Opinion
B289997
06-16-2020
MICHAEL FLINT, Plaintiff and Appellant, v. PAMELA KOSLYN, Defendant and Respondent.
Jay Smith; Michael Flint, in pro. per., for Plaintiff and Appellant. Law Office of Pamela Koslyn, Pamela Koslyn; Benedon & Serlin, Gerald M. Serlin and Melinda W. Ebelhar for Defendant and Respondent.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Los Angeles County Super. Ct. No. BC567687) APPEAL from a judgment of the Superior Court of Los Angeles County, John P. Doyle, Judge. Affirmed. Jay Smith; Michael Flint, in pro. per., for Plaintiff and Appellant. Law Office of Pamela Koslyn, Pamela Koslyn; Benedon & Serlin, Gerald M. Serlin and Melinda W. Ebelhar for Defendant and Respondent.
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Michael Flint, representing himself, appeals the judgment confirming a $87,136.42 final arbitration award in favor of Pamela Koslyn, contending the arbitrator exceeded her authority in determining Koslyn was the prevailing party and awarding her attorney fees and costs incurred in defending the arbitration. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
1. The Parties' Time-for-space Fee and Subtenancy Agreement
On February 18, 2011 Flint and Koslyn entered into a written office lease/legal representation agreement. Koslyn agreed to sublet an office in Flint's leased suite at the rate of $1,400/month through December 2011. Flint, in turn, agreed to retain Koslyn for certain legal work (not including litigation) and to compensate her at the reduced rate of $100/hour for a maximum of four hours per month to be credited toward Koslyn's rent obligation. Koslyn would, therefore, pay monthly rent of $1,000. Legal work done by Koslyn for Flint that was not used as a credit to her rent obligation would be billed at $160/hour.
The agreement contained an arbitration provision that applied to "any dispute arising out of or related to Attorney's professional services, including without limitation, fee disputes and malpractice claims." The arbitration provision also specified that "[t]he prevailing party in any dispute will be entitled to their attorneys' fees and costs, including attorneys' fees and costs of Attorney's where Attorney represents herself." After acknowledging the Supreme Court's decisions in Trope v. Katz (1995) 11 Cal.4th 274 (Trope) and PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084 regarding nonavailability of fees to self-represented lawyers, Flint expressly agreed by initialing the paragraph that Koslyn could claim attorney fees if she represented herself in any arbitration proceeding.
The full arbitration paragraph provided: "ARBITRATION: In the event of any dispute arising out of or related to Attorney's professional services, including without limitation, fee disputes and malpractice claims, Client and Attorney agree to submit such dispute to binding arbitration by one arbitrator, selected by the American Arbitration Association in Los Angeles, California, in accordance with the Commercial Arbitration Rules of such association, and judgment on any award rendered may be entered in any court with competent jurisdiction. The parties consent to the personal jurisdiction of the Los Angeles County Superior Court, and further agree that service of process on the respective parties hereunder by certified mail, return receipt requested, addressed to the address listed on page one hereof, will be deemed for all purposes personal service under the California Code of Civil Procedure. The arbitrability of any dispute will be determined by the arbitrator. Discovery will be permitted in accordance with the provisions of the California Code of Civil Procedure. The prevailing party in any dispute will be entitled to their attorneys' fees and costs, including attorneys' fees and costs of Attorney's where Attorney represents herself. Attorney and Client both acknowledge the decisions in Trope v. Katz, 11 Cal.4th 271 (1995) and PLCM Group v. Drexler, 22 Cal.4th 1084 (2000), and the statute Civil Code § 1717, and intend that if Attorney prevails in a dispute where Attorney represents herself against Client, then Client will pay attorneys' fees to Attorney. By initialing this paragraph, Client agrees that Attorney may claim fees if Attorney represents herself in any such proceeding, and agrees to these arbitration provisions, including waiver of jury trial."
Flint also acknowledged by signing the agreement that he had been advised to consult independent counsel regarding the agreement "and has sought such counsel or has voluntarily waived such right."
2. Flint's Lawsuit and Koslyn's Arbitration Petition
On December 31, 2014 Flint, represented by counsel, sued Koslyn in Los Angeles Superior Court alleging causes of action for breach of contract, monies due and owing and breach of fiduciary duty. Flint alleged Koslyn owed him approximately $30,000 for rent due through February 28, 2013 under the terms of their agreement. (According to Flint, Koslyn was obligated to pay rent at fair market value after December 31, 2011, which Flint alleged was $2,200/month.) Flint also alleged that in 2012 Koslyn had represented him in a transactional matter in which Jason Dauman was the adverse party and thereafter breached her fiduciary duty to Flint as a former client by representing Dauman in a matter in which Flint was the adverse party.
Koslyn petitioned to compel arbitration of the parties' dispute. The trial court granted the petition.
3. The Arbitration Proceedings
The parties' dispute was arbitrated before Laura J. Snoke of the American Arbitration Association. On October 19, 2017 the arbitrator issued her interim award with findings, concluding Koslyn did not breach the parties' February 18, 2011 agreement, which Snoke found was "an arm's length agreement" signed by Flint and Koslyn. Specifically, the arbitrator found that Koslyn did not owe Flint any additional hours beyond the agreed-upon four hours of time per month and that she owed Flint only $2,000 in past due rent: $1,000 for January 2013 and $1,000 for February 2013. Because $5,000 had previously been assessed against Flint as a discovery sanction and remained unpaid, the arbitrator awarded $3,000 to Koslyn.
The parties' agreement provided that Koslyn would pay Flint $2,800 (two months' unreduced rent) at the outset of the sublease as a security deposit; Flint would pay Koslyn $2,800 as an initial refundable deposit retainer for legal services; and "this retainer fee will be credited to Flint for the 2 months security deposit on Koslyn's office." The arbitrator found no funds were owed by either party pursuant to these provisions.
The arbitrator also found that Koslyn had not committed legal malpractice in her representation of Flint and did not breach her fiduciary duty to Flint by representing Dauman in litigation against Flint subsequent to her representation of Flint. The arbitrator explained, "There was no credible evidence that [Koslyn] obtained any confidential information from [Flint] relevant to the Dauman Litigation."
The arbitrator's final award was issued December 20, 2017. The arbitrator found that Koslyn had prevailed on 75 percent of the claims on the contract and therefore was the prevailing party in the arbitration for purposes of Civil Code section 1717, subdivision (b)(1). Koslyn was awarded $84,702.80 in allowable fees, $4,433.62 in allowable costs, less $2,000 due to Flint, for a total award of $87,136.42.
4. Trial Court Proceedings
Koslyn petitioned to confirm the arbitration award on January 30, 2018. Flint filed his response, captioned a petition to correct the contractual arbitration award, on February 26, 2018, contending the arbitrator had exceeded her authority in awarding attorney fees to Koslyn for representing herself in the arbitration proceeding. Flint also argued the provision in the parties' agreement permitting Koslyn to recover fees for representing herself was unconscionable; the arbitrator failed to apportion attorney fees between Koslyn's defense of the contract causes of action and her defense of the tort (legal malpractice and breach of fiduciary duty) claims, which he asserted could not be recovered pursuant to Civil Code section 1717; and, as the only party who recovered damages for breach of contract, he was the prevailing party as a matter of right under Code of Civil Procedure section 1032, subdivision (a)(4). Koslyn filed an opposition to Flint's petition to correct on February 28, 2018, arguing there was no statutory basis for correcting or overturning the arbitrator's award.
On February 28, 2018 the court found Koslyn's petition met all the requirements of Code of Civil Procedure section 1285.4 and granted her petition to confirm the award. Flint did not attend the hearing. The Judgment Re: Contractual Arbitration Award was entered March 22, 2018. Flint filed a timely notice of appeal.
DISCUSSION
1. Grounds for Vacating an Arbitration Award and Standard of Review
As the Supreme Court and courts of appeal have repeatedly held, when parties agree to private arbitration, the scope of judicial review is strictly limited to give effect to the parties' intent to bypass the judicial system and thereby avoid potential delays at the trial and appellate levels. (E.g., Richey v. AutoNation, Inc. (2015) 60 Cal.4th 909, 916; Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 10; Branches Neighborhood Corp. v. CalAtlantic Group, Inc. (2018) 26 Cal.App.5th 743, 750.) Generally, a court may not review the merits of the controversy between the parties, the validity of the arbitrator's reasoning or the sufficiency of the evidence supporting the arbitration award. (Moncharsh, at p. 10.) "'[I]t is within the power of the arbitrator to make a mistake either legally or factually. When parties opt for the forum of arbitration they agree to be bound by the decision of that forum knowing that arbitrators, like judges, are fallible.'" (Id. at p. 12; accord, Cable Connection, Inc. v. DIRECTV, Inc. (2008) 44 Cal.4th 1334, 1340 ["the California Legislature 'adopt[ed] the position taken in case law . . . that is, "that in the absence of some limiting clause in the arbitration agreement, the merits of the award, either on questions of fact or of law, may not be reviewed except as provided in the statute"'"].)
Judicial review of an arbitration award is limited to "circumstances involving serious problems with the award itself, or with the fairness of the arbitration process." (Moncharsh v. Heily & Blase, supra, 3 Cal.4th at p. 12.) The only grounds on which a court may vacate an award are identified in Code of Civil Procedure section 1286.2, which include, in subdivision (a)(4), the arbitrator exceeded his or her power. (See Richey v. AutoNation, Inc., supra, 60 Cal.4th at p. 916 ["courts are authorized to vacate an award if it was (1) procured by corruption, fraud, or undue means; (2) issued by a corrupt arbitrator; (3) affected by prejudicial misconduct on the part of the arbitrator; or (4) in excess of the arbitrator's powers"]; Cable Connection, Inc. v. DIRECTV, Inc., supra, 44 Cal.4th at p. 1344 [same].) An arbitrator's award generally does not exceed his or her powers "if it bears a rational relationship to the underlying contract as interpreted, expressly or impliedly, by the arbitrator." (Advanced Micro Devices, Inc. v. Intel Corp. (1994) 9 Cal.4th 362, 367.) However, "[a]rbitrators may exceed their powers by issuing an award that violates a party's unwaivable statutory rights or that contravenes an explicit legislative expression of public policy." (Richey, at p. 916.)
Code of Civil Procedure section 1286.2, subdivision (a), provides, "[T]he court shall vacate the award if the court determines any of the following: [¶] (1) The award was procured by corruption, fraud or other undue means. [¶] (2) There was corruption in any of the arbitrators. [¶] (3) The rights of the party were substantially prejudiced by misconduct of a neutral arbitrator. [¶] (4) The arbitrators exceeded their powers and the award cannot be corrected without affecting the merits of the decision upon the controversy submitted. [¶] (5) The rights of the party were substantially prejudiced by the refusal of the arbitrators to postpone the hearing upon sufficient cause being shown therefor or by the refusal of the arbitrators to hear evidence material to the controversy or by other conduct of the arbitrators contrary to the provisions of this title. [¶] (6) An arbitrator making the award either: (A) failed to disclose within the time required for disclosure a ground for disqualification of which the arbitrator was then aware; or (B) was subject to disqualification upon grounds specified in Section 1281.91 but failed upon receipt of timely demand to disqualify himself or herself as required by that provision. However, this subdivision does not apply to arbitration proceedings conducted under a collective bargaining agreement between employers and employees or between their respective representatives."
We review de novo a trial court's order confirming an arbitration award, including a determination whether the arbitrator exceeded his or her powers in granting relief. (Richey v. AutoNation, Inc., supra, 60 Cal.4th at p. 918, fn. 1; Branches Neighborhood Corp. v. CalAtlantic Group, Inc., supra, 26 Cal.App.5th at p. 751.) However, to the extent the superior court's decision to grant the petition to confirm and deny the petition to vacate the award rests on its determination of disputed factual issues, we review the court's orders under the substantial evidence standard. (Branches, at p. 750; Cooper v. Lavely & Singer Professional Corp. (2014) 230 Cal.App.4th 1, 11-12.)
2. The Arbitrator Did Not Exceed Her Powers by Awarding Koslyn Attorney Fees and Costs Incurred in Defending the Arbitration Proceeding
a. An award of attorney fees was authorized by the parties' agreement
The parties' time-for-space fee and subtenancy agreement expressly provided for an award of attorney fees and costs to the party prevailing in any dispute between them, specifically including legal malpractice claims. Unquestionably, therefore, the arbitrator was authorized to enter a fee and cost award and did not exceed her powers in doing so, whether or not her reasoning was faulty. (See Moore v. First Bank of San Louis Obispo (2000) 22 Cal.4th 782, 787 ["[h]aving submitted the fees issue to arbitration, plaintiffs cannot maintain the arbitrators exceeded their powers, within the meaning of [Code of Civil Procedure] section 1286.6, subdivision (b), by deciding it, even if they decided it incorrectly"]; see also Moncharsh v. Heily & Blase, supra, 3 Cal.4th at p. 28 [the question of recovery of attorney fees being one of the issues submitted to the arbitrator for decision, "[t]he arbitrator's resolution of these issues is what the parties bargained for in the arbitration agreement"].)
b. Koslyn did not seek to recover fees for representing herself in the arbitration proceeding
Flint's principal argument on appeal is that the arbitrator's fee award exceeded her powers, notwithstanding the express authorization for such an award in the parties' agreement, because compensating Koslyn for time she spent defending herself in the arbitration proceeding makes the fee provision unconscionable (and, therefore, unenforceable) or contravenes an explicit legislative expression of public policy. As Flint explains, in Trope, supra, 11 Cal.4th at page 277 the Supreme Court held an attorney who chooses to represent himself or herself, and therefore does not pay or become liable to pay for such representation, may not recover "reasonable attorney's fees" under Civil Code section 1717 as compensation for the time and effort expended and the professional business opportunities lost.
Flint does not explain why parties to "an arm's length agreement," as the arbitrator found existed in this case, cannot voluntarily agree to disregard the rule of Trope, as Flint and Koslyn did here. But we need not determine that issue because Flint acknowledges Koslyn was represented by separate counsel for at least portions of the arbitration proceeding, and he points to nothing in the fee award itself or elsewhere in the record on appeal that indicates the award included any payment to Koslyn for her own time. (See Cal. Rules of Court, rule 8.204(a)(1)(C) [requiring parties' briefs to support any statements of fact with references to the record]; Centex Homes v. St. Paul Fire & Marine Ins. Co. (2018) 19 Cal.App.5th 789, 796-797 [reviewing courts may treat argument as forfeited when appellant fails to provide record citations supporting his or her contentions].) To the contrary, in her opposition to Flint's petition to correct the arbitration award, Koslyn stated "[t]he only legal fees [she] sought, and the only invoices attached to Koslyn's Motion for Fees [in the arbitration], were those of [third-party attorneys] Sheller and Swearinger."
As discussed in the final section of this opinion, Flint argues the arbitrator failed to timely disclose a potential conflict of interest arising from the fact that she and Koslyn's defense counsel were at one time employed by the same law firm.
Neither Koslyn's motion for fees in the arbitration nor Flint's opposition to the motion is part of the record on appeal. As appellant, it was Flint's responsibility to provide an adequate record for this court to consider his claims of error. (See Maria P. v. Riles (1987) 43 Cal.3d 1281, 1295.)
c. The arbitrator's determination Koslyn was the prevailing party is not a ground for vacating the award
Code of Civil Procedure section 1032, subdivision (b), provides, "Except as otherwise expressly provided by statute, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding." Section 1032, subdivision (a)(4), defines "prevailing party" to include "the party with a net monetary recovery." Emphasizing that he was awarded $2,000 for unpaid rent for January and February 2013, Flint contends, excluding attorney fees and costs, he was the only party with a "net monetary recovery." Accordingly, he argues, he was entitled as a matter of right to an award of his fees and costs in the arbitration proceedings, and the arbitrator's award to Koslyn must be vacated. Flint's argument fails twice over.
Discovery sanctions are not considered in calculating "net monetary recovery" for purposes of an award of costs under Code of Civil Procedure section 1032. (Foothill Properties v. Lyon/Copley Corona Associates (1996) 46 Cal.App.4th 1542, 1553-1554.)
First, Flint has failed to demonstrate any error in the arbitrator's prevailing party determination. Contrary to Flint's unsupported assumption, an arbitrator is not bound by Code of Civil Procedure section 1032's definition of prevailing party in awarding fees and costs incurred in the arbitration. (Taheri Law Group, A.P.C. v. Sorokurs (2009) 176 Cal.App.4th 956, 963.) A determination of which party prevailed "on a practical level" by evaluating the extent to which Flint and Koslyn realized their litigation objectives (see, e.g., Sharif v. Mehusa, Inc. (2015) 241 Cal.App.4th 185, 192; Zuehlsdorf v. Simi Valley Unified School Dist. (2007) 148 Cal.App.4th 249, 257) compels the conclusion Koslyn was the prevailing party. The arbitrator determined Koslyn did not breach the parties' agreement and did not breach any fiduciary duty owed to Flint or commit legal malpractice during her representation of him. Even with respect to unpaid rent for two months based on an alleged oral agreement, the arbitrator fixed the amount due at a figure less than half that claimed by Flint.
Moreover, as this court explained in Zintel Holdings, LLC v. McLean (2012) 209 Cal.App.4th 431, 438, "'[c]ourts have consistently held the prevailing party for the award of costs under section 1032 is not necessarily the prevailing party for the award of attorney's fees in contract actions under section 1717.'" (See, e.g., Santisas v. Goodin (1998) 17 Cal.4th 599, 608-609; Silver v. Boatwright Home Inspection, Inc. (2002) 97 Cal.App.4th 443, 449-450.)
Second, even if the arbitrator had erred in determining Koslyn was the prevailing party for purposes of fees and costs, the error is not subject to correction by a trial or appellate court. (See Pierotti v. Torian (2000) 81 Cal.App.4th 17, 26 ["[w]ho is the prevailing party is a mixed question of law and fact, and we simply have no power to second-guess the arbitrator's decision on that issue"]; Creative Plastering, Inc. v. Hedley Builders, Inc. (1993) 19 Cal.App.4th 1662, 1666 [the identity of the prevailing party for purposes of an attorney fee award, if within the arbitrator's authority to decide, "cannot exceed his powers within the meaning of section 1286.2, subdivision (d). Even if the decision constituted or was generated by the arbitrator's error of law or fact, it nonetheless binds the parties and is immune from judicial interference"].)
d. The arbitrator did not err by failing to allocate fees between the defense of Flint's contract and tort claims
"'"[P]arties may validly agree that the prevailing party will be awarded attorney fees incurred in any litigation between themselves, whether such litigation sounds in tort or in contract."'" (Mountain Air Enterprises, LLC v. Sundowner Towers, LLC (2017) 3 Cal.5th 744, 751; accord, Santisas v. Goodin (1998) 17 Cal.4th 599, 608 ["[i]f a contractual attorney fee provision is phrased broadly enough, . . . it may support an award of attorney fees to the prevailing party in an action alleging both contract and tort claims"]; see Maynard v. BTI Group, Inc. (2013) 216 Cal.App.4th 984, 991-992 ["[w]hile it is clear that an attorney fee provision may authorize an award of fees only to the party who prevails on a claim to enforce the terms of the contract containing the provision, it is equally clear that an attorney fee provision need not be so limited"].)
Flint and Koslyn agreed to a broad contractual attorney fee provision, one that expressly encompassed the tort claims (legal malpractice and any other dispute relating to Koslyn's professional services) at issue in the arbitration proceedings. (See Exxess Electronixx v. Heger Realty Corp. (1998) 64 Cal.App.4th 698, 708 ["[a]s to tort claims, the question of whether to award attorneys' fees turns on the language of the contractual attorneys' fee provision, i.e., whether the party seeking fees has 'prevailed' within the meaning of the provision and whether the type of claim is within the scope of the provision"]; see also Santisas v. Goodin, supra, 17 Cal.4th at p. 602 ["[w]hether attorney fees incurred in defending tort or other noncontract claims are recoverable after a pretrial dismissal depends upon the terms of the contractual attorney fee provision"].) Accordingly, even if the issue of allocation could be reviewed on appeal from a judgment confirming an arbitration award, a highly doubtful proposition, there simply was no need in this case for the arbitrator to allocate between fees incurred by Koslyn in connection with her defense of Flint's contract claims and those relating to her successful defense of the tort claims he asserted.
3. Flint's Belated Challenge to the Adequacy of the Arbitrator's Possible Conflict Disclosures Has Been Forfeited
In his reply brief Flint contends for the first time the arbitrator did not disclose a previous professional relationship with Koslyn's defense counsel—specifically, the "arbitrator at one time in the past was employed by the same law firm as defense counsel" thereby denying him his right to object to the arbitrator on that ground. Absent any explanation why he could not assert this argument earlier, Flint's failure to include it in his response to the petition to confirm the arbitration award forfeits the issue. (See Findleton v. Coyote Valley Band of Pomo Indians (2018) 27 Cal.App.5th 565, 569 ["[i]t is well established that appellate courts will ordinarily not consider errors that 'could have been but [were] not raised below.' [Citations.] The rule applies to defenses as well as theories of liability"]; In re Marriage of Falcone & Fyke (2008) 164 Cal.App.4th 814, 826 [same].) Similarly, the failure to raise this claim in his opening brief forfeits the issue: "Generally, arguments raised for the first time in a reply brief are forfeited." (Sweetwater Union High School Dist. v. Julian Union Elementary School Dist. (2019) 36 Cal.App.5th 970, 987; accord, Holmes v. Petrovich Development Co., LLC (2011) 191 Cal.App.4th 1047, 1064, fn. 2 ["argument is forfeited" when "it is raised for the first time in [appellant's] reply brief without a showing of good cause"].) "'Obvious reasons of fairness militate against consideration of an issue raised initially in the reply brief of an appellant.'" (In re Marriage of Khera & Sameer (2012) 206 Cal.App.4th 1467, 1477.)
In addition, other than the bare assertion that arbitrator Snoke and Koslyn's defense counsel were employed by the same law firm at some point in the past, Flint provides no citations to the record and supplies no other evidence suggesting the arbitrator failed to disclose within the time required for disclosure "a ground for disqualification of which she was then aware," the statutory basis for vacating a final award pursuant to Code of Civil Procedure section 1286.2, subdivision (a)(6)(A). (See Centex Homes v. St. Paul Fire & Marine Ins. Co., supra, 19 Cal.App.5th at pp. 796-797 [reviewing court may treat argument as forfeited when appellant fails to provide record citations supporting his or her contentions].) Nor does he cite any legal authority in support of his argument. (See Cahill v. San Diego Gas & Electric Co. (2011) 194 Cal.App.4th 939, 956 ["'[t]he absence of cogent legal argument or citation to authority allows this court to treat the contention as waived'"]; accord, Potter v. Alliance United Ins. Co. (2019) 37 Cal.App.5th 894, 911.)
For all these reasons, we decline to consider Flint's belated challenge to the adequacy of arbitrator Snoke's possible conflict disclosures.
DISPOSITION
The judgment is affirmed. Koslyn is to recover her costs on appeal.
PERLUSS, P. J.
We concur:
FEUER, J.
Judge of the Los Angeles County Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.