Service by Mail of Petition to Vacate Award Was Ineffective
McKay Says That in Attorney-Client Fee Disputes, Where Adversary Has Not Appeared in Court, Service of Petition to Dump Arbitrator’s Decision Must Be in Same Manner as Serving Summons, Complaint
By a MetNews Staff Writer
An attorney who engaged in a fee arbitration with a former client and was ordered to repay all funds that were advanced, then instituted a court action by petitioning for an order vacating the award, did not effect service of his petition by mailing a copy to the lawyer who had represented the ex-client in the arbitration, the Appellate Division of the Los Angeles Superior Court held in an opinion posted yesterday.
Where the opposing party has not made a court appearance, the opinion announces, service must be made in the same manner as in serving a summons.
Judge Patti Jo McKay authored the opinion, filed Oct. 6. in Div. Five of the Court of Appeal for this district on Monday determined that transfer to itself was unnecessary.
Although attorney Duane R. Folke did not effect service on the ex-client, Carol Pulliam, within the 100-day period set by Civil Code §1288, McKay said, the court must, on remand, determine if equitable relief should be afforded.
Aug. 20 Deadline
In light of the 100-day deadline, Folke had until Aug. 20, 2021, to serve and file his petition to vacate the arbitration award. He mailed a copy to Wole Akinyemi, who had represented Pulliam on Aug. 17, and it was received the following day.
On Sept. 15, a process server delivered a copy to Akinyemi’s office; on Sept. 17, Folke learned that Akinyemi was no longer representing Pulliam; he attempted to serve Pulliam by FedEx at her last known address, but that effort failed.
In any event, Pulliam did learn of the petition. On Nov. 29, 2021, she filed a response.
Trial Court’s Ruling
Los Angeles Superior Court Judge Katherine Chilton denied Folke’s petition without considering the merits, holding that the time limit contained in the Mandatory Fee Arbitration Act (“MFAA”) is jurisdictional and that service by mail was ineffective. She relied on Code of Civil Procedure §1290.4 which provides:
“If the arbitration agreement does not provide the manner in which such service shall be made and the person upon whom service is to be made has not previously appeared in the proceeding and has not previously been served in accordance with this subdivision:
“(1) Service within this State shall be made in the manner provided by law for the service of summons in an action.”
Chilton granted Pulliam’s motion to confirm the award.
McKay said that Chilton was correct in finding that service had not been effected by mailing a copy of the petition to Akinyemi but incorrect in her belief that the jurisdictional failure to make timely service stripped the court of jurisdiction—although the decision rendering her mistaken, in retrospect, had not been handed down until after she ruled.
She noted that §1290.4 is a statute relating to arbitration by agreement of the parties. Departing from the usual rule that arbitration must be by mutual consent, the MFAA provides that a client may unilaterally demand arbitration of a fee dispute, McKay pointed out.
“No published decision has addressed whether the service rules in section 1290.4 apply to an arbitration brought under the MFAA,” she wrote.
The judge said that in 2009, the MFAA was amended to replace reference to “mailing” a copy of the arbitration award with the word “service.” She wrote that this “illustrates the Legislature intended to distinguish between ‘mailing’ and ‘service’ requirements in the context of the MFAA.”
McKay cited §6203(b) which says that “[i]f an action has previously been filed in any court, any petition to confirm, correct, or vacate the award shall be to the court in which the action is pending, and may be served by mail on any party who has appeared…; otherwise it shall be in the same manner as” serving papers on a party that has not appeared, as set forth in the Code of Civil Procedure.
“[I]t is our view the Legislature intended to authorize service by mail, of a petition to vacate an arbitration award issued under the MFAA, only if the responding party has appeared with ‘the court in which the action is pending,...’ ”
Service by Mail
McKay went on to say:
“Given that no action was pending with the court when Folke filed the petition to vacate, ordinary service by mail was insufficient. Without the availability of ordinary service by mail, the remaining option was the service dictated in section 1290.4, as adopted by the trial court….Service of a summons by mail is authorized only when a copy of the summons is mailed by first-class mail to the person to be served, together with two copies of the notice and an acknowledgment….Such service is complete when a written acknowledgment of receipt of summons is returned to the sender….
“Here, no acknowledgment was completed by Pulliam. Without an acknowledgment, the August 17, 2021 service of the petition by mail to Akinyemi’s office address was inadequate.”
Under the California Supreme Court’s June 26 decision in Law Finance Group, LLC v. Key, service-and-filing deadlines that were formerly viewed as jurisdictional no longer are, McKay wrote. She recited:
“[T]he Law Finance decision was filed prior to our decision in this case. Judicial decisions by a higher court are retroactively binding on any pending case—that is, any case prior to a final determination upon appeal.”
“Folke’s call for equitable relief from untimely service of the petition relied upon his multiple and unsuccessful attempts of service, and that Pulliam had actual notice of the action as evidenced by her opposition….[T]he trial court refused to ‘weigh the equities’ based on its assessment that equitable relief was unavailable to save Folke’s failure to comply with the deadline in section 1288. This analysis is now flawed under Law Finance, as there is nothing in the language of section 1288 or its legislative history reflecting an intent by the Legislature to foreclose equitable tolling or other equitable relief under appropriate circumstances.”
The case is Folke v. Pulliam, 2023 S.O.S. 4000.
The arbitrator’s award did not mark the first time Folke was ordered to return unearned fees. On July 9, 2008, he was ordered by the State Bar Court to repay five sets of clients or the Client Security Fund 27,850, plus interest, in addition to such sums as were found owing to another client, to be determined through arbitration.
He was suspended from practice until such time as he presented proof of making the payments and regained active State Bar membership on Dec. 22, 2010.
On Sept. 16, 2019, the State Bar Office of Chief Trial Counsel forwarded to the State Bar Court information that Folke had, on Aug. 21, pled no contest to a misdemeanor, trespass, and placed on two years of probation. No action has been taken by the State Bar Court.
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