Appeals court rules against attorney seeking fees in American Arbitration Association award

By Angela Underwood | Jun 12, 2017

SAN JOSE — A California appeals court recently overturned a lower court’s ruling to deny an attorney’s client an arbitration award.

On May 31, the California Sixth District Court of Appeal partially vacated the lower court’s decision, ruling that an arbitrator or court will determine a new arbitration award amount.

The case stems from a dispute of attorney’s fees for services Alan Heimlich, an attorney, rendered to Shiraz M. Shivji’s business.

In 2012, Heimlich filed a complaint for unpaid invoices. Shivji, however, countered with a $30,001 compromise. Heimlich declined the offer.

After numerous denied judgements to both parties, Heimlich filed a “complaint that added two causes of action for fraud and another for declaratory relief,” according to the appeals court decision. 

Shivji, however, requested arbitration. After an award issued by the American Arbitration Association (AAA) denied requests by Heimlich and Shivji for damages, costs and attorney fees, the matter went before the appeals court.

The attorney argued that Shivji did not file a claim under Section 998 of the California Civil Code of Procedure in a timely matter. Section 998 governs compromises in arbitration disputes.

The appeals court disagreed with the attorney. 

“We conclude that [the] client timely presented his Section 998 claim to the arbitrator, the arbitrator should have reached the merits of that claim and the arbitrator’s refusal to hear evidence of the Section 998 offer warranted partially vacating the arbitration award,” the appeals court said in its decision.

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American Arbitration Association California 6th District Court of Appeal

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