Court Opinion

ID: 2655203
Source: CourtListenerOpinion
Date Created: 2014-02-28 20:06:46.881922+00
Date Added: 2024-06-11T12:59:12.319300
License: Public Domain

Filed 2/28/14 Eagan Avenatti, LLP v. Parrish CA4/3

                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.

              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     FOURTH APPELLATE DISTRICT

                                                DIVISION THREE

EAGAN AVENATTI, LLP,

   Plaintiff, Cross-defendant and                                      G048143
Appellant,
                                                                       (Super. Ct. No. 30-2011-00483570)
WILLIAM PARRISH et al.,
                                                                       OPINION
   Cross-complainants, Cross-
defendants and Appellants,

MICHAEL J. AVENATTI,

     Cross-defendant and Appellant;

         v.

ROBERT J. STOLL, JR.,

   Defendant, Cross-defendant and
Respondent,

STOLL, NUSSBAUM & POLAKOV,

   Defendant, Cross-complainant,
Cross-defendant and Respondent.
              Appeals from an order of the Superior Court of Orange County, Franz E.
Miller, Judge. Affirmed.
              Eagan Avenatti, LLP and Scott H. Sims; Payne & Fears and Erik M.
Andersen, for Plaintiff, Cross-defendants and Appellant Eagan Avenatti, LLP, and for
Cross-complainants, Cross-defendants and Appellants William Parrish and E. Timothy
Fitzgibbons, and for Cross-defendant and Appellant Michael J. Avenatti.
              Lewis Brisbois Bisgaard & Smith LLP, and William John Rea, Jr.; The
Ehrlich Law Firm and Jeffrey Isaac Ehrlich, for Defendant, Cross-defendant and
Respondent Robert J. Stoll, Jr., and for Defendant, Cross-complainant, Cross-defendant
and Respondent Stoll, Nussbaum & Polakov.
                                   *         *          *
                                       INTRODUCTION
              This is an appeal from the denial of motions to compel arbitration. The
respondents are the law firm Stoll, Nussbaum & Polakov (SNP) and Robert Stoll. The
appellants are SNP’s former clients E. Timothy Fitzgibbons and William Parrish (the
former clients), another law firm, Eagan Avenatti (EA), and Michael Avenatti. SNP and
EA, together with a third law firm, represented the former clients in a malicious
prosecution action, which settled for $39 million. The three law firms had a fee-sharing
agreement; SNP alleged that EA and the former clients cut it out of its share of the
settlement proceeds, $5.4 million.
              After about a year and a half of litigation, EA and the former clients moved
to compel arbitration. Michael Avenatti moved to compel arbitration a month later. The
trial court denied the motions because, among other reasons, the moving parties had
engaged in “tons of litigation.”
              The record before us is somewhat unusual. In lieu of a clerk’s transcript,
the appellants have filed an appendix, which they style “appendix of exhibits supporting

                                             2
appellant’s [sic] opening brief,” in three volumes. Respondents’ appendix spans eight
volumes. Perusing appellants’ appendix would convey no idea of what the trial court
meant by “tons of litigation.” Fortunately, respondents’ appendix is more illuminating on
this point.
                 California Rule of Court, rule 8.124 requires an appellant’s appendix to
include any item necessary for the proper consideration of the issues, including any item
                                                                                            1
that the appellant should reasonably assume the respondent will rely on. Appellants’
appendix does not begin to comply with the rule. Instead, appellants left it up to
respondents to demonstrate the basis for the trial court’s ruling.
                 We affirm the order denying the motions to compel arbitration. There was
indeed “tons of litigation” during the period between filing the complaint and filing the
first motion to compel arbitration, including a writ petition to this court and a petition for
review to the California Supreme Court. After making thorough use of the court system,
the former clients have definitely waived any right they may have had to have this
dispute arbitrated. As for EA and Michael Avenatti, neither is a party to an agreement
with SNP containing an arbitration provision. Neither therefore has any basis upon
which to compel arbitration.
                                                    FACTS
                 On July 21, 2008, the former clients entered into an attorney-client fee
                                            2
contract with three law firms: EA, SNP, and Panish, Shea & Boyle, LLP. The law firms
were hired on contingency to represent the former clients as plaintiffs in a malicious
prosecution action against FLIR Systems, Inc.
                 The attorney-client fee contract contained the following arbitration
provision: “Any dispute arising under this Contract or in connection with Attorneys’

        1
                   The appendix must also include the notice of election to use an appendix and the register of
actions, neither of which can be found among appellants’ “exhibits.” (See Cal. Rule of Court, rule 8.124(1)(A) and
(C) and rule 8.122(b)(1)(F).)
          2
                   Then called Eagan O’Malley & Avenatti, LLP.

                                                         3
services hereunder, including any claims by Client against Attorneys for malpractice or
other tort claim, shall be resolved by binding arbitration before JAMS located in Santa
Barbara, California. Such arbitration shall be conducted in accordance with the
arbitration rules and procedures of JAMS then in effect. Client acknowledges that he has
been fully advised of all the possible consequences of arbitration including but not
limited to: [¶] a. If a malpractice action arises from this Agreement, neither Client nor
Attorneys will have the right to a jury trial. [¶] b. Both parties retain the right to retain
counsel to prepare their respective claims and/or defenses for the arbitration hearing. [¶]
c. Client can choose to hire an attorney who may not request or whose retainer
agreement does not contain an arbitration provision. [¶] Client and Attorneys further
acknowledge that this provision does not apply to an action over fees and costs pursuant
to California Business & Professions Code § 6204; an agreement to enter into binding
arbitration with respect to fees and/or costs cannot be made unless such an agreement is
in writing, and is made after the dispute over fees, costs, or both, has arisen.”
              In November 2009, the three law firms entered into a fee-sharing
agreement, acknowledged and agreed to by the former clients. The agreement divided up
“the payment of . . . attorneys’ fees” in the malicious prosecution case among the three
firms in the event of settlement or judgment. The fee-sharing agreement did not contain
an arbitration provision.
              In May 2011, the malicious prosecution action settled in mediation. The
FLIR defendants agreed to pay the former clients $39 million on or before May 31.
According to SNP, on the evening of May 31, after the settlement money had been paid,

                                               4
the former clients faxed SNP a letter terminating its representation. SNP calculated that
it was owed $5.4 million.
                  EA filed a complaint for declaratory relief on June 14, 2011, seeking a
                                                                                            3
ruling that SNP was not entitled to any recovery from the settlement. EA represented
itself. SNP cross-complained against EA and the former clients for breach of contract,
                                                               4
conversion, and constructive trust in July 2011. A year later, the former clients,
represented by EA, cross-complained against SNP and Robert Stoll. In October 2012, the
former clients filed a first amended cross-complaint against SNP and Robert Stoll. EA
and the former clients moved to compel arbitration in December 2012. In December
2012, SNP named Michael Avenatti as a Roe cross-defendant. Michael Avenatti moved
to compel arbitration in January 2013. SNP opposed both motions, which the court
denied in March 2013.
                  That is the skeleton, as provided (mostly) by the appellants in their three-
volume appendix. Here is the flesh on the bones.
                  July 2011 – SNP demurs to the complaint. EA demurs to the cross-
complaint. EA moves for a protective order, for an order quashing deposition subpoenas
for the former clients, and for permission to file an early summary judgment motion. EA
files a request to stay SNP’s cross-complaint against the former clients because they want
                                                                                                                      5
to arbitrate the fee dispute with SNP under Business and Professions Code section 6201.

         3
                    The complaint also named Robert Stoll individually as a defendant, alleging that he as well as
SNP had entered into the fee-sharing agreement. The fee-sharing agreement identifies only SNP as a party; Robert
Stoll signed the agreement on SNP’s behalf.
          4
                    Another law firm represented SNP in this litigation.
          5
                    Business and Professions Code section 6201, subdivision (b), provides in pertinent part: “If an
attorney, or the attorney’s assignee, commences an action in any court or any other proceeding and the client is
entitled to maintain arbitration under this article, and the dispute is not one to which subdivision (b) of Section 6200
applies, the client may stay the action or other proceeding by serving and filing a request for arbitration in
accordance with the rules established by the board of trustees pursuant to subdivision (a) of Section 6200.”

                                                           5
The court enters an order staying the cross-complaint. The former clients request fee
arbitration before the San Francisco Bar Association. EA applies ex parte in the trial
court to modify the stay order.
                 August 2011 – The trial court grants the ex parte application, vacates the
stay order, and enters a new order, staying only the part of the SNP cross-complaint
involving the fee dispute with the former clients. The rest of the cross-complaint goes
forward. The trial court rules on the demurrers to the complaint and to the SNP cross-
complaint. EA answers the SNP cross-complaint for itself, without mentioning
arbitration. The court rules on the July discovery motions and the motion regarding an
early summary judgment.
                 September 2011 – EA files a motion to quash a third-party subpoena from
SNP. The San Francisco Bar Association rules that any fee dispute arbitration must take
place before the Santa Barbara Bar Association.
                 October 2011 – EA files a motion for a protective order and a request for
sanctions. EA files a motion for judgment on the pleadings against the SNP cross-
             6
complaint. EA files a motion to compel further responses to requests for admissions and
a motion to compel further responses to form interrogatory 17.1. Both discovery motions
include requests for sanctions.
                 November 2011 – The trial court rules on the discovery motions regarding
further responses and takes the motion to quash the third-party subpoena and the motion
for judgment on the pleadings under submission.

        6
                  Although EA moved for judgment on the pleadings on its own behalf, the gravamen of the motion
was the claim that the former clients had properly discharged SNP under the attorney-client fee contract and
therefore SNP could recover only in quantum meruit.

                                                       6
                  December 2011 – SNP files a motion to compel further responses to
document production demands.
                  January 2012 – The trial court rules on the motion for judgment on the
pleadings filed in October 2011 and the motion to quash the third-party subpoena filed in
September 2011. EA files a motion to compel further responses to special interrogatories
and requests sanctions.
                  February 2012 – The former clients decide they do not want to proceed
with fee dispute arbitration. They cancel the arbitration before the Santa Barbara Bar
Association on the day before the hearing. EA applies ex parte to have the stay ordered
in August 2011 lifted. One of the former clients files a motion to disqualify the judge
(not for cause), which is granted. The case is transferred to another judge.
                  March 2012 – EA petitions this court for a writ of mandate, requesting an
order to the trial court to grant the motion for judgment on the pleadings. The writ
petition is denied. The former clients demur to the SNP cross-complaint. A trial setting
conference is scheduled for May 2012.
                  April 2012 – EA petitions the California Supreme Court for review of this
court’s denial of the writ petition. SNP opposes the petition for review.
                  May 2012 – SNP files a first amended cross-complaint, once again naming
                                                              7
EA and the former clients as cross-defendants. The former clients demur to the first
amended cross-complaint. At the trial setting conference, the court sets a jury trial date
in March 2013. The record does not reflect any reference to arbitration at the trial setting
conference. The petition for review in the Supreme Court is denied. EA answers SNP’s
first amended cross-complaint for itself, once again without mentioning arbitration.

         7
                  The causes of action in the first amended cross-complaint are: breach of contract against the
former clients, based on the attorney-client fee contract; breach of contract against EA, based on the fee-sharing
agreement; conversion against all cross-defendants; and constructive trust against all cross-defendants.

                                                          7
                 July 2012 – The former clients (represented by EA) answer SNP’s first
amended cross-complaint, alleging 21 affirmative defenses, not including arbitration.
The former clients cross-complain against SNP. EA files a motion to have certain
records sealed. SNP files a motion to enforce a deposition subpoena to a bank.
                 August 2012 – SNP demurs to the former clients’ cross-complaint. SNP
posts jury fees.
                 September 2012 – The court rules on SNP’s motion to enforce the
deposition subpoena to the bank and EA’s motion to seal records (from July 2012). SNP
files a motion to compel a deposition.
                 October 2012 – EA files a motion to quash a subpoena. The former clients
file a first amended cross-complaint.
                 November 2012 – SNP files motions to compel further responses to special
interrogatories and further responses to document production demands. SNP demurs to
the former clients’ first amended cross-complaint. The court rules on EA’s motion to
quash SNP’s subpoena. SNP files a discovery motion.
                 December 2012 – EA and the former clients file a motion to compel
arbitration. SNP files a motion for summary judgment on the same day as well as a
motion to compel further responses to special interrogatories. SNP files another motion
to compel further responses to special interrogatories a few days later. SNP files motions
to compel further responses from the former clients to document production demands.
SNP amends its first amended cross-complaint to name Michael Avenatti as a Roe cross-
                                                                                         8
defendant as to the conversion and constructive trust causes of action.
                 January 2013 – Michael Avenatti files a motion to compel arbitration.
                 March 2013 – The court denies the motions to compel arbitration and rules
on the discovery motions (seven of them), as well as on SNP’s motion for summary

        8
                   Michael Avenatti signed the fee-sharing agreement on behalf of EA. He also signed the attorney-
client fee contract on behalf of EA.

                                                        8
judgment and on the former clients’ demurrer to SNP’s first amended cross-complaint.
The reasons given for denying the motions to compel arbitration are EA’s failure to show
that SNP had refused to arbitrate, the untimeliness of the application “after tons of
                                                                                              9
litigation,” including the writ petition, and the proximity to the trial date.
                 EA, the former clients, and Michael Avenatti have appealed from the denial
of their motions to compel arbitration.
                                                DISCUSSION
I.               The Former Clients’ Motion to Compel Arbitration
                                                 10
                 Code of Civil Procedure section 1281.2 provides in pertinent part: “On
petition of a party to an arbitration agreement alleging the existence of a written
agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such
controversy, the court shall order the petitioner and the respondent to arbitrate the
controversy if it determines that an agreement to arbitrate the controversy exists, unless it
determines that: [¶] (a) The right to compel arbitration has been waived by the petitioner
. . . .” Whether a party has waived the right to compel arbitration is usually a question of
fact, and we affirm the trial court’s findings if they are supported by sufficient evidence.
(St. Agnes Medical Center v. PacifiCare of California (2003) 31 Cal. 4th 1187, 1196 (St.
Agnes).)
                 As to the former clients’ motion to compel arbitration this case closely
resembles a case we decided in 2010, Burton v. Cruise (2010) 190 Cal. App. 4th 939
(Burton), in which we upheld the trial court’s denial of a petition after substantial
litigation had occurred before arbitration was requested. In Burton, a medical
malpractice case, the plaintiff waited for 10 months after filing her complaint to move to

        9
                  Because we affirm the trial court’s ruling based on waiver, we do not address the other two
reasons for denying the motion to compel arbitration.
         10
                  All further statutory references are to the Code of Civil Procedure.

                                                         9
compel arbitration. In the meantime, she had participated in a case management
conference, requested a trial date, and engaged in six months’ worth of discovery. (Id. at
p. 943.)
              Burton lays out the analysis that applies to this case. We therefore quote at
length from the opinion. “California law favors arbitrations as a relatively quick and
cost-effective means to resolve disputes. [Citation.] There is a statutory exception where
the ‘right to compel arbitration has been waived’ by the moving party. (§ 1281.2, subd.
(a).) [¶] Although the statute speaks in terms of ‘waiver,’ the term is used ‘“as a
shorthand statement for the conclusion that a contractual right to arbitration has been
lost.”‘ [Citation.] This does not require a voluntary relinquishment of a known right; to
the contrary, a party may be said to have ‘waived’ its right to arbitrate by an untimely
demand, even without intending to give up the remedy. In this context, waiver is more
like a forfeiture arising from the nonperformance of a required act. [Citations.]
              “In St. Agnes, our Supreme Court set forth a multifactor test to assess
waiver claims. While waiver is not a mechanical process, and no one factor is
predominant, the pertinent factors for this appeal are: (1) Did the party seeking
arbitration act inconsistently with the right to arbitrate or otherwise substantially invoke
the litigation process? (2) Are the parties ‘well into preparation’ of the lawsuit? (3) Is
there an imminent trial date? (4) Has the delay affected, misled, or prejudiced the
opposing party? [Citation.] [¶] . . . [¶]
              “St. Agnes cautions us to examine each case in context. ‘[N]o single test
delineates the nature of the conduct that will constitute a waiver of arbitration.’
[Citation.] True, the mere filing of a complaint, without more, does not constitute the
forfeiture of a right to contractual arbitration: ‘In California, whether or not litigation
results in prejudice also is critical in waiver determinations.’ [Citation.] [¶] But does
this mean that a litigant may wait until trial is due to commence before demanding

                                              10
arbitration? To the contrary, in Wagner Construction Co. v. Pacific Mechanical Corp.
(2007) 41 Cal. 4th 19, the Supreme Court expressly observed that a party’s unreasonable
delay in demanding or seeking arbitration, in and of itself, may constitute a waiver of a
right to arbitrate. ‘[A] party may [not] postpone arbitration indefinitely by delaying the
demand . . . . [¶] When no time limit for demanding arbitration is specified, a party must
still demand arbitration within a reasonable time. [Citation.] … “[W]hat constitutes a
reasonable time is a question of fact, depending upon the situation of the parties, the
nature of the transaction, and the facts of the particular case. “‘ [Citation.] [¶] And in
Adolph v. Coastal Auto Sales, Inc. (2010) 184 Cal. App. 4th 1443, 1452 (Adolph), we
recognized that a party could not blow hot and cold by pursuing a strategy of courtroom
litigation only to turn towards the arbitral forum at the last minute, thereby frustrating the
goal of arbitration as a speedy and relatively inexpensive means of dispute resolution:
‘We are loathe to condone conduct by which a [litigant] repeatedly uses the court
proceedings for its own purposes . . . all the while not breathing a word about the
existence of an arbitration agreement, or a desire to pursue arbitration . . . .’ [Citation.]
              “We recognize that waiver is not to be lightly inferred and the party seeking
to establish it bears a ‘heavy burden of proof,’ with all doubts resolved in favor of
arbitration. [Citation.] Like the ‘clear and convincing’ standard of proof, these higher
burdens guide the trial court’s determination, but do not alter the standard of review on
appeal. ‘“It was the trial court’s duty to determine whether” the petitioners met their
“burden of proof; it is our duty to determine whether there is substantial evidence to
support the trial court’s findings that it did.”‘ [Citations.] ‘Although the burden of proof
is heavy on the party seeking to establish waiver, which should not lightly be inferred in
light of public policy favoring arbitration, a determination by a trial court that the right to
compel arbitration has been waived ordinarily involves a question of fact, which is

                                              11
binding on the appellate court if supported by substantial evidence. The appellate court
may not reverse the trial court’s finding of waiver unless the record as a matter of law
compels finding nonwaiver.’ [Citation.]
                  “On appeal, we review waiver as a factual inquiry for the trial court, and
will affirm if substantial evidence supports the trial court’s determination. (Adolph,
supra, 184 Cal.App.4th at pp. 1449–1450.) We construe any reasonable inference in the
manner most favorable to the judgment, resolving all ambiguities to support an
affirmance. [Citation.]” (Burton, supra, 190 Cal.App.4th at pp. 944-946.)
                  Substantial evidence supported the trial court’s determination in this case
that the former clients had waived their right to arbitration under the attorney-client fee
contract. The former clients’ delay was considerably more egregious than that in Burton.
In the case now before us, the parties engaged in 18 months of litigation – from July 2011
                                                                                                  11
to December 2012 – before the former clients moved to compel arbitration.                              And, as the
recitation of the facts demonstrates, these months were filled with incident. Hardly a
month went by without motions being filed, opposed, replied to, or heard and ruled on.
On March 7, 2013, the date of the hearing on the petition to compel arbitration, there
were 10 other motions on calendar – a motion for summary judgment, a demurrer and a
motion to strike, and seven discovery motions. The trial date was less than a month
away. And for all this time – through a trial setting conference, the posting of jury fees,
and an answer – the former clients never “breathed a word” about arbitration under the
attorney-client fee contract.
                  All but conceding that delay was egregious, appellants argue that
notwithstanding the delay, SNP was not prejudiced. Appellants contend, in effect, that

         11
                  Although part of the SNP cross-complaint was stayed between July 2011 and February 2012 to
permit a fee dispute arbitration, the rest of the case went forward, including the portion dealing with conversion.
After several months’ delay, the former clients changed their minds about fee arbitration and went back to litigating
in court. They waited almost a year after that to request arbitration.

                                                         12
nothing happened in the trial court that would not have happened in arbitration, so SNP
                                                                               12
was not put to any additional expense. Therefore no prejudice.
                 This argument is unavailing. As we said in Burton, delay itself, if long
enough, can amount to prejudice. “As the Supreme Court explained in St. Agnes,
prejudice is typically found where ‘the petitioning party’s conduct has substantially
undermined [the] important public policy [in favor of arbitration] or substantially
impaired the other side’s ability to take advantage of the benefits and efficiencies of
arbitration.’ [Citation.]
                 “In Sobremonte v. Superior Court (1998) 61 Cal. App. 4th 980, 995
(Sobremonte), the appellate court found that a bank waived its right to arbitrate a dispute
with its customers by waiting to demand arbitration until its customers ‘spent 10 months
preparing their case for a full trial at a considerable expenditure of time and money . . . .
Their counsel expended over 200 hours in trial preparation. [The customers] incurred
attorney fees and costs for conducting discovery and taking depositions. They were well
into case preparation, and a little over a month to trial, when the Bank made its motion to
compel.’ The bank’s delay deprived the customers of any benefits to be gained from
arbitration. ‘If we consider the amount of time and money they have already spent in the
judicial system, any benefits they may have achieved from arbitration have been lost.’
[Citation.]” (Burton, supra, 190 Cal.App.4th at p. 947.)
                 The recently decided case of O’Donoghue v. Superior Court (2013) 219
Cal. App. 4th 245, cited in appellants’ reply brief, does not compel a different result. In
O’Donoghue, the reviewing court agreed with appellants that the party requesting
judicial reference had delayed seeking the reference and had exhibited litigation conduct

        12
                  Appellants rely heavily on Groom v. Health Net (2000) 82 Cal. App. 4th 1189 in making this
argument. As we stated in Burton, we decline to follow Groom’s analysis on this issue. (See Burton, supra, 190
Cal.App.4th at p. 948.)

                                                       13
inconsistent with an intent to proceed before a referee, both factors supporting a waiver.
(Id. at p. 263.) The reviewing court found, however, that two other factors – substantial
invoking of the litigation machinery and substantial preparation of a lawsuit – did not
support waiver. (Id. at p. 264.) The court therefore upheld the trial court’s order
granting the petition to compel judicial reference and its determination that no waiver
had occurred, under the abuse of discretion standard of review. (Id. at p. 265.)
                  In this case, all four factors support the trial court’s order denying the
former clients’ petition to compel arbitration under the abuse of discretion standard
because of waiver. They delayed seeking arbitration under the attorney-client fee
contract for many months, even after they head-faked by seeking Business and
Professions Code fee dispute arbitration and then canceling it. They “substantially
invoked” the litigation machinery through motions for rulings on the merits – two
demurrers and a motion for judgment on the pleadings that would have benefited them as
                                              13
much as EA if it had been granted.                 Trial preparation was also well advanced. A trial
date was fast approaching; a trial setting conference had been held and jury fees posted.
All this had occurred without any reference to arbitration under the attorney-client fee
contract.
                                                                                                                      14
                  In addition to the delay and the substantial investment in trial preparation,
appellants have used the litigation machinery in other ways to disadvantage SNP. To
take the most obvious example, appellants would not be eligible for writ relief in an
arbitration. They would not be able to get any review at all of the merits of their claims.

         13
                    Although the writ petition and petition for review were ostensibly filed by EA, we cannot
overlook the position EA occupied in this litigation. It was a plaintiff, counsel for a plaintiff and cross-defendant
(itself), and counsel for co-cross-defendants (the former clients). To argue, as appellants did, that the former clients’
participation in litigation before filing the petition to compel arbitration was minimal is to ignore the alignment
between EA’s interests and those of the former clients.
           14
                    SNP’s counsel stated that the firm had incurred approximately $150,000 in fees by the time of the
petition to compel arbitration, not including the fees spent to prepare for the fee dispute arbitration that never
happened.

                                                           14
(See Moncharsh v. Heily & Blase (1992) 3 Cal. 4th 1, 11.) So SNP would not have been
put to the expense of opposing a petition for review in the California Supreme Court after
this court denied EA’s writ petition. Appellants would also not have been able to file a
disqualification motion – as did one of the former clients – to get rid of an arbitrator
                                                              15
about whom they were having second thoughts.
                  The bulk of the litigation, however, concerned discovery, and appellants
argue that they would have been able to do discovery in the arbitration anyway. This is
questionable at best. The arbitration provision did not incorporate or refer to section
1283.05, which authorizes full-blown discovery in arbitration. In the absence of a
“dispute, controversy, or issue arising out of or resulting from any injury to, or death of, a
person caused by the wrongful act or neglect of another,” the arbitration agreement had to
provide for the incorporation of Code of Civil Procedure discovery procedures. (See §
1283.1, subd. (b).) It did not.
                  Instead, the parties to the attorney-client fee contract agreed to be governed
by JAMS rules and procedures. Rather than adhering to the Code of Civil Procedure, the
JAMS “exchange of information” rule more closely resembles Rule 26 of the Federal
                                                                                      16
Rules of Civil Procedure, especially the early meeting of counsel.                         JAMS requires the
         15
                    The motion disposed of the judge who had denied EA’s motion for judgment on the pleadings
based on the quantum meruit theory. The former clients then reiterated the arguments supporting the motion for
judgment on the pleadings in their demurrer to the SNP cross-complaint before the new judge.
          16
                    Rule 26(a)(1)(A) of the Federal Rule of Civil Procedure (28 U.S.C.) provides: “Initial Disclosure.
[¶] [] In General. Except as exempted by Rule 26(a)(1)(B) or as otherwise stipulated or ordered by the court, a party
must, without awaiting a discovery request, provide to the other parties: [¶] (i) the name and, if known, the address
and telephone number of each individual likely to have discoverable information – along with the subjects of that
information – that the disclosing party may use to support its claims or defenses, unless the use would be solely for
impeachment; [¶] (ii) a copy – or a description by category and location – of all documents, electronically stored
information, and tangible things that the disclosing party has in its possession, custody, or control and may use to
support its claims or defenses, unless the use would be solely for impeachment; [¶] (iii) a computation of each
category of damages claimed by the disclosing party – who must also make available for inspection and copying as
under Rule 34 the documents or other evidentiary material, unless privileged or protected from disclosure, on which
each computation is based, including materials bearing on the nature and extent of injuries suffered; and [¶] (iv) for
inspection and copying as under Rule 34, any insurance agreement under which an insurance business may be liable
to satisfy all or part of a possible judgment in the action or to indemnify or reimburse for payments made to satisfy
the judgment.” Under Rule 26(f), the parties must confer no later than 21 days before a scheduling conference is
held to discuss the disclosures mandated by the rule and must prepare a joint report to be submitted to the court
within 14 days after the conference.

                                                         15
parties to exchange all documents supporting their claims and the names and addresses of
                                                                                                 17
witnesses no later than 21 days after the notice of claims has been received.                         The JAMS
rule also, like federal law but unlike California law, imposes a continuing discovery
                                  18
obligation on the parties.             (Cf. Fed. Rules of Civ. Proc., rule 26(e)(1)(A) 28 U.S.C. and
§ 2030.060, subd. (g).)
                 While some discovery may still be necessary under the JAMS regime, it is
likely to be less expensive and time-consuming because of the disclosure obligations. In
addition, JAMS permits more expeditious resolution of discovery disputes – an arbitrator
is more likely than a judge to be available to resolve issues promptly, and a formal
hearing may not be necessary. JAMS arbitrators can resolve these disputes through
                             19
telephone conferences.            Delay has caused all of these time- and resource-saving aspects
of arbitration to be lost. This amounts to substantial prejudice.
II.              EA’s and Michael Avenatti’s Motions to Compel Arbitration
                 In addition to participating on its own behalf in the “tons of litigation”
leading up to the motion to compel arbitration, EA failed to show that it is a party to an
agreement with SNP containing an arbitration provision. “When ‘the language of an
arbitration provision is not in dispute, the trial court’s decision as to arbitrability is
subject to de novo review.’ [Citation.] Thus, in cases where ‘no conflicting extrinsic
evidence is introduced to aid the interpretation of an agreement to arbitrate, the Court of
Appeal reviews de novo a trial court’s ruling on a petition to compel arbitration.’
[Citation.]” (Molecular Analytical Systems v. Ciphergen Biosystems, Inc. (2010) 186
Cal. App. 4th 696, 707.) “The strong public policy in favor of arbitration does not extend

        17
                  We informed the parties of our intent to take judicial notice under Evidence Code sections 452 and
459 of the JAMS discovery rules. None of the parties objected. The Comprehensive Arbitration Rules and
Procedures are available on the JAMS website, www.jamsadr.com.
          18
                  The rule also limits depositions to one for each side; the arbitrator must approve additional
depositions.
          19
                  As a practical matter, participants in an arbitration are also more likely to cooperate with each
other in discovery if only to avoid giving the arbitrator a bad impression of their reasonableness and overall
worthiness before the arbitrator has to make a decision on the merits.

                                                        16
to those who are not parties to an arbitration agreement, and a party cannot be compelled
to arbitrate a dispute that he has not agreed to resolve by arbitration.” (Benasra v.
                                                          20
Marciano (2001) 92 Cal. App. 4th 987, 990.)
                  The fee-sharing agreement, the sole contractual basis for SNP’s dispute
with EA over the division of the settlement proceeds, contains no arbitration provision.
The attorney-client fee contract, which does have an arbitration provision, is a contract
                                                          21
between the lawyers and the former clients.                    It is not a contract among the law firms
designated as the “Attorneys” in the first paragraph, and it does not mention fee-sharing
or division of proceeds. Nothing in the attorney-client fee contract suggests that the
lawyers agreed to arbitrate with each other. (See Lindemann v. Hume (2010) 204
Cal. App. 4th 556, 570 [arbitration agreement does not apply to “internecine disputes”].)
                  The same analysis supports the denial of Michael Avenatti’s individual
motion to compel arbitration. Although he promptly requested arbitration after being
named as a Roe cross-defendant, he also is not a party to an agreement with an arbitration
provision. He signed both the fee-sharing agreement and the attorney-client fee contract
as a representative of his law firm, not as an individual. Even assuming he could compel
arbitration in his individual capacity by virtue of being EA’s agent (see, e.g., Dryer v. Los
Angeles Rams (1985) 40 Cal. 3d 406, 418; Berman v. Dean Witter & Co., Inc. (1975) 44
Cal. App. 3d 999, 1004), EA itself has no basis upon which to compel SNP to arbitrate
with it. Accordingly, his individual motion to compel arbitration was properly denied.

         20
                     Although the trial court did not explicitly cite lack of an arbitration agreement among its reasons
for denying EA’s and Michael Avenatti’s motions, we review the result, not the reasoning. (See Bains v. Moores
(2009) 172 Cal. App. 4th 445, 478; Luther Burbank Savings & Loan Assn v. Community Construction, Inc. (1998) 64
Cal. App. 4th 652, 660; Economic Empowerment Foundation v. Quackenbush (1997) 57 Cal. App. 4th 677, 692, fn.
13.)
          21
                     The opening paragraph of the attorney-client fee contract recites: “This ATTORNEY-CLIENT
FEE CONTRACT (this “Agreement”) is the written fee contract that California law requires lawyers to have with
their clients. It is between Panish Shea & Boyle LLP, and Stoll Nussbaum & Polakov LLP, and Eagan O’Malley &
Avenatti, LLP (collectively, the “Attorneys”) and William Parrish and E. Timothy Fitzgibbons (collectively, the
“Client”).

                                                          17
                                    DISPOSITION
             The order denying appellants’ motions to compel arbitration is affirmed.
Respondents are to recover their costs on appeal.

                                                BEDSWORTH, J.

WE CONCUR:

RYLAARSDAM, ACTING P. J.

MOORE, J.

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