INTERIM AWARDS

Ortiz v. Elmcrest Care Center LLC, 106 Cal. App. 5th 594

Ortiz’s estate sued defendants, operators of a nursing home, for elder abuse and neglect, willful misconduct and negligence, and fraud arising from Ortiz’s death. The defendants’ motion to compel arbitration was granted. After a hearing, the arbitrator issued a document which she termed “interim award” (the First Interim Award) wherein she found that defendants’ employees were negligent but that such negligence did not have a causal connection to Ortiz’s death. She further stated that the award would become final within 20 days unless either side “points out a failure to decide a submitted issue”. Within that time, the estate filed a motion to amend the award, noting that the defendants’ reckless conduct caused injury to Ortiz’s dignity under the elder abuse cause of action but that no award was made for injury to that dignity.

The arbitrator then issued a second award (the Second Interim Award) wherein she stated that she had failed to consider defendants’ reckless injury to dignity and awarded the estate $100,000 compensatory damages on the elder abuse cause of action plus attorney’s fees and costs. Defendants petitioned the arbitrator to vacate the Second Interim Award, arguing that the First Interim Award was really a final award because it covered all issues and hence the arbitrator had no power to issue the Second Interim Award. The arbitrator denied the petition and issued a Final Award that was like the Second Interim Award.

The defendants moved to vacate the Final Award, and the estate moved to confirm it. The trial court granted defendants’ motion, ruling that the First Interim Award was a final award and that the arbitrator’s reasoning that she amended it because of an alleged failure to consider the dignity issue was a sham to justify her decision.

The estate appealed and the Court of Appeal reversed. The arbitrator could have made a final determination that she had addressed all necessary issues when she served the parties with the First Interim Award. She did not. Instead, she expressly deferred final disposition of the matter until 20 days had lapsed or, in the event either party identified an omitted issue or moved for further relief when she issued a later ruling after additional briefing. Unlike those cases that have conferred award status on rulings that leave open for future resolution issues that could not have been decided at that time because their nature and scope were uncertain as of the award date, the issues the arbitrator deferred in the First Interim Ruling concerned only those matters that had already been presented in the arbitration. The arbitrator did not reserve jurisdiction to address a contingent matter that could arise only in the future. The record showed the Estate made the authorized written submission, asserting—among other things—the First Interim Award omitted a necessary determination of damages for pre-death loss of dignity. Because the Estate's submission called for the arbitrator to resolve the issue, the First Interim Award did not become final by its terms. A ruling that reserves a final determination on matters that could have been decided at the time plainly does not satisfy the statutory definition of an award under the statute.