under the settlement agreement. The arbitrator concluded that Diskeeper was
entitled to an order directing the return of Diskeeper’s documents, an award of
$70,000 “in liquidated damages” from Kaufman, and an award of attorney fees




                                         6
and costs as the prevailing party. The arbitrator reserved the determination of
Diskeeper’s fees and costs for his final award.


                    c. Motion for Judgment Notwithstanding the Verdict
      Appellants filed a motion for judgment notwithstanding the verdict (JNOV),
arguing that Godelman obtained the pertinent documents pursuant to Labor Code
section 432, which obliges employers, upon request, to provide employees with
copies of documents they signed in the course of their employment. The motion
contended that the documents were Godelman’s property, and thus neither he nor
Kaufman breached the settlement agreement by retaining or using them.
      In denying the motion, the arbitrator concluded that he lacked the discretion
to “rehear[]” the case so that appellants could “pursue a different legal theory.”


                    d. Final Award
      On April 4, 2012, the arbitrator issued his final award, which incorporated
the interim award and contained findings regarding Diskeeper’s attorney fees and
costs. The arbitrator determined that Diskeeper was entitled to $297,000 in
attorney fees and $88,034.69 in costs and expenses. The arbitrator further stated:
“Because Diskeeper prevailed against Godelman because of the acts, omissions
and advice of his agent and attorney, Kaufman, it would be inequitable to award
[the fees, costs, and expenses] against Godelman as well. Acccordingly, the award
. . . is assessed only against . . . Kaufman.”


      C. Proceedings Before the Trial Court
      On May 9, 2012, appellants filed a petition to vacate the arbitration award
ruling. They later filed an amended petition and motions to vacate the award.


                                            7
Diskeeper opposed the petitions and motions, and filed a motion to confirm the
award. Following a hearing, the trial court granted Diskeeper’s motion. Judgment
in favor of Diskeeper and against appellants was entered on December 14, 2012.
This appeal followed.


                                  DISCUSSION
      Appellants contend the trial court improperly confirmed the award, arguing
(1) that the arbitrator improperly declined to permit Godelman to testify by
telephone, (2) that the award contravened public policy, and (3) that the remedies
in the award were not authorized by the settlement agreement. For the reasons
discussed below, we disagree.


      A. Governing Law
      To enforce the finality of arbitration, the statutes governing nonjudicial
arbitration awards minimize judicial intervention. (Moncharsh v. Heily & Blase
(1992) 3 Cal.4th 1, 10 (Moncharsh).) Once a petition to confirm an award is filed,
the superior court has only four courses of conduct: to confirm the award, to
correct and confirm it, to vacate it, or to dismiss the petition. (United Brotherhood
of Carpenters, etc., Local 642 v. DeMello (1972) 22 Cal.App.3d 838, 840; 6
Witkin, Cal. Procedure (5th ed. 2008) Proceedings Without Trial, § 566, pp. 1071-
1073.) The trial court is empowered to correct or vacate the award, or dismiss the
petition, upon the grounds set out in the pertinent statutes; “[o]therwise courts may
not interfere with arbitration awards.” (Santa Clara-San Benito etc. Elec.
Contractors’ Assn. v. Local Union No. 332 (1974) 40 Cal.App.3d 431, 437;
see also Moncharsh, supra, 3 Cal.4th at pp. 10-13.)




                                          8
      In seeking to vacate the award and opposing its confirmation, appellants
contended the arbitrator improperly refused to “hear evidence material to the
controversy” by declining to permit Godelman to testify by telephone (Code Civ.
Proc., § 1286.2, subd. (a)(5)). They also maintained that the award “exceeded [the
arbitrator’s ] powers” because it violated the public policy underlying Labor Code
section 432 and fashioned a remedy not supported by the settlement agreement
(Code Civ. Proc., § 1286.2, subd. (a)(4)). (Italics omitted.)
      We subject the trial court’s rulings and the underlying award to different
standards of review. To the extent the trial court made findings of fact in
confirming the award, we affirm the findings if they are supported by substantial
evidence. (Turner v. Cox (1961) 196 Cal.App.2d 596, 603.) To the extent the trial
court resolved questions of law on undisputed facts, we review the trial court’s
rulings de novo. (Advanced Micro Devices, Inc. v. Intel Corp. (1994) 9 Cal.4th
362, 376, fn. 9 (Advanced Micro Devices).)
      We apply a highly deferential standard of review to the award itself, insofar
as our inquiry encompasses the arbitrators’ resolution of questions of law or fact.
Because the finality of arbitration awards is rooted in the parties’ agreement to
bypass the judicial system, “it is the general rule that, ‘The merits of the
controversy between the parties are not subject to judicial review.’ [Citations.]”
(Moncharsh, supra, 3 Cal.4th at pp. 10-11.)
      Under this rule, courts will not review the arbitrator’s reasoning or the
sufficiency of the evidence supporting the award. (Moncharsh, supra, 3 Cal.4th at
pp. 10-11.) Moreover, absent “narrow exceptions” discussed further below (see
pts. B., C. & D., post), “an arbitrator’s decision cannot be reviewed for errors of
fact or law.” (Id. at p. 11.) These exceptions do not encompass errors that are
apparent on the face of the award and cause substantial injustice. (Id. at p. 32.)


                                           9
Circumstances justifying judicial review arise when the award contravenes “an
explicit legislative expression of public policy,” or the arbitrator imposes a remedy
not authorized by the arbitration agreement. (Cotchett, Pitre & McCarthy v.
Universal Paragon Corp. (2010) 187 Cal.App.4th 1405, 1416-1417 & fn. 1
(Cotchett, Pitre & McCarthy); Advanced Micro Devices, supra, 9 Cal.4th at
p. 375.)


      B. No Error Regarding Exclusion of Godelman’s Telephonic Testimony
      We begin with appellants’ contention that the arbitrator denied them a fair
hearing by declining to permit Godelman to testify by telephone.


               1. Governing Principles
      Code of Civil Procedure section 1286.2, subdivision (a)(5), states that the
trial court shall vacate an arbitration award if it determines that “[t]he rights of the
party were substantially prejudiced . . . by the refusal of the arbitrator[] to hear
evidence material to the controversy . . . .” Under that provision, “the arbitrator’s
obligation ‘to hear evidence’ does not mean that the evidence must be orally
presented or that live testimony is required. ‘Legally speaking the admission of
evidence is to hear it.’ [Citation.] An arbitrator ‘hears’ evidence by providing a
‘legal hearing,’ that is, by affording an ‘opportunity to . . . present one’s side of a
case.’ [Citation.] . . . Thus, a ‘hearing’ does not necessarily include ‘an
opportunity to present live testimony or be subject to cross examination.’
[Citation.]” (Schlessinger v. Rosenfeld, Meyer & Susman (1995) 40 Cal.App.4th
1096, 1105.)
      When a party contends the arbitrator breached the obligation to hear
evidence, the trial court’s inquiry ordinarily focuses on the existence of prejudice,


                                           10
as assessing the evidence’s materiality would usually require a “judicial second-
guessing” of the arbitrator’s factual and legal determinations. (Hall v. Superior
Court (1993) 18 Cal.App.4th 427, 438, 439.) The refusal to hear evidence is
substantially prejudicial only if “the arbitrator might well have made a different
award had the evidence been allowed,” in view of the arbitrator’s legal theory
regarding the case. (Id. at p. 439.) We review the trial court’s determination
regarding prejudice for the existence of substantial evidence. (Burlage v. Superior
Court (2009) 178 Cal.App.4th 524, 529 (Burlage).)


             2. Underlying Arbitration Proceedings
      On September 7, 2011, at the beginning of the evidentiary hearing before
the arbitrator, the following colloquy occurred:
      “[] Kaufman: . . . [¶] Even though I let Mr. Godelman, my client, know that
he was required to be here for purposes of today’s proceeding, I received an e-mail
at 8 p.m. last night . . . informing me that he was not going to be coming today.
[He t]hanked me for defending his interests, but . . . his wife recently had cancer
surgery.
      “Arbitrator []: All that’s necessary is to say he’s not going to be here. [¶]
Was he under subpoena?
      “[] Kaufman: Notice to appear. [¶] So I did explain to him the significance
of it, and I don’t mind really sharing his e-mail, if you want. But I did everything
that I could.” (Caps omitted.)
      The arbitrator permitted Kaufman to present copies of the e-mail, which
stated: “I appreciate everything you have done to defend my interests, I really do,
and . . . I will find a way to honor my obligations to you even if I don’t have a pot
to piss in right now. But you know how I feel about . . . all of the crap that


                                          11
Diskeeper threw at me before. Reliving that nightmare is not something I am
willing to do. Besides, the case they filed is about you, not me, so it’s your
problem really, not mine. [¶] With Diana’s surgery and slow recovery, and all of
my responsibilities at work, I can’t do what you asked. I’m not coming tomorrow.
I can’t even give you a commitment that I can call in by phone at a given time.
My family and work are more important to me than this. I gave my deposition,
and I told the truth. I don’t have anything to add. The truth always comes out.
I’m sure you’ll win. Let me know how it turns out.” (Italics added.)
      Diskeeper’s counsel asserted that live testimony from Godelman was
essential regarding certain matters, including changes he had made to his
deposition testimony. Counsel asked the arbitrator for leave to arrange for
Godelman to testify by telephone. In the alternative, counsel urged the arbitrator
to make a finding against Godelman because he was “in default.”
      Kaufman responded: “With regard to a client who’s not here . . . , I think
this impacts me adversely a lot more than it adversely affects [Diskeeper]
because[] in his deposition, they took a full three hours, asked him a ton of
questions[.] . . . I didn’t ask questions because I anticipated that he would be here
as my client and [that I would] be able to elicit the testimony that I wanted to elicit
from him. [¶] So that’s the reason I didn’t ask questions, as is commonly done.
[¶] With regard to the transcript itself, to eliminate any arguable prejudice to
Diskeeper, I will stipulate that you may receive the entire transcript . . . .” (Italics
added.)
      Kaufman further maintained that Godelman’s changes to his deposition
testimony concerned only Godelman’s fee agreement with Kaufman, not
paragraphs 8 and 9 of the settlement agreement. Kaufman thus argued that the
changes would become relevant in the arbitration only if Godelman were


                                           12
determined to be the prevailing party, for purposes of a fee award under the
settlement agreement. Kaufman stated: “[T]he appropriate time for . . . live
testimony [regarding the changes] would be only after there’s a determination that
[Diskeeper] loses . . . .” (Italics added.)
      The arbitrator stated: “Okay. I don’t want to spend more time on the
logistics of getting Mr. Godelman here or . . . answer the telephone or respond to
questions over the telephone. He’s under [s]ubpoena. He hasn’t appeared. [¶] . . .
[¶] . . . [Y]ou can use his deposition for any purpose and his changes to the
deposition will be excluded unless [Diskeeper] wants to bring them in.”
      The next morning, shortly before the close of the presentation of evidence,
Kaufman informed the arbitrator that Godelman would be available to testify by
telephone at 1:30 p.m. The arbitrator declined to permit Godelman to testify,
stating: “That is not . . . an adequate response to the subpoena. . . . [T]he other
side issued a notice to have him appear yesterday and he failed to appear. [¶] His
failure to appear was noted and discussed. The other side elected to use his
deposition, which has been done. And I ruled that Mr. Godelman has forfeited his
chance to appear. If there were to be an effort to postpone the hearing or postpone
his testimony or have him appear by some alternatives, the time to do that was
when he failed to appear. So we have moved on past that question.”
      Later, at approximately 12:45 p.m., the parties completed the presentation of
their evidence, and the arbitrator asked them to submit post-trial briefs.




                                              13
              3. Analysis
       In confirming the arbitration award, the trial court found appellants had
failed to show that the arbitrator’s exclusion of Godelman’s telephonic testimony
resulted in substantial prejudice to them. As explained below, we agree.1
       Under the arbitration statutes, the arbitrator is authorized to rule on requests
to postpone or adjourn the evidentiary hearing, and “the admission and exclusion
of evidence . . . .” (Code Civ. Proc, § 1282.2, subds. (b), (c).) Moreover, the
parties, in submitting to arbitration, became subject to the rules of JAMS, which
afford an arbitrator discretion regarding the evidentiary hearing, including the
admission of evidence (see JAMS Rule 22). JAMS Rule 22(d) provides that
although “[s]trict conformity” to the rules of evidence is not required during the
evidentiary hearing, the arbitrator “shall” consider evidence that “he or she finds
relevant and material to the dispute,” and may be guided in that determination “by
principles contained in the Federal Rules of Evidence or any other applicable rules
of evidence.” (Italics added.) Generally, under state and federal rules of evidence,
the proponent of evidence has the burden of establishing that it is relevant.
(People v. Morrison (2004) 34 Cal.4th 698, 724; Lorraine v. Markel American Ins.
Co. (D. Md. 2007) 241 F.R.D. 534, 538.) JAMS Rule 22(d) also permits the
arbitrator to exclude immaterial or unduly repetitive testimony, provided that all


1      In an apparent effort to challenge the trial court’s written ruling, issued October
22, 2012, appellants note that on October 18, 2012, during a hearing on the parties’
petitions, the court remarked that it was “troubled” by the arbitrator’s decision not to hear
Godelman’s telephonic testimony. However, as a matter of established appellate
principle, the focus of our review is on the court’s written order, not on its antecedent oral
remarks. (Davey v. Southern Pac. Co. (1897) 116 Cal. 325, 329.) As explained in Tract
Development Services, Inc. v. Kepler (1988) 199 Cal.App.3d 1374, 1385, “[g]enerally,
oral opinions of the trial court may not be used to impeach the findings or judgment.
[Citation.]”



                                             14
parties “are afforded the opportunity to present material and relevant evidence.”
In assessing whether the arbitrator improperly denied a continuance or excluded
evidence, we may look to whether a similar ruling would have been within the
discretion of a trial court. (Moore v. Griffith (1942) 51 Cal.App.2d 386, 389
(Moore); Atlas Floor Covering v. Crescent House & Garden, Inc. (1958) 166
Cal.App.2d 211, 216 (Atlas Floor Covering).)
      Here, Kaufman effectively asked the arbitrator to extend the hearing until
the afternoon of September 7, 2011, so that Godelman could supplement his
deposition testimony with telephonic testimony. Insofar as Kaufman sought a
brief continuance of the hearing, he showed no good cause for it, as he made no
offer of proof regarding the proposed testimony, and did not explain why
Godelman could not testify immediately. (Moore, supra, 51 Cal.App.2d at p. 389
[arbitrator did not improperly refuse to hear testimony from absent witness by
denying continuance because no offer of proof was made regarding witness’s
testimony]; see also Simmons v. Dryer (1963) 216 Cal.App.2d 733, 745 [trial court
properly denied request to hear further testimony from witness, as no excuse was
offered regarding why the witness was not available to testify when the request
was made].)
      For similar reasons, appellants failed to show that the arbitrator erred in
excluding Godelman’s telephonic testimony, and that they were “substantially
prejudiced” by its exclusion (Code Civ. Proc., § 1286.2, subd. (a)(5)). No error in
excluding evidence is shown when the record establishes that the arbitrator
reasonably viewed the proffered testimony as cumulative. (Atlas Floor Covering,
supra, 166 Cal.App.2d at p. 216.) Appellants never suggested to the arbitrator
how Godelman’s telephonic testimony would have augmented his deposition
testimony and the other evidence presented at the hearing. In view of appellants’


                                         15
conduct at the beginning of the evidentiary hearing, the arbitrator reasonably could
have inferred that the proposed telephonic testimony would be cumulative.
Godelman’s e-mail stated that he “d[id]n’t have anything to add” to his deposition
testimony; in addition, Kaufman stipulated to the admission of Godelman’s
deposition transcript, requested no continuance to secure further testimony from
Godelman, and opposed Diskeeper’s request that Godelman testify by telephone,
insofar as that testimony might relate to issues other than a fee award.2
      Appellant also failed to show substantial prejudice from the arbitrator’s
ruling regarding Godelman’s telephonic testimony. Under state and federal rules
of evidence, to preserve a claim that the exclusion of evidence was prejudicial, a
party generally must make an offer of proof, or otherwise establish the substance
of the excluded evidence. (Evid. Code, § 354, subd. (a); Fed. Rules Evid., rule
103(a)(2), 28 U.S.C.) Thus, determining prejudice from the exclusion of evidence
ordinarily requires an assessment of the offer of proof to the arbitrator. (Hyatt v.
Eckel Valve Co. (1959) 169 Cal.App.2d 35, 37-38 [arbitrators did not improperly
refuse to hear testimony when offer of proof to arbitrators established neither that
testimony was relevant nor that its exclusion was prejudicial].)




2      Appellants contend the arbitrator erred in excluding the telephonic testimony,
arguing that at the beginning of the hearing, the arbitrator expressly requested briefing
regarding “what the law permitted him do about Godelman’s absence.” However, the
record discloses no request by the arbitrator regarding the admissibility of telephonic
testimony from Godelman. Rather, it shows that after Godelman failed to appear at the
hearing, Diskeeper argued, inter alia, that the arbitrator should “make a finding against
[Godelman]” because he was “in default.” When the arbitrator suggested that Diskeeper
provide briefing regarding that matter, Diskeeper’s counsel replied that she would be
happy to do so. Nonetheless, she apparently provided no such briefing, and the arbitrator
made no finding against Godelman based on a default.



                                           16
        Here, appellant made no such offer. Although appellants later presented a
description of Godelman’s telephonic testimony to the trial court, that description
cannot be regarded as a timely offer of proof. (See Grunwald-Marx, Inc. v. L.A.
Joint Board (1959) 52 Cal.2d 568, 587 [arbitrator’s obligation to hear evidence
mandates the admission of material evidence only when offered “at the proper
time”].)
        Burlage, supra, 178 Cal.App.4th 525, upon which appellants rely, is
distinguishable. There, the plaintiffs asserted claims against the former owner of
their residential property, alleging that she failed to disclose that improvements on
the property encroached on an adjoining country club. (Id. at pp. 527-528.) The
arbitrator granted the plaintiffs’ motion in limine to exclude the former owner’s
evidence that prior to the arbitration, the property’s boundaries had been adjusted
to eliminate the encroachment. (Id. at pp. 528-529.) Because that ruling made it
impossible for the former owner to show that the plaintiffs suffered no damages,
the appellate court held that the arbitrator had improperly refused to hear material
evidence critical to the former owner’s defense. (Id. at pp. 529-532.) Here, in
contrast, appellants never informed the arbitrator how Godelman’s telephonic
testimony would augment the evidence presented during the arbitration. 3


3       For similar reasons, appellants’ reliance on federal decisions applying the Federal
Arbitration Act (FAA) (9 U.S.C. § 1 et seq.) also is misplaced. In all but two of the cases,
the arbitrators were apprised of the substance of the evidence they declined to admit or
consider. (Hoteles Condado Beach etc. v. Union de etc. (1st Cir. 1985) 763 F.2d 34, 40
[arbitrator improperly declined to give evidentiary weight to transcript of prior trial
admitted into evidence]; Tempo Shain Corp. v. Bertek, Inc. (2d Cir. 1997) 120 F.3d 16,
20, 21 [arbitrators improperly declined to hear testimony from witness when record of
arbitration proceeding showed proposed testimony was not cumulative]; Gulf Coast
Indus. Workers Union v. Exxon Co., USA (5th Cir. 1995) 70 F.3d 847, 850 [arbitrator
declined to admit positive drug test].)
(Fn. continued on next page.)


                                            17
       Pointing primarily to Hoso Foods, Inc. v. Columbus Club, Inc. (2010) 190
Cal.App.4th 881 (Hoso Foods), appellants contend the ruling excluding
Godelman’s telephonic testimony necessarily denied them a fair hearing, and thus
nullified the requirement that they show substantial prejudice. We disagree.
Generally, a party must establish the existence of prejudice from the erroneous
exclusion of evidence unless the record shows a “structural error requiring
automatic reversal.” (Conservatorship of Maria B. (2013) 218 Cal.App.4th 514,
534.) “In the civil context, structural error typically occurs when the trial court
violates a party’s right to due process by denying the party a fair hearing.
[Citation.] Structural errors requiring automatic reversal include denying a party’s
request for a jury trial [citation] and violating a party’s right to present testimony
and evidence [citations].” (Ibid.)
       Regarding the latter, automatic reversal is required only when there is an
erroneous exclusion of “all evidence relating to a claim, or essential expert
testimony without which a claim cannot be proven . . . .” (Gordon v. Nissan
Motor Co., Ltd. (2009) 170 Cal.App.4th 1103, 1114.) “The erroneous denial of
some but not all evidence relating to a claim [citations] differs from the erroneous
denial of all evidence relating to a claim, or essential expert testimony without
which a claim cannot be proven [citations]. In the former situation, the appellant


        In the remaining cases, the arbitrator terminated the evidentiary hearing even
though the arbitrator knew the parties had not completed the presentation of their
evidence. (Teamsters Local 312 v. Matlack, Inc. (3d Cir. 1997) 118 F.3d 985, 990
[arbitrator agreed to permit party to present additional evidence on the merits of the
action, but rendered a decision without doing so]; Teamsters, Chauffeurs, etc. v. E.D.
Clapp Corp. (N.D.N.Y. 1982) 551 F.Supp. 570, 577-579 [arbitrator failed to resume
evidentiary hearing after “disturbances” caused by “one or both of the parties”].) In
contrast, as we elaborate below, here the arbitrator ended the evidentiary hearing only
after the parties stated they had no further evidence to present.



                                            18
must show actual prejudice; in the latter situation, the error is reversible per se.”
(Id. at p. 1115.) Thus, in Tudor Ranches, Inc. v. State Comp. Ins. Fund (1998) 65
Cal.App.4th 1422, 1432-1433, the appellate court held that the improper exclusion
of certain evidence supporting the plaintiff’s theory of liability was not structural
error, as the ruling did not entirely foreclose that theory. In contrast, in In re
Marriage of Carlsson (2008) 163 Cal.App.4th 281, 290-291, the appellate court
concluded that structural error occurred when the trial court abruptly terminated
the trial without permitting a party to complete the presentation of his evidence.
      The record before us establishes no structural error requiring automatic
reversal. As explained above, appellants have failed to show that the arbitrator
erred in excluding Godelman’s telephonic testimony. Moreover, even if there
were error, appellants have not provided a record demonstrating that they were
denied a fair hearing.4 The limited record before us lacks a full transcript of the
proceedings before the arbitrator. The excerpts from that transcript in the record
show that Kaufman agreed to the use of Godelman’s deposition transcript, and that
the arbitrator otherwise admitted the parties’ evidence, aside from Godelman’s
telephonic testimony. Indeed, the arbitrator ended the evidentiary hearing only
after the parties stated that they had no more evidence to offer. Furthermore,
before the trial court, Diskeeper pointed to transcript excerpts showing that the
arbitrator admitted some evidence related to the purported subject matter of



4      A fundamental rule of appellate review is that “‘“[a] judgment or order of the
lower court is presumed correct. All intendments and presumptions are indulged to
support it on matters as to which the record is silent, and error must be affirmatively
shown.”’ [Citations.]” (Conservatorship of Rand (1996) 49 Cal.App.4th 835, 841, italics
omitted.) To overcome this presumption, appellants must provide an adequate record that
demonstrates error. (Maria P. v. Riles (1987) 43 Cal.3d 1281, 1295.)



                                           19
Godelman’s telephonic testimony. The record thus demonstrates no structural
error.
         Hoso Foods is factually distinguishable. There, the arbitrator barred a party
from having an independent representative present during the arbitration, even
though the governing arbitration rules specified that the parties and other
“essential person[s]” were entitled to be present. (Hoso Foods, supra, 190
Cal.App.4th at pp. 888-892.) In ordering the arbitration award vacated, the
appellate court concluded that the error was of the type presumed to be prejudicial.
(Id. at p. 892.) No such error occurred here, as the arbitrator did not bar Godelman
or Kaufman from attending the arbitration.5
         Appellants also maintain that the arbitrator’s ruling is subject to a rebuttable
presumption of prejudice. They direct our attention to Hasson v. Ford Motor Co.
(1982) 32 Cal.3d 388, 416-418, in which our Supreme Court examined the
rebuttable presumption of prejudice applicable to juror misconduct, which may be

5       The other decisions upon which appellants rely also are distinguishable. In those
cases, the appellate court concluded that no offer of proof was necessary to preserve a
challenge to the exclusion of evidence, as the trial court barred all the evidence bearing
on a material issue. (Beneficial etc. Ins. Co. v. Kurt Hitke & Co. (1956) 46 Cal.2d 517,
522-523 [trial court erroneously excluded all extrinsic evidence concerning interpretation
of contract]; Lawless v. Calaway (1944) 24 Cal.2d 81, 91 [trial court erroneously
excluded expert testimony essential to plaintiff’s medical malpractice case]; In re Eric H.
(1997) 54 Cal.App.4th 955, 961-962 [trial court barred parent from presenting evidence
at hearing on dependency petition].) As explained above, the limited record shows no
such exclusion of evidence.
       In a related contention, appellants maintain that the exclusion of Godelman’s
telephonic testimony denied Kaufman’s right to cross-examine him. However, the record
contains no suggestion that Kaufman, in seeking Godelman’s telephonic testimony,
intended to cross-examine him, that is, question him as an adverse witness (see Crosat v.
Paige (1957) 147 Cal.App.2d 385, 389). On the contrary, in describing Godelman’s
potential telephonic testimony to the trial court, appellants maintained that the testimony
would have been favorable to Kaufman.


                                            20
triggered when jurors are inattentive during trial. The court explained that the
presumption “is an evidentiary aid to those parties who are able to establish
serious misconduct of a type likely to have had an effect on the verdict or which
deprived the complaining party of thorough consideration of his case, yet who are
unable to establish by a preponderance of the evidence that actual prejudice
occurred.” (Id. at p. 416.)
      Because those special circumstances are not present here, we reject
appellants’ contention. As discussed above, appellants have demonstrated no
misconduct by the arbitrator, and their inability to make a showing of prejudice is
due to Kaufman’s own failure to make an offer of proof to the arbitrator. In sum,
appellants have failed to show that the arbitrator denied them a fair hearing by
declining to permit Godelman to testify belatedly by telephone.


      C. No Error Regarding Public Policy
      Appellants contend the trial court erred in confirming the award because it
contravened a public policy codified in Labor Code sections 432 and 1198.5,
which require employers to permit employees to inspect their personnel records
and obtain copies of documents they signed regarding their employment.6
Generally, courts may refuse to enforce an arbitration award when it contravenes
“an explicit legislative expression of public policy” or a party’s unwaivable rights.


6      Labor Code section 432 states: “If an employee or applicant signs any instrument
relating to the obtaining or holding of employment, he shall be given a copy of the
instrument upon request.”
       As applicable during the underlying arbitration, subdivision (a) of Labor Code
section 1198.5 stated that every employee “has the right to inspect and receive a copy of
the personnel records that the employer maintains relating to the employee’s performance
or to any grievance concerning the employee.”



                                           21
(Cotchett, Pitre & McCarthy, supra, 187 Cal.App.4th at pp. 1416-1417 & fn. 1.)
Here, appellants maintain that the arbitration award is unenforceable because it
ordered appellants to return the pertinent training documents to Diskeeper. The
crux of their contention is that the award contravened the public policy underlying
Labor Code sections 432 and 1198.5 to ensure that employees have access to their
personnel records. The trial court concluded that appellants had forfeited any such
contention by failing to raise it in a timely manner before the arbitrator. As
explained below, we see no error in that ruling.
      The limited record discloses that the arbitrator’s procedural order bifurcated
the issue of an award of attorney fees and costs from the other issues, and provided
that the former issue would be determined after the “Phase I Hearing.” During the
evidentiary hearing, Kaufman elicited testimony from a Diskeeper employee that
California law required employers to permit employees to inspect their personnel
record and copy documents. However, nothing before us suggests that Kaufman
argued that those statutes afforded Godelman the right to possess the documents,
notwithstanding the settlement agreement. Following the evidentiary hearing, the
arbitrator issued an interim award resolving all the issues raised in the arbitration,
with the exception of the attorney fees and costs to be awarded to Diskeeper.
      Appellants first asserted their contention under Labor Code sections 432
and 1198.5 in their JNOV motion, which they submitted after the arbitrator had
conducted the evidentiary hearing and issued the interim award. The motion
stated: “Because this area of the law was not explained, the [a]rbitrator
understandably believed that attorney Kaufman had retained documents that
neither he nor his client Godelman had a right to retain, and imposed liability in
the [i]nterim [a]ward . . . .” (Italics added and fns. omitted.) The motion argued
that the training documents retained by Godelman and disclosed by Kaufman had


                                          22
been provided to Godelman under Labor Code section 432, pursuant to his pre-
litigation request for copies of documents in his personnel file. The motion further
argued that Labor Code section 432 afforded him “a statutory right to possess the
documents.” Diskeeper opposed the motion, arguing, inter alia, that the
determinations in the interim award were final, and that appellants’ sole recourse
was to seek the vacation of the arbitration award once the arbitrator issued the fee
award.
       In denying the motion, the arbitrator stated that “[t]here is no authority in
law or rule for a JNOV motion in arbitration,” and that “the liability phase of the
proceeding ended with the [i]nterim [a]ward.” The arbitrator further stated that
even if he had the discretion to rehear the case, he would not do so, as the motion
merely presented “a different legal theory than that [previously] relied on.” In
view of these determinations, appellants failed to present their contention in a
timely manner to the arbitrator. Accordingly, they forfeited it. (Paramount
Unified School Dist. v. Teachers Assn. of Paramount (1994) 26 Cal.App.4th 1371,
1385-1386 [party forfeited “public policy” challenge to arbitration award by
failing to present it to arbitrator].)
       Appellants maintain that the arbitration award must be vacated because the
arbitrator improperly declined to reconsider the interim award. We disagree. In
agreeing to arbitration pursuant to JAMS rules, appellants placed the arbitrator’s
ruling regarding the interim award beyond judicial review.
       Generally, arbitrators may issue an interim award in the course of deciding
the issues submitted to them. (Roehl v. Ritchie (2007) 147 Cal.App.4th 338, 351;
Hightower v. Superior Court (2001) 86 Cal.App.4th 1415, 1434.) Although
arbitrators have no power to use this process “to correct or modify the terms of an
original award,” the courts apply a deferential standard of review to the


                                          23
arbitrators’ determinations regarding their contractual power to render a
subsequent award. (Roehl v. Ritchie, supra, 147 Cal.App.4th at pp. 350-351.)
      Here, as noted above (see pt. B.3., ante), the parties agreed to arbitration
pursuant to JAMS rules. JAMS Rule 11(a) provides: “Once appointed, the
[a]rbitrator shall resolve disputes about the interpretation and applicability of these
[r]ules and [the] conduct of the [a]rbitration [h]earing. The resolution of the
[dispute] by the [a]rbitrator shall be final.” (Italics added.) Furthermore, JAMS
Rule 24 authorizes the arbitrator to make a variety of rulings, including “[p]artial
[f]inal [a]ward[s].” As explained in Greenspan v. LADT, LLC (2010) 185
Cal.App.4th 1413, 1449-1456 (Greenspan), under those rules, the arbitrator’s
decision regarding the extent to which an interim award conclusively determines
an issue is itself final and not subject to judicial review.
      The authority on which appellants primarily rely for the contrary position is
inapposite, as it concerns an issue not before us, namely, whether the arbitrator’s
interim award was subject to judicial confirmation. Appellants direct our attention
to a treatise stating that when an arbitrator bifurcates the issues of damages or an
award of attorney fees, an interim award following the first phase of the arbitration
is not an “award,” for purposes of judicial confirmation under the arbitration
statutes. (Knight et al., Cal. Practice Guide: Alternative Dispute Resolution
(Rutter Group 2013) ¶ 5:422.5, p. 5-290.) The treatise nonetheless notes that in
Rosenquist v. Haralambides (1987) 192 Cal.App.3d 62, 68, the appellate court
held that an award resolving all the issues except the amount of attorney fees and
costs was subject to judicial confirmation. (Knight et al., supra, ¶ 5:422.7, at p. 5-
290.) In addition to the treatise, appellants point to a federal decision in which the
court stated that under the FAA, an award resolving only the issue of liability is
not subject to confirmation. (Employers’ Surplus Lines Ins. Co. v. Global


                                           24
Reinsurance Corp.-U.S.Branch (S.D.N.Y., Feb. 6, 2008, No. 07 Civ. 2521(HB))
2008 U.S. Dist. Lexis 8253, pp. *14-*27.)
        The instant appeal does not involve an attempt to confirm an interim award.
Rather, the question before us is whether appellants may contest the arbitrator’s
ruling that the interim award was conclusive and beyond reconsideration. As
explained in Greenspan, by agreeing to arbitration pursuant to the JAMS rules,
appellants placed that ruling beyond judicial review. (Greenspan, supra, 185
Cal.App.4th at p. 1451.)
        Appellants also rely on two federal decisions to support their contention that
the arbitrator’s decision must be regarded as erroneous. However, in each case,
the reviewing court affirmed the arbitrators’ ruling regarding the scope and
conclusiveness of an interim award because the governing arbitration rules
authorized the arbitrators to make such rulings. (Lagstein v. Certain Underwriters
at Lloyd’s, London (9th Cir. 2010) 607 F.3d 634, 643-646 [arbitrators properly
awarded punitive damages after issuing initial award, as the governing arbitration
rules authorized them to determine scope of initial award]; United Transportation
Union v. Union Pacific Railroad Co. (S.D. Ill., Mar. 31, 2008, No. 07-CV-251-
WDS) 2008 U.S. Dist. Lexis 25885, pp. *3-*8 [arbitrators properly determined
that they could modify rulings].) Accordingly, those decisions comport with our
conclusion that the arbitrator was authorized to make a final ruling regarding the
extent to which the interim award was beyond reconsideration.7


7       Appellants suggest that the arbitrator necessarily had the authority to reconsider
the liability determinations in the interim award because he modified the attorney fee
ruling in the interim award. The interim award stated that Godelman and Kaufman would
be jointly and severally liable for any fee award. Following the interim award, Kaufman
asked the arbitrator to hold him solely responsible for any fee award, in order to mitigate
his potential conflict of interest with his client, Godelman. Kaufman told the arbitrator:
(Fn. continued on next page.)


                                            25
       Appellants suggest that the trial court erred in failing to determine that
Diskeeper was judicially estopped from opposing the vacation of the award. They
maintain Diskeeper took contradictory positions before the arbitrator and the trial
court. We reject their contention.8
       In opposing appellant’s JNOV motion before the arbitrator, Diskeeper
argued that it was improper for the arbitrator to reconsider the interim award in
light of appellants’ new theory because the award was final regarding liability and
damages. Later, before the trial court, Diskeeper argued that appellants had failed
to assert their contention in a timely manner because they raised it only after the
arbitrator issued the interim award. As those positions are consistent, we see no
contradiction supporting the application of judicial estoppel. In sum, the trial


“I would certainly stipulate to accept full responsibility for whatever attorney[] fees order
is imposed . . . .” The final award determined that Kaufman was solely liable for the fee
award.
       In our view, the arbitrator’s modification of the attorney fee ruling in the interim
award does not establish that he was authorized to modify the other determinations in it.
The arbitrator’s procedural order expressly reserved the amount of a fee award for his
final award. The arbitrator apparently concluded that the procedural order, coupled with
Kaufman’s stipulation, permitted him to modify the attorney fee ruling. For the reasons
discussed above, that ruling, like the arbitrator’s other procedural rulings, is beyond our
review.
8       Generally, judicial estoppel is intended to protect the judicial process, promote
fairness in litigation, and shield parties from improper strategies adopted by opponents.
(Gottlieb v. Kest (2006) 141 Cal.App.4th 110, 131-132.) The doctrine precludes a party
from asserting a position in an action that is inconsistent with a prior position the party
advocated with success. (Id. at pp. 130-131.) “‘The doctrine [most appropriately] applies
when “(1) the same party has taken two positions; (2) the positions were taken in judicial
or quasi-judicial administrative proceedings; (3) the party was successful in asserting the
first position (i.e., the tribunal adopted the position or accepted it as true); (4) the two
positions are totally inconsistent; and (5) the first position was not taken as a result of
ignorance, fraud, or mistake.”’” (Id. at p. 131, quoting Aguilar v. Lerner (2004) 32
Cal.4th 974, 986-987.)



                                             26
court properly concluded that appellants had forfeited their “public policy”-based
contention.


      D. No Improper Remedy
      Appellants contend the arbitrator exceeded his powers by imposing
remedies against Kaufman not authorized under the settlement agreement, namely,
the $70,000 in “liquidated damages” and the award of attorney fees and costs. As
explained below, we reject their contentions.

              1. Governing Principles
      As our Supreme Court has explained, arbitrators have broad authority to
fashion remedies: “Arbitrators are not obliged to read contracts literally, and an
award may not be vacated merely because the court is unable to find the relief
granted was authorized by a specific term of the contract. [Citation.] The remedy
awarded, however, must bear some rational relationship to the contract and the
breach. The required link may be to the contractual terms as actually interpreted
by the arbitrator (if the arbitrator has made that interpretation known), to an
interpretation implied in the award itself, or to a plausible theory of the contract’s
general subject matter, framework or intent. [Citation.] The award must be
related in a rational manner to the breach (as expressly or impliedly found by the
arbitrator).” (Advanced Micro Devices, Inc., supra, 9 Cal.4th at p. 381.)
      Under that standard, “[t]he award will be upheld so long as it was even
arguably based on the contract; it may be vacated only if the reviewing court is
compelled to infer the award was based on an extrinsic source. [Citations.] In
close cases the arbitrator’s decision must stand. [Citation.]” (Advanced Micro
Devices, Inc., supra, 9 Cal.4th at p. 381.)



                                          27
             2. No Error Regarding Damages Award
      We begin by examining the arbitrator’s award of damages against Kaufman
for breach of the settlement agreement. Regarding that award, the arbitrator found
that Kaufman twice contravened paragraph 9(A), which obliged Kaufman not to
“disclose, disseminate or publicize to any other persons . . . the facts . . .
underlying . . . the [l]awsuit . . . .” According to the arbitrator, the two breaches
occurred when Kaufman used Diskeeper’s training documents during the Pitler
deposition and when he showed them to his co-counsel. Noting that paragraph
9(E) provided for an award of $35,000 in liquidated damages for each breach of
paragraph 9, the arbitrator imposed a $70,000 award for “liquidated damages” on
Kaufman.
      Appellants attack the award’s remedies on several grounds. We reject the
challenges, as they contest legal and factual determinations beyond judicial
review, and the remedies are rationally related to the settlement agreement.

                    a. ‘Carve Out’ Covenant
      Appellants maintain that the arbitrator erred in concluding that Kaufman’s
use of the training documents in another lawsuit constituted a breach of his
obligation under subparagraph A of paragraph 9. They point to paragraph 9(D),
which they argue contained a “‘carve out’ covenant” limiting that obligation, for
purposes of Kaufman’s legal services in other litigation against Diskeeper.
According to appellants, the “carve out” covenant effectively permitted Kaufman
to use the training documents in any such litigation.
      Paragraph 9(D) provided: “Nothing contained herein is intended to restrict
or limit Kaufman’s ability to represent [specified] persons.” Nonetheless, the
subparagraph obliged Kaufman to engage in mediation on behalf of those persons



                                           28
before initiating litigation against Diskeeper, and imposed a limit on the maximum
initial demand that Kaufman could assert during any mediation. The subparagraph
further stated: “Notwithstanding this [p]aragraph, Kaufman shall agree not to
disclose the amounts paid, consideration or any terms and conditions of this
[a]greement.”
        Appellants’ contention fails, as it constitutes an attack on the arbitrator’s
interpretation of the settlement agreement. Generally, the arbitrator’s
determinations regarding contract interpretation are beyond judicial review, unless
“the parties have, in either the contract or an agreed submission to arbitration,
explicitly and unambiguously limited those powers.” (Gueyffier v. Ann Summers,
Ltd. (2008) 43 Cal.4th 1179, 1185.) In determining that Kaufman had breached
the duty of confidentiality, the arbitrator noted that Kaufman had signed the
settlement agreement expressly acknowledging that he would be bound by the
non-disclosure provisions of paragraph 9. Rejecting Kaufman’s contention that
paragraph 9(D) relieved him of the broad non-disclosure obligations of paragraph
9(A), the arbitrator found that the specific language of paragraph 9(A), mandating
that all facts underlying the lawsuit remain “‘strictly confidential,’” “control[led]
over” the more general language of paragraph 9(D). As nothing in the arbitration
agreement barred the arbitrator from making this determination, appellants may
not challenge it on appeal.9




9      Nor would we find error were we to address the contention. Although paragraph
9(D) asserts that nothing in the settlement agreement limits Kaufman’s ability to represent
specified persons, it imposes restrictions on Kaufman regarding any such representation,
including duties to engage in mediation and curtail his demands in mediation. Viewed in
context, Kaufman’s obligations “not to disclose the amounts paid, consideration or any
terms and conditions of [the settlement] agreement” is applicable only to those
(Fn. continued on next page.)


                                            29
              b. Amount of Damages
       Appellants contend the arbitrator erred in assessing $70,000 in “liquidated
damages” against Kaufman under paragraph 9(E), which stated in pertinent part:
“PLAINTIFFS [Godelman and LeShay] agree that the sum of $35,000 will be
deemed reasonable liquidated damages for each breach of [paragraph 9] . . . .”
The crux of their argument is that Kaufman was not a party to that provision of the
settlement agreement.10
       Appellants have forfeited their contention, as the limited record before us
does not show that they raised it before the arbitrator.11 However, we would reject
the contention were we to consider it, as it constitutes a challenge to the
arbitrator’s interpretation of the settlement agreement. Under paragraph 9(B),
Kaufman agreed “to be bound by the non-disclosure terms of this [a]greement.”
As explained above (see pt. 2.a., ante), the arbitrator determined that Kaufman’s
obligations under paragraph 9(B) encompassed the duties specified in paragraph
9(A), even though that paragraph imposed those duties only on “PLAINTIFFS.”
Because paragraph 9 was entitled “Confidentiality,” the arbitrator apparently
further concluded that the “non-disclosure terms” of the agreement to which


mediations. The paragraph thus did not displace his obligation under paragraph 9(A) not
to disclose the “facts” underlying Godelman’s and LeShay’s lawsuit in other proceedings.
10    Appellants suggest that the arbitrator expressly found that Diskeeper suffered no
monetary damages from Kaufman’s breach of his duties under paragraph 9(A).
However, the award reflects only a finding that Diskeeper failed to show monetary
damages from Godelman’s violation of his duties under paragraph 8.
11     We note that appellants’ JNOV motion asserted no such challenge to the damages
award. Furthermore, at the hearing on the JNOV motion, Kaufman acknowledged that
the $70,000 award had been assessed solely against him alone, but raised no objection to
it. Rather, he requested that any award of attorney fees and costs also be assessed solely
against him.



                                            30
Kaufman had subjected himself encompassed the other provisions of paragraph 9,
including paragraph 9(E). For the reasons discussed above (see pt. 2.a, ante), that
determination is beyond the scope of our review. As the award of damages bore
“some rational relationship to the contract and the breach” and was not based on
“an extrinsic source,” it did not exceed the arbitrator’s powers. (Advanced Micro
Devices, Inc., supra, 9 Cal.4th at p. 381.)12
       In a related contention, appellants suggest that the liquidated damages
provision was unenforceable because Diskeeper presented no evidence during the
arbitration that the provision was reasonable. We disagree. Subdivision (b) of
Civil Code section 1671 provides that absent exceptional circumstances not
present here, “a contract liquidating the damages for the breach of the contract is
valid unless the party seeking to invalidate the provision establishes that the
provision was unreasonable under the circumstances existing at the time the
contract was made.” (Italics added.) In view of the statute, the burden was on
appellants to show that the liquidated damages provision was defective. (Weber,
Lipshie & Co. v. Christian (1997) 52 Cal.App.4th 645, 654-655.) Because the
record before us discloses no evidence that the liquidated damages provision was,
in fact, unreasonable or that appellants attempted to challenge it before the
arbitrator, they have failed to show error. In sum, the arbitrator did not exceed his
powers in awarding damages against Kaufman.



12     Although the arbitrator’s interpretation is not subject to our review, his conclusion
that Kaufman was a party to paragraph 9(E) was reasonable. Because actual damages
from breaches of the duties in paragraph 9(A) were difficult or impossible to assess, the
settlement agreement necessarily included a liquidated damages provision regarding
them. Accordingly, the arbitrator reasonably determined that the “non-disclosure terms”
to which Kaufman agreed included the liquidated damages provision.



                                             31
             3. No Error Regarding Award of Attorney Fees and Costs
      Appellants contend that the arbitrator improperly ordered Kaufman to pay
an award of attorney fees and costs. In issuing the fee award, the arbitrator relied
on two independent grounds: first, that Kaufman engaged in a negligent
representation when he assured Diskeeper that Godelman had returned the
documents required under the settlement agreement; second, that the fee provision
in the settlement agreement afforded Diskeeper an entitlement to an award from
Kaufman. Appellants challenge the first ground, arguing that the arbitrator
“fashioned a remedy not recognized in modern American jurisprudence -- an
award of attorney[] fees and costs on a tort claim.” They also challenge the second
ground, asserting that Kaufman was not a party to the fee provision.
      We need not address appellants’ contention regarding the first ground, as
they have not shown that the arbitrator exceeded his powers in making the award
on the second ground. Appellants have forfeited any challenge to the second
ground because the record discloses no objection to it before the arbitrator or the
trial court. Moreover, we would reject appellants’ contention in the absence of a
forfeiture. The fee provision in the settlement agreement stated: “In the event any
litigation, arbitration, or other proceeding is brought for the interpretation or
enforcement of this [a]greement, or because of an alleged dispute, default,
misrepresentation, or breach in connection with any of the provisions of this
[a]greement, the successful or prevailing party shall be entitled to recover
reasonable attorneys’ fees, costs, and expenses actually incurred . . . .” (Italics
added.) As explained above (see pt. D.2., ante), the arbitrator concluded that
Kaufman was a party to the settlement agreement, as his signature on the
agreement made him subject to paragraph 9. In view of the broad language of the
fee provision, the arbitrator concluded that Kaufman also subjected himself to that


                                          32
provision. Although that determination is beyond our review, we would regard it
as reasonable were we to examine it. (See Pacific Preferred Properties, Inc. v.
Moss (1999) 71 Cal.App.4th 1456, 1461-1463 [broker subject to limited
obligations under contract was bound by contract’s fee provision, in view of its
terms].) We therefore see no error in the award of attorney fees and costs.


                                 DISPOSITION
      The judgment is affirmed. Respondent is awarded its costs on appeal.
      NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS




                                             MANELLA, J.


We concur:




EPSTEIN, P. J.




WILLHITE, J.




                                        33
