Small business attorney

Appellant, the Commissioner of the California Department of Real Estate, challenged a judgment of the Superior Court of Sacramento County (California), which granted respondent applicant's petition for a writ of administrative mandamus that sought to set aside the Commissioner's denial of his application for a real estate broker's license. The trial court found that the Commissioner had failed to proceed in the manner required by law.

The court agreed with the trial court that, based on the findings set forth in the decision, the Commissioner's decision to deny the applicant a broker's license was improperly based solely on the nature of his prior crime, rather than his inadequate rehabilitation. The small business attorney administrative law judge (ALJ), whose decision the Commissioner had adopted, did not find the applicant's rehabilitation inadequate because he failed to fully satisfy the change of attitude or any other criteria of rehabilitation. Instead, the ALJ expressly found the applicant's rehabilitation was inadequate given the dishonest nature of his crime and his status as a police officer at the time he committed the crime. However, the nature of the crime and the applicant's position as a peace officer were not among the criteria for rehabilitation established by the Department. Accordingly, the Commissioner had not proceeded in the manner required by law, and the decision was not supported by the findings, so there was a prejudicial abuse of discretion.

The court affirmed the judgment.

Appellant corporation sought review of the judgment of the Superior Court of San Mateo County (California), which had confirmed an arbitration award in a fee dispute between appellant and appellee attorney. Appellant argued that the fee agreement which called for binding arbitration, contravened its rights under the California State Bar Mandatory Fee Arbitration rules.

Appellant corporation and appellee attorney had entered into a contract in which appellee provided legal services. When a fee dispute arose, appellee demanding binding arbitration under the terms of the contract to which appellant responded with its demand to arbitrate under the California State Bar Mandatory Fee Arbitration Rules (MFA). Appellant claimed that the American Arbitration Association (AAA) award had to be vacated because the public policy and statutory rights manifest in the MFA were contravened when a client is required to submit, over protest, to binding private arbitration of a fee dispute with an attorney. The court found that because appellant had not voluntarily participated in the arbitration, the award was subject to judicial review. Further, the court concluded that the AAA award contravened the rights of clients under the MFA thus, the arbitrator had exceeded his powers by purporting to enter an award under that authority and appellant was entitled to a trial de novo.

The court reversed and concluded that giving finality to the arbitrator's decision in this case would violate appellant's statutory rights under the California State Bar Mandatory Fee Arbitration Rules (MFA) and appellant did not waive its right to trial de novo under the MFA scheme by signing the fee agreement with the binding arbitration clause.