Albers v. Naegele
| Decision Date | 06 November 2013 |
| Docket Number | B240455 |
| Parties | RAYMOND H. ALBERS et al., Plaintiffs and Respondents, v. TIMOTHY D. NAEGELE et al., Defendants and Appellants. |
| Court | California Court of Appeals Court of Appeals |
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Los Angeles County
APPEAL from a judgment of the Superior Court of Los Angeles County, Huey P. Cotton, Jr., Judge. Affirmed.
Timothy D. Naegele & Associates and Timothy D. Naegele for Defendants and Appellants.
Law Offices of Lloyd J. Michaelson and Lloyd J. Michaelson for Plaintiffs and Respondents.
Appellants Timothy D. Naegele and his law firm, Timothy D. Naegele & Associates, appeal from the judgment confirming an attorney-client fee arbitration award in favor of respondents Raymond H. Albers and Deanna J. Albers.1 Following Naegele's representation of the Alberses in a civil action, a fee dispute arose between the parties. The Alberses invoked their statutory right to arbitrate the dispute pursuant to California's Mandatory Fee Arbitration Act (MFAA; Bus. & Prof. Code,2 § 6200 et. seq.), but Naegele refused to attend the arbitration, claiming the arbitrators lacked jurisdiction over the dispute based on a forum selection clause in the fee agreement. After the arbitrators issued an award in the Alberses' favor, Naegele filed a rejection of the award and request for trial in a pending federal action that he had brought against the Alberses in the United States District Court for the District of Columbia. Over the next four years, the federal court stayed that action at various times without reaching the merits of Naegele's request for trial after arbitration or the Alberses' motion to dismiss for lack of jurisdiction.
Shortly before the expiration of the four-year statute of limitations (Code Civ. Proc., § 1288), while the federal action was being stayed, the Alberses filed a petition to confirm the arbitration award in a new action commenced in Los Angeles County Superior Court. Naegele subsequently filed a motion for judgment on the pleadings in which he contended that the California action was barred as a matter of law by the Alberses' failure to timely serve him with the petition and by the federal court's exclusive jurisdiction over the dispute based on the forum selection clause in the fee agreement and Naegele's filing of the request for trial in the federal action. The state trial court denied Naegele's motion for judgment on the pleadings and thereafter granted the Alberses' petition to confirm the arbitration award. For the reasons set forth below, we affirm.
Naegele is an attorney licensed to practice law in California and the Alberses are California residents. In 1998, the Alberses retained Naegele to represent them in a civil action filed on their behalf in the United States District Court for the Central District of California. On December 18, 1998, the Alberses entered into a fee agreement with Naegele which included the following clause: "This agreement and the rights and obligations of the parties hereto shall be governed by, and construed and enforced in accordance with the laws of the District of Columbia; venue for any disputes or litigation arising out of this agreement shall be in a court of the District of Columbia and/or in the United States District Court for the District of Columbia; and the [Alberses] hereby consent to the jurisdiction of such court or courts with respect to any disputes or litigation arising out of this agreement." The fee agreement was subsequently amended by three separate addenda, each of which included the same forum selection clause. After several years of litigation, the federal district court dismissed the Alberses' action, and following an appeal filed on their behalf by Naegele, the United States Court of Appeals for the Ninth Circuit affirmed the dismissal.
At some point, a dispute arose between the parties over the attorney's fees owed to Naegele. Represented by new counsel, Lloyd J. Michaelson, the Alberses invoked their statutory right to a fee arbitration under the MFAA (§ 6200 et. seq.). On September 25, 2003, the Los Angeles County Bar Association's (LACBA) Dispute Resolution Servicessent a letter to the Alberses, with a copy to Naegele, regarding their pending request for arbitration and waiver of the associated filing fees.
On December 8, 2003, prior to the arbitration hearing, Naegele filed a civil action against the Alberses and their new counsel, Michaelson, in the United States District Court for the District of Columbia, seeking recovery of attorney's fees and alleged tort damages. On January 5, 2004, the Alberses and Michaelson filed notices of automatic stay of the federal action pending the fee arbitration pursuant to section 6201, subdivision (c). Rather than submit to mandatory arbitration, Naegele responded with a flurry of filings in the federal action, including a first amended complaint, a motion to strike the notices of stay, a motion for entry of default, and two separate motions for sanctions. While Naegele continued to actively litigate the federal action, the fee arbitration was scheduled to be held in California in November 2004. As of the scheduled arbitration date, however, the federal district court had not ruled on whether the federal action should be stayed pending the California arbitration proceedings.
On November 17, 2004, the mandatory fee arbitration was held before a three-member arbitration panel through the LACBA's Dispute Resolution Services. Prior to the arbitration hearing, Naegele was served with a notice to appear and produce documents at the hearing. He also was ordered by the arbitration panel to produce the Alberses' case file. Naegele submitted a written memorandum to the arbitration panel in which he contested the panel's jurisdiction to hear the fee dispute based on the forum selection clause in the parties' fee agreement. However, the presiding arbitrator for the State Bar's Office of Mandatory Fee Arbitration rejected Naegele's argument and ruled that the arbitration panel had jurisdiction to adjudicate the fee dispute.
The Alberses and Michaelson attended the arbitration hearing. Although Naegele was represented by counsel at the arbitration, he did not personally appear at the hearing nor did he produce the Alberses' file. During the proceedings, Naegele's counsel made an opening statement and closing argument, cross-examined the Alberses, and presented documentary evidence including a written statement from Naegele and a copy of the fee agreement. However, Naegele's counsel denied knowledge of why his client had failed to produce to Alberses' file or to appear at the hearing, except to state that Naegele continued to contest the arbitrators' jurisdiction.
On January 14, 2005, the arbitration panel issued a written award in favor of the Alberses. The panel found that Naegele repeatedly had pursued meritless litigation in representing the Alberses in the underlying civil action and that the Alberses had paid Naegele $735,481.32 in attorney's fees and costs. The panel further found that the total amount which Naegele reasonably should have charged was $8,500 and that Naegele was required to refund the Alberses the sum of $726,981.32. Additionally, the panel found that Naegele willfully had failed to appear at the arbitration hearing and that he should not be entitled to a trial after arbitration pursuant to the LACBA's Rules for Conduct of Arbitration of Fee Disputes and Other Related Matters. The arbitration award was served by mail on the parties on January 24, 2005.4
On January 3, 2005, after the arbitration was held but prior to the issuance of the arbitration award, the federal district court stayed the federal action pending the completion of the arbitration proceedings. (Naegele v. Albers, supra, 355 F.Supp.2d at p. 132.) In granting the stay, the federal court reasoned as follows: (Id. at p. 141.) The parties were ordered "not to file any motions in this case until so directed" by the federal court, and within 30 days of the completion of the arbitration, "to submit a joint status report informing the court of the outcome of the arbitration proceedings, whether they wish to continue with this case in this venue, and their proposed briefing schedule and deadlines for how this case will proceed from that point forward, if at all." (Id. at pp. 141-142.)5
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