Milder v. Holley CA2/5

CourtCalifornia Court of Appeal
DecidedDecember 16, 2021
DocketB299122
StatusUnpublished

This text of Milder v. Holley CA2/5 (Milder v. Holley CA2/5) 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
Milder v. Holley CA2/5, (Cal. Ct. App. 2021).

Opinion

Filed 12/16/21 Milder v. Holley CA2/5 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FIVE

ANDREW MILDER B299122

Plaintiff and Appellant, (Los Angeles County Super. Ct. Nos. v. BS164577, BS165902, and BS167341) SHAWN HOLLEY et al.,

Defendants and Respondents.

APPEAL from a judgment of the Superior Court of Los Angeles County, Susan Bryant-Deason, Judge. Affirmed in part, reversed in part, and remanded. Andrew Milder, in pro. per., for Plaintiff and Appellant. Nemecek & Cole, Jonathan B. Cole, Mark Schaeffer, and Marshall R. Cole, for Defendants and Respondents. Andrew Milder (plaintiff) initiated arbitration proceedings against his former attorney, Shawn Holley (Holley), and her law firm, Kinsella Weitzman Iser Kump & Aldisert, LLP (collectively, defendants). Plaintiff later sought to resist arbitration, however, and he ultimately refused to attend the arbitration hearing. In this appeal from a judgment confirming an arbitration award in defendants’ favor, we are principally asked to consider whether consumer arbitration rules concerning disclosures and prevailing party attorney fees apply in the context of an attorney-client dispute. We also consider whether the arbitrator abused his discretion in declining to postpone the arbitration pending resolution of plaintiff’s appeal in a lawsuit challenging the validity of the arbitration provision in the retainer agreement signed by the parties.

I. BACKGROUND A. Engagement and Initial Demand for Arbitration Plaintiff hired defendants to represent him in a criminal matter in 2011. Plaintiff and defendants executed a retainer agreement that included provisions to govern resolution of disputes, should they arise, between the parties to the agreement. The dispute resolution section, set forth beneath an underlined heading, “Arbitration,” states “it is always possible that some dispute may arise which cannot be resolved by discussion between us. We believe that such disputes can be resolved more expeditiously and with less expense to all concerned by binding arbitration than by court action.” Following a brief, general description of arbitration, the agreement states that “[a]rbitration usually results in a decision

2 much more quickly than proceedings in court, and the attorneys’ fees and other costs incurred by both sides are usually substantially less.” The agreement further provides, in bold type: “By signing this letter, you agree that, in the event of any dispute arising out of or relating to this agreement, our relationship, or the services performed . . . , such dispute shall be resolved by submission to binding arbitration . . . .” The arbitration section of the retainer agreement closes with a paragraph that provides, subject to exceptions not applicable here, “The prevailing party in any action, arbitration, or proceeding . . . will be awarded reasonable attorneys’ fees and costs incurred in that action, arbitration, or proceeding . . . .” In the criminal case that gave rise to the retainer agreement, Holley moved to be relieved as plaintiff’s attorney after a few months, citing an undisclosed conflict with plaintiff. Pursuant to the retainer agreement, plaintiff initiated arbitration against Holley in September 2014 and alleged she “failed to comply with her own written agreement, causing serious harm.” In February 2015, plaintiff filed an amended demand for arbitration against Holley and her law firm alleging breach of contract, breach of fiduciary duty, fraud, and unfair business practices based on defendants’ failure to deliver the “highest quality legal services” as promised in the retainer agreement.

B. Plaintiff’s Fraudulent Inducement Action In May 2015, plaintiff filed a civil complaint against Holley and her firm. In addition to reiterating the allegations in his amended demand for arbitration, he sought a declaratory judgment that the retainer agreement’s arbitration provision was

3 void.1 Plaintiff alleged he was fraudulently induced to agree to the arbitration provision based on the false assertion that the attorney fees and other costs incurred by both sides in arbitration are “usually substantially less” than in court proceedings. We will refer to this civil action, Los Angeles Superior Court Case No. BC581072, as the fraudulent inducement action. Soon after he filed the fraudulent inducement action, plaintiff filed an ex parte application for a temporary restraining order prohibiting defendants from proceeding with the arbitration. The trial court denied the application and plaintiff did not appeal. As we shall discuss, the arbitration proceeded to a hearing and final award. In October 2015, the trial court sustained a demurrer to the complaint filed in the fraudulent inducement action and entered judgment for defendants. The trial court reasoned plaintiff’s theory of fraud in the inducement must be decided by the arbitrator rather than the trial court. Plaintiff appealed, and this court reversed, explaining that although claims of fraud in the inducement of a contract as a whole are decided by the arbitrator, claims of fraud in the inducement as to an arbitration provision in particular must be decided by the court. (Milder v. Holley (Jan. 31, 2017, B267974) [nonpub. opn.] (Milder I).) On remand, the trial court ruled plaintiff was bound by the arbitration agreement because the statements regarding

1 Plaintiff’s other causes of action were for fraud, breach of fiduciary duty, breach of contract, violation of Business and Professions Code section 17200, unjust enrichment, and intentional infliction of emotional distress. Shortly after filing this complaint, plaintiff filed a second amended demand for arbitration incorporating the complaint’s allegations and claims for relief.

4 expenses associated with arbitration were non-actionable opinion and plaintiff chose not to inquire about the basis for defendants’ opinion.2

C. Arbitration Plaintiff rejected two arbitrators proposed by defendants and one proposed by ADR Services before ADR Services appointed retired judge Michael D. Marcus (Judge Marcus) as the arbitrator in May 2015. In June 2015, ADR Services sent the parties a disclosure statement for Judge Marcus. Plaintiff responded in a letter expressing his objection “to the arbitration moving forward in any way” before the fraudulent inducement action was decided. He further stated he was “unable to object or consent” to Judge Marcus’s appointment because his disclosures were “insufficient in this consumer arbitration.” As we shall discuss in more detail, the ethics standards for arbitrators in the California Rules of Court include special disclosure requirements for arbitrators in consumer arbitrations. Following extensive correspondence between the parties and ADR Services as to whether the arbitration was a consumer arbitration, ADR Services directed the parties in July 2015 to “make a motion to the court” because ADR Services had “no authority” to decide the issue. The appellate record, however, does not reflect an attempt by any party to put the consumer arbitration issue before the trial court. Instead, nearly two months later, ADR Services contacted the parties to schedule a status conference with Judge

2 Plaintiff noticed appeals from this ruling, which we decide in a separate opinion filed concurrently with this one. (Milder v. Holley et al. (Dec. 16, 2021, B303175, B298984) [nonpub. opn.].)

5 Marcus.

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Milder v. Holley CA2/5, Counsel Stack Legal Research, https://law.counselstack.com/opinion/milder-v-holley-ca25-calctapp-2021.