Lawrence v. Walzer & Gabrielson
Decision Date | 24 February 1989 |
Docket Number | No. B030132,B030132 |
Citation | 207 Cal.App.3d 1501,256 Cal.Rptr. 6 |
Court | California Court of Appeals Court of Appeals |
Parties | , 57 USLW 2549 Margaret Ann Drain LAWRENCE, Plaintiff and Respondent, v. WALZER & GABRIELSON et al., Defendants and Appellants. |
Peter R. diDonato, Beverly Hills, for plaintiff and respondent.
The law firm of Walzer & Gabrielson and four attorneys associated with that firm are defendants in an action for legal malpractice brought by Margaret Drain Lawrence, a former client, and appeal from the denial of their petition to compel arbitration. 1 Defendants contend (1) the retainer agreement signed by plaintiff compels arbitration of this action for legal malpractice, and (2) defendants did not waive their right to compel arbitration by conducting discovery in the present case. Plaintiff contends the appeal is frivolous and asks this court to impose sanctions. For the reasons that follow, we affirm the order of the court below but deny sanctions.
In 1986 plaintiff retained defendants to represent her in the dissolution of her marriage. 2 A retainer agreement, consisting of a three-page letter from defendants to plaintiff, states: "This letter sets forth the agreement concerning our representation of you." Thirteen numbered paragraphs follow. The first nine paragraphs concern the computation and payment of attorney's fees and costs. In paragraph 10, defendants promise to keep plaintiff informed of the progress of her case. Paragraph 11 then states: The final two paragraphs contain a promise by defendants to conform "to the highest legal and ethical standards," and instructions to plaintiff to sign and return a copy of the letter. The letter was dated May 5, 1986, and was signed by plaintiff on May 8, 1986.
On February 9, 1987, plaintiff filed a complaint alleging causes of action for legal malpractice and willful breach of fiduciary duty. On April 27, 1987, defendants filed a petition to compel arbitration and a motion for stay of proceedings pending arbitration. (Code Civ.Proc., §§ 1281.2, 1281.4.) In opposition, plaintiff submitted her declaration stating the retainer letter was handed to her by a paralegal employed The court below, stating it believed plaintiff's declaration, denied the petition to compel arbitration and the motion for stay pending arbitration.
by defendants who told her "to sign it, and return it, with $7,500.00, if [she] wanted the firm of Walzer and Gabrielson to act as [her] attorneys...." Plaintiff's declaration said she "had no idea I was giving up my right to sue my attorneys ... in Superior Court, for their future malpractice, and that I was giving up my right to a jury trial." Plaintiff declared she would not have signed the agreement had she been told that she thereby "would be submitting the matter of their possible future malpractice to arbitration."
Our Supreme Court has observed that "arbitration has become an accepted and favored method of resolving disputes [citations], praised by the courts as an expeditious and economical method of relieving overburdened civil calendars [citation]." (Madden v. Kaiser Foundation Hospitals, supra, 17 Cal.3d 699, 706-707, 131 Cal.Rptr. 882, 552 P.2d 1178.) Code of Civil Procedure section 1281 provides: "A written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract." Pursuant to section 1281.2, "On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy ... the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists...." (Emphasis added.) A threshold issue, therefore, is whether an agreement to arbitrate a legal malpractice claim exists. (Ramirez v. Superior Court (1980) 103 Cal.App.3d 746, 752, 163 Cal.Rptr. 223; Windsor Mills, Inc. v. Collins & Aikman Corp. (1972) 25 Cal.App.3d 987, 992, 101 Cal.Rptr. 347.)
(Wheeler v. St. Joseph Hospital (1976) 63 Cal.App.3d 345, 355, 133 Cal.Rptr. 775.) (Id., at p. 356, 133 Cal.Rptr. 775; Beynon v. Garden Grove Medical Group (1980) 100 Cal.App.3d 698, 704, 161 Cal.Rptr. 146; Main v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1977) 67 Cal.App.3d 19, 32, 136 Cal.Rptr. 378.) As our Supreme Court has held, "There is indeed a strong policy in favor of enforcing agreements to arbitrate, but there is no policy compelling persons to accept arbitration of controversies which they have not agreed to arbitrate...." (Freeman v. State Farm Mut. Auto. Ins. Co. (1975) 14 Cal.3d 473, 481, 121 Cal.Rptr. 477, 535 P.2d 341.)
Defendants contend that inclusion of the phrase "any other aspect of our attorney-client relationship" in the arbitration clause of the retainer agreement compels arbitration of "[a]ny dispute arising out of the attorney-client relationship," including a claim of legal malpractice. (Emphasis in original.) If this phrase is considered standing alone, defendants' argument would be compelling. (Cf. Izzi v (Scally v. Pacific Gas & Electric Co. (1972) 23 Cal.App.3d 806, 819, 100 Cal.Rptr. 501, emphasis in original; Fiske v. Niagara Fire Ins. Co. (1929) 207 Cal. 355, 357, 278 P. 861.) In the present case, the broad interpretation of the phrase "any other aspect of our attorney-client relationship" advanced by defendants would include the examples which precede it of disputes regarding fees and costs and render these examples mere surplusage. Instead, the above rule mandates that we interpret the phrase "any other aspect of our attorney-client relationship" to apply only to financial matters similar to disputes regarding fees and costs.
Mesquite Country Club (1986) 186 Cal.App.3d 1309, 1315, 231 Cal.Rptr. 315; compare Victoria v. Superior Court (1985) 40 Cal.3d 734, 738, 222 Cal.Rptr. 1, 710 P.2d 833.) The issue before us, however, is not whether the phrase "any other aspect of our attorney-client relationship," standing alone, would encompass an action for attorney malpractice, because in the retainer agreement at issue, these words do not stand alone. Instead, the phrase is one provision in an agreement devoted almost exclusively to financial matters 3 and appears in a sentence which reads: "In the event of a dispute between us regarding fees, costs or any other aspect of our attorney-client relationship, the dispute shall be resolved by binding arbitration." In this context, the arbitration clause appears to be limited to disputes concerning financial matters such as fees and costs and is most likely to be so viewed by a prospective client to whom the proposed agreement is tendered by the law firm
In adopting the foregoing interpretation we avoid construing the retainer provisions as a document which misleadingly 4 appears to the client to deal almost exclusively with financial matters, while extracting from her a significant yet inconspicuous relinquishment of the client's rights regarding future claims of malpractice.
An arbitration agreement constitutes a waiver of the right to a jury trial. (Main v. Merrill Lynch, Pierce, Fenner & Smith, Inc., supra, 67 Cal.App.3d 19, 31, ...
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