Aguilar v. Lerner

88 P.3d 24, 12 Cal. Rptr. 3d 287, 32 Cal. 4th 974, 2004 Cal. Daily Op. Serv. 3476, 2004 Daily Journal DAR 4897, 2004 Cal. LEXIS 3384
CourtCalifornia Supreme Court
DecidedApril 22, 2004
DocketS099667
StatusPublished
Cited by159 cases

This text of 88 P.3d 24 (Aguilar v. Lerner) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Aguilar v. Lerner, 88 P.3d 24, 12 Cal. Rptr. 3d 287, 32 Cal. 4th 974, 2004 Cal. Daily Op. Serv. 3476, 2004 Daily Journal DAR 4897, 2004 Cal. LEXIS 3384 (Cal. 2004).

Opinions

Opinion

WERDEGAR, J.

When plaintiff Raul V. Aguilar hired defendant Esther R. Lerner to represent him in a marital dissolution matter, he signed a written retainer agreement that included an agreement to arbitrate any dispute “concerning fees ... or any other claim relating to [plaintiff’s] legal matter which arises out of [plaintiff’s] legal representation.” Such an agreement normally would be enforceable under the California Arbitration Act (CAA). (Code Civ. Proc., § 1280 et seq.) A dispute arose, and plaintiff now contends this arbitration agreement is invalid, specifically as to defendant’s claim for attorney fees and costs, and possibly in its entirety, because the agreement contravenes his rights pursuant to the mandatory fee arbitration act set forth in Business and Professions Code section 6200 et seq. (hereafter the MFAA). (All statutory references are to this code unless otherwise stated.) Were the arbitration agreement found to be invalid in its entirety, he claims, he would be entitled to avoid arbitration altogether and litigate in a jury trial both his malpractice claims and defendant’s cross-claim for attorney fees and costs. The Court of Appeal found plaintiff was judicially estopped from raising these arguments; alternatively, defendant claims plaintiff waived them by filing a lawsuit against her for professional malpractice.

We conclude plaintiff is not judicially estopped from attempting to rely on the MFAA to invalidate his arbitration agreement, but that in filing a malpractice suit against defendant he waived all rights he might have asserted under the statutory scheme. In light of plaintiff’s waiver, we have no occasion to address how we might reconcile a client’s rights under the MFAA with a client’s preexisting agreement with counsel to arbitrate under the CAA. Accordingly, we affirm the decision of the Court of Appeal.

[980]*980Facts

Plaintiff Aguilar, himself an attorney, hired defendant Lerner, a family law specialist, to represent him in his marital dissolution. According to plaintiff’s declaration, he explained to Lerner that he desired the matter to be resolved quickly, as he had endured what he believed was unnecessary expense and frustration with his previous attorney. Lerner agreed to represent him and produced a written retainer agreement for his signature. Aguilar declares he signed the agreement and initialed certain paragraphs, including the arbitration provision, without reading them. He declares that he “had no idea the retainer agreement contemplated the arbitration of legal malpractice claims and waiver of [his] right to a jury trial. No one explained to me that it did.” He claims he did not negotiate any of the terms in the retainer agreement. The agreement is dated November 30, 1994.

Lerner declares that after she agreed to represent Aguilar, she gave him her retainer agreement “and asked him to carefully review it before signing [it].” She states it was her “custom and practice to encourage a potential client to carefully review the retainer agreement and ask any questions that they might have before signing. Further, I encourage them to take the retainer agreement with them before signing in order that they can take the time on their own to carefully review the terms of the agreement.” She declares Aguilar did not sign the agreement in her presence but took it with him. He thereafter returned a signed and initialed copy to Lerner by both facsimile and first class mail.

The arbitration agreement is set forth as paragraph 7 in the retainer agreement. It provides: “In the event that there is any disagreement between the CLIENT and ATTORNEY concerning fees, this Agreement or any other claim relating to CLIENT’S legal matter which arises out of CLIENT’S legal representation, CLIENT hereby agrees to submit such dispute to binding arbitration under the rules of the San Francisco Bar Association and the Code of Civil Procedure of the State of California. The prevailing party shall be entitled to reasonable attorney’s fees and costs incurred in enforcing any arbitration award or engaging in any court proceedings.”

A dispute later arose, and Aguilar discharged Lerner. On March 17, 1997, he filed a complaint for damages in San Francisco Superior Court, alleging Lerner had committed professional negligence and a breach of her fiduciary duty to him. In response, Lerner petitioned to compel arbitration of these claims pursuant to Code of Civil Procedure section 1281;1 she also added her [981]*981own claim for unpaid attorney fees and costs. The superior court granted the petition to compel, stating that the results of the arbitration would be binding, and that “[plaintiff’s claim for legal malpractice falls within the scope of [the] arbitration provision [he signed].”

Lemer prevailed in arbitration, the arbitrator granting her judgment against Aguilar on his complaint for damages. On Lemer’s claim for unpaid legal fees and costs, the arbitrator awarded her $32,709.64. On Lemer’s motion for reasonable attorney fees and costs associated with the arbitration hearing, the arbitrator ruled she was entitled to $7,138 in attorney fees pursuant to Code of Civil Procedure section 1033.5, subdivision (a)(10)(A), and $23,514.75 in costs pursuant to Code of Civil Procedure section 1032, subdivision (b).2

The superior court denied Aguilar’s motion to vacate the arbitration award and granted Lemer’s motion to confirm the award. Aguilar appealed; the Court of Appeal affirmed; we granted review.

Discussion

Aguilar contends the parties’ agreement to arbitrate was invalid and unenforceable because it was contrary to the MFAA (§ 6200 et seq.), which makes arbitrating attorney fee disputes wholly voluntary for a client and gives a client who chooses to arbitrate the option of rejecting the arbitrator’s decision and proceeding to trial. Moreover, he contends that although he filed a lawsuit against defendant for professional malpractice, he is entitled to rely on the procedural protections with respect to fee disputes the MFAA provides to consumers of legal services. (See § 6201, subd. (d).) Because plaintiff seeks to invalidate an arbitrator’s award, we must determine, before addressing the merits of his claim, whether his case comes within an exception to the general rale of arbitral finality and limited appellate review.

A. Judicial Review

When parties choose to forgo the traditional court system and arbitrate their claims, it is assumed they wish to have a final and conclusive resolution of their dispute. The Legislature has recognized this underlying assumption of finality and has, by statute, limited the grounds for judicial review of an arbitrator’s award. (Code Civ. Proc, § 1286.2.) Consistent with this legislative intent, we recognized the general mle that “an arbitrator’s decision cannot be reviewed for errors of fact or law.” (Moncharsh v. Heily & [982]*982Blase (1992) 3 Cal.4th 1, 11 [10 Cal.Rptr.2d 183, 832 P.2d 899] (Moncharsh).) We explained that because the Legislature has provided certain statutory grounds to overturn or modify an arbitrator’s decision, courts should not subject such decisions to standard judicial review. (Id. at pp. 26, 27-28.) In addition, however, to the statutory grounds for vacating an arbitrator’s award, we explained in Moncharsh

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88 P.3d 24, 12 Cal. Rptr. 3d 287, 32 Cal. 4th 974, 2004 Cal. Daily Op. Serv. 3476, 2004 Daily Journal DAR 4897, 2004 Cal. LEXIS 3384, Counsel Stack Legal Research, https://law.counselstack.com/opinion/aguilar-v-lerner-cal-2004.