Case Number: YC064452 Hearing Date: June 02, 2014 Dept: 91

The court has together considered Plaintiff’s Motion for Prejudgment Interest and Costs filed on 2/5/14, and Defendants’ Motion to Tax Costs filed on 3/4/14. After consideration of all the papers and evidence submitted, the court GRANTS Plaintiff’s Motion and DENIES Defendant’s Motion. The parties submitted this issue to the Arbitrator, who has decided the issue. Plaintiff’s Supplemental, Ex. A. Where the parties stipulate to binding arbitration, judicial intervention is limited to statutory grounds for vacating or correcting the award.

“[W]here parties have agreed their dispute will be resolved by binding arbitration, judicial intervention is limited to reviewing the award to see if statutory grounds for vacating or correcting the award exist. “ Maaso v. Signer, 203 Cal. App. 4th 362, 377-378 (Cal. App. 2d Dist. 2012).

The arbitrator considered Plaintiff’s entitlement to costs pursuant to Cal Code Civ Procedure § 998 including prejudgment interest under Civ Code § 3291 and granted relief to Plaintiff as prayed. Plaintiff’s Supplemental, Exhibit A, 4:4-8. The arbitrator also awarded expert witness fees pursuant to Civ Code § 998 and found the fees reasonable.

Defendants maintain that the arbitrator did not have authority to award prejudgment interest, and that only the court can award prejudgment interest in judicial arbitration, as distinguished from contractual or “true” arbitration, citing Caro v. Smith, 59 Cal. App. 4th 725, 736 (Cal. App. 4th Dist. 1997)]. Defendants argue that Caro states “[only the court, when entering judgment on the arbitration award, may assess § 3291 interest. At least under the present statute, the arbitrator has no authority to assess prejudgment interest on the award” citing Caro at 736. As the arbitrator in this case observed, that quote does not appear anywhere in the opinion. Award, 2:22-26.

What Caro does hold is that the scope of the arbitrator’s authority depends on the parties’ agreement. Caro at 736-737. As previously noted, the parties stipulated to submit their dispute to binding arbitration. Petition to Confirm Arbitration, Attachment 4b. With respect to costs and the finality of the award, the applicable provisions of the Stipulation for Arbitration stated:

“Should an award be in excess of $199,000, Plaintiff shall be entitled to receive costs pursuant to Cal Code Civ Procedure § 998. However, in no event Plaintiff’s total recovery exceed $700,000.00. [sic]” Stipulation 2:24-26.

“The parties hereto further agree that the decision of the arbitrator shall be final in all respects and that each party hereto does forever waive and relinquish any and all rights to challenge the award or file or attempt to file any writ or appeal relating thereto.“ Stipulation ¶ 9.

The Stipulation is silent as to prejudgment interest under Civ Code § 3291. It does not expressly exclude interest. Therefore, the arbitrator appropriately decided the issue. Corona v. Amherst Partners, 107 Cal. App. 4th 701, 706 (Cal. App. 4th Dist. 2003).

Plaintiff is entitled to prejudgment interest under Civ Code § 3291, which incorporates Cal Code Civ Procedure § 998. The parties agreed to Plaintiff’s entitlement to costs under Section 998 under these circumstances. Plaintiff is also entitled to costs already awarded by the arbitrator for expert fees, which are recoverable under Cal Code Civ Procedure § 998 where Plaintiff serves an offer to compromise and Defendant fails to obtain a more favorable judgment. Cal Code Civ Proc § 998(d).

The fact that one expert, Dr. Conwiser, did not actually testify, is irrelevant. The statute allows for costs “actually incurred and reasonably necessary in either, or both, preparation for trial or arbitration …” Cal Code Civ Procedure § 998(d).

Accordingly, the Plaintiff’s Petition to Confirm the Award is GRANTED pursuant to Cal Code Civ Procedure § 1285.