Nueva Esperanza Healthcare Medical Clinic, Inc. v. Community Family Care Medical Group, IPA

"A response to a petition under this chapter may request the court to dismiss the petition or to confirm, correct or vacate the award." (Code Civ. Proc., Sec. 1285.2.) If a petition or response to an arbitration award is duly served and filed, the court shall confirm the award as made, unless the court corrects the award and confirms it as corrected, vacates the award, or dismisses the proceeding. (Code Civ. Proc., Sec. 1286.) Moreover, a court may not vacate or correct an award unless a petition or response requesting that the award be vacated or corrected has been filed. (Code Civ. Proc. Sec.Sec. 1286.4, 1286.8.) "A petition to vacate an award or to correct an award shall be served and filed not later than 100 days after the date of the service of a signed copy of the award on the petitioner." (Code Civ. Proc., Sec. 1288.)

The court may vacate an arbitration award only on the grounds set forth in Code of Civil Procedure section 1286.2. (Moncharsh, supra, 3 Cal.4th at pp. 12-13.) Section 1286.2 provides that the court shall vacate the award if it determines any of the following: (1) The award was procured by corruption, fraud or other undue means. (2) There was corruption in any of the arbitrators. (3) The rights of the party were substantially prejudiced by misconduct of a neutral arbitrator. (4) The arbitrators exceeded their powers and the award cannot be corrected without affecting the merits of the decision upon the controversy submitted. (5) The rights of the party were substantially prejudiced by the refusal of the arbitrators to postpone the hearing upon sufficient cause being shown therefor or by the refusal of the arbitrators to hear evidence material to the controversy or by other conduct of the arbitrators contrary to the provisions of this title. (6) An arbitrator making the award either: (A) failed to disclose within the time required for disclosure a ground for disqualification of which the arbitrator was then aware; or (B) 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.

However, this subdivision does not apply to arbitration proceedings conducted under a collective bargaining agreement between employers and employees or between their respective representatives.

"The scope of judicial review of arbitration awards is extremely narrow. Courts may not review the merits of the controversy, the sufficiency of the evidence supporting the award, or the validity of the arbitrator's reasoning..... Indeed, with limited exceptions, 'an arbitrator's decision is not generally reviewable for errors of fact or law, whether or not such error appears on the face of the award and causes substantial injustice to the parties.'" (Dept. of Personnel Administration v. California Correctional Peace Officers Ass'n¿(2007) 152 Cal.App.4th 1193, 1200.) (Accord California School Employees Assn. v. Bonita Unif. School Dist. (2008) 163 Cal.App.4th 387, 406-07.)

Discussion

Petitioner Nueva Esperanza Healthcare Medical Clinic, Inc. brought claims against Respondents for breach of contract, breach of the implied covenant of good faith and fair dealing, fraud, violation of Business and Professions Code section 17200, intentional and negligent interference with prospective economic advantage, and related theories arising from the parties' managed care provider relationship. The parties arbitrated the claims before Hon. Ann Kough (Ret.) of JAMS, who issued a Final Award on July 7, 2025 providing that Claimant shall take nothing from Respondents. (Petition, Attachment 8(c).)

Petitioner now moves to vacate the award. The court may vacate an arbitration award only on the grounds set forth in Code of Civil Procedure section 1286.2. As relevant here, section 1286.2 provides that the court shall vacate the award if it determines that "(4) [t]he arbitrators exceeded their powers and the award cannot be corrected without affecting the merits of the decision upon the controversy submitted" or "(5) [t]he rights of the party were substantially prejudiced ... by the refusal of the arbitrators to hear evidence material to the controversy or by other conduct of the arbitrators contrary to the provisions of this title." (Code Civ. Proc., Sec. 1286.2, subds. (a)(4), (a)(5).)

Refusal to Hear Material Evidence

Petitioner argues that the Arbitrator refused to hear material evidence because, despite her March 5, 2025 order directing the parties to provide all exhibits including full deposition transcripts, neither party submitted the third-party health plan deposition transcripts, and the Arbitrator issued the Final Award without them while citing the "testimony of the health plans" in support of a liability finding. (Amir Decl., P.P. 12-13, Exhs. H, O.) Accepting these facts as true, they do not establish a "refusal of the arbitrator[] to hear evidence material to the controversy." (Code Civ. Proc., Sec. 1286.2, subd. (a)(5).) Section 1286.2(a)(5) operates as "a safety valve in private arbitration that permits a court to intercede when an arbitrator has prevented a party from fairly presenting its case." (Burlage v. Superior Court (2009) 178 Cal.App.4th 524, 100 Cal.Rptr.3d 531.)

The Arbitrator did not prevent the parties from presenting anything, but rather expressly ordered the parties to submit the transcripts. (Amir Decl., Ex. H.) Both parties failed to comply with that order. The Arbitrator excluded no witness, sustained no objection to the transcripts, and denied no request to submit them. A party's own failure to deliver evidence the arbitrator affirmatively requested is not arbitrator conduct at all, much less a refusal to hear evidence. Royal Alliance Assocs., Inc. v.

Liebhaber (2016) 2 Cal.App.5th 1092 is distinguishable. There, the panel affirmatively denied a party's request to cross-examine a witness whose unsworn statements the panel then expressly credited in its award. (Id. at pp. 1098-1101.) The arbitrators in Royal Alliance made a ruling excluding evidence. Here, the Arbitrator made no such ruling. Petitioner identifies no authority holding that an arbitrator refuses to hear evidence by deciding a matter on the record the parties actually submitted.

Nor was Petitioner deprived of the opportunity to present this evidence. The parties designated the deposition testimony, and both sides quoted and cited the testimony extensively in their closing briefs, which were before the Arbitrator. (Amir Decl., Exhs. I, J, L-N.) That the full transcripts were not lodged was a failure of counsel and not "conduct of the arbitrators contrary to the provisions of this title." (Code Civ. Proc., Sec. 1286.2, subd. (a)(5).) The Motion is denied on this ground.

Failure to Decide Issues Submitted

Petitioner next argues the award must be vacated under sections 1283.4 and 1286.2(a)(4) because the Arbitrator failed to decide all issues submitted, including the alleged second unilateral change in payment methodology, the implied covenant claim as a source of obligations independent of the contract's express terms, a documentary fraud theory, and damages. "If the record actually shows that [an issue] had been submitted to the arbitrator, and that he had totally failed to consider it, the court could and should have vacated the award." (Banks v. Milwaukee Ins. Co. (1966) 247 Cal.App.2d 34, 38.) But section 1283.4 requires that the award determine "all the questions submitted"; it does not require the arbitrator to expressly address every evidentiary fact or argument advanced in support of each claim.

In Banks, the arbitrator failed to consider an entire element of damages put in issue by the arbitration demand. (Id. at pp. 39-40.) Here, by contrast, the Final Award considers and resolves each cause of action submitted: breach of contract, breach of the implied covenant, fraud and conspiracy, the section 17200 claim, intentional and negligent interference, and the common counts. (Final Award, pp. 5-11.) The Arbitrator expressly found that "Claimant has not proven that CFC breached the Agreement," a finding that necessarily disposed of all asserted theories of breach, including the second payment change. (Final Award, p. 8.)

The Arbitrator likewise expressly ruled on the implied covenant claim, concluding it failed because the covenant "is premised on the breach of a specific contractual obligation" and no breach was found. (Final Award, p. 8.) The Arbitrator addressed the fraud claim, including the contention that "CFC presented Nueva with false capitation data," and found Petitioner did not establish the data was inaccurate. (Final Award, pp. 8-9.)

Whether those rulings were legally or factually correct is a matter beyond this Court's review. "[I]t is within the power of the arbitrator to make a mistake either legally or factually." (Heimlich v. Shivji (2019) 7 Cal.5th 350, 370.) Petitioner's contention that the implied covenant analysis misapplied the law, or that the Arbitrator should have separately discussed each alleged breach, is at most a claim of legal error and is not a ground for vacatur. (Moncharsh, supra, 3 Cal.4th at p. 11.) Further, an Arbitrator exceeds their powers by conducting an unfair proceeding. (Hoso Foods v.

Columbus Club (2010) 190 Cal.App.4th 881, 889.) This would include arbitration procedures that interfere with a party's right to a fair hearing. (Id. at p. 888.) An arbitrator can also select the appropriate remedy and only exceeds their authority if the Arbitration Agreement explicitly states that the arbitrator cannot grant that remedy. (Advanced Micro Devices, Inc. v. Intel Corp. (1994) 9 Cal.4th 362, 381-382). Here, the Arbitrator did not conduct an unfair proceeding. Again, the Arbitrator addressed and issued a finding on all causes of action raised.

The award is squarely within the scope of the powers the parties conferred. (Advanced Micro Devices, supra, 9 Cal.4th at pp. 381-382.)

Sanctions

Respondents' request for $3,500 in sanctions under Code of Civil Procedure section 128.7 is denied. The request was embedded in the Opposition rather than presented by separately served and noticed motion, and Respondents did not comply with the 21-day safe harbor provision. (Code Civ. Proc., Sec. 128.7, subd. (c)(1).) Strict compliance is mandatory. (Transcon Financial, Inc. v. Reid & Hellyer, APC (2022) 81 Cal.App.5th 547, 553-555.) In any event, the Petition, while unmeritorious, is grounded in statutory text and published authority and is not frivolous.

Supplemental Briefing

Following the June 16, 2026 hearing, the Court ordered supplemental briefing directed at what evidence was before the Arbitrator through the November 2023 summary adjudication record and which party bore responsibility for lodging the ordered deposition transcripts. The parties' supplemental papers raise several additional points, addressed below. None alters the analysis set forth above.

Summary Adjudication Record

Petitioner establishes, and the Court accepts, that the November 2023 summary adjudication record could not have cured the gap. The Matthews deposition was not taken until August 16, 2024, nine months after that motion was filed, and was never before the Arbitrator in any form. (Suppl. Brief, pp. 5-6; Eldessouky Suppl. Decl., P.P. 11-12, Ex. A.) Numerous designated passages from the Lageson and Brown depositions likewise appear nowhere in the summary adjudication exhibits. (Suppl. Brief, pp. 6-7; Eldessouky Suppl.

Decl., P. 10, Ex. B.) This does not change the disposition. The analysis above does not depend on the assumption that the summary adjudication file cured the gap. Section 1286.2(a)(5) is directed at arbitrator conduct, and a showing that still more evidence was missing does not convert counsel's non-delivery into the Arbitrator's refusal to hear evidence. It confirms the opposite. An incomplete evidentiary record is not a ground for vacatur. (National Automobile & Casualty Ins. Co. v. Superior Court (1986) 184 Cal.App.3d 948, 951, 954 [section 1286.2 "does not permit vacation of an arbitration award because it is based on insufficient or incomplete evidence"].)

Responsibility for Submitting the Transcripts

The March 5, 2025 order was directed to the parties jointly. It required counsel to meet and confer and to provide "all of the exhibits (including full copies of deposition transcripts)" they intended to rely on, and imposed that obligation on no single side. (Amir Decl., Ex. H; Eldessouky Suppl. Decl., P. 5.) As to the health plan witnesses designated by both parties, both were obligated to act and neither did. Respondents designated first, on February 10, 2025, and represented that transcripts would be "provided separately." (Petition, Exh. I.) Petitioner designated on March 28, 2025. (Petition, Exh. J.) Both briefed the matter to conclusion without lodging the transcripts and without conferring on the subject, though they conferred on the briefing schedule. (Eldessouky Suppl. Decl., P.P. 6-7.)

As to the Matthews Deposition, the responsibility was Petitioner's alone. Respondents designated no portion of that deposition and would not have submitted it under any circumstance. (Steinberg Suppl. Decl., P. 7.) Petitioner alone designated Matthews and concedes it did not submit the ordered transcripts. (Eldessouky Suppl. Decl., P. 7.) The allocation does not affect the outcome. Shared or unilateral, the failure was Counsel's. Section 1286.2 affords no relief from the omissions of a party's own attorneys, and a mutual oversight is still not a refusal by the Arbitrator.

Arbitrator's Reliance on Evidence Not Formally Admitted

For the first time in supplemental briefing, Petitioner advances an alternative ground for vacatur under section 1286.2(a)(4): that to the extent the Arbitrator drew on material contained in the arbitration file but never admitted at the evidentiary hearing, she decided the case on evidence outside the record the parties' agreement defined and thereby exceeded her powers. The argument rests on the arbitration agreement's provision that "[t]he California Code of Evidence shall apply to testimony and documents submitted to the arbitrator," and on In re Marriage of Pasco (2019) 42 Cal.App.5th 585, Acqua Vista Homeowners Assn. v. MWI, Inc. (2017) 7 Cal.App.5th 1129, and Pacific Crown Distributors v. Brotherhood of Teamsters (1986) 183 Cal.App.3d 1138. (Suppl. Brief, pp. 8-9.)

The Court declines to reach it. The Court's June 16, 2026 order continued the hearing and directed supplemental briefing on two discrete questions: what deposition evidence was before the Arbitrator by way of the November 2023 summary adjudication briefing, and which party was responsible for providing the missing deposition transcripts in the event the doctrine of invited error applied. The order granted no leave to supplement the grounds for vacatur, and the Court did not invite briefing on any new theory of excess of powers.

Supplemental briefing ordered for a defined purpose is limited to that purpose. The supplemental papers have answered the questions the Court posed. The summary adjudication record did not contain all of the designated testimony, and responsibility for lodging the transcripts rested jointly on both parties as to the health plan witnesses and on Petitioner alone as to Matthews. Neither answer supplies what section 1286.2 requires. The Arbitrator ordered the transcripts produced, and counsel did not produce them.

That remains a failure of the parties, not conduct of the Arbitrator, and the Petition fails for the reasons stated in the Discussion above.

Conclusion

The Petition to Vacate the Arbitration Award is DENIED. The Request for Sanctions is DENIED. Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at [email protected] indicating intention to submit on the tentative, and copying all parties in the email communication. Please be advised that if you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the matter. Unless you receive a submission from all other parties in the matter, you should assume that others might appear at the hearing to argue. If the Court does not receive emails from the parties indicating submission on this tentative ruling and there are no appearances at the hearing, the Court will adopt the tentative as the final order, or take the matter off calendar at its discretion.

Case Number: 23STCV11507 Hearing Date: August 14, 2026 Dept: 224 Serrano v. Newport Property Investments, LLC et al., TENTATIVE RULING

The Hearing is CONTINUED to September 28, 2026 at 9:00 a.m. for Petitioner to remedy the deficiencies. Corrected documents are due no later than September 18, 2026. Pursuant to California Rules of Court, rule 7.952(a) " The person petitioning for approval of the compromise of the claim on behalf of the minor or person with a disability and the minor or person with a disability must attend the hearing on the petition unless the court for good cause dispenses with their personal appearance." Assuming all documents are in order, Petitioner is ordered to appear at the hearing.

ANALYSIS

Petition to Approve Compromise of Minor's Claim

Petitioner Brenda Yesenia Serrano Ramirez, guardian ad litem for Claimant Aimee Sarai Ramirez, a minor, petitions the Court to approve the compromise of the pending action on behalf of Claimant. (MC-350.) There is an order appointing guardian ad litem on file. No opposition was filed.

Legal Standard: An enforceable settlement of a minor's claim or that of a person lacking the capacity to make decisions can only be consummated with court approval. (Prob. Code., Sec.Sec. 2504, 3500, 3600 et seq.; Code Civ. Proc., Sec. 372; see Pearson v. Sup.Ct. (2012) 202 Cal.App.4th 1333, 1337.) "[T]he protective role the court generally assumes in cases involving minors, [is] a role to assure that whatever is done is in the minor's best interests...[I]ts primary concern is whether the compromise is sufficient to provide for the minor's injuries, care and treatment." (Goldberg v.

Sup. Ct. (1994) 23 Cal.App.4th 1378, 1382.) A petition for court approval of a compromise or covenant not to sue under Code of Civil Procedure section 372 must comply with California Rules of Court, rules 7.950, 7.951 and 7.952. The petition must be verified by the petitioner and contain a full disclosure of all information that has "any bearing upon the reasonableness" of the compromise or the covenant. (Cal. Rules of Court, rule 7.950.) The person compromising the claim on behalf of the minor or person who lacks capacity, and the represented person, must attend the hearing on compromise of the claim unless the court for good cause dispenses with their personal appearance. (Cal.

Rules of Court, rule 7.952.)

Petition

The claimant is Aimee Sarai Ramirez, a 15-year-old minor. Claimant petitions, by and through guardian ad litem Brenda Yesenia Serrano Ramirez, the court to approve of the compromise that was reached through settlement negotiations. Petitioner states that the primary injuries Claimant experienced were allergies or allergy symptoms, itchiness,