Marino v. Tagaris

• Decision Date: 11 July 1985
• Citation: 480 N.E.2d 286,395 Mass. 397
• Parties: Peter G. MARINO v. Katina TAGARIS.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 286

480 N.E.2d 286

395 Mass. 397

Peter G. MARINO v. Katina TAGARIS.

Supreme Judicial Court of Massachusetts Suffolk.

Argued April 2, 1985.

Decided July 11, 1985.

William F. Green, Milton, for defendant.

Kevin M. Keating, Boston (Peter G. Marino, Boston, with him) for plaintiff.

Richard G. Hoffman, Walpole, and Stephen T. Sadler, Boston for Massachusetts Bar Ass'n, amicus curiae, submitted a brief.

Before HENNESSEY, C.J., and LIACOS, ABRAMS, NOLAN and LYNCH, JJ.

LYNCH, Justice.

This case involves a fee dispute between an attorney, Peter G. Marino, and his client, Katina Tagaris. The parties agreed to arbitrate their dispute before a panel of the Fee Arbitration Board (board) of the Massachusetts Bar Association, which rendered its decision in favor of the attorney. The arbitration award was confirmed by the Superior Court, and the client appealed. We transferred the case to this court on our own motion, and we reverse. ¹

The client challenges the fairness of the arbitration procedure. She states that the characterization of the proceedings as "informal" did not sufficiently apprise her of the nature of those proceedings. She also claims that she was not permitted to respond to the attorney's argument before the board, and that she was not adequately informed that the arbitration award could be vacated or modified in court. As a result, she argues that the award should be vacated because there was no "meeting of the minds" on the agreement to arbitrate, and because she was deprived of her property without due process of law. The attorney contends that the client was properly advised concerning the nature of the proceedings through the rules and guidelines furnished to her by the board. He also maintains that the reference in those rules to the procedures of G.L. c. 251 (1984 ed.), were sufficient to put the client on notice of her rights to challenge the award. In addition, the attorney argues that the actions of the arbitration panel, and the subsequent judicial enforcement of the arbitration award, do not constitute "State action," so that no due process question is presented. Finally, he contends that because of the established judicial reluctance to interfere in arbitration, this court should affirm the confirmation of the arbitration award. Because of the view we take of the case, it is unnecessary for us to decide the "State action" question. We decide that the client was not sufficiently advised of the nature of the proceedings or of her rights to challenge the award. Therefore, acting under our inherent power to regulate the practice of law and the general superintendence powers conferred by G.L. c. 211, § 3 (1984 ed.), we reverse, and order that judgment be entered vacating the award. Unless the parties agree upon a new arbitration, the attorney is left to his legal remedies to recover any fees he believes remain unpaid.

The attorney represented the client in a divorce action which concluded in December, 1982. ² The client was a housewife who, even in the attorney's opinion, "had led a relatively sheltered life as far as business was concerned." For legal services rendered, the attorney submitted a bill for legal fees and costs totalling $66,570.47. ^{3 3} The client questioned the amount of the bill, but paid $42,500 and agreed to submit the question to arbitration. On March 28, 1983, the client signed the standard form petition for arbitration before the board, in which she agreed to be legally bound by the decision of the arbitrators. The client also received two documents from the board, entitled, "A Guide to the Fee Arbitration Board" (guide), and "Rules of the Legal Fee Arbitration Board of the Massachusetts Bar Association" (rules).

On October 20, 1983, a hearing was held before a panel of three arbitrators. The client appeared without counsel, relying on the representation in the guide that "these proceedings are informal," as well as oral representations made to her by the board's staff before the hearing that she would not need an attorney. ⁴ The client claims that she and her father spoke for not more than two minutes, followed by a lengthy presentation by the attorney. After the attorney had presented his case, the client and her father sought to make additional statements, but were not permitted to do so, allegedly because the arbitrators were "running behind schedule." ⁵ The client therefore claims that she never had the opportunity to present her case properly, since she did not understand the nature of the proceedings and could not properly prepare for them, and that she was further prejudiced by the panel's refusal to allow her to respond to the attorney's presentation.

On the day of the hearing, the arbitrators rendered their decision in favor of the attorney for $24,070.47, the amount outstanding on the bill. The client did not seek to vacate the arbitration award in court, allegedly because she did not realize that she had such a right. The rules state that the arbitration proceedings are subject to the provisions of G.L. c. 251, the Uniform Arbitration Act. That statute establishes the right and limitations on vacating, modifying, or correcting an arbitration award. See G.L. c. 251, §§ 9, 12, 13. However, neither the rules nor the guide explicitly refers to these rights. On December 2, 1983, after the expiration of the thirty-day period, the attorney brought an action to confirm the arbitration award, pursuant to G.L. c. 251, § 11. After a hearing, judgment was entered in favor of the attorney on December 28, 1983, and the client appealed.

1. Power and scope of judicial review. The Uniform Arbitration Act, as set forth in G.L. c. 251, was designed "to further the speedy, efficient, and uncomplicated resolution of business disputes with very limited judicial intervention or participation." Floors, Inc. v. B.G. Danis of New England, Inc., 380 Mass. 91, 96, 401 N.E.2d 839 (1980). See Quirk v. Data Terminal Syss., Inc., 379 Mass. 762, 767, 400 N.E.2d 858 (1980). Therefore, this court has frequently emphasized the "narrow scope of judicial review" of proceedings commenced under that statute. Trustees of Boston & Me. Corp. v. Massachusetts Bay Transp. Auth., 363 Mass. 386, 390, 294 N.E.2d 340 (1973). See Lawrence v. Falzarano, 380 Mass. 18, 28, 402 N.E.2d 1017 (1980); Greene v. Mari & Sons Flooring Co., 362 Mass. 560, 562-563, 289 N.E.2d 860 (1972). See also Bernard v. Hemisphere Hotel Management, Inc., 16 Mass.App. 261, 263, 450 N.E.2d 1084 (1983). In general, we will inquire into an arbitration award to determine only if the arbitrators have exceeded their authority, or have decided the matter based on "fraud, arbitrary conduct, or procedural irregularity in the hearings." Greene v. Mari & Sons Flooring Co., supra 362 Mass. at 563, 289 N.E.2d 860. To do otherwise would undermine the predictability, certainty, and effectiveness of the arbitral forum that has been voluntarily chosen by the parties. See Quirk v. Data Terminal Syss., Inc. 394 Mass. 334, 339, 475 N.E.2d 1208 (1985); Lawrence v. Falzarano, supra 380 Mass. at 29, 402 N.E.2d 1017.

The board "is designed as an alternative forum for the resolution of fee disputes--taking them out of the courts--with the intention of resolving them confidentially and expeditiously." Deiana & Pessin, Res Gestae: Fee Arbitration Board, 63 Mass.L.Rev. 97, 98 (1978). Thus, many of the same considerations calling for limited judicial interference with the arbitral process are present in cases decided by the board. We need not decide, however, whether the facts of this case would warrant judicial intervention in the commercial situations typified by the cases cited above, for it is clear that our powers are broader here. This court is the "ultimate authority" over the conduct of members of the bar. Opinion of the Justices, 375 Mass. 795, 813, 376 N.E.2d 810 (1978). See Matter of Mayberry, 295 Mass. 155, 160, 3 N.E.2d 248 (1936); Opinion of the Justices, 289 Mass. 607, 612, 194 N.E. 313 (1934); Matter of Keenan, 287 Mass. 577, 582, 192 N.E. 65 (1934). We have a responsibility to ensure that arbitration between attorney and client is fair both in its practice and in its perception by the public. Our power to inquire more closely in these arbitration proceedings is unquestionably broader than in the typical arbitration case, and is based on our inherent power to regulate the practices of members of the bar and to provide for the proper administration of justice. See McInerney v. Lally, 384 Mass. 810, 811, 427 N.E.2d 1164 (1981). Thus, we may intervene "whenever it appears that, in the practice of law, methods, customs, or habits have grown up among members of the bar which are undermining the confidence of the public in the courts." Collins v. Godfrey, 324 Mass. 574, 578, 87 N.E.2d 838 (1949). This inherent power is reinforced by the extraordinary powers, conferred by G.L. c. 211, § 3, of general superintendence over the courts of this Commonwealth, in which the attorney sought to have the arbitration award confirmed. See Hadfield v. Commonwealth, 387 Mass. 252, 255 & n. 2, 439 N.E.2d 279 (1982); McIntyre v. County Comm'rs of Bristol, 356 Mass. 520, 525-526, 254 N.E.2d 242 (1969); Commonwealth v. Cummings, 3 Cush. 212, 214 (1849).

In this case, the board's rules and guide did not adequately inform the client of the nature of the hearing or of her right to challenge the award. Because this creates a risk that public confidence in the conduct of attorneys and the fairness of the judicial system may be undermined, we decide to exercise the powers described above to grant relief to the client.

2. The client's understanding of the proceedings. The board encourages clients to represent themselves in fee arbitration disputes. See Deiana & Pessin, supra at 97. This policy springs from a laudatory desire "to present...