Court Opinion

ID: 4711915
Source: CourtListenerOpinion
Date Created: 2021-08-12 00:37:37.056447+00
Date Added: 2024-06-11T08:07:11.010050
License: Public Domain

Sanders, J.
(dissenting) — I dissent from the majority’s award of attorney fees to Carl Highland pursuant to Superior Court Mandatory Arbitration Rules (MAR), MAR 7.3. Jeffrey Haley improved his position and cannot be taxed his opponent’s reasonable attorney fees under MAR 7.3.
In a swift stroke of judicial legislation, the majority creates a new arbitration rule by holding, “Haley could have requested a ruling from the arbitrator on the issue of attorney fees and his failure to do so precludes a finding that he has improved his position under MAR 7.3.” Majority *161at 154. However, under the plain language of MAR 7.3 we need determine only whether Haley in fact improved his position at the trial de novo, which he obviously did when he was awarded substantial attorney fees at the trial de novo after having received none at arbitration.
Once a case is assigned to an arbitrator, the Superior Court Civil Rules (CR) do not apply. The mandatory arbitration rules govern arbitration proceedings “except where an arbitration rule states that a civil rule applies.” MAR 1.3(b)(1). When a trial de novo is sought, MAR 7.2(b)(1) directs:
The trial de novo shall be conducted as though no arbitration proceeding had occurred. No reference shall be made to the arbitration award, in any pleading, brief, or other written or oral statement to the trial court or jury either before or during the trial, nor, in a jury trial, shall the jury be informed that there has been an arbitration proceeding.
(Emphasis added.) The Rules of Appellate Procedure (RAP) make clear they do not apply to appellate review of actions initiated in arbitration. See RAP 1.1(a) (“These rules govern proceedings in the Supreme Court and the Court of Appeals for review of a trial court decision and for direct review in the Court of Appeals of an administrative adjudicative order . . ..”). Thus, CR and RAP are irrelevant and inapplicable when examining a party’s actions in arbitration. Accordingly, we do not search a nonexistent record in an arbitration to see what arguments were made or omitted.
Attempting to justify its refusal to decide whether Haley improved his position at the trial de novo, the majority explains: “Haley could have requested a ruling from the arbitrator on the issue of attorney fees and his failure to do so precludes a finding that he has improved his position under MAR 7.3.” Majority at 154. However, neither MAR 7.3 nor any other arbitration rule requires the prevailing party to request a ruling on attorney fees from the arbitrator before an appellate court will consider whether the party improved his position at the trial de novo. Unlike *162appeals governed by RAP 2.5(a), arbitration participants need not raise an issue for it to be preserved for review. Such, would defeat the cost-effective simplicity of the arbitration as well as the “de novo” nature of the review.
Further, and in any event, the record does not support the majority’s conclusion Haley failed to request such a ruling from the arbitrator. As the majority acknowledges, Haley submitted a letter to the arbitrator, which provided:
Enclosed is a declaration for attorney fees for Plaintiffs. It includes all amounts through Thursday, April 27, 1995. It includes blanks for the remaining time through the completion of the arbitration hearing and for the bottom line total. At the hearing, I will complete the blanks and sign the declaration.
Clerk’s Papers (CP) at 360. The majority notes the declaration was not fully completed, and thus concludes “there is nothing before this Court indicating that Haley ever requested a ruling regarding attorney fees from the arbitrator.” Majority at 155. The majority is simply wrong. Attached to the letter requesting fees is a declaration of costs and attorney fees, in which Haley declared:
The services performed, fees, costs, and other expenses incurred by Plaintiffs through Thursday, April 27, 1995 are stated on the attached statement produced by the billing system of Graybeal Jackson Haley & Johnson. The total is $12,341.00 for fees and $385.59 for costs and expenses
CP at 361-62 (emphasis added). While Haley did not fully complete the blanks detailing additional costs and fees incurred at the arbitration hearing, Haley could not have more explicitly requested those reasonable attorney fees and expenses incurred prior to the hearing.
MAR 6.1 further undermines the majority’s position. Describing the form and content of the award, MAR 6.1 mandates: “The arbitrator shall determine all issues raised by the pleadings, including a determination of any damages.” Haley’s suit against Highland alleged violation of state securities laws, among other theories. RCW 21.20.430(1) provides when a security has been sold in *163violation of state law, an individual may seek recovery of “the consideration paid for the security, together with interest at eight percent per annum from the date of payment, costs, and reasonable attorneys’ fees . . . .” The arbitrator awarded Haley “$2,500 plus interest at the rate of 12% per annum from June 8, 1990.” CP at 10. But as the majority correctly notes, “[t]he award of interest, which dates back to the time of the tortious activity of Highland, clearly indicates that no part of the $2,500 was intended to be an award of attorney fees.” Majority at 155 n.8. Thus, we must conclude the arbitrator considered and rejected Haley’s claim of entitlement to an award of reasonable attorney fees under his state securities claims. See MAR 6.1.
Citing Wilkerson v. United Investment, Inc., 62 Wn. App. 712, 815 P.2d 293 (1991), the majority suggests in dicta that an award of attorney fees may not be considered in assessing whether a party has improved its position at a trial de novo. Majority at 154. However, because the arbitrator’s award did not reflect an award of attorney fees, the majority refuses to decisively adopt the Wilkerson approach. Majority at 154. The majority not only mischaracterizes the holding in Wilkerson but also fails to give meaning to the plain language of MAR 7.3.
An arbitrator awarded the Wilkersons $10,965.12 in compensatory damages for misrepresentation and violation of the Consumer Protection Act (CPA), chapter 19.86 RCW, plus $10,000 in reasonable attorney fees and costs. Wilkerson, 62 Wn. App. at 715. The defendant, Sloan, requested a trial de novo. A jury subsequently awarded the Wilkersons $16,000 in compensatory damages for the misrepresentation claim. Id. But because the trial court dismissed the CPA claim, there was no statutory basis for an award of reasonable attorney fees and none was made. Notwithstanding, the trial court found Sloan had not improved his position at the trial de novo and therefore awarded MAR 7.3 attorney fees to the Wilkersons.
Sloan appealed and maintained he improved his position *164at trial because the jury’s award of compensatory damages was less than the arbitrator’s total award of compensatory damages and attorney fees. The Court of Appeals rejected his argument, initially noting the distinction between compensatory damages and attorney fees. Id. at 716. The court then concluded:
It would be inequitable to compare the jury verdict for compensatory damages with an arbitrator’s combined award of compensatory damages, attorney fees, and costs. The better approach to determine whether one’s position has been improved, is to compare comparables. Here, the jury’s compensatory damage award exceeded the arbitrator’s compensatory damage award.
Id. at 717.
Assuming this court were to adopt Wilkerson, we would be compelled to conclude Haley improved his position at the trial de novo. If we “compare comparables”—although nothing in the plain language of MAR 7.3 requires us to do so—simple mathematics demonstrates Haley unquestionably improved his position at the trial de novo. Although the jury’s compensatory award did not exceed that of the arbitrator, it also was not less than that awarded by the arbitrator. In fact, both the arbitrator and the jury awarded precisely the same compensatory award—$2,500. But in addition to that the trial court also awarded substantial attorney fees and expenses attributable to the arbitration, whereas the arbitrator did not make such an award. Accordingly, it simply cannot be said Haley did not improve his position at the trial de novo if we are “comparing comparables.”
But we need not adopt the Wilkerson approach to determine Haley improved his position at the trial de novo. Nothing in MAR 7.3 precludes consideration of attorney fees or costs awarded at a trial de novo when determining whether a party improved his or her position. The plain, unambiguous language of MAR 7.3 provides: “The court shall assess costs and reasonable attorney fees against a party who appeals the award and fails to improve the *165party’s position on the trial de novo.” Even a child can appreciate that $4,69512 is more than $2,500. Thus Haley clearly improved his position at the trial de novo. Therefore the trial court erroneously awarded Highland reasonable attorney fees and costs pursuant to MAR 7.3.
Wilkerson stated the purpose of the MAR 7.3 attorney fee award is to discourage meritless appeals of arbitration awards and relieve court congestion. Wilkerson, 62 Wn. App. at 716. Haley’s appeal from the arbitration award was hardly “meritless.” In fact, he was awarded the substantial reasonable attorney fees the arbitrator denied for precisely the same work. Since Haley improved his position at the trial de novo, I would affirm the Court of Appeals vacation of Highland’s MAR 7.3 attorney fee award.
For these reasons, I respectfully dissent.
Johnson, J., concurs with Sanders, J.

 This figure represents the award of legal fees incurred before arbitration ($2,195) plus the jury’s compensatory award ($2,500). See Haley v. Highland, No. 38213-6-1, slip op. at 10-11 (Wash. Ct. App. Aug. 17, 1998).