Hogan v. Miller Barondess CA4/3

Opinion

Filed 9/29/26 Hogan v. Miller Barondess CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

ROBERT T. HOGAN et al., Plaintiffs and Appellants, G064877 v. (Super. Ct. No. 30-2021- 01224818) MILLER BARONDESS et al., OPINION Defendants and Respondents.

Appeal from a judgment of the Superior Court of Orange County, Richard Y. Lee, Judge. Affirmed. Lloydwinter, Jody L. Winder, Jennifer J. Panicker and Sean A. Fredin for Plaintiffs and Appellants. Miller Barondess, Justin Ehrlich, Nadia A. Sarkis and Eleanor S. Ruth for Defendants and Respondents.

* * * This is an appeal from a judgment following the trial court’s ruling confirming an arbitration award between plaintiffs Roger T. Hogan, Roger P. Hogan (Roger Jr.), HFP, Ltd., Cathie Hogan, Kyle R. Hogan, Stephen Hogan, Hogan SRK, Inc., and R & C Motor Corporation (collectively the Hogans) and defendants Miller Barondess, LLP, a law firm, and several of its partners, Louis “Skip” Miller, Amnon Z. Siegel, and Casey B. Sypek (collectively MB). The Hogans contend the arbitration award should not have been confirmed because the agreement to arbitrate was void due to MB’s ethical violations. They further contend the arbitrator failed to disclose pertinent facts that would lead a reasonable person to doubt the arbitrator’s impartiality. MB argues this is merely the latest in a long series of scorched- earth efforts by the Hogans to avoid paying their attorneys. We conclude there was no ground for invalidating the arbitration agreement and therefore the arbitration award. The Hogans have failed to meet their burden to establish error. We also find the arbitrator’s disclosures were adequate. The judgment is therefore affirmed. STATEMENT OF FACTS AND PROCEDURAL HISTORY A. The Record The record in this case, in addition to being voluminous,1 is also so scattered and poorly cited that it borders on useless to this court. Due to the large number of documents that were sealed in the trial court, and the Hogans’ inexplicable decision to proceed with a clerk’s transcript rather than an appendix, finding the pertinent document in any given record reference is somewhat akin to a poorly planned scavenger hunt.

1 The clerk’s transcript exceeds 4,000 pages. The separate confidential volume is another 396 pages. There are also multiple motions to augment the record with their own appendices.

2 Far too many documents only appear in a redacted form, including court filings. To give a single example, a complaint filed in federal court is cited by the Hogans. This ostensibly public document is redacted in its entirety, except for a single incomplete sentence, the caption, and signature pages. Is there an unredacted version of this document somewhere in this record? Apparently not, according to the Hogans.2 A single partial sentence, bereft of context, is not in any way helpful to this court. Another problem is that the Hogans’ record references are always to the clerk’s transcript, even if all that is in the clerk’s transcript are blank pages indicating the document is confidential. That leaves it to us, rather than the Hogans, to try to figure out which page in the confidential transcript (which are not given the same page numbers) they might be referring to. We often gave up this effort due to the time it took and the guesswork involved. Why the parties could not simply have provided pinpoint citations to the exact relevant page in the confidential transcript is a complete mystery.

2 Once this court realized the state of the record, we sent out an order to the parties with numerous questions regarding citations to unredacted versions of redacted documents. In their responsive letter, among other things, the Hogans provided a 22-item list of various redactions. One of the items reads as follows: “15. 11 CT 3132-3137—Emails between Appellants and Respondents. No unredacted version appears to have been filed under seal. All information relied on in Appellants’ briefs is unredacted. A lesser redacted version of 11 CT 3132 is available at 14 CT 3937. Alternative to 3134 are found at 14 CT 3939. A lesser redacted alternative to 11 CT 3136- 3137 is located at 14 CT 3941.” This type of response, which expects the court will cheerfully hunt down the Hogans’ citations in multiple documents, is exactly as unhelpful as it appears to be. The Hogans’ repeated claims that “All information relied on in Appellants’ briefs is unredacted” is equally unhelpful. Without context, a document can easily be misinterpreted or presented as something it is not.

3 “It is the appellant’s affirmative duty to show error by an adequate record.” (Osgood v. Landon (2005) 127 Cal.App.4th 425, 435.) The appellant must cite to the record to direct the reviewing court to the pertinent evidence or other matters in the record that demonstrate reversible error (Cal. Rules of Court, rule 8.204(a)(1)(C)3; Guthrey v. State of California (1998) 63 Cal.App.4th 1108, 1115). All outstanding motions to seal and motions to augment are granted. (See rules 8.46, 8.155.) The parties, particularly the Hogans, are reminded that if we cannot find a document or fact referenced in a brief, we may simply disregard it. “‘Rather than scour the record unguided, we may decide that the appellant has waived a point urged on appeal when it is not supported by accurate citations to the record.’” (Slone v. El Centro Regional Medical Center (2024) 106 Cal.App.5th 1160, 1172.) It is not our responsibility to comb the appellate record for facts that might or might not be buried somewhere in over 4500 pages. (Del Real v. City of Riverside (2002) 95 Cal.App.4th 761, 768.) Further, the Hogans’ Statement of Facts is set forth in a completely self-serving manner, picking and choosing bits of evidence they believe supports them while ignoring all evidence to the contrary. Given the state of the record, we rely in large part on the arbitrator’s recital of and findings as to the facts. Doing so is appropriate as long as the arbitrator’s findings of fact are supported by substantial evidence. (Branches Neighborhood Corp. v. CalAtlantic Group, Inc. (2018) 26 Cal.App.5th 743, 750; see Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 881.) By failing to set forth an evenhanded statement of facts, the Hogans have 3 Subsequent citations to rules are to the California Rules of Court.

4 waived any issue of substantial evidence. (Slone v. El Centro Regional Medical Center, supra, 106 Cal.App.5th at pp. 1173–1174.) B. Factual Background 1. The Initial Fee Agreement Roger T. Hogan (Roger)4 owned two Toyota dealerships during the time period relevant to this case. Roger contacted MB in 2017 due to his belief that Toyota was acting illegally and in violation of his dealership agreements. He referred to Toyota pressuring him financially and attempting to squeeze his family out of his succession plan, which was to have his sons take over the dealerships. Roger and MB attorneys, particularly Louis “Skip” Miller, discussed the possibility that if Toyota was violating the dealership agreements, Roger could be entitled to lost profit damages for both himself and future generations of his family. Roger indicated that he did not want to continue being a Toyota dealer—he wanted to sell for as much money as possible. Miller believed Roger’s goals could not be achieved solely through litigation. Roger and MB, led by Miller, discussed a hybrid fixed fee and contingency fee agreement, and in June 2017, executed an initial fee agreement. MB estimated that litigation against Toyota (the Toyota Action) would cost $10 million or more in hourly billing. They agreed that MB would be given a guaranteed $1 million payment for the litigation. This provision was extensively negotiated and discussed with members of Roger’s family. The parties eventually agreed that MB would receive $250,000 up front and the remaining $750,000 if the Hogans filed a complaint.

4 We refer to the Hogans by their first names for readability and to avoid confusion.

5 In addition, the fee agreement included complex contingency provisions. Because Roger wanted to sell the dealerships, the parties agreed that if MB’s representation resulted in a sale, MB’s fee would be tied to the sale price. Two provisions of the fee agreement provided for different possibilities. The first stated: “You believe the combined fair market value (blue sky) value of the [dealerships] is [$70 million]. If the combined dealerships are sold for [$70 million] or less, you will pay us our regular hourly rates for attorney time incurred. The one-time fixed fee of $1,000,000 is separate and apart from this hourly rate payment. In other words, we are entitled to, and will retain, the $1,000,000 fixed fee no matter what occurs in this matter; and it will not be applied here.”5 The second provision read: “If the combined dealerships are sold for more than [$70 million blue sky], our fee will be [15%][6] of the amount above [$70 million blue sky]. You will be reimbursed for your costs and the one-time $1,000,000 fixed fee off the top, before application and calculation of the [15%] contingent fee. However, in no event will the contingent fee be less than the amount of our regular hourly rates for time spent (excluding the one-time $1,000,000 fixed fee which is not applicable to any hourly fees).” The parties further agreed that if the case led to a settlement, MB would receive a 35 percent contingent fee, regardless of whether the Hogans sold the dealerships or there was a damage award, or both. MB would also bill the Hogans for all costs in connection with any Toyota litigation.

5 “Blue sky value” refers to the combined fair market value of the dealerships.

6 This was initially 35 percent, was later reduced to 15 percent in an amendment to the agreement (the amended fee agreement).

6 The fee agreement called for binding arbitration before Judicial Arbitration and Mediation Service (JAMS) to resolve any fee disputes under the substantive and procedural laws of California. An attorney fee provision entitled the prevailing party to recover all attorney fees and costs in connection with any arbitration. Roger, his wife, and his three sons (Stephen, Kyle, and Roger, Jr.) signed the fee agreement. Roger felt the fee agreement was fair when he signed it. Kyle, who operated the dealerships with Roger, wanted this specific fee structure. 2. Roger Considers a Separate Class Action In January 2018, Roger became interested in pursuing a class action regarding defective Prius inverters with the intent of putting additional pressure on Toyota. A great deal of discussion about this course of action followed. Roger also discussed this with his personal attorney. Miller advised Roger that he would not take on the class action unless Roger wanted MB to represent the class. Roger approved the class action moving forward. He encouraged MB to represent the class, and explored the possibility that he might be able to financially benefit from that action. (Miller informed him that he could not do so.) Miller made it clear that if Hogan did not want MB to pursue the class action, MB would not do so. With Roger’s blessing, MB contacted Paul Kiesel, a class action attorney, to provide an assessment of the potential consumer claims. In February 2018, MB and Kiesel Law filed a consumer class action complaint relating to defective Prius cars. The Hogans actively participated behind the scenes in the class action, offering feedback on a draft complaint and other advice. In April 2018, Roger sent an e-mail to Miller, among others, discussing a possible new class action against Toyota. He asked: “Skip, I also 7 need to know your intentions on the Ravs. We have laid it out for you and others are now starting to scratch around it. Will you file a class action on this issue?” 3. MB Prevails in the Toyota Action MB subsequently filed the Toyota Action, in which Hogan alleged that Toyota had damaged his dealerships by misallocating inventory and failing to issue appropriate recalls. “The Toyota Action was lengthy and extraordinarily complex.” Toyota was represented by numerous large law firms, and the case, which lasted over three years, was hard fought at every step. The case had approximately two million documents produced in discovery, along with almost 50 depositions and hundreds of discovery requests. But the Toyota Action was only part of the strategy. With Roger’s consent, MB developed a multi-pronged strategy against Toyota. The Hogans decided it was to their advantage to maximize the pressure on Toyota by pursuing vehicle safety issues. They believed that being a “‘thorn in the side’” of Toyota would likely yield a larger settlement. This strategy included a media and public relations campaign regarding the Prius inverters, submissions to government entities regarding Toyota’s alleged neglect of safety, outreach to legislators and regulators in Washington, and intervention in a federal criminal case in New York to argue against Toyota’s release from a deferred prosecution agreement resulting from a separate safety controversy. MB took the Toyota Action to trial in 2019. Roger and his sons were highly involved as clients, reading the majority of the documents and submissions. They were also what might charitably be called “challenging” clients, contacting the attorneys at all hours with questions and ideas.

8 A three month long jury trial resulted in a $15.8 million verdict for the Hogans. The Hogans were effusive in their praise, calling it “a huge victory” and “[a] great victory.” Roger wrote, apparently shortly before the verdict, that he was “grateful to have had such great attorneys and people in my corner.” He commented that MB’s work “went beyond expectations.” After Toyota filed three posttrial motions in an effort to overturn the verdict, the parties discussed a global settlement. “In February/March 2020, the Hogans and Toyota entered into a settlement agreement” under which “the Hogans would sell their dealerships and end their relationship with Toyota.” Toyota paid the Hogans $155 million, which included both the “blue sky value” of the dealerships and the real estate value. The settlement required the judgment against Toyota to be vacated. A final settlement agreement was signed on March 12, 2020. 4. The Attorney Fee Dispute The Hogans paid MB $4.12 million for legal fees prior to the arbitration. The parties disagreed on how much was owed under the amended fee agreement. MB believed it was entitled to a balance of approximately $5.38 million. Roger believed the fees were a total of $6.15 million (less the $4.12 million already paid). Roger wanted to renegotiate the fee and asked for further discounts. MB declined. 5. MB Seeks to Arbitrate the Fee Dispute MB filed for arbitration through JAMS in July 2020. The Hogans responded by filing for nonbinding attorney fee arbitration. The Orange County Bar Association issued an award, but the Hogans rejected it. Instead of proceeding with arbitration, the Hogans filed a lawsuit against MB and its partners Miller, Amnon Siegel, and Casey Sypek. The complaint alleged legal 9 malpractice, sought to invalidate the fee agreements, and demanded over $4 million. The Hogans alleged MB had a conflict of interest with regard to the class action, and further claimed MB was required to obtain a conflict waiver from the Hogans to address any conflicts between them. MB moved to compel arbitration and to make an overlong story shorter, this motion was ultimately granted by the trial court. 6. Arbitration Begins at JAMS After the court’s ruling, the case proceeded at JAMS, and the parties selected Viggo Boserup as the arbitrator. Boserup and JAMS issued a disclosure report stating, among other things, that Boserup was among more than 100 neutrals holding an ownership share in JAMS. Further, the report stated that owners are not privy to information about JAMS’ profits from any case, client, or law firm, and owners do not receive credit for customer relationships. The report also indicated Boserup had no prior cases with any attorney or party involved in the instant matter. There were no objections to proceeding with Boserup. Shortly after arbitration began, the Hogans asked the arbitrator to rule that the fee agreements were not enforceable and therefore not arbitrable. The arbitrator denied the request, finding there was “insufficient evidence of actual or potential conflicts of interest to justify setting aside the fee agreement at this early stage” of the case. 7. Arbitration Ruling After a lengthy hearing that generated a voluminous record, the arbitrator made “a general finding that Roger was not a credible witness.” The arbitrator awarded MB a total of $15,718,210.20, including fees and costs. The arbitrator denied the Hogans’ counterclaims, including legal 10 malpractice. We will discuss the arbitrator’s findings as necessary in our discussion. The parties filed cross-motions to confirm and vacate the award, respectively. The trial court confirmed the award. Hogan now appeals. DISCUSSION I. GENERAL PRINCIPLES AND STANDARDS OF REVIEW “‘The California Arbitration Act (CAA; [Code Civ. Proc.,] § 1280 et seq.) “represents a comprehensive statutory scheme regulating private arbitration in this state.”’” (Branches Neighborhood Corp. v. CalAtlantic Group, Inc., supra, 26 Cal.App.5th at p. 750.) The scope of judicial review of arbitration awards is narrow. “An arbitrator's decision generally is not reviewable for errors of fact or law.” (Ahdout v. Hekmatjah (2013) 213 Cal.App.4th 21, 33.) This is true even when the “error appears on the face of the award and causes substantial injustice to the parties.” (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 6.) The grounds for vacating an arbitration award are limited to those set forth by statute. (Sheppard, Mullin, Richter & Hampton, LLP v. J- M Manufacturing Co., Inc. (2018) 6 Cal.5th 59, 72 (Sheppard).) One of those exceptions exists when an arbitrator exceeds his or her powers, including when the arbitrator enforces an agreement that is illegal or against public policy. (Id. at p. 73.) Our review of this issue employs a mixed standard. “‘“‘On appeal from an order confirming an arbitration award, we review the trial court’s order (not the arbitration award) under a de novo standard. [Citations.] To the extent that the trial court’s ruling rests upon a determination of disputed factual issues, we apply the substantial evidence test to those issues.’”’”

11 (Roussos v. Roussos (2021) 60 Cal.App.5th 962, 973.) As we noted above, the Hogans have waived any issue of substantial evidence due to their failure to present an appropriate statement of facts. As always, the judgment is presumed correct. The appellant has the burden of establishing reversible error. (Ballard v. Uribe (1986) 41 Cal.3d 564, 574; Denham v. Superior Court (1970) 2 Cal.3d 557, 564.) II. THE AGREEMENTS BETWEEN MB AND THE HOGANS WERE VALID, LAWFUL AND BINDING A. No Conflict of Interest With the Class Action One narrow exception to the rule of arbitral finality is when the entire agreement that forms the basis of the agreement to arbitrate is illegal. (Sheppard, supra, 6 Cal.5th at p. 80.) In Sheppard, the law firm was retained by a manufacturing company in a qui tam action brought against the company by several public entities. (Id. at pp. 67–68.) The firm did not disclose to the company that it represented one of the public entities in unrelated employment cases. (Id. at pp. 69–70.) When the public entity discovered the firm’s representation of the company, it successfully moved to disqualify the law firm in the qui tam action. (Id. at p. 70.) The law firm (in a rather remarkable display of chutzpah) sued the manufacturing company to collect outstanding legal fees. It also moved to compel arbitration based on a provision in its retention agreement. (Id. at pp. 70–71.) The law firm was initially successful, obtaining an arbitration ruling in its favor and confirmation of that ruling. (Id. at p. 71.) The California Supreme Court reversed. The Court held “the law firm’s conflict of interest rendered the agreement with the manufacturer, including its arbitration clause, unenforceable as against public 12 policy.” (Sheppard, supra, 6 Cal.5th at p. 68.) Relying on Civil Code section 1667, the Court noted a contract is unlawful and enforceable when “it is [c]ontrary to an express provision of law’ or ‘. . . the policy of express law,’” even when the contract itself is not unlawful. (Id. at p. 73.) The Court found the California Rules of Professional Conduct (CRPC) not only exist to guide members of the bar, but were expressions of policy to protect the public. Accordingly, “an attorney contract that has as its object conduct constituting a violation” of those rules is contrary to public policy and therefore unenforceable. (Id. at p. 74.) The Court stated that if “‘the alleged illegality goes to only a portion of the contract (that does not include the arbitration agreement), the entire controversy, including the issue of illegality, remains arbitrable.’” (Id. at p. 77.) If, however, “‘grounds exist to revoke the entire contract, such grounds would also vitiate the arbitration agreement. Thus, if an otherwise enforceable arbitration agreement is contained in an illegal contract, a party may avoid arbitration altogether.’” (Id. at pp. 76–77.) As to the law firm’s agreement with the manufacturing company, the Court found the firm’s concurrent representation of the public entity violated former CRPC rule 3-310(C)(3)7 and left the retention agreement with the company entirely unenforceable. (Sheppard, supra, 6 Cal.5th at p. 80.) The law firm could have, but did not, obtain a waiver based on fully informed consent of the current conflict. (Id. at pp. 84-86.) The facts of this case are wildly different than those present in Sheppard, but before we get to them, a review of the relevant CRPC rule may be helpful. As relevant here, CRPC rule 1.7 states:

7 This rule is equivalent to current CRPC rule 1.7.

13 “(a) A lawyer shall not, without informed written consent from each client and compliance with paragraph (d), represent a client if the representation is directly adverse to another client in the same or a separate matter. “(b) A lawyer shall not, without informed written consent from each affected client and compliance with paragraph (d), represent a client if there is a significant risk the lawyer’s representation of the client will be materially limited by the lawyer’s responsibilities to or relationships with another client, a former client or a third person, or by the lawyer's own interests. “(c) Even when a significant risk requiring a lawyer to comply with paragraph (b) is not present, a lawyer shall not represent a client without written disclosure of the relationship to the client and compliance with paragraph (d) where: “(1) the lawyer has, or knows that another lawyer in the lawyer's firm has, a legal, business, financial, professional, or personal relationship with or responsibility to a party or witness in the same matter . . . .” (Asterisk omitted.) The Hogans claim that at the time they entered into the amended fee agreement, there were existing or potential conflicts between them and the class in the class action. They point to a single allegation in the class action complaint that refers to dealerships as the agents of Toyota, which was used to allege contractual privity. They also point to other language that does not mention dealers without explaining how the allegations created an actual or even potential conflict. No dealers or dealerships are named defendants in the class action. The class action’s allegations are entirely in regard to 14 Toyota’s handling of a manufacturing defect and did not allege any wrongdoing with respect to the dealerships. The Hogans’ argument, even if issues of substantial evidence were not waived, assumes a conflict without setting forth evidence to establish it. They speculate that “the very nature of the Class Action implicates the dealerships” and “the Class Action imputes a form of vicarious liability against the Toyota dealerships.” But without more, this is simply speculation. It is not an actual, or even a potential, conflict of interest. The only actual facts the Hogans point to is the opinion of an attorney who has no relationship to the current cause of action. In a document that is completely redacted with the exception of the five lines the Hogans find helpful, attorney Jeffrey L. Fazio filed a class action complaint against Toyota in federal district court. The sole unredacted paragraph alleged MB “have potential conflicts of interest resulting from their simultaneous representation of a Toyota dealer.” This is not evidence of anything other than the opinion of one attorney. Sypek testified at the arbitration that no dealers were sued in connection with the Toyota class action. MB did not “see any reasonable risk that dealers would ever be sued” because of the nature of the claims the class action brought against Toyota: “The claims in the class action are brought on behalf of consumers in connection with a manufacturing safety defect and . . . the manufacturer’s decisions in how to remedy that defect [and] their ineffective remedy. Those . . . decisions [were] all made by Toyota, no decisions [were] made by the dealers. In fact, the dealers are completely bound by Toyota’s instructions and decisions on those safety issues. There was . . . , in my mind, no potential exposure for dealers in the class action.”

15 The class action did not allege, for example, that the dealers negligently carried out Toyota’s instructions, but rather that Toyota had failed to instruct the dealers on a remedy or issue a recall. Sypek continued: “There were no allegations whatsoever against dealers or how they chose to handle any of those issues. It was only about Toyota, their decisions that they impose on dealers. But there was never any potential exposure or accusations or allegations of negligence or any other misconduct against dealers.” The Hogans assert that “[i]t is not a stretch of imagination to say that allegations relating to the marketing and then actual sale of [Toyota] vehicles would be likely to result in a crossclaim from [Toyota] against the dealerships, including Hogan . . . .” Indeed, that is a stretch, given the nature of the allegations in the class action complaint and the Hogans’ own complaint, which alleged the same defects. The Hogans alleged, for example, that Toyota “has been concealing safety-related defects on its vehicles that pose unreasonable risks of accidents and bodily injury. In order to save money and avoid governmental scrutiny, Toyota has been misleading dealers, like . . . , the public and governmental regulators about safety defects in its vehicles.” The Hogans also alleged “Toyota has a history of covering up defects that affect the safe operation of its vehicles,” referring to the “‘sticky pedals’” and “‘floor mat entrapment’” issues Toyota suffered between 2009 and 2014. The Hogans’ complaint also referred to “unintended acceleration issues.” The class action complaint (which the Hogans participated in drafting) alleged the same issues, often using similar or identical language to the Hogans’ own complaint. “To benefit its bottom line,” the class action complaint alleged, Toyota “has been concealing safety-related defects in its popular Prius and Prius V hybrid models that pose a risk of accidents and 16 bodily injury or death.” Additionally, the class action complaint referred to the history of the “‘sticky pedals’” and “‘floor mat entrapment’” issues. Taken as a whole, the Hogans’ complaint and the class action complaint allege the same background facts with regard to Toyota’s alleged history of concealing defects. Further, there was substantial evidence establishing the Hogans’ knowledge of and participation in the class action, including Roger’s express blessing of the case after conferring with his personal attorney. Indeed, Roger was interested in bringing a second consumer class action. The interests of the Hogans and the class were aligned. The entire purpose of bringing the class action, which Roger encouraged MB to bring, was to put pressure on Toyota. We readily find there was no actual conflict of interest. As to a potential conflict, that exists where “there is a significant risk that a lawyer’s ability to consider, recommend or carry out an appropriate course of action for the client will be materially limited as a result of the lawyer’s other responsibilities, interests, or relationships, whether legal, business, financial, professional, or personal.” (CRPC rule 1.7, cmt. 4.) The classic example of this is a lawyer representing both parties in a joint venture, which “may materially limit the lawyer’s ability to recommend or advocate all possible positions that each might take because of the lawyer’s duty of loyalty to the other clients. The risk is that the lawyer may not be able to offer alternatives that would otherwise be available to each of the clients.” (Ibid.) If, however, all that is present is the “mere possibility of subsequent harm,” this “does not itself require disclosure and informed written consent. The critical questions are the likelihood that a difference in interests exists or will eventuate and, if it does, whether it will materially interfere with the lawyer’s independent professional judgment in considering 17 alternatives or foreclose courses of action that reasonably should be pursued on behalf of each client.” (CRPC rule 1.7, cmt. 4; asterisks omitted.) Given the full context here, at most, a “possibility” of a potential conflict was present rather than a “significant risk” of one. That context includes, as we noted, the facts surrounding the class action—it was undertaken as part of the Hogans’ litigation strategy with their full knowledge and encouragement. It was intended to “put[] additional pressure on Toyota.” The interests of the putative class and the Hogans, as set forth in their respective pleadings, were aligned. There was no likelihood at all that the class action complaint would result in liability for the Hogans, and mere speculation is insufficient to establish a potential conflict.8 For the same reasons, we reject the Hogans’ contention that MB “accept[ed] employment adverse” to them in violation of former CRPC 3- 310(E) (equivalent to current CRPC rule 1.9(a)). As we have discussed, the class action was never “adverse” to the Hogans or their interests; it was driven by and allied with their interests. The Hogans have failed to show MB’s representation of the class was grounds for invalidating the amended fee agreement. Because we find no potential conflict, we need not address whether a written waiver was necessary.

8 We are aware of and have reviewed the recently decided case Doe 1 v. McGrath Kavinoky LLP (Cal. Ct.App., June 29, 2026, No. B343201) 2026 WL 1862123. That case extended the rule of Sheppard to cases in which a potential, but not actual, conflict was present. This case is distinguishable because we find no potential conflict.

18 B. No Conflict of Interest Among the Hogans The Hogans also claim that MB failed to obtain consent to waive potential conflicts between the family members, in violation of former rule 3- 310(c)(1)(2). That provision stated: “A member shall not, without the informed written consent of each client: (1) Accept representation of more than one client in a matter in which the interests of the clients potentially conflict; or (2) Accept or continue representation of more than one client in a matter in which the interests of the clients actually conflict . . . .” The Hogans claim this “conflict did rear its ugly head” during the Toyota case, “as it led to an unclean hands defense and resulted in Hogan incurring $2,322,976 in costs.” The Hogans rely on three citations to the record to support this statement. One is a page from a jury verdict form that found unclean hands on the Hogans’ part, but included no facts in support of that finding. The other two citations are to identical copies of the same newspaper article, which proves nothing. The Hogans go on to state that “MB was well aware of the interfamilial conflicts no later than the filing of the Original Dealership Action Complaint on July 25, 2017 because MB alleged that the retaliation Stephen Hogan and Roger Hogan Jr.—MB’s clients at the time and signators to both the Original Fee Agreement and Amended Fee Agreement—were experiencing as dealerships operators was caused by Roger Hogan Sr. and Kyle Hogan’s activities with Autovation.” The portion of the complaint the Hogans cite in support of this assertion states, in full: “101. Toyota knows that Hogan is planning to pass on his Dealerships his sons. But Toyota is blocking Hogan’s succession plan because Toyota wants Hogan out. [¶] 102. Hogan was shocked by this meeting. He had been trying to work with Toyota for years and spent millions 19 at Toyota’s behest and encouragement, all the while believing that Toyota had his best intentions in mind. But unbeknownst to Hogan, Toyota was already planning the future of the Dealerships without him and his family. The 2016 meeting with Hagey was when Hogan realized Toyota’s plan to oust him as a Toyota dealer.” Nothing in the quoted text establishes an interfamilial conflict or the potential of one. Indeed, the interests of Roger and his family are apparently completely aligned. The remainder of the Hogans’ argument on this point is simply an assertion that MB violated former Rule 3-310(c)(1)(2) and therefore the amended fee agreement should be voided. The Hogans have not met their burden to establish error on this point. None of their cited evidence supports the assertions made, and their opening brief offers no reasoned legal argument, only conclusions. (See Benach v. County of Los Angeles (2007) 149 Cal.App.4th 836, 852; Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784–785.) The additional argument the Hogans offer for the first time in their reply brief is disregarded.9 (Schubert v. Reynolds (2002) 95 Cal.App.4th 100, 108.) Indeed, this entire argument is also improper because the Hogans are raising it for the first time on appeal. (Newton v. Clemons (2003) 110 Cal.App.4th 1, 11.) The Hogans expressly claimed below that they were not claiming interfamily conflicts were grounds for invalidating the amended fee agreement and therefore the arbitration award. There was no error.

9 This argument, which relates to a single allegation that Toyota wrongfully denied Stephen and Roger, Jr., promotion, is poorly taken in any event as it does not establish an actual or potential conflict of interest between the father and the sons.

20 C. Other Alleged Wrongdoing The Hogans assert the amended fee agreement was “exchanged” for their solicitation for the class action. In support of this assertion, they cite 10 pages of the record, which include a number of e-mails and part of the amended fee agreement. One e-mail from Miller includes a comment to Roger that “You’re not a party to the class action but, rather, a non-testifying confidential consultant to us. As such, there is no problem with you helping us and putting us in contact with customers. We’re happy to talk to your company attorney about this; please feel free to have him call me if you like.” This, however, is not proof of “solicitation” in violation of the law or any ethical rule. It is not evidence that the lower contingency rate in the amended fee agreement was compensation for “solicitation.” The only comment from Miller that mentions the class action in connection with the amended fee agreement states: “As for the class action, I reduced the contingent fee from 35 to 15 percent because we couldn’t take it on without your consent . . . .” That, at most, implies that the Hogans’ consent for MB to take on the class action was exchanged for the lower contingency fee, and not, as the Hogans now claim, for “solicitation.” The Hogans also claim MB unlawfully disclosed confidential information to Kiesel Law. Again, the “evidence” the Hogans rely on does not state what they claim. One reference is to four lines of a declaration that says nothing about confidential information. Another is to an e-mail from one of the MB attorneys asking Kyle if he has “contact info for people with [redacted]. You can send contact info to me or put them in touch with me. Much appreciated.” Kyle replies that he is attaching “4 reports” which were “labeled with [redacted] (current up to about 10 days ago.)” This, again, does 21 not support the claim that MB disclosed confidential information without consent. The next citation is to an e-mail in which an MB lawyer is discussing a draft complaint and a forthcoming newspaper article with a Kiesel lawyer. A substantial portion is redacted. Again, there is no obvious confidential information. The only mention of privileged information is a final e-mail where one of the MB lawyers is attaching documents for the Kiesel lawyers to review. In relevant part, it states: “Interesting email from our client about the [redacted]. This is privileged and we are sending to you as a consultant and part of our legal team.” We have no idea of the substance of this e-mail, and the Hogans offer no legal argument defeating the assertion that it could be lawfully shared with the Kiesel lawyers. Any argument on this point is waived for failure to develop it and provide an adequate record. (Osgood v. Landon (2005) 127 Cal.App.4th 425, 435; County of Sacramento v. Lackner (1979) 97 Cal.App.3d 576, 591; rule 8.204(a)(1).) Moreover, the Hogans provide no support for the contention that the narrow ruling in Sheppard invalidating arbitration agreements when a conflict of interest exists extends to any arguably illegal misconduct. (See Brawerman v. Loeb & Loeb LLP (2022) 81 Cal.App.5th 1106, 1123 [holding Sheppard required more than the fact of an ethical violation to invalidate the engagement agreement].) In sum, we find the court correctly ruled there were no grounds for invalidating the amended fee agreement, and later, the arbitration award, and the arbitrator did not exceed his powers by enforcing the agreement.

22 III. THE ARBITRATOR’S RULING ON ARBITRABILITY WAS NOT ERROR In a three-paragraph argument, the Hogans’ opening brief claims the arbitrator, in a pre-arbitration motion, incorrectly found the issue of arbitrability moot. To the extent this is intended to repeat the previous arguments, we reach the same conclusions. Additionally, the Hogans provide no legal grounds for an appellate court to second-guess an arbitrator’s substantive ruling in this procedural context. We find no error. IV. THE ARBITRATOR ADEQUATELY DISCLOSED HIS AFFILIATION WITH JAMS The Hogans repeat the argument they offered below with respect to the arbitrator, contending his service as Chairman of the Board of JAMS was not disclosed and was grounds for disqualification. “An appeal from the trial court’s confirmation of an award challenged due to the arbitrator’s alleged failure to disclose circumstances creating an appearance of partiality presents a mixed question of law and fact. [Citation.] Our review is de novo.” (Rebmann v. Rohde (2011) 196 Cal.App.4th 1283, 1290.) “‘“The party claiming bias bears the burden of establishing facts supporting its position. [Citation.]”’” (Ibid.) Code of Civil Procedure section 1281.9, subdivision (a), requires an arbitrator to “disclose all matters that could cause a person aware of the facts to reasonably entertain a doubt that the proposed neutral arbitrator would be able to be impartial.” Section 1286.2, subdivision (a)(6), requires the court to vacate an arbitration award if an arbitrator fails to disclose a ground of disqualification of which the arbitrator was then aware. In the absence of actual bias, the appearance of partiality standards is judged by asking whether a reasonable observer would believe the arbitrator could not be 23 impartial. It is not judged from the perspective of a litigant involved in the controversy. “‘“Impartiality” entails the “absence of bias or prejudice in favor of, or against, particular parties or classes of parties, as well as maintenance of an open mind.” [Citation.]’ [Citation.]” (Rebmann v. Rohde, supra, 196 Cal.App.4th at p. 1290.) The Hogans’ complaint here is the arbitrator’s failure to disclose that he was Chairman of the Board of JAMS. Their argument rests on the disclosures the arbitrator made that as a shareholder in JAMS, he was “not informed about the extent to which their profit distributions may be impacted by any particular client, lawyer or law firm and shareholders do not receive credit for the creation or retention of customer relationships.” As chairman, the Hogans argue, the arbitrator had a statutory right to inspect the company’s books and records. They claim that because the arbitrator had this statutory right, he could have found out how much business MB brought to JAMS. They claim “[t]his had to be a lot” based on the amended fee agreement’s requirement to use JAMS. This is pure speculation unsupported by the record. JAMS disclosed five years of history with respect to each party, lawyer, and law firm at the outset of the case. JAMS’ counsel further confirmed that the board chair had no greater access to information than any other shareholder. The Hogans, counsel wrote “misunderstand[] . . . the role of Chairman of the Board. JAMS panelists receive no compensation for service on JAMS’ Board, including service as Chairman of the Board. Nor do they receive information regarding the numbers of cases or revenue from cases involving any specific party, lawyer, law firm, or company. Mr. Boserup’s statements to the parties regarding his profit distributions, and the information to which he is not privy, were accurate notwithstanding his service on the Board.”

24 Given the facts in the record, there is no evidence to support the claim that a reasonable observer would believe the arbitrator could not be impartial.10 The Hogans have failed to establish that disclosure was required or that vacatur was appropriate. DISPOSITION The court did not err by enforcing the arbitration agreement or confirming the award. There are no errors by the arbitrator that require vacatur. The judgment is affirmed. MB is entitled to their costs on appeal.

MOORE, ACTING P. J.

WE CONCUR:

DELANEY, J.

SCHWARM, J.* *Judge of the Orange County Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.

10 The Hogans also claim the “appearance of impropriety” standard is satisfied because the arbitrator “effectively conceded this fact” without citation to the record. We do not find any such concession.