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Court of Appeal:
Arbitrator Need Not Disclose Speaker Role on Litigated Issue
Opinion Says Role as Presenter in Webinar Titled ‘Everything an Advocate Needs to Know About Winning Attorney Fees…in…Arbitration’ Did Not Undermine Award of Nearly $60,000 in Costs
By a MetNews Staff Writer
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JONATHAN POLLAND arbitrator |
The Sixth District Court of Appeal has held that an arbitrator was under no obligation to disclose his upcoming participation as a speaker in a webinar titled “Everything an Advocate Needs to Know About Winning Attorney Fees…in an Arbitration” before he ordered nearly $60,000 in litigation costs to the plaintiff.
Noting that the defense only learned about the upcoming seminar through a promotional email sent by the arbitration service provider that handled the case, American Arbitration Association (AAA), after the award was issued, the court declined to find that the arbitrator’s faculty role in the course was grounds for disqualification or triggered disclosure requirements even if the title arguably indicates a bias in favor of such orders.
Appealing the confirmation of the award by Santa Clara Superior Court Judge Frederick Chung was The Signature Motors LLC, a used car dealership in San Jose. In 2021, plaintiff Samantha L. Silva filed a complaint against the dealership relating to her purchase of an allegedly defective vehicle after reading purportedly false advertisements about easy financing.
Chung granted Signature’s motion to compel arbitration based on a clause in the sales agreement. AAA assigned the matter to Jonathan Polland of Berkeley-based Polland Resolution Services.
On the day of the assignment, Signature announced that the parties had agreed to settle Silva’s claims for a total of $9,323.13, to be paid by the dealer and another defendant, in exchange for a return of the car. The settlement did not resolve Silva’s claim for attorney fees and costs.
Attorney Fee Award
Following a hearing, Polland awarded Silva $58,101.75 or 90% of her requested fees. Chung said that the hourly rate of $595, claimed by her attorney Michael R. Quirk of Walnut Creek, was reasonable but reduced the award by 10% because the hours cited were excessive given that the case was settled early in litigation.
Signature challenged the award in the trial court after its counsel, Auto Legal Group LLP, received the promotional email touting the upcoming seminar days after the award was issued. In the motion opposing confirmation, Ali Kamarei, Glen F. Olives, and Brooke A. Brigham of Auto Legal Group wrote:
“The title itself reeks of bias. Usually, a neutral perspective on any…course refers to both winning and defending a motion. For example, a neutral perspective on such a course would hypothetically be entitled ‘Everything an Advocate Needs to know about bringing and defending a motion for costs and attorney’s fees.’ But this is not so with the title of the course that Mr. Polland teaches. Mr. Polland’s course is unilaterally directed in favor of the person making a motion for attorney’s fees….”
They continued:
“Regardless of whether there is actual bias or not, disclosures should have been made before the appointment of Mr. Polland or at the very least at the time the arbitrator knew that he would solely be addressing the issue of attorney’s [fees] in this case. Mr. Polland should have disqualified himself or at minimum made full disclosures regarding his ‘expertise.’ Accordingly, the Award should be stricken and a new arbitrator presented to the parties for selection to act as a neutral arbitrator.”
Sixth District’s View
In an unpublished opinion, filed Tuesday and written by Justice Cynthia C. Lie, the court affirmed the judgment in favor of the plaintiff, saying:
“We consider all the facts, not the title of the webinar in isolation….We assume that teaching a course intended only to help those claiming attorney fees could support a reasonable impression of bias in favor of those claimants. But the content of the advertisement reflects that, however titled, [the] webinar was intended to help ‘better advance your client’s interests…whether you are seeking or opposing fee and cost awards.’ (Italics added.) The webinar, offered for a $75 fee, simply provided any interested practitioners insight that was intended to be useful for all attorneys claiming or defending fee and cost requests in arbitration.”
Acting Presiding Justice Patricia Bamattre-Manoukian and Justice Adrienne M. Grover joined in the opinion.
Arbitral Bias
Lie noted that arbitration awards are generally “nearly immune” from attack except in cases where arbitral bias can be shown, saying that, like judges, arbitrators should be disqualified if a person aware of the facts might reasonably entertain a doubt as to his impartiality. She wrote:
“Subject to exceptions inapplicable here, an arbitration award shall be vacated if the ‘rights of the party were substantially prejudiced by misconduct of a neutral arbitrator’ or the ‘arbitrator making the award…failed to disclose within the time required…a ground for disqualification of which the arbitrator was then aware.”
Saying that “Signature’s main contention is that Polland was required to disclose his faculty role in the webinar because it was a ground for disqualification,” she concluded that “neither the advertisement as a whole nor Polland’s participation in the advertised webinar support a reasonable belief that he was biased for or against any party for a particular reason.”
Taking issue with the notion that Polland was required to disclose anything, the jurist remarked:
“To begin, Signature has not established the basic factual predicates that would be necessary to trigger disclosure—that Polland was aware before the conclusion of arbitration of his future involvement in the webinar or how the webinar would be advertised….Nothing in the record establishes that Polland had agreed to be in the webinar prior to the issuance of the arbitration award. Nor does the record establish when, if ever, Polland became aware of AAA’s advertising materials or the title AAA used in those materials.”
She continued:
“Even assuming Polland was aware of the advertisement before issuing the award, Polland’s involvement in the advertised webinar does not invite a reasonable belief that he was biased for or against a party for a particular reason….Polland’s participation in a neutral presentation of issues on the subject of fee and cost awards in arbitration does not support a reasonable impression of bias in favor of one side or the other.”
Significance of Fees
Signature says that any potential of bias against vehicle dealers is of significant importance to its counsel because
such fee requests are often the “tail that wags the dog” in the consumer protection disputes Auto Legal Group defends.
Unpersuaded, Lie commented that “[w]e appreciate the importance of both impartiality and the appearance of impartiality to Signature, its counsel, and the integrity of the arbitral system more generally” but said that emotionally-invested litigants are not disinterested observers who may be relied upon to provide an objective opinion.
She also rejected the defendant’s argument that Polland has a financial interest in ruling on arbitral fee disputes to drive interest in his webinar and that losing parties like Signature would be particularly incentivized to attend. The justice wrote:
“We presume that any arbitration of a fee dispute—or any dispute—will leave at least one side dissatisfied. We decline to leap from there to the conclusion that one side’s dissatisfaction generates the thirst for education that would supply an arbitrator a ‘financial interest in the subject matter in a proceeding.’ Certainly Signature’s counsel do not attribute the arbitration award here to any deficiency of continuing legal education, only to bias. Taking at face value Signature’s assertion that Polland’s award in this case caused its counsel to ‘[become] interested in taking such a course,’ counsel stopped short of claiming that it did so—even to further investigate its claim of bias.”
The case is Silva v. The Signature Motors LLC, H051552.
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