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A California state appellate court rejected an invitation to review the substance of an arbitration award based upon the allegation that the arbitrator exceeded his powers by awarding attorney fees to the prevailing party in a rent dispute.
In Davis v. Cadena Creek Mobile Home Park, No. E040734, 2007 WL 2219049 (Cal. Ct. App.4d Aug. 03, 2007), Theodore Davis purchased a mobile home and leased a space for the home with Cadena Creek. A dispute arose between the parties regarding the rent contract, which proceeded to arbitration. The arbitrator decided in favor of Davis and awarded attorney fees.
Davis petitioned to confirm the award. Cadena Creek requested the petition be denied, contending that the arbitrator exceeded his power by awarding attorney fees. The trial court found no reason to vacate and confirmed the award. Cadena Creek appealed.
This Court rejected Cadena Creek’s argument. The award of attorney fees bore a “rational relationship to the underlying contract as interpreted…by the arbitrator.” See Advanced Micro Devices, Inc. v. Intel Corp., 885 P.2d 994 (Cal. 1994).
The arbitrator was authorized by the contract to award attorney fees. Here, both the lease and the arbitration addendum to the lease state that the prevailing party is entitled to attorney fees.
Cadena Creek argued that the use of the word “action” in the attorney fee provisions referred only to fees awarded in proceedings to confirm an arbitration award or to compel arbitration.
Rejecting this argument, the Court noted that the arbitrator considered this specific issue in making his determination. It concluded that “[w]hether or not the decision was correct, it was within the power of the arbitrator to decide.”
Review of an arbitration award based on the arbitrator’s alleged erroneous reasoning would allow exceptions to swallow the rule of limited review of arbitration awards. Both parties contractually expressed their intent that the arbitration award be final and binding.
The Court declined to review the decision for factual or legal error, holding that the arbitrator did not exceed his powers. The judgment of the trial court was affirmed.
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