Opinion
A139739
02-17-2017
SUSAN CHAN, D.D.S., M.M.SC., Plaintiff and Appellant, v. DELTA DENTAL OF CALIFORNIA, Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (City & County of San Francisco Super. Ct. No. CGC 12-523350)
I. INTRODUCTION
Plaintiff Susan Chan (Dr. Chan) sued Delta Dental of California (Delta) for allegedly breaching a contract under which Dr. Chan provided endodontic services to patients insured by Delta. Dr. Chan successfully thwarted Delta's petition to compel arbitration, and then moved to recover the attorney fees she incurred litigating the arbitration issue. The trial court denied the petition without prejudice to Dr. Chan seeking attorney fees at the conclusion of the case. Dr. Chan appeals from the order denying her attorney fees. We conclude the order is not appealable, and will dismiss her appeal.
II. FACTUAL AND PROCEDURAL BACKGROUND
This is the second appeal in this case. In the first appeal, our colleagues in Division Two of this court affirmed the trial court's order denying Delta's petition to compel arbitration. (Susan Chan, D.D.S. v. Delta Dental of California, (A138402, July 10, 2014) [nonpub. opn.] (Chan I).) The following background is partly derived from the Chan I opinion, though we recite only those facts germane to this appeal.
Dr. Chan is an endodontist with an office in Walnut Creek. In 2005, Dr. Chan and Delta entered into a standard-form contract under which Dr. Chan agreed to accept patients referred to her by Delta in exchange for compensation. In 2006, Delta issued a new form of contract to its dental provider-members. The 2006 contract stated that disputes arising thereunder were subject to arbitration under the rules of the American Arbitration Association (AAA). Dr. Chan adopted the 2006 contract for some locations where she practiced, but never signed an agreement covering her Walnut Creek office.
Starting in 2009, a dispute arose between the parties regarding the referrals Delta was (or was not) making to Dr. Chan. The parties agreed to arbitrate their dispute with the AAA, but Dr. Chan withdrew from arbitration after the arbitrator was disqualified for a conflict of interest.
In August 2012, Dr. Chan sued Delta in San Francisco Superior Court for breach of contract and unfair business practices. Delta responded with a petition to arbitrate the dispute pursuant to the arbitration clause in the 2006 contract. Dr. Chan opposed the petition, arguing that the 2005 contract governed and did not contain an arbitration clause. The trial court denied the petition, finding that " 'there was no signed written agreement to arbitrate (i.e., the 2006 version of the contract).' " The court also found that Delta had " 'not shown that Dr. Chan was estopped [from bringing a court action] by her voluntary participation in arbitration with AAA.' "
Delta appealed the order denying arbitration. While the appeal was pending, Dr. Chan moved to recover the attorney fees she incurred litigating the arbitration petition. Dr. Chan sought attorney fees under two different statutes. First, she argued she was entitled to fees under a private attorney general theory pursuant to Code of Civil Procedure section 1021.5 because she "preserved and enforced the inviolate and constitutionally protected right to a trial by jury." Second, she argued that because the 2006 contract under which Delta sought to compel arbitration contained an attorney fees provision, she was entitled to her fees under Civil Code section 1717.
Civil Code section 1717 provides: "In any action on a contract, where the contract specifically provides that attorney's fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney's fees in addition to other costs." (Civ. Code, § 1717, subd. (a).)
The trial court denied Dr. Chan's petition "without prejudice as premature." The court stated that "[t]he determination of who is the prevailing party must await the conclusion of this action, in which there can be only one prevailing party. See Civ. Code, § 1717, subds. (a), (b)(1) [Citations]. The motion is also denied without prejudice pursuant to [Code of Civil Procedure] section 1021.5." (Capitalization omitted.)
Dr. Chan filed this appeal from the trial court's order denying her petition for attorney fees. While this appeal was pending, Division Two issued the Chan I opinion affirming the trial court's order denying arbitration.
III. DISCUSSION
Dr. Chan asserts the trial court's order denying her motion for attorney fees is appealable as a "special order after final judgment" under Code of Civil Procedure section 1294, subdivision (e). Delta did not address whether the order is appealable in its respondent's brief. Nevertheless, whether the order is appealable "goes to our jurisdiction, [leaving us] dutybound to consider it on our own motion." (Olson v. Cory (1983) 35 Cal.3d 390, 398.)
"A reviewing court has jurisdiction over a direct appeal only when there is (1) an appealable order or (2) an appealable judgment." (Griset v. Fair Political Practices Com. (2001) 25 Cal.4th 688, 696.) Title 9 of the Code of Civil Procedure makes appealable the following: (a) an order dismissing or denying a petition to compel arbitration; (b) an order dismissing a petition to confirm, correct or vacate an award; (c) an order vacating an award unless a rehearing in arbitration is ordered; (d) a judgment entered pursuant to this title; (e) a special order after final judgment. (Code Civ. Proc., § 1294, subds. (a)- (e).) It is the appellant's burden to explain why an order is appealable. (Cal. Rules of Court, rule 8.204(a)(2)(B); Lester v. Lennane (2000) 84 Cal.App.4th 536, 557.)
In claiming the order denying her attorney fees is a "special order after final judgment," under Code of Civil Procedure, section 1294, subdivision (e), Dr. Chan relies on Otay River Constructors v. San Diego Expressway (2008) 158 Cal.App.4th 796 (Otay). In Otay, before any lawsuit was filed on the merits of a contractual dispute, Otay filed a petition to compel contractual arbitration. (Id. at p. 800.) The trial court denied the petition, concluding that the underlying claims arose under another contract that permitted litigation of the claims. (Id. at p. 801.) The trial court then denied Expressway's motion for attorney fees, concluding Expressway was not a prevailing party because the parties contemplated additional litigation. (Ibid.) Expressway appealed.
On appeal, Otay argued the order denying attorney fees was not appealable. (Otay, supra, 158 Cal.App.4th at p. 801.) The appellate court disagreed and determined the order was appealable as a special order after final judgment. It explained that under Code of Civil Procedure section 1294, appealable arbitration orders "require finality," and that the finality requirement "is consistent with the language of section 1294 and the general prohibition of appeals from interlocutory nonfinal judgments in section 904.1, subdivision (a)." (Otay, supra, 158 Cal.App.4th at p. 803.) The court concluded by "explicitly holding that where, as here, the trial court enters an order in an arbitration proceeding resolving the only issue before the court in that proceeding, the order is essentially a judgment and a party can properly appeal from a subsequent order granting or denying a request for an award of attorney fees and costs under subdivision (e) of section 1294." (Otay, supra, 158 Cal.App.4th at p. 805.)
Otay differs from this case in one critical respect. Whereas Otay's petition to compel arbitration was brought as an independent court proceeding, Delta's petition to compel arbitration was brought in the same proceeding as Dr. Chan's complaint (which, as far as we can tell, is still ongoing). As such, the trial court's order denying Delta's petition to compel arbitration did not resolve the "only issue before the court," so the order was not "essentially a judgment." (Otay, supra, 158 Cal.App.4th at p. 805.) It follows that the trial court's subsequent order denying attorney fees could not be appealable as a "special order after final judgment." (Code Civ. Proc., § 1294, subd. (e).)
Alternatively, Dr. Chan contends that the order denying her attorney fees is appealable under the collateral order doctrine. "When a court renders an interlocutory order collateral to the main issue, dispositive of the rights of the parties in relation to the collateral matter, and directing payment of money or performance of an act, direct appeal may be taken. [Citations.]" (In re Marriage of Skelley (1976) 18 Cal.3d 365, 368.) "To qualify as appealable under the collateral order doctrine, the interlocutory order must (1) be a final determination (2) of a collateral matter (3) and direct the payment of money or performance of an act." (Apex LLC v. Korusfood.com (2013) 222 Cal.App.4th 1010, 1016; see Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2016) ¶ 2:77.) The collateral order doctrine is inapplicable here because the order appealed from did not direct the payment of money, but denied the payment of money. (See Sese v. Wells Fargo Bank N.A. (2016) 2 Cal.App.5th 710, 716 [order denying attorney fees not appealable as collateral order because it "does not direct the payment of any money"]; see also Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2016) ¶ 2:78.)
The parties have cited several cases where an appellate court entertained an appeal involving attorney fees for fees incurred in arbitration-related disputes, but the procedural posture of those cases differed from the one presented here. Turner v. Schultz (2009) 175 Cal.App.4th 974, like Otay, involved an appeal from an order awarding attorney fees in a "discrete legal action" in which the plaintiff sought declaratory and injunctive relief to prevent the defendants from proceeding with arbitration. (Id. at pp. 976, 978.) Frog Creek Partners, LLC v. Vance Brown, Inc. (2012) 206 Cal.App.4th 515 (Frog Creek) involved an appeal from an order awarding attorney fees that was issued after the trial court entered judgment on an arbitration award. (Id. at pp. 522-523.) Two other cases-Roberts v. Packard, Packard & Johnson (2013) 217 Cal.App.4th 822 (Roberts), and Acosta v. Kerrigan (2007) 150 Cal.App.4th 1124 (Acosta)—involved orders granting attorney fees that were appealable under the collateral order doctrine. (Roberts, supra, 217 Cal.App.4th at p.830, fn. 4; Acosta, supra, 150 Cal.App.4th at p. 1128, fn. 4.)
The case that comes closest to supporting appealability is Benjamin, Weill & Mazer v. Kors (2011) 195 Cal.App.4th 40 (Kors). Kors involved a fee dispute between a law firm (BWM) and a former client (Kors). (Id. at p. 46.) After Kors refused to pay the full amount billed, BWM sued her for breach of the fee agreement. (Id. at p. 48.) In the same proceeding, Kors filed a petition to compel arbitration under the arbitration clause in the fee agreement, and the trial court granted the petition. (Id. at pp. 48-49.) Kors then moved to recover the attorney fees incurred to enforce the arbitration agreement, but the trial court denied her motion. (Id. at p. 49.) BWM prevailed in the arbitration and petitioned the trial court to confirm the award; Kors moved to vacate the award due to the chief arbitrator's failure to disclose certain matters. (Id. at pp. 49-50.) The trial court granted BWM's motion to confirm the award and denied Kors's motion to vacate it. (Id. at p. 51.) Kors appealed from the order granting BWM's motion and denying hers. (Id. at p. 46.) Kors also appealed from the order denying her attorney fees. (Id. at p. 47.)
The Court of Appeal reversed the trial court's order confirming the arbitration award and directed the trial court to grant Kors's motion to vacate the award. (Id. at p. 80.) As to the order denying Kors's attorney fees, the appellate court did not expressly address whether the order was appealable, but implicitly determined it was by reversing the order and directing the trial court to award Kors her fees incurred in advancing the merits of her arbitration petition. (Ibid.) The court reasoned: "In the present case, . . . the petition to compel arbitration under the parties' agreement was an 'action on the contract' for purposes of Civil Code section 1717. Kors obtained an unqualified victory on the only contract claim at issue in the action—whether to compel arbitration under the fee agreement. Accordingly, Kors was the prevailing party as a matter of law because she defeated the only contract claim before the trial court in that discrete special proceeding." (Id. at p. 77.)
We are not persuaded that Kors supports appealability of the order denying attorney fees in this case for several reasons. First, the court in Kors never addressed whether the order denying attorney fees was appealable. In addition, Kors is procedurally different than this case; Kors appealed the order denying her attorney fees after the trial court confirmed the arbitration award, while Dr. Chan appealed when her case was still pending. Last, Kors has been criticized by other cases for concluding that the petition to compel arbitration was a "discrete special proceeding" even though it was filed in the same proceeding as the underlying dispute. (See Roberts, supra, 217 Cal.App.4th at p. 841 [criticizing Kors because it "did not recognize that a petition to compel arbitration filed in a pending lawsuit is not a 'discrete proceeding' "]; Frog Creek, supra, 206 Cal.App.4th at p. 536 [disagreeing with Kors's that the motion for attorney fees was a discrete proceeding because "Kors's victory on the arbitration petition did not resolve the underlying suit"].) This criticism of Kors further supports our conclusion that the order denying arbitration in this case was not tantamount to final judgment, meaning that the subsequent order denying attorney fees was not an order after a final judgment.
In sum, Dr. Chan has not established that the order denying her attorney fees is appealable.
IV.DISPOSITION
The appeal is dismissed.
/s/_________
REARDON, J. We concur: /s/_________
RUVOLO, P. J. /s/_________
STREETER, J.