Sixth District So Rules In Sustaining Fee Award For Some Work By Winning Litigant’s Attorneys Before and After Arbitration Proceeding.
Defendant suffered an adverse arbitration award of $67,089.16 to plaintiff for failing to pay plaintiff his value in a health center pursuant to a second buy-out agreement. The arbitrator awarded arbitration costs/fees, but ordered that the parties bear their own attorney’s fees and other costs. Plaintiff petitioned to confirm the award and requested the superior court to award him attorney’s fees of $50,000. The lower court awarded pre-arbitration fees, mediation fees, and post-arbitration fees totaling $25,477 to plaintiff.
Defendant unsuccessfully appealed both the merits and fee judgments to the Sixth District.
In Baird v. Manayan, Case No. H032241 (6th Dist. Nov. 25, 2008) (unpublished), the Court of Appeal found nothing wrong with the fee award by the superior court. The operating agreement between the parties allowed for the award, and the lower court properly divided the litigation into phases—not awarding fees for the arbitration based on the arbitrator’s denial of fees but allowing recovery for pre-arbitration and post-arbitration enforcement work by plaintiff’s attorneys. “Nothing in the parties’ agreement or the rules governing judicial review of arbitration decisions prevented the trial court from applying paragraph 11.6 [of the parties’ operating agreement] to award [plaintiff] the attorney fees he had incurred for enforcing his right to recover from [defendant].”
Paragraph 11.6, entitled “Attorney Fees,” stated, “In the event that any dispute between the Company and/or the Members should result in litigation or arbitration, the prevailing party in that dispute shall be entitle to recover from the other party all reasonable fees, costs and expenses of enforcing any right of the prevailing party, including without limitation, reasonable attorney fees and expenses.”