June 15, 2021
Procedural Posture

Procedural Posture

Defendant insurer appealed an order and judgment from the Superior Court of Los Angeles County (California), which denied the insurer’s motion for a stay of proceedings pending a decision by a federal district court, confirmed an arbitration award in favor of plaintiff insured in a bad faith action, and entered judgment in favor of the insured.

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Overview

One of the arbitration provider’s rules made proceedings subject to the Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq., or applicable state law. Another rule stated that the arbitrator was guided by the rules of law and equity and could grant any remedy or relief that was just, equitable, and within the agreement’s scope. The arbitrator awarded compensatory damages, punitive damages, and attorney’s fees as damages. The insurer filed a petition to vacate, modify, or correct the award in the federal district court, while the insured filed a motion to confirm the award in the superior court. The court found the denial of a stay proper because it did not encourage multiple litigation or cause unseemly conflicts, the state and federal courts were equally capable, and the superior court retained jurisdiction pursuant to Code Civ. Proc., § 1293. California’s procedural provisions applied, including the judicial review provisions in Code Civ. Proc., §§ 1286.2, 1286.6, because the parties did not expressly adopt the FAA as controlling. The arbitrator had broad authority to fashion remedies, and any errors of law were not reviewable absent an express agreement permitting such review.

Outcome

The court affirmed the order and judgment.