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Arbitration
Counsel may be sanctioned for failing to have his clients appear at an arbitration hearing and to present evidence.
In
Rietveld vs. Rosebud Storage Partners, L.P. (2004) 121 Cal.App.4th 250, 16 Cal.Rptr.3d 791, plaintiff’s counsel attended a non-binding arbitration hearing without his clients. During the hearing he did not present any evidence in support of his clients’ claim. Thereafter, the defendants filed a request for sanctions based upon the willful failure of plaintiff’s counsel to participate meaningfully in a judicial arbitration. Counsel unsuccessfully argued that judicial arbitrations often proceed in the form of a mediation, and the ability to request a trial de novo essentially renders the arbitration meaningless. The sanction award against plaintiff’s counsel in the amount of $2,380.00 was confirmed.
Arbitration agreement between employer and employee found unenforceable as a matter of law.
In the case of Ferguson v. Countrywide Credit Industries, Inc. (2002) 298 F.3d 778, the Ninth District Court of Appeal found the arbitration provision in an employee's contract under California law to be unenforceable. An arbitration clause is unenforceable under the doctrine of unconsciousability if there is both the procedural and substantive element of unconscionability, though the two elements need not be present in the same degree. For example, the more substantively unconscionable the contract term, the less evidence of procedural unconscionability is required.
Procedurally the arbitration clause here was unconscionable as the employee was in a position of unequal bargaining power and was offered the contract terms on a take it or leave it basis. It was substantively unconscionable as it: (1) compelled arbitration of claims the employee would have but exempted from arbitration almost all claims the employer would bring against the employee, (2) required the employee to share equally in arbitration costs beyond the first day of hearing which would likely bring the cost of arbitration into thousands of dollars for the employee, and (3) the discovery provisions favored the employer as the employee was limited to four depositions of corporate representatives with no similar limitation in favor of the employee.
The adult children of a mentally incompetent patient cannot bind the patient to a written agreement to arbitrate in the absence of a Durable Power of Attorney.
In Pagarigan v. Livvy Care Center, Inc. (2002) 99 Cal.App.4th 298, 120 Cal.Rptr.2d 892, the Second District Court of Appeal affirmed an order denying the petition to compel arbitration filed on behalf of the defendant, convalescent hospital. The adult children of a resident of the convalescent hospital as successors-in-interest of the deceased resident brought a personal injury action against the hospital operators and wrongful death claims in their own right. At the time of admission, the adult daughters of the deceased resident signed arbitration agreements. Their mother was mentally incompetent at the time of admission and had not signed a Durable Power of Attorney. Consequently, it was determined that no valid arbitration contract existed.
Award of attorneys fees pursuant to arbitration clause on contract upheld despite claim that arbitrator exceeded his authority.
In Kahn v. Chetcuti (2002) 101 Cal.App.4th 61, 123 Cal.Rptr.2d 606, an arbitration agreement between the parties stated that should the prevailing party "attempt an arbitration or court action before attempting to mediate, the prevailing party would not entitled to attorneys fees." Just prior to the mediation the prevailing party filed a lawsuit in order to preserve the statute of limitations. The defendant refused an agreement extending the statute of limitations. In affirming the arbitrator's decision the Court of Appeal noted that the merits of a controversy that has been submitted to arbitration are not subject to judicial review. The Appellate Court cannot review the validity of the arbitrator's reasoning, the sufficiency of the evidence supporting the award or any errors of fact or law that may be included in the award. The Court also noted that arbitrators may base their decisions upon broad principles of justice and equity and in so doing may expressly or impliedly reject the claim that a party may successfully have asserted in a judicial action.
The 3O-day time limit to request a trial de novo pursuant
to Rule 1615 of the California Rules of Court begins to run
when actual notice of the award is received, not on the date
that the award was filed.
In interpreting the provisions of Rule 1615 and 1616 of
the California Rules of Court, the court in Domingo v. Los
Angeles, County Metropolitan Transportation Authority (1999)
74 Cal.App.4th 550, 88 Cal.Rptr.2d 224, relied upon the earlier
decision in Oats v. Oats (1983) 148 Cal.App.3d 416, 196 Cal.Rptr.
20, which found that the only sensible way to harmoniously
apply Rules 1615 and 1616 is to start counting the thirty
days when the award is served, not when it is filed. To do
otherwise would violate long-standing notions of due process,
allowing an adverse action to be taken against a party without
notice.
The arbitrator had filed and served his award the same day.
However, due to a typographical error, he mailed defendant's
copy of the award to the wrong address. Defendant's counsel
did not receive the award until the 30th day after it was
filed. Within days, he filed and served his request for trial
de novo, but it was rejected by the clerk as untimely. The
Court of Appeals reversed the trial court's entry of judgment
on the arbitration award as indicated above.
The timely filing of a request for trial de novo operates to
vacate an arbitration award in its entirety, returning the case
to a status as though no arbitration proceedings had occurred,
according to the Second District Court of Appeal in Southern
Pacific Transportation Company v. Mendez Trucking, Inc. (1998)
Cal.App.4th 78 Cal.Rptr.2d 236. In this case, a court-ordered
arbitration resulted in an award for plaintiff and against both
defendants (who had cross-complained against each other). Nonetheless,
plaintiff filed a timely request for trial de novo. Plaintiff
then settled out of the case. At trial, Mendez argued that,
because Southern Pacific had not filed a request for trial de
novo, the arbitration award constituted a final determination
on Southern Pacific's cross-complaint. The trial court agreed,
but the Appellate Court reversed.
The Appellate Court ruled that the request for trial de novo
filed by plaintiff returned the entire case to the calendar
and both defendants were entitled to proceed to trial on their
cross-complaints, even though they filed no requests for trial
de novo.
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