Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of San Diego County, No. GIN049523, Thomas P. Nugent, Judge.
NARES, Acting P. J.
Plaintiffs Stephen L. Kite, Norma Lalonde and Reid L. Lalonde (collectively, plaintiffs) were former clients of Henry James Koehler IV, who represented them in a child custody matter. A dispute arose between the parties and plaintiffs requested their files back. When they were not returned, plaintiffs filed suit. Koehler in turn filed a petition to compel arbitration pursuant to a clause in the parties' retainer agreement.
After the matter was submitted to arbitration, Koehler objected to the proceedings because he alleged he could not afford the arbitrator's fees. Plaintiffs advanced his share of the fees so the matter could proceed. An arbitration was held and plaintiffs obtained an award of $98,119.56, consisting of $55,000 in damages and $43,119.56 in arbitration fees and expenses. The court later confirmed the award.
Koehler appeals, in propria persona, asserting (1) the trial court erred in failing to stop the arbitration because when he could not pay his share of the arbitration fees his defenses were "sold" by the arbitrator to plaintiffs; (2) the court erred by confirming the award on the same grounds; (3) the court should have dismissed the case because his demurrer and motion to strike demonstrated the action was moot because he had returned the client files; and (4) the arbitrator's award does not specify the basis for the award of $55,000 in damages. We affirm.
We note that effective March 4, 2011, Koehler was disbarred from practicing law in California, in large part because of his actions regarding the plaintiffs.
FACTUAL AND PROCEDURAL BACKGROUND
Much of Koehler's factual and procedural background is unsupported by citations to the record. We disregard any such statements.
A. Koehler's Representation of Plaintiffs
In July 1999 plaintiffs retained Koehler to represent them in an ongoing child custody dispute, arising out of the dissolution of Kite's marriage to Julia Kretschmer. Norma and Reid Lalonde are the child's grandparents. Kretchmer's new husband, a member of the Marine Corps, was ordered to be stationed in Okinawa. Kretchmer brought a motion seeking a "move-away" order to take the child with her and her new husband to Okinawa. The motion was granted and plaintiffs claim that Koehler was grossly unprepared and ineffective. After the hearing, plaintiffs terminated their attorney-client relationship with Koehler.
When plaintiffs terminated their attorney-client relationship with Koehler, they requested return of their client files. From 2003 through 2005, plaintiffs, through their new attorneys, sought to have the client files returned, but Koehler did not comply with their requests.
B. The Instant Action
On December 23, 2005, plaintiffs filed a complaint against Koehler for return of the client files, damages, and other relief. The complaint sought damages in the amount of $55,000 for attorney fees and costs incurred in attempting to get their case file returned, as well emotional distress and punitive damages.
The case files were returned to plaintiffs on December 29, 2005.
Koehler thereafter filed a demurrer and motion to strike, which asserted, among other things, that the action was moot because he had already delivered the files. The court denied both motions.
C. The Arbitration
Koehler thereafter filed a petition to compel arbitration pursuant to an arbitration clause in the plaintiffs' retainer agreement with him. The plaintiffs opposed the motion. The court granted the petition and the parties stipulated to the appointment of retired San Diego Superior Court Judge William J. Howatt, Jr., and using Judicial Arbitration and Mediation Services (JAMS) as the arbitration provider.
1. Motion to vacate arbitration and for fee waiver
Koehler thereafter filed with JAMS a motion to vacate and set aside the arbitration appointment. He also filed an application for a fee waiver. He claimed that he was indigent and living on social security. He also asserted that JAMS Comprehensive Arbitration Rules & Procedures rule 31(b) (hereafter JAMS rule 31(b)) operates so that JAMS in collecting its fees would be "selling the respondent's right to his day in court to his opponents, " and "would force me to give up my defenses."
JAMS rule 31(b), as then in effect, provided:
"JAMS requires that the Parties deposit the fees and expenses for the Arbitration prior to the Hearing and the Arbitrator may preclude a Party that has failed to deposit its pro-rata or agreed-upon share of the fees and expenses from offering evidence of any affirmative claim at the Hearing. JAMS may waive the deposit requirement upon a showing of good cause."
The arbitrator denied Koehler's request for a fee waiver, without prejudice. The arbitrator found that the application was incomplete because it did not "include income from Mr. Koehler's continued practice of law and therefore does not completely reflect Mr. Koehler's income." The arbitrator also noted that the request was made under the California Rules of Court applicable to fee waivers in the superior court, and that those rules were not applicable to a private arbitration. The arbitrator stated that he was denying the fee request without prejudice to Koehler submitting points and authorities showing such requests for fee waivers were applicable to private arbitration.
The plaintiffs agreed to advance Koehler's share of the arbitrator's fees so as to avoid suspension of the proceedings.
The arbitrator also denied Koehler's motion to vacate the arbitration proceedings. The arbitrator first found that it was Koehler who had requested arbitration. The arbitrator had assured Koehler that he could present all of his defenses at the hearing, and there was nothing in JAMS rule 31(b) that precluded him from presenting any defenses. The arbitrator also noted that because plaintiffs had advanced his share of the fees, that guaranteed that the matter would proceed and that Koehler would have a full and fair hearing.
2. Motion to substitute judicial arbitration in place of private arbitration
In May 2008 Koehler filed a motion with the trial court, requesting that the arbitration be vacated and substituted with judicial arbitration. He asserted that he had "become trapped into a private arbitration program that sold my rights to my opponents when I was unable to pay their ever-escalating fees and [they] would not grant me a fee waiver."
Thereafter, Koehler filed an ex parte application to switch from private arbitration to judicial arbitration, essentially making the same arguments as in his noticed motion. At the hearing on the ex parte application, by agreement of the parties, the court treated the matter as a noticed motion.
The court denied the motion, first noting that Koehler had obtained the order referring the case to binding arbitration on his motion, which was opposed by the plaintiffs. The court stated: "There is no authority for me to now reverse that ruling. The fact that you're not comfortable/happy there, or perhaps having difficulty affording it, are not legal bases for me to undo what has been done at your insist[e]nce."
3. Arbitration hearing
The arbitration hearing was held on June 19-20 and 23-25, 2008. The parties submitted documentary evidence and called 11 witnesses. At the conclusion, the parties presented oral arguments and the matter was submitted for decision. The arbitrator found against Koehler, rejecting several defenses he raised, including that the files were abandoned by plaintiffs, there was a temporary impossibility of performance caused by his illness, and plaintiffs did not mitigate their damages. The arbitrator found that Koehler violated the California Rules of Professional Conduct and his ethical and fiduciary duties to plaintiffs by not turning the client files over to plaintiffs for over two years. The arbitrator found that plaintiffs "have been damaged by incurring a great expense in attempting to retrieve from Koehler [] their file and documents."
The arbitrator awarded plaintiffs $55,000 for their costs incurred in seeking the return of the files from Koehler. Plaintiffs were also awarded arbitration fees in the amount of $43,119.56.
4. Petition to confirm arbitration award
In January 2009 plaintiffs filed with the trial court a petition to confirm the arbitrator's award.
Koehler opposed the petition, asserting (1) the appointment of the arbitrator should be vacated because JAMS rule 31(b) deprived him of his constitutional right of access to courts; (2) the case should be dismissed because plaintiffs' claims should have been brought in another case; (3) in the alternative, he renewed his request for judicial arbitration.
5. Trial court's ruling
The court first found that as to Koehler's constitutional claim, he failed to timely file a motion to vacate the arbitration award. The court also found that even if his opposition constituted a timely motion to vacate, it lacked merit because it was an improper attempt to renew his ex parte application to switch to judicial arbitration. The court found that to the extent he was seeking relief under Code of Civil Procedure section 473 from the July 2006 order for binding arbitration, it was untimely. The court also found there was no statutory authority to change the case to judicial arbitration.
The court entered a judgment confirming the arbitration award. This timely appeal follows.
DISCUSSION
I. DEFENSES BEING "SOLD" TO OPPONENTS
Koehler asserts that the trial court erred in failing to stop the arbitration because "the defenses of the indigent had been auctioned off, and sold, to his opponents in exchange for them advancing his portion of JAMs' fees." This contention is unavailing.
First, JAMS rule 31(b) does not state that Koehler would give up any defenses if he failed to pay his share of JAM's fees. Rather, it only states that such failure may preclude a party "from offering evidence of any affirmative claim at the Hearing." (Italics added.) Further, as is demonstrated by the arbitrator's ruling, he did raise several defenses at the hearing, which were rejected by the arbitrator. Indeed, Koehler does not identify any defenses that were allegedly "auctioned off" or "sold."
Koehler also asserts that JAM's rule 31(b) violates an indigent's right to access to the judicial system, resulting in a violation of his right to due process and a fair trial. In support of this contention he cites Boddie v. Connecticut (1971) 401 U.S. 371. However, that case only "involved a rule that barred indigent litigants from using the judicial process in circumstances where they had no alternative to that process." (Kadrmas v. Dickinson Pub. Sch. (1988) 487 U.S. 450, 460 [108 S.Ct. 2481, 2489].) Here, by contrast Koehler affirmatively elected to forgo the judicial process in favor of arbitration in his retainer agreement he prepared for plaintiffs. He brought a petition to compel arbitration, over the objections of plaintiffs, which the court granted. Thus, he affirmatively invoked the arbitration process in lieu of the court system.
Koehler also relies upon Parada v. Superior Court (2009) 176 Cal.App.4th 1554, wherein the Court of Appeal found an agreement to arbitrate unconscionable in an action by securities investors against a precious metal dealer. However, in that case the court found the agreement unconscionable because it was a contract of adhesion that could not be negotiated, it required a three-person arbitration panel, the individual investors could not afford the arbitrator's fees, the investors' claims were small, and they were not allowed to consolidate their claims. (Id. at pp. 1570-1583.)
Here, by contrast, the arbitration agreement was drafted by Koehler, he stipulated to the use of JAMS, and there was no requirement of a three-judge panel. Moreover, to prove the agreement was unconscionable, Koehler needed to prove he was unable to pay the fees at the time the agreement was entered into. (Parada, supra, 176 Cal.App.4th at p. 1583.) He has submitted no evidence he was unable to pay arbitration fees at the time he signed his retainer agreement. Finally, the arbitrator denied his fee waiver request based upon the fact Koehler did not submit evidence of his income from his ongoing law practice. Koehler thereby failed to show he was "indigent" even at the time of the arbitration.
II. ALLEGED ERROR IN CONFIRMING ARBITRATION AWARD
Koehler next contends that it was "double error" for the trial court to confirm the arbitration award, raising the same contentions he raised in the preceding section. As we have concluded the court did not err in refusing to stop the arbitration from going forward, the court also did not err in thereafter confirming the arbitration award.
III. DENIAL OF HIS DEMURRER AND MOTION TO STRIKE
Koehler contends that the court erred in overruling his demurrer and denying his motion to strike because the case was moot as plaintiffs received the case files shortly after this case was filed. However, this contention ignores the expenses plaintiffs incurred over two years in attempting unsuccessfully to obtain their files. The fact that plaintiffs had a cognizable claim for damages makes Koehler's mootness claim untenable.
IV. ARBITRATOR'S DAMAGES AWARD
Koehler last contends that the arbitration award failed to specify the basis for the award of $55,000 in damages. However, the arbitrator stated that plaintiffs had gone to great expense to obtain their files, caused by Koehler's intransigence, and awarded them $55,000 as damages for that expense.
DISPOSITION
The judgment is affirmed. Plaintiffs shall recover their costs on appeal.
WE CONCUR: McINTYRE, J., AARON, J.