ADR Case Updates
Attorney Properly Rejects Mandatory Fee Arbitration Award By Filing Small Claims Court Action, 10/03/2011
A MORE DETAILED SUMMARY OF THE LEAD CASE FOLLOWS:
In Giorgianni v. Crowley (August 4, 2011, Sixth Dist.), 197 Cal. App. 4th 1462, Defendant represented Plaintiff in a family law matter. He billed her over $77,000. She paid over $69,000 and then requested arbitration, claiming Defendant had overcharged her by $40,000. Defendant claimed he was still owed $11,000. The arbitrators awarded Plaintiff $29,714. Later, Defendant filed a small claims court action against Plaintiff seeking an amount "not to exceed $5,000" in unpaid fees and costs. Plaintiff filed a petition in Superior Court to confirm the arbitration award in her favor asserting that more than 30 days had passed since the mailing of the award and no party had filed a timely objection. Defendant argued that he had timely objected by filing the small claims court action. The trial court confirmed the award.
Reversed and remanded. Under the Mandatory Fee Arbitration Act, arbitration of fee disputes is mandatory for attorneys if commenced by a client, and binding if the parties so agree. Likewise, a dissatisfied party must make a timely and unequivocal rejection by filing a de novo request in the pending action, or initiating a new action if none is pending in a court having jurisdiction over the amount in controversy. Here, Defendant claimed an amount "not to exceed $5,000" over which the small claims court had jurisdiction. Thus, under Mandatory Fee Arbitration Act, an attorney properly rejects an arbitration award by filing a request in small claims court for unpaid fees, and the trial court erred in confirming the award.
IN ADDITION, THE FOLLOWING CASES HOLD:
Metis Development LLC v. Bohacek, (September 28, 2011, First Dist., Div. 5), ___ Cal. App. 4th ___, 2011 WL 4471733 (Trial court is obligated to issue statement of decision following order denying petition to compel arbitration of claims);
Burch v. Premier Homes, LLC, (September 28, 2011, Second Dist., Div. 3), ___ Cal. App. 4th ___, 2011 WL 4471805 (Trial court may consider extrinsic evidence of parties' intent to arbitrate based on conclusion that arbitration clause was reasonably susceptible to conflicting interpretations);
Templo Calvario Spanish Assembly of God v. Gardner Construction Corp., (August 16, 2011, Fifth Dist.), 198 Cal. App. 4th 509, (Contract entered into by unlicensed contractor is not automatically void and, therefore, arbitrator may arbitrate dispute);
Kolev v. Euromotors West/The Auto Gallery, ___ F. 3d ___ (Ninth Cir., Sept. 20, 2010), 2011 WL 4359905 (in suit against automobile manufacturer, written warranty provisions that mandate predispute binding arbitration are invalid under Magnuson-Moss Warranty Act);
Maronyan v. Toyota Motor Sales, ___ F. 3d ___ (Ninth Cir., Sept. 20, 2011), 2011 WL 4359907 (Failure to initially resort to California Dispute Settlement Program before filing claim under Magnuson-Moss Warranty Act does not defeat subject matter jurisdiction); and
International Union of Painter and Allied Trades, District 15, Local 159 v. J & R Flooring, Inc., ___ F. 3d ___ (Ninth Cir., Aug. 29, 2011), 2011 WL 3796272 (Union is entitled to arbitration regarding majority status where parties agreed upon such dispute resolution in collective bargaining agreement.
The California opinions are posted at: http://www.courts.ca.gov/opinions.htm.
The Ninth Circuit opinions at: http://www.ca9.uscourts.gov/opinions/.
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