Judge Bruce G. Iwasaki, Case Number: 19STCV24892, Date: 2023-12-05 Tentative Ruling

Tentative Ruling: The Petition to Confirm the Arbitration Award is granted in part.

This is a case arising out of the sale of residential home. On June 22, 2017, Defendant Eduardo Thackeray (Defendant Thackeray) listed for sale the real property located at 1217 Daniels, Los Angeles 90035 (Property). The marketing information showed that the Property was a 1,627 square foot house with a pre-approved plan for an additional 1,050 square feet. On July 10, 2017, Plaintiffs Rebecca West and Luca Giorgetti (Plaintiffs) executed a Purchase Agreement with Defendant for the Property. In November 2017, Plaintiffs learned that, in April 2017, Defendant had withdrawn the request for the permit for an additional 1,050 square feet and sought a refund of the $5,811.02 fee that had been paid; the permit was revoked and a refund issued on June 14, 2017.

Thereafter, on July 16, 2019, Plaintiffs sued Defendants Thackeray (as trustee of the Thackeray Family Revocable Trust and individually), Rodeo Realty, Belen Palacios, and Alex Griswold. The Complaint alleges causes of action for (1.) intentional misrepresentation, (2.) negligent misrepresentation, (3.) breach of fiduciary duty, and (4.) breach of implied covenant of good faith and fair dealing.

On March 26, 2020, Plaintiffs filed a motion to compel arbitration to arbitrate their claims against Defendant Thackeray. On November 4, 2020, the Court granted the motion.

On July 11, 2023, the Arbitrator submitted the Final Award, which was twenty-two pages in length. The Arbitrator found in favor of Plaintiff West – awarding actual damages in the amount of $206,300 against Respondent Eduardo Thackeray, as Trustee of the Thackeray Family Revocable Trust. Plaintiff was also awarded $210,000 in attorneys’ fees and $50,239.86 in costs as the prevailing party.

On September 13, 2023, Plaintiff Rebecca West (Plaintiff) filed a Motion to Confirm the Arbitration Award and sought attorney fees and costs in the amount of $20,720. Defendant Thackeray opposed the motion on limited grounds. A reply was filed. On December 1, 2023, Thackeray filed a Sur-Reply; the Court disregards this unauthorized filing.

When parties agree to private arbitration, the scope of judicial review is strictly limited to give effect to the parties’ intent “to bypass the judicial system and thus avoid potential delays at the trial and appellate levels....” (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 10.) “By agreeing to arbitration, parties anticipate a relatively speedy, inexpensive and final resolution, one that may be based on ‘ “broad principles of justice,” ’ rather than strictly the rule of law. [Citation.] Consequently, ‘as a general rule courts will indulge every reasonable intendment to give effect to arbitration proceedings.’ [Citation.]” (Toal v. Tardif (2009) 178 Cal.App.4th 1208, 1218.)

Further, “the scope of judicial review of arbitration awards is extremely narrow.” (California Faculty Assn. v. Superior Court (1998) 63 Cal.App.4th 935, 943; see Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 10–11, 27–28, 33.) Generally, courts may not review the merits of the dispute, the sufficiency of the evidence, or the reasoning in support of the arbitrator's decision. (Pierotti v. Torian (2000) 81 Cal.App.4th 17, 23.) “Because ‘arbitral finality is a core component of the parties' agreement to submit to arbitration’ [citation] and because arbitrators are not required to make decisions according to the rule of law, parties to an arbitration agreement accept the risk of arbitrator errors [citation], and arbitrator decisions cannot be judicially reviewed for errors of fact or law even if the error is apparent and causes substantial injustice [citations].” (Berglund v. Arthroscopic & Laser Surgery Center of San Diego, L.P. (2008) 44 Cal.4th 528, 534.)

“ ‘[I]t is within the power of the arbitrator to make a mistake either legally or factually. When parties opt for the forum of arbitration they agree to be bound by the decision of that forum knowing that arbitrators, like judges, are fallible.’ ” (Moncharsh v. Heily & Blasé¸ supra, 3 Cal.4th at 12,; accord, Cable Connection, Inc. v. DIRECTV, Inc. (2008) 44 Cal.4th 1334, 1340 [“[T]he California Legislature ‘adopt[ed] the position taken in case law ... that is, “that in the absence of some limiting clause in the arbitration agreement, the merits of the award, either on questions of fact or of law, may not be reviewed except as provided in the statute.” ’ ”].)

Under section 1286.2, the grounds on which a court may vacate an award are if it was (1) procured by corruption, fraud, or undue means, (2) issued by corrupt arbitrators, (3) affected by prejudicial misconduct on the part of the arbitrators, or (4) in excess of the arbitrators' powers. (Cable Connection, Inc. v. DIRECTV, Inc. (2008) 44 Cal.4th 1334, 1340; Code Civ. Proc., § 1286.2, subd. (a).) There is a presumption in favor of the validity of the award, and the challenger bears the burden of establishing a claim of invalidity. (Betz v. Pankow (1993) 16 Cal.App.4th 919, 923.)

Plaintiff West moves for an order confirming the Arbitrator’s final Arbitration Award (Award). She also seeks additional attorney fees and costs in the sum of $20,720.

Plaintiff seeks to confirm an arbitration award issued by the arbitrator, Robert Mann of ADR Services, Inc. The Motion complies with Code Civil Procedure section 1285.4. Plaintiff has attached a copy of the arbitration agreement. (West Decl., ¶ 2, Ex. A; Code Civ. Proc., § 1285.4, subd. (a).) Further, the Award sets forth the name of the arbitrator, Robert Mann, and a copy of the award and opinion is attached. (West Decl., ¶ 6, Ex. C; Code Civ. Proc., § 1285.4, subds. (b)-(c).)

Thus, the Motion to Confirm the Arbitration Award complies with all the statutory requirements.

In opposition, Defendant Thackeray does not oppose or otherwise challenge the underlying Arbitration Award. Rather, the only dispute between the parties concerns who the Judgment is against and the amount of attorney’s fees awardable to Plaintiff.

With respect to the Judgment to be entered, the dispute centers on whether the Arbitration Award was against Defendant Thackeray, solely in his capacity as trustee, or if the Arbitration Award was also against Defendant Thackeray in his individual capacity.

In moving to confirm the arbitration award, Plaintiff submits a Proposed Judgment that states: “IT IS ORDERED that the award of the arbitrator dated July 11, 2023 be and the same is confirmed. Judgment is hereby entered in favor of Plaintiff Rebecca West and against Defendant Eduardo Thackeray, as an individual and as Trustee of the Thackeray Family Revocable Trust, in the amount of $466.539.86.” (Emphasis added)

The Opposition argues simply that the Arbitration Award was clearly only entered against Eduardo Thackeray as Trustee.

The Opposition is correct. The Arbitration Award is unambiguous. Following the arbitration, the Arbitrator issued a Final Award stateubg that the award was only against the Trustee: “Claimant Rebecca West is awarded actual damages in the amount of $206,300 from Respondent Eduardo Thackeray, as Trustee of the Thackeray Family Revocable Trust[.]” (Emphasis added.) Moreover, the caption of the Award refers to Thackeray in his capacity as “Trustee of the Thackeray Family Revocable Trust, and individually,” but not in the terms of the Final Award – suggesting the omission was deliberate.^{^[1]}

Further, the law is clear that a person sued as trustee is not necessarily sued in their individual capacity. Plaintiff’s attempt to conflate Thackeray as Trustee of the Thackeray Family Revocable Trust with Thackeray individually is unsupported by any relevant law.

“A trust itself can neither sue nor be sued in its own name. Instead, the real party in interest in litigation involving a trust is always the trustee. (Powers v. Ashton (1975) 45 Cal.App.3d 783, 787; Code Civ. Proc., § 369.)” However, “[t]he powers of a trustee are not personal to any particular trustee but, rather, are inherent in the office of trustee.” (Moeller v. Superior Court (1997) 16 Cal.4th 1124, 1131.)

In Andrews v. Horton (1935) 8 Cal.App.2d 40, the court held that an attorney could recover fees against a trustee individually because in that case, the trustees were named in the case in which the attorney represented them in their individual capacities, and the trial court found that the defendants entered into the attorney fee contract in their individual capacities. Also in that case, the defendants had previously paid the plaintiff’s attorneys out of their personal funds. Moreover, that agreement did not specify that the representation of the trustees was in their capacity as trustees.

The reply argues that “California law requires that the Award as it is written be interpreted as holding Thackeray liable in his capacity both as trustee and as an individual.” (Reply 4:11-12.) Plaintiff then proceeds to cite Probate Code section 18002, which states “A trustee is personally liable for torts committed in the course of administration of the trust only if the trustee is personally at fault.”

However, Probate Code section 18005 states that “[t]he question of liability as between the trust estate and the trustee personally may be determined in a [separate] proceeding....” According to the Law Revision Commission Comment: “Under this section, ultimate liability as between the estate and the trustee need not be determined before the third person's claim can be satisfied. It is permissible, and may be preferable, for judgment to be entered against the trust without determining the trustee's ultimate liability until later. Where judgment is entered against the trustee individually, the question of the trustee's right to reimbursement may be settled informally with the beneficiaries or in a separate proceeding in the probate court.” (Galdjie v. Darwish (2003) 113 Cal.App.4th 1331, 1348.) That is, whether the Thackeray Revocable Trust will reimburse Thackeray as trustee for his liability here, is not relevant to whether Plaintiff’s Award is against Thackeray in his individual capacity.

The case Andrews v. Horton highlights the elements that are necessary for any attorney to recover against a trustee individually – demonstrating that while a trustee may be sued in his individual capacity for torts that he commits as a trustee in the course of administration of the trusts under Probate Code section 18002 – the two cannot be treated as one “by operation of law” as argued by Plaintiff.

Plaintiff is to submit a new, Proposed Judgment consistent with the Court’s order.

In connection with the motion to compel arbitration, Plaintiffs seek reasonable attorney’s fees and costs in the sum of $11,345.00. (West Decl., ¶ 7). However, as the reply notes, Plaintiff previously requested the $11,345 incurred in connection with the motion to compel arbitration from the arbitrator; the “arbitrator denied those fees.” (Reply 6:15-16 [citing West Decl., Ex. C at Section VII, pp. 20:28-22:5].) Thus, even if Plaintiff is correct that the Court awarding the motion to compel arbitration fees does involve “double-dipping”, the Court – on this motion to confirm the arbitration award – has no authority to correct the arbitration award where the Arbitrator already made a determination on the fees on the motion to compel arbitration. Plaintiff did not move to correct or vacate the arbitrator's award as it pertained to attorney fees, and she has expressed no reasoning or authority for the Award’s correction on this motion. (Code Civ. Proc., §§ 1285, 1286.2, 1286.6.)

In connection with the filing of this Motion to Confirm Arbitration Award, Plaintiff claims she has incurred and will incur reasonable attorney’s fees and costs in the sum of $9,375.00. (Hughes Decl., ¶¶ 2-3). In contrast to the motion to compel arbitration, Plaintiff could not have submitted her fees for the motion to confirm the arbitration award to the Arbitrator. Further, there is no dispute that Plaintiff was the prevailing party on the arbitration. Thus, Plaintiff is entitled to reasonable fees incurred in this incurred in post-arbitration judicial proceeding. (Carole Ring & Associates v. Nicastro (2001) 87 Cal.App.4th 253, 261 [“Because Nicastro was the prevailing party as a matter of law, the mandatory language of the contractual attorney fees clause and section 1293.2 entitle Nicastro to reasonable attorney fees and costs incurred in post-arbitration judicial proceedings.”]; Corona v. Amherst Partners (2003) 107 Cal.App.4th 701, 707 [“Corona was entitled to recover his attorney fees and costs relating to the judicial proceedings.”].)

Plaintiff’s counsel represents that he spent 8 hours preparing this Motion to Confirm Arbitration and anticipates spending an additional 5 hours reviewing Defendant Thackeray’s opposition and preparing a reply brief, and an additional 2 hours preparing for and attending a hearing of this matter, for a total of 15 hours. (Hughes Decl., ¶ 2.) His hourly rate is $625. (Hughes Decl., ¶ 2.)

In this motion, Plaintiff advanced unmeritorious positions with respect to whom the Judgment was against and a request for fees that the arbitrator had previously denied. Without a controversy on those matters, the motion to confirm would likely have been unopposed, take much less time, and not require a hearing or this Court’s ruling. The Court awards Plaintiff fees for four hours of work on the motion for total of $2,500.

Thus, fees are awarded against trustee Thackeray in favor of Plaintiff in the reduced amount of $2,500. Plaintiff is ordered to include this amount in an amended proposed Judgment.

The motion to confirm the Arbitration Award is granted in part. Plaintiff’s Proposed Judgment does not conform with the Arbitration Award. Plaintiff is to file and serve a new Proposed Judgment against Defendant Thackeray, in his capacity as trustee only. Moreover, the request for attorney fees is granted in the reduced amount of $2,500 and shall be added to the Judgment. Plaintiff shall prepare, serve, and submit the Proposed Judgment on or before December 14, 2023.

[1] Plaintiff represents that, after receiving Thackeray’s Opposition, Plaintiff emailed the Arbitrator to request an amendment to the Award to confirm that there was only one Respondent, and that the award was in fact issued against him, in his capacity as trustee and individually, but the Arbitrator declined the request.

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