Lesley G McCarthy v. Eugene Pallisco

CourtMichigan Court of Appeals
DecidedOctober 6, 2016
Docket327647
StatusUnpublished

This text of Lesley G McCarthy v. Eugene Pallisco (Lesley G McCarthy v. Eugene Pallisco) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lesley G McCarthy v. Eugene Pallisco, (Mich. Ct. App. 2016).

Opinion

STATE OF MICHIGAN

COURT OF APPEALS

LESLEY G. MCCARTHY, formerly known as UNPUBLISHED LESLEY KEITH, October 6, 2016

Plaintiff-Appellee,

v No. 327647 Oakland Circuit Court EUGENE PALLISCO, LC No. 2014-142351-CZ

Defendant-Appellant.

Before: SAAD, P.J., and JANSEN and M. J. KELLY, JJ.

PER CURIAM.

Defendant appeals as of right the trial court order denying his motions to vacate the arbitration awards of two arbitrators, confirming those awards, and entering both awards as judgments. We affirm.

I. FACTUAL BACKGROUND

Plaintiff filed the initial action against defendant in 2009. In February 2010, plaintiff and defendant entered into a Confidential Settlement Agreement and Mutual Release (Agreement) in the underlying lawsuit. The Agreement contained an arbitration provision, which provided that “any dispute or the determination of any breach arising under this Agreement shall be submitted and decided through statutory arbitration under MCL 600.5001 et seq.” The Agreement also provided that “[t]he prevailing party shall be entitled to the recovery of his or her reasonable costs and attorney fees, and the arbitrator’s fees.” Additionally, the parties agreed not to disparage or harass each other. The Agreement appointed Joel Serlin as arbitrator and provided for the appointment of a successor arbitrator if needed:

In the event Serlin is unable or unwilling to continue to serve in his role as arbitrator, the Parties will mutually agree to Serlin’s successor. If the Parties are unable to agree to a successor, then each Party will pick a successor, and the two successors shall mutually pick a third successor who shall then be the sole acting successor arbitrator to Serlin.

Plaintiff filed a claim for arbitration under the Agreement on July 19, 2010. Defendant filed his first arbitration claim on October 29, 2010. Over the next four years, the parties

-1- engaged in what Serlin described as among the most highly contentious proceedings over which he had ever presided. The parties submitted over 100 pleadings, motions, responses, and replies to Serlin, and Serlin issued 28 separate decisions. Serlin noted that matters were complicated by defendant having changed his legal representation five times, and by defendant having filed a lawsuit regarding a matter that was already before the arbitrator, which he then refused to dismiss on the arbitrator’s order.

Defendant filed his first motion to disqualify Serlin on July 10, 2013, which Serlin denied. The two-day arbitration hearing was held on July 22 and July 23, 2013. Serlin issued his decision on November 18, 2013. Serlin concluded that plaintiff did not breach the Agreement and that defendant did not default on his payment obligations under the Agreement, but that defendant “materially breached [the Settlement Agreement] by engaging in a concerted course of vexatious and harassing conduct directed toward Plaintiff.” Serlin also concluded that plaintiff was the prevailing party. Serlin’s award also clearly states that any claims not expressly granted in the award were denied with prejudice. Thus, the award fully resolved all claims that had been submitted to Serlin, except the amount of costs and fees to be awarded to plaintiff. Serlin directed plaintiff to file a claim for her costs and fees within 21 days, which she did on December 16, 2013.

On January 13, 2014, defendant filed objections to Serlin’s award, in which he contended that plaintiff’s request for costs and fees should be denied in its entirety. Serlin concluded that defendant was entitled to a hearing on the reasonableness of the costs and fees plaintiff claimed and granted defendant leave to conduct limited discovery in that regard. On July 21, 2014, defendant filed a second motion to disqualify Serlin. This time, defendant argued that Serlin showed bias by failing to disclose certain relationships with attorneys formerly associated with plaintiff’s counsel, and by not returning certain security documents held in escrow. He further contended that Serlin had been accused of fraud or collusion in a former proceeding, although the United States Court of Appeals for the Sixth Circuit held in favor of Serlin.

On August 21, 2014, Serlin denied defendant’s second motion to disqualify him, but recused himself nonetheless. While Serlin “adamantly denie[d] any bias or impropriety in the[] proceedings and [was] appalled at the deplorable tactics [defendant had] chosen to employ” in this motion, he determined that to continue as arbitrator would “risk the potential appearance that any future decisions adverse to [defendant would be] predicated on emotion and not the facts and law.”

In August 2014, and again in September 2014, plaintiff filed with the court a complaint and motion to confirm the arbitration award as a judgment. Defendant responded by filing a motion for summary disposition, after which plaintiff also sought summary disposition, asking the court to determine the amount of fees and costs to be awarded, and then to confirm Serlin’s award and enter it as a judgment. On December 10, 2014, the trial court denied both motions and postponed a decision on plaintiff’s motion to confirm the arbitration award as a judgment “pending decision by a successor arbitrator after an evidentiary hearing on the outstanding issue—the amount of damages (attorney’s fees, arbitrator fees, and costs) for plaintiff.” The court further ordered that the successor arbitrator set an evidentiary hearing on the outstanding issue by January 16, 2015. The parties appointed attorney Thomas Cranmer as successor arbitrator.

-2- The hearing on costs and fees did not take place by the court’s deadline. The parties reached a stalemate when defendant insisted on arbitrating issues other than the amount of the award, and plaintiff refused to do so. Defendant filed a motion with the trial court on March 4, 2015, to compel arbitration and to modify the court’s December 10, 2014 order. At that time, the arbitration hearing was scheduled for March 17, 2015. In a strongly worded opinion issued on March 16, 2015, without oral argument, the court denied defendant’s motion and ordered the parties to proceed with the previously scheduled March 17, 2015 arbitration hearing. Cranmer promptly reinstated the hearing on costs and fees for March 17, 2015.

Defendant appeared at the designated time and place, but filed a motion with Cranmer for a continuance based on insufficient time to prepare and another motion to set aside Serlin’s decision. Cranmer denied both motions, and the hearing on costs and fees took place that day. During the hearing, defendant argued again that plaintiff was not the prevailing party, and was not entitled to any costs or fees, and, alternatively, that any award should be de minimis because plaintiff’s evidence was unreliable and the amount sought was excessive.

Cranmer independently determined that plaintiff was the prevailing party, as Serlin had expressly held. Additionally, he held that the fees of two of plaintiff’s attorneys were reasonable under the governing caselaw regarding hourly rate and total hours worked. He disallowed all additional hours because most of them were billed by Daniel McCarthy, who had been prohibited by Serlin on June 23, 2011, from working on the case.1 Cranmer awarded plaintiff a total of $229,956.90, which the court then confirmed and entered as a judgment. This appeal followed.2

II. ANALYSIS

A. STANDARD OF REVIEW

“A trial court’s decision to enforce, vacate, or modify an arbitration award is reviewed de novo.” Nordlund & Assoc, Inc v Village of Hesperia, 288 Mich App 222, 226; 792 NW2d 59 (2010).

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Lesley G McCarthy v. Eugene Pallisco, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lesley-g-mccarthy-v-eugene-pallisco-michctapp-2016.