Arbitration: Denial Of Attorney’s Petition To Confirm Non-Binding Arbitration Award Under MFAA Affirmed

Client Timely And Properly Rejected Non-Binding Award By Commencing A Trial After Arbitration And Notifying Attorney’s Counsel Of Client’s Intent To Reject The Award.

            The Mandatory Fee Arbitration Act (MFAA) (Bus. & Prof. Code, § 6200 et seq.) recognizes “the disparity in bargaining power in attorney fee matters which favors the attorney in dealings with infrequent consumers of legal services” (Schatz v. Allen Matkins Leck Gamble & Mallory LLP, 45 Cal.4th 557, 564-565 (2009)) and was established in 1978 “to protect clients as consumers of legal services in general.” (Alternative Systems, Inc. v. Carey, 67 Cal.App.4th 1034, 1044 (1998).)   Pursuant to § 6201(a), a client may request nonbinding arbitration under the MFAA despite having a contractual agreement for binding arbitration with his/her attorney, and if a client commences non-binding arbitration under the MFAA, it is mandatory for the attorney pursuant to § 6200(c).  A non-binding arbitration award under the MFAA becomes binding if the parties agree in writing to make it binding, or upon the passage of 30 days after service of notice of the award – unless, within the 30 days, a party has sought a trial after arbitration. (§ 6204(a); §6203(b).)

            This is what happened in Torru v. Price, Case No. A158400 (1^st Dist., Div. 3 December 14, 2020) (unpublished), when a fee dispute arose between attorney and client.  After receiving notice of the arbitrator’s award to attorney of $26,046.70, after a reduction to attorney’s fees of $875, client sent a letter to attorney’s counsel with a confidential settlement offer and notice that she intended to reject the arbitrator’s decision.  Additionally, client timely filed a complaint against attorney following service of the notice of the award concerning the fees at issue. 

            When attorney initiated a separate action to confirm the arbitration award, the trial court denied the petition – finding client had timely rejected the award.

            The 1/3 DCA affirmed.  Client’s letter to attorney’s counsel was admissible as evidence she intended to reject the non-binding decision.  Additionally, client’s filing of complaint properly served as her rejection of the non-binding decision, and satisfied MFAA provisions requiring her to seek and commence a trial after arbitration.