Greenspan v. LADT (185 Cal. App. 4th 1413, 2010)

Court of Appeal of the State of California 2010-06-25

Citations

Full opinion text

Opinion

MALLANO, P. J.

A trust filed this action alleging breach of contract and other claims against two affiliated companies, only one of which was a party to the contract. The trust also named as a defendant the individual who controlled the companies. Defendants petitioned the trial court to compel arbitration of the claims. The trial court granted the petition.

The parties selected an arbitrator associated with JAMS. Previously, some of the parties, including the trust and the individual defendant, had chosen JAMS and the same arbitrator to hear a separate dispute. Before the arbitrator heard this case, he rendered an award in the other matter, finding the individual defendant liable to the trust. The individual responded by filing a civil suit against the arbitrator, alleging the award was untimely.

Thereafter, in this case, defendants requested that the arbitrator recuse himself in light of the civil suit. The arbitrator declined. JAMS also denied the request, providing a written explanation. Defendants sought relief in the trial court without success.

The arbitration hearing went forward. After the presentation of evidence, the parties submitted briefs. Twenty-eight days later, the arbitrator rendered an interim award, finding in favor of the trust on the contract claim and awarding approximately $6.34 million against the company that was a party to the contract. Defendants otherwise prevailed. The interim award also reserved certain issues for resolution in the final award, including attorney fees and the liability, if any, of the noncontracting company. As to those issues, the arbitrator requested additional briefs and declarations, and established a timetable for the remaining proceedings. In the final award, which reiterated the terms of the interim award, the arbitrator awarded attorney fees to the trust and concluded that the two companies should be jointly and severally liable for breach of contract.

The trust returned to the trial court and filed a petition to confirm the award. The companies petitioned to vacate it. The trial court confirmed the award and entered judgment accordingly.

On appeal, the companies argue the award should be vacated because (1) the trust did not plead joint and several liability on the breach of contract claim and thus the issue was not arbitrable; (2) the arbitrator’s finding of joint and several liability was not rationally related to the parties’ contract; (3) the final award was not timely under JAMS rules; and (4) the arbitrator should have been disqualified based on the civil suit brought against him by the individual defendant.

We affirm for several reasons. First, as provided by JAMS rules, the arbitrator, not a court, determines what issues are arbitrable, and consequently we defer to the arbitrator’s determination that the issue of joint and several liability was arbitrable. Second, the arbitrator’s finding of joint and several liability was rationally related to the parties’ contract. Third, as to the timeliness of the final award under JAMS rules, the arbitrator’s interpretation and application of the rules cannot be judicially reviewed on the merits. Last, although we do not defer to the arbitrator or JAMS on the merits of the disqualification issue, we independently conclude the suit against the arbitrator was barred by arbitral immunity and would not have caused a reasonable person to doubt the arbitrator’s impartiality.

I

BACKGROUND

The allegations and facts in this case are taken from the complaint, the petition to compel arbitration, and the respective petitions to confirm and vacate the arbitration award.

A. Parties’ Contract

In 1998, LADT, LLC (LADT), purchased the Higgins Building in downtown Los Angeles. LADT converted the dilapidated structure, built in 1910, from an office building into apartments. In 2003, Barry Shy, who managed LADT, proposed to convert the Higgins Building into loft-style residential condominiums, with commercial units on the ground floor. At the time, Shy held a 50 percent interest in LADT through a company he controlled, LABAR, LLC. The Andrew Meieran Family Trust held the other 50 percent. Arnold Greenspan was the trustee of the trust. (For convenience, we refer to the Andrew Meieran Family Trust as Trust, to Andrew Meieran as Meieran, and to Arnold Greenspan as Greenspan.)

The Trust’s goal was to develop and operate historic bars, not just real estate. For that reason, the Trust decided to sell its interest in LADT and to acquire commercial space on the ground floor of the Higgins Building, where it would later build the Edison Bar.

On August 20, 2004, the Trust sold its 50 percent interest in LADT to a new company controlled by Shy—LA ABC, LLC (LA ABC)—for $7.75 million, payable in two installments, and title to six commercial units in the Higgins Building valued at $3.5 million altogether. The “Purchase Agreement” recited that it was “entered into ... by and between Arnold Greenspan, Trustee of the Andrew Meieran Family Trust u/a/d 12/19/03 . . . (the ‘Seller’), and LA ABC, a California limited liability company (the ‘Purchaser’).”

Section 6 of the Purchase Agreement addressed the duties of LADT, stating: “LADT hereby consents to the terms of this Agreement, including, without limitation, the provisions of . . . Section 4. LADT shall cooperate with the parties hereto and take all actions and execute any agreements and other documents necessary to effectuate the transactions contemplated by this Agreement, including, without limitation, the transactions set forth in . . . Section 4, as necessary. In addition, Barry Shy, individually, agrees to guarantee all the obligations of Purchaser pursuant to Section 4 hereof, and Andrew Meieran, individually, agrees to guarantee all of the obligations of Seller hereunder.” Section 4 stated that LA ABC would indemnify the Trust for any breach of the Purchase Agreement by LA ABC and that the Trust would indemnify LA ABC with respect to any breach by the Trust.

The Purchase Agreement was signed by Greenspan as trustee of the “Seller”—the Trust—and by Shy as manager of the “Purchaser”—LA ABC. For its part, LADT “acknowledged and agreed ... to Section 6” of the Purchase Agreement, with Shy signing twice, first as manager of LADT and then individually; Meieran signed as a member of LADT. The Purchase Agreement did not have an arbitration provision. It contained an integration clause stating: “This Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, both written and oral, among such parties with respect to such subject matter. This Agreement may not be amended or modified in any way, except by a written instrument executed by all of the parties hereto.”

On February 17, 2005, LA ABC transferred six commercial units to the Trust. During the construction phase of the project, Shy and Meieran had a number of disagreements. They argued about walls that had been moved, trash areas, parking spaces, and storage spaces. LA ABC failed to make the second of the two installment payments due under the Purchase Agreement.

B. Mediation

In an attempt to settle their disputes, Shy and Meieran participated in a mediation on September 26, 2005. The mediation resulted in a handwritten document drafted by the mediator, which Shy and Meieran signed. The document contained a list of 10 items to be provided or completed by LA ABC, including “[p]ay for 50% to upgrade electrical power,” “3 parking spaces for free for 5 years,” and “[fjinish existing bathroom in unit 107.” The document concluded: “This is the agreement between the parties with regard to the purchase of LADT by LA ABC [from] Andrew Meieran Living Trust .... The parties hereby agree that LA ABC will do or perform or pay these items in exchange for release from the Trust with respect to this purchase (. . . the Higgins Building), and as full satisfaction Of the obligation of LA ABC with regard to the tenant improvements. [¶] Any dispute as to the interpretation of this agreement shall be submitted to mediation, failing which, shall be submitted to binding arbitration.” (For clarity, we will refer to the handwritten document as the Arbitration Agreement.)

C. Complaint

On August 10, 2006, Greenspan, as trustee of the Trust, filed this action against LADT, LA ABC, and Shy. The complaint alleged as follows.

LA ABC failed to pay more than $4.2 million of the purchase price for the Trust’s interest in LADT. LA ABC did not obtain the certificate of occupancy required by the Purchase Agreement, preventing the Trust from using the commercial units in the Higgins Building. LA ABC also interfered with the Trust’s use of parking spaces and storage space in the building.

The complaint asserted seven causes of action: (1) rescission of the Purchase Agreement, against LA ABC and LADT; (2) breach of the Purchase Agreement, against LA ABC; (3) breach of guaranty, against Shy; (4) breach of fiduciary duty, against Shy; (5) accounting, against all defendants; (6) conversion, against all defendants; and (7) constructive trust, against all defendants.

Under the heading, “Parties Involved,” the complaint recited: “Plaintiff is informed and believes, and based thereon alleges, that all of the acts set forth in this Complaint alleged to have been done by each defendant were authorized, approved, or ratified by each of the other defendants. Plaintiff is informed and believes and thereon alleges that each of the defendants is the agent, servant, employee, partner, associate, joint venturer, co-participant and/or principal of the remaining defendants.” (Italics added.)

D. Petition to Compel Arbitration

On September 22, 2006, defendants filed a petition to compel arbitration and stay the action pending the outcome of arbitration. According to the petition, the Arbitration Agreement required the parties to arbitrate disputes related to the Purchase Agreement. The Trust filed opposition papers, contending it was not a party to any agreement containing an arbitration clause, and the Arbitration Agreement did not encompass the causes of action in the complaint. At a hearing on October 11, 2006, each side claimed the other had drafted the Arbitration Agreement. The hearing was continued so the parties could retain a document examiner to determine who wrote the agreement. On November 8, 2006, the parties filed a stipulation, agreeing that the mediator was the author. The hearing resumed and concluded on December 11, 2006. The trial court, Judge Robert L. Hess presiding, took the matter under submission.

By order dated January 11, 2007, the trial court found “the parties have entered into a valid agreement to submit disputes regarding the Higgins Building initially to mediation and thereafter to binding arbitration. [][]... Plaintiff is to initiate mediation, and defendants are to cooperate in that initiation. Should mediation be unsuccessful, the parties are to attempt to agree upon an arbitrator. If the parties are unable to agree, the Court on application will select an arbitrator.”

E. Resolution of a Separate Dispute

The Trust was also in the midst of a dispute concerning a different real estate project with Shy and one of his other companies, Manhattan Loft, LLC (Manhattan Loft). That project was nicknamed the “215 Building” because of its location, 215 West Sixth Street, Los Angeles. The Trust accused Manhattan Loft and Shy of breaching the purchase contract for the 215 Building by interfering with the Trust’s use of leased space. Pursuant to an arbitration clause in the purchase contract, the Trust, Manhattan Loft, and Shy selected retired Judge Keith Wisot as the arbitrator, in association with JAMS. The arbitration hearing started on June 11, 2007, and continued intermittently until July 2, 2007. Posthearing briefs were submitted.

On October 4, 2007, the arbitrator rendered an interim award in the 215 Building arbitration, finding in favor of the Trust and awarding it approximately $13.5 million in damages against Manhattan Loft and Shy. After additional briefing, the arbitrator rendered a final award on November 5, 2007, granting the Trust’s request for almost $1 million in attorney fees and costs. Manhattan Loft and Shy sought to vacate the award, while the Trust sought to confirm it (Greenspan v. Manhattan Loft, LLC (Super. Ct. L.A. County, 2008, No. BS111465)). In seeking to set aside the award, Manhattan Loft and Shy argued the arbitrator had decided claims not submitted to arbitration, granted relief not rationally related to the contract, and failed to issue the final award in a timely manner. The superior court, Judge Richard L. Fruin presiding, modified the award by excising over $12 million and confirmed the award as modified. Both sides appealed.

On October 16, 2007, shortly after the interim award had been issued in the 215 Building arbitration, Shy filed a civil suit against the arbitrator, alleging the arbitrator had violated JAMS rules by not issuing a timely final award (Shy v. Wisot (Super. Ct. L.A. County, 2010, No. BC379171).) The complaint sought the return of the arbitral fees and costs Shy paid in connection with the 215 Building arbitration.

The suit against the arbitrator was stayed pending the appeal of Judge Fruin’s order modifying and confirming the award in the 215 Building case. On appeal, Division Three of this district rejected all of the challenges to the award and held that Judge Fruin had erred by modifying it (Greenspan v. Manhattan Loft, LLC (Nov. 10, 2009, B205917) [nonpub. opn.]). Division Three reversed and remanded with directions to confirm the award as rendered.

In light of Division Three’s decision, which concluded that the arbitration award was timely, there were no grounds for the suit against the arbitrator. Shy dismissed the case with prejudice.

F. Arbitration in This Action

Meanwhile, after Judge Hess issued the January 11, 2007 order granting the petition to compel arbitration in this action, the parties failed to resolve their disputes through mediation and proceeded with selecting an arbitrator. They, too, chose retired Judge Keith Wisot, in association with JAMS.

Preliminary proceedings in the arbitration, including conferences and motion hearings, began in March 2007 and continued for several months. At an initial status conference on March 7, 2007, the parties agreed that the arbitration would be governed by “JAMS Comprehensive Arbitration Rules & Procedures.” Those rules became effective on March 26, 2007 (JAMS Rules or Rules). The Trust subsequently moved to amend the complaint to add a cause of action for fraud. The arbitrator granted the motion.

In March 2007, the parties executed an “Agreement]] Concerning Hold Instructions,” which required the arbitrator to decide how to dispose of certain funds belonging to LADT. The funds were generated by LADT’s sale of two condominiums in the Higgins Building. At some point, the Trust had recorded a lis pendens against those units, preventing the closing of escrow. The Trust eventually removed the lis pendens, allowing the units to be sold, in exchange for LADT’s promise to hold the sales proceeds for disposition by the arbitrator. The agreement concerning hold instructions (Hold Funds Agreement) stated: “Whereas, on or about March 9, 2007, Arnold Greenspan, as Trustee of the Andrew Meieran Family Trust, and Barry Shy, as managing member of LADT LLC, executed Hold Instructions for the seller’s net proceeds concerning Units 906 and 1001 of the Higgins Building in order to allow the sales of these Units to be closed.

“The Undersigned hereby agree that they will execute Mutual Instructions (‘Instructions’), on or before April 30, 2007, to Mara Escrow. These Instructions will provide that Mara Escrow will transfer the monies held in its interest bearing account, pursuant to the Hold Instructions, to a joint blocked account designated by the undersigned parties. Said account will be opened by the undersigned parties in an institution that is FDIC insured. The account will be [a] blocked account and the institution will receive instructions that the funds may only be released to a person or entity designated by Judge Wisot in his final award in [the Higgins Building arbitration].

“The parties hereby waive any right to challenge, in court or otherwise, any order to release these funds as set forth in Judge Wisot’s final award.”

The Hold Funds Agreement was signed by Shy as manager of LADT and by Greenspan as trustee of the Trust.

As noted, before the arbitration hearing commenced in this action, the arbitrator issued the interim award in the 215 Building arbitration. He found Manhattan Loft and Shy jointly and severally liable to the Trust in the amount of $13,550,522. Within two weeks of the award, Shy filed a civil suit against the arbitrator (Shy v. Wisot, supra, No. BC379171).

In the present action, defendants requested that the arbitrator recuse himself in light of the civil suit. The arbitrator declined, finding defendants had not shown good cause for disqualification. On December 13, 2007, JAMS issued a written denial of the request, stating: “Your request that Judge Wisot disqualify himself from serving as an arbitrator in Greenspan v. LADT . . . has been referred by Judge Wisot to the [JAMS National Arbitration Committee (NAC)] for resolution in accordance with the JAMS Rules.

“As explained below, the NAC denies the request.

“You assert Judge Wisot should be disqualified in Greenspan v. LADT because he made credibility findings regarding Mr. Shy in Greenspan v. Manhattan Loft . . . ; because the claimant in [the] Greenspan v. Manhattan Loft matter has moved to confirm the final award issued; and because you have filed a lawsuit against Judge Wisot and JAMS in which you assert Judge Wisot lost jurisdiction to issue a timely award in Greenspan v. Manhattan Loft. These assertions do not provide good cause for disqualifying Judge Wisot.

“Manhattan Loft and Mr. Shy agreed Judge Wisot would serve as arbitrator in both Greenspan v. Manhattan Loft [(the 215 Building case)] and Greenspan v. LADT [(the Higgins Building case)]. Your clients further requested that Judge Wisot arbitrate these two related matters separately. By so doing, your clients accepted the possibility that Judge Wisot would issue an award in one matter before doing so in the other. Obviously, your clients also accepted the possibility that Judge Wisot would determine issues of fact and law against them. Thus, the fact that Judge Wisot made findings of fact adverse to your client in Greenspan v. Manhattan Loft does not call for his disqualification in Greenspan v. LADT.

“Similarly, the Petition to Confirm Judge Wisot’s Final Award in Greenspan v. Manhattan Loft now pending in Los Angeles Superior Court does not require the disqualification of Judge Wisot in Greenspan v. LADT. The process being followed by Greenspan is required pursuant to [Code of Civil Procedure section] 1285 et seq.

“Finally, your clients’ lawsuit against JAMS and Judge Wisot, which has been stayed temporarily, and may be stayed and/or abated pending the resolution of the Petition to Confirm, provides no basis for disqualification. The fact that a losing party in an arbitration has sued does not in and of itself serve as grounds for recusal of the arbitrator in another arbitration pending before the arbitrator. Bringing the lawsuit is a voluntary act by the losing party, and should not be permitted to serve as a mechanism for influencing or controlling proceedings in other ongoing matters.

“Accordingly, your clients’ request that Judge Wisot be disqualified in Greenspan v. LADT is denied. Judge Wisot is ... to proceed with the pending arbitration.”

On December 21, 2007, defendants filed a motion in the trial court seeking to have the arbitrator disqualified because of Shy’s civil suit. The motion was heard and denied on January 23, 2008. At the hearing, Judge Hess directed some of his comments to defendants’ counsel, stating: “This is a situation where you have agreed that the same arbitrator is going ... to hear both these disputes.

“The first one turned out adversely to you, and now you are objecting to the arbitrator. . . . The fact that you may think that the arbitrator is biased against you because he found against you on the merits in the other case, and therefore should be recused . . .—this is a little bit of a hard sell. [¶]... [¶]

“There was no basis for challenging him as far as I can see, prior to the initiation of the arbitration and prior to his beginning to hold evidentiary proceedings in this [case].

“. . . You have to get the award, whatever the award is, and then we will see where we are. ... I have a dim view of people who try and disqualify arbitrators by suing.

“You are trying to create the basis for disqualification where none exists. . . . [T]he impression that I have here, is that you are trying by hook or by crook, to shortcut this, and you don’t like the results, and so it doesn’t matter what you try and do. [You] are pulling out all the stops [by] whatever means.

“. . . [I]t doesn’t engender a lot of sympathy. I have no personal stake in the outcome of this case. I don’t care who wins or who loses, but we need to proceed in a regular fashion . . . , according to law and I just have a real bad reaction to this. . . .

“. . . [A]t the end of it, you may have a basis for a motion to vacate an award, that is, assuming you lose, but I don’t see it here.”

The arbitration hearing began on February 25, 2008, resumed on March 3, 2008, and continued until it concluded on March 14, 2008. The parties submitted posthearing briefs.

In its opening posthearing brief, the Trust focused almost exclusively on the first cause of action, for rescission of the Purchase Agreement. The Trust argued that “because the Arbitrator can adjust the equities of the parties and grant relief that will achieve substantial justice for the injured party, all [of the defendants] should be held jointly and severally liable for payment of the funds to which the Trust is entitled. ... ‘[A] joint and several judgment against all defendants would force the defendants other than [the purchaser] to assure payment of this monetary portion of the judgment in the event [the purchaser] fails to pay it. Otherwise, plaintiffs would not be made whole.’. . . To ensure that the Trust is properly made whole . . . , the Arbitrator should find all three [defendants] jointly and severally liable.” (Quoting Snelson v. Ondulando Highlands Corp. (1970) 5 Cal.App.3d 243, 258 [84 Cal.Rptr. 800].)

In their posthearing brief, defendants discussed the Hold Funds Agreement, saying: “The Arbitrator must. . . decide who owns the proceeds of the sale of units 906 and 1008. [The Trust] placed a lis pendens on those units, and the parties agreed to lift the lis pendens and allow the Arbitrator to determine whether [the Trust] actually had a right to title to those units or the proceeds. [The Trust] does not even bother to claim [it] has a legal right to the proceeds, i.e., that [it] owned the units. Instead, [it] argues that [it] is entitled to a money judgment against LADT and that the Arbitrator should, in effect, grant a pre-judgment writ of attachment on LADT’s money. Of course, [the Trust] cites no authority for such relief. Even if LADT were liable for anything, which it is not, LADT is not a party to the contract.”

In its reply posthearing brief, the Trust asserted: “Because [defendants] are jointly and severally liable for the return of all consideration paid . . . , the Trust is entitled to receive the funds being held in escrow to help restore the Trust to its former position as far as possible. Runyan v. Pac. Air Indus. Inc. 2 Cal.3d 304, 316 [85 Cal.Rptr. 138, 466 P.2d 682] (1970). The parties voluntarily agreed that disposition of the funds held in escrow would be decided by the Arbitrator. . . . The Arbitrator is not, as [defendants] suggest, being asked to grant a pre-judgment writ of attachment, but rather simply to exercise his broad discretion to fashion relief that adjusts the equities of the parties.”

G. Interim and Final Awards

On June 13, 2008, the arbitrator rendered an “Interim Award,” consisting of 26 pages. The award indicated that the arbitration hearing had been closed, stating: “With [the Trust’s] Reply [Brief] dated May 16, 2008, the matter was submitted.” On the merits of the Trust’s claims, the arbitrator found LA ABC was liable on the second cause of action, for breach of contract, and awarded the Trust $6,338,566.89 in damages. The Trust otherwise failed to prove its claims. With respect to the issues raised by the Hold Funds Agreement, the arbitrator stated: “The funds in escrow (including any interest earned) are . . . the property of LADT, for distribution under its current operating agreement. However, in an exercise of equitable discretion in fashioning this Award, the arbitrator now directs the funds are to remain in escrow until the award ... is fully satisfied.”

The Interim Award concluded: “This Award disposes of all substantive issues raised in this arbitration. [The Trust] is the prevailing party, and entitled ... to recover attorney fees and costs . ... [¶] This is an Interim Award, however, because the arbitrator retains jurisdiction in several particulars: [¶] . . . [¶] [(1)] to include within the award attorney fees and costs, including JAMS fees; [¶] [(2)] to reopen the hearing, if requested by [the Trust] . . . ; [¶] [(3)] to consider modification of the Disposition of Funds Held in Escrow, or equitable remedies, if any, available against [defendants] other than LA ABC for satisfaction of the a.ward[.] . . . [¶] The parties are directed to submit briefs and declarations on the matters reserved for further consideration pursuant to the [established] schedule!.] [¶] ... [¶] Unless the arbitrator determines to reopen the hearing, or to schedule further argument based on the submissions, the Final Award will issue no later than August 1, 2008.” (Italics added.) On June 16, 2008, JAMS served the Interim Award on the parties.

In a letter to the arbitrator dated June 18, 2008, defendants stated: “We are willing to treat the Interim Award as a timely final ruling on the substance, allowing you to rule on attorneys’ fees and costs .... To the extent that you treat the Interim Award as truly interim, and seek to re-open the hearing or . . . grant additional substantive relief, [defendants] hereby object to your continued participation . . . .” (Italics added.)

On June 30, 2008, the Trust submitted a “Request to Reopen Hearing.” The Trust argued that, under section 6 of the Purchase Agreement, LADT was jointly and severally liable for payments owed by LA ABC, including all damages. (See pt. LA., ante, quoting Purchase Agreement, § 6.) The Trust also relied on the Hold Funds Agreement: “Since LA ABC’s only asset was its interest in LADT, it had no funds to make the payments to the Trust. . . . [¶]... [¶] . . . [T]he Trust will be forced to pursue LADT to recover the balance owed under the final award. No purpose would be served by having the funds remain in escrow. To the contrary, it is only fair and just that the Arbitrator include in the final award an express order that the funds be released to the Trust as partial satisfaction of the award.”

By letter dated June 30, 2008, defendants informed the arbitrator: “We have received ... the motion to re-open, [¶] We hereby unconditionally object to your jurisdiction . ... [¶] ... [¶] Either your Interim Award counts as a Partial Final Award, or it does not. If it does, then you have no right to re-open . . . , and your jurisdiction is limited to awarding attorneys’ fees, costs and pre-award interest. If it does [not], then you have . . . exceeded the deadline to issue a Partial Final or Final Award, and you lack jurisdiction to do anything at all. [¶] We will not participate further in any proceedings related to the merits in this arbitration. We will limit ourselves to those issues over which you do have jurisdiction.” (Fn. omitted.)

On July 14, 2008, defendants submitted a brief in opposition to the Request to Reopen Hearing, renewing their jurisdictional objection: “The Interim Award already exceeds the Arbitrator’s jurisdiction in several regards, and [the Trust] has now asked the Arbitrator to further exceed his jurisdiction by granting a motion for reconsideration under the guise of a phony ‘re-opening’ of the hearing. The Arbitrator cannot re-open the hearing after issuing an award. Moreover, [the Trust] is not really asking for a re-opened hearing, i.e., the calling of new witnesses and the submission of additional evidence. Rather, [the Trust] is simply rearguing the same issues [it] litigated and lost. ... [¶] ... [¶]

“. . . [The Trust] is not interested in re-opening the hearing. A hearing means live testimony, with the right to cross-examination. [The Trust] does not ask for a new hearing, nor does [the Trust] offer any new or different evidence. A re-opened hearing would require an actual hearing, which no one wants and which certainly is not anticipated by the Interim Award nor justified for any reason. Reconsideration of the Arbitrator’s decisions to date, based on legal arguments in briefs, is not a ‘hearing.’ ” (Fn. omitted, italics added.)

Defendants also addressed the issue of LADT’s joint and several liability on the merits. They asserted that such liability would not be rationally derived from the Purchase Agreement, citing Advanced Micro Devices, Inc. v. Intel Corp. (1994) 9 Cal.4th 362, 383 [36 Cal.Rptr.2d 581, 885 P.2d 994], and “[that the Trust] has no grounds to ‘pursue’ LADT for LA ABC’s debts. Under no circumstances can LADT be held liable for LA ABC’s obligations. . . . [The Trust] argue[s] that no point would be served in LADT being allowed to keep its own money. The points that would be served include complying with the Purchase Agreement, the laws of California and the Due Process clause of the United States Constitution.”

In a reply brief submitted on July 25, 2008, the Trust emphasized that the arbitrator could grant any remedy or relief that was just and equitable: “Under California law, an arbitrator enjoys the authority to fashion relief that he considers just and fair so long as the remedy may be ‘rationally derived’ from the contract and the breach. [Advanced Micro Devices, Inc. v. Intel Corp., supra, 9 Cal.4th at page] 383. Here, both of the rulings that the Trust seeks are ‘rationally derived’ from the parties’ agreements. The Purchase Agreement—which LADT executed—required LADT to ‘take all actions . . . necessary to effectuate the transactions contemplated by [the] Agreement LADT thus had the contractual duty to make the payments due under the Purchase Agreement in the event that LA ABC failed to do so. Therefore, the remedy of holding LADT jointly and severally liable for payments is rationally derived from the Purchase Agreement itself. Likewise, an order directing the disbursement of funds held in escrow to the Trust as partial satisfaction of the award is rationally derived from both the Purchase Agreement and the [Hold Funds Agreement]. This latter agreement expressly states that the funds in escrow will be disbursed to a person or entity designated by the Arbitrator in his Final Award .... Under California law, ... the Arbitrator has authority to find LA ABC and LADT jointly and severally liable, and to direct that the funds in escrow be distributed to the Trust.”

On August 1, 2008, the arbitrator rendered a “Final Award,” totaling 34 pages. The Final Award reiterated the terms of the Interim Award virtually verbatim and went on to say: “[The Trust] has demonstrated by a preponderance of evidence its entitlement to an award for breach of contract against LA ABC. In [the Trust’s] request to reopen the hearing, [the Trust] reviews evidence previously presented as the basis for rendering a final award on this cause of action jointly and severally against LA ABC and LADT. As [the Trust] points out, section 6 of the Purchase Agreement sets forth the specific consent of LADT to all terms of the Agreement, and further mandates LADT to ‘cooperate with the parties hereto and take all actions and execute any agreements and other documents necessary to effectuate the transactions contemplated by this Agreement. . . .’ In fact, the evidence demonstrates that payments on the Purchase Agreement were made by LADT. . . . LADT by Shy, was a signatory] to acknowledge its obligations under section 6 [of] the Purchase Agreement. . . .

“Both sides rely on Advanced Micro Devices, Inc. v. Intel Corp.[, supra,] 9 Cal.4th 362 in arguing whether the award should include LADT and find joint and several liability with LA ABC. Under that case, the arbitrator is authorized, when circumstances warrant, to fix a remedy for breach of contract that is flexible, creative, and based on fairness. ‘In private arbitrations, the parties have bargained for the relatively free exercise of those faculties. Arbitrators, unless specifically restricted by the agreement to follow legal rules, may base their decision upon broad principles of justice and equity. Id. at 374-375.

“The agreement between the parties to this arbitration contains no restriction to ‘dry law,’ or legal rules. In the circumstances here, LA ABC has only one asset: its membership in LADT. It is apparently without resources to pay the award for breach of contract. Further, the evidence is clear that Shy has exclusive control over each of his entities, and that he pays little attention to which account is used to make payments on the Purchase Agreement. . . . [T]he arbitrator finds that LADT had a full opportunity and did in fact present its evidence in connection with payments on the Purchase Agreement. [Defendants’] arguments that joint and several liability violate[s] due process rights of another Shy entity, LABAR, or LADT’s creditors, [are] rejected. Under the circumstances here, the arbitrator finds the remedy sought by [the Trust] is rationally derived from the Purchase Agreement and its breach. Joint and several liability with LA ABC simply implements LADT’s obligation to effectuate the transactions of the Purchase Agreement.”

Regarding the Hold Funds Agreement, the arbitrator found “[t]he parties stipulated the arbitrator is to determine disposition of the proceeds of sale from two units sold, where the proceeds have been held in escrow pending this arbitration. ... No criteria were presented to guide the arbitrator’s determination, but only that the funds are to be released to the person or entity designated by the arbitrator in the final award. Further, [the Trust] quotes a letter agreement that the parties ‘waive any right to challenge, in court or otherwise, any order to release these funds as set forth in Judge Wisot’s final award.’ . . . [The Trust’s] request for enforcement of that agreement was deferred until the final award. [¶] [The Trust] has not been successful in obtaining rescission of the Purchase Agreement. The funds in escrow (including any interest earned) are . . . the property of LADT. However, in an exercise of equitable discretion in fashioning this Award, and because this award sets forth joint and several liability of LADT and LA ABC, the arbitrator now directs: [¶] (1) On [the Trust’s] written notice to escrow, to LADT and LA ABC, that the funds will apply in partial discharge of this award, escrow is to release the funds directly to [the Trust] within 3 business days of notice, and notwithstanding escrow instructions that may remain unfulfilled; [¶] (2) If no notice is given, escrow is to continue to hold the funds until [the Trust] gives written notice that the award has been fully satisfied. Only if the award is satisfied, escrow is then directed to release the funds directly to LADT.”

With respect to reopening the hearing, the arbitrator found the Trust “does not offer any new witness or document on these issues, but seeks specific findings based on [its] review of the evidence heard in arbitration. The request to re-open the hearing is DENIED; however, the arbitrator has more fully articulated certain findings in this final award, and has otherwise clarified certain findings . . . .”

In concluding the Final Award, the arbitrator stated: “Arnold Greenspan, as Trustee of the Andrew Meieran Family Trust, is to recover from . . . LA ABC, a California Limited Liability Company, and LADT, LLC, a California Limited Liability Company, jointly and severally: [¶] the amount of $6,534,605.66 as compensatory damages on the contract. This amount shall bear further interest at $1,298.27 per day until entry of judgment; [¶] the amount of $1,546,478 in attorney fees; [¶] the amount of $368,215.86 in costs; [¶] for a total recovery of $8,449,299.40. [¶] . . . [¶] On [the Trust’s] written notice to escrow, to LADT and to LA ABC that [the Tmst] will apply the escrow funds in partial discharge of this award .... Only after this award has been satisfied, funds in escrow are to be released directly to LADT.”

H. Postarbitration Petitions

On August 13, 2008, defendants petitioned the trial court to vacate the award. The Trust filed a petition to confirm. On October 16, 2008, the trial court heard argument on the cross-petitions, granted the petition to confirm, denied the petition to vacate, and entered an order to that effect. Judgment was subsequently entered. LADT and LA ABC appealed.

II

DISCUSSION

We review de novo the trial court’s order confirming the arbitration award. (See Advanced Micro Devices, Inc. v. Intel Corp., supra, 9 Cal.4th at p. 376, fn. 9; O’Flaherty v. Belgum (2004) 115 Cal.App.4th 1044, 1056 [9 Cal.Rptr.3d 286].)

On appeal, LADT argues the award should be vacated because (1) the Trust did not plead joint and several liability on the breach of contract claim and thus the issue was not arbitrable; (2) the arbitrator’s finding of joint and several liability was not rationally related to the parties’ contract; (3) the Final Award was not timely under JAMS Rules; and (4) the arbitrator should have been disqualified based on Shy’s suit against him.

We disagree with LADT’s arguments because (1) as provided in JAMS Rules, the arbitrator, not a court, determines what issues are arbitrable, and we consequently defer to the arbitrator’s determination that the issue of joint and several liability was arbitrable; (2) the arbitrator’s finding of joint and several liability was rationally related to the parties’ contract; (3) as to the timeliness of the Final Award under JAMS Rules, the arbitrator’s interpretation and application of the Rules cannot be judicially reviewed on the merits; and (4) although we do not defer to the arbitrator or JAMS on the merits of the disqualification issue, we independently conclude the suit against the arbitrator was barred by arbitral immunity and would not have caused a reasonable person to doubt the arbitrator’s impartiality.

Under the California Arbitration Act (CAA) (Code Civ. Proc., §§ 1280-1294.2), “the [trial] court shall vacate the award if the court 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 . . . 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.” (Code Civ. Proc., § 1286.2, subd. (a)(1)—(6), italics added; all undesignated section references are to that code.) Section 1281.91 states: “If any ground specified in Section 170.1 exists, a neutral arbitrator shall disqualify himself or herself upon the demand of any party made before the conclusion of the arbitration proceeding.” (§ 1281.91, subd. (d).) Section 170.1, in turn, requires disqualification if “[a] person aware of the facts might reasonably entertain a doubt that the [arbitrator] would be able to be impartial.” (§ 170.1, subd. (a)(6)(A)(iii).)

Arbitrators “exceedf] their powers” (§ 1286.2, subd. (a)(4)) by acting without subject matter jurisdiction, deciding an issue that was not submitted to arbitration, arbitrarily remaking the contract, upholding an illegal contract, issuing an award that violates a well-defined public policy or a statutory right, fashioning a remedy that is not rationally related to the contract, or selecting a remedy not authorized by law. (See Jordan v. Department of Motor Vehicles (2002) 100 Cal.App.4th 431, 443 [123 Cal.Rptr.2d 122]; see also Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 31-33 [10 Cal.Rptr.2d 183, 832 P.2d 899] [discussing application of § 1286.2, subd. (a)(4), to illegal contracts]; Lindenstadt v. Staff Builders, Inc. (1997) 55 Cal.App.4th 882, 889-893 [64 Cal.Rptr.2d 484] [same].)

A. Arbitrable Claims

“The interpretation of an arbitration provision ‘is solely a judicial function unless it turns upon the credibility of extrinsic evidence; accordingly, an appellate court is not bound by a tried court’s construction of a contract based solely upon the terms of the instrument without the aid of evidence.’ . . . Where, as here, the language of an arbitration provision is not in dispute, the trial court’s decision as to arbitrability is subject to de novo review. . . . [¶] ‘ “The court should attempt to give effect to the parties’ intentions, in light of the usual and ordinary meaning of the contractual language and the circumstances under which the agreement was made.” . . .’ ” (Gravillis v. Coldwell Banker Residential Brokerage Co. (2006) 143 Cal.App.4th 761, 771 [49 Cal.Rptr.3d 531], citations omitted.) We also interpret arbitration rules in accordance with their plain meaning. (See Schlessinger v. Rosenfeld, Meyer & Susman (1995) 40 Cal.App.4th 1096, 1104 [47 Cal.Rptr.2d 650]; Cheminova A/S v. Griffin L.L.C. (D.D.C. 2002) 182 F.Supp.2d 68, 70, 77.)

“[D]oubts concerning the scope of arbitrable issues are to be resolved in favor of arbitration.” (Ericksen, Arbuthnot, McCarthy, Kearney & Walsh, Inc. v. 100 Oak Street (1983) 35 Cal.3d 312, 323 [197 Cal.Rptr. 581, 673 P.2d 251]; accord, Wagner Construction Co. v. Pacific Mechanical Corp. (2007) 41 Cal.4th 19, 26 [58 Cal.Rptr.3d 434, 157 P.3d 1029].) But “ ‘there is no policy compelling persons to accept arbitration of controversies which they have not agreed to arbitrate . . . .’ ” (Bouton v. USAA Casualty Ins. Co. (2008) 43 Cal.4th 1190, 1199 [78 Cal.Rptr.3d 519, 186 P.3d 1]; accord, Zavala v. Scott Brothers Dairy, Inc. (2006) 143 Cal.App.4th 585, 590 [49 Cal.Rptr.3d 503].)

“ ‘[A]n arbitrator exceeds his powers when he acts in a manner not authorized by the contract or by law.’ ... ‘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.’ ” (O’Flaherty v. Belgum, supra, 115 Cal.App.4th at p. 1056, citations omitted; accord, Advanced Micro Devices, Inc. v. Intel Corp., supra, 9 Cal.4th at pp. 372-373.)

“Our [analysis] of [LADT’s] claim begins with this fundamental proposition: ‘The powers of an arbitrator derive from, and are limited by, the agreement to arbitrate.’ . . . Thus, in determining whether the arbitrators exceeded the scope of their powers here, we first look to the parties’ agreement to see whether it placed any limitations on the arbitrators’ authority.’ ” (Ajida Technologies, Inc. v. Roos Instruments, Inc. (2001) 87 Cal.App.4th 534, 543 [104 Cal.Rptr.2d 686], citation omitted; accord, Hall v. Superior Court (1993) 18 Cal.App.4th 427, 432 [22 Cal.Rptr.2d 376].) “In some situations, the agreement itself may not be the only source of restrictions on an arbitrator’s authority. ‘Even where the parties’ original contract included a broad arbitration clause, the arbitrator’s powers may be restricted by the limitation of issues submitted.’ ” (Ajida Technologies, at p. 543, fn. 7.) A submission agreement may restrict or broaden the issues contemplated by the arbitration clause. (See O’Malley v. Petroleum Maintenance Co. (1957) 48 Cal.2d 107, 110 [308 P.2d 9]; Hall, at p. 432; National Indemnity Co. v. Superior Court (1972) 27 Cal.App.3d 345, 349 [103 Cal.Rptr. 606].) And the rules of a provider like JAMS may determine the scope of the arbitrator’s powers. (See Schlessinger v. Rosenfeld, Meyer & Susman, supra, 40 Cal.App.4th at pp. 1103-1104, 1106-1107 & fn. 15; Zakarian v. Bekov (2002) 98 Cal.App.4th 316, 323 [119 Cal.Rptr.2d 623]; Alan v. Superior Court (2003) 111 Cal.App.4th 217, 224-226 [3 Cal.Rptr.3d 377]; Cione v. Foresters Equity Services, Inc. (1997) 58 Cal.App.4th 625, 643 [68 Cal.Rptr.2d 167].)

“The parties may submit for decision issues they were not contractually compelled to submit to arbitration. In such event, courts look both to the contract and to the scope of the submissions to determine the arbitrator’s authority.” (Knight et al., Cal. Practice Guide: Alternative Dispute Resolution (The Rutter Group 2009) ¶ 5:473.1, pp. 5-326 to 5-327 (rev. # 1, 2008); accord, J.C. Gury Co. v. Nippon Carbide Industries (USA) Inc. (2007) 152 Cal.App.4th 1300, 1305-1306 [62 Cal.Rptr.3d 118].) “ ‘ “ ‘. . . Arbitration submissions are usually construed as broadly as possible in order that differences between the parties may be resolved quickly and economically. Under the [principle] of broad construction an arbitrator is authorized to determine all questions which he needs to determine in order to resolve the controversy submitted to him, and the arbitrator himself decides which questions need to be determined.’ “If participants in the arbitral process begin to assert all possible legal or procedural defenses in court proceedings before the arbitration itself can go forward, the arbitral wheels would very soon grind to a halt.” ’ ” (Kennedy, Cabot & Co. v. National Assn, of Securities Dealers, Inc. (1996) 41 Cal.App.4th 1167, 1175 [49 Cal.Rptr.2d 66], citations omitted, italics added.)

LADT contends that, by finding it jointly and severally liable on the contract claim, the arbitrator exceeded his powers because that issue was not arbitrable under JAMS Rules. The scope of the Rules is covered by JAMS Rule 1, which states: “(a) The JAMS Comprehensive Arbitration Rules and Procedures . . . govern binding Arbitrations of disputes or claims that are administered by JAMS and in which the Parties agree to use these Rules or, in the absence of such agreement, any disputed claim or counterclaim that exceeds $250,000, not including interest or attorneys’ fees ....[¶] (b) The Parties shall be deemed to have made these Rules a part of their Arbitration agreement . . . .” (Italics added.) Here, there is no dispute that JAMS Rules applied: The damages sought in the complaint, $4.2 million, exceeded the $250,000 minimum under JAMS Rule 1(a); the parties agreed at the March 7, 2007 status conference that JAMS Comprehensive Arbitration Rules & Procedures would govern the arbitration; and the parties contend on appeal that JAMS Rules are controlling.

LADT relies specifically on JAMS Rule 9(a), entitled “Notice of Claims,” which provides: “If a matter has been submitted for Arbitration after litigation has been commenced in court regarding the same claim or dispute, the pleadings in the court case, including the complaint and answer (with affirmative defenses and counterclaims), may be filed with JAMS . . . , and if so filed, will be considered part of the record of the Arbitration. It will be assumed that the existence of such pleadings constitutes appropriate notice to the Parties of such claims, remedies sought, counterclaims and affirmative defenses.” (Italics added.) LADT contends (1) under Rule 9(a), the complaint was the source of all arbitrable issues, (2) the complaint did not raise joint and several liability as an issue, and (3) as a result, joint and several liability was not arbitrable.

We must first decide who in this case determines what issues were arbitrable—the arbitrator or a judge. In other words, does the arbitrator or the court decide the question of arbitrability? If the arbitrator does, we should defer to that determination in the same way we defer to an arbitrator’s decision on the merits, that is, the decision is not judicially reviewable for errors of fact or law unless the parties have explicitly and unambiguously agreed to an expanded scope of review. (See Moncharsh v. Heily & Blase, supra, 3 Cal.4th at pp. 6, 11; Cable Connection, Inc. v. DIRECTV, Inc. (2008) 44 Cal.4th 1334, 1355, 1361 [82 Cal.Rptr.3d 229, 190 P.3d 586].)

As explained in First Options of Chicago, Inc. v. Kaplan (1995) 514 U.S. 938 [131 L.Ed.2d 985, 115 S.Ct. 1920]: “We believe the answer to the ‘who’ question ... is fairly simple. Just as the arbitrability of the merits of a dispute depends upon whether the parties agreed to arbitrate that dispute . . . , so the question ‘who has the primary power to decide arbitrability’ turns upon what the parties agreed about that matter. Did the parties agree to submit the arbitrability question itself to arbitration? If so, then the court’s standard for reviewing the arbitrator’s decision about that matter should not differ from the standard courts apply when they review any other matter that parties have agreed to arbitrate. . . . That is to say, the court should give considerable leeway to the arbitrator, setting aside his or her decision only in certain narrow circumstances. See, e.g., 9 U.S.C. § 10.[] If, on the other hand, the parties did not agree to submit the arbitrability question itself to arbitration, then the court should decide that question just as it would decide any other question that the parties did not submit to arbitration, namely, independently. ... [¶].. . [¶]

“. . . Courts should not assume that the parties agreed to arbitrate arbitrability unless there is ‘clea[r] and unmistakable]’ evidence that they did so. . . . In this manner the law treats silence or ambiguity about the question ‘who (primarily) should decide arbitrability’ differently from the way it treats silence or ambiguity about the question ‘whether a particular merits-related dispute is arbitrable because it is within the scope of a valid arbitration agreement’—for in respect to this latter question the law reverses the presumption. . . .

“But, this difference in treatment is understandable. The latter question arises when the parties have a contract that provides for arbitration of some issues. In such circumstances, the parties likely gave at least some thought to the scope of arbitration. And, given the law’s permissive policies in respect to arbitration, . . . one can understand why the law would insist upon clarity before concluding that the parties did not want to arbitrate a related matter. ... On the other hand, the former question—the ‘who (primarily) should decide arbitrability’ question—is rather arcane. A party often might not focus upon that question or upon the significance of having arbitrators decide the scope of their own powers. . . . And, given the principle that a party can be forced to arbitrate only those issues it specifically has agreed to submit to arbitration, one can understand why courts might hesitate to interpret silence or ambiguity on the ‘who should decide arbitrability’ point as giving the arbitrators that power, for doing so might too often force unwilling parties to arbitrate a matter they reasonably would have thought a judge, not an arbitrator, would decide.” (First Options of Chicago, Inc. v. Kaplan, supra, 514 U.S. at pp. 943-945 [115 S.Ct. at pp. 1923-1925], citations omitted.) Simply put, “[t]he question whether the parties have submitted a particular dispute to arbitration, i.e., the ‘question of arbitrability,’ is ‘an issue for judicial determination [u]nless the parties clearly and unmistakably provide otherwise.’ ” (Howsam v. Dean Witter Reynolds, Inc. (2002) 537 U.S. 79, 83 [154 L.Ed.2d 491, 123 S.Ct. 588, 591], italics omitted; accord, McCarroll v. L. A. County etc. Carpenters (1957) 49 Cal.2d 45, 65-66 [315 P.2d 322]; cf. Rent-A-Center, West, Inc. v. Jackson (2010) 561 U.S._[177 L.Ed.2d 403, 130 S.Ct. 2772] [where arbitration provision states that arbitrator will determine “enforceability” of agreement, arbitrator, not court, decides whether entire agreement is unconscionable].)

In this case, the parties did not clearly and unmistakably agree in the Arbitration Agreement that the arbitrator would decide arbitrability; the agreement merely states: “Any dispute as to the interpretation of this agreement shall be submitted to . . . binding arbitration.” (Italics added.) But JAMS Rule 11 is significantly broader, stating: “(a) Once appointed, the Arbitrator shall resolve disputes about the interpretation and applicability of these Rules and conduct of the Arbitration Hearing. The resolution of the issue by the Arbitrator shall be final, [¶] . . . [¶] (c) Jurisdictional and arbitrability disputes, including disputes over the existence, validity, interpretation or scope of the agreement under which Arbitration is sought, and who are proper Parties to the Arbitration, shall be submitted to and ruled on by the Arbitrator. The Arbitrator has the authority to determine jurisdiction and arbitrability issues as a preliminary matter.” (Italics added.)

In Dream Theater, Inc. v. Dream Theater (2004) 124 Cal.App.4th 547 [21 Cal.Rptr.3d 322], the parties’ contract stated arbitration would be conducted in accordance with the commercial arbitration rules of the American Arbitration Association (AAA). Those rules provided that the arbitrator “ ‘shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope or validity of the arbitration agreement.’ ” (Id. at p. 550.) In discussing the issue of arbitrability, the Court of Appeal explained: “It is difficult to imagine how parties could state any more comprehensively than they did in the Contract the intent to avoid litigation at every step of the dispute resolution process. The Contract provides that if a contested claim is not settled within the contractual deadline, then it must be submitted to binding arbitration in accordance with the AAA Commercial Arbitration Rules. These rules specify that the arbitrator will decide disputes over the scope of the arbitration agreement. We conclude that the parties’ agreement to arbitrate according to this rule is clear and unmistakable evidence of the intent that the arbitrator will decide whether a Contested Claim is arbitrable.” (Id. at p. 557.)

In Rodriguez v. American Technologies, Inc. (2006) 136 Cal.App.4th 1110, 1123 [39 Cal.Rptr.3d 437], the Court of Appeal reached the same conclusion: “Although the scope of an arbitration clause is generally a question for judicial determination, the parties may, by clear and unmistakable agreement, elect to have the arbitrator, rather than the court, decide which grievances are arbitrable. . . . Here, the parties clearly and unmistakably agreed to have the arbitrator determine the scope of the arbitration clause. The contract mandates arbitration in accordance with the [AAA’s] Construction Industry Rules. Rule 8(a) of those rules specifies the ‘arbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope or validity of the arbitration agreement.’ (Italics added.) By incorporating rule 8(a) into their agreement, the parties clearly evidenced their intention to accord the arbitrator the authority to determine issues of arbitrability. . . . [A]ny issues concerning the scope of the arbitration clause should be determined by the arbitrator in the arbitration proceeding.” (Citations omitted.)

In Monex Deposit Co. v. Gilliam (C.D.Cal. 2009) 616 F.Supp.2d 1023, the plaintiffs moved to compel arbitration of the defendant’s counterclaims. The defendant argued that the arbitration clause was unenforceable as to his statutory counterclaim because the arbitrator could not award meaningful relief on that claim. The court granted the motion in its entirety, noting: “The [parties’] agreement . . . incorporates JAMS Rules providing that the arbitrator decides scope and validity disputes with respect to particular claims.” (Id. at p. 1025, citing JAMS Rule 11(a), (c).)

In Sidell v. Structured Settlement Investments, LP (D.Conn., Jan. 14, 2009, No. 3:08-cv-00710 (VLB)) 2009 U.S.Dist. Lexis 2244, the court granted a motion to compel arbitration and permitted the arbitrator to determine the issues to be arbitrated. The court stated: “In this case, there is both a broad arbitration clause and the incorporation by reference of the JAMS Rules. The Rules provide that arbitrators will determine their own authority. Either would suffice as evidence of the parties’ intent to arbitrate arbitrability.” (2009 U.S.Dist. Lexis 2244 at pp.*6-*7.)

Thus, “when . . . parties explicitly incorporate rules that empower an arbitrator to decide issues of arbitrability, the incorporation serves as clear and unmistakable evidence of the parties’ intent to delegate such issues to an arbitrator.” (Contec Corp. v. Remote Solution, Co., Ltd. (2d Cir. 2005) 398 F.3d 205, 208; accord, Terminix Internat. Co., LP v. Palmer Ranch Ltd. Partnership (11th Cir. 2005) 432 F.3d 1327, 1332-1333 [citing cases]; Qualcomm Inc. v. Nokia Corp. (Fed.Cir. 2006) 466 F.3d 1366, 1371-1373; see also Patchett v. Bergamot Station, Ltd. (2006) 143 Cal.App.4th 1390, 1396-1397 & fn. 3 [49 Cal.Rptr.3d 941] [trial court properly confirmed arbitration award, notwithstanding appellant’s contention that arbitrator exceeded his powers, where arbitration clause authorized arbitrator to determine “ ‘arbitrability of any claim’ ”]; cf. Bruni v. Didion (2008) 160 Cal.App.4th 1272, 1277, 1280-1281, 1286-1288 [73 Cal.Rptr.3d 395] [court, not arbitrator, decides whether arbitration agreement is unconscionable even if arbitration rule states that arbitrator shall decide “ ‘his or her own jurisdiction, including any objections with respect to the existence, scope, or validity of the arbitration agreement’ ”]; James & Jackson, LLC v. Willie Gary, LLC (Del. 2006) 906 A.2d 76, 78, 80-81 [court, not arbitrator, decides arbitrability issue where arbitration clause incorporates AAA rules but also provides that nonbreaching party may seek injunctive relief and specific performance in court]; Katz v. Feinberg (2d Cir. 2002) 290 F.3d 95, 96-97 [despite incorporation of AAA rules, court, not arbitrator, decides arbitrability issue where purchase agreement contains broadly worded arbitration clause and specific clause vesting accountants with sole authority to determine purchase price].)

In the present action, JAMS Rule 11 authorized the arbitrator to make the final decision regarding what issues were arbitrable. Rule 11 was contained in JAMS Rules, effective March 26, 2007, and in the former rules, dating back to February 2005; it was in existence when the parties agreed to use JAMS Comprehensive Arbitration Rules & Procedures. (See Gilbert Street Developers, LLC v. La Quinta Homes, LLC (2