South Bay Radiology Medical Associates v. W. M. Asher, Inc.

WIENER, Acting P. J., Concurring.

I agree we should affirm the judgment confirming the $450,000 arbitration award. Asher does not challenge the economic components of the award—each is admittedly legal; he did not seek to vacate or correct the award at the trial court by filing a timely *1085response under Code of Civil Procedure sections 1285.8 and 1290.6; and he has accepted the money.

The court did not rule on the validity of the covenant and significantly the judgment says nothing about it. The alleged “illegality” of the award is simply nonexistent. In such circumstances, because our review is governed by statute (Code Civ. Proc., §§ 1286.2, 1286.6.) and Asher has failed to assert any of the statutory grounds, we are jurisdictionally required to affirm the judgment.

I assume the majority’s decision to expand our jurisdiction in this case is based on the statements in the arbitrator’s letter explaining his decision.1 Implicitly, the majority treat these statements as a binding part of the arbitration award. By confirming the award, so the theory goes, the superior court has not only validated the amount of the award, it has also affirmed the arbitrator’s conclusion that the covenant is facially valid.

The arbitrator’s written comments, however, are not part of the judgment. They were omitted for good reason. As the arbitrator pointed out, the covenant’s validity, i.e., whether a court would enforce the covenant if Asher decided to compete, would necessarily turn on the facts of that case. In fairness to the parties, a decision on that question should properly rest on the facts and circumstances surrounding the nature of Asher’s competitive efforts properly reviewed in an appeal, if any, from the judgment following a decision in Asher’s pending declaratory relief action.

Arbitration is a process designed to provide for the expeditious resolution of essentially factual disputes. It is well established that an arbitrator may decide legal questions necessary to the resolution of the arbitrable issue and that courts are strictly limited in their ability to review such legal decisions for correctness. (See, e.g., Hirsch v. Ensign (1981) 122 Cal.App.3d 521, 529 [176 Cal.Rptr. 17].) Here, however, the legal issue we are now asked to review was in no sense necessary to the arbitrator’s decision as to the value of the partnership interest. Even if the covenant were invalid, Asher cannot *1086force his former partners to pay him the value of his share of the partnership goodwill. The remedy for an invalid covenant is that Asher would be allowed to compete. The remaining partners might well prefer to face the hypothetical possibility of competition rather than pay Asher the price of a valid covenant. As a result, even assuming the arbitrator intended to decide the issue of the validity of the covenant, it was not a legal predicate in any way necessary to the valuation of Asher’s partnership interest. Under these circumstances, I find no reasons—compelling or otherwise—which would justify our reaching out to decide a legal issue which was not considered by the superior court, included as part of the judgment, or indeed necessary for resolution of the case before the arbitrator.

A petition for a rehearing was denied May 22, 1990, and appellants’ petition for review by the Supreme Court was denied July 10, 1990.

The arbitrator wrote: “With regard to the covenant not to compete, I do not read Business and Professions Code Section 16602 as requiring an express sale of, or payment for good will. I also do not find the covenant not to compete to be so vague as to be unenforceable. Although it is not free from ambiguity, it is clear that its intended purpose was to prohibit Dr. Asher from practicing radiology in the primary service area of South Bay Radiology Medical Associates. The extent to which it may apply to a concrete situation will have to be determined when that situation arises. It is to be hoped that the parties, aware that the clause has its ambiguities, and that at its core is a valid restraint, can resolve without litigation or arbitration whether any activity Dr. Asher may propose is permissible under the clause. In this regard, for example, I do not read the clauses as having been intended to apply to Dr. Asher’s participation as an owner of Mediscan, nor to his investment in the medical office building.”