Court Opinion

ID: 8488346
Source: CourtListenerOpinion
Date Created: 2022-11-21 20:02:24.520365+00
Date Added: 2024-06-11T16:50:10.443329
License: Public Domain

Filed 11/21/22 Hollander v. Tennenbaum Capital Partners CA2/1
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         SECOND APPELLATE DISTRICT

                                        DIVISION ONE

 DAVID HOLLANDER,                                                         B314018

          Plaintiff, Cross-defendant and                                  (Los Angeles County
          Appellant,                                                      Super. Ct. No. 20STCP02406)

           v.

 TENNENBAUM CAPITAL
 PARTNERS, LLC et al.,

           Defendants, Cross-complainants
           and Respondents.

      APPEAL from an order of the Superior Court of Los
Angeles County, Laura A. Seigle, Judge. Affirmed.
      Hill, Farrer & Burrill and Michael K. Collins for Plaintiff,
Cross-defendant and Appellant.
      Quinn Emanuel Urquhart & Sullivan, Harry A. Olivar, Jr.
and Thomas Parker for Defendants, Cross-complainants and
Respondents.
                                _________________________
                        INTRODUCTION
      David Hollander appeals the superior court’s ruling
denying his petition to correct and affirm as corrected the award
in an arbitration between Hollander, Tennenbaum Capital
Partners, LLC (TCP), and Tennenbaum Special Situations MM,
IX LLC, Tennenbaum IX-C SLP, LLC, Tennenbaum IX-O SLP,
LLC, and Tennenbaum Special Situations IX-S GP, LLC
(collectively the CIV entities).1 Hollander prevailed on certain of
his claims in the arbitration, but not others including his request
for attorney’s fees.
       When Hollander presented his request for attorney’s fees to
the arbitrator, he did not include any claim or argument that he
was entitled to attorney’s fees under Labor Code section 218.5
(section 218.5). That section provides that in any action for
nonpayment of wages, “the court shall award reasonable
attorney’s fees and costs to the prevailing party if any party to
the action requests attorney’s fees and costs upon the initiation of
the action.” (§ 218.5, subd. (a).) In his petition to the superior
court, Hollander sought an order adding attorney’s fees to the
arbitration award, contending section 218.5 entitled him to such
fees. The superior court denied Hollander’s request to correct
and affirmed the arbitration award as is without any award of
attorney’s fees.
       On appeal, Hollander asserts he has an “unwaivable right”
to attorney’s fees under section 218.5 such that he can argue for

      1 Consistent with the parties’ briefs, we refer to the funds
as the CIV entities, reflecting that those entities are “carried
interest vehicles.” TCP and the CIV entities are collectively
referred to as respondents.

                                 2
such fees for the first time in a petition to correct the arbitration
award. We disagree, and conclude Hollander’s failure to make
such a claim in the arbitration proceeding precludes Hollander
from seeking such attorney’s fees through a petition to correct the
award. An arbitration award may be corrected when an
arbitrator exceeds her powers, but the arbitrator here did not
exceed her powers by failing to rule on a claim for relief that was
never presented to her in the first place. Hollander does not
advance any other ground in this appeal for correcting the
arbitration award, and we therefore affirm.
       FACTUAL AND PROCEDURAL BACKGROUND
A.     Hollander’s Employment and the Parties’ Dispute
       The pertinent facts set forth in the arbitrator’s final award
are as follows. Hollander was employed by TCP starting in 2002,
first as a director, then as general counsel. In 2011, he became a
managing partner of TCP. In April 2016, he withdrew from TCP
as a partner and became an employee of TCP. The terms of his
employment were set forth in a transition agreement with TCP.
He remained at TCP as an employee until he voluntarily
separated on January 15, 2017.
       TCP is an investment manager that, among other things,
manages pooled investment funds including the CIV entities.
The CIV entities are limited liability companies directly managed
by TCP and governed by operating agreements referred to
collectively as the “CIV Agreements.” Each of the CIV entities
manages its own investment fund from which the CIV entity
receives a performance fee if the fund generates profits at or
above a specific rate. The performance fee paid to a CIV entity is
distributed to its equity investors based on their percentage
interest, as defined in each of the CIV Agreements; the investors

                                  3
are defined as either “Senior Members” or “Employee Members.”
Hollander was a Senior Member and officer of each of the CIV
entities at the relevant times.
       After Hollander separated from TCP in 2017, a dispute
arose over whether Hollander was entitled to equity interests in
the CIV entities that were forfeited by four former TCP
employees. The forfeited equity interests were conveyed to TCP,
and Hollander did not receive any share of them.
B.    Arbitration Proceeding
      On March 27, 2018, Hollander filed an arbitration demand
with JAMS naming TCP as the sole respondent.2 Hollander
asserted claims for breach of contract and breach of fiduciary
duty and sought compensatory damages, specific performance,

      2 The CIV Agreements included the following arbitration
provision:
      “The parties hereto agree that in the event of any dispute,
controversy or claim arising out of or relating to this Agreement,
whether based on contract, tort, statue [sic] or other legal or
equitable theory (including without limitation, any claim of
fraud, misrepresentation or fraudulent inducement or any
question of validity or effect of this Agreement including this
clause) or the breach or termination hereof (the ‘Dispute’), the
parties shall negotiate in good faith to resolve such Dispute for a
period of no less than thirty (30) days following the notification of
one party to the other(s) that a Dispute exists. If the parties are
unable to resolve a Dispute through such good-faith negotiations,
then such Dispute shall be resolved in binding arbitration in
accordance with the following provisions: [¶] (a) Such dispute
shall be resolved by binding arbitration to be conducted before
JAMS in accordance with the provisions of JAMS’ Comprehensive
Arbitration Rules and Procedures as in effect at the time of the
arbitration. . . . .”

                                  4
and punitive damages. About a year later, Hollander amended
his arbitration demand to add the CIV entities as additional
respondents in the claim for breach of contract and to include as
to all respondents a claim for conversion and a specific prayer for
attorneys’ fees and costs. The prayer for attorney’s fees and costs
was based on indemnification clauses in the operative
agreements governing the investment vehicles.
       The arbitration hearing was held on December 3, 2019, and
the matter was submitted for a final decision after the parties
simultaneously submitted post-hearing briefing on February 3,
2020.
       In her first interim award, issued on March 6, 2020, the
arbitrator decided that Hollander was entitled to recover
$742,170 on his breach of contract claims. The arbitrator found
the CIV entities were required to allocate forfeited equity to
Senior Members, including Hollander, under section 3.10 of the
CIV Agreements. The arbitrator rejected respondents’ argument
that there was a mutual mistake in the drafting of the
agreements. The arbitrator thus concluded that the CIV entities
breached the CIV Agreements; the arbitrator, however, stated
she was not “mak[ing] a determination on the conversion or
breach of fiduciary duty claims, as they are superfluous in
conjunction with Hollander’s breach of contract claim.” The
$742,170 award to Hollander included $622,856 in monetary
damages and $119,314 in prejudgment interest. The arbitrator
denied Hollander’s request for punitive damages.
       Hollander subsequently submitted a request for attorney’s
fees and costs to the arbitrator. Hollander’s request for
attorney’s fees was based on indemnification provisions in the

                                 5
CIV Agreements and the TCP “Operating Agreement.”3
Hollander sought $330,511.70 in attorneys’ fees and expenses
plus another $305,658.57 in indemnification for tax liability
Hollander claimed he would incur as a result of any fee award.
       On April 14, 2020, the arbitrator issued her interim award
No. 2 in which she denied Hollander’s request for attorney’s fees,
concluding the indemnification provisions applied only to third
party claims against the indemnitees, and not to first party
claims such as Hollander’s claims against the CIV entities and
TCP. The arbitrator also stated that “[f]rom an equitable
standpoint, it would be unjust to require [r]espondents to cover
[Hollander’s] costs here,” because Hollander “created a significant
amount of expenses as a result of his quest for indemnification of
tax liabilities, as well as punitive damages” and the positions he
took in support of those claims were “untenable.”
       On May 5, 2020, the arbitrator issued her final award to
Hollander in the amount of $742,170. The final award
incorporated interim award No. 2 by reference and confirmed
that Hollander’s application for attorney’s fees and costs was
denied.
       Respondents paid the award on May 19, 2020.
C.    Superior Court Proceedings
      On July 29, 2020, Hollander filed a petition under Code of
Civil Procedure section 1286.6, subdivision (b) to correct the
arbitration award and confirm it as so corrected. Hollander
sought to correct the arbitration award to include an award of

      3 The full title of this agreement is the “Sixth Amended and
Restated Limited Liability Company Agreement of Tennenbaum
Capital Partners LLC.”

                                 6
attorney’s fees and costs in the amount of $330,510 pursuant to
section 218.5 as well as the indemnification provisions in the CIV
Agreements and the TCP Operating Agreement.
       On August 27, 2020, respondents filed a response to the
petition as well as a contingent cross-petition to vacate the
arbitration award. On September 3, 2020, Hollander filed his
response to respondents’ contingent cross-petition.
       On February 24, 2021, after the matter was fully briefed,
the superior court held a hearing on Hollander’s petition. Prior
to the hearing, the court posted a tentative ruling denying the
petition to correct the arbitration award. On the court’s motion,
the matter was continued to March 30, 2021. The parties
subsequently supplemented the record.
       At the second hearing, held on March 30, 2021, the court
heard oral argument and then took the matter under submission.
The court later issued a written decision denying the petition to
correct the arbitration award and granting the petition to confirm
the award. The court assumed, without deciding, that Hollander
was not precluded from pursuing a claim for attorney’s fees under
section 218.5 in a petition to correct the award even though he
had not presented such a claim to the arbitrator. The court
reasoned that Hollander was not a prevailing party against TCP
because the arbitration award for breach of contract damages
was against the CIV entities only. While Hollander was a
prevailing party against the CIV entities, those entities were not
Hollander’s employer, which the court found to be a prerequisite
to a recovery under section 218.5. In addition, Hollander’s claim
against the CIV entities was premised on the CIV Agreements,
which were not employment contracts.

                                7
       The court also ruled that Hollander could not challenge the
arbitrator’s finding that he was not entitled to attorney’s fees
under the indemnification provisions in the CIV Agreements and
TCP Operating Agreement, because the arbitrator’s finding on
that issue could not be reviewed for errors of fact or law.
       On May 13, 2021, the court entered a judgment denying the
petition to correct the arbitration award and confirming the final
arbitration award issued on May 5, 2020.
       On July 2, 2021, Hollander filed a timely notice of appeal.
                           DISCUSSION
A.     Legal Principles and Standard of Review
       “California law favors alternative dispute resolution as a
viable means of resolving legal conflicts.” (Richey v. AutoNation,
Inc. (2015) 60 Cal.4th 909, 916.) “[I]t is the general rule that
parties to a private arbitration impliedly agree that the
arbitrator’s decision will be both binding and final.” (Moncharsh
v. Heily & Blase (1992) 3 Cal.4th 1, 9, fn. omitted (Moncharsh).)
“Because the decision to arbitrate grievances evinces the parties’
intent to bypass the judicial system and thus avoid potential
delays at the trial and appellate levels, arbitral finality is a core
component of the parties’ agreement to submit to arbitration.”
(Id. at p. 10.)
       “[J]udicial review of private, binding arbitration awards is
generally limited to the statutory grounds for vacating ([Code
Civ. Proc.,] § 1286.2) or correcting ([Code Civ. Proc.,] § 1286.6) an
award.” (Moshonov v. Walsh (2000) 22 Cal.4th 771, 775, citing
Moncharsh, supra, 3 Cal.4th at pp. 8-28.) Hollander does not
seek to vacate the arbitration award, but instead to correct it
under Code of Civil Procedure section 1286.6. This section sets
forth three grounds for correcting an arbitration award:

                                  8
       “(a) There was an evident miscalculation of figures or an
evident mistake in the description of any person, thing or
property referred to in the award;
       “(b) The arbitrators exceeded their powers but the award
may be corrected without affecting the merits of the decision
upon the controversy submitted; or
       “(c) The award is imperfect in a matter of form, not
affecting the merits of the controversy.” (Code Civ. Proc.,
§ 1286.6.)
       Hollander relies on the second ground, arguing that the
arbitrator in this case exceeded her powers. “[A]rbitrators do not
‘exceed[ ] their powers’ within the meaning of . . . [Code of Civil
Procedure] section 1286.6, subdivision (b) merely by rendering an
erroneous decision on a legal or factual issue, so long as the issue
was within the scope of the controversy submitted to the
arbitrators.” (Moshonov v. Walsh, supra, 22 Cal.4th at p. 775,
citing Moncharsh, supra, 3 Cal.4th at p. 28.)
       We review a trial court’s ruling on whether an arbitrator
“exceeded her powers” de novo. (Lonky v. Patel (2020) 51
Cal.App.5th 831, 841-842; see Richey v. AutoNation, Inc., supra,
60 Cal.4th at p. 918, fn. 1 [court reviews de novo “the question
whether the arbitrator exceeded his powers and thus whether we
should vacate his award on that basis”].)
       The principles of waiver and forfeiture apply in the
arbitration context and serve to ensure the finality of arbitration
awards. “ ‘ “[W]aiver” means the intentional relinquishment or
abandonment of a known right.’ [Citations.] . . . [¶] . . . [Waiver]
differs from the related concept of forfeiture, which results when
a party fails to preserve a claim by raising a timely objection.”
(Lynch v. California Coastal Com. (2017) 3 Cal.5th 470, 475-476.)

                                 9
Where a party fails to present a claim to an arbitrator relating to
an issue within the scope of the arbitration, the party is generally
precluded from pursuing that claim in a subsequent court
proceeding challenging the arbitrator’s award. (Moncharsh,
supra, 3 Cal.4th at p. 31; Maaso v. Signer (2012) 203 Cal.App.4th
362, 377-378 (Maaso); Corona v. Amherst Partners (2003) 107
Cal.App.4th 701, 706 (Corona).)
B.     Hollander is Precluded from Pursuing His Claim for
       Attorney’s Fees Under Section 218.5 Because He Did
       Not Present this Claim to the Arbitrator
       Hollander contends the arbitrator exceeded her powers by
not awarding him attorney’s fees under section 218.5.4 TCP and
the CIV entities point out, and Hollander concedes, that he never
presented the arbitrator with a claim for attorney’s fees under
section 218.5. Because the issue of attorney’s fees was submitted
to the arbitrator for decision, Hollander is precluded from raising
a new ground for an attorney’s fees award (here, under § 218.5)
in a court challenge to the arbitration award. (Moncharsh, supra,
3 Cal.4th at p. 31 [“[f]ailure to raise the claim before the
arbitrator . . . waives the claim for any future judicial review”].)
       Hollander contends that Moncharsh “holds only that
arguments about the legality of the arbitration agreement itself
must be raised before the arbitrator to be preserved for future
review.” We do not agree. In Moncharsh, the Supreme Court
addressed whether a party waives certain claims by participating

      4 On appeal, Hollander has abandoned the contention that
the arbitrator exceeded her powers by not awarding him
attorney’s fees under the CIV Agreements and the TCP
Operating Agreement.

                                10
in the arbitration itself. The court held “that unless a party is
claiming (i) the entire contract is illegal, or (ii) the arbitration
agreement itself is illegal, he or she need not raise the illegality
question prior to participating in the arbitration process, so long
as the issue is raised before the arbitrator.” (Ibid.) The court
then noted that “[f]ailure to raise the claim before the arbitrator,
however, waives the claim for any future judicial review.” (Ibid.)
       Nothing suggests that the court’s statement that failure to
raise a claim before the arbitrator precludes “future judicial
review” was limited solely to claims about the legality of an
arbitration agreement. In fact, the claim at issue in Moncharsh
related to the legality of the fee-splitting provision that was at
the heart of the parties’ dispute, and not to the legality of the
arbitration agreement. (See Moncharsh, supra, 3 Cal.4th at p. 30
[“when—as here—the alleged illegality goes to only a portion of
the contract (that does not include the arbitration agreement),
the entire controversy, including the issue of illegality, remains
arbitrable”].) As a result, the court held, the issue was to be
decided by the arbitrator and the plaintiff was not required to
raise it in court prior to the arbitration “in order to preserve the
issue for later judicial review.” (Ibid.) The court then made clear
that “[t]he issue would have been waived, however, had [the
plaintiff] failed to raise it before the arbitrator.” (Ibid.)
       That is the situation here. Hollander is claiming the
arbitrator’s award was in excess of her powers and illegal because
it did not award him fees under section 218.5. His failure to
request such fees from the arbitrator in the first place waived
that claim because, as Moncharsh states, “[a]ny other conclusion
is inconsistent with the basic purpose of private arbitration,

                                11
which is to finally decide a dispute between the parties.”
(Moncharsh, supra, 3 Cal.4th at p. 30.)
       Nor does Hollander’s cramped reading of Moncharsh
square with other cases holding that, where a party fails to
present a claim in an arbitration and the claim falls within the
scope of the arbitration, the party is precluded from pursuing the
claim in a court action challenging the arbitration award.
(Maaso, supra, 203 Cal.App.4th at pp. 377-378; Corona, supra,
107 Cal.App.4th at p. 706; see Heimlich v. Shivji (2019) 7 Cal.5th
350, 358 [noting that the plaintiff “was required to request costs
from the arbitrator in the first instance” and that “[f]ailure to do
so would have precluded relief” in court, citing Maaso and
Corona]; see also Paramount Unified School Dist. v. Teachers
Assn. of Paramount (1994) 26 Cal.App.4th 1371, 1385-1386
[holding school district waived its arguments that a monetary
damage award against it was precluded on various grounds by
failing to raise the arguments before the arbitrator].)
       Maaso is instructive. In that case, the plaintiff filed a
petition to confirm an arbitration award in his favor and also
sought to recover, under Code of Civil Procedure section 998 and
Civil Code section 3291, expert costs incurred in the arbitration
and pre-judgment interest.5 (Maaso, supra, 203 Cal.App.4th at
p. 369.) The plaintiff had made an offer of judgment under Code
of Civil Procedure section 998 prior to the arbitration, the
defendant did not accept the offer, and the arbitration award

      5  The court noted that “[a]lthough [the plaintiff] styled his
petition as one to ‘confirm’ the award, he essentially sought
‘correction’ of the award by asking the court to add costs and
interest not awarded by the panel.” (Maaso, supra, 203
Cal.App.4th at p. 378.)

                                 12
exceeded the offer.6 (Maaso, supra, at pp. 367, 369.) The
plaintiff “did not request that the arbitrators rule on the issue of
[Code of Civil Procedure] section 998 costs or seek to present
evidence on the issue” during the arbitration, although his
counsel did “advise[ ] the panel that [the plaintiff] had previously
made a [Code of Civil Procedure] section 998 offer that was
rejected by [the defendant], without stating the amount of the
offer.” (Id. at pp. 368-369.) The trial court granted the petition to
confirm the arbitration award but denied the plaintiff’s claim for
expert costs and prejudgment interest. (Id. at p. 369.) The Court
of Appeal affirmed, concluding “that [the plaintiff] was not
entitled to these costs and interest because he never requested
these enhancements from the arbitrators.” (Id. at p. 377.)
       Similarly, in Corona, the plaintiff prevailed in an
arbitration and in his petition to confirm the award sought
attorney’s fees and costs incurred in both the arbitration and the
judicial proceedings. (Corona, supra, 107 Cal.Appp.4th at p. 704.)
On appeal from the trial court’s ruling denying the application for
attorney’s fees and costs, the Court of Appeal concluded that the
plaintiff could not pursue his claim for attorney’s fees and costs

      6  Under Code of Civil Procedure section 998, subdivision (d)
if a defendant does not accept an offer of judgment within the
time allowed by the section, and thereafter “fails to obtain a more
favorable judgment or award,” the court or arbitrator has
discretion to require the defendant to pay the plaintiff’s post-offer
expert costs. Civil Code section 3291 provides that, in personal
injury cases, where a plaintiff makes an offer of judgment under
Code of Civil Procedure section 998, which is not accepted, and
the plaintiff then obtains a more favorable judgment, the plaintiff
is entitled to interest at a rate of 10 percent from the date of the
offer.

                                 13
incurred in the arbitration because he had not presented this
claim to the arbitrator. (Id. at p. 706.) The court held that
“[u]nder [Code of Civil Procedure sections 1286.2 and 1286.6], a
party’s failure to request the arbitrator to determine a particular
issue within the scope of the arbitration is not a basis for
vacating or correcting an award.” (Ibid.) As the court explained,
“As a general rule, parties to a private arbitration impliedly, if
not expressly, agree that the arbitrator’s decision will be both
binding and final and thus the arbitrator’s decision ‘should be the
end, not the beginning, of the dispute.’ (Moncharsh, supra, 3
Cal.4th at pp. 9-10.) Allowing a party to request that the trial
court make an award that was within the scope of the arbitration
but not pursued in that forum is inconsistent with the policies
underlying the statutory private arbitration scheme.” (Corona,
supra, 107 Cal.App.4th at p. 706.)
      In this case, Hollander does not contend that the arbitrator
was unable to decide a claim for attorney’s fees under section
218.5, or that Hollander was in any way precluded or hampered
in presenting such a claim to the arbitrator. Indeed, Hollander
presented the arbitrator with a request for attorney’s fees on
other grounds. An arbitrator’s decision on a request for
attorney’s fees cannot be challenged in a petition to correct the
award, as long as the issue was within the scope of the
arbitration. (Moshonov v. Walsh, supra, 22 Cal.4th at pp. 776-
779; see Moore v. First Bank of San Luis Obispo (2000) 22 Cal.4th
782, 787; Maaso, supra, 203 Cal.App.4th at p. 378.) As our
Supreme Court held in Moore, “[h]aving submitted the fees issue
to arbitration, plaintiffs cannot maintain the arbitrators exceeded
their powers, within the meaning of [Code of Civil Procedure]
section 1286.6, subdivision (b), by deciding it, even if they decided

                                 14
it incorrectly.” (Moore, supra, at p. 787.) Thus, Hollander was
required to present his claim under section 218.5 to the arbitrator
if that was a basis on which he was seeking fees. Allowing
Hollander to raise this claim for the first time in court, after the
conclusion of the arbitration, would undermine the strong policy
favoring finality of arbitration awards. (Moncharsh, supra, 3
Cal.4th at p. 30.)
C.     The Cases Hollander Relies Upon Do Not Compel a
       Different Result
       Hollander argues that, because the nature of his attorney’s
fees claim is “unwaivable,” he is excused from the above line of
case law and entitled to have a court consider his section 218.5
claim even though he did not present it to the arbitrator. He first
contends courts have described section 218.5 as an unwaivable
right. (E.g., Carbajal v. CWPSC, Inc. (2016) 245 Cal.App.4th
227, 250; Jones v. Humanscale Corp. (2005) 130 Cal.App.4th 401,
412 [“Because the arbitration dealt with [the] plaintiff’s wage
claim, it covered an unwaivable statutory issue affecting public
policy”].) Hollander asserts the arbitrator exceeded her powers
by issuing an award that did not include fees under section 218.5,
because the award essentially waived his unwaivable statutory
right to such fees. (E.g., Richey v. AutoNation, Inc., supra, 60
Cal.4th at p. 916 [“Arbitrators may exceed their powers by
issuing an award that violates a party’s unwaivable statutory
rights or that contravenes an explicit legislative expression of
public policy”].)
       This argument confuses the minimum requirements
necessary when unwaivable statutory rights are subject to
arbitration instead of litigation in court (minimum requirements
a plaintiff cannot be compelled to waive as part of an agreement

                                15
to arbitrate) with a party’s own failure to make a claim in
arbitration for a specific monetary recovery (which can lead to a
waiver or forfeiture of such a claim for relief).7
       In Armendariz v. Foundation Health Psychcare Services,
Inc. (2000) 24 Cal.4th 83, our Supreme Court considered the
minimum requirements necessary to permit arbitration of
unwaivable statutory rights. (Id. at pp. 90-91.) The court found
parties could agree to arbitrate these matters in the employment
context if “the arbitration . . . meet[s] certain minimum
requirements” deemed essential for the “employee to vindicate
his or her statutory rights.” (Id. at pp. 90, 91.) As relevant here,
“the arbitration agreement or arbitration process cannot
generally require the employee to bear any type of expense that
the employee would not be required to bear if he or she were free
to bring the action in court.” (Id. at pp. 110-111, italics omitted.)
       Applying the teaching of Armendariz demonstrates the
inapplicability of the cases on which Hollander relies to assert he
did not forfeit his section 218.5 claim. Hollander does not
challenge any provisions in the arbitration agreement, nor does
he contend that he was required to pay any attorney’s fees or
inappropriate arbitral expense that he would not have had to pay
had he litigated his claims in court. Nothing in the arbitration
agreement here prevented the arbitrator from awarding attorney
fees under section 218.5 if they were warranted under the

      7  Even assuming section 218.5 sets forth an unwaivable
right, by its terms the section does not allow for the recovery of
fees unless a “party to the action requests attorney’s fees and
costs upon the initiation of the action.” (§ 218.5, subd. (a).) This
demonstrates that the right to seek fees under this section can be
lost if not asserted.

                                 16
statute. (Compare Carbajal v. CWPSC, Inc., supra, 245
Cal.App.4th at p. 250 [striking arbitration clause provision that
each party was to bear their own attorney’s fees because it
conflicted with right of recovery in § 218.5].) Hollander does not
contend the arbitrator exceeded her authority in addressing what
he now characterizes as a wage claim—indeed, he argues that
portion of the award should be confirmed. He does not contend
the arbitration agreement was unconscionable. Hollander does
not assert he was improperly required to pay any arbitration
related costs (compare Jones v. Humanscale Corp., supra, 130
Cal.App.4th at pp. 415-416 [correcting arbitration award to make
the defendant pay all costs and fees for the arbitrator but
otherwise affirming award]), and the award did not require
Hollander to pay any attorney fees of the respondents (compare
D.C. v. Harvard-Westlake School (2009) 176 Cal.App.4th 836,
864-868 [attorney’s fee award to the defendant under prevailing
party provision of arbitration agreement was invalid because
hate crime statute at issue provided for fee award only to a
prevailing plaintiff]). Hollander was ordered to bear his own
attorney fees by the arbitrator, but that result would not have
been any different if Hollander failed to make a claim for section
218.5 fees in court like he failed to do in the arbitration.8

      8 Hollander also relies on DiMarco v. Chaney (1995) 31
Cal.App.4th 1809, where the Court of Appeal held the trial court
properly corrected an arbitration award to grant the defendant
attorney’s fees as the prevailing party in the arbitration but erred
in determining the amount of attorney’s fees itself instead of
remanding the issue to the arbitrator. (Id. at p. 1811.) That case
is inapposite because the defendant presented their claim for
prevailing party attorney’s fees to the arbitrator in the initial

                                17
       Hollander relies on one additional case—Jordan v.
Department of Motor Vehicles (2002) 100 Cal.App.4th 431
(Jordan)—to argue that Moncharsh’s waiver rule does not apply
to his “unwaivable right” to fees under section 218.5. Jordan
arose from a related case which held a smog impact fee imposed
by the state was unconstitutional. The trial court found the case
had resulted in a “common fund” of more than $363 million and
awarded the plaintiffs’ counsel (Attorneys) 5 percent of this fund,
approximately $18 million, in fees and expenses. (Jordan, supra,
100 Cal.App.4th at p. 439.) The state appealed the fee award, but
before the appeal was decided the Attorneys and the state
entered into an agreement to arbitrate the amount of attorney’s
fees; in addition, the Legislature enacted a statute that created a
refund account to be used to reimburse people who had paid the
smog impact fee and also provided the attorney’s fees dispute in
Jordan would be resolved through binding arbitration, with the
fees award being paid from the refund account. That statute was
codified at Revenue and Taxation Code section 6909. (Jordan,
supra, at p. 440.)
       The arbitrators subsequently rendered an award of more
than $88 million in attorney’s fees based on the common fund
doctrine. (Jordan, supra, 100 Cal.App.4th at p. 441.) The state
sought reconsideration of the award before the arbitrators,
contending for the first time that Revenue and Taxation Code
section 6909, subdivision (b) limited the award to $18 million
because otherwise the statute would be an unconstitutional gift

arbitration. (Id. at p. 1812.) Thus, the defendant did not waive
their claim for attorney’s fees by failing to present it to the
arbitrator.

                                18
of public funds. The arbitration panel denied the motion for
reconsideration, with one member dissenting and indicating his
tentative view that the award did violate Revenue and Taxation
Code section 6909, subdivision (b) and was an unconstitutional
gift of public funds. (Jordan, supra, at pp. 441-442.)
       Attorneys then petitioned to confirm the arbitration award;
the state for its part petitioned for a writ of mandate to vacate
the award as being in excess of the arbitrators’ powers and in
violation of public policy. The trial court vacated the arbitration
award and the Court of Appeal affirmed, concluding that both the
statute which authorized the arbitration (Rev. & Tax. Code,
§ 6909, subd. (b)) and public policy limited the award to $18
million. (Jordan, supra, 100 Cal.App.4th at p. 445.) In so ruling,
the court rejected the Attorneys’ argument that they had created
a common fund in the form of the refund account, concluding that
“a cap of $18 million must be read into [Revenue and Taxation
Code] section 6909[, subdivision] (b) because otherwise the
statute authorizes an arbitration award that is an
unconstitutional gift of public funds.” (Id. at p. 450.)
       Attorneys argued the state waived this argument by failing
to make it to the arbitrators prior to the motion for
reconsideration. (Jordan, supra, 100 Cal.App.4th at p 452.)
Jordan found the Moncharsh rule of waiver did not apply to the
facts before it, because the state was acting to protect the public
fisc, and “ ‘ “neither the doctrine of estoppel nor any other
equitable principle may be invoked against a governmental body
where it would operate to defeat the effective operation of a policy
adopted to protect the public.” [Citation.]’ [Citations.]” (Jordan,
supra, at p. 453.) Jordan does not aid Hollander, because none of

                                19
the parties to the arbitration was a governmental body acting to
protect the public, and that fact was instrumental to its holding.
D.     Hollander’s Claim under Section 218.5 Does Not
       Involve Pure Questions of Law
       Hollander asserts that our opinion in D.C. v. Harvard-
Westlake School, supra, 176 Cal.App.4th 836, “rejected the
argument that a claim based on a nonwaivable right was
forfeited if not raised in the arbitration.” That misreads the
opinion, in which a divided panel permitted the plaintiff-
appellant to argue a theory not raised before the arbitrator
because it involved a question of law based on undisputed facts.
(Id. at p. 868, and cases/treatise cited therein.)9 In any event,
Hollander elsewhere argues that we should invoke this exception
that a pure question of law may be raised for the first time on
appeal. (E.g., Waller v. Truck Ins. Exchange, Inc. (1995) 11
Cal.4th 1, 24 [appellate courts have discretion to address
question of law based on undisputed facts even though issue was
not raised in the trial court].)
       The issue upon which Hollander seeks review—a claim for
attorney’s fees under section 218.5—is not a pure question of law.
Section 218.5, subdivision (a) provides, in relevant part, “In any
action brought for the nonpayment of wages, fringe benefits, or

      9 The majority declined to address whether a waiver
occurred because it lacked the entire record of the arbitration
proceedings. (D.C. v. Harvard-Westlake School, supra, 176
Cal.App.4th at p. 867.) In dissent, now Presiding Justice Frances
Rothschild was of the view that because nothing in the record
showed the appellant properly preserved the issue by raising it
before the arbitrator, the issue was waived. (Id. at p. 869 (dis.
opn. of Rothschild, J.).)

                                20
health and welfare or pension fund contributions, the court shall
award reasonable attorney’s fees and costs to the prevailing party
if any party to the action requests attorney’s fees and costs upon
the initiation of the action.” Resolution of this claim requires the
determination of many factual issues or mixed issues of fact and
law, including whether the forfeited equity interests in the CIV
entities were “wages” within the meaning of section 200,
subdivision (a). There are also disputed factual issues regarding
the reasonableness of the fees claimed, and whether some of the
fees sought do not relate to what Hollander now characterizes as
his wage claim and instead to claims the arbitrator found
untenable.
       In any event, the exception Hollander asks us to invoke is
discretionary. (E.g., Greenwich S.F., LLC v. Wong (2010) 190
Cal.App.4th 739, 767.) We decline to consider Hollander’s new
claim under these circumstances. Hollander could have
presented his claim under section 218.5 to the arbitrator, but he
chose to pursue attorney fees on other grounds (presumably
recognizing that a significant portion of his fees was, as the
arbitrator found, related to punitive damage and indemnification
issues that indisputably were not wages). He invited the very
error of which he now complains by not seeking fees under
section 218.5 before the arbitrator. As explained above, his claim
presents messy questions of fact. It would require review of the
grounds for the arbitrator’s ruling that Hollander caused
unnecessary attorney’s fees to be incurred pursuing untenable
claims, which is not a proper basis on which to seek correction of
an arbitration award. Finally, allowing Hollander to raise a
section 218.5 claim now, in the context of a petition to correct the
arbitration award, would frustrate finality of the award, which

                                21
“is a core component of the parties’ agreement to submit to
arbitration.” (Moncharsh, supra, 3 Cal.4th at p. 10.)
                          DISPOSITION
       We affirm the trial court’s order. Respondents are awarded
their costs on appeal.
      NOT TO BE PUBLISHED

                                          WEINGART, J.*

We concur:

             CHANEY, J.

             BENDIX, Acting P. J.

      * Judge of the Los Angeles County Superior Court, assigned
by the Chief Justice pursuant to article VI, section 6 of the
California Constitution.

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