Opinion
B316059
02-21-2024
DONALD S. EISENBERG et al., Plaintiffs and Respondents, v. JORDAN S. ESENSTEN, Defendant and Appellant.
Jordan S. Esensten, in pro per., for Defendant and Appellant. Law Office of Leslie Ellen Shear, Leslie Ellen Shear and Julia C. Shear Kushner for Plaintiffs and Respondents.
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County No. 20STCP00107, Maurice A. Leiter, Judge. Affirmed.
Jordan S. Esensten, in pro per., for Defendant and Appellant.
Law Office of Leslie Ellen Shear, Leslie Ellen Shear and Julia C. Shear Kushner for Plaintiffs and Respondents.
CURREY, P. J.
INTRODUCTION
Jordan S. Esensten challenges the trial court's judgment confirming an arbitration award entered in favor of his former counsel, Donald S. Eisenberg and the Law Office of Donald E. Eisenberg (collectively, Eisenberg). The award directed Esensten to pay Eisenberg approximately $73,000 for legal services performed and costs incurred in Eisenberg's representation of Esensten in family law proceedings against Esensten's wife.
On appeal, Esensten contends the judgment must be reversed because: (1) Eisenberg's petition to confirm the award was subject to dismissal, as it did not comply with Code of Civil Procedure section 1285.4, subdivision (a); (2) the arbitrator failed to comply with his statutorily required disclosure obligations; (3) the arbitrator did not decide all issues necessary to determine the controversy; and (4) the arbitrator exceeded the scope of his authority by issuing an award that violates Esensten's statutory rights and is contrary to public policy. As discussed below, we reject each of Esensten's contentions and affirm.
All undesignated statutory references are to the Code of Civil Procedure.
BACKGROUND
In August 2018, Esensten retained Eisenberg to represent him in the dissolution of his marriage to his wife, Nora Esensten (Nora), to obtain a domestic violence restraining order (DVRO) against Nora, and to defend him from Nora's anticipated petition for a DVRO against him. The parties do not dispute their retainer agreement contained a clause mandating resolution of fee disputes through binding arbitration.
A copy of the arbitration clause is not available for review in the record on appeal. As discussed in section II of the Discussion below, Eisenberg did not attach a copy of the clause to his petition to confirm the arbitration award. Nor did he set forth the clause's contents in his petition. The portion of the retainer agreement attached to Esesten's response to the petition does not include the arbitration clause.
Following a three-day hearing, the family court dismissed Nora's petition for a DVRO and entered a permanent DVRO against Nora in Esensten's favor. Later, Esensten substituted in as his own counsel and reconciled with Nora.
Eisenberg sent Esensten invoices seeking payment for the legal services rendered and costs incurred. According to Eisenberg, his efforts to collect on the invoices were initially "met with complete silence." Later, Esensten disputed his obligation to pay the invoices. Ultimately, the parties agreed to resolve the dispute in arbitration pursuant to the arbitration clause in their retainer agreement.
The arbitration hearing took place on November 13, 2019, before Matthew C. Mickelson, Esq. The parties appeared inperson without counsel. In addition to testifying and being subject to cross-examination, the parties offered written exhibits, most of which were admitted into evidence without objection.
In the arbitration award entered on December 5, 2019, the arbitrator acknowledged Esensten's contentions that he did not need to pay the fees due because: (1) Eisenberg allegedly breached the duty of confidentiality by disclosing the parties' fee dispute to Esensten's family members; and (2) Eisenberg allegedly breached the duty of loyalty by defying Esensten's instruction to accept an offer from Nora permitting him to visit their child while the family law proceedings were pending.
Rejecting both arguments, the arbitrator ultimately determined Esensten owed Eisenberg $72,900.58 and directed Esensten to pay the balance due.
We set forth the arbitrator's analyses on these points in section IV of the Discussion below.
Eisenberg filed a petition to confirm the arbitration award in the trial court. Subsequently, Esensten filed a response asking the court to dismiss or deny the petition to confirm and to vacate the award. He also filed a cross-complaint asserting Eisenberg was liable for legal malpractice, breach of fiduciary duty, breach of contract, and intentional infliction of emotional distress.
Although the petition was filed on January 10, 2020, it was not served on Esensten until November 11, 2020. Consequently, Esensten's response filed on November 23, 2020 (i.e., the Monday after November 21, 2020, which fell on a Saturday) was timely, and the trial court erred in finding otherwise. (See §§ 1290.6 & 12a, subd. (a).) This error, however, was not prejudicial and does not warrant reversal because, in confirming the award, the trial court considered the merits of the arguments raised in Esensten's response.
Following a hearing held in February 2021, the trial court issued a written order confirming the award and entered judgment in Eisenberg's favor. In July 2021, the trial court dismissed Esensten's cross-complaint without prejudice, concluding cross-complaints were impermissible in special proceedings initiated by a petition to confirm an arbitration award. Esensten appealed.
On December 7, 2023, this court filed an order concluding this appeal is taken from the July 22, 2021 order of dismissal, which has not been signed, and therefore does not constitute an appealable judgment under section 581d. Thus, we directed Esesten to obtain forthwith from the trial court a signed order of dismissal entered nunc pro tunc July 22, 2021. Esensten provided this court with an order satisfying these requirements on January 31, 2024. We hereby augment the record on appeal to include the order provided (Cal. Rules of Court, rule 8.155(a)) and construe Esensten's notice of appeal to refer to this order. (See Donohue v. State of California (1986) 178 Cal.App.3d 795, 800.)
DISCUSSION
I. General Principles and Standard of Review
"Judicial review of the arbitrator's award is limited to the grounds set forth in Code of Civil Procedure sections 1286.2 (to vacate) and 1286.6 (to correct). [Citation.] 'Under this rule, courts will not review the arbitrator's reasoning or the sufficiency of the evidence supporting the award. [Citation.]' [Citation.] '[Even] the existence of an error of law apparent on the face of the award that causes substantial injustice does not provide grounds for judicial review.' [Citation.] 'Thus, it is the general rule that, with narrow exceptions, an arbitrator's decision cannot be reviewed for errors of fact or law.'" (Soni v. SimpleLayers, Inc. (2019) 42 Cal.App.5th 1071, 1086-1087 (Soni).)
"The exclusive grounds for vacating an arbitration award are provided in Code of Civil Procedure section 1286.2 ...." (Soni, supra, 42 Cal.App.5th at pp. 1085-1086, fn. omitted.) As relevant to this appeal, the trial court must vacate an award if it determines any of the following: "[t]he arbitrator[ ] exceeded [his or her] powers and the award cannot be corrected without affecting the merits of the decision upon the controversy submitted"; "[t]he rights of the party were substantially prejudiced . . . by other conduct of the arbitrator[ ] contrary to the provisions of [the California Arbitration Act (CAA)]"; or "[a]n arbitrator making the award . . . failed to disclose within the time required for disclosure a ground for disqualification of which the arbitrator was then aware[.]" (§ 1286.2, subd. (a)(4), (5), &(6)(A).) "'On appeal from an order confirming an arbitration award, we review the trial court's order (not the arbitration award) under a de novo standard. [Citations.] To the extent that the trial court's ruling rests upon a determination of disputed factual issues, we apply the substantial evidence test to those issues.'" (Toal v. Tardif (2009) 178 Cal.App.4th 1208, 1217 (Toal).)
II. Esensten has not shown the award must be vacated based on Eisenberg's non-compliance with section 1285.4, subdivision (a).
Esensten contends the trial court should have dismissed Eisenberg's petition to confirm the award because the petition did not "[s]et forth the substance of or have attached a copy of the agreement to arbitrate" as required under section 1285.4, subdivision (a). Accordingly, Esensten argues the trial court erred by confirming the award and, therefore, reversal is required. For the reasons discussed below, we conclude his argument is unavailing.
As an initial matter, Esensten's argument has been forfeited because it was not adequately presented and/or developed in the trial court. In his response to the petition, Esensten briefly addressed Eisenberg's non-compliance with section 1285.4, subdivision (a) in a single sentence, stating: "The Court should dismiss and/or deny the Petition because the Petition filed by Petitioners does not contain a copy of the agreement to arbitrate and therefore fails to comply with Code of Civil Procedure section 1285.4, which requires that the Petition '[s]et forth the substance of or have attached a copy of the agreement to arbitrate unless the petitioner denies the existence of such an agreement.'" Nowhere in his response, however, did Esensten explain how Eisenberg's non-compliance with that particular statutory provision compelled dismissal or denial of Eisenberg's petition. Nor did he present any arguments on this point at the hearing held in February 2021. On this record, we conclude Esensten "did not adequately raise this issue in the trial court and therefore forfeited the issue on appeal." (Carpenter &Zuckerman, LLP v. Cohen (2011) 195 Cal.App.4th 373, 384, fn. 6; see also Bently Reserve LP v. Papaliolios (2013) 218 Cal.App.4th 418, 435-436 [conclusory two-sentence argument asserted in the trial court was insufficient to preserve an issue on appeal].)
In any event, Esensten's argument is meritless because he has not shown dismissal of the petition was required. "The CAA specifies only one circumstance in which the superior court can 'dismiss' a petition: when the superior court determines that a person named in the petition 'was not bound by the arbitration award and was not a party to the arbitration.' (§ 1287.2.)" (Maplebear, Inc. v. Busick (2018) 26 Cal.App.5th 394, 399-400.) In addition, California appellate courts have "recognize[d] additional circumstances where dismissal is appropriate[,]"such as when a petition is untimely filed, or the arbitrator's ruling "does not meet the criteria for an 'award' under section 1283.4." (Id. at p. 400.) None of these circumstances is present in this case, however. And Esensten does not cite-nor could we locate- any authority establishing a petition's non-compliance with section 1285.4, subdivision (a), in and of itself, warrants dismissal.
The case on which Esensten relies, Toal, supra, 178 Cal.App.4th 1208 does not-as he asserts-establish the trial court "was not authorized to grant the petition" due to Eisenberg's non-compliance with section 1285.4, subdivision (a). In Toal, the appellants argued that the trial court erred by confirming an arbitration award in the respondents' favor because they never agreed to resolve the underlying dispute in arbitration, and had raised the issue regarding their lack of consent numerous times in the trial court proceedings. (Toal, supra, at p. 1217.) Specifically, the appellants asserted they were not made aware of, nor did they ratify, the stipulation to submit the matter to arbitration signed by the parties' attorneys. (See id. at pp. 1213, 1217.)
The appellate court reversed the judgment confirming the award. (Toal, supra, 178 Cal.App.4th at pp. 1213, 1224.) It did so not because no arbitration agreement was attached to the petition, but because the petitioners failed to demonstrate the existence of an arbitration agreement. (Id. at p. 1213.) The court noted the elementary principle that "[a]bsent an enforceable agreement [to arbitrate], an arbitration award is invalid." (Id. at p. 1220.) Relying on Rosenthal v. Great Western Fin. Securities Corp (1996) 14 Cal.4th 394, which articulated the analytical framework governing petitions to compel arbitration, the appellate court broadly stated: "[T]he party seeking to enforce an award must prove by a preponderance of the evidence that a valid arbitration contract exists. The court may not confirm an award without first finding the parties agreed in writing to arbitrate their dispute, unless a judicial determination of the issue has already been made (e.g., by a court considering a petition to compel arbitration)." (Toal, supra, at p. 1220.)
Applying these principles, the court concluded the respondents' submission of an arbitration stipulation signed only by the parties' attorneys, without more, was insufficient to prove the existence of a valid arbitration contract between the parties. (Id. at pp. 1222-1223.)
In short, the appellate court in Toal reversed a judgment confirming an arbitration award where: (1) in the trial court and on appeal, the appellants denied the existence of a valid arbitration agreement; (2) in confirming the award, the trial court did not consider the appellants' arguments regarding their lack of consent to arbitration; and (3) the only evidence of the parties' purported arbitration agreement was a copy of a stipulation signed by their attorneys. The court did not address the issue before us, namely, whether a judgment confirming an arbitration award must be reversed where the petition was non-compliant with section 1285.4, subdivision (a), but the parties do not dispute the existence of a valid arbitration contract between them. It is well-settled that "[t]he holding of a decision is limited by the facts of the case being decided, notwithstanding the use of overly broad language by the court in stating the issue before it or its holding or in its reasoning." (McGee v. Superior Court (1985) 176 Cal.App.3d 221, 226.) We therefore conclude Toal does not support Esensten's assertion of reversible error.
Further, Esensten's argument is unavailing because he has not shown how he was prejudiced by Eisenberg's failure to attach a copy of the parties' arbitration agreement to the petition. (See Puccinelli v. Nestor (1956) 145 Cal.App.2d 48, 50.) At no point has Esensten denied the existence of a valid agreement to arbitrate between the parties. Nor has he stated he lacked access to their agreement or was otherwise unfamiliar with its terms.
Instead, the record reflects Esensten was aware of the agreement and had a copy of it. The award states-and Esensten does not dispute-the parties agreed to arbitrate the underlying fee dispute pursuant to an arbitration clause in their retainer contract. Esensten himself attached selected portions of the contract to his response to the petition. Under these circumstances, we are not convinced Eisenberg's failure to comply with section 1285.4, subdivision (a) "deprived [Esensten] of an opportunity to challenge the enforceability of the arbitration agreement," as Esensten contends.
III. Esensten has not shown the arbitrator failed to comply with his disclosure obligations.
Per section 1281.9, subdivision (a), a person selected "to serve as a neutral arbitrator . . . shall disclose all matters that could cause a person aware of the facts to reasonably entertain a doubt that the proposed neutral arbitrator would be impartial ...." Based on those disclosures, the parties can disqualify the arbitrator. (See § 1281.91, subd. (b)(1).) And, as noted above, the trial court must vacate an arbitration award if it determines the arbitrator "failed to disclose within the time required for disclosure a ground for disqualification of which the arbitrator was then aware[.]" (§ 1286.2, subd. (a)(6)(A).) Thus, an award must be vacated when the arbitrator fails to disclose facts within the purview of section 1289.1, subdivision (a). (See §§ 1281.9, subd. (a), 1281.91, subd. (b)(1), 1286.2, subd. (a)(6)(A); see also Ovitz v. Schulman (2005) 133 Cal.App.4th 830, 844 ["Under California law, an arbitrator's failure to comply timely with his or her disclosure obligations risks a severe consequence: the vacating of any arbitration award rendered by the arbitrator"].)
Whether the arbitrator was required to disclose certain facts under section 1281.9, subdivision (a) is governed by "an objective test . . . focusing on a hypothetical reasonable person's perception of bias." (Haworth v. Superior Court (2010) 50 Cal.4th 372, 385.) Under this test, "[t]he question is not whether [the arbitrator] actually was biased or even whether he was likely to be impartial[.]" (Ibid.) Instead, "the question . . . is how an objective, reasonable person" aware of the facts at issue "would view [the arbitrator's] ability to be impartial." (Id. at pp. 385386.) In the context of this test, "'[t]he "reasonable person" is not someone who is "hypersensitive or unduly suspicious," but rather is a "well-informed, thoughtful observer."' [Citations.] '[T]he partisan litigant emotionally involved in the controversy underlying the lawsuit is not the disinterested objective observer whose doubts concerning the [arbitrator's] impartiality provide the governing standard.'" (Id. at p. 389, original italics.)
Esensten contends the award should have been vacated because the arbitrator did not disclose that he "has devoted his entire career [to] advocating on behalf of fellow lawyers against clients in fee disputes and has publicly expressed disdain for clients who engage in fee disputes with their lawyers." He asserts that a reasonable person aware of "[t]he arbitrator's practice advising and representing attorneys in fee disputes and against malpractice claims . . . 'might reasonably entertain a doubt that the arbitrator would be able to be impartial[.]'"
We reject Esensten's argument because the record does not establish the arbitrator "devotes his livelihood [to] defending lawyers against clients in lawyer-client fee disputes[,]" as Esensten contends. Instead, as set forth below, the evidence shows the arbitrator has extensive experience representing attorneys seeking to collect unpaid fees from clients, but currently has a broader legal practice focused on complicated collections actions. Further, the writings by the arbitrator in the record reflect a depth of knowledge he has gained through his prior experience, as well as his views on best practices for lawyers seeking to recover unpaid fees, but do not support Esensten's assertion that the arbitrator harbors disdain for clients asserting malpractice claims against their former attorneys.
The homepage of the arbitrator's law firm website states the following regarding his legal practice: "Mr. Mickelson is currently a sole practitioner whose practice focuses on general business litigation, collection matters (both pre- and postjudgment), and appeals. He specializes in post-judgment collection litigation, representing both creditors and debtors, and has taken a special interest in dealing with wealthier individuals who have hidden away assets in family partnerships, trusts, limited liability companies and small corporations. Mr. Mickelson is also active in the appeals arena, having represented appellants, respondents, and writ petitioners in front of the California and federal courts. He has served as a 'lawyer's lawyer,' representing attorneys in dozens of lawsuits against former clients for unpaid fees; his lawyer clients range from one of the top-25 largest law firms in Los Angeles [C]ounty to sole practitioners. Mr. Mickelson has also defended attorneys in legal malpractice matters."
The arbitrator's law firm website also contains a section titled "Collection Case Studies," which "detail[s] the facts and outcomes in two recent matters in which [the arbitrator] was the attorney of record." This webpage, however, does not specify when these cases took place. The purpose of this webpage is to show "[p]rospective clients . . . the kinds of collections cases [the arbitrator] has worked on and how he has managed to secure money from debtors where other lawyers have failed." The cases on this webpage primarily showcase the arbitrator's success in securing payment of judgments from alternative sources when the original debtor was unable to pay.
In the first case described on the webpage, titled "Getting the Parent Corporation to Pay the Debts of the Subsidiary," the arbitrator represented an attorney who was owed approximately $18,000 in unpaid fees from a former client. The lawsuit was brought against the former client, as well as a small corporation that had also secured legal services from the attorney. The arbitrator successfully moved for summary judgment on the exclient's "frivolous cross-complaint" for malpractice. Subsequently, the attorney's ex-client "disappeared from sight." Eventually, the arbitrator secured payment of a judgment of more than $120,000 entered in his client's favor from Netflix, which owed a substantial sum to the parent corporation of the smaller corporation. In the second case, titled "Collection Against a Defunct Limited Liability Company," the arbitrator represented investors who had invested a substantial sum in an LLC, and were seeking to collect on a judgment of over $500,000 against the LLC. During post-judgment discovery, the arbitrator learned that although the LLC "was merely a shell," it "was the sole owner of the rights to certain very lucrative motion picture projects." He eventually secured payment of the judgment, along with interest, costs, and attorney's fees, from "several major studios which had contracted with the LLC regarding those projects."
In addition to the website discussed above, Esensten relies on the following documents to assert the arbitrator was required to disclose the nature of his legal practice:
(1) An article written by the arbitrator in the June 2005 edition of the Los Angeles Lawyer magazine, titled "Enforcement of Binding Arbitration Provisions in Retainers." In this article, the arbitrator details how California statutes and appellate court decisions "ha[ve] created large uncertainties as to whether or not binding [arbitration clauses in] retainer agreements are enforceable when clients and lawyers have a dispute over unpaid fees."
(2) An article written by the arbitrator in the April 2006 edition of BarNotes, a Publication of the San Fernando Valley Bar Association, titled: "Follow the Money[:] Collecting Fees [W]ithout Triggering Malpractice Claims." This article describes the steps attorneys should take in deciding whether to sue a former client for unpaid fees, advises how attorneys can limit their exposure to liability from cross-complaints for malpractice when suing for unpaid fees, and provides an overview of the collection process.
(3) An article in the June 2006 edition of BarNotes by Lisa Miller regarding the arbitrator's delivery of a presentation to attorneys in April 2006. According to Miller, the arbitrator "offered practical direction on establishing effective fee collection strategies" and "addressed threshold issues such as whether to attempt a collection action, and if so, the process for proceeding." She described the arbitrator as "a general practitioner focusing on collections, appellate law and business litigation," who, at the time, "represent[ed] both large and small firms in his collections practice[,]" "exclusively represent[ed] one of Los Angeles County's larger law firms in all of its fee collection matters[,]" and "conduct[ed] wide-ranging post-judgment collection litigation against wealthy individuals, specializing in seizing assets from judgment debtors who are beneficiaries of irrevocable trusts."
(4) An advertisement in the April 2011 edition of the Los Angeles Lawyer magazine touting the arbitrator's willingness to "[t]ak[e] on the hard cases others refuse" and "special[ty] in statewide pre- and post- judgment collection litigation[,]" including "lawsuits, arbitrations, writs, liens, levies, examinations, garnishments, attachments, asset searches and seizures." (Capitalized and bolded text omitted.)
The evidence discussed above shows the arbitrator is a solo practitioner who specializes in relatively complex collections actions, maintains an active appeals practice, and has substantial experience representing attorneys in actions against former clients seeking payment of unpaid fees. The record does not, however, establish that, at the time of the arbitration hearing held in November 2019, his practice was primarily-let alone exclusively-devoted to representing attorneys collecting unpaid fees and, therefore, dependent on individuals such as Eisenberg for business. Nor does it show that, while presiding over the arbitration in this case, the arbitrator was actively representing any attorneys in fee disputes. Moreover, none of the publications in the record reflect or otherwise suggest the arbitrator disdains clients who assert malpractice claims against their former lawyers in actions for unpaid fees. Thus, the evidence does not establish the arbitrator had any incentive, pecuniary or reputational, to rule in Eisenberg's favor.
"The mere fact an attorney's professional practice regularly involves representing one type of client against another type does not alone support an inference the attorney cannot be impartial when acting in the role of neutral." (Baxter v. Bock (2016) 247 Cal.App.4th 775, 790.) Rather, "an inference of bias arises only when the arbitrator's private economic interests create an incentive to rule in a particular manner even when acting as a neutral." (Ibid.) Accordingly, on the record before us, we conclude that a reasonable person aware of the arbitrator's legal practice would not have entertained a doubt about his impartiality in this case. (See id. at p. 789 [arbitrator presiding over attorney-client fee dispute not required to disclose aspects of his professional background because his practice of auditing legal bills "was not devoted exclusively to one side of fee disputes" and he "did not depend exclusively on business from legal clients or losing parties"]; cf. Benjamin, Weill &Mazer v. Kors (2011) 195 Cal.App.4th 40, 71-72 [arbitrator presiding over attorney-client fee dispute was required to disclose the nature of his legal practice when, at the time of the arbitration, his practice focused on the defense of attorneys and law firms in cases involving professional responsibility, and he was actively representing a law firm in a case before the California Supreme Court involving a dispute over legal fees].) Consequently, the arbitrator was not required to disclose the nature of his legal practice under section 1281.9, subdivision (a). Vacatur of the award therefore was not required under section 1286.2, subdivision (a)(6)(A).
Esensten also asserts the award's "[p]uzzling findings" against him further demonstrate the arbitrator's "favoritism towards attorneys . . . seeking fees and disdain for clients asserting malpractice claim[s.]" We reject this argument because "[t]he mere fact" that a decisionmaker, including an arbitrator, "issued rulings adverse to [a party] on several matters . . ., even assuming one or more of those rulings were erroneous, does not indicate an appearance of bias, much less demonstrate actual bias." (Brown v. American Bicycle Group, LLC (2014) 224 Cal.App.4th 665, 674.)
IV. Esensten has not shown the arbitrator failed to rule upon all issues submitted for decision.
Next, Esensten asserts the award should have been vacated because the arbitrator did not rule on his arguments regarding Eisenberg's alleged breaches of fiduciary duty. In so doing, he appears to contend the trial court should have vacated the award under section 1286.2, subdivision (a)(5) because the arbitrator did not decide "all the questions submitted . . . the decision of which [was] necessary in order to determine the controversy" as required under section 1283.4.
In determining whether to vacate an award based on the arbitrator's alleged failure to decide all necessary issues, courts are guided by four principles: "First, it is presumed that all issues submitted for decision have been passed on and resolved, and the burden of proving otherwise is upon the party challenging the award. [Citations.] [¶] Second, to discharge that burden, the party attacking the award must demonstrate that a particular claim was expressly raised at some time before the award [citation], and that the arbitrator failed to consider it [citation]. [¶] Third, the failure of an arbitrator to make a finding on even an express claim does not invalidate the award, so long as the award 'serves to settle the entire controversy' [citation]. This is a corollary of the proposition that arbitrators are not obliged to find facts or give reasons for their award [citation]. Thus, '[a] decision simply that one of the parties should pay the other a sum of money is sufficiently determinative of all items embraced in the submission.' [Citation.] [¶] Finally, there is the principle that the merits of the controversy are for the arbitrator, not for the courts." (Rodrigues v. Keller (1980) 113 Cal.App.3d 838, 842-843.)
Applying these principles, we conclude Esensten's contention is meritless. As discussed below, the award reflects the arbitrator directly addressed each of Esensten's breach of fiduciary duty arguments and clearly set forth his reasons for rejecting them. Esensten therefore has not discharged his burden of showing the arbitrator failed to decide an issue submitted for decision. (Rodrigues v. Keller, supra, 113 Cal.App.3d at p. 842.)
While reciting his findings in the award, the arbitrator addressed both of Esensten's breach of fiduciary arguments separately and in turn, under different headings.
With respect to Eisenberg's alleged breach of the duty of confidentiality, the arbitrator stated: "Mr. Esensten alleges that Mr. Eisenberg breached the duty of confidentiality by revealing [the underlying] fee dispute to other parties. He claims this revelation ha[s] damaged his standing within his family, leaving him ostracized from them. For this alleged breach, Mr. Esensten seeks the erasure of the entire amount currently due and payable. [¶] The Arbitrator sees no legal basis to support Mr. Esensten's claim. Even assuming that the communication of the fee dispute is somehow a breach of confidentiality (and he provides no legal support for this assertion), Mr. Esensten does not establish that the wiping out of the entire debt is a proper remedy. First, the purely emotional distress damages he alleges- unconnected to any physical injury-would probably never support any monetary damage award or offset. Moreover, those damages are unsupported by sufficient facts. Only hearsay assertions of vague, ambiguous events are submitted to support the damages. These are much too nebulous to establish the alleged damages. Accordingly, the alleged breach of confidentiality does not excuse the debt."
Regarding Eisenberg's alleged failure to follow Esensten's instructions in violation of the duty of loyalty, the arbitrator stated: "Similarly unavailing is Mr. Esensten's assertion that Mr. Eisenberg's alleged failure to accept an offer of visitation was against [his] wishes, and therefore the entire rest of the debt must be excused. First, the actual letter sent by Mr. Eisenberg appears to have followed Mr. Esensten's instructions, by showing willingness to accept any visitation that Nora chose to offer. Indeed, Mr. Esensten approved the letter only moments after it was sent. Even if Mr. Eisenberg did, indeed, fail to follow his client's instructions in this one instance (a very dubious claim), yet again Mr. Esensten does not show how such a failure must lead to the total loss of all fees and costs due and paying [sic]. Mr. Esensten acknowledged he did not know if Nora even read this letter, and so he could not establish that if the letter had been written precisely as he wanted, then all future litigation would have immediately ceased (again, a dubious proposition). And, as before, alleged mental pain and anguish, unconnected to physical injury, is usually not compensable. This is simply no defense to the debt."
Accordingly, the award shows the arbitrator not only considered Esensten's breach of fiduciary duty arguments, but also articulated, in detail, his grounds for rejecting them. For both contentions, the arbitrator reasoned that even assuming, arguendo, Eisenberg had breached his fiduciary duties as Esesten alleged, Esensten's arguments were meritless because he did not demonstrate those breaches entitled him to the relief sought. (i.e., erasure of the debt). In so doing, the arbitrator explained that Esensten failed to prove he had suffered any compensable damages arising out of the alleged breaches and, therefore, did not establish how those breaches operated to excuse the debt.
Thus, for the reasons discussed above, we conclude the arbitrator did not fail to rule on the merits of Esensten's breach of fiduciary duty arguments. He therefore did not run afoul of section 1283.4 by failing to decide an issue submitted for his decision. Consequently, vacatur of the award was not required under section 1286.2, subdivision (a)(5).
We acknowledge that, in his opening brief, Esensten heavily disputes the arbitrator's reasons for rejecting his breach of fiduciary duty arguments. As noted above, however, it is not our role to review the validity of the arbitrator's reasoning, or to review the award for errors of fact or law. (See Soni, supra, 42 Cal.App.5th at pp. 1086-1087.)
V. Esensten has not demonstrated that the award violates a statutory right or public policy.
Finally, Esensten asserts vacatur was required under section 1286.2, subdivision (a)(4) because the arbitrator exceeded the scope of his authority by issuing an award that violates his statutory rights and runs afoul of public policy. Although not entirely clear, he appears to contend California appellate courts have expressed a public policy requiring attorneys who breach their fiduciary duties to forfeit some or all of their fees, regardless of whether their client can prove compensatory damages arising out of the breach.
As noted above, the trial court must vacate an award when "[t]he arbitrator[ ] exceed[s] [his] powers and the award cannot be corrected without affecting the merits of the decision upon the controversy submitted." (§ 1286.2, subd. (a)(4).) "An arbitrator exceeds his powers when he . . . issues an award that violates a well-defined public policy [citation], [or] issues an award that violates a statutory right [citation] ...." (Jordan v. Department of Motor Vehicles (2002) 100 Cal.App.4th 431, 443.) "The public policy so contravened must be a 'well defined and dominant' public policy as 'ascertained "by reference to the laws and legal precedents and not from general considerations of supposed public interests."'" (Honchariw v. FJM Private Mortgage Fund, LLC (2022) 83 Cal.App.5th 893, 899 (Honchariw).)
Esensten's argument is without merit because he has not shown the award in this case violates a statutory right or a "'well defined and dominant'" public policy. (Honchariw, supra, 83 Cal.App.5th at p. 899.) At the outset, Esensten does not direct us to any statute conferring upon him the right to avoid paying the fees due based on Eisenberg's alleged misconduct. And, as discussed below, the California appellate court cases on which he relies do not-as he contends-express a public policy universally mandating that attorneys who commit any breach of fiduciary duty must automatically forfeit some or all of their fees.
In advancing his public policy argument, Esensten primarily relies on the following cases: Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811 (Oasis West), Anderson v. Eaton (1930) 211 Cal. 113 (Anderson), Sheppard, Mullin, Richter, &Hampton, LLP v. J-M Manufacturing Co., Inc. (2018) 6 Cal.5th 59 (Sheppard Mullin), and Cal Pak Delivery Inc. v. United Parcel Service, Inc. (1997) 52 Cal.App.4th 1 (Cal Pak).
In Oasis West, our Supreme Court addressed whether the plaintiff, a real estate developer, provided sufficient evidence to support its claims for breach of fiduciary duty, professional negligence, and breach of contract against its former attorney and his law firm to avoid dismissal of their complaint under section 425.16, also known as the anti-SLAPP statute. (Oasis, supra, 51 Cal.4th at pp. 815.) The Supreme Court concluded the plaintiff "stated and substantiated the sufficiency of its legal claims against its former attorneys" by showing that, after termination of the attorney-client relationship, the former attorney engaged in overt efforts to thwart the city council's approval of the plaintiff's development project, which was the subject of the former attorney's representation. (Id. at pp. 816, 825.) In arriving at this conclusion, the Supreme Court reiterated that, under the duties of confidentiality and loyalty, an attorney who has severed the relationship with his client is "'forbidden'" from "'do[ing] anything which will injuriously affect [the] former client in any matter in which [the attorney] formerly represented [the client]'" and/or "'us[ing] against [the] former client knowledge or information acquired by virtue of the previous relationship.'" (Id. at p. 821.)
The appellate court in Anderson upheld a judgment against an attorney seeking to recover fees pursuant to a contingency fee agreement with a former client. (Anderson, supra, 211 Cal. at pp. 114, 118.) The court reasoned that "the contract sued on [was] clearly against public policy and void" (id. at p. 116) because, at the time the attorney agreed to represent the client, the attorney was also representing an insurance company with interests directly adverse to the client in related matters. (Id. at pp. 115117.) In rendering its holding, the appellate court noted that "an attorney is precluded from assuming any relation which would prevent him from devoting his entire energies to his client's interests" even if "the intention and motives of the attorney [in accepting conflicting employments] are honest." (Id. at p. 116.)
Sheppard Mullin similarly related to a law firm's simultaneous representation of two entities with adverse interests. (See Sheppard Mullin, supra, 6 Cal.5th at pp. 67-68.) There, a client sought vacatur of an arbitration award for unpaid fees entered in favor of the law firm from whom it had received services. (Id. at p. 71.) In short, our Supreme Court held: (1) the law firm's conflicted representation of the client violated rule 3-310(C)(3) of the Rules of Professional Conduct, and therefore rendered the firm's engagement agreement with the client, along with its arbitration clause, unenforceable; and (2) the law firm's ethical breach did not automatically preclude it from recovering compensation for work performed on the client's behalf under a theory of quantum meruit. (Id. at pp. 68, 87, 89.)
With respect to the firm's ability to seek compensation, the Supreme Court acknowledged that "'[a] lawyer engaging in clear and serious violation of duty to a client may be required to forfeit some or all of the lawyer's compensation for the matter.'" (Sheppard Mullin, supra, 6 Cal.5th at p. 89.) It then clarified that "forfeiture of compensation is, in the end, an equitable remedy," the use of which rests in the sound discretion of the trial court based on the circumstances in each case. (Id. at pp. 89-90.) In so holding, the Supreme Court declined to adopt "a rule of automatic and complete forfeiture 'for every breach of fiduciary duty, or even every serious breach,'" because it "'would deprive the remedy of its equitable nature and would disserve its purpose of protecting relationships of trust.'" (Id. at p. 90.) Further, the Supreme Court observed that prior decisions by Courts of Appeal addressing forfeiture "demonstrate that forfeiture of compensation is often an appropriate response to conflicted representation," but "do not stand for the proposition that quantum meruit recovery for legal services performed while the attorney suffers from an unwaived conflict of interest is categorically barred." (Id. at p. 94.)
Finally, in Cal Pak, an attorney "admitted he had offered to sell out his client and the class which the client was seeking to represent for a payment to himself personally of approximately $8 to $10 million." (Cal Pak, supra, 52 Cal.App.4th at pp. 5-6.) The appellate court considered whether the trial court abused its discretion by disqualifying the attorney and prohibiting him from collecting any fees for work performed both before and after the date of his wrongful act. (Ibid.) After concluding disqualification was appropriate, the appellate court held: (1) the trial court "clearly did not abuse its discretion insofar as it denied fees for services rendered by [the attorney] after the date of his misconduct"; and (2) the trial court's ruling regarding the attorney's right to recover fees for services rendered before the act giving rise to his disqualification was premature. (Id. at pp. 13, 16.) In support of its conclusions on forfeiture, the appellate court noted the cases on which the trial court relied "articulate[d] the rule that a court may prevent counsel's recovery of fees from the client where the attorney has violated ethical duties[,]" but permitted partial recovery of fees based on different circumstances present in each case. (Id. at pp. 15-16.)
We conclude the cases Esensten relies upon do not express a "'well defined and dominant'" public policy mandating attorneys who commit any breach of fiduciary duty to automatically forfeit some or all of their fees, even if the client fails to prove monetary damages arising out of the breach. (Honchariw, supra, 83 Cal.App.5th at p. 899.) Esensten therefore has not shown the award violates a statutory right or runs afoul of public policy. Thus, the trial court did not err by declining to vacate the award under section 1286.2, subdivision (a)(4).
DISPOSITION
The judgment confirming the arbitration award is affirmed. Respondents shall recover their costs on appeal.
We concur: MORI, J. ZUKIN, J.