Jerry Friedlander v. Leonard I. Sharon, Esq.

Download Download Decision (PDF)

Disposition: Award to Petitioner

Issued by: Fee Arbitration Commission

Docket #: FAC#14-306

Dated: December 22, 2015

Bar Number: 003291


DECISION

This case was initiated by Respondent Leonard I. Sharon, a licensed Maine attorney, who seeks to vacate a fee arbitration award issued by Panel 2 of the Fee Arbitration Commission of the Maine Board of Overseers of the Bar. See Friedlander v. Sharon, FAC 14-306 (Mar 6, 2015). Oral argument on Respondent's Motion to Vacate was held December 8, 2015. Respondent through his counsel presented argument in person; Petitioner Jerry Friedlander participated by telephone.

Background

The following facts are taken from the Respondent's summary of the fee arbitration proceedings and the record:1

Petitioner Friedlander retained Respondent Sharon in 2009 to represent him in the defense of a criminal matter. From Respondent's perspective, his compensation was a flat fee arrangement, not an hourly rate arrangement. However, there was no engagement letter between Petitioner and Respondent setting forth the terms of representation. Respondent represented Petitioner for about 11 months before the representation was terminated. During the representation, Respondent did not generate detailed records of the time spent and tasks performed on Petitioner's behalf, presumably because, from his standpoint, the engagement was on the basis of a flat fee rather than on an hourly rate.

At some point, a dispute about the fee arose, and Mr. Friedlander invoked the fee arbitration procedure afforded by former Rule 9 (now Rule 7) of the Maine Bar Rules.2 The Fee Arbitration Commission assigned the matter a docket number, FAC-14-306, and assigned it to Panel 2, which held two hearings - one in October 2014 and the other in February 2015.

The first hearing was taken up by Mr. Friedlander's testimony by telephone.

Respondent requested that the Panel allot him three hours at the second hearing to respond to Mr. Friedlander's testimony. In an order issued before the second hearing, the Panel suggested that both parties present evidence by affidavit to save time and also requested Respondent to prepare a list of the tasks he performed on Petitioner's behalf and the time spent on them. Respondent asserts that he came to the second hearing with affidavits from two witnesses and with the detailed written account of tasks performed and hours spent representing Petitioner that the Board had requested him to prepare. He contends that the Panel declined to accept the affidavits because they had not been provided to Petitioner Friedlander in advance. According to Respondent, the Panel also refused to allow him to explain his written account, again because it had not been sent to Petitioner in advance, and limited his testimony to reading his account verbatim.

According to Respondent, he was never notified that he had to send his submittals for the Panel to Petitioner in advance of the hearing, so it was unfair for the Panel to exclude the affidavits for failing to meet a requirement of which he was not advised. He also asserts that he was never allowed to justify the reasonableness of his fee, through the affidavits from his co-counsel in Petitioner's case and another criminal defense attorney and his own testimony. Respondent also complains that the Panel did not give him adequate time to present his evidence.

After the second hearing, Panel 2 issued an Award and Determination dated March 6, 2015, constituting the public notice of the award, and a Confidential Addendum setting forth the Panel's findings and conclusions in detail, also dated March 6, 2015. Consistent with the Maine Bar Rules then in effect, Panel 2 determined that, because there was no written fee agreement, Respondent had the burden to prove that the fee he had been paid was reasonable. See Me. Bar R. 9(g)(13) (superseded eff. July 1, 2015).3 The Panel found that Petitioner had paid Respondent a total of $17,500, and that Petitioner met his burden to prove reasonableness only as to $7,890 in the legal fee and $1,288 in expenses, for a total of $9,178. Accordingly, the Panel ruled that Respondent owes Petitioner $8,322-the difference between the amount he was paid and the amount he proved was reasonable.

As do the new revised rules, the former Maine Bar Rules provide for fee arbitration awards to be enforced pursuant to the provisions of the Maine Uniform Arbitration Act. M. Bar. R. 9(i). See 14 M.R.S. §§ 5927 et seq. Awards in favor of the client are self-enforcing, in that an attorney who is required to refund part or all of a fee must do so within 30 days. M. Bar. R 9(i).4

Respondent initiated this action with his Motion to Vacate, docketed April 27, 2015. The record filed with the Motion includes what is indicated to be a certified copy of all materials in the Fee Arbitration Commission file, see Letter from Angela Morse to Respondent's Counsel (Apr. 10, 2015). However, no record or transcript of the two hearings is in the record before the court. At oral argument, Respondent's counsel indicated it was his understanding that there is no recording or transcript of either hearing. The Bar Rules in effect at the time of the hearings did not require fee arbitration proceedings to be recorded, but permitted a party to have the proceedings transcribed by a certified court reporter. See Me. Bar R 9(g)(10), superseded by Me. Bar R 7(e)(9) (eff. July 1, 2015). It appears that neither Petitioner nor Respondent arranged for either hearing to be recorded.

Respondent's Motion includes a detailed legal argument for vacating the award. By leave of court, the Maine Civil Liberties Union has filed an amicus curiae brief in support of the Respondent's position. However, Petitioner Jerry Friedlander has not filed anything, although he participated by telephone in oral argument. The Fee Arbitration Commission and the Board of Overseers are not parties to this case - arbitrators and the arbitration tribunal are not typically made parties to judicial proceedings to confirm or vacate an award.5

Analysis

Respondent's Motion to Vacate is to be decided under the provision of Maine's Uniform Arbitration Act that allows an arbitration award to be vacated only on limited grounds. See 14 M.R.S. § 5938. Section 5938(1) says that an arbitration award "shall" be vacated when:

  1. The award was procured by corruption, fraud or other undue means;
  2. There was evident partiality by an arbitrator appointed as a neutral or corruption in any of the arbitrators or misconduct prejudicing the rights of any party;
  3. The arbitrators exceeded their powers;
  4. The arbitrators refused to postpone the hearing upon sufficient cause being shown therefore or refused to hear evidence material to the controversy or otherwise so conducted the hearing, contrary to the provisions of section 5931, as to prejudice substantially the rights of a party;
  5. There was no arbitration agreement and the issue was not adversely determined in proceedings under section 5928 and the party did not participate in the arbitration hearing without raising the objection; or
  6. The award was not made within the time fixed therefore by the agreement or, if not so fixed, within such time as the court has ordered, and the party has not waived the objection.

Id
.

The Respondent's Motion to Vacate focuses on subsection D, and claims that the arbitration Panel refused to hear his evidence and conducted the hearing contrary to the requirements of section 5931.

Respondent's primary objection to the Panel decision centers on what he contends was the Panel's refusal to allow him to present his side of the fee dispute with Petitioner Friedlander. He contends that the Panel's refusal to consider his affidavits was an unfair refusal to hear evidence, because he was never told he had to send the affidavits to Petitioner in advance. He contends that, for the same reason, the Panel refused to hear his explanation of his time spent on the case and limited him to reading aloud the written account he prepared at the Panel's request. He also claims he was unfairly limited to an hour for his presentation.

Respondent, with support from the Maine Civil Liberties Union as amicus curiae, argues that awards of the Fee Arbitration Commission should not be accorded the same deference on judicial review as awards arising out of contractual arbitration provisions, because attorneys have no choice but to participate in fee arbitration if the client so elects.

The court does not accept that argument or see it as raising any civil liberties issue. In addition to Law Court precedent making it clear that judicial review of Fee Arbitration Commission awards is subject to the same deferential standard as that for other arbitration awards, see Leete & Lemieux, PA. v. Horowitz, 2012 ME 71, &para 12, 53 A.3d 1106, 1109-10 (“The trial court's and this Court's review of a panel award is very limited."),6 there are practical parallels between private arbitration agreements and the Fee Arbitration Commission process that justify applying the same standard of judicial review to both types of award.

Just as an arbitration provision in a contract becomes binding only when a party makes the voluntary choice to enter into the contract, fee arbitration through the Commission is an aspect of the regulatory framework for Maine attorneys that becomes binding only upon persons who make voluntary choices to hold membership in the bar and charge fees to clients. Accordingly, review of the Panel 2 award will be pursuant to the same standard of review generally applicable to a proceeding to confirm or vacate arbitration awards. The grounds upon which a court may vacate an arbitration award are narrow. The "exclusive grounds for a court to vacate an arbitration award" are those contained in section 5938(1). HL 1, LLC v. Riverwalk, LLC, 2011 ME 29, &para 28, 15 A.3d 725. The primary issue typically is whether the award exceeded the scope of the arbitrator's powers. See Leete & Lemieux, FA. v. Horowitz, 2012 ME 71, &para 12, 53 A.3d 1106, 1109-10. "When an arbitrator stays within the scope of his or her authority, the award will not be vacated even when there is an error of law or fact, unless the challenger demonstrates that the arbitration violated one of the grounds to vacate an award stated in 14 M.R.S. § 5938( 1)." Id. "A reviewing court is not empowered to overturn an arbitration award merely because it believes that sound legal principles were not applied." HL 1, LLC v. Riverwalk LLC, 2011 ME 29, &para 19, 15 A.3d 725 (quotation marks omitted).

Respondent's assertions that the Panel excluded his affidavits based on a previously undisclosed requirement that he send them to Petitioner, and also refused to allow him to present any evidence except to read aloud his written effort to reconstruct his hours spent on the case, could, if substantiated in the record before the court, justify vacating the award on the basis of section 5938(1)(D). However, those contentions are not substantiated in the record before the court.

Nothing on the face of the Award and Determination or the Confidential Addendum alludes to either the exclusion of affidavits or any limitation on the Petitioner's presentation of evidence. The nearest reference appears in paragraph 8 of the Addendum, which says that Respondent read the contents of his "list of tasks" and time spent on each into the record because a copy had not been provided to Petitioner. However, neither the Award nor the Addendum refers to Respondent's affidavits being excluded or Respondent being precluded from explaining the list of tasks and time spent.

Because the Respondent's objections to the Panel award all relate to the exclusion or preclusion of evidence at the hearing, a hearing transcript or other verbatim record is essential to determining how the hearing was conducted; what evidence the Panel actually decided to accept or exclude or preclude; what was the basis for the Panel's actions and decisions during the hearings, and whether objection to the Panel's decisions was made and preserved. Because there is no such transcript or record, the court is unable to conduct meaningful review of the Panel rulings on evidence and conduct of the hearings.

In Leete & Lemieux, PA. v. Horowitz, supra, the client in a proceeding to confirm an award of the Fee Arbitration Commission made an argument against the award similar to Respondent's argument against the award here - that during the hearing he was precluded from presenting evidence before the Fee Arbitration Commission Panel. As here, there was no recording made of the Panel hearing. The Law Court observed, "Because [the client] elected not to have the proceedings recorded so that a record might be prepared, it is not possible to review, pursuant to section 5938(1)(D), any evidentiary issues or procedural problems that arose during the arbitration hearing." 2012 ME 71, &para 13, 53 A.3d 1106, 1110 (emphasis added).

It is Respondent's burden to demonstrate that the award in this case should be vacated on one or more of the grounds in the Maine Uniform Arbitration Act. See Stanley v. Liberty, 2015 ME 21 &para 2, 111 A.3d 663. See also 14 M.RS. § 5938. The court concludes he has not met that burden. Accordingly, the Motion to Vacate will be denied. Although there is no pending motion to confirm the award, the statute indicates that when a motion to vacate is denied, the award should be confirmed, unless a motion to modify or correct the award is pending, and no such motion has been filed. See also 14 M.RS. § 5938(4). Accordingly, the award is confirmed by this Decision and Order, and judgment shall be entered accordingly. See 14 M.R.S. § 5940.

IT IS HEREBY ORDERED AND ADJUDGED:

  1. Respondent's Motion to Vacate is hereby denied. The Award and Determination in Friedlander v. Sharon, Docket No. FAC-14-306, is hereby confirmed. Judgment is hereby entered for Petitioner Jerry Friedlander against Respondent Leonard I. Sharon for $8,322. The court elects not to award costs to either party. See 14 M.R.S. § 5940.
  2. In addition to the parties, the Clerk shall mail a copy of this Decision and Order to the Maine Board of Overseers of the Bar, Fee Arbitration Commission, 97 Winthrop St, Augusta, ME 04330.

Pursuant to M.R. Civ. P. 79(a), the Clerk is hereby directed to incorporate this Order by reference in the docket.

Dated: December 22, 2015


A.M. Horton, Justice


1The Bar Rules in effect at the time of the Panel award designated all materials associated with a fee arbitration proceeding, except the award itself, as confidential, unless otherwise ordered by "the Court," which the Bar Rules elsewhere define to be the Supreme Judicial Court only. See Me. Bar R. 9(j) (superseded eff. July l, 2015 by Me. Bar R. 7(h)). The revised version of the rule maintains that confidentiality. See Me. Bar R. 7(h). This court construes the Bar Rules to provide that only the Supreme Judicial Court has authority to alter the confidential status of the fee arbitration materials designated by rule as confidential. Thus, the court on its own motion is sealing the Fee Arbitration Commission record other than the award. For the same reason, this Decision and Order, which will not be sealed, will limit references to the confidential portions of the fee arbitration record to those necessary to explain the court's reasoning.

2The Maine Bar Rules underwent a substantial revision while this matter was pending before the Fee Arbitration Commission, although none of the substantive changes are material to this case. The new rules took effect July 1, 2015.

3The current Maine Bar Rules contain the same provision, allocating the burden to prove reasonableness to the respondent attorney when there is no written fee agreement. See Me. Bar R. 7(e)(12)

4In response to a question at oral argument, Respondent's counsel indicated Respondent has not made the refund payment to Petitioner that the Panel decided was due, because the deadline is tolled by the filing of this action.

5As a consequence of Petitioner Friedlander not being an attorney or being represented by counsel, his opposition to Respondent's Motion to Vacate was limited to his comments over the telephone. Thus, Respondent's argument for vacating the fee award was substantively unrebutted. There is an argument for the Bar Rules to be changed to require the Board to be joined in proceedings such as this one, to enable the Board to defend its Fee Arbitration Commission awards, as it is able to defend its Grievance Commission decisions.

6The court in Leete cited to decisions involving private arbitration awards in noting that “[a]ppellate review of a court's confirmation of an arbitration award is confined to errors of law only, and the award will be upheld unless the court was compelled to vacate it," see id. ¶ 12, 53 A.3d 1106, citing Randall v. Conley, 2010 ME 68, ¶ 11, 2 A.3d 328; Union River Valley Teachers Ass'n v. Lamoine, 2000 ME 57, ¶ 5,748 A.2d 990, thereby indicating, at least by implication, that Fee Arbitration Commission awards are not subject to any standard of review different than that applicable to arbitration awards generally.