Contract Law

Appeals Court Nixes $650K Legal Fees Award, Says Parties Never Mutually Agreed to Arbitrate

At first, it was former clients of Glaser Weil Fink Jacobs & Shapiro who wanted binding arbitration to settle a dispute over the legal fees they were charged.

Then, after the Los Angeles law firm rejected the written offer from art gallery owners George and Esther Goff, it changed its mind based on the identity of the arbitrators. Then the Goffs changed their minds and decided they didn’t want arbitration after all, recounts Reuters Legal.

Because, as a matter of contract law, no written agreement was ever reached providing for binding arbitration, a Los Angeles Superior Court judge erred in enforcing the arbitrators’ decision, first, that a binding arbitration agreement had been reached and, second, upholding the more than $650,000 in attorney’s fees that the panel awarded the Glaser Weil firm, the California Court of Appeal, Second District, has ruled.

A dissent in the Friday opinion said that the appellate court should have deferred to the arbitrators and exceeded its powers in overturning the award.

Sole practitioner Terran Steinhart, who represented the Goffs, did not respond to requests for comment by the news agency.

Jonathan Cole of Nemecek & Cole represented Glaser Weil. He said he is still analyzing the court’s decision.

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