Party Getting Dismissed Arbitration Proceeding Entitled to Fees.
Lakeside Club Villas, Inc. v. LB Property Mgt., Inc., Case No. B236001 (2d Dist., Div. 5 Oct. 16, 2012) (unpublished) is an interesting case showing how the breadth of a fees clause awarding fees/costs in an arbitration will garner a litigant a fee recovery, even though the arbitration was dismissed and the rule might have been different in the case of dismissed court action (where contractual fees would likely be precluded under Santisas v. Goodin, 17 Cal.4th 599, 617 (1998) [one of our Leading Cases].)
Here, plaintiff HOA sued defendant under various claims arising under a management agreement containing an arbitration clause. Defendant successfully moved to compel arbitration, and plaintiff filed an arbitration demand with JAMS. The parties then settled, and plaintiff dismissed the arbitration–apparently not deciding the fee/costs issue in the settlement. [BLOG POINTER–Resolve the fees/costs issue in this type of settlement agreement.] Then, plaintiff moved to recover fees, seeking $11,680 and obtaining an award of $10,278. Defendant appealed, arguing plaintiff was not a prevailing party in the arbitration.
Defendant was unsuccessful on appeal.
The problem here was that the defense might have won under the Santisas rule. However, the fees clause did allow recovery of costs to the prevailing party in an arbitration. Although the arbitration was not completed, it was commenced with the filing of the arbitration demand such that the ultimate dismissal did not negate the fact that the dispute was submitted to arbitration, meaning that plaintiff won–the fees were awardable as costs pursuant to CCP § 1032.