Breadth Of Fees Clause Sustained The Post-Arbitration Judicial Fees.
In Lonky v. Patel, Case No. B295314 (2d Dist., Div. 2 July 2, 2020) (published), the Second District had to consider two issues: what is an arbitration final “award” for purposes of jurisdictional correction purposes and are post-arbitration judicial proceeding fees to the prevailing party awardable? The answers will follow.
In short, plaintiffs in Phase I won a $558,266 compensatory award, leaving punitive damages and fee/costs issues for a later phase. Then, this interim award was later modified to decrease the compensatory award to $310,838.62. In Phase II, the arbitrator reflected the compensatory damages correction and awarded $1 million in punitive damages, also containing blanks for fees and costs to be determined. Then, the Phase II award was modified upward to $434,158,25. Finally, in Phase III, there was a final award of $434,158.25 in compensatory damages, $1 million in punitive damages, and $791,826.26 in attorney’s fees/costs. The trial court confirmed most of it, but the judge did slash the $434,158.25 compensatory award down to $310,138.62 based on the perception it could not be jurisdictionally corrected. However, it did award $65,197 in post-arbitration judicial proceeding fees based on plaintiffs having prevailed.
On appeal, the 2/2 DCA returned the compensatory award to $434,158.25 and affirmed everything else. It found that “award,” for arbitration correction purposes, needed to be a pragmatic test of whether it resolved every part of the parties’ controversy. When that test was used, the Phase III award was justified in toto. With respect to the post-arbitration judicial proceeding fees, they were allowable. So, that meant plaintiffs could now seek more fees and costs for winning on appeal.