Wednesday, November 27, 2019
Court of Appeal:
Moor Says Fee Arbitration Proviso That Service of Decision by Mail Doesn’t Extend by Five Days
Time for Seeking Court Determination Renders Arbitrator’s $2.50 Award Judicially Unassailable
By a MetNews Staff Writer
The Court of Appeal for this district has stripped an attorney of a $82,788 judgment against a former client and ordered reinstatement of a $2.50 arbitration award, holding that under fee arbitration rules of the Los Angeles County Bar Association, the 30-day period for seeking a trial is not extended by five days based on the award being mailed, and a request made 33 days after the mailing was untimely.
Justice Carl H. Moor of Div. Five wrote Monday’s unpublished opinion which reverses a decision by Los Angeles Superior Court Judge William D. Stewart in favor of Pasadena attorney Surjit P. Soni and against SimpleLayers, Inc.
SimpleLayers had exercised its right to an arbitration under the Mandatory Fee Arbitration Act (“MFAA”) which envisions dispute resolutions by local bar organizations. The arbitration in question was conducted by LACBA.
A nonbinding arbitration award was mailed on Feb. 13, 2015; a Superior Court complaint was filed on behalf of Soni on March 18, 2015. That, Stewart held, was timely, citing Code of Civil Procedure §1013 which provides:
“Service is complete at the time of the deposit, but any period of notice and any right or duty to do any act or make any response within any period or on a date certain after service of the document, which time period or date is prescribed by statute or rule of court, shall be extended five calendar days, upon service by mail, if the place of address and the place of mailing is within the State of California….”
The judge acknowledged that some old cases say that the 30-day period runs from the date of mailing, but observed that the relevant statutes in the MFAA—Business & Professions Code §6203 and §6204—while formerly specifying that the time commences upon “mailing,” were amended in 2009 by SB 544 to substitute the word “service.”
A 2009 bill analysis by the Senate Committee on Judiciary says:
“Under existing law, two sections of the Business and Professions Code that relate to mandatory fee arbitration refer to the ‘mailing’ of documents by the arbitration program….This provision would clarify those sections by replacing ‘mailing’ with ‘service.’ ”
“Although the Legislature’s substitution of the term ‘service’ in sections 6203 and 6204 could appear to resurrect the issue of whether Code of Civil Procedure section 1013 extends the time to seek a trial, the LACBA rules refer to Code of Civil Procedure section 1013 and clearly state that no extension of time is provided for service of an arbitration award by mail. Rule 45(a) of the LACBA rules provides, ‘Unless expressly stated in these Rules to the contrary, service of any notice or other paper shall be by personal delivery or by deposit in the United States mail,...The service is complete at the time of deposit in the mail….The timing for performing any act shall commence on the date of service is complete [sic] and shall not be extended by reason of service by mail.’ ”
The jurist noted that a State Bar rule on fee arbitrations is in accord. However, the State Bar only conducts fee arbitrations in counties where no local bar group performs that service.
Moor said the 30-day deadline for seeking to have a court resolve the fee dispute is jurisdictional.
“The LACBA rules state that the time for initiating a trial de novo begins to run on the date that service is complete, without extension for service by mail,” he wrote. “Since the rules enacted by LACBA and the State Bar at the direction of the Legislature provide a specific exception to the extension of Code of Civil Procedure section 1013, the extension does not apply.”
In an alternative ruling, Moor declared that the 2009 amendment did not change the law. He explained in a footnote:
“The Senate Committee on Judiciary Analysis does not specify the nature of the ‘confusion’ that SB 544 intended to correct. Soni argues on appeal that the change could only have been intended to clear up confusion over whether the time for challenging an arbitral award was extended by Code of Civil Procedure section 1013, otherwise the change would be superfluous. Soni’s premise is not correct.”
The footnote continues:
“Because the State Bar rules of procedure for fee arbitrations provided that service was to be made by personal delivery or by mail, use of the word ‘mailing’ as the trigger for commencing the 30-day period could create confusion about whether and when personal delivery might start the clock running. The amendment of Section 6203(b) to replace the word ‘mailing’ with ‘service’ eliminates any confusion over the commencement of the 30-day period.”
Statute References ‘Receipt’
Also rejected by Moor’s opinion is Soni’s contention that Business & Professions §6206 comes into play—which refers not to mailing of an award, but to the receipt of it. It provides:
“The time for filing a civil action seeking judicial resolution of a dispute subject to arbitration under this article shall be tolled from the time an arbitration is initiated in accordance with the rules adopted by the board of trustees until (a) 30 days after receipt of notice of the award of the arbitrators, or (b) receipt of notice that the arbitration is otherwise terminated, whichever comes first.”
Moor drew this distinction:
“When Soni filed his action…, the claims were not barred by the statute of limitations, but the arbitration award that determined the claims was binding.”
“The structure of section 6206, read in isolation, is arguably confusing, and it may present a trap for the unwary.”
In a concurring opinion, Acting Presiding Justice Lamar Baker quoted that language and commented:
“That is an understatement. The statutory scheme is confusing, full stop, and it does present a trap for the unwary.”
“Respondent Surjit Soni waited to bring a civil action until 29 days after the date on which he said he received notice of the arbitrator’s award. By that time, however, the award had become binding. The Legislature surely did not intend to create a trap for unwary litigants, but a trap is indeed what we now have. Fortunately, the Legislature can easily remedy the problem by making both of the section 6203 and 6206 deadlines run from the same triggering event, receipt of notice of an arbitration award.”
Stewart’s award was based on $2,890 in past-due charges for legal services and $79,898 to Soni under a contractual fee-shifting provision, in the event of a dispute.
The case is Soni v. SimpleLayers, Inc., B284164.
Attorneys on appeal were Rex S. Heinke and Jessica M. Weisel of Akin Gump Strauss Hauer & Feld for SimpleLayers and M. Danton Richardson and Leo E. Lundberg Jr. of the Soni Law Firm for Soni.
Copyright 2019, Metropolitan News Company