Second District, Division 1 Enforces Procedural Aspects of Nonbinding Mandatory Fee Arbitration and Contractual Arbitration Enforcement Provisions.
In Sands & Associates v. Juknavorian, Case No. B218019 (2d Dist., Div. 1 July 30, 2010) (unpublished), client initiated a nonbinding arbitration against law firm under the Mandatory Fee Arbitration Act after being disgruntled with law firm’s handling of a marital dispute. The arbitration panel awarded law firm about $24,000 in fees. Within 30 days of the award, the client initiated a malpractice action. Law firm demurred to the malpractice action based on it being time barred under the applicable statute of limitations, a determination ultimately affirmed on appeal. Law firm then sought to confirm the arbitration award, a request granted by the trial court.
Client appealed, but was unsuccessful. Why? Two reasons, said the reviewing panel.
First, even though client was entitled to a trial de novo in a nonbinding MFAA proceeding, client committed a fatal mistake by filing a malpractice complaint rather than a complaint framing a dispute over the attorney’s fees being claimed by law firm. This error was not cured by client’s filing of a later complaint—one that was filed after the time period for a de novo trial request.
Second, client failed to file a timely petition or response to vacate or correct the arbitration award, which waived any attack on the actual award. (Eternity Investments, Inc. v. Brown, 151 Cal.App.4th 739, 744-746 (2007).)
Here, two mistakes were costly, sustaining the arbitration award in favor of law firm.