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Citing the rule that an "arbitrator's decision should be the end, not the beginning of a dispute," the California Court of Appeal held that an attorney's ignorance of the general law governing arbitration was not an excusable mistake that would justify vacating judgment on an arbitration award.
In Kelly v. RMI Insurance Services, Inc., No. H030047, 2006 WL 3721202 (Cal. Ct. App. Dec. 19, 2006), Kelly filed an arbitration claim against RMI, his former employer, alleging wrongful termination.
The arbitrator awarded Kelly $231,094. In the award, the arbitrator did not address whether RMI had a right to offset Kelly's recovery with amounts allegedly owed RMI. The trial court confirmed the award.
Instead of properly raising the offset issue in opposing Kelly's motion for confirmation, RMI later raised the issue as a cross-complaint. The trial court determined that RMI's cross-complaint was moot because final judgment was entered when the arbitration award was confirmed.
RMI subsequently filed a motion to set aside the judgment, arguing that it was an excusable mistake to infer that its right to an offset could not be argued until judgment was entered. In denying that motion, the trial court pointed out that arbitration is meant to promote efficiency. In affirming the trial court, the Court of Appeal noted that [a]n attorney's ignorance of the general law governing arbitration is not the kind of mistake that will justify vacation of a judgment."
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