Second District, Division 8 Gives Precedence to Arbitral Finality Principle.
In Commonwealth Land Title Co. v. Trembley, Case No. B218601 (2d Dist., Div. 8 Nov. 8, 2010) (unpublished), a buyer of retail cell phone business recovered a $34,530 damages award from an arbitrator as against a title company for negligence in failing to conduct a judgment lien search relating to persons affiliated with seller of the business. Also, buyer was awarded $ 58,260 in attorney’s fees and $1,888.84 in costs. The trial court did not like the fee award; after all, it was hinged on an escrow agreement fees clause that was very narrow in nature and maybe did not apply excepting in an interpleader situation. Buyer cross-appealed the fee award denial.
The appellate court reversed.
The reason? Arbitral finality. A trial court’s power to vacate an arbitration award is very limited, not even to correct erroneous contractual interpretation or merits rulings. (Gueyffier v. Ann Summers, Ltd., 43 Cal.4th 1179, 1184 (2008); see also Moshonov v. Walsh, 22 Cal.4th 771, 775 (2000); Moore v. First Bank of San Luis Obispo, 22 Cal.4th 782, 784 (2000).) “ … case law establishes contractual misinterpretation is at most the arbitrator’s legal error not subject to judicial review.” (Slip Opn., p. 9.) The arbitrator’s fee award was reinstated.
BLOG UNDERVIEW–If you think the arbitrator made a clearly erroneous or premature prevailing party determination based on a contractual clause that does not apply, ask the arbitrator to correct the award. That is the best point of attack, with co-contributor Mike having beat back a fee award in an arbitration because the arbitrator (correctly) was willing to revisit his interim decision on a prevailing party determination.