Page 1 of 18 PETITIONER’S REPLY TO RESPONDENTS’ OPPOSITION TO CONFIRM

THE ARBITRATION AWARD

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

TO ALL PARTIES AND TO THEIR ATTORNEYS OF RECORD HEREIN:

NOTICE IS HEREBY GIVEN that on Tuesday, March 28, 2017, at 2:00 p.m. in 

Courtroom 1 of the United States District Court, Northern District of California, San Francisco / 

Oakland Division, located at 1301 Clay Street, Oakland, California concerning the 

Petition to Confirm and Correct the Arbitration Award;

Respondents’/Defendants’ Opposition;

Respondents’/Defendants’ Motion to Vacate the Arbitration Award; and 

Petitioner’s/ Plaintiff’s Opposition to the Motion to Vacate.

Walt Pennington

State Bar No 214470

 Pennington Law Firm

 3302 30th Street

 San Diego, CA 92104-4535

 Telephone: 619 940 6157

 Email: wpennington@pennfirm.com

Attorney for Aspic Engineering and Construction Company, Petitioner

ASPIC ENGINEERING AND 

CONSTRUCTION COMPANY,

Petitioner,

v. 

ECC CENTCOM CONSTRUCTORS 

LLC, et. al

Respondents

)

)

)

)

)

)

)

)

)

)

)

)

Case No. 4:17-cv-00224-YGR

PETITIONER’S REPLY TO 

RESPONDENTS’ RESPONSE TO 

PETITION TO CONFIRM AND 

CORRECT THE ARBITRATION 

AWARD

Hearing Date: March 28, 2017

Time: 2:00 p.m.

Case 4:17-cv-00224-YGR Document 26 Filed 02/24/17 Page 1 of 18
Page 2 of 18 PETITIONER’S REPLY TO RESPONDENTS’ OPPOSITION TO CONFIRM

THE ARBITRATION AWARD

TABLE OF CONTENTS

INTRODUCTION .......................................................................................................................... 5

ARGUMENTS AND AUTHORITIES........................................................................................... 5

A. This Case Is Governed By California Law................................................................... 5

1. The New York Convention has no application to this domestic award. ...................... 6

2. California law, not the FAA, governs this action. ........................................................ 6

B. This Court Should Confirm the Arbitration Award of $1,072,520.90............................. 9

1. Standard of Review. ..................................................................................................... 9

3. This Court should confirm, not vacate, the arbitration award of $1,072,520.90 on 

Aspic’s claims under the contract. ...................................................................................... 10

C. This Court Should Correct the Award Pursuant to the CAA to Award Aspic’s 

Attorney’s Fees...................................................................................................................... 11

1. Under California law, error in the failure to award attorney’s fees is subject to 

correction where such would not affect the merits of the decision. .................................... 11

2. The parties’ agreement here provides for an award of attorney fees and costs under 

the precise facts of this case. ............................................................................................... 12

3. The arbitrator exceeded his authority under California law by failing to award 

attorney’s fees and costs under the parties’ agreement. ...................................................... 13

4. The arbitrator’s failure to find that Aspic was the prevailing party does not preclude 

Aspic’s entitlement to fees under the contract. ................................................................... 14

D. Aspic’s Claim for Attorney’s Fees is Reasonable. ..................................................... 14

1. Petitioner’s attorney’s fees and costs are reasonable given ECC’s aggressive litigation 

strategy. ............................................................................................................................... 15

2. ECC’s claim that Aspic did not win the arbitration has no merit............................... 16

3. Aspic is entitled to a multiplier under California law. ............................................... 16

Conclusion .................................................................................................................................... 17

Case 4:17-cv-00224-YGR Document 26 Filed 02/24/17 Page 2 of 18
Page 3 of 18 PETITIONER’S REPLY TO RESPONDENTS’ OPPOSITION TO CONFIRM

THE ARBITRATION AWARD

TABLE OF AUTHORITIES

Cases

Advanced Micro Devices, Inc. v. Intel Corp., 9 Cal.4th 362, 383, 36 Cal.Rptr.2d 581, 885 P.2d 

994 (1994)................................................................................................................................. 13

Bosack v. Soward, 586 F.3d 1096 (9th Cir. 2009) .......................................................................... 9

DiMarco v. Chaney, 37 Cal.Rptr.2d 558, 31 Cal.App.4th 1809 (Cal. App. 1995)..... 11, 12, 13, 14

G.C. & K.B. Investments, Inc. v. Wilson, 326 F.3d 1096 (9th Cir. 2003) ..................................... 9

Gates v. Deukmejian, 987 F.2d 1392 (9th Cir. 1992)................................................................... 15

Greenspan v. LADT, LLC, 185 Cal.App.4th 1413, 111 Cal. Rptr. 3d 468 (2010) ...................... 11

Gueyffier v. Ann Summers, Ltd., 50 Cal.Rptr.3d 294, 144 Cal.App.4th 166 (Cal. App. 2006)... 6, 

13

Hall St. Associates, LLC v. Mattel, Inc., 552 U.S. 576 (2008) ...................................................... 9

Hall v. Bolger, 768 F.2d 1148 (9th Cir.1985)............................................................................... 14

Hensley v. Eckerhart, 461 U.S. 424 (1983).................................................................................. 14

Howard Fields & Assocs. v. Grand Wailea Co., 848 F.Supp. 890 (D.Haw.1993)......................... 7

Jordan v. Department of Motor Vehicles, 100 Cal.App.4th 431, 123 Cal.Rptr.2d 122 (2002).... 10

Jordan v. Multnomah County, 815 F.2d 1258 (9th Cir.1987) ...................................................... 15

Ketchum v. Moses, 104 Cal.Rptr.2d 377 (2001).................................................................... 15, 16

Kyocera Corp. v. Prudential-Bache Trade Servs., Inc., 341 F.3d 987 (9th Cir. 2003)................... 9

Lindenstadt v. Staff Builders, Inc. 55 Cal.App.4th 882, 64 Cal.Rptr.2d 484 (1997) ................... 11

Mitchell v. Tillett, 15-cv-04044-VC, 2016 U.S. Dist. LEXIS 153686; 2016 WL 6436820 (N.D. 

Cal. Oct. 28, 2016)...................................................................................................................... 8

Mitsubishi v. Soler Chrysler-Plymouth, 473 U.S. 614, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985)... 7

Morales v. City of San Rafael, 96 F.3d 359 (9th Cir.1996).......................................................... 15

Preston v. Ferrer, 128 S.Ct. 978, 169 L.Ed.2d 917, 552 U.S. 346 (2008)...................................... 6

Southern Cal. Gas Co. v. Util. Workers Union of Am., Local 132, AFL-CIO, 265 F.3d 787 (9th 

Cisr. 2001)................................................................................................................................... 9

Sovak v. Chugai Pharmaceutical Co., 280 F.3d 1266 (2002)......................................................... 8

Case 4:17-cv-00224-YGR Document 26 Filed 02/24/17 Page 3 of 18
Page 4 of 18 PETITIONER’S REPLY TO RESPONDENTS’ OPPOSITION TO CONFIRM

THE ARBITRATION AWARD

Stead Motors v. Auto. Machinists Lodge, 886 F.2d 1200 (9th Cir. 1989) ..................................... 9

United States Olympics Committee v. Ruckman, No. 09-4618 (FLW), 2010 U.S. Dist. LEXIS 

52840 *15 (D.N.J. 2010)............................................................................................................. 8

Valrose Maui, Inc. v. Maclyn Morris, Inc., 105 F.Supp.2d 1118 (D. Hawaii, 2000)..................... 7

Virgin Islands Housing Authority v. Coastal General Const. Services Corp., 27 F.3d 911, 30 V.I. 

417 (3d Cir. 1994)....................................................................................................................... 8

Vizcaino v. Microsoft Corp., 290 F.3d 1043 (9th Cir.2002).......................................................... 15

Statutes

9 U.S.C. § 10 (a) ........................................................................................................................... 10

Cal. Code Civ. Proc. § 1286.2 ................................................................................................ 10, 11

Cal. Code Civ. Proc. § 1286.6 ...................................................................................................... 14

Cal. Code Civ. Proc. § 1717 (a).................................................................................................... 12

Cal. Code Civ. Proc. § 998 ........................................................................................................... 13

Case 4:17-cv-00224-YGR Document 26 Filed 02/24/17 Page 4 of 18
Page 5 of 18 PETITIONER’S REPLY TO RESPONDENTS’ OPPOSITION TO CONFIRM

THE ARBITRATION AWARD

INTRODUCTION

Petitioner Aspic Engineering and Construction Company (“Aspic”) files this Reply to the 

Response to Petition to Confirm and Correct the Arbitration Award filed by ECC CENTCOM

Constructors LLC., et al. (“ECC”), and would ask that Aspic’s Petition to Confirm and Correct 

the Arbitration Award be granted for the reasons set forth herein.

ECC has controlled the relationship between these parties at every step of the way. ECC 

drafted the contract between them, requiring the application of California law. ECC terminated 

the contract between them. ECC made the decision not to pay Aspic. ECC made the decision to 

breach its duty to settle with Aspic. ECC demanded the mediation required by its contract and 

received it. ECC demanded the arbitration required by its contract and received it. Now ECC has 

removed this action to the court of its choice even though its contract requires ECC to submit to 

the jurisdiction of California state courts for the enforcement of any arbitration award. All along 

the line, ECC has received what it has wanted. ECC’s only real complaint now is that it didn’t 

receive the result it wanted. That is not a basis for this Court to depart from clear and longestablished precedent that, except in very limited circumstances not present here, an arbitrator’s 

decision cannot be reviewed for errors of fact or law. Nor is there cause for this Court to apply 

any law other than California law, which requires the Court to correct the award to include the 

attorney’s fees specifically commanded by the contract ECC drafted. Such a correction may be 

made without affecting the merits of the decision upon the controversy submitted. ECC has 

offered no cause for this Court to do otherwise.

ARGUMENTS AND AUTHORITIES

A. This Case Is Governed By California Law.

By the terms of the contract ECC drafted, this case is governed by California law: “13.3

Applicable State Law And Compliance. This Agreement shall be governed by and construed

in accordance with the laws of the State of California.” This fact is not altered by ECC’s 

removal of the case (removal despite the contract’s provision that “[e]ach Party hereto accepts

jurisdiction of the courts of the State of California for the purposes of commencing, conducting,

Case 4:17-cv-00224-YGR Document 26 Filed 02/24/17 Page 5 of 18
Page 6 of 18 PETITIONER’S REPLY TO RESPONDENTS’ OPPOSITION TO CONFIRM

THE ARBITRATION AWARD

and enforcing such arbitration proceedings.”) Contract, §12.4 (c) (emphasis added) (Docket 17, 

p. 49 of 628, Petition Exh. 3, p. 28). 

1. The New York Convention has no application to this domestic award.

ECC suggests that this action is governed by the New York Convention because Aspic is 

an Afghan corporation. Not so. In Gueyffier v. Ann Summers, Ltd., 50 Cal.Rptr.3d 294, 144 

Cal.App.4th 166 (Cal. App. 2006), rev’d on other grounds, 43 Cal.4th 1179, 184 P.3d 739, 77 

Cal. Rptr. 3d 613 (Cal. 2008), the court addressed the identical issue where the arbitration took 

place in California and enforcement of the award was sought in California: “The first sentence of 

New York Convention Article I(1)—’This convention shall apply to the recognition and 

enforcement of arbitral awards made in the territory of a State other than the State where 

recognition and enforcement of such awards are sought ...’ —is inapplicable here. The award 

was “made”—as that term is used in the first sentence of Article I(1) of the New York 

Convention—in California and the enforcement proceedings are occurring here. Thus, the 

present case does not involve an arbitration award returned in a foreign country.” The same is 

true here; the New York Convention does not apply.

2. California law, not the FAA, governs this action. 

Neither does the Federal Arbitration Act (FAA) apply. This arbitration was conducted in 

California under California law. Aspic filed its to confirm the award in California State Court 

under the California Arbitration Act (CAA). The Federal Arbitration Act (FAA) does not now 

become the governing law of the case simply by virtue of removal. ECC cites no authority in 

support of this position.

The FAA “establishes a national policy favoring arbitration when the parties contract for 

that mode of dispute resolution.” Preston v. Ferrer, 552 U.S. 346 (2008). Indeed, the purpose of 

federal legislation concerning arbitration was “to overcome courts’ refusals to enforce 

agreements to arbitrate.” Mastrobuono v. Shearson Lehman Hutton Inc., 514 U.S. 52 (1995). But 

the U.S. Supreme Court has found that the CAA has a similar policy that favors arbitration:

Noting that the California rules were ‘manifestly designed to encourage 

resort to the arbitral process,’ id., at 476, and that they ‘generally foster[ed] 

Case 4:17-cv-00224-YGR Document 26 Filed 02/24/17 Page 6 of 18
Page 7 of 18 PETITIONER’S REPLY TO RESPONDENTS’ OPPOSITION TO CONFIRM

THE ARBITRATION AWARD

the federal policy favoring arbitration,’ id., at 476, n. 5, we concluded that 

such an interpretation was entirely consistent with the federal policy ‘to 

ensure the enforceability, according to their terms, of private agreements to 

arbitrate.’ Id., at 476. After referring to the holdings in Southland and Perry, 

which struck down state laws limiting agreed-upon arbitrability, we added:

‘But it does not follow that the FAA prevents the enforcement of 

agreements to arbitrate under different rules than those set forth in the Act 

itself. Indeed, such a result would be quite inimical to the FAA’s primary 

purpose of ensuring that private agreements to arbitrate are enforced 

according to their terms. Arbitration under the Act is a matter of consent, 

not coercion, and parties are generally free to structure their arbitration 

agreements as they see fit. Just as they may limit by contract the issues 

which they will arbitrate, see Mitsubishi [v. Soler Chrysler-Plymouth, 473 

U.S. 614, 628, (1985), so too may they specify by contract the rules under 

which that arbitration will be conducted.’ Volt, 489 U.S. at 479.

Mastrobuono, supra, 514 U.S. 52 (1995) (emphasis added). Here, ECC cannot establish 

that California law undermines the purpose of the FAA or prevents the enforcement of the 

arbitration agreement. As a result, the CAA is not preempted; the FAA does not apply. 

For this reason, district courts in this circuit have recognized that that state law, not the 

FAA, governs the confirmation of an arbitration award. In Valrose Maui, Inc. v. Maclyn Morris, 

Inc., 105 F.Supp.2d 1118 n.6 (D. Hawaii, 2000), the court explained: 

Citing Howard Fields & Assocs. v. Grand Wailea Co., 848 F.Supp. 890 

(D.Haw.1993), VMI argues that the Federal Arbitration Act governs this 

case. Howard Fields, however, dealt with arbitrability of a dispute, not with 

what law governs confirmation of an arbitration award. This case rather 

raises issues addressed in Volt Info. Sciences, Inc. v. Bd. of Trustees of 

Leland Stanford Junior Univ., 489 U.S. 468, 109 S.Ct. 1248, 103 L.Ed.2d 

488 (1989). In Volt, the Supreme Court held that, even if the Federal 

Arbitration Act applied to a dispute, that Act did not preempt California law 

on staying an arbitration when the parties had agreed to arbitrate in 

accordance with California law. Id. at 476-78, 109 S.Ct. 1248. Volt noted 

that the federal policy is to ensure the enforceability of private agreements 

to arbitrate, but that “[t]here is no federal policy favoring arbitration under a 

certain set of procedural rules.” Id. at 476, 109 S.Ct. 1248. Hawaii law also 

ensures the enforceability of private arbitration agreements. Just as 

California law was applied in Volt, Hawaii law governing the confirmation 

and vacation of the Arbitration Award applies here. 

Valrose Maui, Inc., 105 F.Supp.2d at 1118 n.6.

Case 4:17-cv-00224-YGR Document 26 Filed 02/24/17 Page 7 of 18
Page 8 of 18 PETITIONER’S REPLY TO RESPONDENTS’ OPPOSITION TO CONFIRM

THE ARBITRATION AWARD

ECC’s reliance on Sovak v. Chugai Pharmaceutical Co., 280 F.3d 1266 (9

th Cir. 2002) is 

misplaced. There, one party claimed that state law exempted it from arbitration. The court held 

that state law was preempted to the extent it interfered with the FAA’s policy favoring the 

arbitration of disputes. No such dispute exists here where the arbitration is concluded. Neither 

does Mitchell v. Tillett, 2016 U.S. Dist. LEXIS 153686; 2016 WL 6436820 (N.D. Cal. Oct. 28, 

2016) support ECC’s position. In Mitchell, the court recognized that the domestic law which 

governs the arbitration also governs rules for vacatur, which in that case was not the FAA. 

Mitchell v. Tillett at *3. Mitchell supports Aspic’s position that the appropriate law to apply in 

enforcing the arbitration award is the same domestic law that governed the arbitration –

California law. 

ECC is also mistaken on its related claim that the FAA somehow provides a basis for 

removal jurisdiction. It is settled law that the FAA is not an independent source of jurisdiction: 

“There is no statutory grant of jurisdiction over actions seeking to confirm arbitration awards.”

United States Olympics Committee v. Ruckman, No. 09-4618 (FLW), 2010 U.S. Dist. LEXIS 

52840 *15 (D.N.J. 2010); see also Virgin Islands Housing Authority v. Coastal General Const. 

Services Corp., 27 F.3d 911, 30 V.I. 417 (3d Cir. 1994). 

Finally, if this Court should determine that the FAA preempts the CAA, that preemption 

should be limited to the procedural law only to the extent that it conflicts with the CAA; 

California substantive law should apply to the calculation of attorney’s fees and costs upon a 

correction. Mastrobuono v. Shearson Lehman Hutton Inc., 514 U.S. 52 (1995) involved an 

arbitration under New York law. The Supreme Court held that the FAA preempted state law to 

the extent that it limited the arbitrator’s authority to make a decision, while New York 

substantive law applied to the contract, claims and damage:

We think the best way to harmonize the choice-of-law provision with the arbitration 

provision is to read ‘the laws of the State of New York’ to encompass substantive principles that 

New York courts would apply, but not to include special rules limiting the authority of 

Case 4:17-cv-00224-YGR Document 26 Filed 02/24/17 Page 8 of 18
Page 9 of 18 PETITIONER’S REPLY TO RESPONDENTS’ OPPOSITION TO CONFIRM

THE ARBITRATION AWARD

arbitrators. Thus, the choice-of-law provision covers the rights and duties of the parties, while 

the arbitration clause covers arbitration; neither sentence intrudes upon the other.

Mastrobuono supra, 514 U.S. 52, 115 S.Ct. 1212, 131 L.Ed.2d 76.

B. This Court Should Confirm the Arbitration Award of $1,072,520.90.

1. Standard of Review.

The role of the courts in reviewing arbitration awards is extremely circumscribed. 

Southern Cal. Gas Co. v. Util. Workers Union of Am., Local 132, AFL-CIO, 265 F.3d 787, 792 

(9th Cisr. 2001) (citing Stead Motors v. Auto. Machinists Lodge, 886 F.2d 1200, 1208 n. 8 (9th 

Cir. 1989) (en banc)). The confirmation of an arbitration award is meant to be a summary 

proceeding. G.C. & K.B. Investments, Inc. v. Wilson, 326 F.3d 1096, 1105 (9th Cir. 2003). 

“‘Neither erroneous legal conclusions nor unsubstantiated factual findings justify federal court 

review of an arbitral award.’“ Bosack v. Soward, 586 F.3d 1096, 1102 (9th Cir. 2009) (quoting 

Kyocera Corp. v. Prudential-Bache Trade Servs., Inc., 341 F.3d 987, 994 (9th Cir. 2003)). 

Rather, grounds for vacating an award are limited to those specified by statute. Hall St. 

Associates, LLC v. Mattel, Inc., 552 U.S. 576, 584 (2008) (holding Section 10 provides the 

FAA’s exclusive grounds for vacatur of an arbitration award).

The CAA strictly defines the circumstances in which an arbitration award can be vacated:

(1) The award was procured by corruption, fraud or other undue means.

(2) There was corruption in any of the arbitrators.

(3) The rights of the party were substantially prejudiced by misconduct of a 

neutral arbitrator.

(4) The arbitrators exceeded their powers and the award cannot be corrected 

without affecting the merits of the decision upon the controversy submitted.

(5) The rights of the party were substantially prejudiced by the refusal of the 

arbitrators to postpone the hearing upon sufficient cause being shown 

therefor or by the refusal of the arbitrators to hear evidence material to the 

controversy or by other conduct of the arbitrators contrary to the provisions 

of this title.

(6) An arbitrator making the award either: (A) failed to disclose within the 

time required for disclosure a ground for disqualification of which the 

arbitrator was then aware; or (B) was subject to disqualification upon 

grounds specified in Section 1281.91 but failed upon receipt of timely 

Case 4:17-cv-00224-YGR Document 26 Filed 02/24/17 Page 9 of 18
Page 10 of 18 PETITIONER’S REPLY TO RESPONDENTS’ OPPOSITION TO CONFIRM

THE ARBITRATION AWARD

demand to disqualify himself or herself as required by that provision. 

However, this subdivision does not apply to arbitration proceedings 

conducted under a collective bargaining agreement between employers and 

employees or between their respective representatives.

Cal. Code Civ. Proc. § 1286.2.

Though it does not apply here, the FAA similarly authorizes courts to vacate an award in 

only very limited circumstances, including:

(1) where the award was procured by corruption, fraud, or undue means;

(2) where there was evident partiality or corruption in the arbitrators, or 

either of them;

(3) where the arbitrators were guilty of misconduct in refusing to postpone 

the hearing, upon sufficient cause shown ... or of any other misbehavior by 

which the rights of any party have been prejudiced; or

(4) where the arbitrators exceeded their powers, or so imperfectly executed 

them that a mutual, final, and definite award upon the subject matter 

submitted was not made.

9 U.S.C. § 10(a).

3. This Court should confirm, not vacate, the arbitration award of 

$1,072,520.90 on Aspic’s claims under the contract.

California law is clear that this Court must confirm the award, unless it corrects or 

vacates the award or dismisses the proceedings and the grounds to vacate or correct are limited. 

An arbitrator’s decision is not generally reviewable for errors of fact or law, whether or 

not such error appears on the face of the award and causes substantial injustice to the parties. 

There are, however, limited exceptions to this general rule, which we also discuss below.”

Moncharsh v. Heily & Blase, 10 Cal.Rptr.2d 183, 183, 3 Cal.4th 1, 832 P.2d 899 (1992). 

“Arbitrators ‘exceed[ ] their powers’ (§ 1286.2, subd. (a)(4)) by acting without subject matter 

jurisdiction, deciding an issue that was not submitted to arbitration, arbitrarily remaking the 

contract, upholding an illegal contract, issuing an award that violates a well-defined public 

policy or a statutory right, fashioning a remedy that is not rationally related to the contract, or 

selecting a remedy not authorized by law. (See Jordan v. Department of Motor Vehicles (2002) 

100 Cal.App.4th 431, 443, 123 Cal.Rptr.2d 122; see also Moncharsh v. Heily & Blase (1992) 3 

Case 4:17-cv-00224-YGR Document 26 Filed 02/24/17 Page 10 of 18
Page 11 of 18 PETITIONER’S REPLY TO RESPONDENTS’ OPPOSITION TO CONFIRM

THE ARBITRATION AWARD

Cal.4th 1, 31-33, 10 Cal.Rptr.2d 183, 832 P.2d 899 [discussing application of § 1286.2, subd. 

(a)(4), to illegal contracts]; Lindenstadt v. Staff Builders, Inc. (1997) 55 Cal.App.4th 882, 889-

893, 64 Cal.Rptr.2d 484 [same].)” Greenspan v. LADT, LLC, 185 Cal.App.4th 1413, 1436, 111 

Cal. Rptr. 3d 468, 486 (2010)(emphasis added). 

On September 30, 2016, the arbitrator entered his partial final award of $1,072,520.90. 

Following that award, ECC filed a lengthy motion to amend and correct the award. The arbitrator 

considered ECC’s arguments – the same arguments made here in ECC’s separately filed motion 

for vacatur – and on November 14, 2016, rejected those arguments and denied ECC’s motion. 

This Court should do the same. ECC can show no statutory basis, either under California or 

federal law, to vacate the arbitrator’s award on Aspic’s claims under the contracts. The time has 

come for judgment to be entered against ECC on the arbitration award.

C. This Court Should Correct the Award Pursuant to the CAA to Award Aspic’s 

Attorney’s Fees. 

1. Under California law, error in the failure to award attorney’s fees is subject 

to correction where such would not affect the merits of the decision. 

ECC contends that the same rule that prevents the Court from vacating the award due to 

errors of fact or law also prohibits the Court’s correction of the award to include attorney’s fees, 

as mandated by California law. Again, not so. 

Under the CAA, the Court is to correct, not vacate, the award when the arbitrator exceeds 

his authority by failing to award mandated attorney’s fees and “the award may be corrected 

without affecting the merits of the decision. . . .” Cal. Code Civ. Proc. § 1286.2. In DiMarco v. 

Chaney, 37 Cal.Rptr.2d 558, 31 Cal.App.4th 1809 (Cal. App. 1995), the respondent argued, as 

ECC does here, that the court lacked the authority to correct the arbitration award because it was 

“bound by the arbitrator’s decision denying [the plaintiff] an award of attorney fees and costs.” 

In DiMarco, the terms of the parties’ agreement specified that the prevailing party was entitled to 

an award of reasonable attorney fees and costs. DiMarco, 31 Cal.App.4th at 1815. The arbitrator 

found that the plaintiff was the prevailing party. Id. In such circumstances, held the court, “the 

Case 4:17-cv-00224-YGR Document 26 Filed 02/24/17 Page 11 of 18
Page 12 of 18 PETITIONER’S REPLY TO RESPONDENTS’ OPPOSITION TO CONFIRM

THE ARBITRATION AWARD

arbitrator was compelled by the terms of the agreement to award her reasonable attorney fees and 

costs. In denying [the plaintiff’s] request for attorney fees, the arbitrator exceeded his powers. 

That error was subject to correction because section 1286.6, subdivision (b), provides an award 

shall be corrected if ‘[t]he arbitrators exceeded their powers [and] the award may be corrected 

without affecting the merits of the decision. . . .’” DiMarco, 31 Cal.App.4th at 1815.

2. The parties’ agreement here provides for an award of attorney fees and costs 

under the precise facts of this case.

The parties’ agreement here provides that ECC is entitled to attorney’s fees in two 

circumstances: “Where the Arbitrator(s) decides that ECCI has properly fulfilled the Agreement, 

or where ECCI has offered settlement, before the arbitration decision was rendered, that meets or 

exceeds the arbitrator(s) award and which Subcontractor refused to accept, Subcontractor shall

pay all costs and fees, including attorney and arbitration fees, incurred or necessitated by the 

arbitration proceedings.” Contract ¶12.4(e) (emphasis added) (Docket 17 p. 49 of 628, Petition 

Exh. 3, p. 28). Paragraph 12.4 applies to both Aspic and ECC pursuant to Cal. Code Civ. Proc. § 

1717(a): “Where a contract provides for attorney’s fees, as set forth above, that provision shall 

be construed as applying to the entire contract, unless each party was represented by counsel in 

the negotiation and execution of the contract, and the fact of that representation is specified in 

the contract.” Section 1717 – enacted to create mutuality of remedy where the contract purports 

to allow the recovery of attorney’s fees for just one party – has been held to apply “to the

provisions which the parties themselves have agreed to make it applicable.” Sciarrotta v. Teaford 

Custom Remodeling, Inc., 167 Cal.Rptr. 889, 893, 110 Cal.App.3d 444 (Cal. App. 4 Dist. 1980).

Here, ECC itself defined the conditions under which the recovery of attorney’s fees 

would be made available: “where [one party] has offered settlement, before the arbitration 

decision was rendered, that meets or exceeds the arbitrator(s) award and which [the other party] 

refused to accept.” In this case, Aspic made three offers of settlement to ECC prior to the 

arbitration: In August 2015, shortly after learning that ECC had broken its promise to submit 

Aspic’s claim to the U.S. Government for payment, Aspic wrote to ECC of its intent to file for 

Case 4:17-cv-00224-YGR Document 26 Filed 02/24/17 Page 12 of 18
Page 13 of 18 PETITIONER’S REPLY TO RESPONDENTS’ OPPOSITION TO CONFIRM

THE ARBITRATION AWARD

arbitration and made a written Cal. Code Civ. Proc. § 998 settlement offer of $652,000 on the 

larger of the two contracts at issue in this case (Docket 17 p. 574-6 of 628, Petition Exh 5, p. 

552-4). ECC refused the settlement offer and demanded mediation, as provided for in the 

contract. On March 2, 2016, after the January 2016 mediation had been unsuccessful, Aspic 

made an additional §998 settlement offer of $830,000.00 to ECC CENTCOM Constructors LLC

(Docket 17 p. 578 of 628, Petition Exh 6, p. 555) and $150,000.00 to ECC International LLC

(Docket 17, p. 580 of 628, Petition Exh. 7, p. 556). Again, ECC refused these offers and opted to 

proceed to arbitration, at which Aspic was awarded $1,072,520.90 against both Respondents, 

jointly and severally, well exceeding each of Aspic’s two March 2016 offers. Aspic made offers 

of settlement which ECC refused to accept and Aspic received an award in excess of those 

offers. Under the plain terms of the contract, then, Aspic is entitled to costs and fees.

3. The arbitrator exceeded his authority under California law by failing to 

award attorney’s fees and costs under the parties’ agreement.

Under California law, “[a]n exception to the general rule assigning broad powers to the 

arbitrators arises when the parties have, in either the contract or an agreed submission to 

arbitration, explicitly and unambiguously limited those powers. . . .‘The powers of an arbitrator 

derive from, and are limited by, the agreement to arbitrate.’” Gueyffier v. Ann Summers, Ltd., 43 

Cal. 4th 1179, 184 P.3d 739, 743, 77 Cal. Rptr. 3d 613 (2008), quoting Advanced Micro Devices, 

Inc. v. Intel Corp., 9 Cal.4th 362, 375, 383, 36 Cal.Rptr.2d 581, 885 P.2d 994 (1994). In holding 

that the arbitrator had not exceeded the scope of his authority in Gueyffier, the California 

Supreme Court distinguished the Court of Appeals’ holding in DiMarco v. Chaney. The

Gueyffier court explained that in DiMarco, there was “a direct, explicit contradiction between 

the contractual command and the arbitrator’s refusal to award the prevailing party fees, whereas 

no such inescapable contradiction exists in this case.” Gueyffier, 43 Cal. 4th 1179, 184 P.3d 739, 

746, 77 Cal. Rptr. 3d 61. In Gueyffier, by contrast, the contract did not unambiguously forbid the 

arbitrator’s application of an equitable defense which was the subject of that appeal. Id. 

Case 4:17-cv-00224-YGR Document 26 Filed 02/24/17 Page 13 of 18
Page 14 of 18 PETITIONER’S REPLY TO RESPONDENTS’ OPPOSITION TO CONFIRM

THE ARBITRATION AWARD

Similarly in this case, by refusing to award attorney’s fees, the arbitrator created a 

“direct, explicit contradiction” with “the contractual command” to award costs and attorney’s 

fees where one party refused to settle for an offered amount that was exceeded by the arbitrator’s 

award. In so doing, the arbitrator exceeded his authority. Where, as here, the award may be 

“corrected without affecting the merits of the decision upon the controversy submitted,” Cal. 

Code Civ. Proc. § 1286.6, the Court should correct, not vacate, the award.

4. The arbitrator’s failure to find that Aspic was the prevailing party does not 

preclude Aspic’s entitlement to fees under the contract.

ECC suggests that Aspic is not entitled to attorney’s fees because the arbitrator did not 

find that Aspic was the prevailing party. Once more, ECC is wrong. The clear and unambiguous 

contractual provision commanding that Aspic be awarded attorney’s fees and costs under the 

facts existing here makes no mention of a “prevailing party” and does not turn on a finding 

concerning a “prevailing party.” See discussion supra. 

In DiMarco v. Chaney, supra, the contractual provision that commanded an award of 

attorney’s fees was different. There the provision at issue specifically stated that the prevailing 

party was entitled to fees and the arbitrator found that the plaintiff was the prevailing party. 

DiMarco, 31 Cal.App.4th at 1815. The “prevailing party” finding was at the heart of the issue 

before the Court of Appeals. This case hinges in no way on the prevailing party language

because, unlike DiMarco, the contract does not include that language. 

The parties’ contract set the boundaries of the arbitrator’s authority and that contract 

mandated an award of all attorney’s fees, costs and expenses associated with the arbitration 

proceedings, where, as here, one party refused to settle for an offered amount that was exceeded 

by the arbitrator’s award. 

D. Aspic’s Claim for Attorney’s Fees is Reasonable.

This Court has broad discretion to determine a reasonable award of attorney fees, and 

must provide “a concise but clear explanation of its reasons for the fee award.” Hensley v. 

Eckerhart, 461 U.S. 424, 437 (1983); see also Hall v. Bolger, 768 F.2d 1148, 1151 (9th 

Case 4:17-cv-00224-YGR Document 26 Filed 02/24/17 Page 14 of 18
Page 15 of 18 PETITIONER’S REPLY TO RESPONDENTS’ OPPOSITION TO CONFIRM

THE ARBITRATION AWARD

Cir.1985) (court should provide an explanation of the reasonable hours and hourly rate it uses to 

arrive at fee award). The Court is under no obligation, however, to “make findings as to each of 

defendants’ specific objections.” Gates v. Deukmejian, 987 F.2d 1392, 1400 (9th Cir. 1992).

In the Ninth Circuit, courts generally use the lodestar method to determine reasonable 

attorneys’ fees. See Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1047 (9th Cir.2002). “The 

‘lodestar’ is calculated by multiplying the number of hours the prevailing party reasonably

expended on the litigation by a reasonable hourly rate.” Morales v. City of San Rafael, 96 F.3d 

359, 363 (9th Cir.1996). There is a strong presumption that the lodestar figure represents a 

reasonable fee. Jordan v. Multnomah County, 815 F.2d 1258, 1262 (9th Cir.1987). (Lodestar at

Docket 17, p. 582-604 of 628, Petition Exhs. 9 and 10) (Supporting Declarations at Docket 17. p. 

606-28, Petition Exhs. 10 and 11, p. 579-600)

1. Petitioner’s attorney’s fees and costs are reasonable given ECC’s aggressive 

litigation strategy. 

From the start, Aspic just wanted to settle this case and be paid for its work. Its request 

for settlement negotiations was met with silence. The mediation ECC insisted upon was a failure. 

The arbitration dragged on for three days, with four lawyers sitting at ECC’s counsel table while 

Aspic made do with one. Since the arbitration, ECC has added two more lawyers to the roster. 

And yet, protests ECC, Aspic’s counsel spent too much time on the case. 

No. Aspic’s legal fee is reasonable in light of the fierce opposition ECC mounted leading 

up to, during and following the arbitration. In similar circumstances, the California Supreme 

Court has observed: “having litigated the matter tenaciously, [the defendant] ‘cannot ... be heard 

to complain about the time necessarily spent by the [plaintiff] in response.’” Ketchum v. Moses, 

104 Cal.Rptr.2d 377, 391 (Cal. 2001)(citation omitted). As in Ketchum, ECC cannot now 

complain about the time Aspic’s counsel has been forced to spend on his client’s behalf.

Indeed, if the time Aspic’s counsel has spent on the case thus far were truly excessive, 

ECC might spotlight the issue by introducing evidence of the amount it has been billed by its 

counsel to obtain a result requiring it to pay, rather than receive, a substantial award. It seems 

Case 4:17-cv-00224-YGR Document 26 Filed 02/24/17 Page 15 of 18
Page 16 of 18 PETITIONER’S REPLY TO RESPONDENTS’ OPPOSITION TO CONFIRM

THE ARBITRATION AWARD

quite doubtful, however, that ECC’s six lawyers have spent less time on the case than Aspic’s 

one. The absence of this lodestar evidence from ECC suggests that Aspic’s claimed attorney’s 

fees are not unreasonable when compared with those of ECC. Aspic’s lodestar is reasonable. 

2. ECC’s claim that Aspic did not win the arbitration has no merit. 

The arbitrator awarded more than a million dollars to Aspic, and nothing to ECC, but in 

ECC’s view, this is not the sort of victory that would entitle Aspic to attorney’s fees because 

Aspic was not awarded all the damages it sought. But the measure of success for entitlement to 

an award of attorney’s fees under ECC’s contract is not whether Aspic obtained all the damages 

it sought, but the extent to which either party obtained a more favorable result than a settlement 

offer given or received, as set forth in ¶12.4(e) of the contract. By that measure, Aspic achieved 

complete success and ECC had an unequivocal loss.

3. Aspic is entitled to a multiplier under California law. 

The law is plain under California law that Aspic is entitled to a fee enhancement in this 

contingency fee case. In Ketchum v. Moses, 104 Cal.Rptr.2d 377, 17 P.3d 735, 24 Cal.4th 1122 

(Cal., 2001), a hard-fought landlord-tenant dispute, the trial court applied a fee enhancement of 

2.0 in the contingency fee case. Ketchum, 104 Cal.Rptr.2d 377, 17 P.3d 735, 24 Cal.4th 1122 

(Cal. 2001). The California Supreme Court discussed the purpose underlying fee enhancement in 

such cases: 

The economic rationale for fee enhancement in contingency cases has been 

explained as follows: “A contingent fee must be higher than a fee for the 

same legal services paid as they are performed. The contingent fee 

compensates the lawyer not only for the legal services he renders but for the 

loan of those services. The implicit interest rate on such a loan is higher 

because the risk of default (the loss of the case, which cancels the debt of 

the client to the lawyer) is much higher than that of conventional loans.”

(Posner, Economic Analysis of Law (4th ed.1992) pp. 534, 567.) “A lawyer 

who both bears the risk of not being paid and provides legal services is not 

receiving the fair market value of his work if he is paid only for the second 

of these functions. If he is paid no more, competent counsel will be 

reluctant to accept fee award cases.” (Leubsdorf, The Contingency Factor in 

Attorney Fee Awards (1981) 90 Yale L.J. 473, 480; see also Rules Prof. 

Conduct, rule 4-200(B)(9). 

Case 4:17-cv-00224-YGR Document 26 Filed 02/24/17 Page 16 of 18
Page 17 of 18 PETITIONER’S REPLY TO RESPONDENTS’ OPPOSITION TO CONFIRM

THE ARBITRATION AWARD

Ketchum, 104 Cal.Rptr.2d 377, 17 P.3d 735, 24 Cal.4th 1122 (Cal. 2001); see also Rules 

Prof. Conduct, rule 4-200(B)(9) (recognizing the contingent nature of attorney representation as 

an appropriate component in considering whether a fee is reasonable); ABA Model Code Prof. 

Responsibility, DR 2-106(B)(8)(same); ABA Model Rules Prof. Conduct, rule 1.5(a)(8). 

ECC relies on authorities considering cases brought under fee-shifting statutes to suggest 

that Aspic is not entitled to a fee enhancer. In cases involving fee-shifting statutes, however, the 

risks are not comparable to the continuing uncertainties here. When judgment is entered against 

the government in those cases, the government has an obligation to pay the judgment after it is 

entered. No such certainty exists here. Indeed, the risk remains that Aspic will never be paid. 

In 2015, for instance, another Afghan subcontractor, Sabawoon Salim Construction Co., 

filed suit against these exact Respondents in the Northern District of California, No. 5:15-CV04362-EMC. After judgment was entered in 2016, the judgment creditor attempted to collect the 

more than $4,000,000 owing. ECC mounted a defense to Sabawoon Salim Construction Co.’s 

attempts to collect, and the docket sheet in that case reflects that the judgment remains unpaid. 

The contingent risks in this case are real, continuing and they are of ECC’s own making. 

Under California law, Aspic is accordingly entitled to a multiplier in this case. 

CONCLUSION

Wherefore, Petitioner, Aspic, respectfully requests that the arbitrator’s award be 

confirmed and corrected to reflect the award of attorney’s fees and costs unambiguously 

commanded by ECC’s contract, and that Aspic be granted whatever relief to which it shows 

itself otherwise entitled.

Case 4:17-cv-00224-YGR Document 26 Filed 02/24/17 Page 17 of 18
Page 18 of 18 PETITIONER’S REPLY TO RESPONDENTS’ OPPOSITION TO CONFIRM

THE ARBITRATION AWARD

Respectfully Submitted,

February 24, 2017,

Attorney for Aspic Engineering and Construction Company, Petitioner

s/ Walt Pennington___________

Walt Pennington (#214470)

Pennington Law Firm

3302 30th Street

San Diego, CA 92104-4535

619 940 6157

wpennington@pennfirm.com

Case 4:17-cv-00224-YGR Document 26 Filed 02/24/17 Page 18 of 18