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Arbitrator Lacked Power to Add Award of Attorney Fees, Costs After Decision—C.A.
By a MetNews Staff Writer
The First District Court of Appeal on Friday affirmed a judgment in favor of the defendant based on the confirmation of an arbitrator’s award, and did not disturb the judge’s action in whacking off an award of $73,756.43 in attorney fees and costs because the arbitrator tacked on that award after her decision had become final.
Presiding Justice Teri L. Jackson of Div. One authored the opinion. It declares that San Francisco Superior Court Judge Ethan P. Schulman was correct in holding that the arbitrator exceeded her powers and ordering that both parties bear its own costs.
Jackson pointed to Code of Civil Procedure §1283.4 which provides:
“The award shall be in writing and signed by the arbitrators concurring therein. It shall include a determination of all the questions submitted to the arbitrators the decision of which is necessary in order to determine the controversy.”
Under §1284 of that code, she noted, parties have 30 days after issuance of the award to seek a correction, and the arbitrator may make a correction, pursuant to §1286.6, that does not relate to the merits.
Three Decisions
On April 3, 2020, JAMS arbitrator Cecily Bond, a former Sacramento Superior Court judge, issued a decision in favor of plaintiff Elizabeth Taska’s former employer, The RealReal, Inc. (“TRR”); on June 11, Bond issued a written decision with the heading, “Final Award,” ordering that Taska pay TRR 53,705.43 in attorney fees and costs pursuant to a finding that she rendered false testimony and “knew that her claims were meritless”; on June 29, she corrected the amount, setting it at $73,756.43.
TRR maintained on appeal that the April 3 decision was an “interim ruling” and “was not a final award,” and that Bond “therefore, was entitled to award TRR its attorney’s fees and costs.
Jackson wrote:
“Here, the April 3, 2020 Award met all of the statutory requirements to be deemed a final award.”
She noted that Bond addressed the matter of attorney fees and costs, saying that the requisite for such an award against a plaintiff in an employment action—frivolousness of the action—was not met and specifying that that “[t]he request for fees and costs is denied.”
Award Was Final
The presiding justice reasoned:
“Thus, as this language makes clear, the April 3, 2020 Award was in writing and was served on the parties; it resolved all the issues reserved in the interim award, including the questions related to attorney fees and costs; and it included determinations on all the issues submitted in the arbitration….Despite TRR’s claim that its attorney fees and costs request in posthearing briefing was merely intended to preserve the issue for later, the arbitrator, in denying TRR’s request in the April 3, 2020 Award, made a final determination on the issue, as submitted to her, that was predicated on substantive determinations of law and fact. The April 3, 2020 Award was therefore subject to section 1284, which precluded any subsequent change or correction, whether her legal determinations were correct or not….”
TRR argued in its opening brief:
“[B]y its own terms and Arbitrator Bond’s own ruling, the Initial Ruling was not a final award. It was titled, ‘Award’ (as compared to the subsequent ‘Final Award’), and as Arbitrator Bond expressly held, the Initial Ruling “was not final, in that the Arbitrator did not have the evidence necessary to make a ruling on [TRR’s] Request.’ ”
Jackson responded to the contention that the April 3 award wasn’t denominated a “Final Award” by saying:
“Nor was it labeled an interim award. The label was therefore ambiguous. And, moreover, even if it were not, ‘the arbitrator’s choice of label is not dispositive.’…Rather, we look to the actual substance of the award to determine whether, under section 1283.4, it meets the requirements of a final award.”
The case is Taska v. The RealReal, Inc., A164130.
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