Kaiser Found. Health Plan, Inc. v. Superior Court of L. A. Cnty.
This text of 221 Cal. Rptr. 3d 278 (Kaiser Found. Health Plan, Inc. v. Superior Court of L. A. Cnty.) is published on Counsel Stack Legal Research, covering California Court of Appeal, 5th District primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
SMALL, J.
*1129INTRODUCTION
Prime Healthcare La Palma, LLC and affiliated hospitals (collectively, Prime)1 sued Kaiser Foundation Health Plan, Inc. (Kaiser)2 in superior court *1130under California law, alleging that Kaiser failed to reimburse Prime for emergency medical services Prime provided to Kaiser members. A portion of Prime's claims relate to emergency medical services Prime provided to enrollees in a Medicare Advantage plan administered by Kaiser pursuant to Part C of the Medicare Act ( 42 U.S.C. § 1395w-21 et seq. ) (the Medicare Advantage claims).
After a rather convoluted multi-year path, the parties agreed to arbitration in lieu of the superior court litigation. After Prime filed an arbitration demand, Kaiser moved in the arbitration proceedings to dismiss Prime's Medicare Advantage claims on the ground that they are preempted by the Medicare Act and subject to that Act's requirement that claimants exhaust administrative remedies before resorting to litigation or arbitration. The arbitration panel denied Kaiser's motion and memorialized its ruling in what it labeled as a "Partial Final Award Re Medicare Advantage Claims" (the partial final award). Kaiser petitioned the trial court to vacate the award. The court denied the petition and entered a judgment confirming the award. The case is before us on Kaiser's appeal from that judgment. Kaiser contends that the panel's ruling on the Medicare Act preemption and exhaustion issues memorialized in the partial final award was wrong as a matter of law and that the court thus erred in entering a judgment confirming the award. Prime defends the legal basis of the rulings by the panel and the court on those issues.
Prior to oral argument, we asked the parties to address whether the judgment was appealable, and, if not, whether we could review the judgment by treating Kaiser's appeal as a petition for writ of mandate. At oral argument and in supplemental briefs, Kaiser and Prime joined forces and answered yes to both questions. We have concluded otherwise, however. The merits of the confirmation of the panel's award on the Medicare Act preemption and exhaustion issues are not reviewable, either by appeal or by writ.
Code of Civil Procedure 3 section 1294, subdivision (d) ( section 1294(d) ), authorizes appeals from judgments confirming arbitration *282awards. To be appealable under section 1294(d), however, a judgment confirming an arbitration award must be final-that is, it must embody a final determination of the parties' rights, just like an appealable judgment in a civil case that did not go to arbitration (§§ 577, 904, 1287.4). The judgment confirming the partial final award here does not meet that standard. The judgment is final only as to the determination that the Medicare Advantage claims are neither preempted by the Medicare Act nor subject to exhaustion under that Act. It resolved nothing *1131more than that. Whether Kaiser is liable to Prime on the Medicare Advantage claims remains to be resolved in the arbitration and then in subsequent proceedings in the trial court. The same is true of all of Prime's other claims (the Medicare Advantage claims constitute just one piece of Prime's claims), as well as cross-claims that Kaiser has submitted to arbitration. Because the judgment is not a final judgment, it is nonappealable.
Our ability to review by writ the merits of the judgment confirming the partial final award on the Medicare Act preemption and exhaustion issues depends on whether the trial court had jurisdiction to confirm the award in the first place. The court lacked jurisdiction if the "award" did not meet the section 1283.4 standards for an award. To qualify under section 1283.4, an award must "include a determination of all the questions submitted to the arbitrators the decision of which is necessary in order to determine the controversy" (§ 1283.4). Based on the reasoning of our decision in Judge v. Nijjar Realty, Inc. (2014)
We are, however, treating Kaiser's appeal as a petition for writ of mandate for the purpose of directing the trial court to vacate its judgment confirming the partial final award and enter a new order dismissing Kaiser's petition to vacate the award. We do so on the ground that the failure of the partial final award to qualify as an "award" under section 1283.4 deprived the court of jurisdiction to confirm or vacate it.
Parties generally have broad leeway to structure an arbitration as they see fit, free from statutory constraints. They may, for example, conduct the arbitration in phases and ask the arbitrators, as Kaiser and Prime did here, to issue phase-specific, interim awards. Parties' requests for judicial approval or disapproval of arbitration awards are, however, subject to statutory constraints that limit when and under what circumstances courts may review arbitrators' rulings. Those restrictions deprive trial courts of jurisdiction to review an award that does not qualify as an award under section 1283.4, and appellate courts of jurisdiction to review on appeal a judgment that does not qualify as a final judgment under section 1294(d). The request of Kaiser and Prime for judicial intervention into their arbitration at this stage founders on these shoals.
*1132FACTUAL AND PROCEDURAL BACKGROUND
A. The State Court Litigation
In January 2008, Prime filed five separate state court actions against Kaiser in different counties throughout California.
*283Prime's claims arose from its provision of emergency medical services to Kaiser members, including to enrollees in Kaiser's Medicare Advantage plan.4
Kaiser removed the actions to federal district court based, in part, on the argument that the Medicare Act preempted the Medicare Advantage claims. The district court rejected Kaiser's preemption argument. Although it dismissed some of Prime's claims, the court declined to exercise supplemental jurisdiction over the remaining claims and remanded the actions to state court.
In June 2009, Prime's state court actions were coordinated as a complex case in the Los Angeles County Superior Court.
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SMALL, J.
*1129INTRODUCTION
Prime Healthcare La Palma, LLC and affiliated hospitals (collectively, Prime)1 sued Kaiser Foundation Health Plan, Inc. (Kaiser)2 in superior court *1130under California law, alleging that Kaiser failed to reimburse Prime for emergency medical services Prime provided to Kaiser members. A portion of Prime's claims relate to emergency medical services Prime provided to enrollees in a Medicare Advantage plan administered by Kaiser pursuant to Part C of the Medicare Act ( 42 U.S.C. § 1395w-21 et seq. ) (the Medicare Advantage claims).
After a rather convoluted multi-year path, the parties agreed to arbitration in lieu of the superior court litigation. After Prime filed an arbitration demand, Kaiser moved in the arbitration proceedings to dismiss Prime's Medicare Advantage claims on the ground that they are preempted by the Medicare Act and subject to that Act's requirement that claimants exhaust administrative remedies before resorting to litigation or arbitration. The arbitration panel denied Kaiser's motion and memorialized its ruling in what it labeled as a "Partial Final Award Re Medicare Advantage Claims" (the partial final award). Kaiser petitioned the trial court to vacate the award. The court denied the petition and entered a judgment confirming the award. The case is before us on Kaiser's appeal from that judgment. Kaiser contends that the panel's ruling on the Medicare Act preemption and exhaustion issues memorialized in the partial final award was wrong as a matter of law and that the court thus erred in entering a judgment confirming the award. Prime defends the legal basis of the rulings by the panel and the court on those issues.
Prior to oral argument, we asked the parties to address whether the judgment was appealable, and, if not, whether we could review the judgment by treating Kaiser's appeal as a petition for writ of mandate. At oral argument and in supplemental briefs, Kaiser and Prime joined forces and answered yes to both questions. We have concluded otherwise, however. The merits of the confirmation of the panel's award on the Medicare Act preemption and exhaustion issues are not reviewable, either by appeal or by writ.
Code of Civil Procedure 3 section 1294, subdivision (d) ( section 1294(d) ), authorizes appeals from judgments confirming arbitration *282awards. To be appealable under section 1294(d), however, a judgment confirming an arbitration award must be final-that is, it must embody a final determination of the parties' rights, just like an appealable judgment in a civil case that did not go to arbitration (§§ 577, 904, 1287.4). The judgment confirming the partial final award here does not meet that standard. The judgment is final only as to the determination that the Medicare Advantage claims are neither preempted by the Medicare Act nor subject to exhaustion under that Act. It resolved nothing *1131more than that. Whether Kaiser is liable to Prime on the Medicare Advantage claims remains to be resolved in the arbitration and then in subsequent proceedings in the trial court. The same is true of all of Prime's other claims (the Medicare Advantage claims constitute just one piece of Prime's claims), as well as cross-claims that Kaiser has submitted to arbitration. Because the judgment is not a final judgment, it is nonappealable.
Our ability to review by writ the merits of the judgment confirming the partial final award on the Medicare Act preemption and exhaustion issues depends on whether the trial court had jurisdiction to confirm the award in the first place. The court lacked jurisdiction if the "award" did not meet the section 1283.4 standards for an award. To qualify under section 1283.4, an award must "include a determination of all the questions submitted to the arbitrators the decision of which is necessary in order to determine the controversy" (§ 1283.4). Based on the reasoning of our decision in Judge v. Nijjar Realty, Inc. (2014)
We are, however, treating Kaiser's appeal as a petition for writ of mandate for the purpose of directing the trial court to vacate its judgment confirming the partial final award and enter a new order dismissing Kaiser's petition to vacate the award. We do so on the ground that the failure of the partial final award to qualify as an "award" under section 1283.4 deprived the court of jurisdiction to confirm or vacate it.
Parties generally have broad leeway to structure an arbitration as they see fit, free from statutory constraints. They may, for example, conduct the arbitration in phases and ask the arbitrators, as Kaiser and Prime did here, to issue phase-specific, interim awards. Parties' requests for judicial approval or disapproval of arbitration awards are, however, subject to statutory constraints that limit when and under what circumstances courts may review arbitrators' rulings. Those restrictions deprive trial courts of jurisdiction to review an award that does not qualify as an award under section 1283.4, and appellate courts of jurisdiction to review on appeal a judgment that does not qualify as a final judgment under section 1294(d). The request of Kaiser and Prime for judicial intervention into their arbitration at this stage founders on these shoals.
*1132FACTUAL AND PROCEDURAL BACKGROUND
A. The State Court Litigation
In January 2008, Prime filed five separate state court actions against Kaiser in different counties throughout California.
*283Prime's claims arose from its provision of emergency medical services to Kaiser members, including to enrollees in Kaiser's Medicare Advantage plan.4
Kaiser removed the actions to federal district court based, in part, on the argument that the Medicare Act preempted the Medicare Advantage claims. The district court rejected Kaiser's preemption argument. Although it dismissed some of Prime's claims, the court declined to exercise supplemental jurisdiction over the remaining claims and remanded the actions to state court.
In June 2009, Prime's state court actions were coordinated as a complex case in the Los Angeles County Superior Court. Prime's January 2010 complaint in the coordinated actions divided Prime's claims into two categories. First, Prime alleged that Kaiser had contracted with Multiplan, Inc. (Multiplan), a preferred provider organization that established a network of providers, including Prime, through which Kaiser members could seek emergency medical services, and that Kaiser had failed to pay Prime the contractually-negotiated rates for those services. Second, Prime alleged that Kaiser failed to fully reimburse Prime for emergency medical services Prime provided to enrollees in Kaiser's Medicare Advantage plan. This second category of claims embodied the Medicare Advantage claims.
Kaiser demurred to the Medicare Advantage claims, asserting that they were preempted by the Medicare Act and subject to the Act's requirement of *1133exhaustion of administrative remedies. Kaiser demurred on different grounds to Prime's other claims as well. The trial court overruled the demurrer in its entirety in April 2010.
More than three years later, Kaiser again argued, this time in a motion for summary adjudication before a different trial court judge, that Prime's Medicare Advantage claims were preempted by the Medicare Act and subject to that Act's exhaustion requirement. Whereas Kaiser's demurrer failed, its summary adjudication motion succeeded: in January 2014, the trial court granted the motion on both preemption and exhaustion grounds. Prime filed a petition for writ of mandate seeking to overturn the trial court's decision. We summarily denied the petition. (Prime Healthcare Cases (Mar. 5, 2014, No. B254632).)
While Kaiser's summary adjudication motion was pending, the trial court consolidated with the coordinated action additional law suits that Prime had filed against *284Kaiser in California. In April 2014, Prime filed its first consolidated complaint in the coordinated action. The complaint stated that the parties' dispute arose from Kaiser's unlawful efforts to force Kaiser members who had the right to seek emergency medical services at Prime hospitals to obtain those services at Kaiser hospitals. Prime alleged that, as part of this scheme, Kaiser did not pay, or underpaid, Prime's claims for reimbursement from Kaiser for the provision of emergency medical services to Kaiser members. According to Prime, Kaiser owed it more than $150,000,000 as of the date of the first consolidated complaint.
Prime's claims in the first consolidated complaint fell into the following four categories: (1) claims for breach of contract and the implied covenant of good faith and fair dealing based on Kaiser's alleged failure to reimburse Prime in accordance with the payment schedule in the Multiplan contract; (2) claims for breach of contract and the implied covenant of good faith and fair dealing based on Kaiser's alleged failure to reimburse Prime in accordance with the payment schedule in Kaiser's contract with Beech Street Corporation (Beech Street), another preferred provider organization; (3) claims for breach of an implied-in-law contract based on Kaiser's alleged failure to fully reimburse Prime for emergency medical services provided to Kaiser's commercial members (i.e., employer groups that purchase Kaiser plans); and (4) the Medicare Advantage claims, which Prime described in the complaint as claims for breach of an implied-in-law and implied-in-fact contract based on Kaiser's alleged failure to fully reimburse Prime for emergency medical services provided to enrollees in Kaiser's Medicare Advantage plan.5 Prime *1134presented its Medicare Advantage claims in the first consolidated complaint, notwithstanding the fact the trial court had ruled just a few months earlier that the claims were preempted and thus had to be brought in federal court.6
Kaiser filed cross-claims against Prime, including Medicare Advantage-related cross-claims.
On December 31, 2014, Prime filed another state court action against Kaiser (Prime Healthcare La Palma, LLC v. Kaiser Foundation (Super. Ct. L.A. County, No. BC568336)). This case was deemed "related" to the coordinated action. The related case addressed Prime's claims against Kaiser that arose in 2013 and 2014.
B. The Parties Agree To Arbitrate Their Disputes and Relitigate in the Arbitration Whether the Medicare Advantage Claims Are Preempted and Subject to Exhaustion of Administrative Remedies
On February 7, 2015, the parties agreed to "binding arbitration" of their disputes, *285including Prime's Medicare Advantage claims and Kaiser's Medicare Advantage-related cross-claims, before a panel of JAMS arbitrators and under JAMS rules and procedures, "in lieu of ... [¶] the consolidated [state court] proceeding [and] [¶] the related case." The arbitration agreement specified that the panel would not be bound by the trial court's ruling that the Medicare Advantage claims were preempted by the Medicare Act and subject to that Act's exhaustion requirement. Rather, the agreement authorized relitigation of the preemption and exhaustion questions before the panel and "empowered" the panel to resolve them, independent of the trial court's ruling.
In a paragraph captioned "Decision and Final Award," the agreement states that the panel "shall issue a Final Award within forty-five (45) days of the conclusion of the arbitration hearing.... [¶] The Final Award ... may be confirmed thereafter as a judgment by the Superior Court of the State of California, subject only to challenge on the grounds set forth in ... [s]ection 1285 et seq. or on the grounds that the [panel] exceeded ... [its] powers by *1135making a mistake of law or legal reasoning." The agreement provides for de novo judicial review of the panel's legal conclusions and legal reasoning.
The agreement does not expressly refer to the panel's possible issuance of a partial final award or any other interlocutory award. However, the JAMS rules that govern the parties' arbitration provide that JAMS arbitrators can "render a Final Award or a Partial Final Award." (JAMS Comprehensive Arbitration Rules & Procedures, rule 24(a).) The JAMS rules also contemplate judicial "[p]roceedings to enforce, confirm, modify or vacate an Award," be it final or partial. (Id ., rule 25.) The rules state that such proceedings "will be controlled by and conducted in conformity with the Federal Arbitration Act ... or applicable state law." (Ibid .)
Following the parties' execution of the arbitration agreement, Prime initiated an arbitration demand against Kaiser. The demand presented all of Prime's claims against Kaiser that it had asserted in the superior court litigation.7
C. The Panel's Partial Final Award Regarding the Medicare Advantage Claims
In May 2015, Kaiser filed a motion for summary adjudication asking the arbitration panel to dismiss Prime's Medicare Advantage claims on the ground that they were preempted by the Medicare Act and subject to that Act's exhaustion requirement, just as the trial court had ruled before the parties agreed to arbitrate their disputes. The panel ruled the opposite way, however, on both the preemption and exhaustion questions and thus denied Kaiser's motion. On September 8, 2015, the panel memorialized its preemption and exhaustion rulings in the partial final award.
D. The Trial Court Enters a Judgment Confirming the Partial Final Award
On October 15, 2015, Kaiser filed a petition in the trial court to vacate the partial final award. Kaiser argued that the award should be vacated on the ground that the panel exceeded its powers by making a mistake of law or legal reasoning in concluding that Prime's Medicare Advantage claims were neither preempted by the Medicare Act nor subject to the Act's exhaustion requirement.
*286Kaiser's petition was assigned to the same trial court judge who had granted Kaiser's motion for summary adjudication on the Medicare Advantage claims *1136on preemption and exhaustion grounds prior to the parties' submission of their disputes to arbitration. The second time around, however, the court changed its view. It sided with the arbitration panel on the preemption and exhaustion questions and denied Kaiser's petition. On April 29, 2016, the court entered a judgment confirming the partial final award.
E. Kaiser's Appeal and Writ Petition
On May 12, 2016, Kaiser filed a notice of appeal from the judgment confirming the partial final award. Kaiser stated in the notice that it was appealing under sections 904, subdivision (a)(1), and 1294(d).
While its appeal was pending, Kaiser filed a petition for a writ of mandate (Kaiser Foundation Health Plan, Inc. et al. v. Superior Court , No. B275985). Kaiser stated that it filed the petition because "it was not clear whether the judgment [confirming the partial final award] was a final judgment appealable under ... sections 904.1[, subdivision] (a)[,] and 1294(d)." Kaiser thus asked us to review the judgment by way of a writ if we concluded that it was not appealable. We denied the petition, stating that "[Kaiser's] proper remedy is by way of their pending appeal ... from the judgment ... confirming an arbitration award."
In preparing for oral argument, however, we became concerned that the judgment confirming the partial final award might not be appealable after all. We also became concerned that we might not be able to review the merits of the confirmation of the award by way of a petition for writ of mandate either. Accordingly, we asked the parties to address at oral argument (1) whether we had jurisdiction to hear the appeal; (2) if not, whether we could treat the appeal as a petition for a writ of mandate; and (3) if the issue is properly reached, whether the trial court had jurisdiction to confirm the partial final award. Following oral argument, we requested that the parties submit supplemental briefs on these questions. At oral argument and in their supplemental briefs, both sides contended that the judgment confirming the partial final award is appealable and that, in any event, the trial court had jurisdiction to confirm the award and we thus could treat the appeal as a petition for a writ of mandate and review the merits of the confirmation of the award through that vehicle.
After the supplemental briefs were filed, the parties submitted for our consideration an April 3, 2017 amendment to their arbitration agreement. The amendment recites that the parties intended all along for the arbitrators to adjudicate in the first phase of the arbitration whether the Medicare Advantage claims were preempted and/or subject to exhaustion, and to issue a partial final award on those questions. The amendment further recites that if the arbitrators ruled that the Medicare Advantage claims were not preempted *1137and subject to exhaustion, then the parties intended for the arbitrators to adjudicate the merits of those claims in a subsequent phase. The amendment states that, "[i]n essence" the adjudication of the preemption and exhaustion questions in "Phase 1 of the arbitration would be the equivalent of a separate action for declaratory relief."
DISCUSSION
A. Relevant Statutory Provisions
The provisions of the California Arbitration Act governing the issuance of arbitration awards, trial court review of awards, and appellate court review of trial court orders and judgments approving or disapproving *287awards are housed in chapters 3, 4, and 5 of part 3, title 9, of the Code of Civil Procedure (§ 1282 et seq. ). We summarize the provisions that are relevant here.
Section 1283.4 specifies the form and contents of an award. It provides, "The award shall be in writing and signed by the arbitrators concurring therein. It shall include a determination of all the questions submitted to the arbitrators the decision of which is necessary in order to determine the controversy." (Ibid .)
Section 1285 authorizes "[a]ny party to an arbitration in which an award has been made [to] petition the [trial] court to confirm, correct or vacate the award...." In turn, section 1286 provides that, in disposing of such a petition, the court "shall confirm the award as made ... unless ... it corrects the award and confirms it as corrected, vacates the award or dismisses the proceeding."8 If the court confirms the award, then section 1287.4 requires that "judgment shall be entered in conformity therewith." Section 1287.4 further provides that "[t]he judgment so entered ... is subject to all the provisions of law relating to[ ] a judgment in a civil action...."
Section 1294"lists the types of orders associated with [an] arbitration that may be appealed." ( *1138Sunnyvale Unified School Dist. v. Jacobs (2009)
B. The Judgment Confirming the Partial Final Award Is Not Appealable Because It Is Not a Final Judgment
Section 904.1, subdivision (a), governs the right to appeal in civil actions.
*288It codifies the "one final judgment rule," which provides that an " ' "an appeal may be taken only from the final judgment in an entire action." ' [Citation.]" ( In re Baycol Cases I & II (2011)
Under the one final judgment rule, interlocutory judgments generally are not appealable. ( In re Baycol Cases I & II , supra , 51 Cal.4th at pp. 754, 756,
*1139The one final judgment rule applies to judgments confirming arbitration awards. ( Rubin v. Western Mutual Ins. Co. (1999)
In Rubin , the court held that a judgment confirming an arbitration award against an insurer appraising the amount of earthquake damage to its insured's house did not satisfy the one final judgment rule, and thus was nonappealable, because the award was not a final determination of the parties' rights. Left unresolved by the award, and remaining to be tried in arbitration, were the merits of all four of the insured's causes of action. The court thus dismissed the insured's appeal for lack of jurisdiction to hear it. ( Rubin , supra , 71 Cal.App.4th at pp. 1547-1548,
Rubin did not address whether the one final judgment rule applies to the orders listed in section 1294. It held only that section 1294 judgments are subject to the rule. ( Rubin , supra , 71 Cal.App.4th at p. 1548,
*289to [the] orders listed in section 1294," not just to judgments entered under subdivision (d) of that section. ( Judge , supra , 232 Cal.App.4th at p. 634,
The judgment confirming the panel's partial final award in this case suffers from the same lack of finality as the judgment confirming the award in Rubin and the order vacating the award in Judge . The partial final award was confined to the resolution of the questions of Medicare Act preemption and exhaustion. It is "final" as to those questions. But as its name highlights, it *1140was only "partially final" as to the arbitration as a whole. The award and the judgment confirming it did not decide the merits of Prime's Medicare Advantage claims, let alone the merits of Prime's various other claims (which do not implicate Prime's provision of services to Kaiser's Medicare Advantage enrollees), plus Kaiser's cross-claims to boot. All of those claims must still be resolved in the arbitration, culminating in a final award. That will be followed by further proceedings in the trial court, initiated by petitions to confirm or vacate the award, culminating in a final judgment or order that determines the parties' rights. Because the judgment confirming the partial final award is not a final judgment, it is not appealable under section 1294(d) ; therefore we lack jurisdiction to hear Kaiser's appeal.
The trial court could not have simply entered an order confirming the partial final award and bypassed entry of judgment. Because the court confirmed the award, it was required by section 1287 to enter judgment in conformity therewith. Indeed, section 1294's list of appealable orders does not include orders confirming awards; such orders must be incorporated into judgments. (See Law Offices of David S . Karton v. Segreto , supra , 176 Cal.App.4th at p. 9,
In the face of the finality requirement and its application to the arbitration setting in Rubin and Judge , Kaiser and Prime nevertheless argue that the judgment confirming the partial final award's ruling on the Medicare Act preemption and exhaustion questions is appealable. Their arguments are unavailing.
Prime's principal contention regarding appealability is that the partial final award was akin to a declaratory judgment on the questions of Medicare Act preemption and exhaustion, which the trial court then confirmed. Because declaratory judgments are appealable, Prime asserts that the partial final award and the attendant judgment confirming it are appealable. To support this argument, Prime refers to the April 3, 2017 amendment to the parties' arbitration agreement, which states that Kaiser and Prime intended that, "[i]n essence," the adjudication of the preemption and exhaustion issues in an initial phase of the arbitration "would be the equivalent of a *290separate action for declaratory relief." The problem is that the parties did not submit the preemption and exhaustion issues to the panel in a separate, stand-alone arbitration. Rather, they submitted all of their disputed issues to arbitration in *1141one fell swoop. Under these circumstances, the parties' request that the panel decide the Medicare Act preemption and exhaustion issues before proceeding to the other issues does not render the partial final award the equivalent of an appealable final order in a declaratory judgment action in civil litigation. It renders the partial final award the equivalent of a nonappealable interlocutory order in civil litigation.
For its part, Kaiser's principal contention regarding appealability is that the California Supreme Court's decision in Cable Connection supports the proposition that appellate review of an order confirming or vacating a partial final arbitration award "does not conflict with the one final judgment rule for appealability." We rejected that very argument in Judge . Like Judge , " Cable Connection involved an appeal from an order vacating an arbitration award that concluded that an arbitration provision allowed for class arbitration." ( Judge , supra , 232 Cal.App.4th at p. 637,
Kaiser contends that what we said in Judge about Cable Connection was wrong because (according to Kaiser) subject matter jurisdiction (including appellate jurisdiction) "is always an issue that is necessarily considered and decided" when another jurisdictional issue is considered and decided, and in Cable Connection , the Supreme Court considered and decided that the trial court had jurisdiction to review de novo the legal basis of the arbitrator's award.10 Thus, Kaiser asserts, the Supreme Court in Cable Connection necessarily also considered whether the order at issue was appealable and decided that it was. As a result, Kaiser says, Cable Connection constitutes precedent for our exercise of jurisdiction over Kaiser's appeal.
*1142Kaiser is mistaken about Cable Connection 's precedential force. When an appellate decision does not expressly address a jurisdictional issue, courts confronting the same issue in a subsequent case should not construe the failure of the court in the previous case to address it as a pronouncement on jurisdiction. Jurisdictional precedent is not established by silence.
*291( Gage v. Atwater (1902)
The two cases that Kaiser cites are not to the contrary. Haden v. Haden (1953)
C. The Partial Final Award Is Not an Award Under Section 1283.4, Thus Depriving the Trial Court of Jurisdiction To Confirm It
Section 1283.4 specifies the requirements for an arbitration award. It provides that an award must "include a determination of all the questions submitted to the arbitrators the decision of which is necessary in order to determine the controversy." ( Ibid . ) An arbitrator's designation of his or her ruling as an "award" does not make it one under section 1283.4. Likewise, an award's qualification as an award under the rules of arbitration bodies, such as JAMS and similar entities, does not control the section 1283.4 inquiry. ( Judge , supra , 232 Cal.App.4th at p. 636,
1. Like the Clause Construction Award in Judge, the Partial Final Award Decided a Threshold Issue, and No More
As indicated above, in Judge , we held that an order vacating an arbitration award construing the arbitration clause in the parties' agreement to authorize arbitration of the plaintiff's class and representative claims was nonappealable under section 1294 because it was not final. That holding was bound up in our separate conclusion that the award did not meet the section 1283.4 specifications for an award because it did not "determine all of the questions that are necessary for the arbitrator *292to decide in order to determine the controversy. Rather, the clause construction award only resolved what the arbitrator described as the 'threshold matter' of 'whether the applicable arbitration clause permits the arbitration to proceed on behalf of or against a class" and allowed the class claims to continue. Because the clause construction award does not qualify as an 'award' under section 1283.4, the trial court's order is not an order vacating an arbitration award, and it is not appealable." ( Judge , supra , 232 Cal.App.4th at pp. 633-634,
Whether the trial court had jurisdiction to confirm or vacate the partial final award in this case is before us now because we asked the parties to address it. We asked that question because if the court lacked jurisdiction, then we cannot review the merits of the judgment confirming the partial final award by treating Kaiser's appeal as a petition for a writ of mandate to vacate the judgment. ( People v. Chlad (1992)
We disagree. Like the clause construction award in Judge , the partial final award did not "determin[e] ... all the questions submitted to the arbitrators the decision of which is necessary in order to determine the controversy"
*1144(§ 1283.4). The controversy between Kaiser and Prime encompasses a wide range of questions. The sole question the partial final award determined was whether Prime's Medicare Advantage claims are preempted by the Medicare Act and subject to that Act's exhaustion requirement. The partial final award did not resolve all of the other questions necessary to determine the parties' controversy. These other questions entail not just whether Kaiser is liable to Prime on the Medicare Advantage claims, but also whether Kaiser is liable on Prime's other claims and whether Prime is liable on Kaiser's cross-claims. These questions are pending before the panel through Prime's arbitration demand. The parties have yet to ask the panel to rule on them. They are, however, in controversy in the arbitration. Thus, like the clause construction award in Judge , the partial final award here is not an award.
Prime contends that Judge is distinguishable because the clause construction award there addressed just a threshold matter, whereas the partial final award here did not. Prime is wrong. The partial final award is as equally a threshold ruling as the clause construction award in Judge . The partial final award determined that Prime's Medicare Advantage claims could proceed in the arbitration because they are not preempted and subject to exhaustion. That is no different than the Judge clause construction award's determination that the plaintiff's class and representative claims in that case could proceed in the arbitration. Prime is right that the partial final award "left nothing to be decided" on the issues of Medicare Act preemption and exhaustion. But it left everything else in the arbitration to be decided, just like the clause construction award in Judge did.
*293Prime fares no better in its attempt to distinguish Judge on the ground that the parties in that case did not submit the clause construction issue to the arbitrator, whereas here, the parties submitted the Medicare Act preemption and exhaustion issues to the panel. It is true that the arbitrator in Judge reached out and decided the clause construction issue. That played no role, however, in our conclusion that the clause construction award was not an award under section 1283.4. What mattered is that the clause construction award left the merits of plaintiff's claims unresolved.
It also is correct, as Prime points out, that in Judge , the trial court vacated the arbitration award, whereas here, the court confirmed the award. But this, too, is irrelevant. An award must be an "award" under section 1283.4 before it can be either confirmed or vacated. How a trial court disposes of a petition to confirm or vacate a putative award has no bearing on whether the award satisfies section 1283.4's strictures.
*11452. Compliance With Section 1283.4's Award Requirement Prevents Piecemeal Judicial Review of Arbitrators' Rulings
In Judge , we observed that if section 1294 were construed to permit appeals from nonfinal judgments and orders associated with arbitration awards, then "[a]ggrieved parties could appeal orders vacating interim arbitration orders resolving discovery disputes, sustaining or overruling demurrers, granting summary adjudication on certain claims, ruling on liability but not damages in a bifurcated proceeding, and denying motions for a new arbitration hearing. It would be anomalous to allow parties participating in an arbitration to appeal orders vacating interim arbitration awards when the underlying orders are not appealable in nonarbitration cases." ( Judge , supra , 232 Cal.App.4th at pp. 634-635,
Concerns about piecemeal judicial review of arbitration rulings also informed our conclusion in Judge that the clause construction award at issue there did not qualify as a section 1283.4 award. Judge recognized that compliance with the award requirement ensures that judicial approval or disapproval of an award is timed to the Legislature's specifications, not the parties' preferences.
In arguing that the partial final award is a section 1283.4 award because it left nothing to be decided on the Medicare Act preemption and exhaustion questions, Kaiser and Prime fail to offer a limiting principle that would distinguish arbitrator rulings that meet section 1283.4 requirements and those that do not. Under their approach, anything and everything would qualify as an award. If the partial final award allowing the Medicare Advantage claims to proceed in arbitration is a section 1283.4 award, then so too would be an interim award determining liability on the Medicare Advantage claims. The trial court thus would have jurisdiction to confirm or vacate the liability award on those claims, even if all the other claims remained pending in the arbitration. Similarly, an award on liability on Prime's claims related to the Multiplan contract would be *294an award that the court could confirm or vacate, even if the resolution of damages on those claims, as well as the resolution of liability and damages on Prime's claims related to the Beech Street contract, remained pending in the arbitration.
In short, if Kaiser and Prime are right and the partial final award is an award, then nothing would prevent parties to an arbitration from jumping *1146back and forth between the arbitration forum and courtrooms. They could obtain an award from arbitrators one day, seek judicial approval or disapproval of the award the next day, only to return to arbitration the day after that to resume arbitrating what remains in their dispute. Arbitrator determinations of discrete questions within a controversy would be blurred with determination of the controversy itself, thereby rendering the section 1283.4 requirements meaningless.
The text of section 1283.4 is clear: It specifies that an award must resolve the parties' controversy, not a question within the controversy. Our conclusion that the partial final award is not an award hews to that command.
Kaiser claims that our reading of section 1283.4 to foreclose judicial review of the partial final award in this case would force parties "to go through [the] wasteful procedural formalit[y]" of filing separate, but related arbitrations "in complex, multi-dispute matters," instead of presenting all of their disputes in one arbitration and seeking "timely review" of awards on discrete disputes. This contention overlooks that the tack of sporadic judicial intrusion into ongoing arbitrations that Kaiser and Prime are advocating would be highly inefficient in its own right because it would disrupt the "streamlined process" that, as we noted above, is a hallmark of arbitration. ( Judge , supra , 232 Cal.App.4th at p. 634,
3. Section 1283.4 Does Not Bar Judicial Review of All Interim Awards
We recognize that there is significant overlap between our conclusion that the trial court's judgment confirming the partial final award is not appealable under section 1294 because it was not a final judgment and our conclusion that the court lacked jurisdiction in the first place because the partial final award does not qualify as a section 1283.4 award. Underpinning both conclusions is that the partial final award resolved only the questions of Medicare Act preemption and exhaustion, and nothing more. Whether an award is an award and whether a judgment or order confirming the award is appealable are not always coterminous inquiries, however. In some cases, an interim award will meet the section 1283.4 requirements for an award, thus giving the trial court jurisdiction to confirm or vacate it and enabling the appellate court to review by writ the merits of the order confirming or vacating an award, even if the order is not appealable under section 1294.
Hightower v. Superior Court (2001)
Hightower arose out of a shareholder dispute between two individuals, Hightower and O'Dowd, each of whom owned one-half of a company they jointly formed. Their shareholder agreement contained a "buy-sell provision," which allowed either party to offer to sell his shares to the other at a specified price. The other party then had 90 days either to sell his shares to the offeror at that price or to buy the offeror's shares for that same price. ( Hightower , supra , 86 Cal.App.4th at pp. 1420-1421,
The arbitrator rejected Hightower's claims, concluding that O'Dowd was not responsible for Hightower's inability to secure financing and that Hightower breached the shareholder agreement by blocking O'Dowd from completing his purchase of Hightower's shares. The arbitrator faced a problem in fashioning a remedy for O'Dowd, however, because the 90-day period during which Hightower either had to sell his shares to O'Dowd for $47 million or buy O'Dowd's shares at that price had long since lapsed; and with the passage of time, the financiers who had committed to back O'Dowd's purchase had pulled out due to the uncertainty caused by Hightower's *1148initiation of the arbitration. It thus was impossible for the arbitrator to provide O'Dowd the full benefit of the bargain from the now-collapsed transaction. Seeking to approximate that benefit as closely as possible notwithstanding the changed circumstances, the arbitrator issued a "partial final award" that gave O'Dowd the option to obtain new financing for the purchase of Hightower's shares within six months from the date of the award. The arbitrator reserved jurisdiction to determine issues that might arise depending on whether O'Dowd exercised the option or not. Those issues included (1) the amount of costs, unknown as of the date of the award, O'Dowd might incur to obtain the new financing to purchase Hightower's shares if he exercised that option; and (2) the amount of damages in the form of attorney's fees and the recoupment of financing charges, both of which also were unknown as of the date of the award, if O'Dowd did not exercise the option. ( Hightower , supra , 86 Cal.App.4th at pp. 1424-1428,
The Court of Appeal disagreed. It held that section 1283.4 does not impose a blanket prohibition on interim awards that otherwise meet that provision's specifications for an award. ( Hightower, supra , 86 Cal.App.4th at pp. 1439, 1441,
We devote much attention to Hightower because Kaiser and Prime place great weight on it. They assert that if the partial final award in that case was an award, then so too is the partial final award in this case. They are wrong. The arbitrator in Hightower resolved all the issues necessary as of the date of the award to determine the parties' controversy regarding the breach of the shareholder agreement and the appropriate remedy for the breach. The issues left open for resolution in a subsequent award simply could not have been decided as part of the partial *297final award because their nature and scope were uncertain as of the award date. Those issues would take shape based on contingent events that might, or might not, occur during and after the option period. By contrast here, the issues left open by the partial final award were not potential and conditional ones that would spring into existence based on events that had yet to transpire. Those issues were known and capable of being resolved simultaneously with the Medicare Act preemption and exhaustion issues.12 The parties simply chose to present the remaining issues to the panel at a later time. This is a far cry from what happened in Hightower .13 *1150In sum, because the partial final award is not an award, the trial court lacked jurisdiction to confirm it. And because of the trial court's lack of jurisdiction, we cannot review the merits of the confirmation of the partial final award by treating Kaiser's appeal as a petition for writ of mandate.
Kaiser contends that our shutting off of writ review of the merits of the partial final award in this case will make parties in other cases "less inclined to arbitrate" and thus conflicts with California's policy that encourages arbitration. Kaiser is correct that California's policy is to promote arbitration as an alternative to litigation. (See Serpa v. California Surety Investigations, Inc. (2013)
*298Our decision denying review of the merits of the partial final award by writ thus does not frustrate the policy favoring arbitration-it promotes that policy.
We are, however, treating Kaiser's appeal as a petition for writ of mandate for the limited purpose of directing the trial court to vacate its judgment confirming the partial final award on account of its lack of jurisdiction to confirm it, and to enter a new order dismissing Kaiser's petition to vacate the award. We are not, as was done in Judge , supra , 232 Cal.App.4th at page 634, footnote 12,
*1151DISPOSITION
Let a preemptory writ of mandate issue, directing the trial court to vacate its judgment confirming the "Partial Final Award Re Medicare Advantage Claims" that the arbitration panel issued, and to enter a new and different order dismissing Kaiser's petition to vacate that award. The parties shall bear their own costs in this proceeding.
We concur:
PERLUSS, P.J.
ZELON, J.
Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
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Cite This Page — Counsel Stack
221 Cal. Rptr. 3d 278, 13 Cal. App. 5th 1125, 2017 WL 3224853, 2017 Cal. App. LEXIS 666, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kaiser-found-health-plan-inc-v-superior-court-of-l-a-cnty-calctapp5d-2017.