Compel Arbitration and U.S. Supreme Court Cert Petition Fees Reversed, Based on Frog Creek Partners.
It will not come as a surprise that Frog Creek Partners, LLC v. Vance Brown, Inc., 206 Cal.App.4th 515 (1st Dist., Div. 5 2012) will make our Top 20 List at the end of the year. Several appellate courts have agreed with its reasoning in cases that face the issue of whether a party has prevailed when winning certain interim arbitration compel proceedings.
Although unpublished, Baillie v. Processing Solutions, LLC, Case Nos. A130795/A131521 (1st Dist., Div. 3 Aug. 31, 2012) (unpublished) confronted a situation where defendants were hit with attorney’s fees of over $148,000 after losing a motion to compel arbitration and a petition of certiorari to the U.S. Supreme Court involving the validity of a class action arbitration waiver clause. (For mediation and arbitration issues, see co-contributor Marc’s excellent blog at www.calmediation.org.) As you can probably surmise, the defense lost its attempt to arbitrate based on unconscionability, a determination that was upheld by a cert denial right before AT&T Mobility was issued.
However, not to be undaunted by arbitration compelling losses, the defense appealed the fee awards to plaintiffs based upon the argument they were premature--it goes something like this, “you won some interim arbitration battles, but not the war as far as who prevails on the contractual claims so that Civil Code section 1717 fees cannot be awarded at this time.”
The defense won on appeal!
In deciding that the fee awards were premature, Division 3 of the First District in Baillie endorsed the reasoning of Frog Creek Partners (a Division 5 decision). It found persuasive that no final “prevailing party” had yet been determined, and balked at the idea that there could be two dueling prevailing parties during the course of this case obviously interwoven with arbitration/litigation historical battles.
BLOG OBSERVATION--Our local Santa Ana Court of Appeal, in Wherry v. Award, Inc., Case No. G045520 (4th Dist., Div. 3 June 28, 2012) (unpublished) [reviewed in our June 29, 2012 post], also found Frog Creek Partners’ analysis to be instructive/persuasive in that particular appellate cause.
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