HAEG v. Cole

Citations: 200 P.3d 317; 2009 Alas. LEXIS 7; 2009 WL 225632Docket: S-12771

Court: Alaska Supreme Court; January 30, 2009; Alaska; State Supreme Court

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David S. Haeg appeals the Alaska Supreme Court's affirmation of an arbitration award regarding fees owed to his former attorney, Brent R. Cole. Haeg initially hired Cole for representation in a criminal case, paying most of his fees but terminating the agreement after unsuccessful plea negotiations. Following this, Haeg employed another attorney and lost at trial. He subsequently initiated a fee arbitration with the Alaska Bar Association, claiming Cole's services were inadequate and seeking a refund of fees paid. The arbitration panel ruled in favor of Cole, awarding him the outstanding fees, which Haeg contested in superior court. The superior court corrected a clerical error in the award amount but largely upheld the arbitration panel's decision.

On appeal, the Supreme Court affirmed the superior court's ruling with one modification: the award of unpaid fees to Cole was deemed inappropriate since he did not present a claim for these fees during arbitration. Under the Revised Uniform Arbitration Act, the court determined that an award cannot be made on a claim not submitted to the arbitrator. Consequently, the Supreme Court directed the superior court to remove Cole's affirmative fee award and remanded the case for this adjustment, affirming the superior court's decision as modified. Haeg had raised multiple issues on appeal, including allegations of fraud and bias in the arbitration process, but the court's focus was solely on the validity of the fee award. The relevant fee agreement stipulated a payment of $200 per hour for Cole's services, which became central to the arbitration proceedings.

The Appellee represented the Appellant through the summer and fall of 2004 while sending monthly bills. The Appellant terminated the Appellee's services before any plea agreement was reached and proceeded to trial with a new attorney, resulting in a conviction. This conviction led to the suspension of the Appellant's hunting guide license for five years and the forfeiture of his PA-12 aircraft. Upon termination, the Appellant still owed a balance on his fee agreement, which he refused to pay, prompting the Appellee to not pursue the debt and appear willing to forgive it. The Appellant subsequently filed grievances against the Appellee with the Bar and initiated fee arbitration for an amount exceeding $5,000. An arbitration panel was convened and awarded the Appellee the unpaid fees on August 25, 2006, leading to the current appeal.

Alaska's mandatory fee arbitration rules dictate that courts defer heavily to the findings of arbitrators, with limited grounds for vacating or modifying awards based solely on specific statutory factors. The Appellant's appeal focuses on the merits of his criminal case; however, the court emphasizes that this appeal does not pertain to the validity of the conviction or the re-evaluation of evidence or witness credibility. The Appellant claims the Appellee committed perjury and that the panel's acceptance of the Appellee's testimony indicates arbitrator corruption. The court rejects this argument, noting that unfavorable outcomes for the Appellant do not imply corruption. Additionally, the court finds no bias in the composition of the arbitration panel, which consisted of two attorneys and a public member, aligning with Alaska Bar Rule 37(c).

The Appellant alleges bias and corruption among the arbitrators, arguing that their decision does not align with the evidence presented, particularly regarding the Appellee's alleged perjury. The Appellant claims the panel ignored substantial evidence and favored the Appellee's testimony. However, the court clarifies that it does not reassess the evidence or facts evaluated by the panel, and merely accepting the Appellee's version of events does not imply bias. The Appellant further asserts that the panel's acknowledgment of only three failures by the Appellee, despite his claims of numerous issues, illustrates bias, but the court reiterates that the panel's rejection of his arguments does not constitute evidence of bias or corruption. The panel explicitly stated it found no supporting evidence for the Appellant's claims. 

According to AS 09.43.120(a), a court can vacate an arbitration award only under specific conditions, including fraud, evident partiality, misconduct, or if the arbitrators exceeded their authority. The court finds that the Appellant fails to demonstrate evident partiality or corruption, and while he believes he provided sufficient evidence for a different outcome, the court cannot reassess the panel's factual determinations. Despite the Appellant's assertions of extensive supporting evidence, this alone does not warrant vacating the award. The court emphasizes its lack of authority to overturn the decision due to perceived errors by the panel. Finally, the Appellant contends that the panel exceeded its powers by awarding funds not explicitly requested by the Appellee, but the court maintains its position in upholding the panel's decision.

The Appellant contends that the arbitration panel wrongfully awarded the Appellee $1,000.00 more than owed, alleging this indicates arbitrator corruption since the Appellee did not request these fees. The court refutes this claim, stating the panel did not exceed its authority regarding the award. The Appellant's pursuit of fee arbitration allowed the fee agreement with the Appellee to be considered, and the Appellee's decision not to pursue the Appellant for unpaid fees prior to this action did not waive the panel's ability to address the issue. 

The Appellant acknowledged entering a fee agreement of $200 per hour with the Appellee and did not contest the time records, except for a specific air travel charge that the Appellee conceded was improper. The Appellant admitted to owing $2,059.19 under the agreement and only questioned the quality of the Appellee's services. The panel determined that the Appellee had competently represented the Appellant and awarded the remaining owed amount. 

The court determined that the panel's award did not exceed their powers under AS 09.43.120(a)(3) but identified a clerical miscalculation in the award amount. The panel had acknowledged payments of $11,329.81 made by the Appellant and total charges of $13,389.00 by the Appellee, with the correct difference being $1,689.19 after accounting for a $370.00 credit for travel expenses. The court ruled that this miscalculation did not indicate arbitrator corruption or bias.