Arbitrator Did Exceed Powers in Correcting Awards on a Merits Issue, Especially Where JAMS Rule Did Not Allow For Reconsideration/Revisions of a Final Award.
Cooper v. Lavely & Singer Professional Corp., Case No. B251508 (2d Dist., Div. 4 Sept. 26, 2014) (published) is an important decision on correction and revisions of initial “final” arbitration awards. This one did involve fee recovery, but does have broader implications.
Here, the arbitrator issued an initial “final award” denying a request for fees by a law firm, but then issuing a “revised final award” including a fee award. The aggrieved party argued that the arbitrator exceeded powers by modifying the first “final” award to include fees.
Aggrieved party obtained a reversal on appeal, by which the fees order was ordered to be stricken from the arbitration award.
The appellate court decided the arbitration could not modify the final award once it was published. Any such modification was a “correction on the merits,” something eschewed under CCP § 1284. Otherwise, arbitrators could substitute amendments to final awards to include a new award of fees, something section 1284 does not countenance. Also supporting the result was the fact governing JAMS rules do not allow reconsideration or revision of “final” awards.
BLOG UNDERVIEW—Actually, the form of the arbitration award may make a big difference. This one was “final”; if it had been labeled as “interim,” a different result might have been in the cards.