Failure To Observe 30-Day Deadline To File Rejection Or Request Trial Tubes Appeal
Rothman v. Deshay, Case No. B245075 (2nd Dist. Div. 4 May 13, 2014) (Epstein, Manella, Edmon) (unpublished) is a Court of Appeal case that has its genesis in mandatory fee arbitration between attorney Rothman and client Deshay. Though unpublished, the case has some worthwhile lessons for clients and attorneys engaged in fee arbitration.
First, the review of a judgment confirming an arbitration award – like the review of arbitration awards in general – will be limited. The award won’t be subject to judicial review except on the grounds set forth in Code of Civ. Proc. sections 1286.2 (to vacate) and 1286.6 (for correction).
Second, even though elective arbitration before the County Bar may seem informal, there is a strict 30-day deadline to challenge the award by filing a rejection and request for trial. Bus. & Prof. Code section 6203(b). Here, the appellant failed to observe the 30-day deadline, and that tanked, tubed, torpedoed, and doomed the appeal.
Third, a party needs to be careful about whom they say they represent in arbitration. Appellant contended that the arbitration award was invalid because it only bound Deshay, and failed to bind other affiliated parties in the dispute. Despite some confusion in the record, however, appellant had written earlier to the arbitrators and the court to clarify he sought arbitration on behalf of all appellants who were affiliated with him. “Under these circumstances, the arbitration award bound appellants referenced in respondent’s underlying complaint, Deshay’s letter to the arbitrators and the court, and the ‘et al’ reference in their request for arbitration.”
Fourth, the opinion discusses whether the trial court erred by denying a motion for leave to file a cross-complaint. Deshay wanted to file a cross-complaint for malpractice. The MFAA prohibits clients from raising malpractice claims during the arbitration, except insofar as the claim bears upon fees. Here, the trial court denied appellant’s motion for leave to file a cross-complaint (i) because it was untimely; and (ii) because the malpractice issues, though they could not have been raised affirmatively as a cross complaint in MFAA arbitration, should have been raised defensively.
Fifth and finally, the case discusses whether the attorney was entitled to recover fees under Trope v. Katz, 11 Cal. 4th 274 (1995) (holding that an attorney who chooses to litigate his own case cannot recover fees under Civ. Code section 1717). Here, attorney Rothman was entitled to recover, because he employed independent contractors. For further discussion of the attorney’s fees aspect of the case, see the May 14, 2014 blawg post on California Attorney’s Fees.