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Schwartz v. Chow

February 3, 2005

FREDERIC W. SCHWARTZ, JR., AND CADEAUX & TAGLIERI, P.C., APPELLANTS
v.
RICHARD CHOW, APPELLEE



Appeal from the Superior Court of the District of Columbia. (CA-5624-98). (Hon. John H. Bayly, Jr., Trial Judge).

Before Terry, Reid, and Washington, Associate Judges.

Per curiam.

Argued February 12, 2002

Appellants seek to vacate a decision of the Attorney-Client Arbitration Board ("the Board"),*fn1 awarding them $26,000 in fees and $2,230 in expenses for their representation of appellee Richard Chow in litigation arising out of an automobile accident and in seven other unrelated matters. Appellants maintain that the Board exceeded its authority by retroactively applying a rule not in effect at the time they entered into their retainer agreement with Mr. Chow, with the result that they were not awarded their full fee. We agree that the basis for the Board's award is unclear, but for that very reason we reject appellants' argument. Because the law is well established that an arbitrator is not required to provide an explanation for a ruling, and because appellants have presented no other valid ground for relief, we decline to remand the case and thus affirm the trial court's decision upholding the award.

I.

On May 28, 1982, Mr. Chow, then named Rong Yao Zhou, and his wife, Xiu Juan Wu, were involved in a serious automobile accident. Mr. Chow settled with the driver of the other car for $220,000, but filed suit against the owner of a restaurant who had served alcohol to the driver shortly before the accident occurred. See Zhou v. Jennifer Mall Restaurant, Inc., 534 A.2d 1268, 1269 (D.C. 1987) ("Zhou I"); Zhou v. Jennifer Mall Restaurant, Inc., 699 A.2d 348, 350 (D.C. 1997) ("Zhou II"). Although the case was originally dismissed by the trial court, Mr. Chow won reinstatement of his complaint on appeal. Zhou I, 534 A.2d at 1276. After a long litigation process, including another appeal, Mr. Chow obtained a judgment for $200,000 in 1997.*fn2 Zhou II, 699 A.2d at 350. Mr. Chow is now divorced from his wife, and, under their divorce agreement, he is entitled to half of the judgment.*fn3

Throughout the litigation, Mr. Chow was represented by the law firm of Cadeaux & Taglieri, P.C. The law firm, in turn, engaged the services of Frederic Schwartz, Esquire, to assist in presenting both of Mr. Chow's appeals. The law firm and Mr. Schwartz agreed to divide the fee from the case evenly. In this proceeding appellants claim $50,000 in legal fees from the 1997 judgment, based on a retainer agreement between Mr. Chow and Cadeaux & Taglieri that was signed shortly after the accident occurred. The agreement*fn4 states that the firm is entitled to:

a sum equal to 33a percent of any amount recovered or collected for or by [Chow], through or by compromise, settlement or otherwise before this suit is filed; in the event that the suit is filed, the sum shall be equal to 40 percent of any recovery; and in the event that it is necessary to prosecute an appeal, the sum shall be equal to 50 percent of any recovery.

Because the matter was not finally decided until the second appeal (Zhou II), appellants claimed they were entitled to a 50 percent fee on Mr. Chow's half of the $200,000 recovery, as well as $2,230 in costs.*fn5

Mr. Chow denied signing the retainer agreement*fn6 and filed for arbitration pursuant to Rule XIII of the District of Columbia Bar Rules.*fn7 Appellants counterclaimed for $8,219 in fees relating to seven other matters on which they had done work for Mr. Chow, including a "domestic action" relating to his divorce in which they sought fees of $900.*fn8 The Board awarded appellants $26,000 in fees and $2,230 in expenses, but did not explain the reasons underlying its award.*fn9

Appellants filed a motion in the Superior Court to vacate the award, asserting that the rationale of the award was apparent and that the Board exceeded its authority by retroactively applying rules that were not in effect at the time the retainer agreement was signed. The court found, however, that the rationale of the award was not apparent and therefore confirmed the award. This appeal followed.

II.

It is firmly established that "[j]udicial review of an arbitrator's decision is extremely limited, and a party seeking to set it aside has a heavy burden." Lopata v. Coyne, 735 A.2d 931, 940 (D.C. 1999) (citations omitted); accord, e.g., Tauber v. Trammell Crow Real Estate Services, Inc., 738 A.2d 1214, 1216-1217 (D.C. 1999). D.C. Code § 16-4311 (a) (2001) sets forth the grounds on which a court is authorized to vacate an arbitration award.*fn10 In addition to those statutory grounds, we have also said that "[w]here it appears that the arbitrator manifestly disregarded the law, court inquiry may be undertaken." Lopata, 735 A.2d at 940 (citations omitted). The nature and extent of that inquiry may be limited, however, "particularly if the decision does not approach being arbitrary and capricious." Id. (footnote omitted).

Arbitrators, moreover, are not required to state the grounds for their decisions. Poire v. Kaplan, 491 A.2d 529, 534 (D.C. 1985); see Sargent v. Paine Webber Jackson & Curtis, Inc., 280 U.S. App. D.C. 7, 10, 882 F.2d 529, 532 (1989), cert. denied, 494 U.S. 1028 (1990); Sobel v. Hertz, Warner & Co., 469 F.2d 1211, 1214 (2d Cir. 1972) ("a requirement that arbitrators explain their reasoning in every case . . . would undermine the very purpose of arbitration, which is to provide a relatively quick, efficient and informal means of private dispute settlement"). Therefore, unless manifest disregard of the law is clear, "courts will not look beyond the lump sum award in an attempt to analyze the reasoning process of the arbitrators." Kurt ...


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