Safarian Choi & Bolstad, LLP v. Minassian

• Decision Date: 07 April 2016
• Docket Number: B262526
• Court: California Court of Appeals Court of Appeals
• Parties: SAFARIAN CHOI & BOLSTAD, LLP, Plaintiff and Respondent, v. SHAHEN MINASSIAN, Defendant and Appellant.

SAFARIAN CHOI & BOLSTAD, LLP, Plaintiff and Respondent, v. SHAHEN MINASSIAN, Defendant and Appellant.

B262526

COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION EIGHT

April 7, 2016

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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 Super. Ct. No. BS150950)

APPEAL from a judgment of the Superior Court of Los Angeles County. Susan Bryant-Deason, Judge. Affirmed.

Arthur Minassian for Defendant and Appellant.

Safarian Choi & Bolstad LLC, David C. Bolstad and Jerome M. Jauffret for Plaintiff and Respondent.

____________________ This appeal stems from a fee dispute between Shahen Minassian and Safarian Choi & Bolstad, LLP (SC&B). The fee dispute was arbitrated under a program administered by the Los Angeles County Bar Association (LACBA). The panel of arbitrators issued a decision awarding SC&B $36,508 in fees, which was approximately $6,000 less than what it sought. The panel's award was confirmed by the trial court. We affirm the judgment.

FACTS

SC&B represented Minassian in a lawsuit which alleged he misappropriated property owned by the plaintiffs' deceased parents in Iran. SC&B filed a forum non conveniens motion, arguing Iran was a more convenient forum in which to litigate the suit since the properties and evidence were located there. The trial court granted the motion on October 23, 2013.¹ The next month, SC&B presented Minassian with his first bill for their services. The present fee dispute ensued.

When Minassian engaged SC&B to represent him in the underlying matter, he provided them with a $10,000 retainer. He also signed a written fee agreement on March 30, 2013, which identified the $10,000 as an advance on fees. The agreement set forth a rate of $425 per hour for work performed by attorney David Bolstad, which he noted was an agreed upon discount of $70 per hour, and $250 per hour for his associate's work. The agreement cautioned, "it is impossible to determine in advance the amount of fees and costs needed to complete this matter."

Despite the terms of the agreement, Minassian contends the parties had a "handshake agreement" that SC&B would handle the initial motions for no more than $10,000. This was because Minassian's son, Arthur Minassian,² was an attorney and"would do a lot of the hard work regarding the facts, the documents, the experts and the translations." Arthur was a witness to the handshake agreement. In his initial meeting with Bolstad, which Arthur also attended, Minassian agreed to pay a $5,000 retainer. He was surprised to see the retainer increased to $10,000 in the written fee agreement, but signed it "since I had agreed to pay him that amount anyway." Minassian believed the handshake agreement trumped the written agreement.

On November 19, 2013, Arthur received an invoice from SC&B for approximately $43,000. After the retainer was applied, SC&B sought to recover approximately $33,000 from Minassian. He disputed the bill and the parties submitted the matter to arbitration under a program administered by the LACBA. Minassian argued the handshake agreement trumped the written fee agreement. He also argued the fee agreement was void because SC&B violated the terms of the fee agreement by failing to issue monthly invoices, charging a higher hourly rate than stated, applying the advance fee to the invoice and failing to deposit it into its general trust account, and failing to identify the timekeeper whose work was being charged. Minassian further alleged Bolstad was suspended from the bar for failure to pay membership dues from July 2, 2013 until August 14, 2013, yet continued to bill Minassian for his work during that time. Thus, SC&B was entitled to the agreed-upon $10,000 at best, or nothing at all for its violation of its ethical and fiduciary duties. SC&B disputed Minassian's characterization of their agreement and argued it was entitled to the full amount invoiced.

The arbitration hearing was conducted on July 1, 2014. Minassian, still in Iran, testified by declaration. Arthur testified to his knowledge of the agreement. He also served as Minassian's attorney at the arbitration and presented testimony from Edward McIntyre, an expert witness who opined on attorneys' duties and ethics. The arbitration panel, which consisted of Terry D. Shaylin, Melinda Gagyor, and Berne Rolston, issued a statement of decision on August 7, 2014. The panel unanimously found the engagement letter to be void because SC&B failed to issue monthly invoices and the invoice it did issue failed to clearly identify who worked on what. Nevertheless, the panel held SC&B was entitled to a reasonable fee for the services it rendered, amounting to $33,019, or a15 percent reduction of the fees charged. The panel also allocated $2,259.84 in arbitration filing fees to Minassian and costs of $1,229.70 for a total award of $36,508.54. After applying the $10,000 retainer, the panel calculated the net amount Minassian was to pay SC&B to be $26,508.54.

SC&B petitioned the trial court to confirm the arbitration award on August 27, 2014, while Minassian sought to vacate the award. The trial court confirmed the arbitrators' award and judgment against Minassian was entered January 6, 2015. Minassian timely filed a notice of appeal on March 9, 2015.³

DISCUSSION

Section 6200 et seq. of the Business and Professions Code establishes a system "for the arbitration . . . of disputes concerning fees, costs, or both, charged for professional services by members of the State Bar . . . ." (Bus. & Prof. Code, § 6200, subd. (a).) In appropriate circumstances, an arbitration award in a matter involving a fee dispute may be confirmed, corrected, or vacated under Code of Civil Procedure⁴ section 1285 et seq., the statutory scheme governing arbitrations in general. (Bus. & Prof. Code, § 6203, subd. (b).) Under this provision, a court shall vacate the award if it finds, among other things, that the rights of the party were substantially prejudiced by the refusal of the arbitrators to postpone the hearing upon sufficient cause or by the refusal of the arbitrators to hear evidence material to the controversy or by the failure of the arbitrator to disclose a ground for disqualification. (§ 1286.2, subd. (a).)

Minassian challenges the trial court's order confirming the arbitration award on the same grounds he sought to vacate the award below: (1) Rolston, the panel chair, failed to disclose that 50 percent of his practice involves representing lawyers and lawfirms, thus causing a person to reasonably entertain a doubt as to his impartiality; (2) the panel erroneously refused to compel production of SC&B's trust account records; and (3) the panel refused to continue the arbitration hearing to allow Minassian to testify.

We review de novo the trial court's order confirming the arbitration award. (Advanced Micro Devices, Inc. v. Intel Corp. (1994) 9 Cal.4th 362, 376, fn. 9; Glaser, Weil, Fink, Jacobs & Shapiro, LLP v. Goff (2011) 194 Cal.App.4th 423, 433.) To the extent the trial court's decision to grant the petition to confirm and deny the petition to vacate the award rests on its determination of disputed factual issues, however, we review the court's orders under the substantial evidence standard. (Toal v. Tardif (2009) 178 Cal.App.4th 1208, 1217; Lindenstadt v. Staff Builders, Inc. (1997) 55 Cal.App.4th 882, 892, fn. 7.)

I. Appearance of Partiality

Subsequent to the panel's decision, Minassian discovered that "[s]ince 1982, more than 50% of [Rolston's] practice has involved the representation of lawyers and law firms in connection with the legal problems that arise between law partners or law partners and law firms (and vice versa)." Minassian contends Rolston improperly failed to disclose this material information, which would cause a person to reasonably doubt his impartiality in the matter.

Section 1281.9 imposes on arbitrators a duty to "disclose all matters that could cause a person aware of the facts to reasonably entertain a doubt that the proposed neutral arbitrator would be able to be impartial" and sets forth six specific facts required to be disclosed.⁵ (§ 1281.9, subd. (a).) An arbitrator's failure to disclose facts as required bysection 1281.9 warrants vacation of his or her award. (§ 1286.2, subds. (a)(2), (6); Casden Park La Brea Retail LLC v. Ross Dress for Less, Inc. (2008) 162 Cal.App.4th 468, 476-477; Ovitz v. Schulman (2005) 133 Cal.App.4th 830, 845.) The California Supreme Court has held the six disclosure requirements under section 1281.9 are not exclusive, however. (Advantage Medical Services, LLC v. Hoffman (2008) 160 Cal.App.4th 806, 817 (AMS).)

Thus, in Benjamin, Weill & Mazer v. Kors (2011) 195 Cal.App.4th 40 (Benjamin Weill), an arbitration award in favor of a law firm in a fee dispute with a client was reversed because the chief arbitrator failed to disclose his representation of large law firms in similar cases, including of a law firm in a fee dispute with a client and of another law firm in a malpractice action against it. The description of the chief arbitrator's legal practice showed he often represented "'[a]ttorneys who face charges of misconduct.'" (Id. at p. 51.) The court in Benjamin Weill held the arbitrator was required to disclose that aspect of his legal practice. (Id. at p. 73.)

The law firm argued the disclosure requirements for an arbitrator should not exceed that required of sitting judges under section 170.1.⁶ (Benjamin Weill, supra, at p. 64.) The court disagreed. It reasoned a judge does not engage in private business relationships comparable to those of an arbitrator and thus does not enjoy or suffer economic consequences as a result of his decisions. (Ibid.) On the...