Fifth District Unpublished Decision Finds that Supreme Court Authority Allows Arbitrator to be the Arbiter of “Prevailing Party” Status for Fee Recovery Purposes.
In Thompson Pacific Construction, Inc. v. Swinerton Builders, Inc., Case No. F053237 (5th Dist. May 20, 2008) (unpublished), the Fifth District Court of Appeal affirmed an arbitrator’s power to find there was no prevailing party either for purposes of recovering attorney’s fees or recovering costs. There, a predominant winning party in the arbitration tried to correct an award by including fees and costs. Both the trial and appellate court rebuffed this attempt. Message: arbitrator decisions on fee awards are generally unassailable where the parties expressly refer the determination to the arbitrator.
The record in this case made it hard to come to a different result. The predominant winning party actually submitted the fee/cost request to the arbitrator, who found that each side was partially successful (predominant winner won $1,494,632.12; losing party won $301,086.53 as an offset but successfully defended on even more substantial delay claims) and also found there was no prevailing party. Predominant winner was miffed, moved to correct the arbitration award, lost before the trial court, and lost before the appellate court.
The appellate court did note that the result was supported by Moshonov v. Walsh, 22 Cal.4th 771 (2000) and Moore v. First Bank of San Luis Obispo, 22 Cal.4th 782 (2000), companion cases holding that even legal errors in interpreting fee clauses—in controversies submitted to arbitrators—cannot be the basis for judicial correction. Thompson Pacific discussed these cases and almost parted company completely with DiMarco v. Chaney, 31 Cal.App.4th 1809 (1995), but chose to distinguish it as did the Supreme Court in Moshonov and Moore. However, this case is must reading, even if unpublished, should a litigant wish to argue that DiMarco is likely no longer the law. (See Slip Opn., at p. 11 [“Although the Supreme Court did not overrule DiMarco, the grounds on which it distinguished it are exceedingly fine points. We believe the effect of Moshonov and Moore is—or nearly is—to confine DiMarco to its facts.”].)