Roberts v. Packard, Packard & Johnson
217 Cal. App. 4th 822
| Cal. Ct. App. | 2013Background
- Plaintiffs Neal Roberts and Norman Rille sued their former attorneys Packard, Packard & Johnson (PPJ) for breach of fiduciary duty, conversion, and declaratory relief.
- PPJ’s contingency fee agreement included a broad arbitration clause and an entitlement to fees if a party prevails in enforcing the contract.
- PPJ filed a petition to compel arbitration within the pending lawsuit; the court granted arbitration, stayed the suit, and later awarded PPJ interim fees.
- Plaintiffs contended the arbitration clause void or waived due to how disbursements and costs were allocated, or that PPJ had waived arbitration by delay.
- The core issue is whether PPJ could be deemed prevailing party and receive attorney fees on the petition to compel arbitration before arbitration resolves the contract claims.
- The appellate court held that, under Civil Code section 1717, only the final outcome of the contract action determines prevailing party status, so interim fees on the petition to arbitrate were improper.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether attorney fees on the petition to compel arbitration are proper. | Roberts argues the petition is not an action on the contract and thus not eligible for fees. | PPJ contends the petition to compel arbitration is an action on the contract and entitles it to fees as prevailing party. | Reversed; fees cannot be awarded until arbitration resolves the contract claims. |
Key Cases Cited
- Christensen v. Dewor Developments, 33 Cal.3d 778 (Cal. 1983) (prevailing party determination after contract action in arbitration context)
- Otay River Constructors v. San Diego Expressway, 158 Cal.App.4th 796 (4th Dist. 2008) (independent petition to arbitrate can yield fees; context dependent)
- Frog Creek Partners, LLC v. Vance Brown, Inc., 206 Cal.App.4th 515 (1st Dist. 2012) (no multiple prevailing parties in one contract in a single lawsuit; petition in pending suit not standalone final)
- Kors v. Kors, 195 Cal.App.4th 40 (1st Dist. 2011) (discussed but criticized for not recognizing single-contract prevailing party limitation)
- Turner v. Schultz, 175 Cal.App.4th 974 (1st Dist. 2009) (fee award in contract action with arbitration context)
- Phillips v. Sprint PCS, 209 Cal.App.4th 758 (4th Dist. 2012) (guidance on arbitration within pending action and related procedures)