Rosenson v. Greenberg Glusker Fields Claman & Machtinger LLP
137 Cal. Rptr. 3d 489
Cal. Ct. App.2012Background
- Rosenson signed a 2003 retainer with Greenberg Glusker; dispute over fees invoked arbitration with a provision for binding arbitration of fee disputes.
- The MFAA process produced a nonbinding award in October 2010 in Rosenson's favor on the amount due, with a net difference of $75,000 plus $5,000 in costs.
- On November 1, 2010 Greenberg Glusker filed a demand for binding arbitration with JAMS within 30 days of the MFAA award.
- Rosenson then filed a petition to confirm the nonbinding MFAA award in January 2011; Greenberg Glusker opposed, arguing the filing of the JAMS demand satisfied arbitration rights.
- The trial court granted Rosenson’s petition to confirm the MFAA award, concluding the MFAA process was not still subject to binding arbitration because no superior court action to compel arbitration had been filed.
- The court of appeal held that the law firm’s timely arbitration demand was effective to invoke binding arbitration without a superior court action, and reversed
- The ultimate disposition is that Greenberg Glusker’s petition to confirm the MFAA award was improper; costs awarded to Greenberg Glusker on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a timely demand for binding arbitration can prevent MFAA award finality without a superior court action to compel arbitration | Rosenson argued that no action is a sufficient mechanism to finalize MFAA; the demand did not constitute an action and thus could not prevent finality | Greenberg Glusker maintained that only a superior court action to compel arbitration could prevent finality of the MFAA award | Yes; a timely demand for binding arbitration within 30 days prevents finality and invokes binding arbitration under the agreement |
| Whether the MFAA may be followed by binding arbitration under the CAA when the parties agree in writing and the demand is timely | Rosenson contends the MFAA finality rules require a court action, not continued arbitration; thus no binding arbitration could follow | Greenberg Glusker argues that where there is a written agreement to binding arbitration after MFAA, such arbitration is permissible if invoked timely | Yes; the CAA binding arbitration may follow MFAA arbitration when agreed in writing and timely invoked |
Key Cases Cited
- Schatz v. Allen Matkins Leek Gamble & Mallory LLP, 45 Cal.4th 557 (2009) (affirms that binding arbitration may follow nonbinding MFAA arbitration if agreed and invoked timely)
- Aguilar v. Lerner, 32 Cal.4th 974 (2004) (MFAA framework; public policy favoring arbitration)
- Wagner Construction Co. v. Pacific Mechanical Corp., 41 Cal.4th 19 (2007) (arbitration demand can be a pleading; limits on compelling arbitration before refusal)
- Spear v. California State Auto. Assn., 2 Cal.4th 1035 (1992) (no action to compel arbitration until opposing party refuses to arbitrate)
- Blatt v. Farley, 226 Cal.App.3d 621 (1990) (parties may commence arbitration proceedings by filing a demand for arbitration)
- Fagelbaum & Heller LLP v. Smylie, 174 Cal.App.4th 1351 (2009) (demonstrates demand for arbitration as pleading)