Court May Not Add Costs Not Awarded by Arbitrator

Wednesday, April 2, 2003

Page 3

Court May Not Add Costs Not Awarded by Arbitrator—C.A.

By a MetNews Staff Writer

Where a prevailing party in binding arbitration failed to ask the arbitrator to award attorney fees and costs, the trial court, in affirming the award, is powerless to tack on those items, the Court of Appeal ruled yesterday.

Writing for the Fourth District’s Div. One, Justice James A. McIntyre said the issue was one of first impression.

The plaintiff in the case, Juvenal Corona, was awarded actual damages of $10,000 by the arbitrator based on the sale or real property to a third party after a contract for sale of that property had been entered into with Corona. In seeking confirmation of the award, Corona moved for the addition of $28,257.50 in attorney fees and $6,302.32 in costs (including the arbitrator’s fees).

San Diego Superior Court Judge Robert E. May ruled that Corona would get the $10,000—period.

While affirming the denial of attorney fees and costs in connection with the arbitration, itself, the appeals court reversed May’s denial of those items in connection with the proceeding before him.

“A court must award costs in a judicial proceeding to confirm, correct or vacate an arbitration award,” McIntyre said, citing Code of Civil Procedure §1293.2.

Holding that only an arbitrator may award attorney fees or costs related to the arbitration, McIntyre explained:

“As a general rule, parties to a private arbitration impliedly, if not expressly, agree that the arbitrator’s decision will be both binding and final and thus the arbitrator’s decision ‘should be the end, not the beginning, of the dispute.’…Allowing a party to request that the trial court make an award that was within the scope of the arbitration but not pursued in that forum is inconsistent with the policies underlying the statutory private arbitration scheme.”

The case is Corona v. Amherst Partners, D040084.