Fee Fight Remanded

The District of Columbia Court of Appeals remanded a fight among law firms over an arbitration of fees

After the law firm Quinn, Racusin & Gazzola Chartered (“QRGC”) moved to vacate an arbitration award arising from a dispute with several other law firms, the other firms opposed the motion and sought confirmation of the arbitration award. The trial court dismissed the vacatur motion on the grounds that it had been both filed and served out of time, and it subsequently confirmed the arbitration award. QRGC now appeals that decision, but in an effort to invalidate the entire proceeding, claims for the first time in its reply brief that the Superior Court lacked subject-matter jurisdiction to entertain the original vacatur motion because the arbitration award at issue was a non-final interim award. We conclude that the trial court had statutory authority to review the interim award. Additionally, although we hold that QRGC timely filed its vacatur motion, we agree with the Superior Court that service was untimely and affirm the court’s dismissal on this basis. Finally, we hold that the trial court erred by confirming the arbitration award under D.C. Code § 16-4423(e) based solely on its dismissal of QRGC’s motion, and we remand for the trial court to consider whether the arbitration award should be confirmed on the merits.

The underlying suit

In 2009, Wye Oak Technology, Inc., sued the Republic of Iraq in the United States District Court for the District of Columbia over a contractual dispute relating to the refurbishing of Iraqi military equipment. The litigation continued for roughly ten years until Wye Oak obtained a substantial monetary judgment in 2019. The Republic of Iraq successfully appealed that decision, and litigation has continued.

QRGC served as Wye Oak’s counsel leading up to the litigation and was heavily involved in its initial stages. Wye Oak later retained Pavich Law Group to assist, and QRGC’s role gradually diminished as the litigation progressed. Wye Oak retained two more firms (Whiteford, Taylor & Preston and Kalbian Hagerty), and, in December 2019, all four firms drafted an “Agreement Concerning Attorneys’ Fees” to resolve disputes over compensation. The agreement established a collective 46% contingency fee for all four firms and further provided that “[a]ny claim or dispute between any of the aforementioned parties arising out of or relating to this Agreement . . . including any fee owed to any party, w[ould] be resolved by arbitration in the District of Columbia.”

Pavich Law invoked arbitration

On August 12, 2021, the arbitrator resolved various questions of liability in favor of the Pavich Law Group and the other appellees. As a result, it issued an interim award allocating the agreement’s 46% contingency fee as follows: 27.5% to Whiteford, Taylor & Preston; 18% to Pavich Law Group; 0.5% to Kalbian Hagerty; and 0% to QRGC. The interim award did not give any attorneys’ fees to QRGC because the arbitrator concluded that QRGC had “tortiously interfered with [Pavich Law Group]’s contractual relationships with Wye Oak Technology.” The arbitrator additionally stated that “[i]t is not intended that this Interim Award be subject to judicial review.”

Bottom line

Because we hold that that trial court “dismissed” rather than “denied” QRGC’s vacatur motion, the trial court was not required to confirm the arbitration award. We therefore remand for the trial court to consider whether, on the merits, the award should be confirmed.

(Mike Frisch)