Soni v. SimpleLayers, Inc. ( 2019 )

Filed 11/22/19; Certified for Publication 12/4/19 (order attached)
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FIVE
SURJIT P. SONI, B284164
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No. EC063728)
v.
SIMPLELAYERS, INC., et al.,
Defendants and Appellants.
APPEAL from a judgment of the Superior Court of Los
Angeles County, William D. Stewart, Judge. Reversed.
Akin Gump Strauss Hauer & Feld, Rex S. Heinke,
Jessica M. Weisel, for Defendants and Appellants.
The Soni Law Firm, M. Danton Richardson, Leo E.
Lundberg, Jr., for Plaintiff and Respondent.
__________________________
This case involves the deadlines to set aside an
arbitration award after arbitration of an attorney-client fee
dispute under the Mandatory Fee Arbitration Act (MFAA)
(Bus. & Prof. Code, § 6200 et seq.)1 by requesting a trial or
filing a pleading to vacate the award. A client filed a request
for arbitration under the MFAA with the Los Angeles
County Bar Association (LACBA). The attorney objected to
the arbitrator that the request for arbitration was untimely,
and therefore, the client had waived the right to arbitrate.
Arbitration proceedings were held, and the arbitrator issued
an award of $2.50 in favor of the attorney. Thirty-three days
after the arbitration award was served on the parties by
mail, the attorney filed an action in the trial court to recover
the full amount of the disputed fees. The client filed a
petition in the pending action to confirm the arbitration
award on the ground that the award became binding when
the attorney did not file an action within 30 days after
service of the award. The attorney filed a response to the
petition, more than 100 days after service of the award,
asserting that the request for trial was timely and the
arbitrator lacked jurisdiction. The trial court concluded that
the attorney’s action was timely, because Code of Civil
Procedure section 1013 extended the attorney’s time to file
by five days for service of the award by mail; the trial court
denied the client’s petition to confirm the arbitration award.
At trial, the court issued an award of $2,890 in favor of the
1All further statutory references are to the Business
and Professions Code unless otherwise stated.
2
attorney, and also awarded $79,898 in attorney fees to the
attorney as the prevailing party.
On appeal, the client contends the trial court erred in
concluding that Code of Civil Procedure section 1013 extends
the 30-day time to file an action under section 6204, and the
attorney’s untimely filing means the arbitrator’s award must
be confirmed. The attorney contends that the trial court’s
ruling that he had an additional five days to file should be
affirmed. Alternatively, the attorney contends a tolling
provision in section 6206 means his action was timely.
Finally, the attorney contends that even if his time to file an
action was not extended, the arbitrator never had
jurisdiction over the fee dispute, because the client failed to
request arbitration within 30 days of receiving notice of
arbitration rights.
We conclude that under LACBA’s Rules for Conduct of
Mandatory Arbitration of Fee Disputes Pursuant to Business
& Professions Code Section 6200 et seq. (the LACBA rules),
service is complete at the time of deposit in the mail and not
extended for service by mail. The arbitration award became
binding when the attorney did not file an action within 30
days after service. Section 6206 did not extend this 30-day
deadline. The attorney is barred under Code of Civil
Procedure section 1288 from asserting a ground that
supports vacating the award, because the attorney did not
file a petition or a response within 100 days of service of the
award. Even if the attorney were not barred from raising
arbitrability issues, however, the LACBA rules provide that
3
the arbitrator has the authority to determine jurisdiction
and the arbitrator’s ruling that the fee dispute was
arbitrable is not reviewable for errors of law or fact. We
reverse, with directions.
FACTUAL AND PROCEDURAL HISTORY
Attorney-Client Relationship
Respondent attorney Surjit P. Soni, doing business as
The Soni Law Firm (collectively Soni), operates his legal
practice as a sole proprietorship and hires attorneys to work
for him. Appellant Timothy Tierney was an acquaintance of
attorney Ron Perez, who performed work for Soni. In 2009,
Tierney engaged Soni, through Perez, to work on publicity
claims and patent prosecution. Tierney and Soni executed
an attorney-client agreement. Tierney signed the agreement
as an individual and provided an email address at his
company Cartograph, Inc.2
2 Soni provides office space and resources to the
attorneys associated with his business, assigns work to the
attorneys, bills clients based on the time reflected in the
attorneys’ records, and compensates the attorneys who
worked on the client matters at a rate lower than the rate
billed to clients. Soni also supplies benefits to the attorneys,
including paying a portion of their bar dues, and provides W-
2 forms. The attorney-client agreement used plural
pronouns as well. For example, the agreement stated, “On
rare occasion we have trouble collecting payment for our
4
Correspondence from the United States Patent and
Trademark Office required responses in August and
September 2013. On June 18, 2013, Tierney called and
learned Perez was no longer working with Soni. Soni offered
that Tierney could: (1) keep his legal matters with Soni; (2)
terminate the relationship with Soni and engage Perez
directly; or (3) find a different law firm for his legal work.
Tierney said he would think about it and let Soni know his
decision. He instructed Soni to do no further work on
Tierney’s legal matters until hearing from Tierney.
Soni asked attorney Michael Long to review Tierney’s
files and complete the work indicated. On July 17, 2013,
Long began reviewing the work performed on Tierney’s
patent cases over the prior four years. On July 25, 2013,
Long wrote an e-mail to Tierney introducing himself as the
attorney handling Tierney’s patent and trademark matters
under Soni’s direction. Long analyzed the next steps for
Tierney’s applications.
On July 31, 2013, Tierney responded that he planned
to stay with Perez for continuity. He confirmed that he
would pay the outstanding balance owed to Soni, which he
believed was $4,941. On August 8, 2013, a legal assistant to
Soni sent invoices to Tierney by e-mail, which included
charges for Long’s legal services. On October 8, 2013,
Tierney wrote an e-mail to Soni with instructions and asked
Soni to adjust the time that Long billed on July 17, 19, and
services. Since our firm is a law office and not a bank,
unpaid bills work a substantial hardship on us.”
5
25, 2013, because Tierney had not authorized the legal
services performed by Long.
On October 14, 2013, Long wrote a letter to Tierney
stating, “As I notified you previously, you are entitled to your
file. Ron is welcome to coordinate with Cassandra to obtain
the file. [¶] I understand that you spoke with Mr. Soni and
that you promised to pay $1,000 by the end of the week and
to sign this letter. Please countersign and return signed
copy to The Soni Law Firm the following letter [sic]: [¶] I,
Timothy Tierney, and the president of Cartograph, Inc. [sic]
I acknowledge that The Soni Law Firm has provided services
to Cartograph Inc. And that there is an outstanding balance
of $7,211.00 less a check payment of $100.00 which will
presumably clear. After discussing the matter, I agree to
personally guarantee the debts of Cartograph, Inc. for the
full amount owed, less any accommodation The Soni Law
Firm may permit, by paying no later than November 30,
2013. By signing below, I agree to the above terms without
reservation.” Tierney signed the letter on October 15, 2013,
and returned it to Soni.
On November 18, 2013, Tierney sent a letter to Soni
with a check in the amount of $3,531. He referred to
adjustments that he was asking Soni to consider on the basis
that he did not authorize Long or Soni to perform legal
services on Tierney’s behalf after he was told that Perez was
no longer employed by Soni.
On December 18, 2013, Soni prepared a “Notice of
Client’s Right to Fee Arbitration” for an outstanding balance
6
of $3,580. The notice of arbitration rights did not list the
post office box in Tierney’s address. That day, Soni’s legal
assistant sent an e-mail to Tierney at
“tierney@cartograph.com” with the subject line “Tierney –
Notice of Arbitration.” The text of the e-mail stated, “On
behalf of The Soni Law Firm, please see the attached
documents.” The attachment was the notice of arbitration
rights.
Arbitration
Tierney submitted a petition for fee arbitration under
LACBA’s attorney-client arbitration services on February 19,
2014. On February 25, 2014, Tierney sent a letter to Soni on
letterhead for SimpleLayers, Inc., asking for a tax form.
Tierney noted that his company’s name had changed, and he
provided new contact information. His post office box
number was the same, but his new email address was
“tim@simplelayers.com.”
On January 5, 2015, attorney Long sent a letter to the
arbitrator stating that he was representing Soni. He
requested dismissal of the arbitration on the ground that it
was untimely, and therefore waived under section 6201,
subdivision (a). Tierney had been given notice of his right to
arbitrate on December 18, 2013. Failure to request
arbitration within 30 days after receipt of the notice from an
attorney was deemed a waiver under section 6201, and
Tierney had initiated arbitration more than 30 days after
7
receipt of the notice, thereby waiving his right to arbitration.
As a result, the arbitration should be dismissed for lack of
jurisdiction.3
3 On January 9, 2015, Long wrote the arbitrator the
following letter: “Mr. Soni respectfully requests
reconsideration of the ruling re: jurisdiction. In response to
Mr. Tierney’s letter of January 8, 2015 and the recent ruling:
[¶] First, via U.S. mail, the Notice of Client’s Right to Fee
Arbitration was provided to Mr. Tierney’s last known
mailing address. Our records confirm service by mail was
also performed on December 18, 2013. This satisfies the
requisite notice. [¶] Second, via email, the Notice was also
provided to Mr. Tierney’s last known email address. Mr.
Tierney used that same email address just two days before
the notice, so his claim of ‘disuse’ is not credible. (Exhibit C
– December 16, 2013 Email from Tierney via
tierney@cartograph.com). It matches the email address used
to provide him with the Notice two days later. (Exhibit D –
December 18, 2013 Email to Tierney at
tierney@cartograph.com). No change or ‘disuse’ message
was received from Mr. Tierney. Mr. Tierney admits he
received the notice in his email inbox, again confirming the
December 18, 2013 notice. Mr. Tierney used the email, and
by checking it, he cannot fairly disclaim its use under the
circumstances. A ‘read receipt’ is not required by Section
6201(a). In addition, Mr. Tierney never established the date
range when he stopped checking his email. Simply
abandoning his email makes no sense when he was never
locked out of his email, and still clearly had access to it.
Indeed, Mr. Tierney seizes artificially on the lack of read
receipt, which a response thereof could likely be denied in
any event. The email was sent and no ‘undeliverable’ return
8
On January 16, 2015, Long submitted Soni’s reply to
the petition for arbitration, stating that Soni was “specially
appearing” and reserving jurisdictional objections.
An arbitration hearing was conducted on January 30,
2015. Tierney challenged billing charges of $3,720, because
he had not authorized Long or Soni to perform legal services
on his behalf after being informed that Perez was no longer
employed by Soni. Soni and Long testified that although
they had not received further directions from Tierney, they
believed they had a duty to continue to represent Tierney,
including handling his cases with the United States Patent
and Trademark Office, until instructed otherwise. In light of
the fact that Tierney clearly stated that he needed to think
about his legal representation and get back to Soni on the
next steps, the arbitrator was not persuaded that Soni had a
duty to continue working on Tierney’s case until Tierney
definitively terminated the attorney-client relationship.
Nothing needed to be done in the immediate future on
Tierney’s matters. Furthermore, Soni or Long could have
easily contacted Tierney by telephone or e-mail to inquire
whether Tierney was going to continue to be represented by
Soni or terminate the relationship. Soni unilaterally
proceeded with additional legal work that Tierney had not
authorized based on their most recent conversation. Even if
email was received. [¶] Therefore, notice is met under
California Bus. & Prof. Code, Section 6201(a). Mandatory
arbitration cannot be compelled and the case should be
dismissed for lack of jurisdiction.”
9
the deadlines in Tierney’s cases necessitated quick action,
waiting a day or two for clear instructions from Tierney
would have been reasonable and not jeopardized the pending
cases.
The arbitrator concluded Tierney was not liable for the
fees charged by Long under two rationales. First, Tierney
had not authorized the fees charged by Long and was not
responsible for paying them, regardless of the personal
guarantee that Soni had Tierney sign. Second, Long’s
charges to review Tierney’s matters were duplicative billing.
When the attorney responsible for the matters left the firm,
it was a staffing issue and the costs associated with taking
over the case should have been absorbed as a cost of
business. The subsequent lawyer’s review of the file
duplicated work that had been previously performed by the
initial lawyer, and the client cannot be billed for the
duplicative work. In addition, Soni had attempted to charge
fees for collection activities to Tierney, which the arbitrator
found should not have been billed to Tierney and were
duplicative.
During the arbitration, Tierney agreed not to dispute
charges totaling $380 associated with transferring his file.
The parties stipulated that with respect to undisputed fees,
Tierney had a credit balance of $140. The arbitrator
allocated the initial arbitration fee of $242.50 to Soni and the
amended arbitration filing fee of $26 to Tierney. The
arbitrator awarded net fees to Soni of $2.50. The arbitrator
10
signed the award on February 11, 2015. The arbitration
award was served by mail on February 13, 2015.
Lawsuit
On March 18, 2015, attorneys who were associated
with Soni, including Long, filed a complaint on Soni’s behalf
against Tierney for breach of contract, quantum meruit,
money had and received, book account, fraudulent and
negligent misrepresentation, fraudulent inducement to enter
into a contract, and breach of guaranty. Soni sought $3,580
in fees and $23,898 for collection expenses.
Tierney filed an answer. On June 30, 2015, Tierney
filed a petition in the pending action to confirm the
arbitration award. The petition alleged that no party had
rejected the award and requested trial within 30 days after
notice of the arbitration award was mailed, and as a result,
the arbitration award was binding.
On July 24, 2015, Soni filed an “opposition” to the
motion to confirm the arbitration award, and a request to
dismiss the petition, or in the alternative, correct the award
to reflect the amount of attorney fees Soni sought in the
complaint. Soni’s arguments relied on the arbitrator’s lack
of jurisdiction and Soni’s lack of proper notice of the
arbitration award. Soni stated that he had objected twice in
January 2015 that the arbitrator lacked jurisdiction. He
added, “Mr. Tierney’s assertion that he did not receive email
notice despite the parties’ ongoing prior communications
11
amounts to procuring the arbitration by fraud.
Nevertheless, Mr. Soni participated in the arbitration
proceeding under objection to the arbitration as untimely
and fraudulently invoked, and elected non-binding
arbitration.”
Soni argued that the arbitration award was invalid,
because there was no evidence that three signed copies of the
award were provided to the Arbitration Committee Office, no
notice was provided of the parties’ post-arbitration rights as
required under rule 35 of the LACBA rules, the award failed
to decide all of the issues submitted to the arbitration, and
the award improperly construed the language of the
attorney-client fee agreement.
Soni also argued that the action was timely, because
section 6206 and rule 48 of the LACBA rules tolled the time
to file a civil action until 30 days after receipt of the
arbitration award. He argued that the time for filing a civil
action was based on the date that the arbitration award was
received, not the date that the arbitration award was mailed,
and Soni had received the award on February 17, 2015. In
addition, the time to file an action was extended by five days
under Code of Civil Procedure section 1013 based on service
of the arbitration award by mail.
Soni submitted his declaration in support of his
opposition. He provided the e-mail sent by his legal
assistant on December 18, 2013, with the notice of the right
to arbitration. He also submitted Tierney’s letter providing
new contact information in February 2014. He provided one
12
of his January 2015 letters to the arbitrator objecting that
Tierney’s request for arbitration was untimely. Soni
declared that during the arbitration proceeding in January
2015, Tierney stated that he did not check his old email
address and did not receive the notice of his right to
arbitration.
Tierney filed a reply on July 31, 2015, arguing that the
arbitration award became binding 30 days after service
under section 6204, subdivision (b). In addition, Soni had
failed to exercise his opportunity to vacate or correct the
arbitration award by raising his claims within 100 days after
service of the arbitration award. The arbitration award was
served on February 13, 2015, and Soni did not petition the
court to vacate or correct the award within the 100-day time
limit that expired on May 24, 2015. The time limits in
sections 6203 and 6204 controlled over the tolling provisions
of section 6206. Tierney requested an award of attorney
fees.
The trial court issued a tentative ruling finding the
arbitration award was not binding, because Code of Civil
Procedure section 1013 extended the time to file an action by
five days for service of the arbitration award by mail, and
Soni had commenced a civil action within the required time
period. The trial court acknowledged case law that held the
30-day time period began to run from the date that the
award was mailed, but the Legislature had subsequently
amended sections 6203 and 6204 to replace the term
“mailing” with “service,” and thereby altered the law.
13
Tierney filed a supplemental reply on August 31, 2015,
arguing that the existing case law and the LACBA rules
provided that the time for filing an action was not extended
under Code of Civil Procedure section 1013 for service by
mail. Soni filed a supplemental response arguing that the
action was timely and the trial court had jurisdiction,
because Code of Civil Procedure section 1013 extended the
time to file an action by five days based on service of the
award by mail.
A hearing was held on September 4, 2015. Tierney
argued that under the case law, the State Bar rules, and the
LACBA rules, there was no extension of the time period in
which an arbitration award became binding for service by
mail. The trial court denied the motion to confirm the
arbitration award and set a date for trial.
A bench trial was held over four days in January and
February of 2017. On March 21, 2017, the trial court issued
a tentative ruling. The court stated that an attorney
proceeds at his peril if work is suspended without written
instructions in the face of an impending deadline. Tierney’s
matter was an open case, and it was a universal practice
among competent attorneys to review open client files
periodically, typically monthly. The court concluded that
professional and fiduciary duties bound someone to look at
the file. Soni and Long were not aware of Perez’s practice to
contact Tierney for authorization to perform further work.
Long needed to prepare to answer a broad range of questions
that Tierney might ask. In addition, the court found the
14
amount that Tierney guaranteed was the outstanding
balance of $7,211. Soni argued that he was entitled to an
award of attorney fees, because Soni was not self-
represented during the action. The court found Soni’s W-2
employees represented Soni in the trial court action as
independent contractors, as if Soni hired a firm across the
street or down the hall, and Soni was entitled to an award of
attorney fees.
Judgment was entered on May 19, 2017, in the amount
of $2,890 in favor of Soni, plus pre-judgment interest,
attorney fees, and costs to be determined. On July 28, 2017,
Tierney filed a notice of appeal from the May 19, 2017
judgment and all intermediate rulings. Soni filed a motion
requesting an award of $281,191.65 in attorney fees and
costs. The trial court awarded attorney fees of $79,898.
Tierney filed a notice of appeal from the post-judgment order
awarding attorney fees, and this court consolidated Tierney’s
appeals.4
DISCUSSION
Statutory Scheme
The MFAA is a statutory scheme for the arbitration of
attorney-client disputes over legal fees, costs, or both.
4 Tierney’s request for judicial notice of a post office
address and the legislative history of section 6203, filed with
this court on July 3, 2019, is granted.
15
(Rosenson v. Greenberg Glusker Fields Claman &
Machtinger LLP (2012) 203 Cal. App. 4th 688, 692–693
(Rosenson).) The MFAA has its own rules and limitations,
distinct from the framework of the California Arbitration Act
(CAA) (Code Civ. Proc., § 1280 et seq.), which governs
private contractual agreements to arbitrate. (Aguilar v.
Lerner (2004) 32 Cal. 4th 974, 983–984.) “The MFAA
arbitration is voluntary for the client, but mandatory for the
attorney if commenced by the client.” (Rosenson, supra, 203
Cal.App.4th at p. 693.)
Section 6200 directed the State Bar to adopt rules for
local bar associations to sponsor systems for arbitration and
mediation of fee disputes under the MFAA. The rules of
procedure that are adopted by local bar associations are
subject to review by the State Bar. (§ 6200, subd. (d).)
An attorney is required to provide notice of the client’s
right to fee arbitration prior to, or at the same time as,
serving an action or commencing a proceeding against the
client to recover fees and costs. (§ 6201, subd. (a); Rules of
State Bar, rule 3.501(B) [“attorney must provide the
mandatory State Bar Notice of Client’s Right to Fee
Arbitration form”].) If the client does not request arbitration
within 30 days after receipt of the notice, the right to
arbitration under the MFAA is deemed waived. (§ 6201,
subd. (a).)
The arbitration award is not binding, although the
parties can agree to be bound by the award at any time after
the dispute arises. (§§ 6203, subd. (b), 6204, subd. (a).) Even
16
absent an agreement between the parties, however, the
arbitration award becomes binding 30 days after service of
notice of the award, unless a party requests a trial de novo
within the 30 days. (§ 6203, subd. (b).)
Judicial Review of Arbitration Awards
“California has a long-established and well-settled
policy favoring arbitration as a speedy and inexpensive
means of settling disputes.” (Hightower v. Superior Court
(2001) 86 Cal. App. 4th 1415, 1431 (Hightower).) An
arbitration award is not independently enforceable; it has
the force and effect of a contract between the parties to the
arbitration until it is confirmed or vacated. (Code of Civ.
Proc., § 1287.6; Cinel v. Christopher (2012) 203 Cal. App. 4th
759, 765.)
The MFAA borrows the procedures of the CAA to
confirm, correct or vacate an arbitration award. (Levinson
Arshonsky & Kurtz LLP v. Kim (2019) 35 Cal.App.5th 896,
906.) A party may petition to the court where an action is
pending, or to the court having jurisdiction over the amount
of the award if no action is pending, to confirm, correct or
vacate the award “in the same manner as provided in
Chapter 4 (commencing with Section 1285) of Title 9 of Part
3 of the Code of Civil Procedure.” (§ 6203, subd. (b).)
A party to an arbitration may petition the court to
confirm, correct or vacate the award. (Code of Civ. Proc.,
17
§ 1285.)5 A response to a petition may request that the court
dismiss the petition or confirm, correct or vacate the award.
(Code of Civ. Proc., § 1285.2.) A petition or a response
requesting that the court correct or vacate an award must
set forth the grounds for the relief. (Code of Civ. Proc,
§ 1285.8.)
When a party files a petition under Code of Civil
Procedure section 1285, the trial court has only four choices
under Code of Civil Procedure section 1286: (1) confirm the
award, (2) correct the award and confirm it as corrected, (3)
vacate the award, or (4) dismiss the proceeding.6 (Glassman
v. McNab (2003) 112 Cal. App. 4th 1593, 1598 (Glassman);
Law Offices of David S. Karton v. Segreto (2009) 176
Cal. App. 4th 1, 8 (Karton).)
The exclusive grounds for vacating an arbitration
award are provided in Code of Civil Procedure section
5 The petition must name all the parties to the
arbitration as respondents and may name any other people
bound by the arbitration award. (Code of Civ. Proc., § 1285.)
6 Code of Civil Procedure section 1286 provides: “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.”
18
1286.27 (Moncharsh v. Heily & Blase (1992) 3 Cal. 4th 1, 27–
28 (Moncharsh)), including that the trial court shall vacate
an award when “[t]he arbitrators exceeded their powers and
the award cannot be corrected without affecting the merits of
the decision upon the controversy submitted.” (Code of Civ.
Proc., § 1286.2, subd.(a)(4)) The exclusive grounds for
7 The grounds provided in Code of Civil Procedure
section 1286.2, subdivision (a), for vacating an award are as
follows: “Subject to Section 1286.4, the court shall vacate
the award if the court determines any of the following: [¶]
(1) The award was procured by corruption, fraud or other
undue means. [¶] (2) There was corruption in any of the
arbitrators. [¶] (3) The rights of the party were substantially
prejudiced by misconduct of a neutral arbitrator. [¶] (4) The
arbitrators exceeded their powers and the award cannot be
corrected without affecting the merits of the decision upon
the controversy submitted. [¶] (5) The rights of the party
were substantially prejudiced by the refusal of the
arbitrators to postpone the hearing upon sufficient cause
being shown therefor or by the refusal of the arbitrators to
hear evidence material to the controversy or by other
conduct of the arbitrators contrary to the provisions of this
title. [¶] (6) An arbitrator making the award either: (A)
failed to disclose within the time required for disclosure a
ground for disqualification of which the arbitrator was then
aware; or (B) was subject to disqualification upon grounds
specified in Section 1281.91 but failed upon receipt of timely
demand to disqualify himself or herself as required by that
provision. However, this subdivision does not apply to
arbitration proceedings conducted under a collective
bargaining agreement between employers and employees or
between their respective representatives.”
19
correcting an arbitration award are contained in Code of
Civil Procedure section 1286.6.8 (Moncharsh, supra, 3
Cal.4th at p. 28.) The court must dismiss the proceeding as
to respondent if the court determines the person “was not
bound by the arbitration award and was not a party to the
arbitration.” (Code of Civ. Proc., § 1287.2.) Courts have
suggested additional circumstances exist that would allow
the court to dismiss the proceeding. (Karton, supra, 176
Cal.App.4th at p. 8, fn. 12 [stating in dicta that other
procedural bases may exist for dismissal of a proceeding,
such as when a petition is filed after the four year statute of
limitations set forth in Code of Civil Procedure section 1288,9
8 The grounds for correction of an award are as follows:
“Subject to Section 1286.8, the court, unless it vacates the
award pursuant to Section 1286.2, 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.”
(Code Civ. Proc., § 1286.6.)
9 “A petition to confirm an award shall be served and
filed not later than four years after the date of service of a
signed copy of the award on the petitioner. A petition to
vacate an award or to correct an award shall be served and
filed not later than 100 days after the date of the service of a
20
a party to a non-binding arbitration award filed a timely
request for trial de novo, or any procedural basis that would
justify dismissal of any other civil action]; Cinel v.
Christopher, supra, 203 Cal.App.4th at p. 767 [dismissal was
proper when there was no “award” within the meaning of
Code of Civil Procedure section 1283.4]; Maplebear, Inc. v.
Busick (2018) 26 Cal.App.5th 394, 399–401 [concluding from
case law that Code of Civil Procedure section 1287.2 does not
contain exclusive grounds for dismissal of proceeding].)
Judicial review of the arbitrator’s award is limited to
the grounds set forth in Code of Civil Procedure sections
1286.2 (to vacate) and 1286.6 (to correct). (Moncharsh,
supra, 3 Cal.4th at p. 33.) “Under this rule, courts will not
review the arbitrator’s reasoning or the sufficiency of the
evidence supporting the award. (Moncharsh, supra, 3
Cal.4th at pp. 10–11.)” (Cooper v. Lavely & Singer
Professional Corp. (2014) 230 Cal. App. 4th 1, 12 (Cooper).)
“[Even] the existence of an error of law apparent on the face
of the award that causes substantial injustice does not
provide grounds for judicial review.” (Moncharsh, supra, 3
Cal.4th at p. 33.) “Thus, it is the general rule that, with
narrow exceptions, an arbitrator’s decision cannot be
reviewed for errors of fact or law.” (Id. at p. 11.)
We subject the trial court’s ruling on a petition under
Code of Civil Procedure section 1285 to a different standard
of review than the underlying arbitration award. (Cooper,
signed copy of the award on the petitioner.” (Code of Civ.
Proc., § 1288.)
21
supra, 230 Cal.App.4th at p. 11.) We apply the substantial
evidence test to the trial court’s determination of disputed
factual issues. (EHM Productions, Inc. v. Starline Tours of
Hollywood, Inc. (2018) 21 Cal.App.5th 1058, 1063 (EHM).)
“Issues of statutory interpretation and the application of
that interpretation to a set of undisputed facts are questions
of law subject to independent review by this court. (Twedt v.
Franklin (2003) 109 Cal. App. 4th 413, 417.)” (Loeb v. Record
(2008) 162 Cal. App. 4th 431, 441.)
No Extension of Time to Request Trial Based on
Service by Mail
Tierney contends the time to file an action seeking a
trial after arbitration under section 6204 is not extended
under Code of Civil Procedure section 1013 when the
arbitration award is served by mail. We agree.
Prior to January 1, 2010, former section 6203,
subdivision (b), stated that an arbitration award under the
MFAA became binding “30 days after mailing of notice of the
award,” unless a party sought a trial de novo within 30 days
as provided under section 6204. Former section 6204,
subdivision (c), similarly measured the time to file an action
from the date of mailing of the notice: “If no action is
pending, the trial after arbitration shall be initiated by the
commencement of an action in the court having jurisdiction
over the amount of money in controversy within 30 days
after mailing of notice of the award. After the filing of such
22
an action, the action shall proceed in accordance with the
provisions of Part 2 (commencing with Section 307) of the
Code of Civil Procedure, concerning civil actions generally.”
Code of Civil Procedure section 1013, subdivision (a),
provides in relevant part that “Service is complete at the
time of the deposit, but any period of notice and any right or
duty to do any act or make any response within any period
or on a date certain after service of the document, which
time period or date is prescribed by statute or rule of court,
shall be extended five calendar days, upon service by mail, if
the place of address and the place of mailing is within the
State of California, . . . but the extension shall not apply to
extend the time for filing notice of intention to move for new
trial, notice of intention to move to vacate judgment
pursuant to Section 663a, or notice of appeal. This extension
applies in the absence of a specific exception provided for by
this section or other statute or rule of court.”
In Simpson v. Williams (1987) 192 Cal. App. 3d 285,
286–287 (Simpson), the appellate court considered whether
Code of Civil Procedure section 1013 extended the time for
filing an action under sections 6204. The Simpson court
concluded from the express language of the statute that the
date of mailing of an arbitration award commenced the
period for requesting a trial de novo, not the date of service
of the award. (Id. at pp. 288–289.) Because the statutory
language did not refer to service of the award, Code of Civil
Procedure section 1013 did not apply to extend the time to
act. (Ibid.) However, the Simpson court concluded relief
23
was available under Code of Civil Procedure section 473.
(Id. at p. 291.)
“[T]he cases have consistently held that where a
prescribed time period is commenced by some circumstance,
act or occurrence other than service then section 1013 will
not apply. [Citations.] [¶] On the other hand, where a
prescribed time period is triggered by the term ‘service’ of a
notice, document or request then section 1013 will extend
the period. [Citations.]” (Citicorp North America, Inc. v.
Superior Court (1989) 213 Cal. App. 3d 563, 567–568,
fn. omitted.)
We note that former rule 732 of the State Bar Rules of
Procedure for Fee Arbitration provided that service was to be
made by personal delivery or by mail, and “[t]he service is
complete at the time of deposit. The time for performing any
act shall commence on the date service is complete and shall
not be extended by reason of service by mail.”
The California Supreme Court in Maynard v. Brandon
(2005) 36 Cal. 4th 364, 369 (Maynard), overruled Simpson as
to the availability of relief under Code of Civil Procedure
section 473, holding instead that “section 473, subdivision (b)
cannot remedy a failure to meet the 30-day deadline for
seeking a trial following arbitration under the MFAA.” Code
of Civil Procedure section 473, subdivision (b) cannot provide
relief from deadlines that are jurisdictional, such as the time
to move for a new trial, the applicable limitations period to
institute an action, and the time for filing of a notice of
appeal. (Maynard, supra, at pp. 372–373.) The Maynard
24
court found the MFAA’s procedure for a trial de novo
following arbitration was like a conventional appeal, because
it allows a court to determine a dispute previously decided in
another forum. (Id. at p. 374.) “As a general rule, section
473, subdivision (b) cannot extend the period in which a
party must file a notice of appeal. No persuasive
justification exists for departing from this well-established
principle here, as the MFAA’s terms, policy goals, and
legislative history all indicate that the Legislature did not
intend for the 30-day deadline for seeking a trial after fee
arbitration to be subject to extension through invocation of
section 473, subdivision (b).” (Id. at p. 369.)
In 2009, the Legislature enacted an omnibus bill
containing several provisions that the Senate Committee on
Judiciary characterized as “technical and clarifying
changes.” (Sen. Com. on Judiciary, Analysis of Sen. Bill No.
544 (2009–2010 Reg. Sess.) as amended May 4, 2009.)
Among these revisions, the Legislature replaced the word
“mailing” with “service” in sections 6203 and 6204, effective
January 1, 2010. (Stats. 2009, ch. 54, §§ 2, 3, pp. 287–289.)
The Senate Committee on Judiciary explained, “Under
existing law, two sections of the Business and Professions
Code that relate to mandatory fee arbitration refer to the
‘mailing’ of documents by the arbitration program. (Bus. &
Prof. Code Secs. 6203, 6204.) This provision would clarify
those sections by replacing ‘mailing’ with ‘service.’ [¶] The
State Bar, sponsor of this provision, states that the use of
the word mailing ‘has occasionally created confusion for
25
parties and may jeopardize the rights of parties in ways that
the statutes did not intend.’ Accordingly, the substitution of
‘service’ for ‘mailing’ is intended to eliminate confusion.”
(Sen. Com. on Judiciary, Analysis of Sen. Bill No. 544, supra,
at p. 6.)
As a result, section 6203, subdivision (b) currently
provides: “Even if the parties to the arbitration have not
agreed in writing to be bound, the arbitration award shall
become binding upon the passage of 30 days after service of
notice of the award, unless a party has, within the 30 days,
sought a trial after arbitration pursuant to Section 6204. . . .
If no action is pending in any court, the award may be
confirmed, corrected, or vacated by petition to the court
having jurisdiction over the amount of the arbitration
award, but otherwise in the same manner as provided in
Chapter 4 (commencing with Section 1285) of Title 9 of Part
3 of the Code of Civil Procedure.”
Section 6204 provides: “(a) The parties may agree in
writing to be bound by the award of arbitrators appointed
pursuant to this article at any time after the dispute over
fees, costs, or both, has arisen. In the absence of such an
agreement, either party shall be entitled to a trial after
arbitration if sought within 30 days, pursuant to
subdivisions (b) and (c), . . . [¶] (b) If there is an action
pending, the trial after arbitration shall be initiated by filing
a rejection of arbitration award and request for trial after
arbitration in that action within 30 days after service of
notice of the award. . . . [¶] (c) If no action is pending, the
26
trial after arbitration shall be initiated by the
commencement of an action in the court having jurisdiction
over the amount of money in controversy within 30 days
after service of notice of the award. After the filing of such
an action, the action shall proceed in accordance with the
provisions of Part 2 (commencing with Section 307) of the
Code of Civil Procedure, concerning civil actions generally.”
Although the Legislature’s substitution of the term
“service” in sections 6203 and 6204 could appear to resurrect
the issue of whether Code of Civil Procedure section 1013
extends the time to seek a trial, the LACBA rules refer to
Code of Civil Procedure section 1013 and clearly state that
no extension of time is provided for service of an arbitration
award by mail. Rule 45(a) of the LACBA rules provides,
“Unless expressly stated in these Rules to the contrary,
service of any notice or other paper shall be by personal
delivery or by deposit in the United States mail, . . . The
service is complete at the time of deposit in the mail (Code
Civ. Proc. § 1013 (a)). The timing for performing any act
shall commence on the date of service is complete [sic] and
shall not be extended by reason of service by mail.”
Rule 3.513 of the State Bar Rules of Procedure for Fee
Arbitrations and the Enforcement of Awards (the State Bar
rules) similarly provides: “(A) Unless these rules provide
otherwise, service is by personal delivery or by mail
pursuant to Code of Civil Procedure section 1013(a). . . . [¶]
(B) Service by mail is complete at the time of deposit in the
United States mail or in a business facility used to collect
27
and process correspondence for mailing with the United
States Postal Service. The time for performing any act
commences on the date service is complete and shall not be
extended by reason of service by mail.”
The deadline for seeking a trial after arbitration under
the MFAA, like the time to file a motion for new trial or a
notice of appeal, is jurisdictional. The LACBA rules state
that the time for initiating a trial de novo begins to run on
the date that service is complete, without extension for
service by mail. Since the rules enacted by LACBA and the
State Bar at the direction of the Legislature provide a
specific exception to the extension of Code of Civil Procedure
section 1013, the extension does not apply.
Our conclusion is supported by the legislative history of
the amendments to sections 6203 and 6204, which reflects
that the amendments were proposed to clarify existing law.
At the time, the existing case law and the State Bar
arbitration rules clearly stated that the time limit to seek a
trial was not extended for service of the award by mail, but
the use of the term “mailing” in the statutes was ambiguous
if a different method of service was employed. There is no
indication that the State Bar or the Legislature intended the
statutory amendments to change the time limit applicable to
service of an arbitration award by mail.10
10 The Senate Committee on Judiciary Analysis does
not specify the nature of the “confusion” that SB 544
intended to correct. Soni argues on appeal that the change
could only have been intended to clear up confusion over
28
Since Soni did not file the complaint within 30 days of
service of the award, the award became binding and the
petition to confirm the award should have been granted.
Tolling Statute
Soni contends section 6206 tolled the time to file a civil
action until 30 days after receipt of the notice of the
arbitration award, and therefore, his civil action was timely.
We conclude section 6206 tolled the statutes of limitation
applicable to his claims, but did not affect the date that the
arbitration award became binding.
Section 6206 provides in relevant part: “The time for
filing a civil action seeking judicial resolution of a dispute
subject to arbitration under this article shall be tolled from
the time an arbitration is initiated in accordance with the
rules adopted by the board of trustees until (a) 30 days after
receipt of notice of the award of the arbitrators, or (b) receipt
whether the time for challenging an arbitral award was
extended by Code of Civil Procedure section 1013, otherwise
the change would be superfluous. Soni’s premise is not
correct. Because the State Bar rules of procedure for fee
arbitrations provided that service was to be made by
personal delivery or by mail, use of the word “mailing” as the
trigger for commencing the 30-day period could create
confusion about whether and when personal delivery might
start the clock running. The amendment of Section 6203(b)
to replace the word “mailing” with “service” eliminates any
confusion over the commencement of the 30-day period.
29
of notice that the arbitration is otherwise terminated,
whichever comes first.”
Section 6206 encourages arbitration by tolling the
applicable statutes of limitation during arbitration
proceedings. A party will not lose the right to file a civil
action due to the statute of limitations running while the
parties are engaged in arbitration. But section 6206 does
not affect the time in which an arbitration award becomes
binding under sections 6203 and 6204. In this case, the
statutes of limitation on Soni’s claims for breach of contract,
quantum meruit, money had and received, book account,
fraudulent and negligent misrepresentation, fraudulent
inducement to enter into a contract, and breach of guaranty
were tolled during the arbitration of the fee dispute and did
not resume again until 30 days after Soni received notice of
the award. For example, if Soni had two years to file a civil
action within the statute of limitations when the arbitration
was initiated, then 30 days after his receipt of notice of the
award, the statute of limitations began to run again and he
had two years to file a civil action within the statute of
limitations from that date, regardless of the length of the
arbitration proceedings. However, 30 days after service of
the award, unless a civil action had been filed, the
arbitration award became binding. Once the award became
binding, it had the force and effect of a contract between the
parties.
The structure of section 6206, read in isolation, is
arguably confusing, and it may present a trap for the
30
unwary.11 Our interpretation of section 6206, however,
operating in conjunction with the other provisions of the
MFAA, is supported by the legislative history of Assembly
Bill No. 3475 (1983–1984 Reg. Sess.), which amended section
6206 to add the tolling language. (Stats. 1984, ch. 825, § 6,
p. 2855.) The legislative reports state that among other
changes, the bill specifies the procedure to request a trial
within 30 days after mailing of notice of the arbitration
award, and “provides that the statute of limitation for filing
a civil action to resolve an attorney fee dispute would be
tolled from the time the arbitration procedure is initiated
until (a) 30 days after receipt of notice of the arbitration
award or (b) receipt of notice that the arbitration is
otherwise terminated.” (Assem. Com. on Judiciary, Analysis
of Assem. Bill No. 3475 (1983–1984 Reg. Sess.) as amended
Apr. 23, 1984, p. 2; see Sen. Com. on Judiciary, Analysis of
Assem. Bill No. 3475 (1983–1984 Reg. Sess.) as amended
Apr. 23, 1984, p. 6.) When Soni filed his action against
Tierney, the claims were not barred by the statute of
limitations, but the arbitration award that determined the
claims was binding.
Alternate Grounds
Soni contends there are alternate grounds to support
the trial court’s order. He asserts that Tierney’s request for
11 To the extent the current statutory language may
cause confusion, it is up to the Legislature to clarify it.
31
arbitration was untimely, and as a result, the arbitrator
lacked jurisdiction to conduct the arbitration. Lack of
jurisdiction is a ground to vacate an arbitration award. We
conclude that Soni is barred from opposing confirmation of
the award on this ground, because Soni did not file a petition
or a response raising this ground within 100 days of service
of the award.
A. Time Limit to Assert Grounds to Vacate
One of the statutory grounds to vacate an arbitration
award is that “[t]he arbitrators exceeded their powers and
the award cannot be corrected without affecting the merits of
the decision upon the controversy submitted.” (Code of Civ.
Proc., § 1286.2, subd. (a)(4).) Code of Civil Procedure section
1286.2, subdivision (d), allows a trial court to vacate an
arbitrator’s implied or express finding of jurisdiction when
the award is outside the scope of statutes providing for
arbitration. (National Union Fire Ins. Co. v. Stites Prof. Law
Corp. (1991) 235 Cal. App. 3d 1718, 1724.) If the court
determines that the arbitrators exceeded their power and
the award cannot be corrected without affecting the merits,
the plain language of Code of Civil Procedure section 1286.2,
subdivision (a)(4), requires the court to vacate the
arbitration award.
A petition or a response seeking to vacate or correct an
arbitration award must be filed within 100 days after service
of the award. (Code of Civ. Proc., § 1288.) A petition to
32
confirm the award, however, may be filed within four years
after service of the award. (Ibid.)
“A party who fails to timely file a petition to vacate
under section 1286 may not thereafter attack that award by
other means on grounds which would have supported an
order to vacate. (Knass v. Blue Cross of California (1991)
228 Cal. App. 3d 390, 393–396.)” (Louise Gardens of Encino
Homeowners’ Assn., Inc. v. Truck Ins. Exchange, Inc. (2000)
82 Cal. App. 4th 648, 659 (Louise Gardens).) “‘Although
section 1287.4 allows an appeal from a judgment confirming
an arbitrator’s award, we find no indication that the section
contemplates allowing a party to bypass the procedures
which provide for limited review by the superior court. . . .
[¶] The arbitration statute is clear. A party to an
arbitration proceeding must challenge an award under
section 1288 by a petition to vacate or correct the award
within 100 days of service of the award. An appeal of the
judgment confirming the award may not be used to
circumvent the prescribed time allowed to petition for
vacation or correction of the award.’ (Knass v. Blue Cross of
California, supra, 228 Cal.App.3d at pp. 395–396; see also
Davis v. Calaway (1975) 48 Cal. App. 3d 309, 311.)” (Louise
Gardens, supra, 82 Cal.App.4th at p. 660, fn. omitted.)
“If the rule were otherwise, a party who missed the
initial 100-day deadline would be able to resurrect any
otherwise time-barred challenge by filing a timely response
to a petition to confirm.” (Douglass v. Serenivision, Inc.
(2018) 20 Cal.App.5th 376, 385 (Douglass).)
33
Soni did not file a petition to vacate the arbitration
award, and Soni’s response to the petition to confirm the
award was filed more than 100 days after service of the
award. As a result, Soni was barred from asserting that the
arbitrator exceeded his powers as a ground to prevent
confirmation of the petition.
B. Authority to Determine Jurisdiction under
the MFAA
Even if we were to conclude that Soni could raise
issues concerning the arbitrator’s jurisdiction, we would
conclude that the arbitrator did not exceed his powers and
his ruling on the issue of arbitrability is not subject to review
for legal or factual errors.
Section 6201, subdivision (a), requires the rules
adopted by the board of trustees to provide that “the client’s
failure to request arbitration within 30 days after receipt of
notice from the attorney shall be deemed a waiver of the
client's right to arbitration under the provisions of this
article.” Rule 8(c) of the LACBA rules provides that a
client’s right to request or maintain arbitration is waived if
“[t]he client fails to submit a request for arbitration in
writing that is either postmarked or actually received by the
Los Angeles County Bar Association 30 days or less after the
client’s receipt of the ‘Notice of Client’s Right to Arbitration’
(Bus. & Prof. Code § 6201 (a)).”
34
An arbitration award must include a determination of
all the questions submitted to the arbitrators which were
necessary to decide in order to determine the controversy.
(§ 6203.) The LACBA rules give the arbitrator authority to
determine whether a request for arbitration is timely. Rule
12(b) of the LACBA rules provides, “Each sole arbitrator or
panel shall have the authority to determine jurisdiction and
shall decline to act if it determines that it lacks jurisdiction.”
Under the LACBA rules, arbitrators have the authority to
determine their own jurisdiction over fee disputes between
client and the client’s attorney, including a determination of
whether the client’s conduct constitutes a waiver of
arbitration under the MFAA. (Manatt, Phelps, Rothenberg
& Tunney v. Lawrence (1984) 151 Cal. App. 3d 1165, 1170–
1171 [LACBA rules gave arbitration panel authority to
determine whether conduct waived arbitration rights,
terminating arbitration].)
The arbitrator in this case had the authority to rule on
the issue of arbitrability, and implicitly or expressly found
the request for arbitration was timely. We do not review the
substance of the arbitrator’s ruling for legal or factual errors.
35
DISPOSITION
The judgment and the order denying the petition to
confirm the arbitration award are reversed. The trial court
is directed to enter a new and different order granting the
petition to confirm the arbitration award. Appellant
Timothy Tierney and his company SimpleLayers, Inc.,
formerly known as Cartograph, Inc., are awarded their costs
on appeal.
MOOR, J.
I concur:
KIM, J.
36
Surjit P. Soni v. Simplelayers, Inc. et al.
B284164
BAKER, Acting P. J., Concurring
I write separately to underscore a point made in the
opinion for the court, which I join in full.
The court’s opinion observes “[t]he structure of section
6206, read in isolation, is arguably confusing, and it may
present a trap for the unwary.” That is an understatement.
The statutory scheme is confusing, full stop, and it does
present a trap for the unwary.
As the opinion for the court explains, Business and
Professions Code section 6206 (section 6206) tolls the time to
file a civil action until 30 days after receipt of the notice of a
fee arbitration award. Many lawyers work right up until a
deadline, and those who do will file a lawsuit only at the end
of this tolling period. The problem is that Business and
Professions Code section 6203 (section 6203) states a fee
arbitration award becomes binding on the arbitrating
parties—even if they have not agreed to be bound—“upon
the passage of 30 days after service of the notice of the [fee
arbitration award], unless a party has, within the 30 days,
sought a trial after arbitration . . . .” (Bus. & Prof. Code,
§ 6203, subd. (b), italics added.) In practice, this means the
uninitiated will timely file civil actions in court near the end
of the section 6206 tolling period (measured from receipt of
the award notice) but these actions will be dead on arrival
because the arbitration award by that time will have already
become binding under section 6203 (where the deadline runs
from service of the award notice, which often precedes
receipt by days). The statutory scheme’s unexplained use of
differing deadlines that turn on “service” in one place and
“receipt” in another will predictably result in unintentional
forfeiture of the prerogative to challenge arbitral fee awards
in court.
That is just what we have here. Respondent Surjit
Soni waited to bring a civil action until 29 days after the
date on which he said he received notice of the arbitrator’s
award. By that time, however, the award had become
binding. The Legislature surely did not intend to create a
trap for unwary litigants, but a trap is indeed what we now
have. Fortunately, the Legislature can easily remedy the
problem by making both of the section 6203 and 6206
deadlines run from the same triggering event, receipt of
notice of an arbitration award.
BAKER, Acting P. J.
2
Filed 12/3/19
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FIVE
SURJIT P. SONI, B284164
Plaintiff and (Los Angeles County
Respondent, Super. Ct. No. EC063728)
v. ORDER CERTIFYING
OPINION
SIMPLELAYERS, INC., et FOR PUBLICATION
al.,
Defendants and
Appellants.
THE COURT:
The opinion in the above-entitled matter filed on
November 22, 2019, was not certified for publication in the
Official Reports. Upon request by a non-party to this action,
the arbitrator who adjudicated the fee dispute at issue, and
for good cause appearing, it is ordered that the opinion shall
be published in the Official Reports.
Pursuant to California Rules of Court, rule 8.1105(b),
this opinion is certified for publication.
BAKER, Acting P. J. MOOR, J. KIM, J.
2