News 3-2011

The attorneys at our firm have been providing seminars on the New California Mechanic's Lien Laws which took effect on January 1, 2011 to various construction trade associations. If you want a seminar on the lien laws brought to your trade association or exchange or in-house for your staff or customers, please e-mail us at info@agrlaw.com.
Additionally, we have been approached to offer seminars on other construction related topics. If you have not already done so, please take the time to click the link below and let us know what topics you are interested in hearing from us in the future. We would love to hear from you regarding your preferences. Abdulaziz, Grossbart & Rudman Seminar Questionnaire
We thank you in advance for filling out this questionnaire regarding seminars so that we can provide what you want, when you want it!

 

The question of whether an arbitrator is required to disclose his law firm's representation of a company that owed over $3 million and was in litigation with a party to the arbitration comes to light in Agri-Systems, Inc. v. Foster Poultry Farms. In this instance, a party to the arbitration, a general contractor, argued that the arbitrator was required to disclose his firm's representation of a company that owed the general contractor a substantial sum even though the arbitrator himself did not handle the debtor company.

The arbitrator's firm was no longer representing the debtor company when the litigations between the debtor company and the general contractor began. This matter came up for arbitration more than a year after the arbitrator's firm stopped representing the debtor company.

Unfortunately, the ethics standards for contractual arbitration nor the California Arbitration Act do not have provisions that apply specifically to the disclosure of an arbitrator's legal representation of a third party who has an adverse relationship with a party to the arbitration.

The court concluded that disclosure was not required and affirmed the arbitrator's decision, which was not in the general contractor's favor.

The general contractor appealed the matter to the Fifth Appellate District. The appellate court used the rule of law to determine if the general requirement that a proposed neutral arbitrator "shall disclose all matters that could cause a person aware of the facts to reasonably entertain a doubt that the proposed neutral arbitrator would be able to be impartial."

According to the California Arbitration Act, a neutral arbitrator must disclose attorney-client relationships, relationships with any party or lawyer for a party in the particular arbitration, as well as any significant personal or professional relationship, current or in the past, with a party or lawyer for a party in the particular arbitration. The California Rules of Court, Ethics Standards for Neutrals further states that it is necessary for a neutral arbitrator to disclose "...attorney-client relationship the arbitrator has or has had with a party or lawyer for a party."

Given that, the attorney-client relationship is brought into question. The arbitrator in this matter was required to disclose any relationship he had with any member of the arbitration or their attorneys. Not only was the arbitrator not the attorney for the debtor company, but also the debtor company was not a member of the arbitration.

As a result the court agreed with the Superior Court finding that disclosure was not required. Therefore, the court affirmed the judgment entered after the arbitration award was confirmed.

Samantha Jo Abdulaziz

Sam Abdulaziz became a grandpa again! His son, Michael Abdulaziz, and wife Michele, gave birth to Samantha Jo on January 18, 2010. Big brother Benjamin couldn't be more proud.

In 2005, Vision Manufacturing, Inc. (VMI) wanted to lease property from Mr. Miller. Around October, VMI had attorney Bruce Glasser review the lease. The lease was signed in late October. Turns out that the property was not in compliance with building codes and some improvements could not be made. Because of this, in December, Miller asked VMI to sign a "lease addendum" which stated that Miller would obtain the necessary permits to allow VMI to use the property and would release Miller from any claims for damages. The addendum was sent to Glasser for review and was later signed.

In March of 2006, VMI sued Miller and the trial court found in favor of Miller. This brought about VMI's suit against Glasser in September 2007, which was for negligence and breach of fiduciary duty by failing to properly advise VMI about the lease and the addendum. However, the trial court granted a Summary Judgment Motion (meaning that the court saw no merit in the lawsuit) in favor of Glasser because they found that any claim for malpractice would have been barred by the one-year statute of limitations and this matter was beyond that one-year period.

The Appellate Court agreed with the trial court's decision. Legal malpractice issues have a one-year statute of limitations which starts to run once the plaintiff finds or should have found out about the facts that brought about the wrongful act. Keep in mind that the time would stop if the plaintiff did not suffer injury or if the attorney continues to represent the client regarding the matter with which the wrongful act occurred.

VMI sustained injury when a new attorney was hired to file a lawsuit against Miller to get out of the lease and addendum, in March of 2006. The lawsuit against Glasser was not filed until September of 2007, which was one-year and six months later. The malpractice lawsuit was filed more than one year after the actual injury was suffered. The Appellate Court held up the trial court's Summary Judgment Motion.

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