Losing Party Played It Well All Along the Way.
Looks like the appellate courts have been facing a lot of post-judgment enforcement fee issues lately, as recent posts have demonstrated. Here is another one to add to the list.
Horath v. Hess, Case Nos. D063124/D063709 (4th Dist., Div. 1 Apr. 10, 2014) (published) involved a winning arbitration claimant/plaintiff who sought to enforce a $366,527.22 arbitration award. The problem was that, before the arbitration, both sides had reached a “high/low” arrangement—not to be disclosed to the arbitrator—by which claimant would accept the lower of the arbitration award or $100,000 (but with claimant in any event obtaining not less than $44,000 even if the arbitration award was lower). Claimant agreed to accept the $100,000 (if the award was greater) plus allowable costs in satisfaction of any later confirmed judgment, even a larger judgment amount was confirmed based on the actual arbitration award. Claimant did move to confirm the $366,527.22 award, with respondent/defendant moving to force a judgment satisfaction acknowledgment given he did tender the $100,000 plus costs to claimant. Claimant argued that respondent should have moved to correct or vacate the award, with the lower court apparently agreeing by entering the full award amount, denying the judgment satisfaction motion, and awarding $5,000 in fees against respondent for bringing the satisfaction motion.
On appeal, respondent/defendant got a clean sweep reversal.
The “high/low” stipulation was unambiguous and should have been enforced with no necessity for a motion to correct/vacate the award. In fact, the arrangement benefited everyone: claimant got at least $44,000 in any event; respondent capped his exposure at $100,000 plus costs; and respondent obviously agreed not to contest the judgment by making the $100,000 plus costs tender. This meant the CCP § 724.050 judgment satisfaction acknowledgment motion was the correct way to go. The lower court should have granted it, so it was remanded for reconsideration—meaning it likely will be granted. That also resulted in a reversal of the $5,000 fee award to claimant under the judgment satisfaction acknowledgment fee-shifting provision (CCP § 724.080) as well as a remand to see if respondent was entitled to fees for likely gaining a judgment satisfaction. Reversal of fortune, needless to say.
For more on the arbitration deadline problem in the case, check the April 13, 2014 post on California Mediation and Arbitration.