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Herbert Rebmann et al v. Peter Rohde et al

June 28, 2011


Appeal from a judgment of the Superior Court of Orange County, Richard Luesebrink, Judge. (Retired judge of the Orange Super. Ct. assigned by the Chief Justice pursuant to art. VI, § 6 of the Cal. Const.) (Super. Ct. No. 30-2009-00295959)

The opinion of the court was delivered by: Moore, Acting P. J.




Defendant Peter Rohde informed the trial court that if he had "known about his religious affiliation, his cultural affiliation, and the dedication to keeping the memory of the Holocaust alive, I never would have allowed him to be the arbitrator in my case." Rohde submitted declarations stating his own father served in the German army during World War II and his wife's father was in the Schutzstaffel (commonly known as the SS). He claims to have discovered that the arbitrator's parents were German Jewish escapees who lost family and property in the Holocaust by searching on the Internet after he lost the arbitration, a commercial case which has absolutely nothing to do with the Jewish religion or the Holocaust. Rohde and the other appellants now claim the arbitration award should be vacated because the arbitrator did not disclose facts about his religion and family background. Their argument is without merit.

Defendants further argue that the trial court should have permitted them to take the arbitrator's deposition and that a statement of decision regarding the petition to confirm the arbitration award was necessary. Defendants are again wrong, and we affirm.


Rohde is a principal of Science & Ingredients, Inc. (Science Inc.), formerly known as Precious Smart Ingredients, Inc. (Precious Smart), a California corporation. Precious Smart was formed by Rohde for the purpose of creating a new entity called Lipoid USA, LLC (Lipoid) with plaintiff R&R Beteiligungsgellschaft (RRB), a German business entity. RRB is owned by plaintiff Herbert Rebmann.*fn1 Lipoid had a written operating agreement, whereby Rohde and Precious Smart had a 25 percent interest, and Rebmann and RRB owned the remaining 75 percent. The limited liability company was formed to distribute nutritional supplements in North America.

Problems developed and the Rohde parties initiated arbitration proceedings pursuant to the operating agreement.*fn2 They sought to hold the Rebmann parties liable for substantial monetary damages, arguing that the Rebmann parties induced the Rohde parties into the Lipoid joint venture by intentionally or recklessly misrepresenting various material facts.

The arbitration was conducted by the Judicial Arbitration and Mediation Service, Inc. (JAMS). The parties could not agree on an arbitrator, so JAMS selected Stephen E. Haberfeld, a retired federal magistrate judge. JAMS provided a 10-page Arbitrator Disclosure Checklist, covering a lengthy list of items under the Code of Civil Procedure and California Rules of Court Ethics Standards. This document also included Haberfeld's declaration that he had "made a reasonable effort to inform [him]self of any matters that could cause a person aware of the facts to reasonably entertain a doubt that as the proposed arbitrator [he] would be able to be impartial."

JAMS advised the parties of these declarations and stated that the arbitrator had "disclosed all such matters to the parties to the best of his/her knowledge according to statutory and ethical guidelines." JAMS also stated: "Each participant in this arbitration is asked to advise all parties and JAMS of any information that is inconsistent with or not included in the provided disclosure, such as any matters that may affect the arbitrator's ability to be impartial. Please advise [JAMS] . . . if you know of any additional information that should be in the disclosure to all parties. . . . JAMS and the arbitrator will rely upon all parties' disclosure to us of information which is inconsistent with or not included in the disclosure provided."

During a conference call several weeks later, Haberfeld reiterated that he had no specific disclosures to make based on the information the parties provided. The parties and counsel were directed to check their records and recollections to determine "whether any of them knows or has any reason to believe there has been any professional, financial, and/or social relationship between any party, lawyer . . . and/or witness, on the one hand, and the Arbitrator or any member of the Arbitrator's family, on the other hand."

The arbitration then began. According to the arbitration award, the proceedings lasted "more than 33 months," concluding with a seven-day session in January 2009. According to the Rohde parties, the arbitration lasted only those seven days.*fn3

Because the merits of the arbitrator's decisions are not contested here, we do not discuss them in detail. Suffice to say that based on Haberfeld's lengthy decision, the arbitration concerned purely commercial matters. Haberfeld concluded that the Rohde parties had "failed to sustain [their] burden of proof" on any of their claims. He ruled in favor of the Rebmann parties on their counterclaims, but awarded only nominal damages of $1,000. Haberfeld also found that the Rebmann parties were the "prevailing party" under the operating agreement, and thus entitled to contractual attorney fees and costs. After initially releasing these findings in April, further briefing was conducted, and Haberfeld eventually awarded the Rebmann parties $1,136,000 in attorney fees and costs. Haberfeld set forth his ...

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