Appeal Sanctions Was Not Imposed For Frivolous Appeal Because Respondent’s Request Was Patently Excessive.
Justice Goethals, in Housen v. Ultimate Autoline, Case No. G055878 (4th Dist., Div. 3 June 10, 2019) (unpublished), reminds litigants and practitioners that the merits of arbitrator’s decisions are by and large not reviewable and that the arbitrator has limited powers to revise/correct awards (the latter being known as the “anti-revision rule”). He, on behalf of his panel, did so based on his perception that these principles “may be surprising even to experienced practitioners.”
In this one, the arbitrator basically granted total relief to a car owner in a fraud/Song Beverly Act hybrid action as against the dealer, dealer’s principal, and loan paper holder standing in the shoe of the dealer. (The arbitrator even awarded one component that was wrong, but it was not corrected so the merits could not be reviewed.) To add insult to injury to the defense’s perspective, the arbitrator also awarded $55,764 in fees to plaintiff (the full request). The appellate court confirmed that the merits of the compensatory and fee awards could not be second-guessed.
What is very interesting about this opinion is the discussion on appellate sanctions. Respondent moved for sanctions, seeking $47,795 for fees expended on the frivolous appeal. The 4/3 DCA panel did believe that the appeal was frivolous, but it was taken aback when respondent’s counsel at oral argument indicated he was requesting just over $12,000 in sanctions. Given that the initial request was patently excessive, the appellate court refused to award sanctions of any amount to respondents. (BLOG COMMENT—Key takeaway here is to make sure your sanctions requests are reasonable and documented with precision; don’t make an inflated request and think a “scale back” at oral argument will necessarily save the day. It might, but do not count on it.)