California Mediation and Arbitration

Arbitration/Fees: Attorney Relies On Arbitration Provision To Arbitrate Fee Issue, And Obtains Very Substantial Award

$78,154.49 In Unpaid Fees Plus $126,406.25 In Fees Plus $36,681.57 In Costs Plus $133,362.50 In  Fees From Court For Motion To Compel And Motion To Confirm Award.

        On April 28, 2018, my colleague Mike Hensley posted on Caswell v. Jamgotchian, Case No. B271389 (2d Dist., Div. 3 Apr. 24, 2018) (unpublished) in our California Attorney's Fees blawg.  In this case, an attorney arbitrated a fee dispute with his client, obtained a substantial arbitration award for fees and costs, and the superior court judge then added fees for having to bring a motion to compel arbitration and confirm the award.  Mike cites this case as demonstrating "how fees/costs easily can outstrip base compensatory award."     And the former client is also on the hook for fees on appeal, to be determined by a fee petition before the superior court judge.

Delegation: Petition To SCOTUS Presents Delegation Of Arbitrability Issue

Does Delegation To Arbitrator Of Arbitrability Issue Need To Occur Even If Arbitration Claim Is Wholly Groundless?

     In the April 18, 2018 on-line issue of ScotusBlog, under "Petition of the Day," Aurora Barnes posts:

"Henry Schein Inc. v. Archer and White Sales Inc.

17-1272

Issue: Whether the Federal Arbitration Act permits a court to decline to enforce an agreement delegating questions of arbitrability to an arbitrator if the court concludes the claim of arbitrability is 'wholly groundless.'”

The boundaries of the delegation doctrine are being tested by the case.

Arbitration/Fees: 2/1 DCA Accepts "Incremental Or Successive Award Process" To Allow Party To Obtain Cost Award After Trial Judge Entered Judgment On "Partial Final Award"

Court Of Appeal Couldn't Find Case Or Rule Preventing This Procedure.

        EHM Productions, Inc. v. Starline Tours of Hollywood, Inc., B281595 (2/2  3/28/18) (Chavez, Lui, Ashmann-Gerst), presents a situation that arises from time to time in arbitration:  a prevailing party seeks to recover attorney's fees, costs, or both, after an earlier entry of judgment requiring Starline Tours to defend EHM Productions in a wage and hours case brought by bus drivers.  This is problematic, because of the one judgment rule.   The procedure can be confusing in arbitration, because we are accustomed to following procedures in civil trials to obtain costs and fees. 

         In EHM Productions, Defendant and Appellant Starline Tours challenged the trial court's confirmation of a cost award obtained in arbitration after a so-called "partial final award" on the merits had already been entered as a judgment.   The trial court relied on Hightower v. Superior Court, 86 Cal.App.4th 1415, 1434 (2001) for the proposition that "utilization of a multiple incremental or successive award process may be appropriate." 

        The Court of Appeal, also relying on Hightower, accepted the approach taken by EHM Productions, the prevailing party in arbitration.  The Court of Appeal explained, "Hightower suggests that an incremental award process may be appropriate in situations where not all issues may be resolved at the time of the initial partial final award."  Also, the Court of Appeal could not find a case foreclosing obtaining the costs judgment here.  And the very last footnote in the opinion notes that the arbitrator reserved jurisdiction to enforce appellant's defense obligation going forward, that the arbitrator might enter future substantive and cost awards, and that application of the one judgment rule could prevent confirmation of such awards in the future.

         COMMENT: The Court's aside that it was unable to find a case preventing the approach it took, and that there was no requirement to amend the petition to confirm the substantive award "under the circumstances of this case," should make one cautious about what procedure to follow in the future.  Best to have the parties discuss the matter with the arbitrator, get everyone on the same page, and avoid the pleasure of obtaining a published appellate opinion.