News 3-2011

March 2011
Abdulaziz, Grossbart & Rudman
P.O. Box 15458
North Hollywood, California 91606
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Sam K. Abdulaziz
Kenneth S.Grossbart
Bruce D. Rudman
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The Staff At
Abdulaziz, Grossbart & Rudman

The attorneys at our firm have been providing seminars on the New California Mechanic's Lien Laws which took effect on January 1, 2011 to various construction trade associations. If you want a seminar on the lien laws brought to your trade association or exchange or in-house for your staff or customers, please e-mail us at
Additionally, we have been approached to offer seminars on other construction related topics. If you have not already done so, please take the time to click the link below and let us know what topics you are interested in hearing from us in the future. We would love to hear from you regarding your preferences. Abdulaziz, Grossbart & Rudman Seminar Questionnaire
We thank you in advance for filling out this questionnaire regarding seminars so that we can provide what you want, when you want it!

Contractor Challenges Arbitrators Disclosure


The question of whether an arbitrator is required to disclose his law firm's representation of a company that owed over $3 million and was in litigation with a party to the arbitration comes to light in Agri-Systems, Inc. v. Foster Poultry Farms. In this instance, a party to the arbitration, a general contractor, argued that the arbitrator was required to disclose his firm's representation of a company that owed the general contractor a substantial sum even though the arbitrator himself did not handle the debtor company.

The arbitrator's firm was no longer representing the debtor company when the litigations between the debtor company and the general contractor began. This matter came up for arbitration more than a year after the arbitrator's firm stopped representing the debtor company.

Unfortunately, the ethics standards for contractual arbitration nor the California Arbitration Act do not have provisions that apply specifically to the disclosure of an arbitrator's legal representation of a third party who has an adverse relationship with a party to the arbitration.

The court concluded that disclosure was not required and affirmed the arbitrator's decision, which was not in the general contractor's favor.

The general contractor appealed the matter to the Fifth Appellate District. The appellate court used the rule of law to determine if the general requirement that a proposed neutral arbitrator "shall disclose all matters that could cause a person aware of the facts to reasonably entertain a doubt that the proposed neutral arbitrator would be able to be impartial."

According to the California Arbitration Act, a neutral arbitrator must disclose attorney-client relationships, relationships with any party or lawyer for a party in the particular arbitration, as well as any significant personal or professional relationship, current or in the past, with a party or lawyer for a party in the particular arbitration. The California Rules of Court, Ethics Standards for Neutrals further states that it is necessary for a neutral arbitrator to disclose " relationship the arbitrator has or has had with a party or lawyer for a party."

Given that, the attorney-client relationship is brought into question. The arbitrator in this matter was required to disclose any relationship he had with any member of the arbitration or their attorneys. Not only was the arbitrator not the attorney for the debtor company, but also the debtor company was not a member of the arbitration.

As a result the court agreed with the Superior Court finding that disclosure was not required. Therefore, the court affirmed the judgment entered after the arbitration award was confirmed.


Litigation Costs

The Vons Companies, Inc. (Vons) owned property and entered into a contract with Lyle Parks Jr. Inc. (Parks) to improve Vons' real property. The contract contained an attorney's fees provision. After the work was completed, Parks gave Vons a separate warranty that work was completed, etc. This warranty (as well as the original contract) stated that Parks would fix any defects in his work for one year. The warranty did not contain an attorney's fees provision like the contract did. Before the year was over on the warranty, Vons sold its property to Mock Rank, Inc. (Mock). In the sale agreement, Vons sold "all of its right, title and interest" in the warranty, but not the contract.

Two years after the sale, Mock sued both Vons (for failing to disclose water leaks among other things) and Parks (for breach of warranty and negligence, etc.). Before trial, Mock and Vons settled, with Mock assigning its claims against Park to Vons. Vons prevailed in court over Parks on most of the issues. After the verdict, Vons filed a memorandum asking for costs and attorney's fees, which Parks objected to. The trial court denied Vons both its costs and attorney's fees. Vons appealed.

The Court of Appeal reversed the judgment of Vons so that they could obtain their costs since they were the prevailing party. But the Court of Appeal did not reverse the judgment of no attorney's fees since the claims were based on the warranty and not the contract. Since the warranty did not contain an attorney's fees provision, no attorney's fees should be awarded.


Samantha Jo Abdulaziz
Sam Abdulaziz became a grandpa again! His son, Michael Abdulaziz, and wife Michele, gave birth to Samantha Jo on January 18, 2010. Big brother Benjamin couldn't be more proud.


The Effect Of A One-Year Statute Of Limitations

In 2005, Vision Manufacturing, Inc. (VMI) wanted to lease property from Mr. Miller. Around October, VMI had attorney Bruce Glasser review the lease. The lease was signed in late October. Turns out that the property was not in compliance with building codes and some improvements could not be made. Because of this, in December, Miller asked VMI to sign a "lease addendum" which stated that Miller would obtain the necessary permits to allow VMI to use the property and would release Miller from any claims for damages. The addendum was sent to Glasser for review and was later signed.

In March of 2006, VMI sued Miller and the trial court found in favor of Miller. This brought about VMI's suit against Glasser in September 2007, which was for negligence and breach of fiduciary duty by failing to properly advise VMI about the lease and the addendum. However, the trial court granted a Summary Judgment Motion (meaning that the court saw no merit in the lawsuit) in favor of Glasser because they found that any claim for malpractice would have been barred by the one-year statute of limitations and this matter was beyond that one-year period.

The Appellate Court agreed with the trial court's decision. Legal malpractice issues have a one-year statute of limitations which starts to run once the plaintiff finds or should have found out about the facts that brought about the wrongful act. Keep in mind that the time would stop if the plaintiff did not suffer injury or if the attorney continues to represent the client regarding the matter with which the wrongful act occurred.

VMI sustained injury when a new attorney was hired to file a lawsuit against Miller to get out of the lease and addendum, in March of 2006. The lawsuit against Glasser was not filed until September of 2007, which was one-year and six months later. The malpractice lawsuit was filed more than one year after the actual injury was suffered. The Appellate Court held up the trial court's Summary Judgment Motion.


About Our Law Firm
We Are An Experienced And Efficient Resource To Help Resolve The Legal Issues Involved In Construction

Abdulaziz, Grossbart & Rudman provides this information as a service to its friends & clients. The presentation and/or documents are of a general nature and are intended to highlight areas of the subject matter and should not be used as a substitute for specific advice or content. This document does not create an attorney-client relationship, or protect any confidential information until a written agreement is signed. You should seek the aid and advice of a competent attorney, accountant and/or other professional instead of relying on the presentation and/or documents. Sam Abdulaziz can be reached at Abdulaziz, Grossbart & Rudman, P.O. Box 15458, North Hollywood, CA 91615-5458; (818) 760-2000 begin_of_the_skype_highlighting            (818) 760-2000      end_of_the_skype_highlighting, Facsimile (818) 760-3908; or by E-Mail at

On the Internet, visit our Website at

In This Issue
Contractor Challenge
Litigation Costs
One-Year Statute

Ever Wonder...


Why do people order double cheeseburgers, large fries, and a diet coke?


Why women can't put on mascara with their mouth closed?


Why is the man who invests all your money called a broker?

An Elderly Gentleman

Had serious hearing problems for a number of years. He went to the doctor and the doctor was able to have him fitted for a set of hearing aids that allowed the gentleman to hear 100%.

The elderly gentleman went back in a month to the doctor and the doctor said, "Your hearing is perfect. Your family must be really pleased that you can hear again."

The gentleman replied, "Oh, I haven't told my family yet. I just sit around and listen to the conversations. I've changed my will three times!"

Finding A Wife At The Mall

While at the mall, a gentleman approached a very beautiful woman at a shop and asked, "You know, I've lost my wife here at the mall. Can you talk to me for a couple of minutes?"

"Why?" she asks.

"Because every time I talk to a beautiful woman, my wife appears out of nowhere."