Deadline To Move To Vacate Arbitration Award Is Jurisdictional.
Cover, First Edition of Charles Dickens' Bleak House. 1852-53.
Locked in sororicidal probate litigation over the disposition of mom and dad's estate, Sarah Plott Key prevailed at first, entitling her to one-third of her parents' estate which, at the time "was equivalent to about $20 million." To get to that result, Key borrowed $2.4M from Law Finance Group to pay for the probate action. Key paid back the principal, but refused to pay back the interest, claiming terms of the note violated the California Financing Law.
The loan agreement with LFG required binding arbitration. A panel of three arbitrators awarded LFG $778,351 interest plus $838,864 attorney fees and costs to LFG.
In superior court, Key filed a petition to vacate the award, arguing the arbitrators exceeded their power because they found the loan to be a consumer loan and should have voided the loan in violation of the California Financing Law. For good measure, Key also filed a response to LFG's petition to confirm the award, raising the same arguments as in her petition to vacate. And the superior court agreed with Key, vacating the award. LFG appealed. Law Finance Group, LLC v. Sarah Plott Key, B305790 (2/2 7/30/21) (Lui, Ashmann-Gerst, Hoffstadt).
With a nod to the recently departed Ron Popeil: "But wait, there's more!" The Court of Appeal never reached the substantive issue because it held Key did not timely request the arbitration award be vacated. Here's the timeline:
9/18/19 -- panel of 3 arbitrators issued modified award
10/1/19 -- LFG files petition to confirm award in superior court
1/27/20 -- Key files petition to vacate award in superior court
2/5/20 -- Key files response to LFG's petition to confirm, including her arguments from motion to vacate
The Court of Appeal held Key is SOL because her petition to vacate was filed 130 days after the modified award was issued, missing the 100 day deadline for filing the petition to vacate. Key argued she had ten days to respond to LFG's motion to confirm the award, which was true, and she included her objections to confirming the award in her timely response to the petition, which was also true. But that did not help her in the Court of Appeal, which concluded the dispositive statutory provision was the one governing time to file the petition to vacate the award (100 days), rather than the statutory provision giving her 10 days to respond to the petition to confirm the award. By the time Key filed her petition to confirm, and by the time she filed her response to LFG's petition to confirm, she was beyond the 100-day deadline to petition to vacate.
COMMENT: "Litigation among the sisters continues. . . . " (footnote 1 to the opinion). There is an anti-SLAPP motion filed in a probate proceeding to enforce a no contest clause in the parents' trust, and another currently pending appeal arising from a petition by Key alleging her sister breached fiduciary duties as trustee. It's a shame this roiling family dispute among sisters could not have been successfully mediated.
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