Prevail at arbitration? Make sure your arbitrator rules on your fees and costs, or they may be waived.
And no, voluntarily paying a judgment does not automatically forfeit your appeal. Usually.
Those two potential pitfalls arose in Garrett & Tully, P.C., v. Aliso Properties, LLC, et al., (D2d3, Dec. 9, 2025, No. B332463) (non-pub. opn.). In an arbitration between a client and former attorneys, Garrett & Tully, attorneys were awarded their fees for their past services. Although the arbitrators did not award any pre-award interest, the Superior Court did, and the 3-years’ interest totaled over $25,000. The client appealed.
The attorneys moved to dismiss the appeal. In a shrewd move immediately after the award, the client had voluntarily paid the award immediately, even before it was reduced to judgment, so as to cut off any right to post-award interest. The attorneys claim that this voluntary satisfaction of judgment forfeited the appeal. Not so. “[W]hen there has been a payment of the judgment by the appellant, he does not lose his right to appeal if it is compulsory, such as under execution or other coercion.” (Reitano v. Yankwich (1951) 38 Cal.2d 1, 3 (Reitano).) Payment of a judgment is presumed compulsory unless the payment was made “ ‘by way of compromise and settlement or under an agreement not to appeal or under circumstances leaving only a moot question for determination.’ [Citation.]” ([Id. at p. 4]; see also Retzloff v. Moulton Parkway Residents’ Assn., No. One (2017) 14 Cal.App.5th 742, 748 (Retzloff).)
Opposite of making that showing the attorneys undermined it. The record showed that the attorneys threatened to record an abstract of judgment if the client did not immediately pay. The attorney's motion to dismiss the appeal was denied.
Moving to the merits. The court of appeal agreed with the client that the trial court erred when it awarded the pre-award interest and costs that the arbitration award had not addressed. Attorneys prayed for interest and costs in arbitration, but the the arbitration award was silent on those issues. In arbitration, all claims and issues—including fees and costs—are before the arbitrator. And even if the arbitrator fails to consider the issue, “the failure to consider it is only an error of judgment that in the absence of fraud or gross misconduct is not subject to judicial review. ‘Even if the omission to find as to those items was due to a mistake on the part of the arbitrators, nevertheless the omission was in effect a disallowance of those items, which became final and conclusive when the award was made and proper notice thereof given to the interested parties.’ [Citations.]” (Sapp v. Barenfeld (1949) 34 Cal.2d 515, 523) (Sapp), italics added; see also Griffith Co. v. San Diego College for Women (1955) 45 Cal.2d 501, 516 [“ ‘It must be presumed “[t]] hat all matters within ... a submission to arbitration were laid before the arbitrators and passed upon by them.” ’ ”].)
The court concluded that, whether the arbitrator impliedly denied the cost issues or merely overlooked them, the trial court was not permitted to modify the award.
Takeaways
