Aguilar v. Lerner

108 Cal. Rptr. 2d 546, 90 Cal. App. 4th 177, 2001 WL 711757
CourtCalifornia Court of Appeal
DecidedOctober 17, 2001
DocketA091884
StatusPublished

This text of 108 Cal. Rptr. 2d 546 (Aguilar v. Lerner) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Aguilar v. Lerner, 108 Cal. Rptr. 2d 546, 90 Cal. App. 4th 177, 2001 WL 711757 (Cal. Ct. App. 2001).

Opinion

108 Cal.Rptr.2d 546 (2001)
90 Cal.App.4th 177

Raul V. AGUILAR, Plaintiff and Appellant,
v.
Esther R. LERNER, Defendant and Respondent.

No. A091884.

Court of Appeal, First District, Division Five.

June 26, 2001.
Review Granted October 17, 2001.

*547 Allen J. Kent, Aguilar & Sebastinelli, for plaintiff and appellant.

Howard R. Melamed, for defendant and respondent.

Certified for Partial Publication[*]

JONES, P.J.

Plaintiff/appellant Raul V. Aguilar appeals a judgment confirming an arbitration award in favor of defendant/respondent Esther R. Lerner. He contends the arbitration clause in their professional legal services contract was statutorily unenforceable; the arbitration was beyond the scope of the contract's arbitration clause; and the award of attorney fees and costs to respondent was improper.

BACKGROUND

On November 30, 1994, appellant and respondent, an attorney, entered into a written fee agreement whereby she would represent him in an action for dissolution of marriage. Paragraph seven of the agreement (hereafter arbitration clause) states:

"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, 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."

In executing the agreement appellant specifically initialed the arbitration clause.

Appellant discharged respondent on April 2, 1996, and on March 17, 1997, brought an action against her for professional negligence. He alleged that her various breaches of duty caused him unnecessary litigation expenses, attorney fees, and support obligations, loss of income, and emotional distress.

Respondent then requested that appellant agree to arbitrate his malpractice action, pursuant to the arbitration clause. She also informed him that she wanted to arbitrate her claim for unpaid attorney fees. When he declined, she petitioned to compel arbitration of both appellant's malpractice claim and her claim for unpaid attorney fees.

In opposition to respondent's petition, appellant declared: Before retaining respondent, he was represented by other counsel in his dissolution action. The "legal malpractice" of his former counsel resulted in potential tax and other liability. Through mediation and arbitration he recovered $90,000 from them. While interviewing respondent as his potential new counsel, he described to her the pain, expense and frustration caused by his previous attorney, and his wish to avoid any further delay or problems in his action. At the end of the interview, respondent *548 produced a retainer agreement and requested him to execute it. Although appellant is also an attorney, he practices in the corporate field of insurance regulations and has no experience in family law. He did not read the retainer agreement before executing and initialing it. He and respondent did not negotiate the agreement, which he believed to be a standard form agreement used by family law specialists to secure payment of fees and costs. Respondent did not explain, and he had no idea, that the agreement contemplated arbitration of malpractice claims and waiver of his right to jury trial. Had he suspected that the agreement required arbitration of all disputes, he would not have entered into it. Respondent did not provide him the form Notice of Client's Right to Arbitrate, required by Business and Professions Code section 6201, subdivision (a). Had she done so, he would not have consented to arbitration. He was at all times aware that legal malpractice claims could not be the subject of arbitration under statutorily-required local bar association attorney fee arbitration programs. He was also aware that the San Francisco Bar Association Rules of Procedure for the arbitration of fee disputes precluded arbitration of claims of malpractice and unprofessional conduct.

In response to appellant's opposition and in support of her petition, respondent declared: Appellant was referred to her by his associate. She agreed to his request to meet on short notice. They met on the morning of November 24, 1994. When appellant expressed his wish to retain her during their interview, she gave him her retainer agreement and asked him to review it carefully before signing, as is her custom and practice with potential clients. It is also her practice to encourage potential clients to take the retainer with them before signing so they may review it carefully on their own. Appellant did not sign the agreement in her presence but took it with him. He returned the executed agreement to her by FAX and first class mail on November 30. His letter contained the required $5,000 retainer check. He never objected to the arbitration clause while she represented him.

The court granted respondent's petition to compel arbitration of appellant's legal malpractice complaint and her unpaid fees pursuant to the arbitration clause. It specified the arbitration was to be binding.

Following a three-day arbitration, the solo arbitrator denied any relief to appellant and awarded respondent $32,709.64 on her claim of unpaid fees under the retainer agreement. Finding respondent to be the prevailing party, he awarded her attorney fees and costs of $30,652.75 incurred by arbitration.

Appellant petitioned to vacate the arbitration award and set the matter for trial on the grounds the arbitrator exceeded his powers by conducting a binding attorney-client fee arbitration that violated the mandatory fee arbitration statutes (Bus. & Prof.Code, § 6200 et seq., hereafter the MFA) and awarding her costs incurred in a judicial proceeding.

Respondent simultaneously opposed appellant's petition to vacate the award and moved for confirmation of the award. The court denied appellant's petition. It entered judgment confirming the arbitration award and awarding respondent's request for prejudgment interest on the award and attorney fees to confirm the arbitration award, for a total judgment of $70,986.29.

DISCUSSION

Appellant's primary contention is that the arbitration award must be vacated because the arbitration clause of the retainer *549 agreement violates the MFA and was therefore unenforceable.

I. Standard of Review

Because of the strong public policy favoring arbitration as a speedy and relatively inexpensive method of dispute resolution, judicial review of arbitration awards is restricted to the grounds for vacation or correction enumerated in Code of Civil Procedure sections 1286.2 and 1286.6. (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 11, 27-28, 10 Cal. Rptr.2d 183, 832 P.2d 899 (Moncharsh).) An enumerated ground for vacation occurs when a court determines that the "arbitrators exceeded their powers and the award cannot be corrected without affecting the merits of the decision upon the controversy submitted." (Code Civ. Proc., § 1286.2, subd. (d).)

Moncharsh recognized that "there may be some limited and exceptional circumstances justifying judicial review of an arbitrator's decision when a party claims illegality affects ... a portion of the underlying contract.

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108 Cal. Rptr. 2d 546, 90 Cal. App. 4th 177, 2001 WL 711757, Counsel Stack Legal Research, https://law.counselstack.com/opinion/aguilar-v-lerner-calctapp-2001.