SWAB FINANCIAL v. E Trade Securities

I. INTRODUCTION

Defendant, E*Trade Securities, LLC, appeals from an order vacating an arbitration award against plaintiff, SWAB Financial, LLC. The trial court found plaintiff’s rights were substantially prejudiced by the National Association of Securities Dealers arbitrators’ failure to postpone the arbitration hearing upon sufficient cause being shown. We conclude the arbitrators did not abuse their discretion in refusing to continue the arbitration hearing. Accordingly, we reverse the order vacating the arbitration award.

II. BACKGROUND

A. Arbitration Agreement

Defendant is a registered securities broker-dealer and a member of the National Association of Securities Dealers. Plaintiff opened a securities brokerage account with defendant on March 21, 2001. Plaintiff’s brokerage account was governed by a customer agreement. The March 21, 2001 customer agreement provided for arbitration of disputes: “31. a. Arbitration Disclosures. The following is a required disclosure for all brokerage agreements containing a pre-dispute arbitration provision: [ft] (1) Arbitration is final and binding on the parties, [ft] (2) The parties are waiving their right to seek remedies in…

I concur in the result, but write separately to discuss the standards of review to be employed by the trial court and by this court when a party seeks to vacate an arbitration award on the ground that the arbitrators refused to postpone a hearing.

The grounds for vacating an arbitration award are set forth in Code of Civil Procedure section 1286.2, subdivision (a)* 1 (section 1286.2). (See Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1 [ 10 Cal.Rptr.2d 183 , 832 P.2d *1203 899 ] .) 2 If the trial court determines that any of those grounds exists, it “shall vacate the award.” (§ 1286.2, subd. (a).) 3 SWAB Financial, LLC (SWAB), has invoked one of those grounds: “The rights of the party were substantially prejudiced by the refusal of the arbitrators to postpone the hearing upon sufficient cause being shown therefor . . . .” (§ 1286.2, subd. (a)(5).)

SWAB’s grievance that the arbitrators did not allow it to amend its claim is not a ground for vacating an award unless the decision constituted prejudicial misconduct by the arbitrators (§ 1286.2, subd. (a)(3)) or a prejudicial “refusal of the arbitrators to hear evidence material to the controversy or . . , other conduct of the…

Defendant, E Trade Securities, LLC, appeals from an order vacating an arbitration award against plaintiff, SWAB Financial, LLC. The trial court found plaintiff's rights were substantially prejudiced by the National Association of Securities Dealers arbitrators' failure to postpone the arbitration hearing upon sufficient cause being shown. We conclude the arbitrators did not abuse their discretion in refusing to continue the arbitration hearing. Accordingly, we reverse the order vacating the arbitration award.

Defendant is a registered securities broker-dealer and a member of the National Association of Securities Dealers. Plaintiff opened a securities brokerage account with defendant on March 21, 2001. Plaintiffs brokerage account was governed by a customer agreement. The March 21, 2001 customer agreement provided for arbitration of disputes: "31. a. Arbitration Disclosures. The following is a required disclosure for all brokerage agreements containing a pre-dispute arbitration provision: [¶] (1) Arbitration is final and binding on the parties. [¶] (2) The parties are waiving their right to seek remedies in court, including the right to jury trial. [¶] (3)…