Each Side’s Arbitration Submissions Allowed Arbitrator to Award Fees–Invited Error, Pure and Simple.
Here is an interesting case from our local appellate court affirming a substantial attorney’s fees award, even though based on dubious grounds, because both parties invited consideration of the relief in their own pleadings before the arbitrator.
In Vadim Chudnovsky, M.D. v. Chapman Medical Center, Inc., Case No. G047990 (4th Dist., Div. 3 Dec. 23, 2013) (unpublished), the appellate court faced an interesting case where a plaintiff was awarded Labor Code section 218.5 attorney’s fees of $265,440 by an arbitrator in a dubious fee entitlement situation where the arbitration clause specified that each side would bear their own fees and costs. The defense countered that the arbitrator had no jurisdiction to award fees/costs in light of this contractual clause.
Fee award affirmed, in a 3-0 decision authored by Justice Ikola.
Reason, you ask? Actually, invited error. Even though it was dubious whether plaintiff was an employee entitled to Labor Code statutory fees, the parties invited error because both sides asked for fee recovery in any award in pleading submissions. So, the arbitrator did have jurisdiction over the fee recovery dispute. Practice tip is to beware what you put in general pleadings or prayer demands in arbitration.