Marik v. >University> >Village>

 

 

 

 

 

 

 

 

 

Filed 10/3/13  Marik v. University Village CA2/3

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>NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

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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opinion has not been certified for publication or ordered published for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.

 

 

IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

 

SECOND
APPELLATE DISTRICT

 

DIVISION
THREE

 

 

 
>

JAROSLAV MARIK et al.,               Plaintiffs and Appellants,               v.   UNIVERSITY VILLAGE, LLC,               Defendant and Respondent.

B247171         (Los Angeles County       Super. Ct. No. BS123468)

 

 

 

            APPEAL from a judgment of the Superior
Court of href="http://www.adrservices.org/neutrals/frederick-mandabach.php">Los Angeles
County, Soussan G. Bruguera, Judge.  Reversed in part and otherwise affirmed.

            Douglas Caiafa for Plaintiffs and
Appellants.

            De Castro, West, Chodorow, Mendler,
Glickfeld & Nass and Jerry L. Kay for Defendant and Respondent.

 

_________________________

 

 

 

 

 

 

            Plaintiffs and appellants Jaroslav
Marik, M.D. (Marik) and Letkov Financial Partners, LP (Letkov) (sometimes
collectively referred to as Marik) appeal a judgment confirming an href="http://www.mcmillanlaw.com/">arbitration award, insofar as the
judgment awards defendant and respondent University Village, LLC (UV-LLC)
reasonable attorney fees of $51,575 incurred in the arbitration, as well as post-arbitration
attorney fees of $6,450, for a total fee award of $58,025.

For the reasons discussed below, we reverse the judgment to the extent it
awards UV-LLC post-arbitration attorney fees of $6,450 and otherwise affirm.

FACTUAL AND
PROCEDURAL BACKGROUND

            1. 
Arbitration proceedings.

Marik is a member of UV-LLC, which was involved in development projects
near the UC Riverside campus.  Letkov was
the entity by which Marik made investments in UV-LLC.

In November 2009, Marik and Letkov filed a petition to compel arbitration
against UV-LLC. The petition sought arbitration of a dispute that UV-LLC failed
to produce financial documentation regarding investments and loans that UV-LCC
members made to UV-LLC, and payments that UV-LLC made to the members.

In February 2012, the arbitrator issued his "Final Award" in
favor of UV-LLC.  The arbitrator found
that UV-LLC had produced all documents responsive to the request for production
from Marik and Letkov.  The arbitrator’s
Final Award declared UV-LLC to be the prevailing party, and provided that
UV-LLC was entitled to its reasonable attorney fees in the amount of $51,575 as
well as costs in the amount of $5,969.

2.  Superior court proceedings.

UV-LLC filed a
petition to confirm the arbitrator’s Final Award. The parties argued the
petition to the trial court on March
22, 2012, and the court took the matter under submission.  On May
24, 2012, the trial court entered an order granting UV-LLC’s
petition “in its entirety,” and entered judgment in favor of UV-LLC. The judgment
provided that UV-LLC had produced all records that it was required to produce,
and that it was entitled to attorney fees and costs “pursuant to law,” and
entitled to post-arbitration attorney fees and costs “pursuant to law.”href="#_ftn1" name="_ftnref1" title="">[1]

Seven months later, on December
20, 2012, the trial court entered a judgment fixing UV-LLC’s
attorney fees and costs in the following amounts:

(i)  $51,575 in attorney fees as
the prevailing party in arbitration;

(ii)  $5,969 in costs as the
prevailing party in arbitration;

(iii)  An additional $6,450 in
attorney fees associated with the petition to confirm the arbitrator’s award
and the motion fixing the amount of attorney fees and costs; and

(iv)  An additional $80 in court
costs.

3.  Appellate proceedings; order partially dismissing appeal.

On February 7, 2013,
Marik and Letkov filed a notice of appeal.  The notice of appeal specified they appealed
“from the Order and Judgment Confirming Arbitration Award” that was entered on December 20, 2012.

            On February 28, 2013, UV-LLC filed a motion to dismiss the
appeal as untimely.  UV-LLC contended the
only event that had occurred in this matter was entry of judgment on May 24, 2012, and the notice of
appeal, filed February 7, 2013,
was filed more than 180 days after entry of judgment.

            In an
order filed April 4, 2013,
Division Eight of this courthref="#_ftn2"
name="_ftnref2" title="">[2]
partially dismissed the appeal.  It
ruled:  “On appeal, [Marik and Letkov] may challenge issues concerning
attorney’s fees and costs awarded in the judgment entered on December
20, 2012.  To the extent
[Marik and Letkov] attempt on appeal to raise issues regarding the arbitrator’s
decision on production of records, as confirmed by the judgment entered on May 24, 2012, those issues are beyond
the jurisdiction of this court and must be and hereby are dismissed.”  (Italics added.)

CONTENTIONS

Marik contends the trial court erred in awarding attorney fees to UV-LLC
because the contract between Marik and UV-LLC did not contain an attorney fee
provision.

DISCUSSION

            1. 
Marik’s appeal from the December
20, 2012 judgment enables
this court to address all the attorney fees which were awarded to UV-LLC.

UV-LLC contends Marik cannot challenge the arbitrator’s award to UV-LLC
of $51,575 in attorney fees because the trial court entered judgment on May 24, 2012, granting UV-LLC’s
petition to confirm the award in its entirety, and Marik did not file notice of
appeal until February 7, 2013.  Therefore, according to UV-LLC, the sole
issue Marik may raise on appeal is the trial court’s award of >post-arbitration attorney fees and
costs, which were set forth in the December
20, 2012 judgment.

UV-LLC’s arguments
in this regard are unavailing.  UV-LLC
fails to address the impact of Division Eight’s April 4, 2013 order partially dismissing Marik’s
appeal.  To reiterate, Division Eight
ruled:  “On appeal, [Marik and Letkov] >may challenge issues concerning attorney’s
fees and costs awarded in the judgment entered on December 20, 2012.  To the extent [Marik and Letkov] attempt to raise
issues regarding the arbitrator’s decision on production of records, as
confirmed by the judgment entered on May
24, 2012, those issues are beyond the jurisdiction of this court
and must be and hereby are dismissed.” 
(Italics added.)

Thus, Division Eight already has determined the scope of the issues which
Marik may raise on appeal.  Division
Eight held that because Marik did not file notice of appeal from the May 24,
2012 judgment confirming the award, Marik is barred from attacking the
arbitrator’s determination that UV-LLC had produced all records that it was
required to produce; on the other hand, “[Marik] may challenge issues
concerning attorney’s fees and costs awarded in the judgment entered on
December 20, 2012.”  As indicated, the December 20, 2012 judgment
enumerates all the attorney fees awarded to UV-LLC, i.e., $51,575 for the
arbitration and $6,450 for post-arbitration attorney fees.

The impact of Division Eight’s order is that Marik’s notice of appeal
from the December 20, 2012
judgment enables this court to review Marik’s challenge to all the attorney
fees specified in said judgment.

2.  No merit to Marik’s contention the trial court should have corrected
the arbitration award to eliminate the arbitrator’s award of attorney fees to
UV-LLC.

As indicated, the arbitrator’s Final Award included the finding that
“[UV-LLC] is entitled to its reasonable attorneys’ fees in the amount of
$51,575 . . . .” 
Consistent therewith, the trial court, in its final judgment entered
December 20, 2012, awarded UV-LLC “the amount of $51,575.00 as prevailing party
legal fees . . . .”

On appeal, Marik contends the trial court should have corrected the
arbitration award pursuant to Code of Civil Procedure section 1286.6.href="#_ftn3" name="_ftnref3" title="">[3]  Marik asserts the petition for arbitration
did not request attorney fees, the petition did not sue on any contract which
contained an attorney fee clause, and because “attorneys’ fees were not pleaded
in the Petition as an item of costs or damages, awarding them was beyond the
scope of the arbitrator’s powers and should have been corrected by the trial
court.”

Marik’s contention is belied by the record.  In a post-arbitration brief filed with the
arbitrator on or about December 6, 2011, Marik requested attorney fees from the
arbitrator.  The post-arbitration brief
stated in pertinent part:  “PLAINTIFFS
ARE ENTITLED TO REASONABLE ATTORNEYS’ FEES AND COSTS  [¶]  To
the extent that any party is entitled to attorneys’ fees, it should be to
Petitioners.  Since Defendant refused
Plaintiffs’ request for documents under the Operating Agreement and forced
Plaintiffs to Demand Arbitration and file the instant Petition, and since
Plaintiffs have obtained some relief as established at
arbitration . .  , they should be determined to be ‘prevailing
parties.’  As such, they are entitled to
attorneys’ fees and costs pursuant to the Operating Agreements attached to the
Petition as Exhibit F.  Plaintiffs are
also entitled to fees and costs under Civil Code Section 1717 and the rules of
the American Arbitration Association which grants discretion to the Arbitrator
to award such fees and costs.  Plaintiffs
therefore request this Arbitrator to set a hearing for such once this matter
has been resolved.”

Thus, both sides to the arbitration requested an award of reasonable attorney
fees from the arbitrator.  Two months
later, on February 10, 2012, the arbitrator issued his Final Award, awarding
$51,575 in reasonable attorney fees to UV-LLC. 
Because both Marik and UV-LLC submitted the issue of attorney fees to
the arbitrator, there is no merit to Marik’s assertion the arbitrator exceeded
his powers by deciding the issue of attorney fees.

Because both Marik
and UV-LLC submitted the issue of attorney fees to the arbitrator, Marik cannot
assert the arbitrator exceeded his powers in addressing the issue of attorney
fees.  With the issue of attorney fees
having been tendered to the arbitrator, the arbitrator resolved the competing
requests for attorney fees in UV-LLC’s favor. 
Because both parties submitted the issue of attorney fees to the
arbitrator, the trial court properly refused Marik’s request that the trial
court “correct” the award to eliminate the arbitrator’s award of $51,575 in
attorney fees to UV-LLC.

It is settled that
arbitrators do not exceed their powers “merely by rendering an erroneous
decision on a legal or factual issue, so long as the issue was within the scope
of the controversy submitted to the arbitrators.”  (Moshonov
v. Walsh (2000) 22 Cal.4th 771, 775.) 
Here, as explained, the parties submitted the issue of attorney fees to
the arbitrator.  Therefore, any error by
the arbitrator in awarding attorney fees to UV-LLC would have been at most an
error of law, not an act exceeding the arbitrator’s powers.  (See Taylor
v. Van-Catlin Construction (2005) 130 Cal.App.4th 1061, 1068 [even if
arbitrator incorrectly applied the statute on which a party based its request
for attorney fees “it would have amounted to an error of law, not an act
exceeding his powers” and therefore not subject to judicial review].)

We conclude the trial court properly refused Marik’s request to “correct”
the award.

3.  Due to the absence of an attorney fee provision in the contract between
Marik/Letkov and UV-LLC, there is no basis for the award of post-arbitration
attorney fees to UV-LLC; therefore, the award of $6,450 in post-arbitration
fees must be reversed.

In addition to the award of $51,575 in attorney fees for UV-LLC’s defense
of the arbitration, the trial court awarded UV-LLC $6,450 in post-arbitration
attorney fees.  Unlike the award of
$51,575 in arbitral attorney fees, the trial court’s award of post-arbitration
attorney fees was clearly erroneous and is reversible.

It is settled that each “party to a lawsuit must pay his or her own
attorney fees except where a statute or contract provides otherwise.”  (Cargill,
Inc. v. Souza (2011) 201 Cal.App.4th 962, 966.)  On appeal, “this court reviews a
determination of the legal basis for an award of attorney fees de novo as a
question of law.”  (Sessions Payroll Management, Inc. v. Noble Construction Co. (2000)
84 Cal.App.4th 671, 677.)

In a previous
appeal involving these same parties, Marik and Letkov as plaintiffs and UV-LLC
as a defendant, this court found the pertinent contract, i.e., the UV-LLC
Operating Agreement, does not contain an attorney fee provision.  (Marik et
al. v. University Village, LLC, et al. (Feb. 19, 2013, B236248 consolidated
w/ B236249 [nonpub. opn.], slip opn., at p. 8.) href="#_ftn4"
name="_ftnref4" title="">[4]   In that case, the trial court awarded
attorney fees to various defendants in the sum of $130,137.50.  (Slip opn., p. 2.)  We reversed and held the parties to
certain agreements, including the UV-LLC Operating Agreement, had no right to
attorney fees because those agreements did not contain an attorney fee
provision.  (Slip opn., p. 8.)

Here, in an attempt to overcome the absence of an attorney fee provision
in the instant UV-LLC Operating Agreement, UV-LLC argues that Marik’s action
sought not only the documents of UV-LLC but also other University Village
entities, and “[c]ertain of the UV Entities’ operating agreements contain an
attorney fees provision entitling the prevailing party to its fees in the event
of a dispute.”

UV-LLC’s reliance on the existence of attorney fee clauses in >other entities’ agreements is
misplaced.  In the absence of an attorney
fee provision in the pertinent UV-LLC Operating Agreement, UV-LLC cannot
recover attorney fees from Marik/Letkov, even if UV-LLC is a prevailing party.

Therefore, the award of $6,450 in post-arbitration attorney fees to
UV-LLC must be reversed.

DISPOSITION

The judgment entered December 20, 2012,
is reversed insofar as it awards UV-LLC post-arbitration attorney fees of
$6,450.  As modified, the judgment is
affirmed.  The parties shall bear their
respective costs on appeal.

NOT TO BE
PUBLISHED IN THE OFFICIAL REPORTS

 

 

 

 

 

                                                                                    KLEIN,
P. J.

 

 

We
concur:

 

 

 

                        CROSKEY, J.

 

 

 

 

                        KITCHING, J.