Baxter v. Bock

Filed 5/18/16; part. pub. & mod. order 5/24/16 (see end of opn.)
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION ONE
JOSEPH BAXTER,
Plaintiff and Appellant, A142372, A142984, A143689
v. (Sonoma County
MICHAEL BOCK et al., Super. Ct. No. SCV 253350)
Defendants and Respondents.
MICHAEL BOCK et al.,
A144112
Plaintiffs and Appellants,
v. (Sonoma County
Super. Ct. No. SCV 253366)
JOSEPH BAXTER,
Defendant and Respondent.
Attorney Joseph Baxter and his former clients Michael and Lorie Bock,
participated in an arbitration under the Mandatory Fee Arbitration Act (Bus. & Prof.
Code, § 6200 et seq.; MFAA), after stipulating to be bound by the result. In his decision,
the arbitrator concluded the legal services provided by Baxter should be valued at the
amount already paid by the Bocks and awarded Baxter nothing. As all parties
acknowledge, however, the arbitrator erred in stating the amount of fees paid by the
Bocks. When the error was brought to his attention, the arbitrator declined to correct his
award. In addition, considerably after the arbitration was concluded, Baxter discovered
the arbitrator was in the business of auditing attorney bills and had written extensively
about attorney overbilling.
In the trial court, Baxter argued unsuccessfully that the arbitration award should be
vacated, among other reasons, because the arbitrator erred in stating the amount paid by
the Bocks and failed to disclose matters relating to bias. He repeats those arguments on
appeal. In turn, the Bocks contend the trial court failed to award them sufficient legal
fees in connection with the confirmation proceeding.
We reject Baxter’s arguments and affirm the trial court’s confirmation of the
arbitration award. With respect to the attorney fees award, we find no error in the amount
of compensable time approved by the trial court, but we can find no reasonable basis in
the record for the court’s assignment of different hourly rates to the Bocks’ two attorneys.
We therefore vacate this aspect of the court’s decision and remand for its reconsideration.
I. BACKGROUND
Baxter, an attorney, provided legal services for the Bocks. In August 2011,
following a dispute over the value of Baxter’s services, the Bocks filed a request for
arbitration with respect to his fees under the MFAA. The State Bar of California
appointed Attorney James Schratz to arbitrate the dispute.
When the parties first appeared for arbitration, Baxter claimed he needed more
time to prepare a response to the arguments raised by the Bocks in their arbitration brief,
and a two-month continuance was granted. The arbitration ultimately occurred in August
2012. At that time, the parties stipulated the arbitrator’s award would be binding. (Bus.
& Prof. Code, § 6204, subd. (a) [parties to an MFAA arbitration can agree in writing to
be bound by the award].)
Prior to the commencement of the hearing, Schratz informed the parties the
arbitration hearing would last only four hours.1 The Bocks presented their case through
40 minutes of direct testimony by the Bocks and a third witness. Baxter’s cross-
1
The record does not explain the arbitrator’s limitation, other than he had an
appointment later in the day. Under the State Bar rules, an MFAA arbitrator is not to be
paid for his or her services unless the arbitration lasts more than four hours. (Rules of
State Bar, tit. 3, div. 4, ch. 2, rule 3.536(E).) The parties agree Schratz was a volunteer
arbitrator.
2
examination of the Bocks’ witnesses consumed much of the remaining four hours.
Following this testimony, the arbitrator accepted the Bocks’ arbitration brief and its
exhibits as testimonial evidence. When Baxter moved to have his arbitration brief and
exhibits admitted into evidence, the arbitrator did not rule on the request.
After Baxter had testified for 15 minutes, Schratz told him to conclude his
testimony promptly. When Baxter asked for more time, the arbitrator agreed to receive
additional evidence from Baxter in the form of a declaration and supplemental briefing,
and he provided Baxter an additional 40 minutes of live testimony.
Several months after the conclusion of the arbitration, in December 2012, Schratz
entered an award stating he had reviewed all of the documents and considered all of the
testimony presented at the hearing and was ruling “in favor of the clients Michael and
Lorie Bock.” Specifically, Schratz found Baxter had billed the Bocks $99,373; the
services rendered were worth only $68,148; and the Bocks had paid Baxter $68,148.
Accordingly, other than requiring Baxter to reimburse the Bocks one-half of the
arbitration filing fee, Schratz rendered an award of $0. In the text of the decision, Schratz
criticized Baxter in several respects, finding he engaged in “a substantial amount” of
block billing, which is the practice of reporting more than one task in a single time entry;
violated State Bar Rules of Professional Conduct, rule 3-310(F) when he requested and
accepted payment of fees billed to the Bocks from a third party without obtaining the
Bocks’ written consent to the practice or making appropriate conflict of interest
disclosures; failed to keep the Bocks informed of the status of their appeal; failed to
retender the defense of their action to the insurance company following an appeal; and
spent “unreasonable” amounts of time on certain specified tasks.
The figure quoted by Schratz for the fees paid by the Bocks was, as the award
stated, drawn from a letter sent by Baxter to the Bocks’ counsel prior to the
commencement of the arbitration, a copy of which had been forwarded by Baxter to the
arbitrator. As all parties acknowledge, Baxter misstated the amount of money paid by the
Bocks in this letter; in fact, they had paid him only $29,225, less than half of the amount
3
stated in the award. The arbitrator apparently had not been informed of the error in the
letter.
Baxter sent a letter to Schratz, acknowledging his error in the letter, contending
the letter was not part of the evidence at the arbitration hearing, and asking for the award
to be corrected to reflect the actual payments. Unlike Baxter, who merely sent a letter to
Schratz, the Bocks filed a formal request for correction with the State Bar,
acknowledging their actual payments of $29,225 and seeking correction to confirm
Baxter’s services were worth that amount. Through the State Bar, Schratz denied the
Bocks’ request, finding the claimed error in the award did not qualify as a basis for
correction of an arbitration award under the relevant State Bar arbitration rule. Although
the response did not directly acknowledge Baxter’s letter requesting correction, it noted
the arbitrator had reviewed Baxter’s “replies” to the Bocks’ request for correction, which
made clear Baxter’s position regarding the error.
Baxter filed a petition to correct or vacate the arbitration award in the trial court,
and the Bocks filed a petition to confirm it. In the course of the extended trial court
proceedings, Baxter raised several issues in addition to the undisputed error on the face of
the arbitration award.
The trial court denied the petition to correct or vacate and granted the petition to
confirm. In a lengthy and detailed written decision, the court found (1) the arbitrator’s
error in relying on Baxter’s letter did not provide grounds for correcting or vacating the
award; (2) Schratz was not subject to disqualification for bias and was not required to
disclose aspects of his professional background that, Baxter contended, would have
provided grounds for his disqualification; and (3) the arbitrator’s purported evidentiary
errors did not provide grounds for vacating the award. The court subsequently entered a
judgment confirming the award.
Following entry of the judgment, the Bocks filed a motion seeking reimbursement
of their attorney fees incurred in connection with the superior court proceedings to
confirm the award. The request was premised on their fee agreement with Baxter, which
permitted the prevailing party in an action to enforce the agreement to recover reasonable
4
attorney fees and costs. The motion detailed Baxter’s extensive motion practice in the
trial court, arguing it was largely unnecessary and ineffective.2 The motion was
accompanied by a declaration from the Bocks’ attorney, who detailed Baxter’s allegedly
abusive conduct and attached the legal bills incurred by the Bocks in connection with the
trial court proceedings. Although the Bocks’ attorneys had billed their clients at a rate of
$375 per hour, they sought compensation at a rate of $425 per hour, for a total of
$122,584. Baxter opposed the motion, disputing the characterization of his conduct and
arguing the fee request was “outrageously inflated,” due in part to the activities of the
Bocks’ attorneys. Baxter also pointed out the Bocks had already received the benefit of
the $38,922 error in Schratz’s arbitration award.
The trial court granted the Bocks’ motion to the extent of ordering Baxter to pay
$32,790 in attorney fees. The court found the Bocks’ attorneys’ regular hourly charges
not reflective of market conditions in Sonoma County and reduced them accordingly. In
doing so, it assigned a lodestar figure for the two attorneys involved in the litigation,
Kathryn Curry and Kenneth Van Vleck, of $300 and $350 per hour, respectively.
Although the court disagreed with Baxter that the confirmation proceeding was a
“ ‘simple’ motion,” it authorized compensation for a total of 103.6 attorney hours, less
than half of the time actually billed by Curry and Van Vleck. In explanation, the court
noted: “The billings themselves provide some justification for a fee award. There is little
additional evidence presented. Considering the matters contained in the court file, and
the court’s experience with this matter, the court determines as follows . . . .” Both
parties have appealed from the court’s attorney fee award.3
2
We have not attempted to recount the parties’ procedural maneuvering in the trial
court because its details are not relevant to the issues raised on appeal.
3
A total of four appeals have been filed. Baxter’s initial notice of appeal, case
No. A142372, purported to appeal four orders of the trial court: the initial order ruling on
the cross-petitions to confirm and vacate, an amended version of the same ruling, an
order denying Baxter’s motion for a new trial, and an order denying his motion for
reconsideration and to vacate the judgment. Baxter thereafter appealed the judgment
confirming the award (case No. A142984), and both parties have appealed the attorney
5
II. DISCUSSION
On appeal, Baxter contends the judgment confirming the arbitration award should
be reversed and the award vacated because (1) the arbitrator relied on erroneous
information in Baxter’s letter, (2) the arbitrator should have disqualified himself for bias,
and (3) the arbitrator made erroneous evidentiary rulings.
A. The Arbitrator’s Error
With very limited exceptions, the judiciary is precluded from vacating an
arbitration award on the basis of purported errors of fact or law. “California law favors
alternative dispute resolution as a viable means of resolving legal conflicts. ‘Because the
decision to arbitrate grievances evinces the parties’ intent to bypass the judicial system
and thus avoid potential delays at the trial and appellate levels, arbitral finality is a core
component of the parties’ agreement to submit to arbitration.’ [Citation.] Generally,
courts cannot review arbitration awards for errors of fact or law, even when those errors
appear on the face of the award or cause substantial injustice to the parties.” (Richey v.
AutoNation, Inc. (2015) 60 Cal. 4th 909, 916 (Richey).) “ ‘[B]oth because it vindicates
the intentions of the parties that the award be final, and because an arbitrator is not
ordinarily constrained to decide according to the rule of law, it is the general rule that,
“The merits of the controversy between the parties are not subject to judicial review.”
[Citations.] More specifically, courts will not review the validity of the arbitrator’s
reasoning. [Citations.] Further, a court may not review the sufficiency of the evidence
supporting an arbitrator’s award.’ ” (Jones v. Humanscale Corp. (2005) 130 Cal. App. 4th
401, 407–408.) “ ‘When parties contract to resolve their disputes by private arbitration,
their agreement ordinarily contemplates that the arbitrator will have the power to decide
any question of contract interpretation, historical fact or general law necessary, in the
fees award (case Nos. A143689 and A144112). All of the appeals have been
consolidated. We decline to address the Bocks’ argument that Baxter’s appeal of the trial
court’s various orders and his appeal of the attorney fee order should be dismissed.
While it appears that some of these arguments are technically meritorious, dismissal of
the particular appeals cited by the Bocks would not change the nature of the claims made
on appeal or their resolution in this decision.
6
arbitrator’s understanding of the case, to reach a decision. [Citations.] Inherent in that
power is the possibility the arbitrator may err in deciding some aspect of the case.
Arbitrators do not ordinarily exceed their contractually created powers simply by
reaching an erroneous conclusion on a contested issue of law or fact, and arbitral awards
may not ordinarily be vacated because of such error, for “ ‘[t]he arbitrator’s resolution of
these issues is what the parties bargained for in the arbitration agreement.’ ” ’ ” (Hoso
Foods, Inc. v. Columbus Club, Inc. (2010) 190 Cal. App. 4th 881, 887.)
The arbitrator found the Bocks did not owe Baxter any further payments for his
services. Under the prevailing law, we are precluded from reviewing the sufficiency of
the evidence supporting that determination or the arbitrator’s reasoning in reaching it.
While it is understandably frustrating for Baxter that the arbitrator’s decision was based
on demonstrably flawed reasoning, we are not authorized to vacate the award for that
reason.
In an effort to avoid the restrictions on judicial review of arbitration awards,
Baxter argues the award should be vacated under Code of Civil Procedure4
section 1282.2, subdivision (g), which states: “If a neutral arbitrator intends to base an
award upon information not obtained at the hearing, he shall disclose the information to
all parties to the arbitration and give the parties an opportunity to meet it.”
The argument fails to overcome the general prohibition on merits review. First, it
is far from clear that section 1282.2 applies to this matter. Section 1282.2 is part of the
California Arbitration Act (Code Civ. Proc., § 1280 et seq.; CAA), which is a “separate
and distinct arbitration scheme” from the MFAA, which has “its own rules and
limitations, as set forth in the Business and Professions Code.” (Aguilar v. Lerner (2004)
32 Cal. 4th 974, 983, 984.) Baxter cites no authority suggesting section 1282.2 applies to
arbitrations under the MFAA, nor does he cite any parallel provision from the provisions
4
All statutory references are to the Code of Civil Procedure unless otherwise
indicated.
7
governing MFAA arbitrations.5 (See, e.g., Benjamin, Weill & Mazer v. Kors (2011)
195 Cal. App. 4th 40, 60, fn. 10 (Kors) [CAA disclosure rules do not apply to arbitrations
under the MFAA].) Neither the MFAA nor the State Bar’s fee arbitration rules contain a
provision similar to section 1282.2, subdivision (g), and the State Bar’s rules permit an
arbitration to occur without any hearing at all. (Rules of State Bar, tit. 3, div. 4, ch. 2,
rule 3.542.) The State Bar’s Fee Arbitration Handbook states only that an award should
be “based upon the evidence submitted,” rather than restricting the record to evidence
presented at the hearing. (State Bar, Com. on Mandatory Fee Arbitration, Fee Arbitration
Handbook (Apr. 2005) § XII, p. 22.) Accordingly, the rule of section 1282.2,
subdivision (g) appears not to apply to MFAA arbitrations.
Yet even if section 1282.2 did apply here, we are not persuaded that the contents
of Baxter’s letter qualify as “information not obtained at the hearing.” Section 1282.2,
subdivision (g) is generally regarded as precluding an arbitrator from relying on evidence
obtained by his or her own investigation, at least without providing the parties notice and
an opportunity to respond. (See, e.g., Canadian Indem. Co. v. Ohm (1969)
271 Cal. App. 2d 703, 708–709.) The requirement of subdivision (g) that the arbitrator
“disclose the information to all parties . . . and give the parties an opportunity to meet it”
makes little sense if the information was provided to the arbitrator by the parties
themselves.
Further, while the document was not submitted on the day the parties met with the
arbitrator, Baxter sent it to the arbitrator in the normal course of the arbitration
proceedings. In the absence of any contrary indication in the letter itself, the arbitrator
5
At oral argument, counsel suggested that the provisions of the CAA are
applicable to this arbitration by virtue of the parties’ agreement to make the MFAA
arbitration binding. That argument was waived when it was not presented in Baxter’s
opening brief. (People v. Duff (2014) 58 Cal. 4th 527, 550, fn. 9.) In any event, the
argument proves too much. Baxter’s argument would make the CAA applicable to every
MFAA arbitration in which the parties stipulated to a binding result, effectively
eliminating the distinction between the two systems recognized in Aguilar v. Lerner,
supra, 32 Cal.4th at pages 983–984.
8
was justified in regarding it as properly within the record of proceedings. Baxter’s
argument that “hearing” under section 1282.2 is restricted to the period during which the
parties are in the presence of the arbitrator is inconsistent with the flexible procedures
permitted in arbitrations. In particular, it is inconsistent with Baxter’s own submission of
written testimony in this arbitration well after the conclusion of the hearing. He cites no
relevant legal authority to support his restrictive view of the statute.
Baxter’s claim that the order violates due process is without merit. The concept of
due process does not apply to private arbitration proceedings. (Mave Enterprises, Inc. v.
Travelers Indemnity Co. (2013) 219 Cal. App. 4th 1408, 1438–1439 (Mave Enterprises).)
Yet even if due process principles were applicable here, we would find no violation.
Baxter himself wrote the letter on which the arbitrator based his award and sent a copy to
the arbitrator, presumably for the arbitrator’s information. Baxter therefore was fully
aware of the possibility the arbitrator would rely on it. For that reason, the two cases
cited by Baxter in support of his due process claim are inapplicable. Carter v. Kubler
(1943) 320 U.S. 243, 246, and Moser v. Mortgage Guarantee Co. (9th Cir. 1941)
123 F.2d 423, 425, both address the same Depression-era statutory scheme in finding it is
error for a bankruptcy commissioner to value property based partly on personal
investigation. Schratz made no personal investigation; he relied on erroneous
information provided by Baxter.
B. The Arbitrator’s Disclosures
Baxter claims the award should be vacated because the arbitrator failed to make
required disclosures about his background or, alternately, should have disqualified
himself for bias.
1. Factual Background
Both parties received e-mails disclosing Schratz’s address and law firm affiliation,
Jim Schratz & Associates. Beyond that, the extent of the arbitrator’s disclosure of his
background was in dispute. Baxter asserted in a declaration that Schratz told the parties
only that he had worked for an insurance company in the past and had previously served
as an arbitrator. The Bocks’ attorney declared Schratz described “the nature of his law
9
practice and his experience as a legal fee auditor and expert,” including “the nature of his
legal practice included reviewing and auditing legal bills, acting as a retained expert, and
acting as a fee arbitrator,” as well as prior work at Fireman’s Fund Insurance Company
(Fireman’s Fund). Schratz submitted a declaration stating he told the parties “on more
than one occasion” of his experience as a legal fee bill auditor and disclosed his Web site,
which contains information about his work.6
Following his receipt of the arbitration award, Baxter learned information causing
him to conclude Schratz was biased against attorneys. Among the information submitted
to the trial court in connection with Baxter’s claim that the arbitration award should be
vacated either on grounds of a failure to disclose or outright bias was the following:
(1) a July 1992 article from the Wall Street Journal profiling Schratz, then a vice-
president of Fireman’s Fund, in which his job was described as finding “attorneys who,
he believes, do unnecessary work, inflate bills or even fake accidents.” The article
described a variety of excessive and fraudulent billing practices uncovered by Schratz in
his work for Fireman’s Fund and described him as “more than willing to believe the
worst about lawyers,” based on his experience;
(2) a promotional flyer assembled by Schratz that recounts the results of billing
audits performed by his law firm that resulted in judicial awards of legal fees
substantially lower than those requested by the attorneys;
(3) a 1998 law review article written by Schratz subtitled, “A Psychological and
Sociological Analysis of Why Attorneys Overbill,” as well as other articles written by
Schratz discussing proper billing practices;
6
Unfortunately, the trial court did not resolve the dispute over the nature of the
arbitrator’s disclosure at the hearing. After reviewing the conflicting evidence, the trial
court noted only, “there is no evidence that [Baxter] had actual knowledge of the
arbitrator’s background here in issue,” without making clear what this “background”
entailed.
10
(4) a 1992 article by Schratz in a State Bar publication discussing best practices
by outside counsel, in the course of which he stated Fireman’s Fund “will not tolerate
abusive billing” and criticizes block billing as a “fraudulent practice”; and
(5) a declaration by an attorney, John O’Connor, who has been acquainted with
Schratz since 1988, and had filed suit against Schratz for defamation. O’Connor stated
he had spoken with “numerous” attorneys who had disputes with Schratz over fees and
recounted various claims made to him of improper conduct or unfairness by Schratz in
his work as a fee auditor. Based on his own experience, which included deposing Schratz
and persons who worked with him at Fireman’s Fund, O’Connor claimed Schratz was
biased “against attorneys and their bills” and took shortcuts in evaluating legal bills.
O’Connor’s declaration contains five pages of criticism of Schratz’s audit methods.
Schratz submitted a second declaration stating he was not biased, had no prior
relationship with any of the parties or their attorneys, had never been “predisposed to rule
in any particular manner in the fee arbitration proceeding,” and knew of no facts that
would require his disqualification or recusal. In that declaration, Schratz described the
nature of his career and law practice, stating he had first worked for Fireman’s Fund for
13 years, adjusting “complex high profile insurance claims.” In 1993, he left to form his
own consulting and expert witness firm “specializ[ing] in providing testimony on
insurance industry practices such as claims handling or investigating insurance fraud.” A
“relatively small amount” of his practice involves auditing legal bills. As to that part of
his business, Schratz explained, most of it is done by his associates. Eighty percent of
their work involves reviewing fee applications that have been submitted by counsel for
prevailing parties in a lawsuit. The remaining 20 percent of the audits performed by
Schratz’s firm are done in support of attorneys, either in connection with attorney fee
requests or fee disputes. The declaration lists some 26 law firms, most large and well
known, that have retained Schratz’s firm in support of their fee requests.
2. Governing Law
Section 1286.2, subdivision (a)(6) permits a court to vacate an arbitration award if
the arbitrator “either: (A) failed to disclose within the time required for disclosure a
11
ground for disqualification of which the arbitrator was then aware; or (B) was subject to
disqualification . . . but failed upon receipt of timely demand to disqualify himself or
herself as required by that provision.” Although the MFAA does not specify the grounds
for vacating an award rendered under its provisions, it does authorize the filing of a
petition to confirm, correct, or vacate an award “in the same manner as provided” in the
CAA. (Bus. & Prof. Code, § 6203, subd. (b).) We therefore assume that section 1286.2
applies to judicial challenges to an award under the MFAA, as has at least one other
court. (See, e.g., Glaser, Weil, Fink, Jacobs & Shapiro, LLP v. Goff (2011)
194 Cal. App. 4th 423, 436.)
“Where the material facts are undisputed, the trial court’s determination whether
an arbitrator failed to make required disclosures is reviewed de novo. [Citation.] Where
the facts are disputed, ‘ “[w]e must accept the trial court’s resolution of disputed facts
when supported by substantial evidence; we must presume the court found every fact and
drew every permissible inference necessary to support its judgment, and defer to its
determination of credibility of the witnesses and the weight of the evidence.” ’
[Citation.] This standard applies to judgments based on affidavits or declarations, as well
as judgments based on oral testimony.” (United Health Centers of San Joaquin Valley,
Inc. v. Superior Court (2014) 229 Cal. App. 4th 63, 74.)
a. Disclosure Requirements Under the MFAA
The case law governing disclosure by an arbitrator has arisen under the CAA,
which requires an arbitrator to disclose “all matters that could cause a person aware of the
facts to reasonably entertain a doubt that the proposed neutral arbitrator would be able to
be impartial,” including a specific list of matters pertaining largely to the arbitrator’s past
relations, if any, to the parties and their counsel. (§ 1281.9, subd. (a).) Section 1281.9,
however, does not apply to arbitrations under the MFAA. (See, e.g., Kors, supra,
195 Cal. App. 4th 40, 60, fn. 10 [CAA disclosure rules do not apply to arbitrations under
the MFAA].) We must therefore determine disclosure obligations under the MFAA
independently.
12
The statutes and State Bar-promulgated rules governing MFAA arbitrations
contain no similar disclosure requirement. Rule 3.537 of the State Bar’s fee arbitration
rules, promulgated under the authority of Business and Professions Code section 6204.5,
subdivision (a), states: “An arbitrator who believes he or she cannot render a fair and
impartial decision or who believes there is an appearance that he or she cannot render a
fair and impartial decision must disqualify himself or herself or accede to a party’s
challenge for cause.” (Rules of State Bar, tit. 3, div. 4, ch. 2, rule 3.537(B).) Rule 3.537
does not, however, require any particular disclosure by an arbitrator.
The State Bar’s Fee Arbitration Handbook, published in April 2005, does address
the issue. Section V, governing the assignment and disqualification of arbitrators, states:
“If an arbitrator, for any reason, may not be impartial, that arbitrator shall disqualify
himself or herself from any further consideration of the proceedings.” (State Bar, Com.
on Mandatory Fee Arbitration, Fee Arbitration Handbook (Apr. 2005) § V, p. 8.)
Implementing this requirement, section V requires arbitrators to “disclose any prior or
present relationship to any party or participant in the proceeding and any other fact that
may bear upon his or her disqualification as an arbitrator.” (Ibid.) Because an
arbitrator’s disqualification under the MFAA turns on his or her ability to be impartial,
the handbook’s requirement of disclosure of matters bearing on the arbitrator’s
disqualification essentially requires disclosure of matters relating to impartiality or the
appearance of impartiality, the same standard for disclosure imposed by the general
disclosure requirement of section 1281.9, subdivision (a). As a result, the general
disclosure requirements of the MFAA and CAA are, for practical purposes, the same, and
decisions under the “impartiality” disclosure requirements of the CAA may be applied in
evaluating arbitrator disclosure obligations under the MFAA.
b. Disclosure Generally
The leading case on CAA disclosure is Haworth v. Superior Court (2010)
50 Cal. 4th 372 (Haworth), in which the female plaintiff in a medical malpractice
arbitration contended the award should be vacated because the arbitrator, a retired judge,
failed to disclose that he had been censured 10 years earlier for conduct offensive to
13
female court staff. (Id. at pp. 378–379.) Discussing “the general requirement that the
arbitrator disclose any matter that reasonably could create the appearance of partiality,”
the court noted: “ ‘Impartiality’ entails the ‘absence of bias or prejudice in favor of, or
against, particular parties or classes of parties, as well as maintenance of an open mind.’
[Citation.] In the context of judicial recusal, ‘[p]otential bias and prejudice must clearly
be established by an objective standard.’ [Citations.] ‘Judges, like all human beings,
have widely varying experiences and backgrounds. Except perhaps in extreme
circumstances, those not directly related to the case or the parties do not disqualify them.’
[Citation.] [¶] . . . [¶] ‘An impression of possible bias in the arbitration context means that
one could reasonably form a belief that an arbitrator was biased for or against a party for
a particular reason.’ ” (Id. at pp. 385, 389, italics added by Haworth.)
The court rejected out of hand the plaintiff’s contention that the arbitrator’s
“public censure would cause a person to reasonably conclude that this arbitrator might be
biased against a female plaintiff in a medical malpractice case involving cosmetic
surgery.” (Haworth, supra, 50 Cal.4th at p. 389.) While recognizing the arbitrator’s
offensive conduct, all directed specifically at women, “is clearly inappropriate; it is
disrespectful toward staff members and tends to create an offensive work environment,”
the court concluded “nothing in the public censure would suggest to a reasonable person
that [the arbitrator] could not be fair to female litigants, either generally or in the context
of an action such as the one now before us.” (Id. at p. 390.)
After further discussion, the court explained: “There are many reasons why a
party might, reasonably or unreasonably, prefer not to have a particular arbitrator hear his
or her case—including the arbitrator’s prior experience, competence, and attitudes and
viewpoints on a variety of matters. The disclosure requirements, however, are intended
only to ensure the impartiality of the neutral arbitrator. [Citation.] They are not intended
to mandate disclosure of all matters that a party might wish to consider in deciding
whether to oppose or accept the selection of an arbitrator. [Citation.] When, as here, an
arbitration agreement provides the parties or the parties’ representatives the authority to
jointly select a neutral arbitrator, they have the opportunity to take reasonable steps to
14
satisfy themselves that the arbitrator they agree upon is acceptable. The type of
information here at issue—a decision publicly censuring a judge, which has been
published in the Official Reports of this court—is readily discoverable.” (Haworth,
supra, 50 Cal.4th at pp. 393–394, fn. omitted.) In further explaining its conclusion that
disclosure of this type of matter was not required, the court stated: “The arbitrator cannot
reasonably be expected to identify and disclose all events in the arbitrator’s past,
including those not connected to the parties, the facts, or the issues in controversy, that
conceivably might cause a party to prefer another arbitrator. Such a broad interpretation
of the appearance-of-partiality rule could subject arbitration awards to after-the-fact
attacks by losing parties searching for potential disqualifying information only after an
adverse decision has been made. [Citation.] Such a result would undermine the finality
of arbitrations without contributing to the fairness of arbitration proceedings.” (Id. at
pp. 394–395.)
c. Disclosure of Business Activities
With respect to the nature of the business of an arbitrator, courts have recognized
that “ ‘[b]ecause arbitrators are selected for their familiarity with the type of business
dispute involved, they are not expected to be entirely without business contacts in the
particular field, but they should disclose any repeated or significant contacts which they
may have with a party to the dispute, his attorney or his chosen arbitrator.’ ” (Casden
Park La Brea Retail LLC v. Ross Dress for Less, Inc. (2008) 162 Cal. App. 4th 468, 477.)
Despite this general rule, the court in Kors, supra, 195 Cal. App. 4th 40, imposed
an additional disclosure requirement for attorney arbitrators whose practice is focused in
a particular area related to the subject matter of the litigation. Kors featured, like this
case, a fee dispute between a law firm and its client. (Id. at p. 46.) A panel of three
arbitrators was appointed. (Id. at p. 49.) Following issuance of the award, the client
learned that, at the time of the arbitration, the chief arbitrator was representing a
prominent law firm in a client fee dispute before the California Supreme Court. In
addition, his law firm’s Web site stated his practice was focused on “ ‘claims against
lawyers’ ” and touted his representation of “ ‘some of the nation’s largest law firms.’ ”
15
(Id. at p. 51.) On appeal, the client argued the chief arbitrator had an obligation to
disclose the nature of his law practice. In considering the claim, the court noted that, in
enacting the disclosure requirements of the CAA, “[o]ne of the ethical problems the
Legislature was specifically concerned about was the danger that, like the referees in
proceedings authorized by section 638 and 639, arbitrators’ impartiality might be
undermined by their economic self-interest.” (Kors, at p. 68, fn. omitted.) In particular,
the Legislature was concerned that persons who frequently served as neutrals in a
particular industry might tend to favor “steady customers,” parties in the industry who
commonly appear before them. (Ibid.) By analogy, the Kors court concluded the chief
arbitrator’s legal practice could cause “a reasonable person [to] doubt whether [his or her]
dependence on business from lawyers and law firms sued by former clients would
prevent him from taking the side of a client in a fee dispute with a former law firm,
because doing so might ‘put at risk’ his ability to secure business from the lawyers and
law firms whose business he solicits.” (Id. at p. 71.) For that reason, the court
concluded, the chief arbitrator was required “to timely disclose to the parties the nature of
his legal practice, including the fact that he was then representing a law firm engaged in a
fee dispute with a former client.” (Id. at p. 73.)
3. Discussion
a. Disclosure Under Kors
We find no obligation under Kors for Schratz to have disclosed the nature of his
consulting practice. Unlike the arbitrator in Kors, Schratz’s practice was not devoted
exclusively to one side of fee disputes. As Schratz stated in his second declaration, the
bulk of the fee audit work of his firm was not performed on behalf of clients in legal fee
disputes but for the losing parties in litigation who were faced with claims for prevailing
party attorney fees. Further, a significant percentage of his clients were attorneys looking
for expert support for their bills, either against their former clients or in support of their
fee applications. The expertise of his firm was therefore in reviewing attorney bills,
rather than in representing one side or the other in fee disputes. Because Schratz did not
depend exclusively on business from legal clients or losing parties, the nature of his
16
business created no particular economic incentive for him to rule either in favor of Baxter
or against him, and there was no reason to think that a ruling for Baxter “might ‘put at
risk’ his ability to secure business from the lawyers and law firms whose business he
solicits.” (Kors, supra, 195 Cal.App.4th at p. 71.) As a result, the nature of Schratz’s
business did not create a reasonable doubt about his ability to rule impartially in the
arbitration.
Because we reach this conclusion, we need not resolve the parties’ dispute about
the actual nature of Schratz’s disclosure at the arbitration hearing. Even assuming
Schratz told the parties nothing more than he used to work at an insurance company and
now maintained a law practice, as Baxter contends, the nature of his business did not
require further disclosure.
b. Disqualification
Baxter’s central claim is that Schratz was biased in his approach to evaluating
attorney fee requests and therefore should have disqualified himself.7
We agree with the trial court that Baxter failed to prove his fundamental claim that
Schratz is biased against attorneys. Schratz is himself an attorney, and there is nothing in
the materials presented by Baxter to suggest he bears a grudge or is otherwise
predisposed to rule against attorneys. Although his practice sometimes causes him to
represent interests contrary to those of attorneys, that alone does not demonstrate a bias.
Nor is there anything in the award or in the conduct of the arbitration proceedings to
suggest Schratz bore some animus toward Baxter. The fact the arbitrator ruled against
him is not, standing alone, evidence of bias.
Rather than demonstrating bias or a lack of impartiality, the materials submitted
by Baxter suggest Schratz was an appropriate choice to arbitrate this matter. He has
7
Actual bias is not listed as a basis for vacating an arbitration award under
section 1286.2, but subdivision (a)(6) does require a court to vacate an arbitration award
if the arbitrator (A) failed to disclose a ground for disqualification or (B) was subject to
disqualification. If an arbitrator is actually biased, he or she is subject to disqualification,
and the failure to disqualify requires vacating an award under subdivision (a)(6)(B) of
section 1286.2.
17
spent large parts of his 40-year legal career evaluating attorney bills. Further, Schratz’s
writings make clear he has spent much time and effort investigating how attorneys
account for their time and attempting to uncover methods used by attorneys to inflate or
exaggerate their work. Contrary to Baxter’s claim, this does not betray a “bias” in
evaluating legal bills. Schratz’s writings never suggest an attorney who performs
appropriate services, which are properly accounted for in his or her bills, is not entitled to
be paid the negotiated hourly fee for those services. Rather, Schratz recognizes some
attorneys overbill and believes their clients should not be required to pay for work that
was not actually or appropriately performed. In the Wall Street Journal article, for
example, Schratz is described as working to detect attempts by attorneys to cheat
Fireman’s Fund through their bills. His own writings display a similar concern for
unethical and improper billing practices by counsel. Nothing in his writings suggests a
belief that attorney work should not be fairly and appropriately compensated.
Baxter’s claim of bias is based largely on reports of Schratz’s conduct in his
practice when retained to work contrary to the interests of attorneys. The mere fact an
attorney’s professional practice regularly involves representing one type of client against
another type does not alone support an inference the attorney cannot be impartial when
acting in the role of neutral. On the contrary, our superior courts are filled with former
prosecutors and public defenders who regularly try criminal cases without challenge. As
discussed in Kors, an inference of bias arises only when the arbitrator’s private economic
interests create an incentive to rule in a particular manner even when acting as a neutral.
As discussed, the nature of Schratz’s practice does not create such an incentive.
Baxter argues Schratz has a “ ‘leaning of the mind’ in matters concerning
attorneys or attorneys’ fees,” citing Pacific etc. Conference of United Methodist Church
v. Superior Court (1978) 82 Cal. App. 3d 72. In Pacific, the Court of Appeal reversed the
denial of a request to disqualify for bias a law and motion judge who sent a letter to the
parties disclosing he had concluded the plaintiffs’ claims were “ ‘meritorious.’ ” (Id. at
p. 76.) Because that opinion had been formed outside the context of a judicial hearing
addressed to the merits, the court held, it demonstrated that the judge “has prejudged the
18
matter before him” and required his disqualification. (Id. at p. 85.) As the court held,
“Bias is defined as a mental predeliction or prejudice; a leaning of the mind; ‘a
predisposition to decide a cause or an issue in a certain way, which does not leave the
mind perfectly open to conviction.’ ” (Id. at p. 86.) Baxter demonstrated no similar
prejudice by Schratz against him or his claims in the arbitration. There is no indication
Schratz had reached any conclusions about the proper outcome of the arbitration prior to
commencing the hearing.
Baxter also criticizes Schratz’s skeptical attitude toward block billing. Here we
quote the ruling of the trial court, which properly addresses the claim: “Issues involving
block billing exist quite apart from the efforts made by Mr. Schratz. Many courts, and
legal commentators, have drawn attention to the issues associated with presentations of
legal bills in this format. . . . There is no evidence that the Arbitrator employed . . . a per
se rule of exclusion; in fact, the arbitration award provided that only a small percentage
of the fees were excluded, and there was a basis for the exclusion stated.”
The type of information Baxter contends Schratz was required to disclose—
essentially, his experience in auditing attorney bills and his attitude toward proper
methods of billing—is just the type of information that Haworth holds is not within the
arbitrator’s duty of disclosure: that is, “the arbitrator’s prior experience, competence, and
attitudes and viewpoints on a variety of matters.” (Haworth, supra, 50 Cal.4th at p. 393.)
As Haworth noted, parties to an arbitration “have the opportunity to take reasonable steps
to satisfy themselves that the arbitrator they agree upon is acceptable.” (Ibid.) If Baxter
intended to disqualify any arbitrator whose practice regularly involves representing
clients against attorneys, or who believes attorney bills should be carefully scrutinized, he
was required to perform his own investigation of Schratz.
C. Evidentiary Issues
Baxter contends the arbitrator’s admission into evidence of the Bocks’ arbitration
brief and exhibits, while “refusing to rule on or admit” Baxter’s arbitration brief and
19
exhibits, violated section 1282.2, former rule 35.0 of the State Bar Rules, and due
process.8
We place quotations around the phrase “refusing to rule on or admit” because it
represents a mischaracterization by Baxter of the evidence on this issue. In a declaration
submitted by Baxter discussing the conduct of the hearing, he does not mention having
requested the admission of his brief and exhibits, let alone a refusal to admit them. The
only evidence on the issue is a declaration by another attendee, Sara Baxter, Baxter’s
appellate counsel, who states: “Baxter thereupon [(that is, immediately following
admission of the Bocks’ brief and exhibits)] moved to have the Baxter arbitration brief,
and the 42 exhibits attached to it, and a copy of the Bock billing file, also an exhibit,
moved into evidence, and further requested that the Baxter arbitration brief be admitted
as testimonial evidence. The Arbitrator did not rule on this request.” Neither Sara Baxter
nor any other witness states that the arbitrator refused to admit Baxter’s materials. At
most, Schratz made no immediate ruling on Baxter’s request. There is nothing in the
evidence before the trial court to suggest Schratz distinguished between the two parties
by agreeing to consider the Bocks’ materials while declining to accept the same materials
presented by Baxter.
Pursuant to section 1286.2, subdivision (a)(5), an arbitration award may be
vacated if “[t]he 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.” This subdivision is “ ‘a safety
valve in private arbitration that permits a court to intercede when an arbitrator has
prevented a party from fairly presenting its case.’ [Citation.] When a party contends it
8
Baxter argues the arbitrator violated section 1282.2, but, as discussed above,
section 1282.2 does not appear to be applicable to MFAA proceedings. Further, Baxter
cites no authority for his implicit claim that a violation of section 1282.2 provides a basis
for vacating an arbitration award. We therefore discuss the portion of section 1286.2
dealing with an arbitrator’s consideration of evidence, which does provide a basis for
vacating an award.
20
was substantially prejudiced by the arbitrator’s exclusion of material evidence, a court
should generally consider prejudice before materiality. [Citation.] To find substantial
prejudice, the court must first accept the arbitrator’s theory and conclude the arbitrator
might well have made a different award had the evidence been allowed.” (Epic Medical
Management, LLC v. Paquette (2015) 244 Cal. App. 4th 504, 518 (Epic).)
We find no merit to Baxter’s contention for several reasons. First, he failed to
prove the premise of section 1286.2, subdivision (a)(5), that the arbitrator “refus[ed]” to
hear material evidence. As discussed above, Baxter’s evidence demonstrates only that
the arbitrator made no audible ruling when Baxter asked to have his brief and exhibits
admitted. There is no indication the arbitrator refused the offer of evidence. Further, the
arbitrator gave Baxter an unrestricted opportunity to submit additional written testimony
after this claimed failure to rule, suggesting the arbitrator was willing to consider any
evidence Baxter believed material. Finally, the arbitrator’s decision expressly stated he
“has reviewed all of the documents.” There is no indication he viewed some of the
submitted documents as inadmissible.
Second, Baxter has failed to demonstrate “substantial prejudice” from the
purported failure of the arbitrator to accept his arbitration brief and exhibits.9 As noted
above, Baxter had the opportunity to submit additional written testimony after the
conclusion of the hearing. To the extent he was concerned his arbitration brief was not
accepted into evidence, he had the opportunity to repeat critical matter in his
supplemental testimony. He has made no attempt to demonstrate what material was
contained in his arbitration brief that was not in his written testimony or otherwise before
9
In his reply brief, Baxter contends the conduct of the arbitration was “structural
error” that was reversible per se. Section 1286.2 makes no provision for “per se”
reversal. The argument is drawn from due process cases, which are inapplicable to
arbitrations. (Mave Enterprises, supra, 219 Cal. App. 4th 1408, 1438–1439.)
21
the arbitrator, let alone why the arbitrator “might well have made a different award had
th[at] evidence been allowed.”10 (Epic, supra, 244 Cal.App.4th at p. 518.)
There is also no merit to Baxter’s claim of a due process violation. It is well-
established that the principles of due process do not extend to private arbitration. (Mave
Enterprises, supra, 219 Cal.App.4th at pp. 1438–1439.) “ ‘Private arbitration . . . really
is private; and since constitutional rights are in general rights against government
officials and agencies rather than against private individuals and organizations, the fact
that a private arbitrator denies the procedural safeguards that are encompassed by the
term “due process of law” cannot give rise to a constitutional complaint.’ ” (Id. at
p. 1439.) Although this particular arbitration was conducted under the auspices of the
State Bar, a governmental organization, it was binding only because of a private
agreement between Baxter and the Bocks.11
Nor do we find the purported violation of former rule 35 of the State Bar Rules to
support vacating the arbitration award.12 Baxter contends the arbitrator’s admission of
the Bocks’ arbitration brief as evidence constituted such a violation, but he cites no
statutory authority for his implicit claim that the violation of a State Bar fee arbitration
rule, standing alone, supports vacating an arbitration award. On the contrary, the
exclusive grounds for vacating an award are stated in section 1286.2, and the wrongful
admission of evidence is not among them. In any case, we are not persuaded the
10
Baxter’s opening brief contains a three-page chart comparing material in his and
the Bocks’ arbitration briefs. The comparison is immaterial under section 1286.2,
subdivision (a)(5), which permits vacating an arbitration award only if material evidence
was refused that might have made a difference in the arbitrator’s award. The critical
question was whether Baxter’s arbitration brief contained material evidence that was not
otherwise before the arbitrator that might have made a difference to his decision. He has
not demonstrated the existence of such evidence.
11
Baxter’s brief does not even acknowledge this issue, let alone make an argument
for application of due process principles on the basis of State Bar sponsorship.
12
Former rule 35.0 was in effect at the time of the arbitration hearing, but it no
longer exists. Its content is preserved in current rule 3.541(A). (Rules of State Bar, tit. 3,
div. 4, ch. 2, rule 3.541.)
22
arbitrator erred. Former rule 35 states: “Any relevant evidence shall be admitted if it is
the sort of evidence upon which responsible persons are accustomed to rely in the
conduct of serious affairs, regardless of the existence of any common law or statutory
rule to the contrary.” (Rules of State Bar, tit. 3, div. 4, ch. 2, former rule 35.0.) The
arbitrator is a lawyer of some 40 years’ experience. In accepting the Bocks’ arbitration
brief as evidence, he was competent to distinguish argument from fact. The arbitration
process is regarded as a useful alternative to litigation precisely because it permits such
procedural shortcuts.13
D. Additional Arguments
We find no merit in Baxter’s remaining arguments.
Baxter first claims the caption of Schratz’s award, “Findings and Award of the
State Bar of California,” violates due process because Baxter was not, in fact, issuing
findings on behalf of the State Bar. The caption of an award provides no basis for
vacating the arbitration award under section 1286.2. Further, as noted above, private
arbitration is not governed by the due process clause. (Mave Enterprises, supra,
219 Cal.App.4th at pp. 1438–1439.)
Baxter next contends that a declaration submitted by Schratz in connection with
the confirmation proceeding “required a motion to intervene since James Schratz was not
a party.” Although characterized by Baxter as an “intervenor declaration,” it was
submitted simply as evidence; Schratz was not seeking any relief or otherwise to
participate in the confirmation proceeding, and the trial court overruled Baxter’s
objection to the declaration. Baxter cites no authority to support his argument that a trial
court lacks the discretion to consider a relevant evidentiary declaration submitted by a
person other than a party to the action.14
13
We also find no merit to the claim of a violation of the procedural rules of
section 1282.2, since this provision of the Code of Civil Procedure is not applicable to
MFAA arbitrations. (Kors, supra, 195 Cal.App.4th at p. 60.)
14
In his reply brief, Baxter also argues the award should be corrected under
section 1286.6. Because the argument was not raised in his opening brief, it is forfeited.
23
E. The Attorney Fees Order
The Bocks contend the trial court abused its discretion in setting a different
lodestar rate for Attorneys Kathryn Curry and Kenneth Van Vleck and in failing to
compensate them for the full number of hours actually worked by their attorneys on the
litigation.15
“We apply an abuse of discretion standard when reviewing a trial court order
awarding attorney fees. [Citation.] ‘ “Trial judges are entrusted with this discretionary
determination because they are in the best position to assess the value of the professional
services rendered in their courts.” ’ [Citation.] Hence, the fee award [‘ “]will not be
disturbed unless the appellate court is convinced that it is clearly wrong.[” ’] [Citation.]
Indulging all inferences in favor of the trial court’s order, as we are required to do, we
presume the trial court’s attorney fees award is correct, and ‘[w]hen the trial court
substantially reduces a fee or cost request, we infer the court has determined the request
was inflated.’ ” (McKenzie v. Ford Motor Co. (2015) 238 Cal. App. 4th 695, 703–704.)
1. The Difference In Hourly Rate
The Bocks’ legal services were performed by GCA Law Partners LLP, through
Curry and Van Vleck. The two attorneys have similar resumes. Both graduated from
prestigious undergraduate and law school programs; Curry ranked second in her law
school class at the University of Santa Clara. At the time of the fee request in 2014,
Curry had 23 years of legal experience, while Van Vleck had 20 years. Their legal
experience in sophisticated civil litigation was also similar, and both have been
recognized as excellent practitioners in trade publications. GCA Law Partners LLP,
(Mammoth Lakes Land Acquisition, LLC v. Town of Mammoth Lakes (2010)
191 Cal. App. 4th 435, 476.) In any event, the arbitrator’s error in relying on Baxter’s
letter is not the type of error subject to correction. (Severtson v. Williams Construction
Co. (1985) 173 Cal. App. 3d 86, 95.)
15
Baxter has appealed the attorney fees order, but his only ground for appeal is
that the fee award should be vacated along with the arbitration award. Because we affirm
the trial court’s judgment confirming the arbitration award, we deny Baxter’s appeal of
the attorney fees award.
24
which listed Curry ahead of Van Vleck on the pleadings, charged the Bocks the same
hourly rate for both attorneys. Although Baxter disputed the appropriateness of this rate,
he did not argue the two attorneys should be compensated at different rates. Yet the trial
court, without explanation, compensated Van Vleck’s work at a significantly higher rate
than Curry’s work.16
On the record before us, we find no reasonable basis for the difference in
compensation assigned by the trial court to Curry and Van Vleck. Judged from the bare
bones of their resumes, the two attorneys are nearly indistinguishable. If there is any
advantage, it would appear to tilt to Curry by virtue of her additional years of experience.
Baxter argues the two can be distinguished by their Martindale-Hubbell attorney ratings,
which are “BV” for Curry and “AV” for Van Vleck. As Curry explained, however, her
rating was assigned a dozen years ago when she had nine years of experience, at which
time it was the highest rating for which she was eligible, and she had never sought to
update the rating. Even assuming that a difference in Martindale-Hubbell ratings could
overcome Curry’s two additional years of experience and justify a different billing rate,
Curry’s explanation demonstrated the out-of-date rating is not a reliable measure of the
quality of her services.
We therefore vacate the portion of the attorney fees order assigning different rates
for Curry and Van Vleck and remand for the trial court either to assign the two attorneys
the same rate of compensation or to articulate a reasonable basis for any difference.17
16
It is possible the court articulated reasons for the distinction at the hearing on the
attorney fees motion, but there is no transcript of that hearing in the appellate record.
17
Because the trial court’s finding of the appropriate billing rate for Van Vleck
has not been challenged on appeal, that finding stands. Unfortunately, the exact hourly
rate awarded by the court for Van Vleck’s work is unclear. On page 3 of the court’s
decision, it set the rate at $325 per hour, while on page 6 it specified a rate of $350 per
hour. Yet when the court specified the precise dollar amount of fees awarded to the
Bocks on page 7, it compensated for Van Vleck’s work at the rate of $344.74 per hour
($11,790 for 34.2 hours’ work). If a final figure was ever embodied in a judgment, the
parties did not include that judgment in the appellate record. Accordingly, on remand the
25
2. The Reduction In Hours Compensated
In addition to awarding the Bocks’ attorneys less than their requested rate of $425
per hour, the trial court awarded compensation for far less than the number of hours they
billed to the litigation. As noted above, our review of such an award is highly deferential.
The Bocks argue their counsel provided detailed billing records which disclosed
“having to respond to six motions, an amended motion, six ex parte appearances,
multiple reply briefs in support of a single motion, and 15 declarations, and 3 requests for
judicial notice.” As the Bocks acknowledge, however, they are not entitled to
compensation for this work merely because it was performed. It was their burden to
persuade the trial court the work was reasonably necessary, both as to the particular tasks
performed and the amount of time devoted to them. (Center for Biological Diversity v.
County of San Bernardino (2010) 188 Cal. App. 4th 603, 615 [“The ‘burden is on the party
seeking attorney fees to prove that the fees it seeks are reasonable.’ ”].)
The billing records submitted by the Bocks reflect far more work than would be
expected for a petition to confirm an arbitration award, which ordinarily involves little
investigation and no discovery and requires the briefing of a single set of cross-petitions.
The Bocks’ attorneys blamed the additional work on Baxter’s litigation tactics, which
they characterized as wasteful and inefficient. In turn, Baxter contended the Bocks’
attorneys’ bills were inflated and their work unnecessary. The experienced trial judge,
who presided over the entire proceeding, was able to observe the parties’ tactics and
evaluate the appropriate amount of time and effort required. While we recognize the
court awarded compensation for considerably less time than was actually expended, we
are not in a position to second-guess its determination of reasonable necessity, let alone
to declare its judgment “clearly wrong” (McKenzie v. Ford Motor Co., supra,
238 Cal.App.4th at pp. 703–704) or beyond “the bounds of reason” (Taylor v. Nabors
Drilling USA, LP (2014) 222 Cal. App. 4th 1228, 1249).
trial court must settle the issue of Van Vleck’s rate and either compensate Curry at that
rate or articulate a reasonable basis for assigning her a different rate.
26
III. DISPOSITION
The judgment of the trial court confirming the arbitration award is affirmed. The
amount of the court’s award of attorney fees to the Bocks is vacated, and the matter is
remanded to the trial court solely for reconsideration of the lodestar compensation rate
assigned to Kathryn Curry. The Bocks may recover their costs on appeal. (Cal. Rules of
Court, rule 8.278(a)(1), (2).)
27
_________________________
Margulies, J.
We concur:
_________________________
Humes, P.J.
_________________________
Dondero, J.
A142372, A142984, A143689, A144112
28
Filed 5/24/16
CERTIFIED FOR PARTIAL PUBLICATION*
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION ONE
JOSEPH BAXTER, A142372, A142984, A143689
Plaintiff and Appellant,
(Sonoma County
v. Super. Ct. No. SCV 253350)
MICHAEL BOCK et al.,
Defendants and Respondents.
MICHAEL BOCK et al., A144112
Plaintiffs and Appellants, (Sonoma County
v. Super. Ct. No. SCV 253366)
JOSEPH BAXTER, ORDER CERTIFYING OPINION FOR
Defendant and Respondent. PARTIAL PUBLICATION AND
MODIFYING OPINION
NO CHANGE IN JUDGMENT
THE COURT:
The opinion in the above-entitled matter filed on May 18, 2016, was not certified
for publication in the Official Reports. For good cause, it now appears that the opinion
should be published with the exception of parts II.A., C., and D, in the Official Reports
pursuant to California Rules of Court, rules 8.1105 and 8.1110, and it is so ordered.
It is further ordered that the opinion filed herein on May 18, 2016, be modified as
follows:
*
Pursuant to California Rules of Court, rules 8.1105(b) and 8.1110, this
opinion is certified for publication with the exception of parts II.A., C., and D.
1. On page 1, first sentence in the first paragraph, insert a comma after the word
“clients.”
There is no change in the judgment.
Dated:
___________________________
Margulies, J.
2
Trial Court: Sonoma County Superior Court
Trial Judge: Hon. Gary Nadler
Counsel:
Sara Baxter; Greines, Martin, Stein & Richland and Kent L. Richland for Plaintiff,
Defendant, and Appellant Joseph Baxter.
GCA Law Partners, Kathryn C. Curry and Kenneth R. Van Vleck for Plaintiffs,
Defendants, and Appellants Michael Bock and Lorie Bock.
3