Rickman Brown v. Eva Sperber-Porter , 711 F. App'x 416 ( 2018 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS FEB 14 2018
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
RICKMAN BROWN; et al., No. 17-15121
Petitioners-Appellees, D.C. No. 2:16-cv-02801-SRB
v.
EVA SPERBER-PORTER, a married MEMORANDUM*
woman dealing with her sole and separate
property; et al.
Respondents-Appellants.
On Appeal from the United States District Court
for the District of Arizona
Hon. Susan R. Bolton, District Judge, Presiding
Submitted February 12, 2018**
San Francisco, California
Before: KLEINFELD and TALLMAN, Circuit Judges, and JACK,*** District
Judge.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable Janis Graham Jack, United States District Judge for
the Southern District of Texas, sitting by designation.
Eva Sperber-Porter, Joseph Baldino, Helen Baldino, and various entities
controlled by them (collectively, “Baldino Parties”), appeal from the Arizona
District Court’s confirmation of an arbitration award rejecting their malpractice
claim against their former attorneys, Rickman Brown; Jeff Ross; Evans, Sholz,
Williams & Warncke, LLC; and Ross Orenstein & Baudry LLC (collectively,
“Former Counsel”). We have jurisdiction pursuant to 28 U.S.C. § 1291 and we
affirm.
1. The basis of the Baldino Parties’ malpractice claim is that their
engagement agreement with Former Counsel contained a purportedly unethical
provision allowing Former Counsel to settle on their behalf claims arising from
their investment in a defunct mortgage business, provided that a majority of the
Baldino Parties’ co-plaintiffs approved of the settlement. The parties then agreed
to submit their claims against each other to arbitration, and that the Arbitrator’s
decision would be “final” except as provided by Ariz. Rev. Stat. Ann. § 12-1512.
2. In reviewing a district court’s confirmation of an arbitration award,
we accept findings of fact unless they are “clearly erroneous,” while we review
questions of law de novo. First Options of Chi., Inc. v. Kaplan, 514 U.S. 938,
947–48 (1995). “[W]ith respect to the underlying arbitration decision, however,
our review is both limited and highly deferential.” See Coutee v. Barington
2
Capital Grp., L.P., 336 F.3d 1128, 1132–33 (9th Cir. 2003) (quotations omitted);
see also Nolan v. Kenner, 250 P.3d 236, 238 (Ariz. Ct. App. 2011).
3. Arizona law requires a court to refuse to confirm an arbitration award
where the arbitrator “refused to postpone the hearing upon sufficient cause being
shown therefor . . . .” Ariz. Rev. Stat. Ann. § 12-1512(A)(4).1 The Arbitrator’s
refusal to postpone the hearing does not entitle the Baldino Parties to relief because
they failed to show sufficient cause for a postponement. Their malpractice claim
would fail even if the purportedly unethical majority-rule provision were struck
down, see Martin v. Burns, 429 P.2d 660, 662 (Ariz. 1967) (in division), and their
requested postponement of “several more years,” is contrary to the “speedy final
disposition” which is the primary purpose of arbitration. Smith v. Pinnamaneni,
254 P.3d 409, 414 (Ariz. Ct. App. 2011) (quoting Canon Sch. Dist. No. 50 v.
W.E.S. Constr. Co., 882 P.2d 1274, 1278 (Ariz. 1994) (en banc)). Additionally,
the Baldino Parties are not entitled to relief on this ground because they were not
substantially prejudiced by the refusal to postpone. See Ariz. Rev. Stat. Ann. § 12-
1512(A)(4); Canon, 882 P.2d at 1276. The Arbitrator made the Baldino Parties’
obligation to pay Former Counsel for the GT Settlement contingent on the
1
We assume, without deciding, that the parties’ agreement that § 12-1512 would
govern is valid. But see Ariz. Rev. Stat. Ann. § 12-3004(C). We would reach the
same result under the Revised Uniform Arbitration Act.
3
enforcement of that settlement by the Arizona courts, all of which have so far ruled
for Former Counsel.2
4. Under Arizona law, an arbitration award can also be set aside where it
“conflict[s] with express guidelines or standards set forth or adopted in the
arbitration agreement.” Smitty’s Super-Valu, Inc. v. Pasqualetti, 525 P.2d 309, 313
(Ariz. Ct. App. 1974); see Ariz. Rev. Stat. Ann. § 12-1512(A)(3). The Baldino
Parties urge that the Arbitrator’s award of interest and attorneys’ fees conflicted
with the parties’ agreement that Arizona law would apply. However, those parts of
the award are authorized by the agreement’s incorporation of the rules of the
American Arbitration Association (“AAA”).3 AAA Rule 47(d) (2013); see A.P.
Brown Co. v. Super. Ct., 490 P.2d 867, 869 (Ariz. Ct. App. 1971). The
Arbitrator’s award thus did not conflict with the “express guidelines” of the
arbitration agreement. Pasqualetti, 525 P.2d at 313.
The judgment of the district court is AFFIRMED. Costs and fees for this
appeal are awarded to Appellees.
2
We take judicial notice that the Arizona Court of Appeals approved of the
majority-rule provision and upheld the GT settlement. Baldino v. Ashkenazi, No. 1
CA-CV 16-0404, slip op. at 2 (Oct. 5, 2017). The record does not reveal whether
the Baldino Parties seek discretionary review from the Arizona Supreme Court.
See Ariz. R. Civ. App. Pro. 23.
3
The parties’ disputes about, e.g., whether the “gravamen” of the malpractice
claim sounded in contract are thus beside the point. Regardless, any alleged error
by the Arbitrator in resolving these issues of Arizona law would not amount to a
failure to apply Arizona law. See Pasqualetti, 525 P.2d at 313.
4