Soni v. Cartograph, Inc. ( 2023 )

Filed 3/23/23; Certified for Publication 4/5/23 (order attached)
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FIVE
SURJIT P. SONI, B316270
Plaintiff and Appellant, (Los Angeles County
Super. Ct.
v. No. EC063728)
CARTOGRAPH, INC., et al.,
Defendants and Respondents.
APPEAL from a judgment of the Superior Court of
Los Angeles County, Ralph C. Hofer, Judge. Affirmed.
The Soni Law Firm and Leo E. Lundbert, Jr., for Plaintiff
and Appellant.
Complex Appellate Litigation Group, Rex S. Heinke and
Jessica M. Weisel for Defendants and Respondents.
——————————
Plaintiff and appellant Surjit P. Soni, doing business as
The Soni Law Firm (collectively Soni), appeals from a judgment
awarding attorney fees under the Mandatory Fee Arbitration Act
(MFAA) (Bus. & Prof. Code, § 6200 et seq.)1 in favor of
defendants and respondents Timothy Tierney and Cartograph,
Inc., formerly known as Simplelayers, Inc. (collectively Tierney).
On appeal, Soni contends: he was the prevailing party for the
purposes of an attorney fees award under sections 6203 and 6204;
he was also the prevailing party under the parties’ contractual
attorney fees provisions; he was entitled to an award of attorney
fees, because he was not a self-represented litigant; and even if
Tierney were entitled to fees, the amount was excessive. We
conclude the provisions of sections 6203 and 6204 govern the
award of attorney fees. Tierney was the prevailing party for
purposes of an award of attorney fees under either statute, and
no abuse of discretion has been shown as to the amount of
attorney fees awarded. Therefore, we affirm.
FACTS AND PROCEDURAL BACKGROUND
Arbitration, Trial, and Prior Appeal
This portion of the facts is derived from our published
opinion in the parties’ prior appeal in this case, Soni v.
SimpleLayers, Inc. (2019) 42 Cal.App.5th 1071, 1078–1094. Soni
operates his legal practice as a sole proprietorship and hires
attorneys to work for him. Tierney engaged Soni, through
1All further statutory references are to the Business and
Professions Code, unless otherwise stated.
2
attorney Ron Perez, to work on certain publicity and patent
claims. Tierney and Soni executed an attorney-client agreement.
Perez stopped working with Soni, but correspondence was
received from the United States Patent and Trademark Offices
that required responses from Tierney in August and September
2013. Soni offered three options: continue using Soni’s legal
services; terminate the relationship with Soni and engage Perez
directly; or find a different law firm for his legal work. Tierney
said he would advise Soni of his decision, and instructed Soni to
do no further work until hearing from him. Soni asked attorney
Michael Long to review Tierney’s files and complete the work
indicated. At the end of July 2013, Tierney told Soni that he
planned to continue working with Perez, and he agreed to pay the
outstanding balance owed on his account. In October 2013, Soni
notified Tierney that the outstanding balance on his account was
$7,211. Tierney paid $3,531, but disputed that he authorized the
services performed by Long.
Tierney submitted a petition for fee arbitration to Los
Angeles County Bar Association (LACBA) under the MFAA.
Tierney challenged charges of $3,720 that he had not authorized.
The arbitrator concluded Tierney was not liable for the fees
charged for work performed by Long. During the arbitration,
Tierney agreed not to dispute $380 associated with transferring
his file to Perez, and the parties stipulated that Tierney had a
credit balance of $140 as to the undisputed fees. The arbitrator
allocated the initial arbitration fee of $242.50 to Soni and an
amended arbitration fee of $26 to Tierney. Based solely on the
charge of $380 that Tierney had not disputed, the allocation of
arbitration filing fees, and the credit for Tierney’s overpayment of
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undisputed fees, the arbitrator awarded a net amount of $2.50 to
Soni.
On March 18, 2015, 33 days after service of the arbitration
award, attorneys associated with Soni, including Long, filed a
complaint on Soni’s behalf against Tierney for breach of contract,
quantum meruit, money had and received, book account,
fraudulent and negligent misrepresentation, fraudulent
inducement to enter into a contract, and breach of guaranty.
Soni sought $3,580 in fees and $23,898 for collection expenses.
Tierney filed a petition in the pending action to confirm the
arbitration award, which the trial court denied. After a bench
trial, the trial court found Tierney was responsible for the
charges associated with Long’s work, because professional and
fiduciary duties compelled Soni to review Tierney’s file under the
circumstances of the case. In addition, the court found the
attorneys representing Soni in the fee collection matter were
independent contractors, so Soni was entitled to an award of
attorney fees. Judgment was entered in the amount of $2,890 in
favor of Soni, plus prejudgment interest, attorney fees, and costs
to be determined. Soni requested attorney fees of $281,191.65,
which the trial court reduced to $79,898 due to the nature of the
dispute. Tierney appealed the judgment and the postjudgment
order awarding attorney fees.
In a published opinion, this appellate court concluded the
arbitration award was binding, because Soni failed to file an
action within 30 days after service of the award, and therefore,
the petition to confirm the award should have been granted.
(Soni v. SimpleLayers, Inc., supra, 42 Cal.App.5th at p. 1077.)
We reversed the judgment and the order denying the petition to
confirm the arbitration award, with directions to the trial court to
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confirm the arbitration award. Tierney was awarded costs on
appeal.
Proceedings After Remand
On July 16, 2020, after remand, the trial court granted the
petition to confirm the arbitration award. On August 24, 2020,
Soni filed a motion in the trial court seeking attorney fees of
$543,365 based on approximately 1,400 hours of work. Soni
argued that he was the prevailing party under the attorney fees
provision of the parties’ contract based on his net monetary
recovery under the arbitration award, as confirmed by the trial
court.
Tierney filed a motion for attorney fees seeking $339,603
for 731.8 hours of work as the prevailing party under the parties’
contract and under section 6203, subdivision (c).
A hearing was held on the attorney fees motions on July 2,
2021. The trial court concluded that the specific statutory
provisions of section 6203, subdivision (c), and section 6204,
subdivision (d), governed the award of attorney fees, rather than
the general contractual attorney fees provisions of Code of Civil
Procedure section 1032 and Civil Code section 1717. The court
found Tierney was the prevailing party under Business and
Professions Code sections 6203 and 6204, because Soni could not
establish that he obtained a judgment after trial more favorable
than the arbitration award. The trial court concluded charges of
$11,436.50 by one of Tierney’s attorney were likely duplicative, so
reduced the amount of fees accordingly. The court awarded
attorney fees of $328,166.50 to Tierney. The court denied Soni’s
motion.
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On August 16, 2021, the court entered a judgment
confirming the February 11, 2015 arbitration award and
awarding Tierney $334,458.41 in attorney fees and costs. Soni
filed a timely notice of appeal.2
DISCUSSION
Standard of Review
“ ‘Generally, the trial court’s determination of the
prevailing party for purposes of awarding attorney fees is an
exercise of discretion, which should not be disturbed on appeal
absent a clear showing of abuse of discretion. [Citation.] But the
determination of the legal basis for an attorney fee award is
subject to independent review. [Citation.] In such a case, the
issue involves the application of the law to undisputed facts.
[Citation.]” [Citation.] Further, where an issue of entitlement to
attorney fees and costs depends on the interpretation of a statute,
our review is de novo.” (Wohlgemuth v. Caterpillar Inc. (2012)
207 Cal.App.4th 1252, 1258.)
“ ‘A fundamental rule of statutory construction is that a
court should ascertain the intent of the Legislature so as to
effectuate the purpose of the law. [Citations.] In construing a
statute, our first task is to look to the language of the statute
itself. [Citation.] When the language is clear and there is no
uncertainty as to the legislative intent, we look no further and
2 We deny the motion for judicial notice that Soni filed with
this court on June 27, 2022, because the documents submitted
are not relevant to the issues on appeal.
6
simply enforce the statute according to its terms. [Citations.] [¶]
Additionally, however, we must consider the [statutory language]
in the context of the entire statute [citation] and the statutory
scheme of which it is a part. “We are required to give effect to
statutes ‘according to the usual, ordinary import of the language
employed in framing them.’ [Citations.]” [Citations.] “ ‘If
possible, significance should be given to every word, phrase,
sentence and part of an act in pursuance of the legislative
purpose.’ [Citation.] . . . . ‘When used in a statute [words] must
be construed in context, keeping in mind the nature and obvious
purpose of the statute where they appear.’ [Citations.]
Moreover, the various parts of a statutory enactment must be
harmonized by considering the particular clause or section in the
context of the statutory framework as a whole.” ’ ” (Phelps v.
Stostad (1997) 16 Cal.4th 23, 32 (Phelps).)
Attorney Fees Provisions of the MFAA
Under certain circumstances, the MFAA provides for an
award of attorney fees to a prevailing party. Soni contends he
was the prevailing party for the purposes of an award of attorney
fees under section 6203, subdivision (c), and section 6204,
subdivision (d). We conclude that the trial court properly found
Tierney was the prevailing party under both section 6203 and
section 6204 of the MFAA.
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A. Attorney Fees After Confirmation of Arbitration
Award
Section 6203, subdivision (c), provides the trial court
discretion to award attorney fees and costs to a party who obtains
a judgment confirming, correcting, or vacating an arbitration
award as follows: “Neither party to the arbitration may recover
costs or attorney’s fees incurred in preparation for or in the
course of the fee arbitration proceeding with the exception of the
filing fee paid pursuant to subdivision (a) of this section.
However, a court confirming, correcting, or vacating an award
under this section may award to the prevailing party reasonable
fees and costs incurred in obtaining confirmation, correction, or
vacation of the award including, if applicable, fees and costs on
appeal. The party obtaining judgment confirming, correcting, or
vacating the award shall be the prevailing party except that,
without regard to consideration of who the prevailing party may
be, if a party did not 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 attorney’s fees or costs upon
confirmation, correction, or vacation of the award.”
The plain language of the statute states that the prevailing
party for purposes of an award of attorney fees under section
6203, subdivision (c), is the party obtaining a judgment
confirming, correcting, or vacating the arbitration award.
Tierney obtain a judgment confirming the arbitration award.
The trial court properly exercised its discretion to find Tierney
was the prevailing party under section 6203, subdivision (c), for
purposes of an attorney fees award.
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Soni contends that the trial court should have found he was
the prevailing party under section 6203, subdivision (c), because
the trial court initially vacated the arbitration award, which was
reversed on appeal solely on procedural grounds. This is
incorrect. Soni did not file a petition to vacate the arbitration
award and there was no order vacating the arbitration award;
rather, Soni purported to initiate a trial after arbitration
pursuant to section 6204, subdivisions (a) and (c). Moreover, the
judgment from the trial has no effect on the issue of attorney fees,
because the judgment was reversed on appeal. There is only one
final judgment in an action. (Nicholson v. Henderson (1944)
25 Cal.2d 375, 378.) Until a judgment becomes final because it is
affirmed on appeal or the time to take an appeal has lapsed, the
judgment is not admissible in evidence and cannot be relied upon
to enforce the rights declared in the judgment. (Thomas v.
Lavery (1932) 125 Cal.App. 666, 668.) The “reversal of the
judgment places the parties in the trial court in the same position
as if the cause had never been tried, with the exception that the
opinion of the court on appeal must be followed so far as
applicable.” (Id. at p. 669.) There was no order vacating the
arbitration award, and the final judgment in this case confirmed
the arbitration award. Therefore, Tierney was the prevailing
party for purposes of section 6203, subdivision (c).
B. Effect of Seeking Trial After Arbitration
Soni contends the trial court should have found he was the
prevailing party for the purposes of an attorney fees award under
section 6204, subdivision (d). This is incorrect as well.
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When parties to arbitration under the MFAA have not
agreed in writing to binding arbitration, either party may seek a
trial within 30 days after service of notice of the award. (§ 6204,
subd. (a).) If a party seeks a trial after arbitration, section 6204,
subdivision (d), allows the trial court to award attorney fees as
follows: “The party seeking a trial after arbitration shall be the
prevailing party if that party obtains a judgment more favorable
than that provided by the arbitration award, and in all other
cases the other party shall be the prevailing party. The
prevailing party may, in the discretion of the court, be entitled to
an allowance for reasonable attorney’s fees and costs incurred in
the trial after arbitration, which allowance shall be fixed by the
court. In fixing the attorney’s fees, the court shall consider the
award and determinations of the arbitrators, in addition to any
other relevant evidence.”
The plain language of the statute again governs the
outcome. Soni was the party who sought a trial after arbitration.
The final judgment confirmed the arbitration award; it was not
more favorable than the arbitration award. Because the party
who sought a trial after arbitration did not obtain a more
favorable judgment than had been provided by the arbitration
award, the other party, Tierney, was the prevailing party for the
purposes of an attorney fees award under section 6204,
subdivision (d).
C. Effect of Contractual Attorney Fees Provision
Soni contends that he is entitled to recover his attorney
fees as the prevailing party under Civil Code section 1717, based
on the attorney fees provision of the parties’ contract and his
10
recovery of $2.50. We conclude that the attorney fees provided
for by the MFAA control over the parties’ contract provision.
Code of Civil Procedure section 1021 allows parties to enter
into agreements for the payment of attorney fees, except when
attorney fees are specifically provided for by statute. Code of
Civil Procedure section 1021 states: “Except as attorney’s fees
are specifically provided for by statute, the measure and mode of
compensation of attorneys and counselors at law is left to the
agreement, express or implied, of the parties; but parties to
actions or proceedings are entitled to their costs, as hereinafter
provided.”
Code of Civil Procedure section 1032, subdivision (b), which
governs the allocation of costs, also does not apply when another
statute expressly provides for costs. Code of Civil Procedure
section 1032, subdivision (b), states: “Except as otherwise
expressly provided by statute, a prevailing party is entitled as a
matter of right to recover costs in any action or proceeding.” The
items recoverable as costs include attorney fees authorized by
contract, statute, or law. (Code Civ. Proc., § 1033.5,
subd. (a)(10).)
When attorney fees are specifically provided for by statute,
“the question is whether the statutory attorney fees provision
expressly, or the policy of the statute implicitly, overrides the
freedom to contract for a different outcome.” (County of
Sacramento v. Sandison (2009) 174 Cal.App.4th 646, 651.) “The
MFAA was enacted to eliminate a disparity in bargaining power
between attorneys and clients attempting to resolve disputes
about attorney fees. [Citation.] The Legislature recognized that
many clients were infrequent consumers of legal services and
would need to hire separate lawyers to litigate fee agreement
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disputes. [Citation.] Proponents of the legislation at the time
observed that the cost of a second lawyer was prohibitive because
it would often equal or exceed the value of the fees in dispute.”
(Dorit v. Noe (2020) 49 Cal.App.5th 458, 467.)
We conclude that the policies underlying the attorney fees
provisions of section 6203, subdivision (c) and section 6204,
subdivision (d), preclude the application of contractual attorney
fee provisions. The purpose of the attorney fees provisions of the
MFAA is to promote the finality of arbitration awards and
discourage frivolous additional litigation by either party. Section
6203, subdivision (c), expressly prohibits parties to an MFAA
arbitration from recovering any attorney fees or costs for the
arbitration. (See Dorit v. Noe, supra, 49 Cal.App.5th at p. 467
[arbitrators cannot award attorney fees or costs for MFAA
arbitration, regardless of provisions of parties’ contract].) Section
6203, subdivision (c), allows the trial court to award attorney fees
incurred in connection with a successful petition to confirm,
correct, or vacate an MFAA arbitration award. The statute
encourages parties to avoid further litigation by allowing
recovery of attorney fees only for meritorious petitions to confirm,
correct, or vacate an MFAA arbitration award. The policy would
be undermined if contractual attorney fee provisions governed in
such proceedings, allowing attorney fees to be awarded in
connection with unmeritorious petitions.
The policy underlying section 6204, subdivision (d),
similarly precludes an award of contractual attorney fees.
Arbitration under the MFAA is nonbinding. Dissatisfied parties
are guaranteed their day in court by electing a trial de novo. To
discourage parties from seeking trials de novo, however, section
6204, subdivision (d), allows the trial court discretion to award
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attorney fees to the party seeking a trial after arbitration only if
that party obtains a judgment more favorable than the recovery
provided by the arbitration award. If the party seeking a trial
after arbitration does not obtain a more favorable award, the
other party is the prevailing party for the purposes of an attorney
fee award. The policy underlying section 6204, subdivision (d),
would be thwarted if the parties’ contractual attorney fees
provision prevailed.
In the analogous context of judicial arbitration, courts have
considered language in Code of Civil Procedure section 1141.21
that is similar to Business and Professions Code section 6204,
subdivision (d), and concluded that the Legislature’s intent was
to discourage trial de novo. “ ‘Unlike commercial or true
arbitration, judicial arbitration is not binding, since any party
dissatisfied with an award may elect trial de novo. [Fn. omitted.]
(Code Civ. Proc., § 1141.20.) The Legislature, however, seeking
to encourage finality of judicial arbitration awards, enacted
disincentives to trial de novo.” (Bhullar v. Tayyab (1996)
46 Cal.App.4th 582, 589.) “To encourage parties to accept
reasonable arbitration awards, the Legislature enacted Code of
Civil Procedure section 1141.21, which provides that if a party
elects a trial de novo following judicial arbitration, and fails to
obtain a judgment that is more favorable than the arbitration
award, that party shall pay the costs incurred by the opposing
party following the election of the trial de novo and shall not
recover his or her own costs incurred following the election of the
trial de novo. Section 1141.21[, subd.] (a)(ii) creates an exception
to the usual rule that the prevailing party in an action ‘is
entitled . . . to recover costs.’ (Code Civ. Proc., § 1032, subd. (b).)”
(Phelps, supra, 16 Cal.4th at p. 29, fn. omitted.)
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“The purpose of Code of Civil Procedure section 1141.21 is
to discourage trials de novo. [Citation.] ‘ “While there is no
specific legislative language to that effect, it is apparent that the
[L]egislature desired alternative, not cumulative, dispute
resolution . . . and that the disincentive of . . . Civ. Proc. Code
§ 1141.21 . . . reflect[s] that underlying purpose.” ’ ” (Phelps,
supra, 16 Cal.4th at p. 29.) “ ‘Discouraging trial de novo is
essential to the proper functioning of the judicial arbitration
system. Along with its goal of resolving small claims efficiently
and affordably, judicial arbitration is intended to ease court case
loads. [Citation.] The success of judicial arbitration in achieving
these goals is dependent on a small incidence of trial de novo
election.’ ” (Bhullar v. Tayyab, supra, 46 Cal.App.4th at p. 589.)
We conclude that the statutory attorney fees provisions of
sections 6203 and 6204 govern, rather than the attorney fees
provision of the parties’ contract. The trial court properly
awarded attorney fees to Tierney as the prevailing party under
sections 6203 and 6204.
Amount of Fees
Soni contends that the trial court abused its discretion by
awarding fees based on hourly rates in excess of rates that the
court had previously found reasonable for a simple collection
matter. We find no abuse of discretion.
We review the amount of attorney fees awarded for an
abuse of discretion. (Karton v. Ari Design & Construction, Inc.
(2021) 61 Cal.App.5th 734, 743.) “An experienced trial judge is in
the best position to evaluate the value of professional services
rendered in the trial court. We presume the fee approved by the
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trial court is reasonable. We will not disturb the trial court’s
judgment unless it is clearly wrong. The burden is on the
objector to show error.” (Id. at p. 743.)
The issues presented after the trial de novo in this case
were not simple fee collections issues. The issues required the
services of specialized appellate attorneys and resulted in a
published opinion on novel issues. Tierney’s attorneys worked
half as many hours as Soni’s attorneys on the matters at issue,
and Tierney’s attorneys billed substantially lower total fees than
the charges that Soni incurred and sought to recover in his
competing motion for attorney fees. The trial court examined the
bills carefully and reduced the amount awarded to Tierney for
duplicative work by one attorney. No abuse of discretion has
been shown as to the amount of fees awarded.
DISPOSITION
The judgment is affirmed. Respondents Timothy Tierney
and Cartograph, Inc., formerly known as Simplelayers, Inc., are
awarded their costs on appeal.
MOOR, J.
We concur:
BAKER, Acting P. J. KIM, J.
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Filed 4/5/23
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FIVE
SURJIT P. SONI, B316270
(Los Angeles County
Plaintiff and Appellant, Super. Ct. No. EC063728)
v. CERTIFICATION AND
ORDER FOR PUBLICATION
CARTOGRAPH, INC., et al.,
Defendants and Respondents.
The opinion in the above-entitled matter filed March 23,
2023, was not certified for publication in the Official Reports. For
good cause it now appears that the opinion should be published in
the Official Reports and it is so ordered.
MOOR, J. BAKER, Acting P. J. KIM, J.