Singleton v. Amazon.com CA4/1

• Court: California Court of Appeal
• Decided: March 20, 2015
• Docket: D066091
• Status: Unpublished

Opinion

Filed 3/20/15 Singleton v. Amazon.com CA4/1 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

STANLEY E. SINGLETON, D066091

Plaintiff and Appellant,

v. (Super. Ct. No. 37-2013-00041646- CU-CO-CTL) AMAZON.COM et al.,

Defendants and Respondents.

APPEAL from an order and judgment of the Superior Court of San Diego County,

Ronald S. Prager, Judge. Affirmed.

Stanley E. Singleton, in pro. per., for Plaintiff and Appellant.

Stoel Rives, J. Will Eidson and Jonathan A. Miles for Defendants and

Respondents.

Plaintiff and appellant Stanley E. Singleton sued defendants and respondents

Amazon.com and Evan James (Amazon), on theories of breach of contract and fraudulent

misrepresentation, regarding their disputes over the Amazon Services Business Solutions

Agreement (the "Agreement") that Singleton had signed to enable him to sell merchandise on Amazon's website. This action was stayed while arbitration proceeded

under an arbitration clause in the Agreement. (Code Civ. Proc., § 1286 et seq.; all further

statutory references are to the Code of Civil Procedure unless otherwise noted.) The

arbitrator ruled for Amazon.

This is Singleton's appeal from a trial court order denying his petition to vacate the

arbitration award (the award) and granting Amazon's cross-petition to confirm it, and

from the judgment of dismissal. Singleton contends the trial court failed to recognize that

the award should be vacated because the underlying Agreement was void due to a

fraudulent provision, and thus the award was procured through corruption. (§ 1286.2,

subd. (a)(1).) He also argues the arbitrator prejudicially refused to hear evidence material

to the controversy, such as his claims about lack of adequate notice before termination of

his account or entitlement to punitive damages. (§ 1286.2, subds. (a)(3), (a)(5).)

In response, Amazon argues the trial court correctly denied the petition to vacate,

because none of the grounds to vacate an award, as listed in section 1286.2 et seq., exists

in this case. Amazon contends the trial court properly confirmed the award, because

Singleton's objections to its conclusions on fraudulent misrepresentation, or the manner

in which the hearing was conducted, had no basis in fact or law. The record supports

Amazon's claims and the judgment of dismissal of Singleton's action, with prejudice, is

affirmed.

2 I

BACKGROUND FACTS

A. Arbitration

Singleton, as "Stan's Big Savings," agreed with Amazon to sell his goods online.

Paragraph 3 of the Agreement allowed either the seller or Amazon to terminate or

suspend the Agreement immediately by giving notice, for any reason at any time. Under

paragraph 18 of the Agreement, the parties agreed to submit any disputes about the

Agreement to arbitration.

Paragraph 18 of the Agreement incorporates the provisions of Amazon's "Service

Terms and the applicable Program Policies," as a subagreement. Those terms include

criteria for seller performance measurement and targets for performance, and a

performance review and notification process. The policy states that "in most cases, we

contact sellers with poor performance to ask for measurable improvements within 60

days of the first warning. Occasionally, we remove the selling privileges of accounts

with very poor performance immediately."

After Singleton failed to meet its performance standards, Amazon terminated his

seller account. Singleton attempted to initiate contractual arbitration but the Agreement

contained the wrong address (outdated) for such a request to its agent, and his letter was

returned. Singleton complained to the Better Business Bureau, which investigated.

Additional defendant Evan James represented Amazon in that matter. About two weeks

later, Singleton was provided with the correct address to contact Amazon's agent, and he

decided to file his complaint for fraud and breach of contract.

3 Amazon and James successfully petitioned the trial court to have the matter sent to

arbitration. Counsel for Amazon provided the trial court with a declaration stating that it

had nevertheless received Singleton's letter sent to the erroneous address.

At the arbitration hearing on February 5, 2014, Amazon, represented by counsel,

sought a declaration that it had terminated Singleton's seller account consistent with the

terms of the Agreement. Representing himself, Singleton presented evidence and

argument about his four counterclaims for breach of contract (lost profits) and

misrepresentation, such as claiming Amazon did not provide him proper notice before

cancelling his account. He defended against Amazon's claims.

The arbitrator rendered his award on February 19, 2014. He ruled that Amazon

had properly terminated Singleton's seller's account because of his high order default rate

and numerous buyer complaints. Singleton's counterclaims were denied, but were not

found to be frivolous, only misguided. The arbitrator's award charged all fees and costs

to Amazon.

B. Petitions

In the pending action in the trial court, Singleton sought to have the arbitration

award vacated under section 1286.2, on the ground that it had been procured by

corruption (false address for claims provided in the Agreement). (§ 1286.2, subd. (a)(1).)

He also argued misconduct by the arbitrator had substantially prejudiced him, when the

arbitrator refused to hear evidence material to the controversy. (§ 1286.2, subds. (a)(3),

(a)(5).)

4 In Singleton's declaration in support of his petition to vacate, he claimed he was

"denied [his] right to present punitive damages against the defendants" for his

misrepresentation claim, and that he was "denied [his] right to present evidence that

defendant failed to provide [him] notice before they terminated [his] seller account."

Singleton argued the arbitrator did not fairly consider his case because, "On information

and belief all the arbitrator wanted to do was hurry up so that he could go on his vacation.

[¶] He mentioned it several times about his vacation, with his wife. [¶] On information

and belief too me his mine [sic] was not in the case [sic] before him but on his vacation."

Singleton's declaration lodged supporting exhibits.

In response, Amazon moved to confirm the award. Its opposing declarations

explained what had occurred at the arbitration, including testimony being presented by

Singleton about his alleged damages, including but not limited to a punitive damages

claim. As shown in the award, Singleton told the arbitrator about the incorrect address in

the Agreement and claimed that Amazon did not provide him adequate notice before it

terminated his seller account.

The court denied Singleton's motion to vacate, ruling that Singleton (1) "failed to

present sufficient evidence" to show that any of the reasons argued for vacating the award

existed, and (2) failed to rebut the evidence supplied by Amazon that he was allowed at

arbitration to argue he was not given proper notice of his termination, and that he

sustained different kinds of damages. Further, the court denied Singleton's contention

that the arbitration was corrupt, as "conclusory" and "unsupported by any facts." The

5 court expressly ruled, the fact "that the arbitrator mentioned his vacation plans during the

proceedings was not a proper basis for vacating the award."

Accordingly, the award was deemed to resolve the action in its entirety and was

confirmed, and judgment of dismissal entered for Amazon. (§§ 1286, 1287.4.) Singleton

appeals.

II

STANDARD OF REVIEW

On review of the trial court's judgment confirming the arbitration award, we apply

the standards of section 1286, requiring " 'the court shall confirm the award as made . . .

unless in accordance with this chapter it corrects the award and confirms it as corrected,

vacates the award or dismisses the proceeding.' " (Ikerd v. Warren T. Merrill & Sons

(1992) 9 Cal.App.4th 1833, 1841.) "Our review of an arbitration award requires us to

extend to it every intendment of validity and the party claiming error has the burden of

supporting his contention." (Ibid., citing Cobler v. Stanley, Barber, Southard, Brown &

Associates (1990) 217 Cal.App.3d 518, 526; Evans v. Centerstone Development Co.

(2005) 134 Cal.App.4th 151, 157 (Evans).)

As explained in Pearson Dental Supplies, Inc. v. Superior Court (2010) 48 Cal.4th

665, 676, " 'It is well settled that "arbitrators do not exceed their powers merely because

they assign an erroneous reason for their decision." [Citations.] A contrary holding

would permit the exception to swallow the rule of limited judicial review; a litigant could

always contend the arbitrator erred and thus exceeded his powers.' " (Ibid.) However,

there are " 'some limited and exceptional circumstances justifying judicial review of an

6 arbitrator's decision' such as when 'granting finality to an arbitrator's decision would be

inconsistent with the protection of a party's statutory rights.' " (Ibid.) In that case, the

high court answered questions about "the proper standard of judicial review of arbitration

awards arising from mandatory-arbitration employment agreements that arbitrate claims

asserting the employee's unwaivable statutory rights." (Id. at p. 679.)

Singleton argues that the rationale of Pearson Dental Supplies v. Superior Court,

supra, 48 Cal.4th 665, should apply here. However, this is not a case of "an employee

subject to a mandatory employment-arbitration agreement [who] is unable to obtain a

hearing on the merits of his FEHA claims, or claims based on other unwaivable statutory

rights, because of an arbitration award based on legal error." (Id. at p. 680.) Instead, we

are reviewing the trial court's ruling after arbitration on an ordinary commercial contract.

" 'In determining whether an arbitrator exceeded his powers, we review the trial

court's decision de novo, but we must give substantial deference to the arbitrator's own

assessment of his contractual authority.' " (Kelly Sutherlin McLeod Architecture, Inc. v.

Schneickert (2011) 194 Cal.App.4th 519, 528; Evans, supra, 134 Cal.App.4th 151, 157.)

We examine the terms of the Agreement and its interpretation by the arbitrator, including

the subagreement incorporated into the Agreement, and the trial court's application of

these legal standards. We thus review the trial court's order (not the arbitration award)

under a de novo standard, giving it every intendment of validity. (Malek v. Blue Cross of

California (2004) 121 Cal.App.4th 44, 55-56.)

7 III

ISSUES PRESENTED; ANALYSIS

A. Fraud

We understand Singleton's first claim as asserting that he has statutory rights to be

free from contractual fraud, and thus that the trial court should have vacated the award.

(§ 1286.2, subds. (a)(1)-(6).) Singleton cites to Civil Code section 1607, which states,

"The consideration of a contract must be lawful within the meaning of Section 1667."

Civil Code section 1667 explains, "That is not lawful which is: [¶] 1. Contrary to an

express provision of law; [¶] 2. Contrary to the policy of express law, though not

expressly prohibited; or, [¶] 3. Otherwise contrary to good morals." In the trial court, he

raised the applicability of Civil Code section 1608, to the effect that illegality of

consideration for the object of a contract will render the entire contract void.

Singleton thus objects to the merits of the arbitrator's decision to deny his

fraudulent misrepresentation claim, which was based upon his argument that the

underlying Agreement was void due to fraudulent provisions (incorrect address). To the

extent that Singleton argues the arbitrator erroneously denied his fraud claim (when

reasoning that arbitration had gone forward anyway), we do not reach the merits of such

an argument. "Arbitrators do not ordinarily exceed their contractually created powers

simply by reaching an erroneous conclusion on a contested issue of law or fact, and

arbitral awards may not be vacated because of such error, for ' "[t]he arbitrator's

resolution of these issues is what the parties bargained for in the arbitration

agreement." ' " (Gueyffier v. Ann Summers, Ltd. (2008) 43 Cal.4th 1179, 1184.)

8 B. Adequacy of Hearing

Singleton's next claim appears to be that the arbitrator made legal errors that

barred him from obtaining a full hearing on the merits of his claims, i.e., the punitive

damages requests or the failure of Amazon to provide adequate notice before termination

of his account, within the terms of the subagreement incorporated into the main

Agreement.

Absent proof of one of the statutory grounds for vacating an arbitration award,

" '. . . a court may not vacate an award, even if the arbitrator commits legal or factual

errors which appear on the face of the award and which cause substantial injustice.' "

(Roitz v. Coldwell Banker Residential Brokerage Co. (1998) 62 Cal.App.4th 716, 722.)

Singleton claims the award was invalid because the arbitrator did not allow him to

present his entire case, instead somehow rushing through the procedures in anticipation

of his vacation.

To prevail on such a claim, Singleton had to supply proof that his rights were

"substantially prejudiced" by the arbitrator's conduct, and that he supplied "sufficient

cause" that should have caused the arbitrator to hear more material evidence, thus

extending the hearing. (§ 1286.2, subds. (a)(3), (a)(5).) Singleton would have to

demonstrate to the trial court that " '. . . the record reveals facts which might create an

impression of possible bias in the eyes of the hypothetical, reasonable person.' " (Roitz v.

Coldwell Banker Residential Brokerage Co., supra, 62 Cal.App.4th 716, 723.)

Here, however, the trial court concluded in light of the material contained in the

moving and opposing papers that Singleton had failed to present any sufficient evidence

9 to support his generalized claims that the award should be vacated. Singleton had not

rebutted the evidence supplied by Amazon that he was allowed, during arbitration, to

argue about a lack of proper notice of this termination, and to present his claims about

different kinds of damages. The trial court was aware that Singleton was claiming that

the arbitration was corrupt, but found those claims to be "conclusory" and "unsupported

by any facts." The court did not find that Singleton's emphasis on the mention by the

arbitrator of his vacation plans was justified or amounted to a proper basis for vacating

the award. The record fully supports those conclusions, and the trial court correctly

determined that the statutory requirements for vacating the award under section 1286.2,

subdivisions (a)(1) through (a)(5) were not met. The trial court did not err in confirming

the arbitration award, and we affirm. (§§ 1286, 1287.4.)

DISPOSITION

The order and judgment of dismissal are affirmed. Each party to pay its own costs

on appeal.

HUFFMAN, J.

WE CONCUR:

McCONNELL, P. J.

HALLER, J.