Award of Arbitration Costs Was Affirmative Relief Violating Automatic Stay, With Striking Of Costs Award But Affirmance Of Merits Award Being The End Results.
In Hilton v. Allcare Medical Mgt., Inc., Case No. B253984 (2d Dist., Div. 1 Sept. 25, 2015) (unpublished), former employee lost an arbitration to former employer, but then declared Chapter 13 bankruptcy. However, the arbitrator concluded that she could entertain the fees/costs requests and then awarded arbitration costs of $15,166.37 against the bankrupt and in favor of former employee as the prevailing party, although denying the ex-employer’s motion to recoup fees.
The appellate court disagreed, striking the costs award but affirming the merits award. The reason was that a fees/cost proceeding constitutes an action or proceeding asserting a claim for relief such that it violated the automatic stay. That meant the arbitrator exceeded her authority by ruling on the defense motion for fees and costs. (Derringer v. Fitch, 2005 WL 5111008 (D.N.M. June 8, 2005).)
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