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Per A. Maaso, Etc., et al v. Stephen Signer

February 7, 2012


(Los Angeles County Super. Ct. No. NC036290) APPEALS from a judgment of the Superior Court of Los Angeles County. Patrick T. Madden, Judge. Affirmed.

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


Per A. Maaso, by and through his guardian ad litem, George Richard Martin, sued Stephen Signer, M.D., for medical malpractice. The case was ordered to binding contractual arbitration before a panel of three arbitrators. Two of the three arbitrators found that Maaso failed to prove causation, and an arbitration award was issued in favor of Signer. The trial court vacated the award on the ground that it was procured by "undue means," based on ex parte contact between Signer's party arbitrator and the neutral arbitrator while the award was pending, and ordered the case back to arbitration before a different neutral arbitrator. The second arbitration resulted in a monetary award in favor of Maaso. The award exceeded an offer to compromise pursuant to Code of Civil Procedure section 998 (section 998) made by Maaso, and rejected by Signer, prior to the first arbitration.

On appeal, Maaso contends the trial court erred in denying him costs under section 998 and prejudgment interest under Civil Code section 3291 (section 3291) as the prevailing party in the second arbitration. In his cross-appeal, Signer contends the trial court erred in vacating the original arbitration award. We affirm the judgment.


Factual Background

In August 2002, Maaso was admitted to Palomar Medical Center and placed on a Welfare and Institutions Code section 5150 hold with symptoms of dementia, inappropriate behavior and paranoia. He was evaluated by Signer, a psychiatrist, who ordered a number of tests, including one to rule out neurosyphilis. This test was not performed while Maaso remained at Palomar Medical Center before being discharged.

In November 2004 Maaso, by and through his guardian ad litem, filed a medical malpractice action alleging that a neurologist and various Doe defendants had delayed a diagnosis of neurosyphilis, causing Maaso to suffer irreversible brain damage. Signer was later added as a Doe defendant.

Pursuant to a "Physician-Patient Arbitration Agreement" (the agreement), the parties stipulated to submit the medical malpractice action to binding arbitration. The agreement required a panel of three arbitrators. Maaso chose attorney Jeffrey A. Milman as his party arbitrator; Signer chose attorney P. Theodore Hammond as his party arbitrator; and the parties' arbitrators chose Retired Judge Alan Haber as the designated neutral arbitrator.

The agreement provided: "Each party to the arbitration shall pay such party's pro rata share of the expenses and fees of the neutral arbitrator, together with other expenses of the arbitration incurred or approved by the neutral arbitrator, not including counsel fees or witness fees, or other expenses incurred by a party for such party's own benefit."*fn1

The First Arbitration

On January 23, 2008, prior to the first arbitration, Maaso served Signer with a section 998 offer to compromise for $500,000. The offer stated that "[a]cceptance shall be made by signing the attached acceptance and delivering a copy to the office of the neutral arbitrator, Alan Haber, before the commencement of the arbitration." Signer did not accept the offer.

The arbitration was conducted over four days between February 4 and 7, 2008, during which each party's counsel was limited to 30 minutes of argument and Maaso's counsel was not allowed to present rebuttal argument. The three arbitrators held a 45-minute telephone conference on February 28, 2008, during which Haber informed the other panelists that he had decided to deny Signer's motion for non-suit. Haber also stated that he had not made up his mind on the issue of causation, that he would circulate a draft opinion in about a week, and that he would further consider the matter. He did not ask for any further briefing.

About five months before the first arbitration hearing, Maaso's party arbitrator Milman had moved to a new business address. He did not formally notify the parties or panel, but at some point during the four-day arbitration hearing he gave Signer's party arbitrator Hammond his business card with his new address.

On March 3, 2008, Hammond faxed a five-page letter arguing his position on the issue of causation. The letter included a "cc" to Milman, but the copy of the letter was mailed to Milman at his old address, and Milman did not see it until it was forwarded to him on March 17, 2008.

Meanwhile, on March 11, 2008 Haber faxed a signed arbitration award to Milman and Hammond. He concluded that while Signer was negligent, Maaso had failed to meet his burden of proof on causation.

On March 13, 2008, Milman, still unaware of Hammond's letter, faxed a three-page letter to Haber and Hammond, asking Haber to reconsider his decision. The following day the same arbitration award, now also signed by Hammond, was issued as the final binding award. The proof of service reflects that the award was mailed to Milman's old address, but faxed to his correct number. After receiving a copy of Hammond's March 3, 2008 letter on March 17, Milman immediately sent a letter to Hammond and Haber by mail and facsimile. Milman expressed his strong objection that the "letter was sent surreptitiously behind my back without permitting nor even addressing a discussion of the issues!" Hammond responded the next day that Milman's business card never made it into his files.

Signer then filed a petition to confirm the arbitration award, and Maaso a petition to vacate the award. Maaso relied on Code of Civil Procedure section 1286.2, which vests the trial court with the power to vacate an arbitration award that has been procured by corruption, fraud or other undue means. Signer opposed Maaso's petition to vacate.*fn2 The court granted Maaso's petition to vacate the award, finding that Hammond's postarbitration letter to the neutral arbitrator resulted in ex parte contact while the award was pending; that the ex parte contact "could have influenced" the award and that it called into question "the irregularity and integrity of the decision-making process"; and that "undue means were employed that caused the Award to issue." The court ordered a new arbitration hearing before a different neutral arbitrator.*fn3

The Second Arbitration

The party arbitrators chose attorney Darrell A. Forgey to act as the neutral arbitrator for the second arbitration, which took place between February 2 and 5, 2010. On January 15, 2010 Signer served Maaso with a section 998 offer to compromise the action for a dismissal in exchange for a waiver of costs and a waiver of Signer's right to sue for malicious prosecution. Maaso did not accept the offer. During the course of the arbitration proceedings Maaso's counsel advised the panel that Maaso had previously made a section 998 offer that was rejected by Signer, without stating ...

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