Opinion
A149830
11-09-2017
MICHAEL D. LIBERTY, Plaintiff and Respondent, v. THOMAS NUSSBAUM et al., Defendants and Appellants.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (San Mateo County Super. Ct. No. CIV525365)
Plaintiff, attorney Michael D. Liberty, obtained an arbitration award (Award) for attorney fees against defendants Thomas Nussbaum and Evelyn Clayton in the amount of $105,000. More than 30 days after notice of the Award was served on defendants, plaintiff filed a petition in the trial court to confirm the Award. Defendants thereafter filed an opposition and sought to vacate the Award. The trial court ruled the Award was binding and entered judgment in favor of plaintiff. While the court's reasoning was flawed in certain respects, defendants' arguments on appeal fail to persuade us that reversal is required. Accordingly, we affirm the judgment.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
In 2003, plaintiff filed a lawsuit in San Mateo County on behalf of defendants, alleging they had been defrauded in a real estate scheme.
In 2005, defendants obtained a default judgment for $1,455,167. The default judgment included a punitive damages award that the trial court subsequently struck, reducing the amount of the judgment to $455,217.
On September 6, 2005, defendants signed an attorney-client fee agreement with plaintiff, retaining him to collect the default judgment. The agreement contains a binding arbitration clause. However, it also provides that any dispute between the parties must first be submitted to mediation before proceeding to arbitration.
In March 2006, plaintiff filed a lawsuit on behalf of defendants in Los Angeles County to collect on the default judgment.
In April 2009, on the second day of trial, the attorneys notified the court that they had settled the case. The terms of the settlement agreement were recited in open court and on the record. Under the settlement, $375,000 was to be deposited into a trust account to be disbursed following the execution of a written settlement agreement. However, after the settlement agreement was reduced to writing, defendants refused to sign it and fired plaintiff.
On January 14, 2013, plaintiff served defendants with a Notice of Client's Right to Arbitration under the Mandatory Fee Arbitration Act (Bus. & Prof Code, §§ 6200-6206 (MFAA)). Plaintiff claimed defendants owed him $310,137 in attorney fees and/or costs. While the record does not contain the petition to arbitrate, the face of the Award indicates defendants initiated the arbitration. The Award also states that Nussbaum appeared and participated in the arbitration hearing.
All further undesignated statutory references are to the Business and Professions Code.
On June 4, 2013, the MFAA arbitration hearing was held on plaintiff's claim for attorney fees. The hearing panel of the San Mateo County Bar Association (Panel) found that plaintiff was entitled to $75,000, plus $30,000 in interest, for a total award of $105,000. The first page of the document setting forth the Award and the Panel's findings includes two boxes, allowing the person filling out the form to indicate by a checkmark whether the arbitration is "Binding" or "Non-Binding." The box marked "Non-Binding" is checked. There is an asterisk beside the unchecked box labeled "Binding," indicating that "[b]oth parties have agreed in writing for binding arbitration before the hearing."
Among its findings, the Panel concluded that the parties had orally agreed plaintiff would be paid $75,000 for his services once a settlement agreement was reached in the underlying litigation. The Panel rejected defendants' argument that payment was not due because they had not actually settled the matter, noting this contention had been conclusively rejected by both the trial court and by an unpublished opinion of the Second District Court of Appeal. It further concluded that the sum of $75,000 was reasonable compensation for plaintiff's services.
The trial court in the default matter granted a motion to enforce the settlement. In a nonpublished opinion filed on October 25, 2011, the Second District Court of Appeal affirmed the settlement but reversed a portion of the trial court's order that had required defendants to pay attorney fees to the parties seeking to enforce the settlement. (See Nussbaum v. Corlyn (Oct. 25, 2011, B222102) [nonpub. opn.].)
On September 10, 2013, the San Mateo County Bar Association served defendants with a copy of the Award. Also included was a notice explaining defendants' rights after MFAA arbitration.
On November 20, 2013, plaintiff filed a petition in the trial court to confirm the Award. In the petition, he indicated that the Award was binding—not because the parties had agreed in writing that it would be binding—but because more than 30 days had passed since the notice of the Award had been mailed, and no party had filed a rejection of the Award and request for trial.
On December 20, 2013, defendants filed an opposition to plaintiff's petition to confirm the Award, asking that the Award be vacated. They asserted they had not stipulated to arbitration, and claimed there was no written fee agreement between the parties, contrary to the requirements contained in section 6148.
Section 6148, subdivision (a) provides that "[i]n any [non-contingency fee] case . . . in which it is reasonably foreseeable that total expense to a client, including attorney fees, will exceed one thousand dollars ($1,000), the contract for services in the case shall be in writing." The written contract shall contain the basis of compensation, "[t]he general nature of the legal services to be provided to the client," and the respective responsibilities of the attorney and the client. (§ 6148, subd. (a)(2).) Failure to comply with these requirements "renders the agreement voidable at the option of the client, and the attorney shall, upon the agreement being voided, be entitled to collect a reasonable fee." (§ 6148, subd. (c).)
In a letter dated December 23, 2015, plaintiff asked the trial court to drop from calendar a motion set for February 10, 2016 to confirm a different arbitration award that had mistakenly been filed under the present case's number.
On March 9, 2016, plaintiff filed a noticed motion to confirm the Award. He argued the Award was binding, claiming the 30-day time period for defendants to have appealed the award under section 6203, subdivision (b) had passed. In an accompanying declaration, he included a copy of the September 6, 2005 attorney-client fee agreement containing the provision for mediation and arbitration of any disputes.
Section 6203, subdivision (b) provides, in part: "Even if the parties to the arbitration have not agreed in writing to be bound, the arbitration award shall become binding upon the passage of 30 days after service of notice of the award, unless a party has, within the 30 days, sought a trial after arbitration pursuant to Section 6204." As we discuss below, a dissatisfied party may still move to vacate an MFAA award even after this 30-day period has expired.
On April 18, 2016, defendants filed an answer and opposition to plaintiff's motion, again moving to vacate the Award.
On May 6, 2016, the trial court granted plaintiff's motion to confirm the Award and entered judgment in his favor. The court found the parties had agreed to participate in binding arbitration, and that their challenge was resultantly time-barred: "The parties agreed to attend binding arbitration with the San Mateo County Bar Association, which they did and which awarded Plaintiff $105,000. The Defendants had 30 days in which to file an appeal of that award and did not do so within the time allotted. Therefore the arbitration award in favor of Plaintiff is confirmed and judgment on that award is entered pursuant to [Code of Civil Procedure section] 1287.4."
On June 6, 2016, defendants filed a motion to set aside and vacate the "default judgment" entered against them on the grounds that the judgment had been procured as a result of plaintiff's extrinsic fraud. They also asserted the Award should be vacated under Code of Civil Procedure section 1286.2 because the arbitrators had exceeded their powers in that they lacked jurisdiction over the fee dispute because the fees were based on an unwritten fee agreement.
On August 25, 2016, the trial court entered its order denying the motion to vacate its judgment. The court adopted its tentative ruling as its final order, which stated in part: "The court's order granting the Motion to Confirm the Arbitration Award does state that the parties agreed to binding arbitration. That order comports with the arbitrator's award which states that the parties agreed in writing to binding arbitration."
Defendants contested the tentative ruling.
On September 12, 2016, defendants filed a motion to disqualify the trial judge and to vacate her judgment.
On September 30, 2016, defendants filed a peremptory challenge seeking to transfer the case to a different county.
On October 6, 2016, defendants filed another motion to disqualify the trial judge.
On November 2, 2016, the trial court filed a minute order noting that the original trial judge had signed orders striking the motions to disqualify her. The order concluded that any further motion seeking to vacate the judgment would need to be heard by the original judge.
On November 9, 2016, defendants filed another motion seeking to disqualify the trial court judge. Their primary argument was that the judge had manipulated the facts by finding that they had agreed to binding arbitration. They cited to the first page of the Award, which indicates that the arbitration was nonbinding. That same day, they filed a notice of appeal of the May 13, 2016 judgment.
DISCUSSION
I. Plaintiff's Failure to File a Respondent's Brief
Plaintiff has failed to file any brief. Although it is an appellant's duty to show error, the respondent has a corresponding obligation to aid the appellate court in sustaining the judgment or order. (See 9 Witkin, Cal. Procedure (5th ed. 2008) Appeal, § 720, p. 787.) This obligation is especially pertinent in the present case because plaintiff is an attorney and an officer of this court. Plaintiff's failure to brief this case imposes an unfair, improper, and "unnecessary burden on this court, and at least raises the inference that respondent concedes that the appeal is meritorious." (Yarbrough v. Yarbrough (1956) 144 Cal.App.2d 610, 612.) Further, "[w]here the respondent does not file any brief we are under no duty to look up the law, nor are we required to make any search for evidence." (Mann v. Andrus (1959) 169 Cal.App.2d 455, 458.) If a respondent is unwilling to suggest any theory upon which a judgment may be sustained, he should not expect an appellate court to do so without his assistance. In our discretion, we may treat plaintiff's failure to file a brief as an acknowledgement that the appeal is well taken and reverse the trial court's orders. (Bennett v. California Custom Coach, Inc. (1991) 234 Cal.App.3d 333, 338, fn. 1.) Notwithstanding plaintiff's dereliction of duty, we have undertaken to examine the record on the basis of defendants' brief, and review the trial court's order and judgment for prejudicial error. (Ibid.; see Cal. Rules of Court, rule 8.220(a)(2).) II. The MFAA
"The Legislature created the MFAA as a separate and distinct arbitration scheme applicable to disputes between clients and attorneys over legal fees, costs, or both. [Citations.] [¶] Unlike arbitration based on an agreement under the [California Arbitration Act (CAA); Code Civ. Proc., § 1280 et seq.)], arbitration under the MFAA is based on statute and does not require a prior agreement. [Citations.] The MFAA arbitration is voluntary for the client, but mandatory for the attorney if commenced by the client. [Citations.] An award under the MFAA is not binding, absent a written agreement to make it binding by the parties. In contrast, the party's typical expectation under the CAA is that the arbitration award will be final." (Rosenson v. Greenberg Glusker Fields Claman & Machtinger LLP (2012) 203 Cal.App.4th 688, 692-693 (Rosenson).)
"In order to protect the client's right to arbitration under the statute, an attorney wishing to pursue a claim for fees must first, prior to or at the time of serving an action—and only after a fee dispute has arisen [citation]—send the client a notice advising of its right to arbitration under the MFAA." (Perez v. Grajales (2008) 169 Cal.App.4th 580, 597.) Again, it is presumed under the MFAA that the arbitration award will be nonbinding. "The arbitration will be binding . . . only if the attorney and client so agree in writing after the dispute has arisen. Otherwise, either party may request a trial de novo within 30 days after the arbitration has concluded." (Schatz v. Allen Matkins Leck Gamble & Mallory LLP (2009) 45 Cal.4th 557, 561; see Schatz at p. 572, § 6204, subd. (a) ["parties may agree in writing to be bound by the award of arbitrators appointed pursuant to this article at any time after the dispute . . . has arisen"].)
After the award is issued, "[e]ither the attorney or client may have a trial de novo of the dispute if the dissatisfied party, within 30 days after service of the arbitration award, files a rejection and request for trial in the pending action [citation], or, if no action is pending, files a rejection and trial request by initiating an action [citation]. [Citation.] Absent the filing of a timely rejection and request for trial, the arbitration award becomes final. [Citation.] Once the award has become final, it cannot be vacated by the filing of a motion for relief from default under Code of Civil Procedure section 473." (Giorgianni v. Crowley (2011) 197 Cal.App.4th 1462, 1473 (Giorgianni), fn. omitted.)
"Under section 6203, subdivision (b), a party may petition to confirm an arbitration award in the same manner as arbitration awards may be confirmed under Code of Civil Procedure section 1285 of the [CAA]. [Citations.] If an arbitration order is confirmed, the court is required to enter judgment thereon, and '[t]he judgment so entered has the same force and effect as . . . a judgment in a civil action of the same jurisdictional classification . . .' and is enforceable in the same manner. [Citations.] An appeal will lie from the judgment entered on the order confirming the arbitration award." (Giorgianni, supra, 197 Cal.App.4th at p. 1470, fn. omitted.)
Code of Civil Procedure section 1285 provides: "Any party to an arbitration in which an award has been made may petition the court to confirm, correct or vacate the award. The petition shall name as respondents all parties to the arbitration and may name as respondents any other persons bound by the arbitration award."
As an alternative to requesting a trial de novo within 30 days, a dissatisfied party can move to vacate an MFAA award under the CAA. The CAA sets forth narrow grounds for vacating an award. An award may be vacated if: (1) it was procured by corruption, fraud, or other undue means; (2) any arbitrator was corrupt; (3) a neutral arbitrator engaged in prejudicial misconduct; (4) the arbitrators exceeded their powers, and the award cannot be corrected without affecting the merits of the decision; (5) a party was prejudiced by the arbitrators' refusal to postpone the hearing after a showing of sufficient cause therefor or by their refusal to hear material evidence; or (6) the arbitrators violated applicable rules regarding disqualification. (Code Civ. Proc., § 1286.2, subds. (a)(1)-(6).) III. Standard of Review
While section 6203, subdivision (b) provides that an arbitration award becomes binding 30 days after service of the award, it also provides that "[i]f no action is pending in any court, the award may be . . . vacated by petition to the court having jurisdiction over the amount of the arbitration award, but otherwise in the same manner as provided in Chapter 4 (commencing with Section 1285) of Title 9 of Part 3 of the Code of Civil Procedure." (Italics added.) It appears the trial court did not consider this provision in its May 6, 2016 ruling, when it concluded the Award must be confirmed because defendants had not filed an appeal within 30 days of service of the Award.
Our review is of the trial court's judgment, not of the Award itself. Accordingly, we review de novo the court's judgment on the order confirming the Award. (Advanced Micro Devices, Inc. v. Intel Corp. (1994) 9 Cal.4th 362, 376, fn. 9; see Toal v. Tardif (2009) 178 Cal.App.4th 1208, 1217.) To the extent defendants assert the court erred in denying their motion to vacate the Award, we also review de novo a trial court's judgment concerning petitions to vacate an arbitration award. (SWAB Financial v. E*Trade Securities, LLC (2007) 150 Cal.App.4th 1181, 1196.) If there are disputed issues of fact before the trial court, the appellate court accepts the trial court's resolution of those disputed facts if supported by substantial evidence. (Id. at p. 1205.) IV. Statute of Limitations
Defendants first contend that plaintiff's action is barred by the four-year statute of limitations for breach of written contract under Code of Civil Procedure section 337, subdivision (1). They claim that because the petition to confirm the Award was not filed until November 20, 2013, it was untimely. They assert that "the last possible date to file a cause of action against [them] was March, 2013," based on their conclusion that plaintiff's claim arose in April 2009, when he was fired. We disagree. This action is not based on the underlying contract, but instead arises from the issuance of the Award.
We note plaintiff initiated his arbitration action in January 2013, two months before the expiration of the statute of limitations for written contracts.
The statute of limitations on a petition to confirm an arbitration award is set forth in Code of Civil Procedure section 1288, which provides, in part: "A petition to confirm an award shall be served and filed not later than four years after the date of service of a signed copy of the award on the petitioner." It is undisputed that plaintiff filed his petition within four years of service of the Award on defendants.
We note "[t]he CAA's deadlines for challenging and confirming arbitration awards serve important goals. . . . The award is treated as a contract [citation], and the prevailing party has a substantially longer period—up to four years (similar to the four-year statute of limitations for breach of contract [citation])—to obtain satisfaction of the award before resorting to the courts. In the event of satisfaction, judicial relief will not be necessary, conserving court resources. If, however, the award is not satisfied, the prevailing party may convert it into an enforceable judgment by way of a petition to confirm." (Eternity Investments, Inc. v. Brown (2007) 151 Cal.App.4th 739, 746.)
While defendants acknowledge that plaintiff had four years to file a petition to confirm the Award, they complain that he waited until March 9, 2016 to schedule a hearing. This circumstance is inconsequential. Defendants were served with a copy of the Award on September 10, 2013. Therefore, defendant had until September 10, 2017 to file his petition to confirm the award. The petition was timely filed and the hearing was scheduled well before the four-year deadline.
Defendants also complain that plaintiff failed to serve his petition to confirm the arbitration award in the manner provided by law for a service of summons, as required by Code of Civil Procedure section 1290.4, subdivision (b)(1), instead serving the petition by mail. They do not, however, assert that the trial court lacked jurisdiction over them.
Defendants alternatively claim that any claim for payment of plaintiff's fees was barred by the two-year statute of limitations for oral agreements. (Code Civ. Proc., § 339, subd. (1).) It is too late to raise this claim. When parties agree to arbitrate a dispute arising out of contract, the statute of limitations affirmative defense is for the arbitrator to decide. (Wagner Construction Co. v. Pacific Mechanical Corp. (2007) 41 Cal.4th 19, 23.) Even if this defense had been raised at the arbitration, challenges to an arbitrator's finding of fact that the statute of limitations did not bar a petitioner's claims are not reviewable on appeal. (Department of Personnel Administration v. California Correctional Peace Officers Assn. (2007) 152 Cal.App.4th 1193, 1200.) "The scope of judicial review of arbitration awards is extremely narrow. Courts may not review the merits of the controversy, the sufficiency of the evidence supporting the award, or the validity of the arbitrator's reasoning. [Citations.] Indeed, with limited exceptions, 'an arbitrator's decision is not generally reviewable for errors of fact or law, whether or not such error appears on the face of the award and causes substantial injustice to the parties.' " (Ibid.) V. Failure to First Proceed by Mediation
Defendants assert the MFAA arbitration was not authorized under the written fee agreement because the parties' dispute was not first submitted to mediation. The attorney-client fee agreement provided that disputes would be submitted first to mediation, followed by arbitration: "CLIENTS agree that any dispute arising out of this Agreement including claims of professional negligence and malpractice shall be submitted first to mediation; if the mediation is unsuccessful, the dispute shall then be submitted to binding arbitration. The mediation and arbitration shall be held in San Mateo County. By agreeing to binding arbitration, the parties understand that they are waiving their constitutional right to a jury trial and other procedural rights of citizens of California and the United States." In asserting the Panel lacked authority over the dispute, defendants rely on National Union Fire Ins. Co. v. Stites Prof. Law Corp. (1991) 235 Cal.App.3d 1718 (National). Their reliance is misplaced.
In National, the appellate court stated that even though the arbitrators had concluded they had subject matter jurisdiction over a fee dispute, the trial court could vacate the arbitration award on the ground that the arbitrators lacked jurisdiction because the party invoking arbitration was the insurance company that was obligated to pay defense costs for an insured's employee's defense. The company was thus not the law firm's actual client. (National, supra, 235 Cal.App.3d at pp. 1722, 1726-1728.) Here, defendants were unquestionably plaintiff's clients. Thus, National has no application to this case.
Defendants acknowledge that they did not raise this point below in the trial court or during the arbitration, asserting this failure "did not matter" because the arbitrators lacked authority over the dispute. If defendants desired to assert that arbitration was premature because the parties had not first attempted mediation, they should have done so before the arbitration hearing.
By analogy, in the context of waiver of the right to arbitrate, the law is that " '[a] demand for arbitration must not be unreasonably delayed. . . . [A] party who does not demand arbitration within a reasonable time is deemed to have waived the right to arbitration.' " (Sobremonte v. Superior Court (1998) 61 Cal.App.4th 980, 992.) Here, as the parties seeking to compel mediation, defendants had the responsibility to timely request mediation before the parties and the trial court had wasted valuable resources on the MFAA arbitration. At a minimum, this issue should have been raised before the trial court: " '[I]t is fundamental that a reviewing court will ordinarily not consider claims made for the first time on appeal which could have been but were not presented to the trial court. [Citation.]' [Citations.] We will therefore 'ignore arguments, authority, and facts not presented and litigated in the trial court.' [Citation.] Such arguments raised for the first time on appeal are generally deemed forfeited." (Perez v. Grajales, supra, 169 Cal.App.4th at pp. 591-592.) Although they had the opportunity to do so, defendants did not assert below that the Award was unauthorized due to plaintiff's failure to first pursue mediation. Nor do they indicate that they ever sought to avail themselves of mediation. Accordingly, they have forfeited the argument. VI. Whether the Parties Agreed to Be Bound by Arbitration
At oral argument, defendants' attorney stated that his clients had demanded mediation. No evidence of such demand appears in the record on appeal.
Defendants assert the trial court incorrectly determined that the parties had agreed to be bound by the MFAA arbitration. They also complain that Liberty improperly introduced the September 6, 2005 written fee agreement in his March 2016 moving papers, claiming this was an attempt to override the arbitrators' finding that the parties had only an oral agreement to pay $75,000 for plaintiff's legal services upon settlement of the underlying litigation. Even if we accept defendants' contentions as true, the alleged errors were not prejudicial.
Typically, arbitration awards are binding. (See Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 9.) In contrast, unless the parties agree otherwise, an arbitration award rendered under the MFAA becomes binding if it is not challenged by the proper procedure. Specifically, an MFAA award is not binding if a party initiates a trial (or initiates CAA arbitration) within 30 days after mailing of the notice of the award. (§ 6204, subds. (b), (c); see Rosenson, supra, 203 Cal.App.4th at p. 693.) "Even if the parties to the arbitration have not agreed in writing to be bound, the arbitration award shall become binding upon the passage of 30 days after service of notice of the award, unless a party has, within the 30 days, sought a trial after arbitration pursuant to Section 6204." (§ 6203, subd. (b).) It is undisputed that defendants did not commence any action within the 30-day time period. Therefore, the Award became binding by operation of law. "[T]he burden [is] on the party dissatisfied with the arbitration award to take steps to prevent the award from becoming binding." (Loeb v. Record (2008) 162 Cal.App.4th 431, 443.)
Defendants represented themselves below. Self-representing litigants, as well as the pleadings and motions they file in the trial court, are subject to the standards generally applied by California courts in civil litigation. (Gamet v. Blanchard (2001) 91 Cal.App.4th 1276, 1284-1285 [self-representing litigants are not exempt from statutes or court rules governing procedure].)
While it appears the trial judge here mistakenly concluded that the parties had elected to have binding arbitration at the time of the arbitration hearing, this does not affect our conclusions. Even if the trial court's reasoning in support of its order was erroneous, it is immaterial, because our review of the order confirming the arbitration award is de novo. (E.g., Mave Enterprises, Inc. v. Travelers Indemnity Co. (2013) 219 Cal.App.4th 1408, 1422; Advanced Micro Devices, Inc. v. Intel Corp. (1994) 9 Cal.4th 362, 376, fn. 9.) Under the de novo standard of review, we exercise our independent judgment and do not review the validity of the lower court's reasoning. Again, it is undisputed that defendants did not file a request for a de novo proceeding within 30 days after September 10, 2013, the date the Award was mailed to them by the arbitration panel. Instead, they filed an opposition to plaintiff's petition and a request to vacate the Award on December 20, 2013. By then, the Award had become binding. VII. Validity of Oral Contract
Defendants also assert the trial court erred in denying their request to vacate the Award because the oral fee agreement under which plaintiff sought to recover was voided, and therefore the arbitrators acted in excess of their authority under Code of Civil Procedure section 1286.2, subdivision (a)(4) because they lacked jurisdiction over the dispute.
While their brief is not a model of clarity, we agree that their request to vacate the Award was timely filed under section 6203, subdivision (b).
For fee contracts governed by section 6148, requirements regarding form and content are set forth in subdivision (a), which states, in part: "(a) In any case not coming within Section 6147 in which it is reasonably foreseeable that total expense to a client, including attorney fees, will exceed one thousand dollars ($1,000), the contract for services in the case shall be in writing. At the time the contract is entered into, the attorney shall provide a duplicate copy of the contract signed by both the attorney and the client . . . . The written contract shall contain all of the following: [¶] (1) Any basis of compensation including, but not limited to, hourly rates, statutory fees or flat fees, and other standard rates, fees, and charges applicable to the case. [¶] (2) The general nature of the legal services to be provided to the client. [¶] (3) The respective responsibilities of the attorney and the client as to the performance of the contract." Subdivision (c) of section 6148 further provides: "Failure to comply with any provision of this section renders the agreement voidable at the option of the client, and the attorney shall, upon the agreement being voided, be entitled to collect a reasonable fee." Section 6148, subdivision (d)(2) provides: "(d) This section shall not apply to . . . [¶] . . . [¶] (2) An arrangement as to the fee implied by the fact that the attorney's services are of the same general kind as previously rendered to and paid for by the client."
Defendants do not state that they took any action to void the oral contract at any time prior to the issuance of the Award, nor is there anything in the Panel's findings to suggest that they argued the oral contract to pay fees was void. Insofar as they seek to render the contract void at this time, their efforts are too late.
A voidable contract will take its full and proper legal effect unless and until it is set aside by judicial adjudication or the client otherwise declares the agreement void. (Depner v. Joseph Zukin Blouses (1936) 13 Cal.App.2d 124, 127-128 ["A voidable contract is one which may be rendered null at the option of one of the parties, but is not void until so rendered."].) We found no authority, and defendants cite to none, holding a client can engage in the arbitration of a voidable contract until such time as they receive an adverse ruling.
The Award has been issued and it is binding. Failure to make an election to have the contract declared void before submitting to arbitration waives the claim for future judicial review. As aptly stated in Moncharsh v. Heily & Blase, supra, 3 Cal.4th at p. 30 (albeit in the context of waiver of an illegal contract provision), "[a]ny other conclusion is inconsistent with the basic purpose of private arbitration, which is to finally decide a dispute between the parties. Moreover, we cannot permit a party to sit on his rights, content in the knowledge that should he suffer an adverse decision, he could then raise the illegality issue in a motion to vacate the arbitrator's award. A contrary rule would condone a level of 'procedural gamesmanship' that we have condemned as 'undermining the advantages of arbitration.' [Citations.] Such a waste of arbitral and judicial time and resources should not be permitted."
Our conclusion is reinforced by the record on appeal, which, as noted above, indicates that defendants initiated the MFAA arbitration proceeding by filing a petition after plaintiff served them with notice of their right to attorney fee arbitration.
In light of our conclusions, we need not address defendants' further argument that the trial court erred in denying their motion for reconsideration.
DISPOSITION
The order confirming the Award is affirmed. The parties shall bear their own costs on appeal.
/s/_________
Dondero, J. We concur: /s/_________
Margulies, Acting P. J. /s/_________
Banke, J.