Judge: Colin Leis, Case: 22STCV20052, Date: 2024-07-17 Tentative Ruling

Case Number: 22STCV20052    Hearing Date: July 17, 2024    Dept: 74

McDaniel v. Colaianni et al.

Defendants’ Motion to Correct and Confirm Arbitration Award

BACKGROUND 

            Plaintiff April McDaniel sued defendants Rodrigue Colaianni and Lisa Colaianni aka Lisa Leroy on September 14, 2022 for (1) breach of contract, (2) negligence, (3) fraud, (4) negligent misrepresentation, and (5) concealment. Plaintiff alleged Defendants knowingly sold her a home replete with construction defects after Defendants negligently remodeled it.

            On October 31, 2022, the parties stipulated to arbitrate their claims and stay court proceedings in the interim.

            The arbitrator, Ernest C. Brown, issued a twenty-six-page Final Award on April 19, 2024, awarding Plaintiff $391,114.50, accruing simple interest at 10% annually from the date of the award. (D.Ex. 10, 26:2-7 (“Award”).)

            On May 28, 2024, Defendants filed the instant “Motion to Confirm the Arbitration Award With Corrections by Striking the Award of Attorneys’ fees and Pre-Judgment Interest”. On July 3, 2024, Plaintiff opposed. On July 10, 2024, Defendants replied.

LEGAL STANDARD

¿¿            “Any party to an arbitration in which an award has been made may petition the court to confirm, correct or vacate the award.” (Code Civ. Proc., § 1285.) “If a petition or response under [section 1285] is duly served and filed, the court shall confirm the award as made ... , unless in accordance with this chapter it corrects the award and confirms it as corrected, vacates the award or dismisses the proceeding.” (Id., § 1286.) 

            “[T]he court ... shall correct the award and confirm it as corrected if the court determines that: (a) There was an evident miscalculation of figures or an evident mistake in the description of any person, thing or property referred to in the award; (b) The arbitrators exceeded their powers but the award may be corrected without affecting the merits of the decision upon the controversy submitted; or (c) The award is imperfect in a matter of form, not affecting the merits of the controversy.” (Id., ¶ 1286.6.)  

“[A]n arbitrator's decision is not generally reviewable for errors of fact or law, whether or not such error appears on the face of the award and causes substantial injustice to the parties.” (Moncharsh v. Heily & Blase¿(1992) 3 Cal.4th 1, 6.) An arbitrator does not exceed their powers by assigning an erroneous reason for their decision. (Id. at 28.) “Arbitrators do not exceed their statutory powers merely by rendering an erroneous decision on a legal or factual issue, so long as the issue was within the scope of the controversy submitted to the arbitrators.” (Roehl v. Ritchie (2007) 147 Cal.App.4th 338, 348.) 

DISCUSSION 

            1. Attorneys’  Fees

            Defendants move the Court to strike the arbitrator’s $87,320.00 attorneys’ fees award.

            Defendants mistakenly suggest that “the award of attorneys’ fees and the award of interest [by the arbitrator] are reviewed de novo” but the authorities they cite refer to the standard a higher court applies when reviewing a lower court’s fees determination. (Mot., 3:27-28.)  When a trial court reviews an arbitrator’s decision, the standard is more deferential, as described above. (See Moncharsh, supra, 3 Cal.4th at p. 6.)

Defendants argue Plaintiff is not entitled to fees because she did not attempt to mediate with them before resorting to legal action. The arbitrator found differently. The Final Award includes findings that on May 25, 2022, Plaintiff’s counsel demanded “prompt mediation”, and between June and August 2022, Plaintiff requested “that Respondents participate in an early mediation” and “Respondents and its [sic] counsel did nothing and refused to agree to mediate”. (Award, 14:20-26, 15:7-14.)

Defendants ask the Court to reverse the arbitrator’s factual determinations, not to correct them. The Court cannot do so. “[P]arties who enter into arbitration agreements are presumed to know the arbitrator’s decision will be final and binding; ‘arbitral finality is a core component of the parties’ agreement to submit to arbitration.’ ” (SingerLewak LLP v. Gantman (2015) 241 Cal.App.4th 610, 616, quoting Moncharsh, supra, at pp. 6, 10.) The Court defers to the arbitrator’s finding of fact – that Plaintiff tried to mediate and Defendants refused. The arbitrator was thus empowered to award fees.

            2. Prejudgment Interest

            Defendants contend “the arbitrator’s award is not clear and unequivocal as to the scope of interest awarded.” (Mot., 10:23-25 [heading].) The contention is unavailing because the award is straightforward. The arbitrator awarded Plaintiff 10% simple annual interest beginning on the date of the award. That rate will continue after judgment. The arbitrator simply formalized the date on which damages were capable of being ascertained for purposes of post-award, prejudgment interest.

            3. Attorneys’ Fees for This Motion

            A party entitled to attorneys’ fees in an arbitration award is similarly entitled to fees incurred to confirm it, where fees are otherwise authorized by the parties’ contract. (See Carole Ring & Associates v. Nicastro (2001) 87 Cal.App.4th 253, 260-261.) The prevailing party’s right to fees extends from Code of Civil Procedure section 1293.2, entitling a party to costs after a successful petition to confirm, and Code of Civil Procedure section 1033.5(a)(10), incorporating attorneys’ fees within costs when authorized by contract.

Here, the parties’ contract authorized a fees award. (See Mot. Ex. 1, ¶ 25 [reasonable fees to prevailing party “[i]n any action, proceeding, or arbitration” between the parties “arising out of [their] Agreement”].) The arbitrator determined Plaintiff to be the prevailing party and awarded fees. The Court awards Plaintiff the costs of litigating this petition based on section 1293.2, and per section 1033.5, those costs include Plaintiff’s fees.

Plaintiff’s two attorneys charge a reasonable hourly rate of $400.00 based on their experience and qualifications. (Markow Dec., ¶¶ 17-19.) Counsel Ari Markow estimates his colleague spent 15.4 hours “reading and analyzing Defendants’ motion, conducting legal research, and writing the opposition”, and Markow himself spent 2.2 hours “discussing the motion, case status, and strategy with Plaintiff, and reviewing and finalizing [counsel’s] declaration and related exhibits.” (Id., ¶ 21 [typo omitted].) Markow estimated 3.5 hours reviewing a reply brief and appearing at the hearing.

Plaintiff’s counsel’s billing is slightly excessive. 2.2 hours spent meeting with the client about a single law and motion matter is unnecessary, as is 3.5 hours to review the reply and prepare for the hearing on a straightforward legal issue. The Court will award 15.0 hours, in total, to review the motion and reply and prepare the opposition, and 1.0 hours to prepare for and attend the hearing, which can be accomplished remotely.

            The Court awards $6,400.00 in attorneys’ fees.

            4. Prejudgment Interest

            The Court also calculates interest from April 19, 2024, through date of judgment as follows: ten percent, divided by three-hundred sixty five, multiplied by the total award of $391,114.50, results in a $107.15 per diem accrual. Eighty-nine (89) days passed between the award on April 19, 2024 and the judgment on July 17, 2024; $107.15 multiplied by 89 is $9,536.35.

CONCLUSION 

The Court denies Defendants’ petition to correct the arbitration award.

The Court confirms the award as rendered and enters judgment for Plaintiff against Defendants, jointly and severally, in the amount of $413,450.85, inclusive of attorneys’ fees and interest accrued to the date of judgment.