Attorney, Who Was Not an “Arbitral Party”, Could Not Take Advantage of Arbitrator’s Findings
Shumake v. Mirisola, Case No. B227383 (2nd Dist. Div. 2 March 5, 2012) (Boren, P.J.) (not certified for publication), is a good reminder of an elementary, but useful point, concerning arbitration. If you want to take advantage of the res judicata effect of an arbitrator’s award, it certainly helps if you are a party to the arbitration. Here, the attorney arguing for res judicata was not a party to the arbitration, nor was there evidence that the actual arbitral parties intended a res judicata effect to the arbitration in any subsequent lawsuit.
The case really is about a fee dispute between the attorney, Shumake, and his client, Mirisola. Mirisola was represented by attorney Treadwell in a contractor’s dispute. Some of the issues were resolved, and Mirisola terminated Treadwell, who moved on with attorney Shumake.
In an arbitration, where he was represented by Shumake, Mirisola obtained a favorable result against the contractor – including attorney’s fees in the amount of $40,125.
But in a subsequent lawsuit between Shumake and his client Mirisola in which the attorney sought to recover fees from Mirisola, the client claimed that he had never seen the cost memorandum that was the basis for the $40,125 award when it was submitted, and besides, it was all wrong. A jury awarded Shumake $29,625 in fees in his action against Mirisola – $10,500 less than he had obtained for Mirisola in the latter’s arbitration with his contractor.
In his appeal, Shumake argued for arbitral finality and the res judicata effect of the arbitrator’s award. No go – because Shumake was not himself a party to the arbitration, and there was no evidence that the parties to the arbitration intended the results to be binding in a subsequent judicial action involving Shumake and Mirisola.
Result: In all respects, the judgment was affirmed, except for a remand to determine litigation costs.
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