HOOMAN AUTOMOTIVE GROUP, et al., Plaintiffs and Appellants, v. GLASER WEIL FINK HOWARD AVCHEN & SHAPIRO, LLP, Defendant and Respondent.
B322256
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION THREE
Filed 7/15/24
Los Angeles County Super. Ct. No. 21STCV45057. NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS. 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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
William Fahey, Judge. Affirmed.
Rosen Saba, Elizabeth L. Bradley; Esner, Chang, Boyer & Murphy, and Stuart B. Esner for Plaintiffs and Appellants.
Nemecek & Cole, Claudia L. Stone, and Daniel L. Reback for Defendant and Respondent.
We affirm the judgment. We conclude the evidence does not compel a finding as a matter of law that plaintiffs’ failure to appear at arbitration was not willful, i.e. done voluntarily, intentionally, and with knowledge that failing to appear could forfeit their right to a trial de novo under
Nissani owns and is the president or chief operating officer of several corporations including HK (formed in 2013), RHC (formed in 2015), and RHH (formed in 2016). These corporations did business under the fictitious business name Hooman Automotive Group.
I. First Engagement Agreement
In September 2013, Hooman Automotive Group and Nissani retained Glaser Weil to provide legal services. The engagement agreement stated the firm was being engaged to provide services to both Nissani “individually, and to Hooman Automotive Group.”
On October 15, 2019, and again on January 29, 2020, the parties amended the engagement agreement. In each amendment, Nissani agreed that he and Hooman Automotive Group unconditionally owed Glaser Weil past due attorney fees and costs and he agreed to a payment plan. In the October 2019 amendment to the engagement letter, Nissani acknowledged that both he “personally” and his “related entities” owed Glaser Weil $974,026.84.
II. Second Engagement Agreement
In October 2020, Glaser Weil and Nissani, individually and on behalf of Hooman Automotive Group, entered into an engagement agreement for legal representation before the California Department of Tax and Fee Administration (CDTFA). The engagement agreement provided: “The Firm will represent you, individually and the members of the Hooman Automotive Group identified above in this letter, all of which are managed by you as Corporate President. The Firm will represent all entities
III. Nissani Initiated and then Failed to Appear at Fee Arbitration
Over the years, Glaser Weil billed plaintiffs $7,620,859.88 in fees and costs. Plaintiffs paid $6,330,891.59 and Glaser Weil wrote off $827,510.98, leaving a remaining balance of $462,457.31. When plaintiffs refused to pay the remaining balance, Glaser Weil ceased representing them. In March 2021, Glaser Weil sent Nissani and Hooman Automotive Group a letter stating that Glaser Weil intended to initiate a proceeding against Hooman Auto Group and Hooman, individually, to recover the debt, and advised that plaintiffs had “the right under
Attorney Susan Keenberg chaired the three-person fee arbitration panel. Nissani and Hooman Automotive Group were not represented by counsel. Attorney Claudia L. Stone represented Glaser Weil.
On September 4, 2021, Keenberg issued a notice of hearing stating that the fee arbitration would be held on October 28, 2021, at 10:00 a.m., via Zoom video conference. The notice identified Hooman Automotive Group and Nissani as the clients, and Glaser Weil and Peter M. Weil as the attorneys. The notice warned: “If either the client or the responding attorney does NOT appear at the hearing after due notice to appear at the hearing, the arbitrator may hear and determine the controversy upon the evidence produced, notwithstanding such failure to appear. Any party who willfully fails to appear at the hearing, as provided for under the rules of procedure governing this proceeding, may not be entitled to a trial in
On October 27, 2021, at 2:08 p.m., the day before arbitration was to commence, Nissani‘s assistant, Blanca Vargas, emailed Keenberg, writing: “My name is Blanca and I am Mr. Nissani‘s assistant. Unfortunately Mr. Nissani is very ill at home and we are awaiting his doctors [sic] note and COVID-19 results. As of right now we have been told that it seems he has all the symptoms of having COVID. We need to cancel and reschedule tomorrows [sic] hearing. Please keep his health information confidential and only let the other side know we need to cancel due to health reasons.”
Keenberg replied that the arbitration “will go forward as scheduled tomorrow unless Mr. Nissani provides us with a doctor‘s note TODAY. The note must state that the doctor has determined that Mr. Nissani is unable to attend a video meeting.” Vargas then transmitted a hand-written doctor‘s note from Soheil Soleymani, M.D. Identifying Nissani as the patient, the note stated: “Patient evaluated in the clinic today. Complete bed rest advised until stabilized.” Keenberg replied that the doctor‘s note was insufficient and arbitration would go forward.
Vargas emailed back: “We were hoping that he would feel better but unfortunately he is not and his doctor has put him on Bed rest with very strong medication you [sic] asked for us to provide you with a doctor note stating so and we sent you a doctor note that clearly says he is ordered to be in bed without any sort of movement or any activities[.] The fact that you are not showing any concerns for a witness[‘s] well-being or the fact
Keenberg‘s reply explained that ex parte communications were not permitted in arbitration proceedings and all communications with the arbitration panel would be shared with all parties. Keenberg pointed out that she requested the doctor‘s note before Vargas obtained it, and the note did not say Nissani was too ill to appear by video. Keenberg stated, “it isn‘t fair to all involved to cancel the arbitration on less than 24 hours’ notice absent a suitable doctor‘s note.”
On October 28, 2021, 25 minutes before the scheduled start of the arbitration hearing, Keenberg received an email directly from Nissani‘s email address, stating: “I am very confused on what you mean about being fair, are you suggesting in order for this to be fair, our witness should have know [sic] he was going to get ill a few days prior to getting ill and should have notified you? [¶] Also your Dr. note [sic] request said you need it to say that the witness cannot attend video meeting, the Dr. Note [sic] says he need to be in Bed clearly he doesn‘t have a computer in Bed so how can he attend by Video. [¶] If you really need to we will ask the Dr. [sic] to re-write the note, as you can understand we don‘t control what the Dr. Says [sic], but what is very alarming to me is that you have no concern or care for our witnesses [sic] wellbeing and health!” Nissani never submitted a revised doctor‘s note.
IV. Arbitration Award
Nissani failed to appear at the October 28, 2021 fee arbitration and did not submit any information regarding his claim that Glaser Weil charged too much because of “Billed hours & Work Product Issues.”
On November 8, 2021, the arbitration panel issued its decision, which identified “Hooman Automotive Group and Hooman Nissani” as the client. The decision stated “Client failed to appear for the Hearing after being given Notice to Appear both electronically and via U.S. Mail. [Glaser Weil] appeared via Zoom video conference with counsel, and has agreed to non-binding arbitration. Accordingly, the Arbitration Findings and Award is NON-BINDING and is subject to
The arbitration panel found there was a valid written fee agreement, Glaser Weil “routinely provided Client with carefully itemized billings,” and the charges were reasonable. The panel stated: “Client, Hooman Automotive Group and Hooman Nissani jointly and severally, shall pay Attorney, Peter M. Weil of Glaser Weil Fink Jacobs Howard Avchen & Shapiro LLP four hundred sixty-two thousand four hundred fifty-seven dollars and thirty-one cents ($462,457.31) plus interest in the amount of the prevailing legal rate per annum from the 30th day after the date of service of this award.”
That same day, Vargas emailed on Nissani‘s behalf and requested the arbitration panel hear the matter again. The
“Throughout the administrative phase of this fee dispute arbitration, Mr. Nissani has steadfastly endeavored to delay the hearing. For example, when proposed dates for the hearing were sent to the parties in August, Mr. Nissani first said he would check with his attorney and later said he was completely unavailable on any dates in October. But Mr. Nissani didn‘t have an attorney representing him in this arbitration and he eventually agreed to a hearing on October 28th. In addition, despite numerous warnings, Mr. Nissani (and Ms. Vargas) routinely failed to copy the respondent‘s attorney on their correspondence and sent many ex parte communications to me without even including [the other two arbitrators hearing the case].”
On November 10, 2021, the fee arbitration panel served the parties with the award in favor of Glaser Weil and against Nissani and Hooman Automotive Group for $462,457.31 plus interest.
V. Plaintiffs’ Lawsuit and Glaser Weil‘s Petition to Confirm the Arbitration Award
In December 2021, plaintiffs, represented by counsel, filed a complaint against Glaser Weil for breach of contract based on incorrect billing and incompetent legal services. Plaintiffs alleged: “On or about 2013, Plaintiffs engaged Defendant to
In response, Glaser Weil filed a petition to confirm the arbitration award, arguing plaintiffs forfeited their right to trial de novo because they willfully failed to appear at the arbitration. Glaser Weil also sought prejudgment interest, fees, and costs. In support of the petition, Glaser Weil submitted the declarations of its counsel, Claudia Stone, and two Glaser Weil partners. Stone provided the email communications she received from the arbitration panel chair, Keenberg, showing the exchange between Keenberg and Nissani‘s assistant, Vargas, regarding the doctor‘s note. Barry Fink, a Glaser Weil partner, declared that on October 9, 2020, he entered into an agreement on behalf of the firm with Nissani, individually and on behalf of HK, RHC, and RHH, to represent plaintiffs before the CDTFA. Fink provided a copy of the engagement agreement and stated that all three corporations “sometimes did business as Hooman Automotive Group.” Glaser Weil partner Peter Weil attested that the firm entered into the September 13, 2013 retention agreement with Nissani, individually and on behalf of the Hooman Automotive Group, and twice amended the agreement. Weil attached copies of the agreement and amendments to his declaration.
Plaintiffs opposed the petition to confirm the arbitration award, arguing: (1) Nissani, RHH, and RHC were not parties to the arbitration,4 and (2) Nissani‘s and Hooman Automotive Group‘s failure to appear at the arbitration was not willful. In support of the opposition, Nissani provided a declaration stating HK began doing business as Hooman Automotive Group in September 2013, around the time it entered into an engagement agreement with Glaser Weil, and no other entities were added to that engagement agreement in the subsequent amendments. He attested that RHC, formed in 2015, and RHH, formed in 2016, have never done business under the fictitious business name Hooman Automotive Group. He stated he was an officer of both RHC and RHH. Nissani also attested that he was too ill to appear at the arbitration because he could not keep his eyes open and could barely move the day before the arbitration hearing. Plaintiffs also filed a declaration by Vargas discussing her email
After considering the parties’ briefs, pleadings, and evidence, the court determined that Nissani and Hooman Automotive Group had no right to a trial de novo pursuant to
In May 2022, the court entered judgment in favor of Glaser Weil and against HK, RHC, RHH, and Nissani in the amount of the arbitration award, plus prejudgment interest, attorney fees, and costs, for a total judgment of $499,279.02. Plaintiffs timely appealed.
DISCUSSION
Plaintiffs contend the court erred by (1) finding that they willfully failed to appear at arbitration, and (2) entering judgment against HK, RHC, and RHH, and Nissani.
I. The MFAA
“The MFAA was first proposed by the Board of Governors of the State Bar of California in 1976 when, finding that disputes concerning legal fees were the most serious problem between members of the bar and the public, the board sought to create a mechanism for arbitrating disputes over legal fees and costs.
Under the MFAA, “when there is a fee dispute between an attorney and a client, the client may choose to submit the matter to arbitration by a local bar association. If the client elects such arbitration, the attorney must agree to arbitrate.” (Schatz v. Allen Matkins Leck Gamble & Mallory LLP (2009) 45 Cal.4th 557, 561 (Schatz);
“The parties may agree in writing to be bound by the award of arbitrators . . . at any time after the dispute over fees, costs, or both, has arisen. In the absence of such an agreement, either party shall be entitled to a trial after arbitration if sought within 30 days, . . . except that if either party willfully fails to appear at the arbitration hearing in the manner provided by the rules adopted by the board of trustees, that party shall not be entitled to a trial after arbitration.” (
II. Standards of Review
On appeal from an order confirming an arbitration award, we generally review the trial court‘s order under a de novo standard and the court‘s determination of disputed factual issues for substantial evidence. (Toal v. Tardif (2009) 178 Cal.App.4th 1208, 1217.) However “[i]n a case where the trier of fact has determined that the party with the burden of proof did not carry its burden and that party appeals, ‘it is misleading to characterize the failure-of-proof issue as whether substantial evidence supports the judgment.’ [Citations.] Instead, ‘where the issue on appeal turns on a failure of proof at trial, the question for a reviewing court becomes whether the evidence compels a finding in favor of the appellant as a matter of law.’ ” (Ajaxo, Inc. v. E*Trade Financial Corp. (2020) 48 Cal.App.5th 129, 163 (Ajaxo).)
The primary disputed issue in the present appeal is the trial court‘s finding that plaintiffs’ failure to appear was willful, and in the trial court, plaintiffs had the burden to prove that the failure to appear was not willful. Thus, because plaintiffs appeal the trial court‘s finding on an issue for which they bore the burden of proof, “we ask ‘whether the appellant‘s evidence was (1) “uncontradicted and unimpeached” and (2) “of such a character and weight as to leave no room for a judicial determination that it was insufficient to support a finding.” ’ ” (Ajaxo, supra, 48 Cal.App.5th at pp. 163–164; In re I.W. (2009) 180 Cal.App.4th 1517, 1528, disapproved on other grounds in Conservatorship of O.B. (2020) 9 Cal.5th 989, 1003, fn. 4.)
III. The Evidence Does Not Compel a Finding as a Matter of Law that Plaintiffs’ Failure to Appear Was Not Willful
It is undisputed that plaintiffs failed to appear at the arbitration hearing. Thus, to obtain a trial de novo, plaintiffs had the burden of proving to the trial court that their failure was not willful. (
a. Defining “Willful”
The MFAA does not define “willful,” and there is no case law discussing the meaning of “willful” in this context. The legislative history of
In proposing definitions of “willful,” plaintiffs and Glaser Weil both cite Kwan v. Mercedes-Benz of North America, Inc. (1994) 23 Cal.App.4th 174, 183–185 (Kwan), which analyzed the meaning of “willful” in the context of the Song-Beverly Consumer Warranty Act (
Kwan explained that “[c]ivil cases show much the same line of analysis” and similarly require ” ‘intentional doing of something either with knowledge, express or implied’ ” of some serious consequence. (Kwan, supra, 23 Cal.App.4th at p. 182.) ” ‘In civil cases the word “wilful” as ordinarily used in courts of law, does not necessarily imply anything blameable, or any malice or wrong toward the other party, or perverseness or moral delinquency, but merely that the thing done or omitted to be done, was done or omitted intentionally. It amounts to nothing more than this: That the person knows what he is doing, intends to do what he is doing, and is a free agent.’ ” (Davis v. Morris (1940) 37 Cal.App.2d 269, 274; Kwan, at p. 183.) The Kwan court ultimately concluded that the meaning of “willful” was statute-specific, and courts “should interpret willfulness in light of the particular statutory obligation allegedly violated and should eschew any interpretation that would render meaningless or inoperative the Act‘s distinction between willful and nonwillful violations.”6 (Kwan, at p. 84.)
Black‘s Law Dictionary likewise indicates that “willful” means “[v]oluntary and intentional” plus something more. (See Black‘s Law Dict. (11th ed. 2019) p. 1916, col. 2.) Black‘s
Plaintiffs also point us toward cases involving judicial arbitration (see
Based on the foregoing, we conclude that “willful” in the context of the MFAA means that a party both intentionally and voluntarily chose not to appear at an arbitration hearing, and the party understood the consequences of failing to appear, i.e. forfeiture of the right to trial de novo.
In the trial court, plaintiffs argued that Nissani‘s failure to appear was not willful because he was too ill to participate. Plaintiffs asserted the doctor‘s note provided by Nissani‘s assistant, Vargas, to the panel was sufficient because the doctor stated Nissani needed “complete bed rest.” Plaintiffs argued that Hooman Automotive Group “was not represented by counsel, and Mr. Nissani was the company‘s primary witness, and could not be replaced. This was not simply a ‘video meeting’ which anyone suffering from COVID-19 symptoms could attend from bed.” Plaintiffs averred: “Nissani wanted to attend the hearing, and had no desire to delay or avoid attending the hearing, since Hooman Automotive Group was the one who requested the arbitration and paid the $5,000 filing fee, and since Hooman Automotive Group had made a claim that it had overpaid Glaser Weil approximately $1.4 million.”
Plaintiffs provided a declaration from Nissani, in which he attested that he became ill with COVID-19 a few days before the arbitration and that he could “barely move” or keep his eyes open. Nissani stated he waited until the day before the hearing to have his assistant request a continuance from the arbitrators because he was hoping he would be well enough to participate. Nissani further stated: “Due to my illness, it would have been absolutely impossible for me to participate in or testify in the October 28, 2021 arbitration proceeding in light of my illness. Nor could I or did I participate in any actual ‘video meetings’ or in-person meetings on that day due to my illness. Instead, I was very sick and in bed the entire day.” Nissani‘s assistant, Vargas, also attested that she “observed Mr. Nissani very sick in bed.”
Based on the foregoing, we cannot conclude that the evidence compels a finding in plaintiffs’ favor. It was undisputed that plaintiffs (1) received notice in September 2021 that by failing to appear at the hearing, they could forfeit their right to trial de novo, (2) were aware arbitration was to proceed as scheduled unless Nissani presented a doctor‘s note stating he
We also reject plaintiffs’ suggestion that the trial court “abdicated resolution of the issue of willfulness to the arbitrators.” Plaintiffs cite Trabuco Highlands Community Assn. v. Head (2002) 96 Cal.App.4th 1183 and Glaser, Weil, Fink, Jacobs & Shapiro, LLP v. Goff (2011) 194 Cal.App.4th 423 in support of this contention, but both are of no assistance to plaintiffs. In Trabuco, at page 1190, the trial court abdicated its function to determine whether an arbitration award was binding because the court did not consider the parties’ declarations. Instead the court “expressly noted it was relying on a letter by the arbitrator that said the arbitration was binding.” (Ibid.) In Goff, the parties disputed whether arbitration was binding, and the trial court completely deferred the issue to the arbitrators even though the arbitrators’ finding that the arbitration was binding was subject to independent judicial review. (Goff, at pp. 433–435.)
Here, by contrast, there is no indication in the record that the trial court disregarded evidence, deferred rulings to the arbitration panel, or failed to make its own factual finding. Moreover, in the case at bar, the trial court was statutorily authorized to “consider any findings made by the arbitrators on the subject of a party‘s failure to appear,” (
Plaintiffs’ arguments amount to a request that we reweigh the evidence. It is not within our province to do so. (In re Aurora P. (2015) 241 Cal.App.4th 1142, 1167 [the reviewing court does
IV. The Court Did Not Err in Confirming the Arbitration Award and Entering Judgment Against All Four Plaintiffs
Plaintiffs contend the court erred in confirming the arbitration award and entering judgment against them because (1) the individual corporate entities were not named in Glaser Weil‘s MFAA notice, did not elect to participate in the arbitration, and were not implicated in the fee dispute, and (2) Nissani did not arbitrate in his personal capacity. As we explain, the court properly entered judgment against all four plaintiffs.
a. HK, RHH, and RHC
Plaintiffs argue that because Glaser Weil provided the MFAA notice to Hooman Automotive Group but did not explicitly name corporate entities HK, RHC, and RHH, and because these entities did not participate in the arbitration proceedings under their corporate names, the court erred in entering judgment against them. Specifically, plaintiffs argue that the court exceeded its powers under the Code of Civil Procedure7 by naming them in the order confirming the award and judgment.
Asserting HK, RHC, and RHH were “added” to the award, plaintiffs contend the trial court did not have the power to “correct” the arbitration award “to add a party who was not named in the arbitration as a party to the judgment confirming that award.”
We disagree with plaintiffs’ characterization that the trial court “added” HK, RHC, and RHH to the award. Rather, it appears the trial court, applying
We also conclude plaintiffs suffered no prejudice from the way Glaser Weil sought correction. Plaintiffs had ample notice that Glaser Weil was seeking to have the award entered against HK, RHH, and RHC, even if Glaser Weil did not expressly petition for correction. Consistent with
Further, the record supports the trial court‘s conclusion that although HK, RHC, and RHH did not utilize their corporate names in the arbitration proceedings, they “are parties to the Engagement Letter, as amended, and are parties to the Award, which may be confirmed against them.” HK, RHC, and RHH all utilized the fictious business name “Hooman Automotive Group,” which did engage in the arbitration and had entered into engagement agreements with Glaser Weil. Via the initial 2013 engagement agreement, HK, which was then doing business as Hooman Automotive Group, engaged Glaser Weil‘s services using the fictitious business name. In the 2019 amendment to that engagement agreement, Nissani acknowledged that he and his
Plaintiffs argue “even if HK, RHH and RHC ‘sometimes’ used the same name as other businesses, that does not mean they should be treated as each other for all purposes. Rather, it would be necessary to establish that when ‘Hooman Automotive Group’
“Use of a fictitious business name does not create a separate legal entity. . . . ‘The business name is a fiction, and so too is any implication that the business is a legal entity separate from its owner.’ ” (Pinkerton‘s, Inc. v. Superior Court (1996) 49 Cal.App.4th 1342, 1348.) Given that Hooman Automotive Group received the MFAA notice, engaged in the arbitration, and
b. Nissani
Finally, plaintiffs argue that the judgment must be vacated as to Nissani “because he did not agree to participate in the MFAA in his individual capacity.” Nissani asserts the only client named on the request for arbitration was Hooman Automotive Group, and Nissani signed the arbitration request form only in his capacity as an officer of Hooman Automotive Group.
We are unpersuaded. As explained thoroughly above, Hooman Automotive Group is not an entity of which Nissani can be an officer. It is a fictitious business name used by multiple corporations under Nissani‘s control. In addition, where Nissani signed the request, he did not indicate he was signing solely in his capacity as an officer or president.
Moreover, all four legal services contracts signed by Nissani reflect that Nissani had entered into the agreements in
Further, the arbitration panel‘s September 4, 2021 notice of hearing explicitly identified Hooman Automotive Group and Hooman Nissani as the clients. Nothing in the record shows that Nissani objected to being named a party to the proceeding. When the panel issued its award, it again identified Nissani as a client. Nissani did not object to being named a party in this instance either.
Substantial evidence thus supports the trial court‘s confirmation of the arbitration award and entry of judgment against Nissani in his individual capacity.
The judgment is affirmed. Respondent Glaser Weil Fink Howard Avchen & Shapiro LLP is awarded its costs on appeal.
EDMON, P. J.
We concur:
LAVIN, J.
ADAMS, J.