Messy Arbitration Case With Assignment of Rights Means Trouble.
Liner Grode et al. v. Rotondo, Case No. B22106 et al. (2d Dist., Div. 7 Mar. 22, 2012) (unpublished) was an appeal from a messy corporate governance/derivative arbitration in which no one clearly prevailed. However, the arbitrator–because equity can be used–did award fees to a couple of groups of claimants, with one of the claimants–having spent $1 million in the dispute and becoming impecunious–assigned the $285,000 fee award to the servicing law firm.
Then, in a twist of fate, the appeal centered on whether firm was entitled to certain post-arbitration attorney’s fees awarded to it by the trial court. Not really, said the appellate court. Although the entitlement award was appealable, the Trope v. Katz rule rose up and bit the firm–after all, when it filed the petition to confirm the arbitration in its own name, it was acting on its own behalf (assignment or not), which means Trope prevented the firm from getting post-arbitration fees for litigating on its own behalf.
The arbitration is also reported at California Mediation and Arbitration.