Metropolitan News-Enterprise


Tuesday, June 28, 2011


Page 1


C.A. Upholds Arbitration Award Against Ex-Beverly Hills Attorney


By SHERRI M. OKAMOTO, Staff Writer


The Fourth District Court of Appeal yesterday affirmed a $98,000 arbitration award against a former Beverly Hills attorney, arising from his refusal to return a client file.

Div. One, in an unpublished decision, concluded Henry James Koehler IV’s unsupported claims of indigence did not provide a basis to stop the arbitration process, which Koehler himself had initiated, or to deny confirmation of the arbitrator’s award.

Stephen Kite and his parents, Norma and Reid L. Lalonde, retained Koehler in July 1999 to represent them in a custody dispute involving Kite’s son.

Four months after Kite and the LaLondes retained him, the California Supreme Court suspended Koehler from the practice of law for 60 days.

Kite and the LaLondes dismissed Koehler as their attorney in November 2003, contending he had been grossly unprepared and ineffective as their counsel. They also filed a complaint with the State Bar, which, along with Koehler’s history of misconduct, served as the basis for his disbarment in March.

History of Discipline

According to State Bar records, Koehler was disciplined in 1977 for having failed to competently perform, to communicate, and to refund unearned fees in four client matters between 1974 and 1975.

In 1992, he was disciplined again, and suspended, for having failed to competently perform and properly manage his client trust account in two client matters between 1984 and 1985.

Koehler was disciplined a third time, and suspended for the second time, in 1999 for having improperly withdrawn from representation in one client matter in 1994. The State Bar later found Koehler engaged in the unauthorized practice of law by rendering legal advice to Kite and the LaLondes while serving the suspension imposed as part of this discipline.

He now resides in Akron, Ohio.

Kite and the LaLondes, through new counsel, filed suit against Koehler in December 2005, seeking return of their client files. Their complaint sought damages in the amount of $55,000 for attorney fees and costs incurred in attempting to get their case file returned, as well emotional distress and punitive damages.

Six days later, Koehler returned the files. He then filed a demurrer and motion to strike, which asserted, among other things, that the action was moot. San Diego Superior Court Judge Thomas Nugent denied both of these motions, but granted Koehler’s petition to compel arbitration pursuant to an arbitration clause in the retainer agreement signed by Kite and the LaLondes.

Motion to Vacate

The parties stipulated to the appointment of retired San Diego Superior Court Judge William J. Howatt Jr. as the arbitrator, but Koehler thereafter filed a motion to vacate and set aside the arbitration appointment. He also filed an application for a fee waiver, claiming he was indigent and living on social security.

Koehler contended the rules and procedures set forth by the private arbitration firm requiring parties to deposit the fees and expenses for the hearing in advance, was tantamount to “selling [his] right to his day in court to his opponents,” and that proceeding to arbitration “would force me to give up my defenses.”

Howatt denied Koehler’s request for a fee waiver without prejudice, finding the application was incomplete because it did not include income from Koehler’s practice of law. He also denied Koehler’s motion to vacate the arbitration proceedings, noting that Koehler had requested arbitration in the first instance, and assured Koehler that he was not precluded from presenting any defenses at the hearing.

Kite and the LaLondes eventually agreed to advance Koehler’s share of the arbitrator’s fees so as to avoid suspension of the proceedings

In May 2008 Koehler filed a motion with the trial court requesting that the private arbitration be vacated and substituted with judicial arbitration. He asserted that he had “become trapped into a private arbitration program that sold my rights to my opponents when I was unable to pay their ever-escalating fees and [they] would not grant me a fee waiver.”

Nugent denied the motion, finding “no authority” to reverse his prior order referring the dispute to binding arbitration on Koehler’s motion. Nugent told Koehler “[t]he fact that you’re not comfortable/happy there, or perhaps having difficulty affording it, are not legal bases for me to undo what has been done at your insist[e]nce.”

The arbitration hearing was held in June 2008, after which Howatt found Kite and the LaLondes “have been damaged by incurring a great expense in attempting to retrieve from Koehler their file and documents.” Howatt awarded them $55,000 for their costs incurred in seeking the return of the files from Koehler and arbitration fees in the amount of $43,119.56.

In January 2009, Kite and the LaLondes filed a petition to confirm the arbitrator’s award, which Nugent granted.

On appeal, Koehler argued Nugent erred in failing to stop the arbitration because “the defenses of the indigent had been auctioned off, and sold, to his opponents in exchange for them advancing his portion of [the arbitration] fees.”

Justice Gilbert Nares, in his decision for the appellate court, said this argument was “unavailing” since the arbitration rules did not provide for the forfeiture of any defenses if the deposit required by the arbitrator was not paid.

Nares noted Koehler also raised several defenses at the hearing, which were rejected by the arbitrator, and failed to identify any defenses which were “auctioned off” or “sold.”

The justice also emphasized that Koehler had brought the petition to compel arbitration, pursuant to a provision in a contract he had drafted, and submitted no evidence he was unable to pay the arbitration fees.

Since the trial “court did not err in refusing to stop the arbitration from going forward, the court also did not err in thereafter confirming the arbitration award,” Nares said.

Justices James A. McIntyre and Cynthia Aaron joined Nares in his decision.

The case is Kite v. Koehler, D055667.


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