Arbitration Award Binding/Attorneys' Fees
McGill v. Ball, No. 1 CA-CV 21-0580 (App. Div. I, October 11, 2022) (J. Paton) https://www.azcourts.gov/Portals/0/OpinionFiles/Div1/2022/1%20CA-CV%2021-0580%20McGill.pdf
ARBITRATION AWARD FOLLOWING ARBITRATION IN CONTRAST TO MEDIATION IS BINDING/ATTORNEYS' FEES INCURRED TO ENFORCE ARBITRATION AWARD NOT ALLOWED WERE LAW FIRM REPRESENTS ITSELF
Defendant client disputed attorneys' fees billed by attorney for federal court representation. Fee agreement with attorney required fee disputes be decided by arbitration but the fee agreement did not expressly say any arbitration award would be binding. After a four day arbitration, the arbitrator awarded the attorney the requested fees. Client then took the position the arbitration award was not binding. The attorney applied for confirmation of the award in superior court pursuant to A.R.S. §§ 12-1501to -1518. The trial court found that client was bound by the arbitration award because he participated in the arbitration and awarded attorney additional fees incurred in seeking the confirmation. Client appeals this decision to the Arizona Court of Appeals which affirmed the trial court in part and vacated in part.
Client, by agreeing to arbitrate the fee dispute is limited under Arizona's Uniform Arbitration Act [UAA] to challenging the confirmation of the arbitration award to those grounds enumerated in A.R.S. § 12-3023 (e.g., award procured by corruption, fraud, misconduct, partiality). Client did not allege any of these grounds to overturn this award. By agreeing in the fee contract to be arbitrate a fee dispute, client waived his right to jury trial.
The fact the fee contract did not specifically say an arbitration award would be binding, by definition (Arbitration, Black's Law Dictionary (3d. pocket ed.
2006) it is. Unlike a mediation, when you agree to arbitration you agree to be bound by the result. In fact, “even without an agreement to arbitrate, a party's participation in the arbitration proceedings, without objection, waives the right to challenge the arbitration award.”
While the UAA does not apply to employment contracts, client presented no evidence here (such as a W-2) that the attorney was his employee. Attorney was an independent contractor.
However, attorney is not entitled to fees incurred in pursuing the enforcement of the arbitration award because “party does not incur attorneys' fees unless there is (1) an attorney-client relationship and (2) a client has a genuine obligation to pay its attorney.” A firm that represents itself cannot recover attorneys' fees.