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Date: 02-08-2018

Case Style: Clayton Douglas v. Serenivision, Inc.

Case Number: B277574

Judge: Hoffstadt

Court: California Court of Appeals Second Appellate District Division Two on appeal from the Superior Court, Los Angeles County

Plaintiff's Attorney: Steven I. Hochfelsen

Defendant's Attorney: Michael R. Halvorsen

Description: There is a “strong presumption that courts should
determine the jurisdiction of arbitrators.” (Sandquist v. Lebo
Automotive, Inc. (2016) 1 Cal.5th 233, 249 (Sandquist).) Parties
may nevertheless agree to let an arbitrator decide his or her own
jurisdiction, at least if their agreement to do so is “‘clear[] and
unmistakabl[e].’” (Howsam v. Dean Witter Reynolds, Inc. (2002)
537 U.S. 79, 83 (Howsam).) Does a party clearly and
unmistakably consent to have an arbitrator decide his own
jurisdiction when that party does not object to the arbitrator’s
jurisdiction in its answer to the arbitration petition, informs the
arbitrator that it is “voluntarily” “submit[ing]” to the arbitrator’s
jurisdiction, appears at multiple prehearing conferences, formally
asks the arbitrator to impose a bond requirement on the opposing
party, and only after the arbitrator denies that request tells the
arbitrator that its submission to jurisdiction was conditional on
obtaining that bond? On these facts, we conclude that such
conduct does constitute clear and unmistakable consent to allow
the arbitrator to decide the issue of his own jurisdiction. We
further conclude that the party’s challenge to the arbitrator’s
jurisdiction is untimely and that his challenges to the arbitrator’s
assessment of his jurisdiction and to the ultimate arbitration
award are without merit. Accordingly, we affirm.
I. Facts
A. The Contract
On August 19, 2009, Vivera, a company that sold diet pills
and other health and beauty products online, signed an
Adverting Insertion Order (Insertion Order) with Pinnacle
Dream Media, a company that offered “internet advertising
The Insertion Order “incorporate[d] as though fully set
forth herein” a Master Advertiser Agreement (Master
Agreement) and provided a weblink to access the Master
Agreement; a hard copy of the Master Agreement was not
attached. The Master Agreement is a more comprehensive
document designed to “govern the placement and delivery of
advertising” set forth in Insertion Orders. Among other things,
the Master Agreement provided that (1) “the Parties consent to
have all disputes regarding this agreement resolved by binding
arbitration,” and that any “prevailing party in any Arbitration
shall be entitled to an award of attorney fees and costs for such
arbitration,” and (2) “[a]ll payments are personally guaranteed by
the individual executing the [Insertion Order] or secured by the
assets of [Pinnacle Dream Media’s customer].”
The Insertion Order was “Accepted” by Vivera and bears
the printed name and signature of plaintiff Clayton Douglass
By April 2011, Vivera had an unpaid balance with Pinnacle
Dream Media totaling $816,530.
B. The Arbitration Proceedings
In March 2014, defendant Serenivision, Inc. (Serenivision)
filed a demand for arbitration against Vivera and Douglass
seeking damages of $816,530 plus late penalties and interest.
Serenivision had been doing business as Pinnacle Dream Media.
In April 2014, Douglass filed an answer in response to the
demand. In his answer, Douglass admitted that he had signed
the Insertion Order “as Vivera’s representative,” but denied any
liability for Vivera’s debt because he had “refused to” sign the
Master Agreement and thus never “agree[d] to personally
guarantee any amounts owed . . . by Vivera.” He also alleged
that Vivera’s products were “fraudulent,” thereby rendering the
Insertion Order unenforceable because its subject matter was
In September 2014, Douglass appeared at a preliminary
hearing before the arbitrator, at which time he reaffirmed he was
“appear[ing] voluntarily and submit[ting] to the jurisdiction of
this Arbitrator.”
In early November 2014, Douglass wrote a letter to
Serenivision’s counsel. In that letter, Douglass explained that he
was “voluntarily” appearing in the arbitration because he was
“trying to avoid the additional time and expense” of litigating the
same matter in “a federal lawsuit.” Douglass then stated that he
would “decline to participate in the arbitration” if Serenivision
did not agree to post a bond to cover the costs of attorney’s fees
Douglass might collect, under the terms of the Master
Agreement, as the prevailing party in the arbitration.
On February 18, 2015, just 19 days before the matter was
set for an evidentiary hearing before the arbitrator, Douglass
wrote a letter to the arbitrator: (1) relaying his prior statements
to Serenivision that he would voluntarily participate in the
arbitration only if Serenivision posted a bond; (2) informing the
arbitrator that Serenivision had refused to post a bond; and
(3) stating that “[a] bond is necessary for this action to proceed or
for this tribunal to exercise jurisdiction.” The arbitrator
construed the letter as an expedited request for an order
requiring Serenivision to post a bond, and denied that motion a
week later.
On March 2, 2015, Douglass wrote the arbitrator a letter
“terminat[ing] his voluntary appearance” before the arbitrator.
Douglass explained that he had been “willing to participate in
this arbitration” because it would be “more cost-efficient” than
litigating “before a court”; indicated that his “voluntary
appearance” had been “conditioned . . . on the posting of a bond
by [Serenivision]”; and declared that he would “no longer”
participate because the arbitrator had not required a bond to be
posted. Douglass proclaimed he would make no further
appearances in the arbitration proceedings.
True to his word, Douglass did not appear at the
evidentiary hearing a week later. The arbitrator allowed
Serenivision to present its case, and Serenivision called witnesses
and introduced documentary evidence.
On May 22, 2015, the arbitrator issued a written order.
The arbitrator ruled that Douglass had consented to having the
arbitrator decide the question of his own jurisdiction by
participating in the arbitration proceeding for months as a way
“to avoid defending a federal court lawsuit”; that the arbitrator
had jurisdiction over Serenivision’s claim because Douglass
signed the Insertion Order, which incorporated the Master
Agreement (and its arbitration clause) by reference; and that
Douglass, under the terms of the Master Agreement, was liable
as the guarantor of Vivera’s debt to Serenivision, which with
penalties, interest, attorney’s fees, and costs came to a total of
$1,755,050.34, with additional interest accruing at a rate of 10
percent as of March 10, 2015.
Douglass’s counsel was served with this order on May 30,
II. Procedural Background
On October 2, 2015, 125 days after he was served with the
arbitrator’s order, Douglass filed a lawsuit against Serenivision
(1) to vacate the arbitration award, (2) for declaratory relief, and
(3) for $1 million in compensatory damages and for punitive
damages on the ground that the Insertion Order and Master
Agreement were illegal and hence subject to rescission.
On January 5, 2016, and again on April 7, 2016,
Serenivision filed a petition to confirm the arbitrator’s award.
Douglass filed a response to Serenivision’s first petition on
February 2, 2016. Contrary to what he pled in his answer to the
arbitration demand, Douglass in his response claimed that (1) he
never signed the Insertion Order, and offered testimony from a
handwriting expert that the signature on the Insertion Order was
not his; (2) he had no interest in Vivera whatsoever and just had
a “partial interest in a company that processed payments to
Vivera”; and (3) he had told the arbitrator from the outset that
his participation in the arbitration was conditioned on
Serenivision posting a bond.
In a 17-page minute order, the trial court granted
Serenivision’s petition to confirm the arbitration award and
denied Douglass’s competing claim to vacate it.1 As an initial
matter, the court ruled that Douglass’s petition was untimely
because it was filed more than 100 days after he was served with
the arbitration award, but agreed to address Douglass’s challenge
to the arbitrator’s jurisdiction in light of language contained in
National Union Fire Ins. Co. v. Stites Prof. Law Corp. (1991) 235
Cal.App.3d 1718, 1723-1724 (National Union) stating that

1 The court denied as moot Serenivision’s demurrer to
Douglass’s complaint.
“[s]ubject matter jurisdiction, in this case meaning the
arbitrators’ authority or power to adjudicate a certain type of fee
dispute, cannot be conferred by consent, waiver, or estoppel.”
The court then found that Douglass had “agreed to have the
arbitrator decide the jurisdiction question” because he “expressed
a willingness to participate in [the] arbitration” and “only
attempted to withdraw months later” when “the arbitrator ruled
against imposing a bond.” “Simply put,” the court reasoned, “one
cannot agree to arbitration, with the proviso that the arbitrator
rule in your favor on certain preliminary issues.” The court went
on to conclude that the arbitrator had jurisdiction over the
dispute and that the arbitrator’s finding that Douglass was liable
for Vivera’s debt was not in excess of the arbitrator’s powers.
Douglass filed this timely appeal.
Douglass argues that the trial court erred in confirming the
arbitrator’s award. Serenivision asserts that we need not reach
Douglass’s challenge because his challenge to the award was
untimely. We address the timeliness issue first.
I. Timeliness of Douglass’s Challenge
“Any party to an arbitration in which an award has been
made may petition the court to . . . vacate [the arbitrator’s]
award” (Code Civ. Proc., § 1285),
2 but any such petition must “be
served and filed not later than 100 days after” that party was
served with a signed copy of the award (id., § 1288). Douglass did
not file his petition to vacate until October 2, 2015, which is 125
days after he was served with the award on May 30, 2015. His
petition was untimely.

2 All further statutory references are to the Code of Civil
Procedure unless otherwise indicated.
Douglass raises three arguments in response, none of
which has merit.
First, he asserts that he was not properly served with the
arbitrator’s award on May 30, 2015. However, this assertion is
directly contrary to the allegation in his petition that “the signed
award was served on counsel for [Douglass] on May 30, 2015.”
This allegation is a “judicial admission” that Douglass “may
not . . . contradict[].” (Minish v. Hanuman Fellowship (2013)
214 Cal.App.4th 437, 456.)
Second, Douglass contends he should be able to challenge
the arbitrator’s award because he asked the trial court to vacate
the arbitrator’s award in his timely response to Serenivision’s
first petition to confirm. To be sure, “[a] response to a petition” to
confirm an award “may request the court to . . . vacate the award”
(§ 1285.2), but a response containing such a request is only timely
if it is “served and filed not later than 100 days” after the
responding party was served with a signed copy of the award
(§ 1288.2). (Accord, Eternity Investments, Inc. v. Brown (2007)
151 Cal.App.4th 739, 745 [“‘If [the party who lost in the
arbitration does] not serve and file a petition to vacate or a
response to [a] petition to confirm within the 100-day period from
the date of service of the award . . . , the award must be treated
as final’” (italics added)], quoting Klubnikin v. California Fair
Plan Assn. (1978) 84 Cal.App.3d 393, 398.) If the rule were
otherwise, a party who missed the initial 100-day deadline would
be able to resurrect any otherwise time barred challenge by filing
a timely response to a petition to confirm. Because a party has
four years to file a petition to confirm an arbitration award
(§ 1288), accepting Douglass’s argument would effectively turn
the statute’s 100-day deadline into a 1,560-day deadline (that is,
four years plus 100 days). As our Supreme Court has said time
and again, “[i]t is not for us to rewrite . . . statute[s].” (J.M.
v. Huntington Beach Union High School Dist. (2017) 2 Cal.5th
648, 657, fn. 7.)
Lastly, Douglass argues that he is challenging the
arbitrator’s jurisdiction and such a jurisdictional challenge may
be raised at any time, including for the first time on appeal. For
support, he—like the trial court—cites the following language
from National Union: “Subject matter jurisdiction, in this case
meaning the arbitrators’ authority or power to adjudicate a
certain type of fee dispute, cannot be conferred by consent,
waiver, or estoppel.” (National Union, supra, 235 Cal.App.3d
at pp. 1723-1724.)
Of course, parties may not confer subject matter
jurisdiction upon a court by consent, waiver, or estoppel because
our jurisdiction is defined by our Constitution or our Legislature,
not by litigants. (People v. Chadd (1981) 28 Cal.3d 739, 757 [“‘the
power of the courts to proceed’—i.e., their jurisdiction over the
subject matter—cannot be conferred by the mere act of a litigant,
whether it amounts to consent, waiver, or estoppel”]; People
v. Tindall (2000) 24 Cal.4th 767, 776, fn. 6 [same].) By contrast,
and as discussed more fully below, the subject matter jurisdiction
of an arbitrator is purely a product of contract (First Options of
Chicago, Inc. v. Kaplan (1995) 514 U.S. 938, 943 (First Options)
[“arbitration is simply a matter of contract”]), which by definition
turns on the parties’ mutual consent (Moncharsh v. Heily & Blase
(1992) 3 Cal.4th 1, 8 (Moncharsh)). To say that an arbitrator’s
subject matter jurisdiction “cannot be conferred by consent” is
accordingly incorrect. (Accord, Hydrothermal Energy Corp.
v. Fort Bidwell Indian Community Council (1985) 170 Cal.App.3d
489, 497 [“‘unlike a court of law, an arbitrator may herein decide
any issue which the parties willingly present to it’”].) National
Union’s language makes sense when it is read in context, as
National Union was addressing the scope of an arbitrator’s
jurisdiction fixed by a statute (there, Business and Professions
Code section 6200 et seq.) (National Union, supra, 235
Cal.App.3d at p. 1722); but to the extent that language is read
out of context to say that an arbitrator’s subject matter
jurisdiction cannot be enlarged by consent when that jurisdiction
is solely a matter of contract, we disagree with National Union.
For these reasons, Douglass’s petition to vacate was
II. Propriety of Order Confirming Arbitration Award
Douglass’s challenge to the trial court’s order confirming
the arbitration award entails three analytically distinct
questions: (1) did the parties consent to have the arbitrator
decide whether the Master Agreement’s arbitration clause
applies to Serenivision’s demand?; (2) if so, did the arbitrator
decide that question correctly?; and (3) if so, did the arbitrator
exceed his powers in ultimately concluding that Douglass owed
Serenivision more than $1.7 million? We will address each issue
separately. In so doing, we review the trial court’s order de novo
and its factual findings for substantial evidence. (ECC Capital
Corp. v. Manatt, Phelps & Phillips, LLP (2017) 9 Cal.App.5th
885, 900.)
A. Was the Arbitrator the Proper Person to Decide
Whether the Arbitration Clause Applies to This Dispute?
Arbitration “is . . . a matter of contract between the parties”
(First Options, supra, 514 U.S. at p. 943), and, as such, whether
particular disputes are subject to arbitration “‘is strictly “a
matter of [the parties’] consent”’” (Sandquist, supra, 1 Cal.5th at
p. 252, quoting Granite Rock Co. v. Teamsters (2010) 561 U.S.
287, 299). (Accord, Moncharsh, supra, 3 Cal.4th at p. 8 [“In cases
involving private arbitration, ‘[t]he scope of arbitration is . . . a
matter of agreement between the parties’”], quoting Ericksen,
Arbuthnot, McCarthy, Kearney & Walsh, Inc. v. 100 Oak Street
(1983) 35 Cal.3d 312, 323.) The default presumption—and it is a
“strong” one—is that “‘the parties intend courts, not arbitrators,
to decide . . . disputes about “arbitrability,”’ e.g., whether there is
an enforceable arbitration agreement or whether it applies to the
dispute at hand.” (Sandquist, at pp. 251-252, quoting BG Group
PLC v. Republic of Argentina (2014) 572 U.S. ___, ___ [188
L.Ed.2d 220, 228, 134 S.Ct. 1198, 1206]; Howsam, supra, 537
U.S. at p. 84.) However, the parties are free to designate the
arbitrator as the one to decide whether a particular dispute is
subject to arbitration (Dream Theater, Inc. v. Dream Theater
(2004) 124 Cal.App.4th 547, 551-552; Fidelity & Cas. Co. v.
Dennis (1964) 229 Cal.App.2d 541, 543 (Dennis)), although they
must do so “clearly and unmistakably” if they wish to rebut the
default presumption to the contrary (Howsam, at pp. 83-84; First
Options, at p. 944).
“When deciding whether the parties agreed to arbitrate a
certain matter (including arbitrability [itself]), courts
generally . . . should apply ordinary state-law principles that
govern the formation of contracts.” (First Options, supra,
514 U.S. at p. 944.) Under California’s law of contracts, a
contract may be express (that is, either written or oral) or implied
in fact (that is, one whose “existence and terms . . . are
manifested by conduct”). (Civ. Code, §§ 1619-1621; Retired
Employees Assn. of Orange County, Inc. v. County of Orange
(2011) 52 Cal.4th 1171, 1178.)
Applying these principles, parties may expressly agree to
arbitrate: (1) in a contract signed before an dispute arises,
although they always retain the power to mutually broaden or
narrow the scope of their earlier agreement (Greenspan v. LADT,
LLC (2010) 185 Cal.App.4th 1413, 1437 [“A submission
agreement may restrict or broaden the issues contemplated by
the arbitration clause”]; O’Malley v. Petroleum Maintenance Co.
(1957) 48 Cal.2d 107, 110 (O’Malley) [“‘The powers of an
arbitrator are limited and circumscribed by the agreement or
stipulation of submission’”]; Advanced Micro Devices, Inc. v. Intel
Corp. (1994) 9 Cal.4th 362, 382 [“the arbitrator’s powers may be
restricted by the limitation of issues submitted”]); or (2) in a
binding stipulation to arbitrate entered into after a dispute has
arisen (Caro v. Smith (1997) 59 Cal.App.4th 725, 729 (Caro)
[parties “stipulate[d] to binding arbitration”]; Hall v. Superior
Court (1993) 18 Cal.App.4th 427, 431 & fn. 1).
Alternatively, and most pertinent here, parties may enter
into an implied in fact agreement to arbitrate through their
conduct (which may additionally be deemed to estop them from
denying such an agreement). (See Cabrera v. Plager (1987)
195 Cal.App.3d 606, 613, fn. 8 [“appearance at the arbitration
hearing and participation therein without raising any objection to
the jurisdiction of the arbitrator estops them from challenging it
afterwards”].) On the one hand, consent to arbitration (or to the
arbitrator’s power to decide arbitrability) will not be inferred
solely from a party’s conduct of appearing in the arbitral forum to
object to the arbitrator’s exercise of jurisdiction, at least if the
party makes that objection “prior to participat[ing]” in the
arbitration. (International Film Investors v. Arbitration Tribunal
of Directors Guild (1984) 152 Cal.App.3d 699, 706 (International
Film)); First Options, supra, 514 U.S. at p. 946 [written objection;
no consent]; Keller Construction Co. v. Kashani (1990)
220 Cal.App.3d 222, 225, fn. 2 [“merely appear[ing] [to]
articulate[] . . . objection to arbitration”; no consent]; George Day
Const. v. United Broth. of Carpenters (9th Cir. 1984) 722 F.2d
1471, 1475 [if a party “reserve[s] the question of arbitrability for
initial determination in a judicial forum”; no consent].) On the
other hand, consent to arbitration (or to the arbitrator’s power to
decide arbitrability) will be inferred from a party’s conduct of
litigating an issue up to the point of submitting it for decision in
the arbitral forum, at least if the party does so without objection.
(Dennis, supra, 229 Cal.App.2d at p. 544 [party “twice submitted
on [the] merits”]; Badie v. Bank of America (1998) 67 Cal.App.4th
779, 790 [party “participated in the arbitration without
objection”]; George Day Const., at p. 1475 [when “the arbitrability
issue is argued along with the merits, and . . . submitted to the
arbitrator for decision, it becomes readily apparent that the
parties have consented to allow the arbitrator to decide the entire
controversy, including the question of arbitrability”]; Cabrera,
at p. 613, fn. 8.)
Whether a party’s conduct constitutes consent is
necessarily fact specific, and this case presents the question: Has
a party clearly and unequivocally consented to have an arbitrator
decide whether a dispute is subject to arbitration when that
party: (1) files an answer that does not object to the arbitrator’s
power to decide that issue; (2) tells the arbitrator that he is
“voluntarily” “submit[ting]” to the arbitral forum to avoid the
higher cost of litigating issues in federal court; (3) appears, again
without objection, at multiple prehearing conferences; (4)
formally asks the arbitrator to impose a bond on the opposing
party; and (5) only after the arbitrator refuses to require a bond,
and on the eve of the evidentiary hearing, purports to rescind his
voluntary participation on the ground that a bond was a
condition precedent to his participation? We conclude that the
answer is “yes,” and do so for three reasons.
First, Douglass’s conduct establishes, under the above-cited
precedent, his consent to have the arbitrator decide which
disputes are arbitrable. Although Douglass did not litigate in the
arbitral forum to the point of submitting the issue to the
arbitrator, he willingly and without objection participated in the
arbitration proceedings for over 10 months (from April 2014
when he filed his answer to March 2015 when he withdrew from
the arbitration proceedings); he availed himself of the arbitrator’s
authority when he asked the arbitrator to issue an order
requiring Serenivision to post a bond; and he purported to rescind
his voluntarily participation a few weeks before the evidentiary
hearing and only after the arbitrator issued a ruling he did not
like. What is more, Douglass’s participation in the arbitration
was no accident. As he told both the arbitrator and Serenivision,
he was making a conscious and tactical decision to participate in
the arbitration forum because it was cheaper. We also note that
he was seeking to avail himself of the attorney’s fees award only
available in the arbitral forum; indeed, he was seeking a bond
specifically in anticipation of such an award. This extent of
voluntarily participation in an arbitration where one of the
primary issues is whether the dispute was arbitrable, without
any objection or reservation and done for tactical reasons,
constitutes clear and unmistakable evidence of Douglass’s
consent to have the arbitrator decide that issue. (Accord,
International Film, supra, 152 Cal.App.3d at p. 706 [objection
“prior to participation” required].) Because we may infer
Serenivision’s consent to have the arbitrator decide this issue
from the fact that it filed an arbitration demand, there was
mutual consent.
Second, allowing Douglass to back out of the arbitral forum
on the proverbial eve of the evidentiary hearing runs afoul of the
principle that “[a] claimant may not voluntarily submit his claim
to arbitration, await the outcome, and if the decision is
unfavorable, challenge the authority of the arbitrator to act.”
(University of San Francisco Faculty Assn. v. University of San
Francisco (1983) 142 Cal.App.3d 942, 954; see also O’Malley,
supra, 48 Cal.2d at p. 110 [a party “may not agree to arbitrate a
question and then, if the decision goes against it, litigate the
question in another proceeding”].) Such conduct constitutes
“‘gamesmanship’” insofar as it allows a party “‘both to have his
cake and eat it too.’” (Caro, supra, 59 Cal.App.4th at p. 731;
Sy First Family Ltd. Partnership v. Cheung (1999) 70
Cal.App.4th 1334, 1343.) Courts are disinclined, and rightly so,
to reward such “inequitable” conduct. (Caro, at p. 731.)
Third, our conclusion that Douglass’s conduct in this case
qualifies as consent affirms that the test for waiving resolution of
an issue in a judicial forum by conduct fits where it should in the
hierarchy of tests used to evaluate waiver of other fora through
one’s conduct. By their conduct, litigants can waive their right to
litigate in an arbitral forum (Christensen v. Dewor Developments
(1983) 33 Cal.3d 778, 781-782 (Christensen); St. Agnes Medical
Center v. PacifiCare of California (2003) 31 Cal.4th 1187, 1204
(St. Agnes)), and can waive their right to litigate in a particular
judicial forum (by waiving their right to object to personal
jurisdiction) (Air Machine Com SRL v. Superior Court (2010) 186
Cal.App.4th 414, 419 (Air Machine)).
However, the tests for waiver by conduct in these different
contexts vary in their stringency, and do so for policy reasons.
The test for assessing whether a party, through her conduct in
litigating in a judicial forum, has thereby waived her right to
litigate an in arbitral forum is the most stringent, and the
onerousness of this test implements the “‘“strong public policy in
favor of arbitration as a speedy and relatively inexpensive means
of dispute resolution.”’” (St. Agnes, supra, 31 Cal.4th at p. 1204.)
The test for assessing whether a party, through his conduct in
litigating an in arbitral forum, has thereby waived his right to
litigate in a judicial forum is less onerous because the “strong
public policy” favoring arbitration is not militating against a
finding of waiver. And the test for assessing whether a party,
through its conduct in litigating in one judicial forum, has
thereby waived its right to object to that forum on personal
jurisdiction grounds is the least onerous. Indeed, the simple act
of filing an answer constitutes a waiver (Air Machine, supra,
186 Cal.App.4th at pp. 419-420; Goodwine v. Superior Court
(1965) 63 Cal.2d 481, 484; § 1014), undoubtedly because the type
of forum (i.e., judicial) is not changing.
Were we to conclude that Douglass’s conduct did not
constitute a waiver of his right to a judicial forum, we would
effectively make the test for such waivers more stringent than
the test for waiver of the right to an arbitral forum because
Douglass’s conduct, as explained next, constitutes a waiver under
that more stringent test. Although “there is no ‘single test’ for
establishing waiver” of one’s right to arbitrate (Christensen,
supra, 33 Cal.3d at p. 782), relevant factors include whether:
(1) “‘“the party’s actions are inconsistent with the right to
arbitrate” because he “‘“‘substantially invoked’”’” “‘“‘the litigation
machinery’”’” of a court (such as by filing a cross-claim without
asking for a stay or seeking discovery not available in the arbitral
forum), particularly if the parties “‘“‘were well into preparation of
a lawsuit’ before [he] notified the opposing party of an intent to
arbitrate”’”; (2) the party “‘“has unreasonably delayed” in seeking
arbitration’” (that is, whether the party waited until “‘“close to
the trial date”’” to assert his right to arbitrate), especially if that
delay “‘“‘affected, misled, or prejudiced’ the opposing party”’”; and
(3) the party has acted in ‘bad faith’ or with ‘willful misconduct.’”
(St. Agnes, supra, 31 Cal.4th at p. 1196; Christensen, at p. 782.)
Under this precedent, the filing of a lawsuit or the “‘mere
participation in litigation’” is not enough to effect a waiver; some
“‘“judicial litigation of the merits”’” is required. (Christensen,
at pp. 782-783; St. Agnes, at p. 1203.)
Douglass’s conduct constitutes a waiver under this test
because he substantially invoked the machinery of the arbitral
forum in asking the arbitrator for relief, delayed until the eve of
the evidentiary hearing his proclamation that his voluntary
participation was conditional, and purposefully availed himself of
the cheaper arbitral forum until the arbitrator made a ruling he
did not like. Were we nevertheless to conclude that Douglass’s
conduct did not constitute a waiver of his right to a judicial
forum, we would make the test for waiving a judicial forum more
onerous than the test for waiving an arbitral forum, and would
consequently upset the carefully crafted, policy-based hierarchy
for evaluating when one’s conduct waives the right to litigate in a
particular forum.
Douglass offers three arguments in response.
First, he asserts that the never signed the Master
Agreement, that the Master Agreement was never incorporated
by reference into the Insertion Order, and that he never signed
the Insertion Order. Even if we accept these assertions as true,
they are irrelevant to our conclusion that Douglass has, by virtue
of his subsequent conduct before the arbitrator alone, consented
to having the arbitrator decide the issue of arbitrability.
Second, Douglass argues that his consent to having the
arbitrator decide the question of arbitrability was conditioned on
Serenivision posting a bond, and this condition was never met.
To be sure, parties may make their promises conditional on the
occurrence of a condition precedent (Civ. Code, § 1439; Alki
Partners, LP v. DB Fund Services, LLC (2016) 4 Cal.App.5th 574,
592), including their consent to arbitration (Platt Pacific, Inc.
v. Andelson (1993) 6 Cal.4th 307, 313-314 [right to arbitration
may be made conditional on a timely demand]). But here,
Douglass did not inform Serenivision in writing that his
participation was conditional until seven months after
unconditionally answering the arbitration demand, and did not
inform the arbitrator in writing until a few weeks before the
evidentiary hearing. Douglass contests this timeline. Directing
us to his attorney’s later-filed declaration, Douglass says he gave
the arbitrator oral notice at a status conference (held five months
after he unconditionally answered) that his participation was
going to be conditional, but the arbitrator’s contemporaneous
minutes from that conference reflect that Douglass was
“appear[ing] voluntarily and submit[ting] to the jurisdiction of
this Arbitrator”; no conditions or qualifications were reported.
The trial court was well within its rights to reject a self-serving
subsequent declaration in favor of the arbitrator’s
contemporaneous record. If we accept the trial court’s factual
findings (as we must where, as here, they are supported by
substantial evidence), Douglass’s notice of the conditional nature
of his participation did not occur until his conduct had already
established his unconditional consent to have the arbitrator
decide the question of arbitrability. Douglass’s belated attempt
to retroactively impose a condition at that point in time was too
little, too late.
Lastly, Douglass contends that he sufficiently preserved his
objection to the arbitrator’s power to decide the question of
arbitrability because he registered objections to his participation
from the outset. As noted above, a party’s participation in an
arbitral forum does not constitute a waiver if it is preceded by an
objection. (International Film, supra, 152 Cal.App.3d at p. 706);
First Options, supra, 514 U.S. at p. 946.) In this case, however,
there was no timely objection. Douglass raised no objection in his
answer and, months later, reaffirmed he was “appear[ing]
voluntarily and submit[ting] to the jurisdiction of this
Arbitrator.” Although Douglass now takes the position, in the
declarations he and his counsel submit, that he had objected from
the beginning, the trial court had ample basis to find those
declarations not to be credible: Those declarations contradict the
arbitrator’s contemporaneous order indicating Douglass’s
participation was unconditional, and the declarations contain
other statements (such as Douglass’s denial that he ever signed
the Insertion Order and his disclaimer of any relationship to
Vivera) that directly conflict with other contemporaneous
evidence (such as Douglass’s admission, in his answer, that he
signed the Insertion Order on behalf of Vivera). (E.g., People v.
Lenix (2008) 44 Cal.4th 602, 614 [“‘determinations of credibility
and demeanor lie “‘peculiarly within a trial judge’s province’”’”].)
We would make the same credibility call as the trial court.
In sum, the arbitrator had the power to decide whether the
disputes before him were subject to arbitration.
B. Did the Arbitrator Err in Concluding That This
Dispute is Subject to Arbitration?
Where, as here, the parties have agreed to have the
arbitrator decide whether their dispute is subject to arbitration,
“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 the parties have agreed
to arbitrate.” (First Options, supra, 514 U.S. at p. 943, italics
omitted.) As a “general rule,” courts “cannot . . . review[]” “an
arbitrator’s decision . . . for errors of fact or law.” (Moncharsh,
supra, 3 Cal.4th at p. 11; § 1286.2, subd. (a); 9 U.S.C. § 10.) This
“‘extremely narrow’” standard of review means that we must
“accord ‘substantial deference to the arbitrator[’s] own
assessment[] of [his] contractual authority.’” (Ajida Technologies,
Inc. v. Roos Instruments, Inc. (2001) 87 Cal.App.4th 534, 541.)
We conclude that the arbitrator did not exceed his powers
in determining that the arbitration clause in the Master
Agreement reaches this dispute. That clause makes “all disputes
regarding” the Master Agreement subject to “binding
arbitration.” The Master Agreement, including the arbitration
clause, is incorporated by reference into the Insertion Order. One
contract may incorporate the terms of another (Avery v.
Integrated Healthcare Holdings, Inc. (2013) 218 Cal.App.4th 50,
66), and an incorporation is valid as long as “(1) the reference is
clear and unequivocal, (2) the reference is called to the attention
of the other party and he consents thereto, and (3) the terms of
the incorporated document are known or easily available to the
contracting parties” (DVD Copy Control Assn., Inc.
v. Kaleidescape, Inc. (2009) 176 Cal.App.4th 697, 713). Here, the
one-page Insertion Order stated that it was “incorporat[ing]”
“fully” the Master Agreement in a prominent location and font
and provided the exact web address to access the Master
Agreement. Douglass admitted that he signed the Insertion
Order on behalf of Vivera under the word, “Accepted.” Because
this dispute involves the collection of an unpaid balance incurred
pursuant to the Insertion Order, it falls squarely within the
terms of the arbitration clause incorporated into the Insertion
Douglass’s various arguments to the contrary lack merit.
He argued to the arbitrator that he never signed the Master
Agreement (and argued to the trial court that he refused to sign
the Master Agreement), but his signature on the Master
Agreement is unnecessary to incorporate its terms because he
signed and thereby affirmatively “accepted” the terms of the
Insertion Order, which expressly incorporated the Master
Agreement’s provisions. Douglass argued to the trial court that
he never signed the Insertion Order and never received a copy of
the Master Agreement. Of course, the arbitrator could not have
erred in not considering an argument never presented to him.
Moreover, these arguments either directly contradict what
Douglass told the arbitrator (namely, that he did sign the
Insertion Order)3 or directly contradict evidence Serenivision
submitted authenticating the version of the Master Agreement
available at their website at the time the Insertion Order was

3 This admission renders irrelevant Douglass’s challenge to
the admissibility of additional evidence that he was the signatory
to the Insertion Order.
signed. The trial court was well within its province to resolve
these factual disputes in favor of the arbitrator’s decision.
C. Did the Arbitrator Err in Concluding That
Douglass was Liable as a Guarantor for Vivera’s Unpaid
Balance on the Insertion Order?
The only pertinent basis for overturning the arbitrator’s
award in this case is that the arbitrator “exceeded [his] powers.”
(§ 1286.2, subd. (a)(4).) It is well settled, however, that an
arbitrator does “not exceed [his] powers merely by erroneously
deciding a contested issue of law or fact.” (Advanced Micro
Devices, Inc. v. Intel Corp., supra, 9 Cal.4th at p. 366.)
The arbitrator did not commit any errors of law or fact, let
alone exceed his powers. As discussed above, the terms of the
Master Agreement were incorporated into the Insertion Order.
The Master Agreement provides that “[a]ll payments are
personally guaranteed by the individual executing the” Insertion
Order. Because Douglass admitted that he signed the Insertion
Order and thereby accepted its terms, he “executed” that Order
and is contractually bound as a guarantor of Vivera’s outstanding
debt. (See Transdyn/Cresci JV v. City and County of San
Francisco (1999) 72 Cal.App.4th 746, 757-758 [signature and
execution synonymous].) Douglass’s acts, coupled with the
pertinent contractual terms, take him outside of the default rule
that “‘a guarantor who is not a signatory to a contract containing
an arbitration clause is not bound by the arbitration clause.’”
(Grundstad v. Ritt (7th Cir. 1997) 106 F.3d 201, 204.) Douglass
has not challenged the arbitrator’s findings that Vivera is liable
to Serenivision or the arbitrator’s calculation of the amount due.
Consequently, we have no basis to disturb the arbitrator’s order
holding Douglass liable to Serenivision for Vivera’s debt.

Outcome: The judgment is affirmed. Serenivision is entitled to its costs on appeal.

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