3200 Imperial Highway v. Setareh CA2/3

CourtCalifornia Court of Appeal
DecidedOctober 31, 2022
DocketB312467
StatusUnpublished

This text of 3200 Imperial Highway v. Setareh CA2/3 (3200 Imperial Highway v. Setareh CA2/3) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
3200 Imperial Highway v. Setareh CA2/3, (Cal. Ct. App. 2022).

Opinion

Filed 10/31/22 3200 Imperial Highway v. Setareh CA2/3 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

SECOND APPELLATE DISTRICT

DIVISION THREE

3200 IMPERIAL HIGHWAY B312467 CORP., Los Angeles County Plaintiff and Appellant; Super. Ct. No. BC573118

MEHRDAD SETAREH et al.,

Cross-defendants and Appellants,

v.

KAMRAN SETAREH,

Defendant, Cross-complainant and Respondent.

APPEAL from a judgment of the Superior Court of Los Angeles County, Susan Bryant-Deason, Judge. Affirmed. Southern California Attorneys and Mac E. Nehoray for Plaintiff, Cross-defendants and Appellants. Sam Vahedi & Associates and Sam Vahedi for Defendant, Cross-complainant and Respondent. _________________________ Mehrdad Setareh and 3200 Imperial Highway Corp. (IHC) (collectively, plaintiffs) appeal from a judgment confirming an arbitration award in favor of Mehrdad’s brother Kamran Setareh.1 In confirming the award, the trial court rejected IHC’s response—asking the court to vacate the award—because it was filed more than 10 days after service of Kamran’s petition to confirm, in contravention of Code of Civil Procedure section 1290.6.2 The court found that, although IHC had presented evidence that could support the vacation of the arbitration award, it could not consider IHC’s response because the 10-day deadline was jurisdictional. The court thus considered the petition unopposed, deemed its factual allegations admitted under section 1290, and confirmed the award. We conclude section 1290.6 authorizes a court to consider— upon a showing of good cause—a responsive request to vacate an award filed more than 10 days after service of a petition to confirm, where, as here, the response is served and filed within 100 days of service of the award. Nevertheless, because plaintiffs failed to provide an adequate record demonstrating the trial court erred, we affirm the judgment. FACTS AND PROCEDURAL BACKGROUND Kamran and Mehrdad are brothers and shareholders in their family-owned corporation IHC, a real estate holding company for a commercial property that generates rental income. Mehrdad is the majority shareholder of IHC. IHC’s underlying

1 We refer to the Setareh brothers by their first names to avoid confusion. 2 Statutory references are to the Code of Civil Procedure, unless otherwise indicated.

2 lawsuit against Kamran alleges he owes IHC for the attorney fees it incurred in defending a lawsuit a third brother brought against Kamran and IHC.3 The operative second amended complaint alleges Kamran’s fraudulent conduct caused the third brother to file his lawsuit. Kamran cross-complained against IHC and Mehrdad, alleging Mehrdad, who controlled IHC’s finances, breached his fiduciary duty, and he and IHC owed Kamran shareholder distributions and other funds. Eventually, the parties stipulated to submit the entire cause to arbitration. The stipulation—signed by the parties on June 12 and 13, 2019, and filed by the court on June 18, 2019— is titled, “Stipulation and Order for Binding Arbitration.” It states the parties “stipulate to submit the instant matter to arbitration pursuant to section 3.817 et seq. of [the] California Rules of Court,” and ask the court to stay the action pending the outcome of the arbitration. The parties agreed: to submit “all . . . claims and counter claims” to a panel of three named arbitrators, with a decision of the majority to determine the prevailing party; “a final written decision shall be rendered by the arbitrators within 30 days of the [a]rbitration hearing at which time the original award shall be filed with the Court”; to share the cost of the arbitration equally; and there would be no further discovery. The arbitration was conducted over two hearings on August 20 and October 6, 2020. On November 3 and 4, 2020, two of the three arbitrators signed an arbitration award, as

3 In February 2015, Mehrdad filed, in his individual capacity, the original complaint against Kamran. The court subsequently ordered Mehrdad to amend the action to substitute IHC for Mehrdad as the plaintiff.

3 “concurring court-appointed arbitrators,” in favor of Kamran on both the complaint and cross-complaint. They awarded Kamran a total of $238,536.33, plus attorney fees and costs incurred in connection with the lawsuit, including the arbitration. Kamran’s counsel sent a proposed arbitration award to the two arbitrators who ultimately signed the award. According to plaintiffs’ counsel, neither the proposed award nor executed final award was sent to the third arbitrator, and the arbitrators never sent the final executed award to plaintiffs’ counsel. Rather, on November 4, 2020, Kamran’s counsel served plaintiffs’ counsel with a notice of entry of arbitration award. On November 16, 2020, Kamran filed a petition to confirm the arbitration award on the judicial council form approved for arbitrations “conducted pursuant to an agreement” subject to section 1285 et seq. The petition attached a copy of the stipulation and the signed “final binding arbitration award.” On November 18, 2020, IHC filed a judicial council form request for trial de novo after judicial arbitration under section 1141.20 and rule 3.826 of the California Rules of Court.4 The same day, Kamran filed objections to the request contending a trial de novo was unavailable as the parties had not participated in a nonbinding, judicial arbitration but a contractual, binding arbitration. Kamran also filed a notice of hearing on the petition for January 8, 2021.

4 Rule references are to the California Rules of Court. Rule 3.826 permits a party to request a trial within 60 days after a judicial arbitration award has been filed with the court. (Rule 3.826(a).) If the request is timely, the “case must be tried as though no arbitration proceedings had occurred.” (Rule 3.826(c).)

4 On December 24, 2020, nine court days before the noticed hearing date, IHC filed an “opposition” to Kamran’s petition to confirm the arbitration award. IHC argued the court must set aside the arbitration award and set the matter for a jury trial because the parties stipulated to nonbinding arbitration, and IHC had filed a timely request for trial de novo. Plaintiffs’ counsel declared the parties agreed in March 2019 to submit the matter to binding arbitration, but they never executed the stipulation he prepared. In June 2019, the parties agreed to have the matter “proceed as [j]udicial [a]rbitration.” Plaintiffs’ counsel said he revised the original stipulation but “[u]nfortunately” failed to delete the word “ ‘[b]inding’ ” from the caption. The body of the stipulation does not call the arbitration “binding.” Plaintiffs’ counsel noted the stipulation states the arbitration “was to be conducted under . . . [r]ules . . . 3.817 et seq.[,] which is for [j]udicial [a]rbitration and NOT [b]inding [a]rbitration.” IHC alternatively argued that, even if the award were binding, the court must vacate it based on any one of the following grounds set forth in section 1286.2: the award was “procured by corruption, fraud or other undue means”; there was “corruption in any of the arbitrators”; IHC’s rights “were substantially prejudiced by misconduct of a neutral arbitrator”; and the “arbitrators exceeded their powers.” (§ 1286.2, subd. (a)(1)–(4) [“court shall vacate the award” if it determines any of the enumerated grounds occurred].) IHC presented evidence supporting its request to vacate through its counsel’s declaration and various e-mail communications among the arbitrators, counsel, and parties.

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