Appeal Sanctions, Arbitration: Broad Operating Agreement Fees Clause Justified $238,000 Fees/Costs Award To Arbitration Prevailing Party, Plus Fees For Winning On Appeal

Appealing Party Just Avoided Sanctions For Frivolous Appeal, But Fees On Appeal Found To Be The Appropriate Remedy.

            Walters v. Boustead Securities, LLC, Case No. G056250 (4^th Dist., Div. 3 July 11, 2019) (unpublished) is an interesting Fourth District, Division 3 opinion affirming a $238,000 fees/costs arbitration award in favor of a prevailing party where the compensatory award was $186,354.  The operative fees clause in an operating agreement between the parties was broad, fully supporting fees, costs, and expenses to the prevailing party in any litigation or arbitration.  The merits of the arbitration award, including the fees/costs components, were beyond review.

            That brought to the appellate court to a request for sanctions by the non-appealing party.  Admitting that silly arguments were advanced on appeal and that the matter was “a close call,” the 4/3 DCA panel, in a 3-0 opinion authored by Justice Moore, believed that the respondent was entitled to attorney’s fees on appeal (in remand proceedings before the lower court), because the other side made no argument why the operating agreement fees clause did not allow for this result.  So, in the end, a less restrictive alternative was adopted, even though we could say that sanctions were narrowly averted.

            HAT TIP—We give a hat tip to Richard A. Jones, who is a local attorney known by co-contributor Mike.  He is a locally-based Santa Ana attorney who successfully represented respondent on appeal.  Congrats!