Kiker v. Pilch CA2/8

Opinion

Filed 9/29/26 Kiker v. Pilch CA2/8 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

SECOND APPELLATE DISTRICT

DIVISION EIGHT

DALE KIKER, B348548

Plaintiff and Respondent, Los Angeles County Super. Ct. No. 24STCP03104 v. BORIS PILCH et al., Defendants and Appellants.

APPEAL from a judgment of the Superior Court of Los Angeles County, Holly J. Fujie, Judge. Affirmed.

Katten Muchin Rosenman, Christopher D. Beatty for Defendants and Appellants.

Rutan & Tucker, Bradley A. Chapin and Briana F. Richmond for Plaintiff and Respondent.

_________________________ Two doctors feuded, settled, then feuded about their settlement. An arbitrator rejected one of the doctors’ claims that the other doctor had breached their settlement agreement. The trial court confirmed the award. It concluded the arbitrator’s interpretation of the doctors’ settlement agreement was rational. It also concluded the arbitrator’s findings — that the doctor asserting breach had waived those breaches and failed to prove damages from them — were findings within the scope of the arbitrated controversy and were beyond court review. The arbitrator’s waiver and no damages findings are indeed beyond court review, and they independently support the trial court’s confirmation of the award. We therefore affirm. I. We take the facts “from the arbitrator’s award and memoranda of decision.” (Advanced Micro Devices, Inc. v. Intel Corp. (1994) 9 Cal.4th 362, 367, fn. 1 (AMD); accord, Valencia v. Mendoza (2024) 103 Cal.App.5th 427, 433, fn. 2 (Valencia).) Boris Pilch and Dale Kiker are both anesthesiologists. After working together for many years and setting up several business entities, they parted ways in 2019 when Kiker struck out and formed his own competing surgery center and billing company. Pilch confronted Kiker about his competing entities and sought relief in arbitration. The arbitration ended when Pilch and Kiker signed a settlement agreement. The settlement agreement, with a closing date of October 31, 2019, was, in large part, a purchase agreement. Kiker agreed to buy out Pilch’s interests in their shared business entities. Kiker would also make monthly payments to Pilch tied to revenue from pre-buyout patient services. From those payments, Kiker could deduct expenses with the approval of Marc Wolfsohn, 2 a doctor who remained associated with Kiker’s and Pilch’s business entities. Kiker, for transparency, had to provide Pilch with access to QuickBooks accounting information until payment of all pre-closing receivables. After settlement, Kiker had his office manager, Ann Cox, handle compliance. She prepared the figures, met with Wolfsohn and Pilch, and sent Pilch the checks. She made three timely payments for Kiker between November 2019 and January 2020. She then made batch payments in August 2020 (for February through July), November 2020 (for August through October), and January 2021 (for the previous November and December). Cox gave several reasons for these delayed batch payments. First, “it was impractical to make monthly payments . . . because the income” subject to distribution “had decreased significantly.” Second, there were expenses related to a lawsuit that had been pending at the time of settlement, and the settlement agreement permitted deduction of those expenses. And third, Cox attributed some delay to issues in her personal life. Pilch cashed each check promptly and without objection. After January 2021, no further payments occurred until January 2023. Cox could not make payments for Kiker because a billing company in Pilch’s control post settlement was not providing necessary data. “Pilch never complained about the timing or manner of the payments.” That is, until 2023, when Pilch refused to cash the check sent that year and initiated arbitration for asserted breaches of contract. The demand, in which Pilch Investments and Management, LLC joined as a claimant, sought relief from Kiker personally and as trustee of the Dale G. Kiker Revocable 3 Intervivos Trust, as well as from Central Pacific Pain Management, a Medical Group, Inc. Two months before the arbitration hearing, Pilch, in March 2024, made the appropriate billing records available. Cox reviewed them and issued two final payments totaling just over $4,000. The arbitrator found for Kiker and the arbitration respondents. The arbitrator found Cox’s testimony extremely credible and Pilch’s testimony not credible. The arbitrator found Pilch’s claimed breaches were nonexistent or technical in nature and chose to read the settlement agreement through the lens of section 15 of the agreement, which provided that whenever possible the agreement be given a reasonable, practicable, and workable interpretation. Thus, it found, for instance, no actionable breach based on the lack of monthly payments, for which Pilch sought no damages, and no actionable breach based on Pilch’s lack of access to QuickBooks, as Pilch had access through an accountant and had not offered credible evidence that any receivables were left to collect. The arbitrator went on to explain that: “More importantly, the missing component from all of these purported breaches is any actual harm to Claimants. Claimants cannot demonstrate any connection between the alleged breaches and any actual, tangible harm suffered by Pilch. “For instance, Claimants cannot identify any amount they are owed as a result of payments being made every several months instead of monthly. Presumably, if Pilch had actually suffered harm, he would have complained much earlier. Instead, Pilch cashed the checks he received and, as Cox, Kiker, and Wolfsohn all testified, he never complained about unpaid monies, 4 improper deductions, the timing of the payments or anything of the sort. “The Arbitrator also agrees that Pilch waived the right to challenge any of [ ] Kiker’s alleged breaches by not raising any of these issues prior to initiating this arbitration. “Lastly, the Arbitrator agrees that Pilch failed his burden of proof regarding damages. Pilch made no effort to quantify or calculate his damages. He did not present any expert witnesses or expert reports to present a calculation of his alleged damages. Instead, he simply testified that he left it to his lawyers.” Following the arbitration, Kiker and the respondent petitioned the superior court to confirm the award while Pilch and the claimants requested its vacatur. The superior court confirmed the award and denied vacatur. The court concluded Pilch and the claimants had “not shown that the Arbitrator exceeded his authority in interpreting the Settlement Agreement. The Settlement Agreement specifically states that it ‘shall whenever possible be given a reasonable, practical and workable interpretation so as to effect the general intentions of the Parties hereto.’ . . . The Arbitrator concluded that Respondent did not suffer damages from the failure to make monthly payments, the deducted expenses were in accordance with historical practices, Respondent had proper access to Quickbooks, and Respondent waived his claims by failing to bring them earlier. . . . Thus, the decision of the Arbitrator was within the scope of the controversy submitted to him and rationally based upon the terms of the Settlement Agreement.”

5 The court also concluded “the Arbitrator’s comments on the complexity of the matter and finding that Pilch was not a credible witness do not create an impression of personal bias against Respondents.” The trial court entered judgment on May 28, 2025 and Kiker served notice of entry that same date. On July 7, 2025, the trial court entered an amended judgment that filled in stipulated amounts for blanks left for awards of attorney fees and costs. Pilch, on July 24, 2025, timely appealed from the judgment. Whether Pilch Investments and Management, LLC, also appealed is unclear, and is ultimately unimportant in light of our affirmance. II. Pilch seeks reversal of the trial court’s rulings and vacatur of the arbitration award. He asserts the arbitrator improperly remade the parties’ settlement agreement, interpreting it irrationally and exceeding his authority. Pilch asserts the arbitrator strayed so far from the contract, in fact, that the award violates important public policies surrounding contracting that courts should protect. And finally, Pilch asserts the arbitrator’s award arose from bias. None of these contentions warrants vacatur. A. “ ‘Typically, those who enter into arbitration agreements expect that their dispute will be resolved without necessity for any contact with the courts.’ ” (Heimlich v. Shivji (2019) 7 Cal.5th 350, 366.) “The scope of judicial review of arbitration awards is extremely narrow.” (Ahdout v. Hekmatjah (2013) 213 Cal.App.4th 21, 33.) Code of Civil Procedure section 1286.2 circumscribes when vacatur of arbitration awards is available.

6 (Moshonov v. Walsh (2000) 22 Cal.4th 771, 775 (Moshonov).) Vacatur is justified when, as relevant here, “arbitrators exceed[] their powers and the award cannot be corrected without affecting the merits of the decision upon the controversy submitted” (§ 1286.2, subd. (a)(4)) and when “misconduct of a neutral arbitrator,” which can include actions that create the impression of bias, substantially prejudices a party’s rights (id., subd. (a)(3); FCM Investments, LLC v. Grove Pham, LLC (2023) 96 Cal.App.5th 545, 553 (FCM)). “[A]n arbitrator’s decision is not generally reviewable for errors of fact or law, whether or not such 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 (Moncharsh).) Our review is de novo, but “to the extent the trial court’s decision to grant a petition to confirm or deny an arbitration award rests on its determination of disputed factual issues, we review the court’s orders for substantial evidence.” (Valencia, supra, 103 Cal.App.5th at p. 442.) An “ ‘appellant bears the burden of establishing [its] claim of invalidity.’ ” (Ibid.) More than that, an appellant must show prejudice from an arbitrator’s asserted errors or bias. (Richey v. AutoNation, Inc. (2015) 60 Cal.4th 909, 916, 920 (Richey); id. at p. 920 [“Even if the arbitrator erred, and even if such an error could serve as a basis for vacating an arbitration award [under subdivision (a)(4)], plaintiff has not shown that the error was prejudicial”]; Royal Alliance Associates, Inc. v. Liebhaber (2016) 2 Cal.App.5th 1092, 1106; § 1286.2, subd. (a)(3) [requiring prejudice], id., subd. (a)(4) [only permitting vacatur for exceeding power if “the award cannot be corrected without affecting [its] merits”]; Cal. Const., art. VI, § 13.)

7 B. The arbitrator’s interpretation of the parties’ contract, whether or not irrational or violative of public policies regarding contract, does not warrant vacatur under section 1286.2, subdivision (a)(4)’s prohibition of acts in excess of an arbitrator’s power. Pilch, attacking the award as beyond the arbitrator’s power, argues a decision exceeds an arbitrator’s powers “if it is so utterly irrational that it amounts to an arbitrary remaking of the contract between the parties.” (Southern Cal. Rapid Transit Dist. v. United Transportation Union (1992) 5 Cal.App.4th 416, 423.) Kiker, defending the award, accepts review for arbitrariness, but cautions this exception to an award’s finality is so “narrow” and “so strict that it should discourage all but the most serious claims of abuse.” (Pacific Gas & Electric Co. v. Superior Court (1993) 15 Cal.App.4th 576, 594.) Any interpretation “within the ordinary bounds of semantic permissibility” (id. at p. 594) or “arguably based on the contract” (AMD, supra, 9 Cal.4th at p. 381) should survive scrutiny. Our Supreme Court has cautioned arbitrators do not exceed their powers “merely by rendering an erroneous decision on a legal or factual issue, so long as the issue was within the scope of the controversy submitted to the arbitrators.” (Moshonov, supra, 22 Cal.4th at p. 775.) It has expressly declined to address “whether an arbitrator’s interpretation of a contract is subject to review for ‘irrationality’ or ‘arbitrariness.’ ” (AMD, at p. 377, fn. 10.) We need not delve into the arbitrator’s interpretations of the settlement agreement or address, more generally, what threshold permits a court to reject an arbitrator’s interpretations. Nor, moreover, need we inquire whether, as Pilch alleges, the 8 arbitrator’s interpretations violated important public policies of contract law. (Cf. Moncharsh, supra, 3 Cal.4th at p. 32 [“Without an explicit legislative expression of public policy, however, courts should be reluctant to invalidate an arbitrator’s award on this ground”].) This is so because any error in contract interpretation would be harmless given the remainder of the award. (Richey, supra, 60 Cal.4th at pp. 916, 920.) The arbitrator not only found the absence of the breaches Pilch asserted but also found Pilch waived those breaches and had not shown damages from them. Put another way, the arbitrator’s award stands on independent grounds that do not implicate the supposed interpretive errors Pilch raises. As to the arbitrator’s waiver finding, Pilch argues it “suffers from two fatal defects: it misstates California’s waiver standard, and it fabricates a contractual obligation that does not exist.” To start, the arbitrator did not fabricate a contractual obligation; he found waiver of contractual breaches. Waiver is the “ ‘intentional relinquishment or abandonment of a known right’ ” (United States v. Olano (1993) 507 U.S. 725, 733) and may be implied from conduct (Barsamyan v. Appellate Division of Superior Court (2008) 44 Cal.4th 960, 969; accord, Wellness Int’l Network, Ltd. v. Sharif (2015) 575 U.S. 665, 684 [“ ‘actions rather than words’ ”]). To the extent Pilch contends the arbitrator made an error of law or fact regarding waiver, we do not review arbitration awards for errors or evidentiary sufficiency. (Moncharsh, supra, 3 Cal.4th at p. 6; Brawerman v. Loeb & Loeb LLP (2022) 81 Cal.App.5th 1106, 1131 [“[C]ourts cannot review the merits of the controversy, the validity of the arbitrator’s reasoning, or the sufficiency of the evidence supporting an 9 arbitrator’s award”]; Bacall v. Shumway (2021) 61 Cal.App.5th 950, 961 [same].) Waiver aside, the arbitrator found no damages. “A breach of contract is not actionable without damage.” (Bramalea California, Inc. v. Reliable Interiors, Inc. (2004) 119 Cal.App.4th 468, 473.) On appeal, Pilch contends he could have obtained nominal damages, but Pilch points to no evidence that he requested nominal damages before the arbitrator. The arbitrator never considered the issue, and that theory of relief is forfeited. (Moncharsh, supra, 3 Cal.4th at p. 31 [“Failure to raise [a] claim before the arbitrator, however, waives the claim for any future judicial review”]; Tribeca Companies, LLC v. First American Title Ins. Co. (2015) 239 Cal.App.4th 1088, 1103, fn. 12 [“Tribeca has made no argument that it might have been entitled to nominal damages and costs, and therefore has forfeited any such contention”].) C. Finally, vacatur is not required because of any appearance of bias. The test for arbitral bias is “whether a hypothetical reasonable person (i.e., a disinterested, well-informed, thoughtful member of the public) would form an impression of possible bias on the part of the arbitrator.” (FCM, supra, 96 Cal.App.5th at p. 555, italics omitted.) “ ‘ “An impression of possible bias in the arbitration context means that one could reasonably form a belief that an arbitrator was biased for or against a party for a particular reason.” ’ [Citation.] The test is objective and fact- specific; there is no bright-line demarcation for the impression of bias, and each case must be considered in light of the particular facts involved.” (Ibid.)

10 Pilch offers this evidence of asserted bias: First, the arbitrator, in his ruling, stated he had “informed counsel that their presentation of the case was very confusing and hard to follow” prompting solicitation of closing briefs instead of closing oral arguments. While those briefs were somewhat helpful, the arbitrator “still had an extremely difficult time putting together the pieces of this puzzle.” Thus, the arbitrator engaged in an “excruciatingly painful review of the witness testimony, documentary evidence,” and closing briefs. Second, during Pilch’s direct examination, the arbitrator stated “I mean, this is incredibly confusing. I am having a hard time trying to put it together . . . And let me just state, I got to be honest with you, I am struggling how I am going to resolve this case because I am not following any of this.” Third, Pilch points to interjections during his testimony. In one instance, the arbitrator cut Pilch off mid-sentence. He did so, however, to enforce a ruling on an objection that had been interposed and to have counsel move on to another question. In other instances, the arbitrator asked Pilch’s lawyer to “ask another question,” asked Pilch to “listen closely to what he is asking you and only answer the question,” and asked Pilch to “[not] elaborate.” Fourth, the arbitrator determined Pilch was not a credible witness. Fifth, the arbitrator adopted findings prepared by Kiker. Pilch cites two cases in support of vacatur based on bias, FCM and Grabowski v. Kaiser Foundation Health Plan, Inc. (2021) 64 Cal.App.5th 67. Neither is apposite. In FCM, the appellate court found bias when an arbitrator explicitly based a credibility determination on a party’s use of a language 11 interpreter. (FCM, supra, 96 Cal.App.5th at p. 549.) In Grabowski, the arbitrator engaged in unethical, undisclosed ex parte communications with one party’s lawyer where he derided the performance of the other party, who was self-represented. (Grabowski, at pp. 78–79.) “The arbitrator plainly felt a connection to . . . counsel, which made him comfortable enough to violate ethical rules and comment on [counsel’s] opponent.” (Id. at p. 79.) An audio recording of the encounter strikingly revealed the arbitrator’s tone and attitude. It revealed commiseration with counsel, discussions about the case’s merits, and a shared “hearty laugh.” (Id. at pp. 78–79.) The arbitrator’s remarks here, made in the course of the proceedings and made openly to both counsel, do not remotely betray the appearance of bias. DISPOSITION We affirm the judgment and award costs to respondent.

SCHERB, J.

We concur:

STRATTON, P. J.

WILEY, J.