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Cooper v. Lavely & Singer Professional Corp.

California Court of Appeals, Second District, Fourth Division

September 26, 2014

JEFFREY COOPER, Plaintiff and Appellant,

APPEAL from a judgment of the Superior Court of Los Angeles County, No. SS023190 Gerald Rosenberg, Judge. Reversed and remanded with directions.

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Lyle R. Mink for Plaintiff and Appellant.

Lavely & Singer Professional Corporation, Michael E. Weinsten and Paul N. Sorrell for Defendant and Respondent.



In the underlying arbitration proceeding, the arbitrator initially issued a “Final Award” denying a request for an award of attorney fees by respondent Lavely & Singer Professional Corporation (L & S). The arbitrator later modified the Final Award to include a fee award, and issued a “Revised Final Award.” Appellant Jeffrey Cooper challenges the trial court’s confirmation of the Revised Final Award. We conclude that the arbitrator exceeded his powers in modifying the Final Award and in issuing the Revised Final Award. We therefore reverse the judgment, and remand the matter with instructions to the trial court to correct the Revised Final Award by striking the attorney fee award, and confirm the award, as corrected.

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A. Prior Proceedings

In 2003, Cooper met Larry Solomon and Adam Linter, who described certain entertainment-related projects they were pursuing through a production company called “Hopeful Monster, Inc.” (HMI). In September 2003, Cooper entered into a revenue sharing agreement with HMI, which obliged Cooper to invest $250, 000 in HMI.

In 2009, after coming to suspect that HMI was a sham, Cooper retained L & S. Cooper’s legal services contract with L & S obliged him to submit all claims arising under the contract, including malpractice claims, to “mandatory” arbitration pursuant to the rules of JAMS or other specified arbitrators. The contract also contained an attorney fee provision, which provided for a fee award to the prevailing party in any such arbitration.

On Cooper’s behalf, L & S initiated a fraud action against HMI, Solomon, and the estate of Linter, who was then deceased. Solomon secured an order compelling arbitration of Cooper’s claims pursuant to an arbitration clause in Cooper’s agreement with HMI. In September 2010, the arbitrator (retired Judge Alan Haber) concluded that Cooper had not established his claims, and issued an award against Cooper and in favor of HMI.

B. Underlying Arbitration

1. Interim Award

In September 2011, Cooper commenced an arbitration against L & S by filing a demand for arbitration with JAMS. Cooper asserted claims for breach of contract, breach of fiduciary duty, and professional negligence arising out of L & S’s representation in the proceedings against HMI, Solomon, and the estate of Linter. The matter was submitted to arbitration before retired Judge Terry Friedman. L & S represented itself in the arbitration.[1]

On December 14, 2012, following an evidentiary hearing, the arbitrator issued his “Interim Award.” The arbitrator concluded that Cooper had failed to establish his claims against L & S, and that L & S was the prevailing party. In view of those determinations, the arbitrator permitted L & S to file a

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motion for an attorney fee award and a memorandum of costs, and afforded Cooper an opportunity to respond.

Fee Motion

On December 21, 2012, L & S submitted a motion for an award of contractual attorney fees under Civil Code section 1717. L & S argued that although it had represented itself in the arbitration proceeding, it was entitled to the fee award because Lloyd’s, London and Companies (Lloyd’s), its professional malpractice insurer, had “specifically retained” L & S to represent its own interests in the proceeding. L & S sought fees totaling $225, 677.

Supporting the motion was a declaration from Paul N. Sorrel, a partner in L & S. Sorrel stated: “Shortly after this proceeding was filed by [Cooper], the defense of this matter was tendered to [Lloyd’s] pursuant to the terms of [L & S’s] professional liability policy. Pursuant to [that] policy..., [L & S] pays substantial premiums in order [to have] the ability (with Lloyd’s consent) to self-represent in certain malpractice actions.... After this matter was tendered to Lloyd’s, Lloyd’s authorized and retained [L & S] to represent [L & S’s] interests in this matter, and indicated that it would reimburse [L & S] (subject to the applicable deductible under the policy) for fees and costs incurred in defending this matter.”

Cooper’s opposition maintained that as a matter of law, L & S could not recover its fees because it had represented itself in the arbitration proceeding. In addition, Cooper contended that L & S had offered insufficient evidence of an agreement or attorney-client relationship between L & S and Lloyd’s, arguing that when deposed, Sorrell had testified that he had no personal knowledge of the identity of L & S’s professional malpractice insurer. Cooper also objected to Sorrell’s declaration statements regarding the retention of L & S by Lloyd’s on several grounds, including that the statements constituted hearsay.

On January 3, 2013, Sorrell e-mailed a request to the arbitrator for leave to submit additional evidence. Sorrell stated: “Certain matters were raised in Mr. Cooper’s opposition to the [fee] motion that could not be anticipated, and to which [L & S] would like an opportunity to respond. Among other things, we would like to provide a copy of the insurance policy, ... and/or a declaration from the carrier, as well as my declaration addressing how and when I learned the specifics of the terms of coverage.”

In an order dated January 4, 2013, the arbitrator granted Sorrell’s request in part and denied it in part, ruling that L & S would be permitted to offer documentary evidence regarding ...

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