Filed 6/9/16 McElvany, Inc. v. Ahmadi CA5



                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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

                                       FIFTH APPELLATE DISTRICT

MCELVANY, INC.,
                                                                                           F069809
         Plaintiff and Respondent,
                                                                              (Super. Ct. No. CU151358)
                   v.

HASSAN AHMADI et al.,                                                                    OPINION
         Defendants and Appellants.



         APPEAL from a judgment of the Superior Court of Merced County. Frank
Dougherty, Judge.
         Rad Law Group and Peyman H. Rad for Defendants and Appellants.
         Morse, Morse & Morse and Brian D. Morse for Plaintiff and Respondent.
                                                        -ooOoo-
         Defendants appeal from a judgment entered after confirmation of an arbitration
award in plaintiff’s favor. Defendants contend the arbitration award should not have
been confirmed because the arbitrator denied a further continuance of the arbitration
hearing based on defense counsel’s claimed unavailability and one defendant’s incapacity
due to recent surgery. They also contend the award should not have been confirmed
because the arbitrator failed to disqualify himself on their request, based on disclosures
he made, which they assert gave the appearance of partiality.
       We conclude defendants failed to demonstrate that their rights were substantially
prejudiced by the arbitrator’s denial of a postponement of the arbitration hearing upon
sufficient cause being shown. We further conclude the arbitrator was not required to
make the disclosures he made, and therefore defendants failed to establish he was
obligated to disqualify himself upon defendants’ subsequent request. Consequently, the
trial court properly confirmed the arbitration award and entered judgment. We affirm.
                   FACTUAL AND PROCEDURAL BACKGROUND
       Plaintiff sued defendants for breach of contract and to foreclose a mechanic’s lien
against their real property. Defendant Hassan Ahmadi cross-complained against plaintiff
for breach of contract. In July 2009, shortly before the scheduled trial date, the parties
stipulated to submit the matter to binding arbitration before a single, neutral arbitrator.
The court appointed C. Logan McKechnie as arbitrator; he scheduled the matter for
arbitration on January 27, 2010. A few days before the scheduled hearing, defendants’
attorney, Thomas Kidwell, advised plaintiff’s counsel he would not appear for
arbitration; he proposed a settlement and represented that, if it was not accepted,
defendants would file for bankruptcy. Kidwell also faxed plaintiff’s counsel a letter from
attorney Peyman Rad, confirming Rad had been retained by Ahmadi to represent him in a
bankruptcy proceeding. On January 27, 2010, plaintiff appeared for the arbitration;
Ahmadi appeared, expressed surprise that Kidwell was not present, and requested a
continuance, which the arbitrator granted.
       Four days prior to the continued hearing date, Ahmadi filed a bankruptcy petition.1
Because of the bankruptcy stay, the arbitrator closed his case. In August 2010, the
bankruptcy court dismissed Ahmadi’s case, and plaintiff petitioned the trial court for
reappointment of McKechnie as arbitrator. The trial court granted the petition.
McKechnie scheduled the arbitration hearing for September 27, 2010. Kidwell advised

1      Defendant, Mahboobe Bidgoli, was not identified as a party in the bankruptcy case.


                                              2.
that he no longer represented Ahmadi, Rad did. As a result, the arbitration was reset for a
later date.
       On November 16, 2010, plaintiff appeared for the scheduled arbitration.
Defendants still had not filed a substitution of attorneys. Ahmadi appeared without an
attorney; Bidgoli did not appear in person or by counsel. A few days prior to the hearing,
both plaintiff’s attorney and Ahmadi had learned that Kidwell had been suspended from
the practice of law. Ahmadi requested another continuance, but the arbitrator denied the
request and entered a default judgment in favor of plaintiff and against both defendants,
based on the history of delays.
       On January 4, 2011, Rad substituted into the action as counsel for Ahmadi.2 He
filed a motion to set aside both the arbitrator’s award and the order submitting the matter
to arbitration. In his supporting declaration, Ahmadi professed ignorance of entry of the
arbitration award and denied he had agreed to submit the matter to binding arbitration.
Plaintiff filed a petition to confirm the arbitration award. The trial court set aside the
arbitration award, but not the order for binding arbitration. In announcing its decision
orally, the trial court opined that McKechnie had “become too embroiled in these issues”
and a new arbitrator should be appointed. It appointed Weldon Mattos, Jr.
       On November 30, 2011, Mattos disclosed to the parties that his law firm had hired
a new associate, Ann Hanson, who had previously worked for the law office of plaintiff’s
attorney, Morse, Morse & Morse. Rad requested that Mattos recuse himself, suggesting
plaintiff’s attorney had engaged in misconduct. Mattos declined.
       On October 31, 2013, Mattos disclosed that the sister of his long-time paralegal
had started employment as a receptionist with the Morse firm. He stated this would not
influence his ability to act as a fair and impartial arbitrator.


2       No substitution of attorneys for Bidgoli, changing her attorney from Kidwell to Rad, was
filed until August 29, 2011.


                                               3.
       Mattos scheduled and rescheduled the arbitration hearing. Ultimately, he set it for
January 29 through 31, 2014. Rad represented he would be unavailable that week and
substituted out as defense counsel. On January 27, 2014, attorney Kaveh Mirshafiei
substituted in as attorney for defendants. He immediately filed an ex parte application to
continue the arbitration hearing, based on his recent substitution into the case and on
Bidgoli’s recent surgery, which made travel difficult; the application also sought to
disqualify Mattos as the arbitrator, based on his disclosures and his refusal to continue the
hearing date again. The trial court denied both the continuance and disqualification.
       The matter proceeded to arbitration. Plaintiff appeared with counsel and produced
evidence in support of its claims. Neither defendants nor their attorney appeared. The
arbitrator awarded plaintiff $90,833.62, plus prejudgment interest, costs and attorney fees
against both defendants. He found plaintiff had a valid and enforceable lien against
defendants’ real property and ordered that the property be sold. Further, he found in
favor of plaintiff on Ahmadi’s cross-complaint.
       Plaintiff filed a petition to confirm the arbitration award, which defendants
opposed on the grounds the arbitrator unfairly denied a continuance and should have
disqualified himself. The trial court granted the petition, confirmed the arbitration award,
and entered judgment in accordance with the arbitration award. Defendants appeal.
                                         DISCUSSION
I.     Vacating an Arbitration Award
       “[A]n award reached by an arbitrator pursuant to a contractual agreement to
arbitrate is not subject to judicial review except on the grounds set forth in [Code of Civil
Procedure] sections 1286.2 (to vacate) and 1286.6 (for correction).”3 (Moncharsh v.
Heily & Blase (1992) 3 Cal.4th 1, 33.) Section 1286.2 lists the exclusive grounds for


3       All further statutory references are to the Code of Civil Procedure unless otherwise
indicated.


                                                4.
vacating an arbitration award. (Trabuco Highlands Community Assn. v. Head (2002) 96
Cal.App.4th 1183, 1188.) The trial court must vacate the award if it determines that
“[t]he rights of the party were substantially prejudiced by the refusal of the arbitrators to
postpone the hearing upon sufficient cause being shown therefor” (§ 1286.2, subd. (a)(5))
or that “[a]n arbitrator making the award … was subject to disqualification upon grounds
specified in Section 1281.91 but failed upon receipt of timely demand to disqualify
himself or herself as required by that provision” (§ 1286.2, subd. (a)(6)). Defendants
contend the trial court erred in failing to vacate the arbitration award on either or both of
these grounds.
       On appeal from a judgment based on an order confirming an arbitration award,
“we review the trial court’s order (not the arbitration award) under a de novo standard.
[Citations.] To the extent that the trial court’s ruling rests upon a determination of
disputed factual issues, we apply the substantial evidence test to those issues.”
(Lindenstadt v. Staff Builders, Inc. (1997) 55 Cal.App.4th 882, 892, fn. 7.) The party
claiming error in confirmation of the arbitration award bears the burden of establishing
that claim. (Ikerd v. Warren T. Merrill & Sons (1992) 9 Cal.App.4th 1833, 1841.)
II.    Failure to Grant a Continuance
       Defendants argue under section 1286.2, subdivision (a)(5), that their rights were
substantially prejudiced by the arbitrator’s refusal to postpone the arbitration. They
assert they presented good cause for a continuance, because Bidgoli was unable to travel
to attend the hearing, their attorney was unavailable on the date set for the hearing, and
the new counsel they retained just prior to the hearing required time to prepare for the
hearing.4

4      In support of their position, defendants cite California Rules of Court, rule 3.818(b),
which authorizes the trial court to grant a continuance on motion of a party, if the arbitrator
declines to do so. Rule 3.818 governs judicial arbitrations; the arbitration in issue was a
contractual arbitration. Defendants also cite title 9 of the California Standards of Judicial
Administration, as authority for granting a continuance based on the illness of a party, the

                                                 5.
          The procedures for contractual arbitration are set out in sections 1280 to 1294.2.
Section 1282.2 provides: “The neutral arbitrator shall appoint a time and place for the
hearing and cause notice thereof to be served personally or by registered or certified mail
on the parties to the arbitration … not less than seven days before the hearing.”
(§ 1282.2, subd. (a)(1).) “On request of a party to the arbitration for good cause, or upon
his own determination, the neutral arbitrator may postpone the hearing.” (§ 1282.2,
subd. (b).) “The word ‘may’ is permissive rather than mandatory.” (SWAB Financial,
LLC v. E*Trade Securities, LLC (2007) 150 Cal.App.4th 1181, 1197 (SWAB).) The
ethical standards applicable to arbitrators require them to “conduct the arbitration fairly,
promptly, and diligently.” (Cal. Rules of Court, Ethics Stds. For Neutral Arbitrators in
Contractual Arbitration, std. 13(a), italics added (Ethics Stds.).) Thus, postponement of
the hearing was within the arbitrator’s discretion, on a showing of good cause.
          “[T]he decision whether to grant a continuance lies in the first instance with the
arbitrator.” (SWAB, supra, 150 Cal.App.4th at p. 1196.) When an arbitrator exercises
discretion by denying a continuance request, two issues must be resolved by the trial
court in determining whether to vacate the arbitration award. (Id. at p. 1198.) “First, the
trial court must determine whether the arbitrator abused his or her discretion by refusing
to postpone the hearing upon sufficient cause being shown. Second, if there was an
abuse of discretion, the trial court must determine whether the moving party suffered
substantial prejudice as a result. Moreover, on appeal from the trial court’s order
granting or denying a request to vacate the arbitration award, our review is de novo. In
other words, in this case, we must consider whether the arbitrators abused their
discretion and there was substantial prejudice in denying plaintiff’s continuance motion.”
(Ibid.)



unavailability of a trial attorney, or substitution of an attorney. That standard has not existed
since 2006.


                                                 6.
       The record indicates Mattos scheduled the arbitration hearing for October 2013.
He later postponed it to November 2013, based on Rad’s representation he had
discovered he had a calendar conflict; the order resetting the hearing required counsel to
avoid any conflicting commitments. Mattos subsequently postponed the hearing again.
He extended to defense counsel the opportunity to designate dates on which he and his
clients would be available. Mattos and Rad discussed the scheduling of the arbitration on
December 23, 2013. In an e-mail of that date, Mattos confirmed an agreement that Rad
was to respond by January 6, 2014, with dates in late January and early February for the
arbitration. Thus, Rad, and presumably his clients, knew in December that Mattos
planned on scheduling the arbitration for the end of January or beginning of February.
       Rad declared he called Mattos on January 6, 2014, “to discuss availability and the
possibility of substituting out of the case, but was unable to speak with him.” Rad’s
declaration did not state that he left dates of availability or unavailability with his
message, nor did it explain why he did not do so, in light of the agreed upon deadline.
The next day, January 7, 2014, the arbitrator issued his order No. 11, also signed by a
judge, ordering that the arbitration take place on January 29 through 31, 2014.
       On January 10, 2014, Rad sent Mattos a letter complaining that Mattos had set the
arbitration date without Rad’s input, and stating January 29 was Rad’s birthday and he
would be unavailable that week. Rad asserted the “selection of [an] arbitrary date
without consultation” had made it “impossible to attend to this case”; he enclosed
substitutions of attorney, which removed Rad as counsel for defendants and left Ahmadi
and Bidgoli representing themselves 19 days before the scheduled arbitration.
       On January 16, 2014, defendants sent a letter to Mattos asking for a continuance,
based on Bidgoli’s “double complete knee replacement surgery in the month of
December 2013” and on their need to find replacement counsel. Defendants apparently
also provided Mattos with a note from Bidgoli’s doctor, which stated that she was
recovering from surgery and “should limit long distance driving for the next 1-2 months,

                                               7.
and may return to driving as tolerated.” Mattos responded to defendants’ letter by e-mail,
stating “I am going to change the Arbitration date based on your letter.” Two hours later,
after plaintiff’s attorney objected, Mattos corrected his e-mail, stating he was not
changing the arbitration, and his prior e-mail was in error; he apologized for omitting the
word “not” in his first e-mail.
       On January 27, 2014, two days before the arbitration was scheduled to begin,
Mirshafiei substituted in as counsel for Ahmadi and Bidgoli, and brought an ex parte
application in the trial court for a 60- to 90-day continuance of the arbitration. The
request was based on Mirshafiei’s need to prepare for arbitration and on Bidgoli’s
incapacitation after knee surgery. The trial court denied the application.
       After the arbitrator made his award in favor of plaintiff, defendants opposed
plaintiff’s petition to confirm the arbitration award, contending the arbitrator should have
disqualified himself and he unfairly refused to continue the hearing. The trial court
confirmed the arbitration award, finding in part that, “based on the procedural history of
this case involving substantial delays and previous continuances amounting to several
years’ time, … the Arbitrator did not abuse his discretion in reasonably concluding that
there was no good cause to further delay the arbitration.”
       A.     Bidgoli’s incapacity
       Defendants assert they were prejudiced by the denial of a continuance that would
have allowed defendant Bidgoli to be present at the arbitration hearing. They claim “[i]t
is always prejudicial to deny a party’s presence at a dispositive hearing on the merits of
an action.” In support of this statement, they cite Hoso Foods, Inc. v. Columbus Club,
Inc. (2010) 190 Cal.App.4th 881 (Hoso) and Graham v. Scissor-Tail, Inc. (1981) 28
Cal.3d 807 (Graham). Neither case supports such a broad rule.
       In Hoso, a dispute arose between the parties about the provisions of a lease
contract between them. (Hoso, supra, 190 Cal.App.4th at p. 885.) The parties agreed to
binding arbitration. (Ibid.) The arbitrator permitted only one representative of the

                                             8.
defendant, the Columbus Club, to be present during the arbitration: Rodela, who was a
codefendant with an agreement that he would be dismissed if the matter were arbitrated.
(Id. at p. 886.) The arbitrator ruled in favor of Hoso, and the trial court confirmed the
award. (Id. at p. 886.)
       The appellate court reversed, concluding the arbitrator exceeded his authority by
restricting the Columbus Club to being represented only by Rodela, which denied the
Columbus Club a fair hearing. (Hoso, supra, 190 Cal.App.4th at p. 889.) Neither the
Code of Civil Procedure nor the rules of the American Arbitration Association (AAA),
under which the arbitration was conducted, permitted the arbitrator to preclude a
corporate party from designating a representative to attend the arbitration proceedings.
(Hoso, at p. 889.) In fact, the AAA rules provided that any person having a direct interest
in the arbitration was entitled to attend hearings. (Hoso, at p. 889.) The arbitrator
exceeded his authority under the AAA rules by limiting the Columbus Club’s
representation in the arbitration proceedings. (Hoso, at p. 890.) The Columbus Club was
prejudiced by the limitation. Hoso’s representative testified to what the Columbus Club’s
representatives had said during contract negotiations; Rodela had not been present during
those negotiations and could not contradict that testimony or assist counsel in cross-
examining the witness. (Id. at pp. 891–892.) The court concluded “that the arbitrator’s
exclusion of any representative beyond Rodela precluded appellant from receiving a fair
hearing. [Citation.] Rodela had neither the knowledge nor the incentive to effectively
represent appellant’s interests at the arbitration. Under these circumstances, we may
presume that appellant suffered prejudice from the absence of an independent
representative.” (Id. at p. 892.)
       Graham did not involve a party’s absence from the arbitration proceedings. It
involved a standard form contract between musicians and a concert promoter, which
required arbitration of disputes before the American Federation of Musicians. (Graham,
supra, 28 Cal.3d at p. 813.) The court concluded the arbitration agreement could not be

                                             9.
enforced because it did not provide for minimum levels of integrity that would ensure
each party a fair opportunity to present the party’s side of the dispute; the agreement
designated as arbitrator the musician’s union, which was presumptively biased in favor of
its members. (Id. at pp. 821, 826–828.) On that basis, the court reversed the judgment
that was entered after confirmation of the arbitration award. (Id. at p. 831.)
       Hoso dealt with an arbitrator who prevented a corporate party from designating
which representative or representatives of the corporation would be present during the
arbitration. The court concluded the rules governing the arbitration did not permit the
arbitrator to limit the corporation to a single representative chosen by the arbitrator.
Graham determined that an arbitration proceeding must provide each party with a fair
opportunity to present its case, and having an arguably biased arbitrator did not comply
with that requirement.
       The arbitrator here did not preclude any party from attending the arbitration
hearing. Unlike the arbitrator in Hoso, he did not bar Bidgoli, or any other party, from
attending that arbitration.
       Mattos scheduled, then postponed, the arbitration in October and November 2013.
Defendants presumably were aware of the pending arbitration and knew the hearing
would be rescheduled shortly. Mattos advised Rad in December 2013 that he intended to
set the arbitration for late January or early February 2014. Rad agreed to notify Mattos of
dates of availability during that period by January 6, 2014, “regardless whether [Rad]
remain[ed] as counsel or Mr. Ahmadi [was] in pro per.” Nothing in the record indicates
Rad notified Mattos, either in December 2013 or prior to January 6, 2014, that Bidgoli
wished to attend the arbitration, but was undergoing surgery and would be unable to
travel to the arbitration in late January or early February 2014. Nothing in the record
indicates why Bidgoli scheduled surgery in December 2013, or whether she took the
pending arbitration proceeding into account in scheduling it then. Bidgoli had not
appeared for prior scheduled arbitrations, even when Ahmadi had appeared. Many of the

                                             10.
documents filed by defense counsel in this case were filed on behalf of Ahmadi only,
including the petition to set aside the first arbitration award and the opposition to
plaintiff’s petition to confirm that award.
       The record contains no declaration from Bidgoli expressing a desire to attend the
arbitration. Defendants presented no evidence to the arbitrator or the trial court showing
what Bidgoli would contribute to the arbitration proceedings. They did not show she was
involved in any of the events that led to the litigation; they did not show she possessed
critical knowledge that required her testimony or that would have assisted counsel in
presenting defendants’ case or opposing plaintiff’s. The record indicates Bidgoli had
little or no involvement in the arbitration proceedings in the years leading up to the
January 2014 arbitration hearing. Thus, when defendants requested a continuance of the
January 2014 arbitration date, there was nothing before the arbitrator or the trial court
demonstrating that Bidgoli desired to be present at the arbitration or that her presence was
necessary to a fair presentation of defendants’ case.
       Under these circumstances, and given the lengthy delays that had occurred prior to
scheduling the January 2014 arbitration hearing, we conclude the arbitrator did not abuse
his discretion by denying defendants’ last minute request for another continuance of the
arbitration hearing. We agree with the trial court’s conclusion, “based on the procedural
history of this case, involving substantial delays and previous continuances amounting to
several years’ time, that the arbitrator did not abuse his discretion in reasonably
concluding that there was no good cause to further delay the arbitration hearing.”
       Further, defendants failed to demonstrate that their rights were substantially
prejudiced by the arbitrator’s denial of a postponement of the arbitration hearing
(§ 1286.2, subd. (a)(5)). They failed to show they could not adequately present their case
without Bidgoli’s presence at the arbitration hearing.




                                              11.
       The trial court did not err in confirming the arbitration award and denying
defendants’ motion to vacate the award based on the arbitrator’s denial of the request for
a continuance because of Bidgoli’s incapacity.
       B.     Substitution of attorneys
       Defendants also contend the arbitration award should have been vacated because
the arbitrator refused to grant a postponement despite their last minute substitution of
attorney Mirshafiei into the case. To determine whether the arbitrator properly denied a
postponement of the hearing, we must determine whether the arbitrator abused his
discretion by refusing to postpone the hearing when sufficient cause was shown, and
whether defendants suffered substantial prejudice as a result. (SWAB, supra, 150
Cal.App.4th at p. 1198.)
       Mattos advised Rad in December 2013 that he intended to set the arbitration for
late January or early February 2014. Rad knew he had only until January 6, 2014, to
notify Mattos of the dates he and his clients would be available during that period. The
previous order setting the arbitration date had included an order that “[a]ll counsel
SHALL avoid any conflicting commitments.” In light of these facts, Rad and defendants
knew or should have known of the importance of advising the arbitrator of their pre-
existing commitments and avoiding new commitments during the time period in which
Mattos intended to schedule the arbitration hearing. Rad waited until the last day,
January 6, 2014, to contact Mattos to discuss his dates of availability. Rad was unable to
reach Mattos. Despite the importance of the information and the deadline for providing
it, Rad did not leave a timely message providing his and his clients’ availability
information to Mattos. The record does not indicate Rad tried to contact Mattos again the
same day or the next day.
       On January 7, 2014, not having received any availability information from Rad,
Mattos scheduled the arbitration hearing for the end of January, as previously
contemplated, and faxed the order to counsel. In response, Rad accused Mattos of setting

                                            12.
an “arbitrary date without consultation” and asserted he had a calendar conflict (without
providing any details, other than stating the first day set for arbitration was his birthday).
Defendants then substituted Rad out as their attorney, even though the arbitration date
was less than three weeks away, leaving themselves unrepresented. The record contains
no declaration from defendants explaining why they agreed to allow Rad to substitute
out, when the arbitration hearing was imminent. Defendants used the substitution and
their need to find replacement counsel as the basis for requesting a further continuance
from the arbitrator, which was denied. Defendants retained new counsel just a few days
before the arbitration hearing. They again asked the trial court for another postponement
of the arbitration hearing, based on their new attorney’s lack of preparation. When their
request for a continuance was denied by the trial court, defendants and their new attorney
chose not to appear at the January 30, 2014, arbitration hearing.
       We conclude the arbitrator did not abuse his discretion in denying a further
postponement. The parties agreed in July 2009 to arbitrate their dispute. Prior to January
2014, the matter had been set for arbitration at least eight times.5 On January 27, 2010,
Ahmadi appeared at the arbitration hearing; Bidgoli and defendants’ attorney, Kidwell,
did not appear. Prior to that hearing, Kidwell had indicated to opposing counsel he
would not appear for the arbitration, as defendants anticipated settling the matter or filing
for bankruptcy. Neither occurred. Ahmadi expressed surprise at his attorney’s absence
and requested a postponement. The matter was reset; shortly before the next hearing
date, Ahmadi filed for bankruptcy. After the bankruptcy case was dismissed because
Ahmadi failed to comply with the bankruptcy court’s order, the arbitration was reset for
September 27, 2010. Prior to that date, Kidwell advised opposing counsel and the
arbitrator that he no longer represented defendants, and requested a continuance until Rad
could substitute in as their counsel. The matter was rescheduled for October 20, 2010.

5    In addition to the eight times discussed here, the matter may have been set for hearing on
November 29, 2009.


                                              13.
        The matter was again reset for November 16, 2010. On that date, Ahmadi
appeared, without an attorney; Bidgoli did not appear. No substitution of attorneys had
yet been filed. Ahmadi requested another continuance. The arbitrator denied the request,
based on the history of the case and defendants’ conduct, and entered a default award
against defendants.
        On motion of Ahmadi, then represented by Rad, the default award was vacated on
the ground defendants were prejudiced by the denial of a continuance because they were
essentially unrepresented; Ahmadi had advised the arbitrator that he learned just prior to
the November 16, 2010, arbitration date that attorney Kidwell was the subject of
disbarment proceedings.
        The matter was reassigned to Mattos as arbitrator. He scheduled the hearing for
May 29, 2012. On that date, Ahmadi filed his second bankruptcy petition.6 After
consulting the attorneys, Mattos next set the matter for hearing on October 24, 2013.
Despite approving the date, Rad later advised he had discovered a calendaring error and
needed a continuance. The matter was reset for November 18, 2013, then January 29,
2014.
        In light of the whole history of the matter, the arbitrator could have concluded
defendants and their attorneys were manipulating events and unnecessarily delaying the
arbitration. The undisputed evidence indicated that, through bankruptcy filings and
dismissals, continuances, delays in replacing their first attorney, and other actions,
defendants and their attorneys managed to delay the arbitration for more than four and
one-half years. Substantial evidence supported an inference they then manufactured a
scheduling conflict for their attorney, used it as an excuse to substitute in new counsel,




6     The record contains references to a third bankruptcy proceeding, but does not indicate
when or under what circumstances that proceeding was commenced.


                                              14.
and requested another delay. The arbitrator and the trial court were justified in
concluding good cause for a further postponement did not exist.
       Defendants have also failed to establish any prejudice to them. “An error is
prejudicial and results in a miscarriage of justice only if the reviewing court concludes,
based on its review of the entire record, that it is reasonably probable that the trial court
would have reached a result more favorable to the appellant absent the error.” (Jones v.
Farmers Ins. Exchange (2013) 221 Cal.App.4th 986, 999.) The burden is on defendants,
as the appellants, to establish prejudice; they must tender a proper prejudice argument,
spelling out in their brief exactly how the alleged error caused a miscarriage of justice.
(In re Marriage of McLaughlin (2000) 82 Cal.App.4th 327, 337.) Defendants argue here,
as they did in the trial court, that the denial of a continuance prevented them from
presenting their case. They have not pointed to any evidence in the record or offered any
argument demonstrating a probability the outcome of the arbitration would have been
different if they had presented their case on the merits. They have not asserted or shown
that they had a potentially viable defense to plaintiff’s claims.
       Accordingly, we find the arbitrator did not abuse his discretion in denying a
further postponement of the arbitration proceeding. The trial court was justified in
confirming the arbitration; defendants did not demonstrate their rights “were substantially
prejudiced by the refusal of the arbitrator[] to postpone the hearing upon sufficient cause
being shown therefor.” (§ 1286.2, subd. (a)(5))
III.   Disqualification of Arbitrator
       Initially, we reject plaintiff’s argument that the disqualification order was
appealable at the time it was made, and no timely appeal from it was filed, so we cannot
review that order in this appeal. Its argument is based on cases discussing
disqualification of attorneys, not arbitrators. Section 1286.2, subdivision (a)(6), requires
the trial court to vacate the arbitration award if the arbitrator was subject to
disqualification, but failed to disqualify himself. Defendants are appealing from the

                                              15.
judgment entered after the trial court confirmed, rather than vacated, the arbitration
award. Section 1294 identifies the arbitration orders that may be appealed. They do not
include an order denying disqualification of an arbitrator. (§ 1294; see Steelform
Contracting Co. v. Baldwin Contracting Co. (1962) 209 Cal.App.2d 177, 178
[concluding an order denying a petition to annul the designation of an arbitrator was not
appealable].) They do include a judgment entered on an arbitration award. (§ 1294,
subd. (d).) Accordingly, we review on the merits defendants’ contention the arbitration
award should have been vacated based on the arbitrator’s failure to disqualify himself.
       Section 1281.9 requires a neutral arbitrator to disclose to the parties “all matters
that could cause a person aware of the facts to reasonably entertain a doubt that the
proposed neutral arbitrator would be able to be impartial.” (§ 1281.9, subd. (a).) This
includes disclosure of any ground set out in section 170.1 for disqualification of a judge
and any matter required to be disclosed pursuant to the ethics standards applicable to
neutral arbitrators. (§ 1281.9, subd. (a)(1), (2).) Section 170.1 requires a judge to
disqualify himself or herself if “[a] person aware of the facts might reasonably entertain a
doubt that the judge would be able to be impartial.” (§ 170.1, subd. (a)(6)(A)(iii).) “If
any ground specified in Section 170.1 exists, a neutral arbitrator shall disqualify himself
or herself upon the demand of any party made before the conclusion of the arbitration
proceeding.” (§ 1281.91, subd. (d).) Likewise, the ethics rules applicable to neutral
arbitrators require the arbitrator to “disclose all matters that could cause a person aware
of the facts to reasonably entertain a doubt that the arbitrator would be able to be
impartial,” and to disqualify himself or herself if the arbitrator fails to make the
disclosure or makes the disclosure and receives a notice of disqualification from one of
the parties. (Ethics Stds., std. 7(d), std. 10(a)(2).)
       Section 1281.91 “confers on both parties the unqualified right to remove a
proposed arbitrator based on any disclosure required by law which could affect his or her
neutrality.… As long as the objection is based on a required disclosure, a party’s right to

                                               16.
remove the proposed neutral by giving timely notice is absolute.” (Azteca Construction,
Inc. v. ADR Consulting, Inc. (2004) 121 Cal.App.4th 1156, 1163.) Disqualification of an
arbitrator based on a disclosure is an absolute right only when the disclosure is legally
required, however. (Luce, Forward, Hamilton & Scripps, LLP v. Koch (2008) 162
Cal.App.4th 720, 735.) When an arbitrator, out of an abundance of caution, discloses
information he is not legally required to disclose, disqualification is not mandated even if
a party makes a timely request. (Id. at pp. 724–725.) When the facts are not in dispute
and the question involves disclosure of “all matters that could cause a person aware of the
facts to reasonably entertain a doubt that the proposed neutral arbitrator would be able to
be impartial” (§ 1281.9, subd. (a)), the appellate court must determine de novo whether
disclosure of the facts was legally required. (Haworth v. Superior Court (2010) 50
Cal.4th 372, 386, 388 (Haworth).)
       “The test for partiality is an objective one. [Citations.] Actual bias is not
required.” (Guseinov v. Burns (2006) 145 Cal.App.4th 944, 960.) “‘Impartiality’ entails
the ‘absence of bias or prejudice in favor of, or against, particular parties or classes of
parties, as well as maintenance of an open mind.’” (Haworth, supra, 50 Cal.4th at
p. 389.) “[T]he appearance-of-partiality ‘standard “must not be so broadly construed that
it becomes, in effect, presumptive, so that recusal is mandated upon the merest
unsubstantiated suggestion of personal bias or prejudice.”’ [Citations.] ‘The “reasonable
person” is not someone who is “hypersensitive or unduly suspicious,” but rather is a
“well-informed, thoughtful observer.”’ [Citations.] ‘[T]he partisan litigant emotionally
involved in the controversy underlying the lawsuit is not the disinterested objective
observer whose doubts concerning the judge’s impartiality provide the governing
standard.’ [Citations.] [¶] ‘An impression of possible bias in the arbitration
context means that one could reasonably form a belief that an arbitrator was biased for or
against a party for a particular reason.’” (Ibid.)



                                              17.
       Thus, the decision on disqualification is not based on the arbitrator’s personal
belief about his or her impartiality, nor is it based on the challenging party’s necessarily
partisan views. (United Farm Workers of America v. Superior Court (1985) 170
Cal.App.3d 97, 104.) Rather, the test is whether a reasonable person could believe the
arbitrator was biased for or against a party for a particular reason. (Haworth, supra, 50
Cal.4th at p. 389.)
       On November 30, 2011, Mattos disclosed to the parties that his firm had hired an
associate, Ann Hanson, who had formerly worked for the Morse firm. He stated Hanson
believed she had had no contact with this case while she worked for the Morse firm, and
she had no knowledge of the facts, circumstances, or information involved. Mattos
opined there was no actual conflict and asserted his ability to act as a neutral arbitrator
was not affected by her hiring. Rad requested that Mattos disqualify himself as arbitrator
due to “at least an appearance of conflict.” He complained of Morse’s conduct, including
obtaining a default arbitration award when defendants’ attorney was being disbarred, and
suggested no confidence could be placed in Morse’s assurances about Hanson. Mattos
declined to recuse himself, asserting Hanson would not be involved in the arbitration and
would be isolated from any discussion of the case or activity in the file.
       Almost two years later, on October 31, 2013, Mattos disclosed to the parties that
the sister of his long-time paralegal had started employment with Morse’s firm as a
receptionist. He stated the situation would not influence his ability to be a fair and
impartial arbitrator.
       Defendants contend the arbitration award should have been vacated because
Mattos should have disqualified himself as arbitrator, based on the “back and forth
exchange of staff and Mr. Mattos’ exhibited bias.” As to the hiring of Hanson by
Mattos’s firm, defendants’ argument is confused. They assert their request that Mattos
recuse himself was based on their lack of confidence in Morse’s representations
regarding insulation of Hanson from this case. The record does not reflect that any such

                                             18.
representations were made. Mattos advised defendants of Hanson’s hiring by his firm
and advised that Hanson stated she had not been involved in the case and had no
knowledge of it. Mattos then assured Rad that Hanson would not be involved in the case
and would be isolated from any discussion of it or activity on the file. Hanson was hired
by Mattos’s firm, not by Morse’s, so Morse made no assertion that she would be isolated
from the case.
       Defendants provide no citation of legal authority or reasoned argument
demonstrating that disqualification of an arbitrator is required whenever the arbitrator’s
firm hires an attorney who formerly worked for the office of a party’s attorney, even
when the hired attorney had no involvement in the case while working for the party’s
attorney and would be isolated from the case in the arbitrator’s office. We do not believe
this is the type of information that would cause a reasonable person to believe the
arbitrator was biased for plaintiff or against defendants, or that he would be unable to
remain impartial.
       Defendants have also made no showing that disqualification is required based on
the Morse firm’s hiring of the sister of Mattos’s paralegal as a receptionist. Defendants
have provided no citation of legal authority or reasoned argument that this hiring caused
any kind of conflict of interest, or even the appearance of a conflict, that would require
the arbitrator to disqualify himself. The sister was hired as a receptionist, not an attorney
or a paralegal. Presumably, she would have no substantive involvement in the handling
of the case at Morse’s firm. She was not previously employed by Mattos’s firm. There
was no evidence she had any prior contact with the case or information about it; there
was no evidence she ever discussed the case with Mattos’s paralegal. Mattos’s disclosure
letter to the parties advised that he had instructed his paralegal not to discuss the case
outside the office or with nonemployees, which would include the sister hired by Morse’s
firm. Nothing in the record supports even an appearance of partiality or bias based on the
hiring by plaintiff’s attorney of a relative of an employee of Mattos’s firm.

                                             19.
       Defendants argue that, in addition to these two disclosed matters, Mattos’s
conduct demonstrated a lack of impartiality. In support they cite his “unilaterally” setting
an arbitration date without consulting Rad and denying a continuance based on Rad’s and
Bidgoli’s unavailability. In the circumstances of this case, neither setting a hearing date
after counsel failed to take advantage of the opportunity to designate dates that he and his
clients would be available for the hearing, nor ruling against defendants on a request for a
continuance based on counsel’s unavailability on the date chosen in the absence of
counsel’s designation of dates, demonstrates the arbitrator had any bias against
defendants.
       Defendants have not shown that Mattos’s disclosures or his conduct, individually
or collectively, demonstrated bias or “could cause a person aware of the facts to
reasonably entertain a doubt that [Mattos] would be able to be impartial.” (§ 1281.9,
subd. (a).) Mattos was not required to disqualify himself. The trial court did not err in
confirming the arbitration award.
                                      DISPOSITION
       The judgment is affirmed. Plaintiff is entitled to its costs on appeal.



                                                                 _____________________
                                                                              HILL, P.J.
WE CONCUR:


 _____________________
FRANSON, J.


 _____________________
PEÑA, J.




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