Crooymans v. Givner CA2/3
B305916
| Cal. Ct. App. | Sep 7, 2021Background
- Preston King, owner of a company worth over $20M, retained estate-tax attorney Bruce Givner to implement a plan that included a private annuity executed Dec. 31, 2012; King died May 3, 2013.
- King’s children (Kathryn Crooymans and David King) sued Givner in arbitration as executors of the estate and as co-trustees of the family trust, alleging malpractice for advising the private annuity and later persuading rescission, causing tax exposure.
- An arbitrator awarded the King children damages ($654,800) and prevailing-party attorney fees and costs; after post-award submissions the arbitrator first issued an August 21 final award ($1,738,292.10 in fees/costs) then issued a September 17 corrected award increasing fees/costs to $2,025,485.91.
- Givner petitioned the trial court to vacate or correct the award, arguing the arbitrator failed to issue a “reasoned award” as required by ADR Services Rule 34(c) and later exceeded authority by amending the final award.
- The trial court denied vacatur (deferred to arbitrator’s interpretation of ADR rules) but ruled the arbitrator exceeded his correction authority and reverted the fee/cost award to the August 21 amounts; the Court of Appeal affirmed.
Issues
| Issue | Plaintiff's Argument (King children) | Defendant's Argument (Givner) | Held |
|---|---|---|---|
| Did arbitrator exceed powers by failing to issue a “reasoned award” under ADR Rule 34(c)? | Award supplied reasoning more than a "simple result" and satisfied Rule 34(c) as the arbitrator reasonably construed it. | Award lacked required reasoned findings on capacity allocation, statute-of-limitations, and fee calculations, so vacatur is required. | Denied vacatur. Court defers to arbitrator’s interpretation; award gave more than a simple result and did not exceed powers. |
| Did arbitrator exceed authority by correcting a final award to add fees/costs (Sept. 17 correction)? | Correction fixed an evident miscalculation and was authorized under §1284/§1286.6. | Arbitrator lacked statutory power to change a final award absent an evident miscalculation on the face of the award. | Held for Givner on correction point. No evident miscalculation on the face of the August 21 final award; trial court properly restored the original August 21 fee/cost amounts. |
| Could arbitrator award damages to the King children in their individual capacities though they did not assert individual claims? | The award could be construed to be in individual and representative capacities and any correction would not affect merits. | Arbitrator lacked power to award relief in a capacity not submitted to arbitration. | Objection forfeited (Givner did not timely raise before petition to vacate); trial court overruled and judgment confirmed. |
| What standard governs review of an arbitrator’s compliance with provider rules (reasoned award requirement)? | Defer to arbitrator’s interpretation; a reasoned award need be more than a simple result but less than formal findings. | Arbitral rules require sufficiently detailed reasoning; failure justifies vacatur. | Review is highly deferential; courts apply a ‘‘more than a simple result’’ test (following Cat Charter/Rain) and will vacate only if arbitrator’s construction is utterly irrational. |
Key Cases Cited
- Moncharsh v. Heily & Blase, 3 Cal.4th 1 (1992) (limits on judicial review of arbitration awards; courts may not review sufficiency of evidence).
- Vandenberg v. Superior Court, 21 Cal.4th 815 (1999) (arbitration trades judicial safeguards for finality; limited review).
- Advanced Micro Devices, Inc. v. Intel Corp., 9 Cal.4th 362 (1994) (deferential review; arbitrator’s remedial discretion constrained by agreement).
- Cat Charter, LLC v. Schurtenberger, 646 F.3d 836 (11th Cir. 2011) (reasoned award is intermediate: more than result but less than full findings).
- Rain CII Carbon, LLC v. ConocoPhillips Co., 674 F.3d 469 (5th Cir. 2012) (agreeing a reasoned award requires more than a simple result; no vacatur where that threshold met).
- Severtson v. Williams Construction Co., 173 Cal.App.3d 86 (1985) (correction of awards permitted only for evident miscalculations appearing on the award’s face).
- Elliott & Ten Eyck Partnership v. City of Long Beach, 57 Cal.App.4th 495 (1997) (section 1284 narrowly circumscribes arbitrators’ power to correct final awards).
- A.M. Classic Construction, Inc. v. Tri-Build Development Co., 70 Cal.App.4th 1470 (1999) (discussing nonstatutory amendment doctrine for omitted issues but distinguishing statutory limits on corrections).