No Good Deed Goes Unpunished . . .
Here, the Court of Appeal reverses the order affirming the arbitrator’s award because the arbitrator, distinguished retired judge Eli Chernow, failed to timely disclose that he had attended the memorial service for attorney Steven Knowles, who “was directly implicated in the legal malpractice claim” brought by plaintiff. The late Mr. Knowles had been deposed during the course of the arbitration. Though not named as a party, Mr. Knowles had been the initial lead attorney for plaintiff Evans while Mr. Knowles was an attorney with defendant Trope & Trope. Evans v. Trope & Trope, Case No. B252833 (2/5 Sept. 18, 2013) (Turner, with Mink and Mosk concurring) (unpublished).
The Court of Appeal is at pains to point out that Retired Judge Chernow behaved without a display of bias. For example, ”Judge Chernow issued a patient, dignified and courteous admonition concerning Mr. Trope’s conduct,” sometime after the admittedly thick-skinned plaintiff’s attorney complained, “Mr. Trope called me a ‘lying sack of sh-t.’” The Court also is at pains to state, “We are not finding actual bias existed.” Calling the case a “close one,” the Court nevertheless reverses the order confirming the award in favor of Trope & Trope, concluding “attendance at the celebration would cause a person aware of the facts to reasonably entertain a doubt that the Judge Chernow would be able to be impartial.”
However, the Court also holds the arbitration provision is not unconscionable, despite its requirement that the arbitrator must be a retired LASC judge who sat in the family law department and “who is currently active as a reference judicial officer handling family law matters.” Trope & Trope is the most prominent family law firm in Los Angeles, famous for the high profile cases it has handled over the years.
Connect the dots.
And that’s just what Justice Mosk, concurring, does. He believes “the arbitration clause in this case could have been found unconscionable, depending on the facts.” (my italics). “There could be no reason for such a restrictive clause,” explains Justice Mosk, “other than to insure that the arbitrator might well have some likelihood of being retained by or selected by Trope & Trope in the future.” This “repeat player” situation, in which “the arbitrator is likely to be utilized by one of the parties in the future”, seems calculated to give Trope & Trope an advantage. However, Justice Mosk concedes that in this particular case, there is “no evidence as to the effect of such a clause.” Just based on the record, unconscionability simply hasn’t been established.
COMMENT: Justice Mosk’s concurrence leaves open the door for someone to argue, upon a different record, that a similar clause does lead to a substantively unconscionable unfair advantage.