Judge Upinder S. Kalra, Case Number: 23STCP02817, Date: 2023-10-31 Tentative Ruling

RESPONDING PARTY(S): Respondent Crestbrook Insurance Co. (as to motion for costs only)

On July 7, 2023, the Arbitrator Hon. Richard Stone (Ret.) (Arbitrator) issued an award in favor of Petitioner Daniela Saspe (Petitioner) and against Respondent Crestbrook Insurance Co. (Respondent) in the amount of $200,000.[1] Petitioner simultaneously filed a Motion for Costs pursuant to CCP § 998.[2] The parties entered into a written arbitration agreement on or about November 2018. Petitioner sought UIM policy limits payment from Respondent and a dispute arose as to the amount of damages. The arbitration hearing was on May 11, 2023.

Petitioner filed the instant Petition to Confirm Arbitration Award on August 4, 2023. On August 7, 2023, Petitioner filed Notice of Petition and Petition to Confirm Award of Arbitration with supporting declaration and exhibits. Respondent timely filed an opposition to Petitioner’s motion to award costs only on October 19, 2023.[3] Petitioner timely filed a reply in support of the motion to award costs on October 23, 2023.

“Any party to an arbitration in which an award has been made may petition the court to confirm, correct or vacate the award. The petition shall name as respondent all parties to the arbitration and may name as respondents any other persons bound by the arbitration award.” (Code Civ. Proc., (CCP) § 1285.) “If a petition or response under this chapter is duly served and filed, the court shall confirm the award as made, whether rendered in this state or another state, unless in accordance with this chapter it corrects the award and confirms it as corrected, vacates the award or dismisses the proceeding.” (CCP § 1286.)

Filing Requirements of a Petition to Confirm Arbitration Award (CCP § 1285.4)

Code of Civil Procedure section 1285.4 states: “A petition under this chapter shall:

a. Set forth the substance of or have attached a copy of the agreement to arbitrate unless the petitioner denies the existence of such an agreement.

Here, Petitioner set forth the terms of the Arbitration Agreement in the Petition and to her declaration in support of the Petition and Motion for Costs. (Petition p. 4:8-24; Saspe Decl., Exhibit G.) Petitioner also identified the arbitrator. (Petition p. 3:4.)

(a) A copy of the petition and a written notice of the time and place of the hearing thereof and any other papers upon which the petition is based shall be served in the manner provided in the arbitration agreement for the service of such petition and notice.

(b) 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.

Here, Petitioner attached proof of service to her petition that indicates service via e-mail to counsel for Respondent on August 4, 2023. Although there is no indication that the arbitration agreement allows service via e-mail because the quoted portion of the agreement does not say so, Respondent appears to have accepted service via e-mail because it timely filed an opposition to the motion for costs and has not argued insufficient service.

Code of Civil Procedure section 1283.6 provides that: “The neutral arbitrator shall serve a signed copy of the award on each party to the arbitration personally or by registered or certified mail or as provided in the agreement.”¿This requirement may be satisfied by service by the arbitrator or upon proper service of the Award with the Petition. (See Murry v. Civil Service Employees Ins. Co. (1967) 254 Cal.App.2d 796, 799-800.)

A party may seek a court judgment confirming an arbitration award by filing and serving a petition no more than four years, but not less than 10 days, after the award is served. (CCP §§ 1288, 1288.4.)

Petitioner filed the instant petition approximately 1 month after service of the Award, making it timely under Code of Civil Procedure sections 1288 and 1288.4.

The court must confirm the award as made, unless it corrects or vacates the award, or dismisses the proceeding. (CCP § 1286; Valsan Partners Limited Partnership v. Calcor Space Facility, Inc. (1994) 25 Cal.App.4th 809, 818.)

Petitioner has demonstrated that on July 7, 2023, the arbitrator issued an Arbitration Award in her favor and against Respondent in the amount of $200,000.00.

Petitioner served a CCP § 998 Offer to Compromise to Respondent’s counsel on March 14, 2023 in the amount of $99,999.00. (Theriault Decl., Exhibit B.) Respondent did not accept Petitioner’s offer. (Theriault Decl., ¶¶ 3, 4.) Petitioner contends that her offer was reasonable and, because she is the prevailing party and obtained an award of $200,000, that she is entitled to costs.[4] Petitioner claims the following costs:

Respondent opposes portions of Petitioner’s cost memorandum as excessive. First, Respondent notes that the parties agreed to split the arbitration fees equally and so Petitioner’s bill should be the same as their bill. Second, Respondent contends that Petitioner’s expert witness fees are unreasonable and unexpected and are not supported by the facts and evidence.[6]

A Petitioner may request costs on a petition to confirm arbitration award. (CCP § 1293.2; MBNA America Bank, N.A. v. Gorman (2006) 147 Cal.App.4th.Supp. 1, 7.) “If an offer made by a plaintiff is not accepted and the defendant fails to obtain a more favorable judgment or award in any action or proceeding other than an eminent domain action, the court or arbitrator, in its discretion, may require the defendant to pay a reasonable sum to cover postoffer costs of the services of expert witnesses, who are not regular employees of any party, actually incurred and reasonably necessary in either, or both, preparation for trial or arbitration, or during trial or arbitration, of the case by the plaintiff, in addition to plaintiff's costs.” (CCP § 998(d).)

The court agrees with Petitioner that the arbitration costs, as indicated by the receipts provided with the moving papers, reflect the cost Petitioner requests.[7]

Upon reviewing the evidence provided in support of the cost request, the court agrees with Petitioner that the request for expert fees are reasonable and expected. First, Dr. Tagliati’s fees are reasonable because, as Petitioner indicates, the hourly rate comports with Dr. Tagliati’s unique expertise in his field, the Arbitrator heavily relied on his opinion in issuing the award, and Dr. Tagliati’s review of extensive records to prepare his opinion and for testimony.[8] (Exhibit G, CV; Exhibit A, Arbitration Award; Exhibit C Invoice Nos. 001, 002.) Respondent’s contention that Dr. Tagliati’s testified for a limited amount of time fails to acknowledge the hours of preparation for that hearing. As to Dr. Rashtian, the court disagrees with Respondent that the bills reflect excessive time. Indeed, the bills reflect Dr. Rashtian spend 0.35 hours reviewing neuro records and also communicating with Petitioner and spent 0.8 hours preparing for the instant arbitration. (Exhibit C, Invoice Nos. 455, 466.) Otherwise, the bills reflect work pertaining only to this arbitration. (Ibid.)

Accordingly, reduces the fee request by $3,200.00 for a total of $18,460 in expert witness fees.

[1] According to the Petition, Respondent issued the $200,000 payment on August 1, 2023.

[2] Petitioner seeks $48,362.22 in costs.

[3] Respondent did not oppose confirmation of the Arbitration Award itself.

[4] As to the experts in particular, Petitioner highlights that the Aarbitrator heavily relied on expert testimony in issuing the award, that the experts reviewed thousands of pages of medical records as well as deposition transcripts of Respondent’s experts, and otherwise prepared for arbitration.

[5] Petitioner notes that she incurred $4,193.06 in arbitration fees associated with preparing the arbitration award (Exhibit C has a receipt for $4,750.00, not $4,193.06), $434.20 in credit card fees (confirmed in Exhibit C), and $1,900 associated with Respondent’s motion to reschedule the arbitration (confirmed in Exhibit C).

[6] In particular, Respondent challenges the amount of time some of Petitioners experts spent preparing for the instant arbitration because there was a prior arbitration that, Respondent claims, these experts should have already been familiar with Petitioner’s injuries.

[7] However, the first bill for $16,700.00 indicates it was incurred on October 21, 2022, due on December 20, 2022, and paid on January 20, 2023. Petitioner cites Storm v. Standard Fire Insurance Company (2020) 52 Cal.App.5th 636 to support her position that she may recoup her portion of the arbitration fee. Storm does not say when the petitioner there paid their portion of the arbitration fee compared to when they served their 998 offer. Instead, the court in Storm focused on whether the petitioner could recover her arbitration fees at all. Still, because Respondent did not oppose the arbitration fees on this ground, the court will not do so either.

[8] Petitioner’s request as to Dr. Tagliati is missing $3,200.00 of supporting invoice. This accounts for 4 hours of work billed at Dr. Tagliati’s $800 rate.