Too Late to Vacate

Bacall v. Shumway, No. B32787 (D2d8 Mar. 16, 2021)

An arbitrator partially cancelled a contract after finding that some of the services provided under it included the unlicensed practice of law because Attorney let his license lapse during the period of performance. In moving to vacate the award, Attorney and his company argue that the arbitrator violated public policy in making that finding—this exceeding his authority—and committed misconduct by failing to consider arguments related to costs and fees. The trial court rejected those arguments, and now the Court of Appeal does too.

On the authority point, Attorney points to a line of cases where courts have vacated arbitral awards premised on the enforcement of contracts that would be illegal under California law. (Much like this recent case, where the Court of Appeal vacated an award declining to void a non-compete.) But the facts here are the other way—the arbitrator declined to enforce the contract because it was partially illegal. So the same policy isn’t implicated.  

On the misconduct, Attorney seems to have blew the Arbitrator’s deadline to respond to Client’s fee request. After the award issued, Attorney requested to file an opposition. The Arbitrator considered the late opposition to be a request to modify the award and—under the applicable AAA Commercial Rules—ruled that he lacked the authority to re-determine an issue that had already been decided. Although Attorney tries to frame the issue as a refusal to consider evidence, it’s really not. Attorney had a chance to oppose the fee request. The fact that he blew the deadline did not mean that the arbitrator committed misconduct meriting vacation of the award under Code of Civil Procedure 1281.2 in rejecting the late arguments.

Affirmed.