Opinion
B222705
08-25-2011
KAYVAN KAROON, Plaintiff and Appellant, v. NOVIAN & NOVIAN, LLP et al., Defendants and Respondents.
Reid & Hellyer, David G. Moore, Michael Gerald Kerbs; Law Office of Philip L. Guarino and Philip L. Guarino for Plaintiff and Appellant. Novian & Novian, in pro. per.; and David B. Felsenthal for Defendants and Respondents.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Los Angeles County Super. Ct. No. BC421471)
APPEAL from a judgment of the Superior Court of Los Angeles County, Robert H. O'Brien, Judge. Reversed.
Reid & Hellyer, David G. Moore, Michael Gerald Kerbs; Law Office of Philip L. Guarino and Philip L. Guarino for Plaintiff and Appellant.
Novian & Novian, in pro. per.; and David B. Felsenthal for Defendants and Respondents.
Kayvan Karoon appeals from a judgment confirming a $190,117.39 arbitration fee award in favor of his former attorneys, respondent Novian & Novian. His sole claim of error is that the trial court erroneously denied his request for a trial de novo because the request was untimely. As we find a subsequent legislative clarification that could not have been foreseen by the trial court requires it, we reverse.
FACTS AND PROCEEDINGS
Because the only issue on appeal is the correctness of the trial court's order confirming the arbitration award and rejecting the request for trial de novo as untimely, we describe the underlying dispute between the parties only briefly. Appellant had engaged respondents' law firm to advise him on the circumstances of his father's death and related family wealth issues. After initially paying attorney fees billed to him, appellant stopped, apparently unhappy with the services that respondents had been providing. Appellant then substituted respondents out of the matter and retained new counsel. At the time, there was a significant outstanding bill.
On October 2, 2007, appellant, with new counsel, filed a petition for arbitration with the Los Angeles County Bar Association. The petition claimed both respondents -Novian & Novian and Farhad Novian - had billed him for unnecessary and unauthorized work and that certain charges were unreasonable. Thereafter, the county bar notified respondents that appellant had commenced mandatory fee arbitration pursuant to Business and Professions Code sections 6200-6206. On June 30, 2009, the panel of three arbitrators issued its written decision, awarding respondent law firm $190,117.39.
The statute is colloquially referred to as the Mandatory Fee Arbitration Act. (See Maynard v. Brandon (2005) 36 Cal.4th 364, 368 (Maynard).)This is somewhat of a misnomer because for the most part the obligation to arbitrate is optional for the client, although mandatory for the attorney once the client initiates arbitration proceedings. (See Bus. & Prof. Code, § 6203, subd. (c).)
All further undesignated code references are to the Business and Professions Code, unless otherwise stated.
On August 7, 2009, the county bar mailed to the parties the "Statement of Decision and Award and Notice of Your Rights After Fee Arbitration." This mailing triggered the running of time within which the parties had to request a trial de novo in superior court. Under the language of section 6204, subdivision (c) as it then existed, appellant was required to file the request for trial de novo "within 30 days after mailing of notice of the award." (See also former §§ 6203, subd. (b), 6204, subd. (b).)
By law, the 30th day after August 7, 2009, was September 8, 2009, as the two preceding days were a Sunday and Labor Day, respectively. (Code Civ. Proc., §§ 10, 12a.) Appellant's complaint challenging the validity of the arbitration award was not filed until September 10, 2009. Appellant argued to the trial court that his complaint was nevertheless timely because the arbitration award had been mailed to him; thus, his 30 days had been extended by the five-day period of Code of Civil Procedure section 1013, subdivision (a). That statute provides in part:
"Service is complete at the time of the deposit, but any period of notice and any right or duty to do any act or make any response within any period or on a date certain after service of the document, which time period or date is prescribed by statute or rule of court, shall be extended five calendar days, upon service by mail, if the place of address and the place of mailing is within the State of California . . . ."
Respondents argued to the trial court that the issue of whether the 30-day deadline was extended by five days had already been resolved in its favor by the case of Simpson v. Williams (1987) 192 Cal.App.3d 285, 290-291 (Simpson) (disapproved on another point in Maynard, supra, 36 Cal.4th at p. 380, fn. 10).
The trial court, finding Simpson controlling, ruled in respondents' favor, dismissed the complaint, and awarded respondent law firm the $190,117.39.
DISCUSSION
A. Standard of Review and Statutory Construction Principles
The case presents us with a single issue of statutory construction: Is the 30-day deadline set out in Business and Professions Code sections 6203 and 6204 extended by Code of Civil Procedure section 1013 if the arbitration award is mailed? Construction of a statute is a question of law; as such, our standard of review is de novo. (Sierra Club v. Superior Court (2011) 195 Cal.App.4th 1537.)
We are guided by accepted rules of statutory interpretation. "Our fundamental task in interpreting a statute is to determine the Legislature's intent so as to effectuate the law's purpose. We first examine the statutory language, giving it a plain and commonsense meaning. We do not examine that language in isolation, but in the context of the statutory framework as a whole in order to determine its scope and purpose and to harmonize the various parts of the enactment. If the language is clear, courts must generally follow its plain meaning unless a literal interpretation would result in absurd consequences the Legislature did not intend. If the statutory language permits more than one reasonable interpretation, courts may consider other aids, such as the statute's purpose, legislative history, and public policy." (Coalition of Concerned Communities, Inc. v. City of Los Angeles (2004) 34 Cal.4th 733, 737.) B. The Statutes Pre-2009, Simpson, and Maynard
As of September 8, 2009, the 30th day (by statute) after the arbitration award was mailed, the state of the law was principally governed by three code provisions and one Court of Appeal opinion. Two of the statutes, each dealing with mandatory fee arbitration, were sections 6203 and 6204. Section 6204, subdivision (c) at that time provided in part:
"If no action is pending, the trial after arbitration shall be initiated by the commencement of an action in the court having jurisdiction over the amount of money in controversy within 30 days after mailing of notice of the award. After the filing of such an action, the action shall proceed in accordance with the provisions of Part 2 (commencing with Section 307) of the Code of Civil Procedure, concerning civil actions generally." (Italics added.) Business and Professions Code section 6203, subdivision (b) and section 6204, subdivision (b) had similar language measuring the 30 days by "mailing of notice of the award."
Neither party had initiated a civil action before the fee arbitration.
The third statute, Code of Civil Procedure section 1013, subdivision (a), which we quoted more fully earlier, provides "that any period of notice and any right or duty to do any act or make any response" is extended for five days in cases in which the time commences by service by mail. The parties agree that if section 1013, subdivision (a) applies, the request for trial de novo was timely, and if the statute is inapplicable then the request came legally too late.
The principal case on which respondent relies for the inapplicability of Code of Civil Procedure section 1013, subdivision (a) is Simpson, supra, 192 Cal.App.3d 285. We agree that, as far as it goes, Simpson is on all fours. The appellate court there phrased the issue the same way we have here: Does Code of Civil Procedure section 1013, subdivision (a) extend the time for filing actions under Business and Professions Code section 6204? (Simpson, at pp. 286-287.) The court held that it did not.
The plaintiff in Simpson, as does appellant here, equated "mailing of notice of the award," the language in Business and Professions Code section 6204, with "service," the term of art in Code of Civil Procedure section 1013, subdivision (a). The Court of Appeal found the two terms were not synonymous. In one, the triggering event is mailing, in the other it is service. Looking to other statutes, the court concluded the Legislature had taken various approaches to measure deadlines by which a party must act and Code of Civil Procedure section 1013, subdivision (a) only applies when the event is service, not mailing. (Simpson, supra, 192 Cal.App.3d at pp. 288-290.)
The Court of Appeal nevertheless reversed the dismissal of the plaintiff's request for a trial de novo because it found that Code of Civil Procedure section 473 dealing with excusable neglect did apply, and found as a matter of law that relief under that statute was appropriate in the case before it. Three years after Simpson, the Court of Appeal in Shiver, McGrane & Martin v. Littell (1990) 217 Cal.App.3d 1041, 1049, disagreed with Simpson and concluded Code of Civil Procedure section 473 did not apply to section 6204 proceedings. The court did not mention Code of Civil Procedure section 1013, except in its description of the events in Simpson.
The next case to address the general subject matter was Maynard, supra, 36 Cal.4th 364. But Maynard does not deal with the interplay between section 6204 and Code of Civil Procedure section 1013, subdivision (a). Rather, as that court also framed the issue, it was whether the excusable neglect principles of Code of Civil Procedure section 473 apply to an untimely request for trials de novo under section 6204. The Supreme Court held that they did not, and disapproved Simpson on that point. (Maynard, at p. 380, fn. 10.) The Supreme Court mentioned Code of Civil Procedure section 1013 only once in describing a labor case decided 23 years earlier. (Maynard, at p. 375, fn. 5, citing Pressler v. Donald L. Bren Co. (1982) 32 Cal.3d 831.)
That was the state of the law on December 9, 2009, when the parties appeared before the trial court to argue appellant's request for trial de novo and respondents' motion to confirm the arbitration award. Appellant's counsel unabashedly acknowledged that he was asking the trial court to ignore Simpson "because it was wrong." The experienced trial judge, well schooled in the teachings of Auto Equity Sale, Inc. v. Superior Court (1962) 57 Cal.2d 450, 455, would have none of it. The trial court followed Simpson, rejected the untimely trial de novo, and confirmed the arbitration award.
C. The 2009 Amendments to Sections 6203 and 6204
In the spring and summer of 2009, as this case was marked by the arbitrators' decision, the request for trial de novo and other superior court proceedings, relevant events were also taking place in Sacramento. The Legislature had before it Senate Bill No. 544, an omnibus bill containing a provision that would replace "mailing" in Business and Professions Code sections 6203 and 6204 with "service." (Sen. Com. on Judiciary, Analysis of Sen. Bill No. 544 (2009-2010 Reg. Sess.) as amended May 4, 2009.) The Governor signed Senate Bill No. 544 on August 5, 2009, ironically two days before the state bar mailed notice of the arbitrators' award. (Stats. 2009, ch. 54, p. 256.) The law was not urgency legislation and, therefore, did not go into effect until January 1, 2010. (Cal. Const., art. IV, § 8, subd. (c); see also Gov. Code, § 9600.)
The parties did not address the 2009 amendments either in the trial court or in the original sets of briefs on appeal. Accordingly, we asked for, and the parties filed, supplemental briefs on the relevance, if any, of the 2009 amendments to the present case.
D. Analysis
The parties agree that the significance of the 2009 amendments turns on whether the amendments changed existing law or merely clarified the law as it had been. Predictably, respondent posits change, appellants, clarification.
Whether a legislative enactment is intended to change existing law or only to clarify it is an issue well known to the appellate courts. "A statute that merely clarifies, rather than changes, existing law is properly applied to transactions predating its enactment." (Carter v. Department of Veteran Affairs (2006) 38 Cal.4th 914, 922.) This is so for essentially a semantical reason, as the Legislature has announced that the new language is what it intended by the old language all along. "Material changes in language, however, may simply indicate an effort to clarify the statute's true meaning." (Id. at p. 923.)
Respondents argue in their supplemental brief that the amendments to sections 6203 and 6204 are not retroactive. Appellant expressly disclaims any argument for retroactive application of the statute. Whether an amendment clarifies or changes legislation is distinct from whether the Legislature intended to apply a statute retroactively. We do not address retroactivity.
In cases where the statute itself and legislative history are silent on intent, courts are often required to analyze the question with scant information. There need be no divining here because the Legislature recorded its intent during Senate Bill No. 544's consideration. In a report dated May 12, 2009, the Senate Committee on Judiciary acknowledged that existing law was confusing for parties and needed clarification. Specifically:
"Under existing law, two sections of the Business and Professions Code that relate to mandatory fee arbitration refer to the 'mailing' of documents by the arbitration program. (Bus. & Prof. Code Secs. 6203, 6204.) This provision would clarify those sections by replacing 'mailing' with 'service.' The State Bar, sponsor of this provision, states that the use of the word mailing 'has occasionally created confusion for parties and may jeopardize the rights of parties in ways that the statutes did not intend.' Accordingly, the substitution of 'service' for 'mailing' is intended to eliminate confusion." (Sen. Com. on Judiciary, Analysis of Sen. Bill No. 544, supra, at p. 4.) Although the report did not specify the origin of the confusion, we note that sections 6203 and 6204 use both mailing and service. This may have been the source of the confusion.
Elsewhere, the Senate Committee on Judiciary characterized the 2009 amendments to sections 6203 and 6204, and other provisions in the omnibus bill, as making "technical and clarifying changes." (Sen. Com. on Judiciary, Analysis of Sen. Bill No. 544, supra, at p. 4.)
As an omnibus bill, Senate Bill No. 544 dealt with a number of subjects unrelated to mandatory fee arbitration. In its description of the bill, the Senate Committee on Judiciary highlighted some of these unrelated provisions and then said the bill would "make other technical and clarifying changes." (Sen. Com. on Judiciary, Analysis of Sen. Bill No. 544, supra, at p. 1.)
Because the use of the word "service" was expressly a clarification and not a change, the term is properly applied to matters such as this one that predate the enactment of the amendments. (Carter v. Department of Veteran Affairs, supra, 38 Cal.4th at p. 922.) Business and Professions Code section 6204, as properly interpreted in light of the 2009 amendments, here measured the 30-day deadline to file a request de novo by service. Accordingly, Code of Civil Procedure section 1013 was applicable, and appellant's request was timely.
Even though we reverse the trial court, we recognize that because of the stare decisis effect of Simpson, supra, 192 Cal.App.3d 285, the trial court had no discretion other than to rule as it did.
DISPOSITION
The judgment is reversed. Appellant to recover costs on appeal.
RUBIN, J. WE CONCUR:
BIGELOW, P. J.
FLIER, J.