Arbitration And Void Judgments: $6,250 Postarbitration Fees Reversed To Person Who Was The Recipient Of The Benefits Of A Void Judgment

 

Second District, Division 4 Finds No Basis To Award Fees To A True Nonparty.

     We do get email feedback from readers, for which we thank you. Sometimes we can be of help, sometimes we can’t, but we do usually respond one way or the other. One reader wanted some posts on void judgments. Voila! Here you go.

     In L.A. Arena Funding, LLC v. D.N. Concrete Pumping, Inc., Case No. B210649 (2d Dist., Div. 4 Oct. 28, 2009) (unpublished), president of a misnamed business in a license dispute with a licensor over some Staples Center seats was eventually absolved in “dicta” in an arbitration award based a sole proprietorship theory, even though he was never made a party to the complaint or the arbitration. Licensor did win, however, an award against president’s business. The trial court confirmed the arbitration award, although the judgment did not mention president. No alter ego theory was ever litigated so that president was effectively a nonparty. Nevertheless, the lower court eventually granted president’s petition to confirm an award against a nonparty based on the arbitrator’s “dicta” as well as awarded him $6,250 in postarbitration attorney’s fees. Licensor appealed both the confirmation award and the fee award. 

     Guess what?

                                        Cosmic Voids.

 

     Licensor won a reversal on appeal.

     The crux of the appellate opinion was jurisdictional in nature. A judgment, of course, is void if the court rendering it lacked subject matter jurisdiction or jurisdiction over the parties. Rendering a judgment even in favor of a nonparty likely constitutes a denial of due process. (Bronco Wine Co. v. Frank A. Logoluso Farms, 214 Cal.App.3d 699, 717 (1989).) No alter ego theory was resolved, with the arbitration only adjudicating the sole proprietorship theory notwithstanding that president was not a party. Given that a judgment rendered by a court lacking jurisdiction over the parties is void (Pajaro Valley Water Mgt. Agency v. McGrath, 128 Cal.App.4^th 1093, 110 (2005)), the judgment confirming the arbitration award in president’s favor was void. As a result, the dominoes fell such that the reversal of the merits judgment also compelled a reversal of the fees award. End result—POOF!

Comments

[Mari-Lynne Earls]

Hum, family court entered an order naming a college trust as a source of child support with the outrageous condition that, if the trustee paid any child support item without the non custodial parent's permission, that parent could return to court and lower child support by that amount. But the trust prohibited its use for this. Think I'll explore a motion for rescission based on lack of subject matter jurisdiction and ultra vires doctrine. Comments?