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Haddad v. Jackson

July 16, 2010


The opinion of the court was delivered by: Oliver W. Wanger United States District Judge


(Doc. 36)


On December 22, 2009, Plaintiff John Haddad ("Plaintiff") filed the instant motion to vacate an arbitration award pursuant to 9 U.S.C. § 10(a)(1)-(4). (Doc. 36).

Defendant Chris Jackson ("Defendant") filed opposition to Plaintiff's motion on February 19, 2010. (Doc. 37). Plaintiff filed a reply to Defendant's opposition on February 26, 2010. (Doc. 49). Plaintiff also filed objections to the declarations filed in support of Defendant's opposition on February 26, 2010. (Docs. 50-57). A hearing on Plaintiff's motion was conducted on June 25, 2010.


On September 24, 2008, Plaintiff and Defendant entered into a stipulated judgment purporting to resolve various disputes between the parties, who were neighbors at all times relevant. (Doc. 35). The judgment enjoins each party from engaging in certain conduct and provides that claims for breach of the agreed judgment are subject to mandatory, binding arbitration. (Doc. 35).

In late September 2008, Plaintiff elected to proceed to arbitration in connection with an alleged violation of the stipulated judgment. (Motion to Vacate at 3). Pursuant to the stipulated judgment, Kenneth Byrum was pre-selected as the arbitrator. (Id.). At the time of the arbitration, Mr. Byrum was of counsel to the law firm of Dowling, Aaron, And Keeler ("the Firm") and shared office space with the Firm in Bakersfield, California. (Id.). Mr. Byrum's mediation and arbitration practice operated independently from the Firm, and the Firm had no role in the arbitration between Plaintiff and Defendant. (Klingenberger Dec. at 3).

Disclosure During First Round of Arbitration Proceedings

Arbitration commenced on June 22, 2009 at the Firm's Bakersfield office. (Id. at 4); (Byrum Dec. at 2). According to Mr. Byrum, at some point during the first round of proceedings, one of the Firm's attorneys, Daniel Klingenberger, informed Mr. Byrum that a Firm employee was involved in a legal dispute with one of the parties to the arbitration. (Byrum Dec. at 2). Mr. Klingenberger states that he told Mr. Byrum about the Firm employee's involvement with one of the parties on or about June 23, 2009, the second day of the first round of arbitration proceedings. (Klingenberger Dec. at 2). Mr. Klingenberger did not tell Mr. Byrum which party was involved in the dispute and did not convey the nature of the dispute. (Byrum Dec. at 2); (Klingenberger Dec. at 2).

Mr. Byrum's declaration does not identify the date on which he first disclosed that a Firm employee was involved in a dispute with one of the parties, but Mr. Byrum's declaration states that after discussing the situation with Klingenberger, he disclosed the contents of the conversation to the parties attorney's "before any further hearing." (Byrum Dec. at 2). Plaintiff's attorney, Richard Middlebrook, declares that during "the initial two days of arbitration," Mr. Byrum disclosed to Mr. Middlebrook and Plaintiff's counsel, H. Ty Kharazi, that a Firm employee was involved in a dispute with the one of the parties to the arbitration. (Middlebrook Dec. at 12).

In support of Plaintiff's motion to vacate the arbitration award, Plaintiff's counsel submitted a declaration under penalty of perjury in which he stated, "I do not recall Mr. Byrum telling me about the conflict until I raised the issue on September 29, 2009." (Kharazi Dec. at 2). However, during oral argument, Mr. Kharazi conceded that he recalled Mr. Byrum discussing the issue during the first round of arbitration proceedings.

The Second Round of Arbitration Proceedings

The second round of arbitration proceedings commenced in September, 2009. On the morning of September 29, 2009, prior to the start of the arbitration hearing scheduled for that day, Plaintiff encountered Angela Stidham at the front door of the Firm's office. Ms. Stidham, a paralegal at the Firm's Bakersfield office since February 2009, was the Firm employee who was involved in a legal dispute with Plaintiff. (Stidham Dec. at 2).*fn1

The dispute between Ms. Stidham and Plaintiff arose on or about February 13, 2009, regarding a lease agreement. (Id.). Ms. Stidham represented herself in litigation with Plaintiff concerning the lease. (Id.). Ms. Stidham states that she spoke briefly about the dispute with Mr. Klingenberger, her supervisor, but did not get into specifics beyond the name of her landlord and location of her the property subject to the dispute. (Id.). Mr. Klingenberger recalled that Ms. Stidham told him that she was having problems with her landlord "several weeks or months before" June 22, 2009. (Klingenberger Dec. at 2). The Firm had no role and provided no advice to Ms. Stidham regarding her dispute with Plaintiff. (Klingenberger Dec. at 2). Mr. Stidham apparently prepared her pleadings in a document template created by the Firm, as a footer contained on the pleading paper contains the Firm's insignia. (Haddad Dec., Ex. H). However, the header at the top of the first page of Ms. Stidham's pleading clearly indicates that Ms. Stidham was representing herself "in pro per." (Id.).

After seeing Ms. Stidham in the Firm's office space, Plaintiff instructed Mr. Kharazi to discuss the potential conflict of interest with Mr. Byrum. (Id. at 5). In a conference with both parties' attorneys on September 29, Mr. Byrum assured Mr. Kharazi that Ms. Stidham' situation would not affect his decision. (Kharazi Dec. at 5). Mr. Byrum states that both Mr. Kharazi and Mr. Middlebrook expressed their confidence that Mr. Byrum could reach a fair decision. (Byrum Dec. at 2). Mr. Middlebrook also declares that after Mr. Byrum discussed Ms. Stidham's situation with the parties' attorneys for a second time, both Mr. Middlebrook and Mr. Kharazi told Mr. Byrum that they had no concern about Mr. Byrum's impartiality. (Middlebrook Dec. at 13). Mr. Kharazi's declaration indicates that he did not raise any conflict of interest concerns after the September 29 discussion about Ms. Stidham's situation.

Alleged Bias During the Proceedings

According to Plaintiff, during the September 29 arbitration hearing, Mr. Byrum told Plaintiff, who is an Arab-American, "you do not look like a sand nigger to me, you look like a sand honkey." (Motion to Vacate at 6). Mr. Byrum's statement was allegedly made in response to an allegation that Defendant had called Plaintiff a "sand nigger" at some point during their dispute. (Id.). Plaintiff further contends that throughout the proceedings, Mr. Byrum unduly restricted Plaintiff's witnesses from testifying and allowed Defendant to intimidate Plaintiff's witnesses. (Motion to Vacate at 5-7). Mr. Byrum denies ever making a racial slur towards Plaintiff or unduly restricting Plaintiff's witnesses. (Byrum Dec. at 2).

The Award

On October 20, 2009, Mr. Byrum issued his arbitration award, finding that Defendant had established that Plaintiff committed 39 violations of the stipulated judgment and imposed a penalty of $5,000 per violation, in accordance with the stipulated judgment. (Motion to Vacate at 7). Mr. Byrum found that Defendant had committed one violation. (Id.). In response to Mr. Byrum's award, Plaintiff wrote Mr. Byrum a letter requesting clarification of the award and requesting a reference in the award to the potential conflict of interest. (Id. at 8). Mr. Byrum denied Plaintiff's request in a written response on October 27, 2009. (Id.). The October 27 letter indicated that Mr. Byrum had disclosed Ms. Stidham's situation during the arbitration proceedings, had not talked to Ms. Stidham about her dispute with Plaintiff until after he entered his award on October 20, 2009, and also indicated that he believed what Ms. Stidham told him. (Id.).

On December 17, 2009, Mr. Byrum entered a final arbitration award which included an award of attorney's fees. (Id. at 9). Plaintiff subsequently filed the instant action seeking to vacate the award.


Federal court review of arbitration awards is extremely limited. A.G. Edwards & Sons, Inc. v. McCollough, 967 F.2d 1401, 1403 (9th Cir. 2007). The Federal Arbitration Act, 9 U.S.C. at § 10, ("FAA") sets forth the grounds upon which a federal court may vacate the decision of an arbitration panel. E.g. Todd Shipyards Corp. v. Cunard Line, Ltd., 943 F.2d 1056, 1060 (9th Cir. 1991). The FAA provides that a district ...

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