Court Opinion

ID: 3007189
Source: CourtListenerOpinion
Date Created: 2015-10-06 07:04:29.224823+00
Date Added: 2024-06-11T12:26:42.056577
License: Public Domain

FOURTH DIVISION
                                BARNES, P. J.,
                            RAY and MCMILLIAN, JJ.

                   NOTICE: Motions for reconsideration must be
                   physically received in our clerk’s office within ten
                   days of the date of decision to be deemed timely filed.
                               http://www.gaappeals.us/rules

                                                                    October 1, 2015

In the Court of Appeals of Georgia
 A15A1544. McFARLAND v. ROBERTS et al.

      BARNES, Presiding Judge.

      Robert P. McFarland appeals the superior court’s order confirming an

arbitration award and entry of judgment against him. He argues that the court erred

because the award by the State Bar Committee on the Arbitration of Attorney Fee

Disputes (“the Committee’) did not correctly interpret well-established contract law

and because one of the parties to which the panel granted the award was not a party

to the fee contract. For the reasons that follow, we affirm.

             The State Bar’s Fee Arbitration program is designed to
             provide a convenient mechanism to resolve disputes
             between lawyers and clients over fees, and is administered
             by the State Bar Committee on the Arbitration of Fee
             Disputes (“Committee”). See State Bar Rules, Part VI,
             Arbitration of Fee Disputes, Preamble, 247 Ga. A-2. A
             petitioner seeking arbitration, whether lawyer or client,
             must agree to be bound by the award, Rule 6-201 (h) (4),
             and the respondent may either agree to be bound or not
            agree to be bound. The arbitration process differs
            depending on whether the respondent agrees to be bound
            by an award or not. If both parties agree to be bound by the
            arbitration, “the award of the arbitrators is final and
            binding upon them and may be enforced as provided by the
            general arbitration laws of the State.” Bar Rule 6-417.

(Citation omitted.) Farley v. Bothwell, 306 Ga. App. 801, 802 (703 SE2d 397) (2010).

      This action arose out of a fee dispute between Doris Roberts and McFarland,

her former counsel. The procedural history is complicated. Mrs. Roberts’ executor

and widow, Raymond Roberts, filed a petition for fee arbitration with the Committee

in July 2008, seeking the return of $30,537 in attorney fees paid to McFarland. Mr.

Roberts claimed that McFarland had been hired to recover funds “from Woodrow

Thomas Roberts on behalf of the Estate of Laura Mae Smith,” and asserted that the

$30,537 fee was not correct because:

      (a) Client did not win any judgment or receive any compromise
      settlement proceeds[;]
      (b) Client lost at trial, causing the money previously paid to the attorney
      to be owed to the Estate of Laura Mae Smith[; and]
      (c) The attorney already received real estate commissions for the sale of
      estate property.

                                          2
Under former State Bar Arbitration Rule 6-201,1 the Committee “may” accept

jurisdiction over a fee dispute if certain requirements were met, including the client’s

agreement to be bound by the results of the arbitration. Former Rule 6-201 (f) and (h)

(4). Mr. Roberts agreed to be bound.

      McFarland answered the petition, also agreeing to be bound by the results of

the arbitration. In his answer, McFarland summarized his representation of Mrs.

Roberts after she came to him because she thought that one of her three sons had

“taken advantage” of Mrs. Roberts’ mother, Laura Mae Smith, before she died, and

had removed money from Smith’s bank account. McFarland explained in his fee

arbitration answer that he had “reluctantly” agreed to advance expenses to Mrs.

Roberts and accept half of any funds recovered, and drew up the fee contract that

Mrs. Roberts signed.

      Mrs. Roberts was the only child and sole heir at law of Smith, who was a

widow when she died. McFarland subsequently filed a petition in probate court for

Mrs. Roberts to obtain Letters of Administration to settle Smith’s estate, and also

filed suit in superior court against Mrs. Roberts’ son, seeking to recover $228,000 the

      1
        The State Bar Rules related to fee arbitration were amended in their entirety
effective December 1, 2012. The rules followed by the arbitration panel throughout
these proceedings were those in effect before the December 1, 2012, amendments.

                                           3
son allegedly took from Smith before she died. The probate court issued Letters of

Administration to Mrs. Roberts in November 2005, which she used to withdraw

$59,666 from two bank accounts that had belonged to Smith. On December 5, 2005,

Mrs. Roberts paid McFarland $30,537, representing half of the proceeds from Smith’s

bank accounts plus expenses of $1,408, and signed a document McFarland prepared

that was titled “Attorney/Client Settlement Agreement.”2

      In April 2006, Mrs. Roberts’ son filed a petition to probate the Last Will and

Testament of Laura Mae Smith, under which Mrs. Roberts’ three sons would share

equally in their grandmother’s estate and Mrs. Roberts would get nothing. McFarland

filed a caveat to the will on Mrs. Roberts’ behalf. Funds were paid into the registry

of the probate court pending resolution of the will’s validity. In January 2007, Mr.

Roberts was appointed to serve as Mrs. Roberts guardian and conservator. Mrs.

Roberts died in May 2007, and Mr. Roberts was appointed as executor of her estate

and has continued to represent her interests in these claims.

      A jury determined in November 2007 that the will of Laura Mae Smith

propounded by Mrs. Roberts’ son was valid, and the probate court admitted the will

      2
      Mr. Roberts actually signed the document under a Power of Attorney Mrs.
Roberts signed on December 5, 2005.

                                          4
to probate. The probate court issued letters testamentary to the son, and in February

2008, the probate court ordered the clerk of court to transmit the funds in the court

registry to the son as the executor of Smith’s estate. The probate court also granted

McFarland’s request to withdraw as counsel of record for Mrs. Roberts.

      On November 30, 2007, the day after the probate court jury returned its verdict,

McFarland sent a letter to Mr. Roberts, reminding him that Mrs. Roberts had signed

a fee agreement on August 4, 2005, that obligated her to pay actual expenses incurred

in the litigation regarding Smith’s estate, which totaled $12,161. McFarland asked

Mr. Roberts, as Mrs. Roberts’ executor, to make arrangements to pay the debt. In July

2008, Mr. Roberts filed his petition with the Committee, seeking repayment of the

$30,537 paid to McFarland from the estate of Laura Smith while Mrs. Roberts was

the administrator of that estate. McFarland responded as previously described.

      Following a hearing that was not transcribed, the arbitrators issued the

following award on July 10, 2009, in favor of Mr. Roberts:

      Arbitrators find that a contract is in place. Arbitrators find that the
      contract was between Doris Geneva Roberts and Robert P. McFarland.
      Arbitrators find that the contract was a contingent fee contract “in
      connection with the estate of [Roberts’] mother: Laura Mae Smith and
      proceeding against her son, Woodrow Thomas Roberts.” Contract
      entitled Mr. McFarland to receive “one half (50%) of the net amount

                                          5
      paid in satisfaction of any ultimate judgment or compromise settlement
      proceeds.” Arbitrators find that on December 5, 2005, an
      Attorney/Client Settlement Agreement was signed. On that date, Doris
      Geneva Roberts, in her capacity as administrator of the estate of Laura
      Mae Smith[,] disbursed $30,537 to Mr. McFarland. Arbitrators find that
      there was no ultimate judgment or proceeds from a compromise
      settlement in existence at that time. Therefore, Arbitrators find for Estate
      of Doris Geneva Roberts, Respondent to refund $30,537 to Estate of
      Doris Geneva Roberts.

      Although he agreed to be bound by the result of the arbitration, McFarland

decided to appeal the decision and reconstructed a transcript of the hearing from his

recollection as authorized by OCGA § 5-6-41 (c). He hired new counsel, who asked

the Committee in July 2009 to determine whether the transcript was correct, but the

Committee did not respond.

      McFarland’s attorney also asked the State Bar’s director of fee arbitration to

file the award with the clerk of the Forsyth County Superior Court, thus initiating a

civil action per Rule 6-501. In November 2009, McFarland filed a document titled

“Objection of Appellant to Award” in the superior court action. He argued that the

court should vacate the arbitration award because under State Bar Arbitration Rule

6-412, the arbitrators had no authority to enter an award contrary to the terms of an

                                           6
executed written contract between the parties unless they find fraud, accident,

mistake, or that the contract was contrary to Georgia contract law. McFarland and

Mrs. Roberts had two written contracts, he argued, one being their contingency fee

agreement and the second being their “Settlement Agreement” disbursing the funds

that Mrs. Roberts removed from Smith’s estate while she was the estate administrator.

McFarland argued that the arbitrators apparently had determined, incorrectly, that

neither contract was valid.

      After a hearing in superior court on May 2012, Mr. Roberts filed an

“emergency motion for reconsideration and continuance,” asking the superior court

to reconsider a proposed ruling it had pronounced orally. The court had pointed out

at the hearing that the attorney fees McFarland had collected had not actually

belonged to Mrs. Roberts, but had come from bank accounts belonging to Smith’s

estate. In his motion, Mr. Roberts asked the court to allow the executor of Laura Mae

Smith’s estate to intervene or substitute for Mr. Roberts in the fee arbitration

proceeding and then seek a modification of the award so the payment could be

properly directed to the estate rather than to Mr. Roberts. Mr. Roberts also filed a

motion to join the executor of Smith’s estate as the real party in interest based on the

court’s questioning whether Mr. Roberts actually had standing to pursue the claim.

                                           7
      The superior court issued a written order in October 2012, finding that it sat as

an appellate court in this proceeding under the authority of the Fee Arbitration Rules

adopted by the Supreme Court of Georgia in 1980. The court denied the motion to

join Smith’s estate as a party, finding that it had no authority to do so because the

Civil Practice Act had no application to the judicial review of an administrative

hearing when the superior court sat as an appellate judge. It further denied Mr.

Robert’s motion for reconsideration as premature, as the court had not previously

entered a written order. As to the merits of the award, the court determined that under

the Fee Arbitration Rules, it could only render a decision “from the record without a

trial de novo on the merits” and either affirm, vacate, or “return the award to the

arbitrators with specific directions for further consideration.” Rule 6-501.

      The trial court chose to return the award, directing the arbitrators to further

consider the award in light of specific facts and legal principles set out in the order.

Basically, the superior court concluded that the money McFarland had received was

not paid to him out of Mrs. Roberts’ personal funds, but out of Smith’s estate, and

that Mrs. Roberts obtained the funds while acting as the administrator of Smith’s

estate. The cause of action for improper disbursement of estate funds by a previous

personal representative vests in the successor personal representative, the court held.

                                           8
Therefore, the issue for the arbitration panel to determine upon remand was whether

the successor personal representative of the Smith estate, who was not party to the

arbitration proceedings, could intervene upon remand “as a party who paid [Mrs.]

Roberts’ fees for representation by McFarland, pursuant to [Rule 6]-201 (c).”

      Former Rule 6-201 provided that the Committee “may accept jurisdiction over

a fee dispute only” if certain requirements were satisfied. The trial court wanted the

arbitration panel to consider this requirement of the Arbitration Code:

      At the time the legal services in question were performed there existed
      between the lawyer and the client an expressed or implied contract
      establishing between them a lawyer/client relationship. A relative or
      other person paying the legal fees of the client may request arbitration
      of disputes over those fees provided by the client and the payor join as
      co-petitioners or co-respondents and both agree to be bound by the
      result of the arbitration.

(Emphasis supplied.) Former Fee Arbitration Rule 6-201 (c).

      The panel reconvened, and a transcript of the June 19, 2013, hearing is

included in the appellate record. After determining that the applicable Fee Arbitration

Rules were those in place at the prior hearing in March 2009, the panel heard

argument and proffers of evidence. McFarland, through counsel, argued that the

Rules contained no provision for intervention, no motion had been filed in the

                                          9
arbitration proceedings to add a party, and the record contained no evidence that the

party who sought to be added agreed to be bound by the arbitration results. Further,

McFarland objected to applying former Rule 6-201, which was no longer in effect

after the Rules were amended in December 2012.

      McFarland then reviewed the underlying facts of the claim, and proffered that

he had recommended that Mrs. Roberts settle the dispute with her sons about Smith’s

will by settling for three-quarters of the estate, almost $300,000, but Mr. Roberts,

acting on Mrs. Roberts’ behalf under a power of attorney, declined to do so. As noted

earlier, a jury then determined that Smith’s will was valid, and the result of that

determination was that instead of being a sole heir at law entitled to the entire estate,

Mrs. Roberts took nothing under the will. The probate court removed her as the estate

administrator and installed one of her sons as the executor of Smith’s estate.

McFarland also proffered a list of $13,161 in actual expenses his firm paid to

prosecute these cases, in addition to the $1,408 in expenses that had been included

in the payment in dispute here. Finally, he argued that if the panel determined he was

not entitled to the money based on the parties’ fee agreement, he should be allowed

to prove the value of his services under quantum meruit, which would have exceeded

the amount he received.

                                           10
      In response, Mr. Roberts’ counsel stated that he was making an oral locum

tenens motion3 to intervene, that the executor of Smith’s estate was present and

agreed to be bound by the panel’s determination, and that the superior court remanded

this case to the panel because it determined that the Civil Practice Act did not

empower the superior court to add parties but the panel did have that authority.

Further, Roberts’ counsel emphasized that, while McFarland was arguing that the

money came from Smith’s estate and the estate’s claim should be against Mrs.

Roberts’ estate rather than her attorney, the panel had already determined the merits

and awarded the money. The parties were present before the panel simply “trying to

fix the record so that we have an award that the Court can confirm.” Further,

McFarland had consented to the panel’s jurisdiction and agreed to be bound by its

determination, so the purpose of the hearing was simply to allow the panel to exercise

its jurisdiction and substitute a real party in interest. Consonant with former Rule 6-

201 (c), Mr. Roberts argued, a person paying the legal fees of the client was permitted

to request arbitration of those fees if both the person and the client agreed to be bound

by the panel’s decision, which was exactly the issue in this case.

      3
       Locum tenens is a Latin phrase that means “holding the place,” and it connotes
“a deputy; a substitute; a representative.” Black’s Law Dictionary 1025 (10th ed.
2014).

                                           11
      In June 2013, the panel issued a written decision allowing the representative

of Smith’s estate to intervene, noting that it had been clear in the first phase of these

proceedings that the fees McFarland obtained from Mrs. Roberts had actually come

from Smith’s estate. Exercising its power under Rule 6-423 to interpret the Rules

related to the arbitrators’ powers and duties, the panel determined that under former

Rule 6-201 (c), the estate was permitted to join the claim, as it had agreed to be bound

by the arbitration decision. The panel further held that McFarland could not revoke

his consent to be bound by the panel’s decision. Subsequently, pursuant to Roberts’

motion, the panel issued an amended award in October 2013, finding for Roberts and

Smith’s estate, and directing McFarland to refund $30,537 to Smith’s estate.

      In January 2014, Mr. Roberts and Smith’s estate petitioned the superior court

to confirm the amended arbitration award under OCGA § 9-9-12, asserting that

McFarland had not refunded the fee or responded to telephone calls or email

messages. This petition was filed under a new civil action number and assigned to a

different superior court judge. McFarland responded to the petition and objected to

the award, arguing that he had not contracted with Smith’s estate, which had been

Mrs. Roberts’ “opponent[] in legal matters, not being on the same side.” He further

contended that any claim of Smith’s estate was time-barred, that the motion for the

                                           12
amended award was time-barred, that a “compromise settlement” satisfied the fee

contract requirements, and that the panel erred by allowing the estate to join the

proceedings after the case was remanded by the superior court. McFarland also filed

a motion to dismiss the case.

      Shortly after a hearing in January 2015, the superior court issued an order

confirming the amended award. The court noted that McFarland orally withdrew his

motion to dismiss during the hearing, and directed the clerk to enter judgement in

favor of the executor of Smith’s estate against McFarland for $30,357.

      1. The appellees argue that this court lacks jurisdiction over this direct appeal

because it should have been brought by application for a discretionary appeal seeking

review of a superior court’s confirmation of an arbitration award issued by the State

Bar of Georgia, a governmental agency, citing Beckman v. Black, 170 Ga. App. 193

(316 SE2d 784) (1984). But Mr. Roberts and Smith’s estate brought this appeal under

the general arbitration law, OCGA § 9-9-12, not just the Fee Arbitration Rules.

      “Rule 6-501 does not provide the exclusive means for enforcing an arbitration

award issued by the State Bar arbitration committee in a dispute over attorney fees.”

Prince v. Bailey Davis, LLC, 306 Ga. App. 59, 61 (701 SE2d 492) (2010). The Fee

Arbitration Rules preamble and Rule 6-417 provide that, when both attorney and

                                         13
client agree to be bound by the decision, the award is enforceable under the general

arbitration laws of the state. Rules Preamble; Rule 6-417; Prince, 306 Ga. App. at 61.

Under OCGA § 9-9-16, “[a]ny judgment or any order considered a final judgment

under this [Arbitration Code] may be appealed pursuant to Chapter 6 of Title 5.” As

the superior court has issued a final order and judgment in this case, “we conclude

that this appeal is from a final judgment directly appealable under OCGA § 5-6-34

(a) (1).”4 Torres v. Piedmont Builders, Inc., 300 Ga. App. 872, 872-873 (686 SE2d

464) (2009).

      2. McFarland argues that the trial court erred in confirming the arbitration

award because the three-attorney panel “did not correctly interpret well[-]established

contract law” and because one of the parties to whom the award was made was not

a party to the fee contract. We find no error.

      4
       An order simply confirming an arbitration award is not a final, appealable
judgment, and until recently, this court required the confirmation order and the final
judgment on an arbitration award to be entered on separate documents. In Green Tree
Servicing, LLC v. Jones, ___ Ga. App. ___ (1) (775 SE2d 714) (2015), however, we
determined that, “although OCGA § 9-9-15 of the Georgia Arbitration Code
contemplates entry of a judgment separate from the order confirming the award, it
does not require that the order and the judgment be entered on separate documents.”
Accordingly, we have jurisdiction to consider McFarland’s appeal.

                                          14
      Pretermitting the validity of all of the preceding proceedings, McFarland’s

objections to the amended award were filed too late. After the panel issued its

amended award, Mr. Roberts and the Smith estate filed a timely application in

superior court under OCGA § 9-9-12 to confirm the award within one year of its

delivery to them. McFarland filed an objection to the award in March 2014. A party

who seeks to modify or vacate an arbitration award must file an application to the

court “within three months after delivery of a copy of the award to the applicant.”

OCGA §§ 9-9-13 (a), 9-9-14 (a). The amended award was issued in October 2013,

and McFarland’s objection to the award was filed in March 2014, well outside the

three-month time statutory time limit allowing such a claim. See Fulton County v.

Lord, 323 Ga. App. 384, 390-391 (2) (746 SE2d 188) (2013); Cypress

Communications, Inc. v. Zacharias, 291 Ga. App. 790, 793-795 (2) (662 SE2d 857)

(2008); cf. Galindo v. Lanier Worldwide, Inc., 241 Ga. App. 78, 84 (4) (526 SE2d

141) (1999) (construing similar provision in Federal Arbitration Act, defenses that

were raised in response to confirmation petition more than three months after

arbitration award issued were untimely). Accordingly, the trial court did not err in

confirming the award.

      Judgment affirmed. Ray and McMillian, JJ., concur.

                                        15