Once Again, Fourth Appellate District Demonstrates That Often There’s More Than One Way To Skin A Cat Where Arbitration Deadlines Are Involved
Cats. 1927. Library of Congress.
On April 4, 2014, we posted about the way a plaintiff found to get around a deadline in arbitration: after the time ran out to modify an arbitration award, the plaintiff was able to amend a judgment to add another party as a “successor corporation.” Butler v. Lyons & Wolivar, Inc., Case No. G04766 (4th Dist. Div. 3 March 3, 2014) (Fybel, Rylaarsdam, Aronson) (unpublished). As our next case also demonstrates, when it is a matter of an arbitration deadline, often, “there’s more than one way to skin a cat.” Horath v. Hess, D063124; D063709 (4th Dist. Div. 1 April 10, 2014) (McDonald, Huffman, McIntyre).
In Case No. D063124, Horath and Hess submitted to “high-low arbitration.” In such arbitration, the parties privately agree, without informing the arbitrator, on a “high-low” range to the arbitration award. In this case, the parties agreed that Plaintiff Horath would accept the award of the arbitrator or $100,000, whichever was less, but in no event less than $44,000. The arbitrator awarded $329,644.61 in damages, and $36,882.61 in costs – far outside the “high-low” range.
Let’s pause for a moment to contemplate the resulting tensions. On the one hand, an award so far outside the “high-low” range might incline a judge to find a way around the stipulation. On the other hand, a deal is a deal. Despite the stipulation, the trial judge confirmed the arbitrator’s award – and the Court of Appeal reversed.
The problem for defendant Hess in the trial court was that he encountered the 100-day deadline to move to vacate or correct an award (Cal. Code of Civ. Proc., sections 1288 and 1288.2), after filing his motion to limit the judgment amount to $100,000: Hess filed his motion more than 100 days after the date of the award. Plaintiff Horath opposed Hess’s motion, arguing that it was a motion to “correct” the award, and as such, was untimely. Agreeing with plaintiff, the trial judge confirmed the award, and denied as untimely a motion to vacate it or correct it to conform with the “high-low stipulation”. Defendant Hess’s motion for reconsideration, brought under section 473, was also denied.
In Case No. D063709, Hess filed a motion for acknowledgment of satisfaction of the judgment, arguing he had paid Horath $100,000 plus costs, and was therefore entitled to a satisfaction pursuant to the terms of the “high-low” stipulation and section 724.050. The trial court also denied this motion.
In the consolidated appeal of the two cases, the Court of Appeal concluded that the trial court erroneously denied the section 724.050 motion for acknowledgment of satisfaction of judgment, because the terms of the stipulation and the intent of the parties to submit to “high-low” arbitration was clear. Furthermore, no term could be implied in the stipulation that the defendant was required to seek enforcement of the “high-low” provision by the arbitrator, who didn’t even know about the stipulation, or that defendant had to move to vacate or correct the award or respond to a petition to confirm the award.
The motion to obtain acknowledgment of the satisfaction provided a clear route for enforcement of the stipulation that did not require vacation or correction of the award. Therefore, the Court of Appeal affirmed the judgment, but reversed the post-judgment order denying Hess’s section 724.050 motion for acknowledgment of satisfaction of judgment.
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