Alaska Supreme Court Opinions made Available byTouch N' Go Systems and Bright Solutions


Touch N' Go
, the DeskTop In-and-Out Board makes your office run smoother.

 

You can search the entire site. or go to the recent opinions, or the chronological or subject indices. McAlpine v. Priddle (2/21/2014) sp-6866

McAlpine v. Priddle (2/21/2014) sp-6866

         Notice:  This opinion is subject to correction before publication in the PACIFIC  REPORTER .  

         Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts,  

         303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email  

                                                                                     

         corrections@appellate.courts.state.ak.us.  



                   THE SUPREME COURT OF THE STATE OF ALASKA  



KALINDI McALPINE,                                         )  

                                                          )    Supreme Court No. S-14891  

                           Appellant,                     )  

                                                          )    Superior Court No. 3AN-12-04798 CI  

         v.                                               )  

                                                          )    O P I N I O N  

STEVEN PRIDDLE,                                           )  

                                                          )    No. 6866 - February 21, 2014  

                           Appellee.                      )  

                                                          )  



                  Appeal from the Superior Court of the State of Alaska, Third  

                                                                  

                  Judicial District, Anchorage, Paul E. Olson, Judge.  



                  Appearances:  Kalindi McAlpine, pro se, Alachua, Florida,  

                                                                  

                  Appellant.    Steven  J.  Priddle,  Law  Offices  of  Steven  J.  

                                                                      

                  Priddle, pro se, Anchorage, Appellee.  



                  Before:  Fabe, Chief Justice, Winfree, Stowers, Maassen, and  

                                               

                  Bolger, Justices.  



                  WINFREE, Justice.  



I.       INTRODUCTION  



                  This  appeal arises from an attorney's fee dispute arbitration conducted  



under Alaska's Revised Uniform Arbitration Act (Revised Arbitration Act).1  

                                                                                                          The two  



                                                                                             

primary  issues  relate  to  the  appropriate  standard  of  review  when  a  party  asserts  an  



         1        AS  09.43.300-.595.    The  Revised  Arbitration  Act  governs  arbitration  



agreements made on or after January 1, 2005.  AS 09.43.300(a).  


----------------------- Page 2-----------------------

arbitration decision was procured by fraud and the possible application of non-statutory  

                                                                



public policy grounds to vacate an arbitration award.  We adopt the federal standard for  

                                  



reviewing a claim that an arbitration decision was procured by fraud, and we conclude  

                                                                            



the  arbitration  panel's  decision  that there  was  no  fraud  is  not reviewable.    We  also  

                                                                                                                   



conclude that on the facts found by the arbitration panel, there is no basis to vacate the  

                                                           



arbitration decision on public policy grounds.  We therefore affirm the superior court's  

                                                                      



decision to confirm the arbitration decision.  



II.       DISCUSSION  



          A.        Background  



                    The background facts underlying this attorney's fee dispute are fully set out  

                                                                            



in the arbitration panel's decision, attached as Appendix A, and the superior court's  

                                                                                        



decision to confirm the arbitration decision, attached as Appendix B.  A few basic facts  

                                                                                                                  



are set out here for context.  



                    Jierum  Duarte  was   arrested  on  federal  drug  conspiracy  charges  in  

                                                    



November 2008.  Duarte asked his girlfriend, Kalindi McAlpine, to contact attorney  

                  



Steven Priddle about representing Duarte in the federal criminal proceedings and in a  

                                                                                                  



concurrent state probation proceeding.  Both Duarte and McAlpine later asserted that  

                                                                                                       



Priddle told them he would charge up to $25,000 if the case did not go to trial, up to  

                                                                                                                 



$50,000 if the case went to trial, and up to $75,000 if the case went to trial and required  



hiring experts.  



                    McAlpine and Priddle signed a written agreement for Priddle to represent  

                                                       



Duarte.  McAlpine and Duarte later claimed they were never provided a copy of the  



signed agreement.  The day after the agreement was signed, McAlpine gave Priddle  



$75,000 cash wrapped in a plastic grocery bag.  



                                                              -2-                                                        6866
  


----------------------- Page 3-----------------------

                                                                                             

                    Duarte's case was set for trial in February 2009, but he entered a guilty plea  



                                                                                 

the morning of trial.  Following Duarte's sentencing, McAlpine asked Priddle to refund  



                                                                                

"at least" $50,000 of the fee because the  case  did  not go to trial.  In October 2010  



                                                                                                                                  2  

                                                                                                          

McAlpine petitioned for an attorney's fee arbitration with the Alaska Bar Association. 



The arbitration panel issued a decision in June 2011, concluding that the $75,000 fee was  



reasonable under the facts and circumstances of the case.  



                                                                   

                    During the arbitration hearing, Priddle offered into evidence the three-page  



                                                                                             

written fee agreement that he asserted was the one McAlpine signed in November 2008.  



                               

McAlpine disputed the document's authenticity.  McAlpine testified that she recalled  



                                                         

signing a one-page agreement - not a three-page agreement - and that the agreement  



                                                                                                        

Priddle presented did not reflect the parties' prior verbal agreement to a graduated fee.  



          2         See Alaska Bar R. 34(a)-(b), providing:  



                    (a) Fee Dispute Resolution Program Established.  It is the  

                    policy  of  the  Alaska  Bar  Association  to  encourage  the  

                    amicable resolution of fee disputes between attorneys  and  

                                                                             

                    their clients which fall within the Bar's jurisdiction and, in  

                    the  event  such  resolution  is  not  achieved,  to  arbitrate  and  

                    determine such disputes. To that end, the Board of Governors  

                                                                             

                    (hereinafter   "[B]oard")   of   the   Alaska   Bar   Association  

                    (hereinafter "Bar") hereby establishes through the adoption  

                                        

                    of these rules of fee dispute resolution (hereinafter "rules"),  

                                                                                

                    a  program  and  procedures  for  the  arbitration  of  disputes  

                                      

                    concerning  any  and  all  fees  paid,  charged,  or  claimed  for  

                                                                          

                    professional services by attorneys.  



                    (b)   Mandatory   Arbitration   for   Attorneys.      Arbitration  

                    pursuant to these rules is mandatory for an attorney when  

                    commenced  by  a  client.  For  the  purpose  of  these  rules,  a  

                                              

                    "client" includes any person who is legally responsible to pay  

                                                                       

                    the fees for professional services rendered by an attorney.  



                                                               -3-                                                         6866
  


----------------------- Page 4-----------------------

McAlpine also testified she could not confirm that her purported signature and initials  



on the agreement were authentic.  



                   The  fee  agreement  contained  a  provision  specifying,  "A  flat  fee  of  



$75,000.00 will be charged. . . . This flat-rate is earned and owing upon execution of this  

                                                                                  



fee agreement. . . . THIS FLAT-RATE FEE, OR ANY PART THEREOF, IS NON- 

                                                                                                            



REFUNDABLE  AND  WILL  NOT  BE  REFUNDED/RETURNED  UNDER  ANY  



CIRCUMSTANCES."  The panel noted that "[t]he written fee agreement on its face  



violates Ethics Opinion 2009-1, which concludes that it is misleading to describe a fee  

                                                                               



retainer in any way as 'non-refundable.' "3  

                                                             But the panel concluded that the agreement  



"accurately reflected the terms of the fee agreement entered into between the parties[,]  

                                                     



satisfied the requirement of the Code of Professional Conduct that all fee agreements be  

                                                                                                     



in writing[, and] clearly contemplates a fixed fee and not a graduated fee."  



                   The  panel  then  analyzed  whether  the  agreed-upon  $75,000  fee  was  



reasonable for the work performed.4  

                                                   The panel ultimately concluded that "$75,000 was  



                                                                     

a reasonable fee to charge in this case based upon all of the factors contained in Bar Rule  



35(a)."    But  the  panel  referred  the  matter  to  bar  counsel  to  investigate  whether  



disciplinary proceedings were appropriate for Priddle's use of the "non-refundable" and  

                                    



"already earned" language in the fee agreement and his acceptance of a large sum of cash  

                                                                                                                



that may have come from illegal sources.  



                   McAlpine filed a "motion to amend" the panel's decision in the superior  



court  in  January  2012.    McAlpine  advanced  several  arguments  for  overturning  the  



arbitration decision:  (1) the panel failed to analyze the reasonableness  of the fee in  

                                                                                                       



         3        See Alaska Bar Ass'n Ethics Comm., Ethics Op. 2009-1 (2009).  



         4         Cf.  Alaska Bar R. 35(a) (setting out considerations for reasonableness of  



attorney's fees).  



                                                          -4-                                                       6866  


----------------------- Page 5-----------------------

relation to work actually performed; (2) the panel failed to weigh the fact that neither  



McAlpine nor Duarte was given a copy of the agreement; (3) Priddle misled Duarte on  

                                                                                  



his experience with federal drug cases; (4) Priddle's fee was not reasonable; (5) Priddle  

                             



did not provide an accounting of time spent on the case; (6) the panel could not assess  

                            



the reasonableness of the fee without timekeeping records; (7) the panel should have held  

                                                                                           



Priddle to a "higher standard" in assessing the reasonableness of the fee charged; (8) the  

                                                                                                     



panel should have given greater weight to the fact that the  fee agreement contained  



provisions in violation of the rules of professional conduct; (9) Priddle coerced his client  

                                                                                                  



into  entering  the  fee  agreement  and  ultimately  pleading  guilty;  and  (10)  the  fee  



agreement considered by the panel was fraudulent.  



                   The superior court reviewed McAlpine's petition under the narrow judicial  



review standards of the Revised Arbitration Act.5  The court rejected most of McAlpine's  



                                                                                               

arguments as falling outside the statutory judicial review provisions and therefore being  



unreviewable.  The court acknowledged that McAlpine's fraudulent agreement argument  



fell within one of the statutory review provisions - that "the award was procured by  



corruption,  fraud,  or  other  undue  means."6  

                                                                 The  court  concluded,  however,  that  the  



                                                                                  

panel's finding that the document was not fraudulent was not reviewable.  Concluding  



that McAlpine "ha[d] not established any of the statutory grounds to vacate or modify  



an arbitration award as set forth in AS 09.43.500 or .510," the superior court affirmed  



the arbitration decision.  



                   McAlpine, appearing pro se, appeals.  



         5         See AS 09.43.500, .510.  



         6         See AS 09.43.500(a)(1).  



                                                           -5-                                                       6866  


----------------------- Page 6-----------------------

          B.       Standard Of Review  



                   We  "review  de  novo  the  superior  court's  decision  to  confirm  [an]  



arbitration award."7  



          C.       McAlpine's Appeal  



                                                                                           

                   "[W]e consider pro se [papers] liberally in an effort to determine what legal  

claims have been raised."8  

                                        McAlpine generally challenges the merits of the panel's  



                                                                           

decision; she also appears to claim that the arbitration decision was fraudulently obtained  



                                        

and that the panel violated public policy by giving effect to an "unconscionable" fee  



                9  

agreement. 



                                                                    

                   Judicial  review  of  attorney's  fee  arbitration  awards  is  governed  by  the  



                                                                    

Revised Arbitration Act; a court can review the award only on the grounds listed in the  



          10  

statute.      Under the Revised Arbitration Act, a court shall vacate the award if:  



                            (1) the award was procured by corruption, fraud, or  

                   other undue means;  



                            (2) there was  



          7        State v. Pub. Safety Emps. Ass'n (PSEA 2010), 235 P.3d 197, 201 (Alaska   



2010) (citing State v. Alaska Pub. Emps. Ass'n , 199 P.3d 1161, 1162 (Alaska 2008)).  



          8        Toliver v. Alaska State Comm'n for Human Rights, 279 P.3d 619, 622  



(Alaska 2012) (citing Clemensen v. Providence Alaska Med. Ctr., 203 P.3d 1148, 1150  

                                                   

(Alaska 2009)).  



          9        See State v. Pub. Safety Emps. Ass'n (PSEA 2011), 257 P.3d 151, 158  



                                                                                                    

(Alaska 2011) ("Following a path taken by the U.S. Supreme Court and many other state  

jurisdictions, we now . . . adopt the exception to enforcing arbitration decisions where  

doing so would violate an explicit, well defined, and dominant public policy." (quoting  

                                                                     

PSEA 2010 , 235 P.3d at 203) (internal quotation marks omitted)).  



          10       Alaska Bar R. 40(a)(2); Haeg v. Cole , 200 P.3d 317, 320 (Alaska 2009)  



(adopting supeior court order); Breeze v. Sims , 778 P.2d 215, 217 (Alaska 1989).  



                                                           -6-                                                    6866
  


----------------------- Page 7-----------------------

                                       (A) evident partiality by an arbitrator appointed  

                             as a neutral arbitrator;  



                                       (B) corruption by an arbitrator; or  



                                       (C) misconduct by an arbitrator prejudicing the  

                             rights of a party to the arbitration proceeding;  



                             (3)  an arbitrator refused to postpone the hearing on  

                   showing  of  sufficient  cause  for  postponement,  refused  to  

                   consider evidence material to the controversy, or otherwise  

                                                                

                   conducted  the  hearing  contrary  to  AS  09.43.420,  so  as  to  

                                                                        

                   prejudice substantially the rights of a party to the arbitration  

                                                                           

                   proceeding;  



                             (4) an arbitrator exceeded the arbitrator's powers;  



                             (5) there was not an agreement to arbitrate, unless the  

                                                                           

                   person  participated  in  the  arbitration  proceeding  without  

                                                                             

                   raising the objection under AS 09.43.420(c) not later than the  

                                                                                    

                   beginning of the arbitration hearing; or  



                             (6) the arbitration was conducted without proper notice  

                   of  the  initiation  of  an  arbitration  as  required  under  AS  

                   09.43.360 so as to prejudice substantially the rights of a party  

                                                                                              

                   to the arbitration proceeding.[11]  



A court shall modify an award if:  



                                                                  

                             (1) there was an evident mathematical miscalculation  

                                                             

                   or an evident mistake in the description of a person, thing, or  

                   property referred to in the award;  



                                                                                             

                             (2) the arbitrator has made an award on a claim not  

                   submitted to the arbitrator and the award may be corrected  

                                                                                           

                   without  affecting  the  merits  of  the  decision  on  the  claims  

                   submitted; or  



          11       AS 09.43.500(a).  



                                                            -7-                                                       6866  


----------------------- Page 8-----------------------

                               (3)  the  award  is  imperfect  in  a  matter  of  form  not  

                                                                      

                     affecting       the     merits      of     the    decision        on     the     claims  

                     submitted.[12]  



                                                                              

                     1.        The merits of the arbitration panel's decision are unreviewable.  



                    McAlpine asks us to review the merits of the arbitration panel's decision  



                                                                                                            

on many of the same grounds she raised before the superior court.  Her merits challenge  



                                                                                                 

can be distilled into five main points.  She argues that the panel:  (1) erred in finding that  



the  written  fee  agreement  superseded  the  alleged  verbal  fee  agreement;  (2)  erred  in  



                                 

determining that the written fee agreement was not invalidated by Priddle's failure to  



                                                                                                    

give McAlpine a copy or explain the fee; (3) erred in determining the fee was reasonable  



                          

because it failed to consider all the Bar Rule 35(a) factors; (4) gave Priddle's witnesses'  



                                                                                                       

testimony  improper  weight;  and  (5)  could  not  have  properly  assessed  the  fee's  



                                                                                                                      

reasonableness because Priddle did not account for the time he worked on the case.  The  



superior court considered several variations of these arguments and concluded that all  



were unreviewable.  



                                                                                                   

                    McAlpine asserts that the superior court erred  in  determining it lacked  



                                                                                                                         

authority to review the panel's decision except under the statutory grounds.  But we  



                                                                                              

repeatedly have rejected requests for heightened review of attorney's fee arbitration  



            13  

                  Under  our  precedent,  neither  the  panel's  factual  findings  nor  its  legal  

awards.                                                            



          12        AS 09.43.510(a).  



          13        Butler v. Dunlap , 931 P.2d 1036, 1040 (Alaska 1997) (rejecting request to                        



review attorney's fee arbitration decision under arbitrary and capricious standard); A.  

Fred  Miller  v.  Purvis ,  921  P.2d  610,  618  (Alaska  1996)  (holding  attorney's  fee  

          

arbitration  without  judicial  review  for  factual  or  legal  errors  does  not  violate  due  

                                            

process); Breeze , 778 P.2d at 217 (rejecting request to review attorney's fee arbitrator's  

                            

factual findings for gross error).  



                                                                -8-                                                         6866
  


----------------------- Page 9-----------------------

                                          14  

                                                                           

conclusions are reviewable.                   The superior court therefore applied the correct standard  



                                                  

in  concluding  that  McAlpine's  challenges  to  the  panel's  decision's  merits  were  not  



                                                                                 

reviewable.  For the same reason, we will not review the merits of the panel's decision  



on appeal.  



                                                                                                   

                    2.	       The superior court properly determined it could not review the  

                              arbitration panel's conclusion that the fee agreement was not  

                              fraudulent.  



                                                                                                                         

                    McAlpine also asserts that the panel relied on a fraudulent copy of the fee  



                                                                                     

agreement supplied by Priddle.  Whether an award was procured by fraud is one of the  

statutory grounds for reviewing an arbitration award.15  The superior court acknowledged  



                                                                                                                

that McAlpine had raised a statutory ground on which it could review the award, but it  



                                                                                              

concluded that "the arbitration panel's finding of fact that the fee agreement document  



        

was not falsified, manufactured, or otherwise illegitimate . . . is not reviewable by the  



court."  



                                                                                                        

                    We have not articulated the proper standard of review under the Revised  



Arbitration Act for determining whether an arbitration award was procured by fraud.  



          14        See Haeg, 200 P.3d at 320; Breeze , 778 P.2d at 217; see also Univ. of  



Alaska v. Modern Const., Inc. , 522 P.2d 1132, 1140 (Alaska 1974) ("The general rule  

                             

in both statutory and common law arbitration is that arbitrators need not follow otherwise  

                                                                                                          

applicable law when deciding issues properly before them, unless they are commanded  

                                                                                          

to do so by the terms of the arbitration agreement." (citing Ramonas v. Kerelis , 243  

N.E.2d 711, 717 (Ill. App. 1968);  In re Reynold's Estate , 20 S.E.2d 348, 351 (N.C.  

 1942))).  



          15  

                                                                                                     

                    AS 09.43.500(a)(1).  McAlpine does not expressly  invoke the Revised  

                                                        

Arbitration Act, but does claim that Priddle committed "fraud" in presenting the panel  

with a forged agreement.  See Wilkerson v. State, Dep't of Health & Soc. Servs., 993 P.2d  

 1018, 1022  (Alaska  1999)  (explaining  pro  se  litigant's  failure  to  identify  and  apply  

                                                                                                                   

precise legal test not fatal when test is well established and easily applied).  



                                                               -9-	                                                        6866
  


----------------------- Page 10-----------------------

Federal courts applying a similar Federal Arbitration Act provision16 require a party  



                                                                                                    

seeking an arbitration award's vacatur to "show that the fraud was (1) not discoverable  



upon the exercise of due diligence prior to the arbitration, (2) materially related to an  

issue in the arbitration, and (3) established by clear and convincing evidence."17  



                                                    

                     Under the federal standard's first prong, a court will not independently  



review  an  arbitration  award  for  fraud  when  the  arbitrators  already  considered  and  

resolved the fraud claim18 because fraud "necessarily raises issues of credibility which  



                                                                             19  

                                                                                 It follows that a court should give  

have already been before the arbitrators once." 



deference to arbitrators' credibility determinations on fraud claims.  



                     Fifteen  states  and  the  District  of  Columbia  have  adopted  the  Revised  



                                         20  

                                                               

Uniform Arbitration Act.                     Courts in these jurisdictions generally have followed the  



           16        Compare  9 U.S.C.  10(a)(1) (2012) (court may vacate arbitration award     



"where  the  award  was  procured  by  corruption,    fraud,  or  undue  means"),  with  

AS 09.43.500(a)(1) (court shall vacate arbitration award if "the award was procured by                

corruption, fraud, or other undue means").  



           17  

                                    

                     Lafarge Conseils Et Etudes, S.A. v. Kaiser Cement & Gypsum Corp. , 791  

                                                                                  

F.2d 1334, 1339 (9th Cir. 1986) (citing Dogherra v. Safeway Stores, Inc. , 679 F.2d 1293,  

1297 (9th Cir. 1982)).  



           18  

                                                                                                                     

                     A.G. Edwards & Sons, Inc. v. McCollough , 967 F.2d 1401, 1404 (9th Cir.  

                                                

1992) ("[W]here the fraud or undue means is not only discoverable, but discovered and  

                                                                                                               

brought to the attention of the arbitrators, a disappointed party will not be given a second  

bite  at  the  apple.");  cf.  Johnson  v.  Wells,  73.  So.  188,  191-92  (Fla.  1916)  (holding  

evidence that records presented in arbitration were falsified was reviewable by trial court  

                                                                                                                       

for  fraud  because  such  evidence  was  not  considered  by  arbitrators  nor  available  to  

plaintiff during arbitration).  



           19        Karppinen v. Karl Kiefer Mach. Co. , 187 F.2d 32, 35 (2d Cir. 1951).  



           20        UNIF .  ARBITRATION  ACT (2000), 7(1A) U.L.A. 1 (Supp. 2013) (Table Of   



Jurisdictions Wherein Act Has Been Adopted) (adopted by Alaska, Arizona, Arkansas,   

                                                                                                                     (continued...)  



                                                                  -10-                                                            6866
  


----------------------- Page 11-----------------------

federal standard for determining whether an arbitration award was procured by fraud.  



Courts  in  Hawaii,  Nevada,  North  Dakota,  and  Utah  expressly  adopted  the  federal  



standard  in  reviewing  claims  brought  under  those  states'  versions  of  the  Revised  



                                                              21  

                                                                    Other  courts  have  applied  the  federal  

Uniform  Arbitration  Act  fraud  provision. 



standard to arbitration fraud claims under an identical vacatur provision in the original  

                                                                               



                                    22  

Uniform Arbitration Act.                Because Alaska's fraud provision is nearly identical to that  

                                                                                                                    



of the Federal Arbitration Act, and most other states that have adopted the Revised  

                       



Uniform Arbitration Act apply the federal standard, we conclude that Alaska courts  



                                                                      

should apply the federal standard in reviewing a claim that an arbitration award was  

procured by fraud.23  



                                                                                     

                   Under the federal standard the superior court correctly concluded that the  



                                       

arbitration panel's finding regarding the fee document's authenticity is not reviewable;  



          20       (...continued)  



Colorado, District of Columbia, Hawaii, Minnesota, Nevada, New Jersey, New Mexico,  

North Carolina, North Dakota, Oklahoma, Oregon, Utah, and Washington).  



          21       See  Low v. Minichino , 267 P.3d 683, 690-92 (Haw. App. 2011);                               Sylver v.  



Regents Bank, N.A., 300 P.3d 718, 721-22 (Nev. 2013); MBNA Am. Bank, N.A. v. Hart ,  

710 N.W.2d 125, 129 (N.D. 2006); Fleming v. Simper , 158 P.3d 1110, 1112-13 (Utah  

                                                                                 

App. 2007).  



          22       See UNIF .  ARBITRATION  ACT (1956), 7(1A) U.L.A. 9 (Supp. 2013) (Table  



Of Jurisdictions Wherein Act Has Been Adopted); Davenport v. Dimitrijevic , 857 So.2d  

957, 961 (Fla. Dist. App. 2003);  West v. Heart of the Lakes Constr., Inc., No. C5-01- 

 1823, 2002 WL 1013529, at *4 (Minn. App. May 21, 2002); Las Palmas Med. Ctr. v.  

                                                                                                            

Moore ,  349  S.W.3d  57,  67  (Tex.  App.  2010).    Compare  U 

                                                                                          NIF .   ARBITRATION   ACT  

 12(a)(1) (1956), 7(1A) U.L.A. 514 (2009) (requiring court to vacate award if "[t]he  

award  was  procured  by  corruption,  fraud  or  other  undue  means"),  with  UNIF .  

A 

                      

   RBITRATION ACT  23(a)(1) (2000), 7(1A) U.L.A. 77 (2009) (requiring court to vacate   

award if "the award was procured by corruption, fraud, or other undue means").  



          23       See Lafarge Conseils Et Etudes, 791 F.2d at 1339.  



                                                           -11-                                                      6866
  


----------------------- Page 12-----------------------

                               

the panel considered the fraud allegation and made credibility findings.  We therefore  



                                                                       

affirm the superior court on this issue and likewise decline to review the panel's finding  



regarding fraud.  



                   3.	      The      arbitration         panel's       decision       does      not     enforce       a  

                            nonrefundable fee provision in violation of public policy.  



                   In PSEA 2011 we adopted a non-statutory exception to enforcing arbitration  



awards when doing so would violate an "explicit, well defined, and dominant" public  

          24  McAlpine appears to argue on appeal that the panel's award should be vacated  

policy.                                                                                 

because it enforces a contract that violates public policy.25  



                   McAlpine generally complains that Priddle's putative $75,000 flat fee is  



"unconscionable"  because  it  violates  Alaska  Bar  Association  Ethics  Opinions  and  



amounts  to  pay  for  work  not  done.    But  the  panel  did  not  give  effect  to  the  

                                                                                                      



"nonrefundable" aspect of the fee agreement's flat fee provision.  The panel interpreted  



                                                                          

the flat fee provision as allowing the $75,000 fee to be refundable to the extent it was  

                                                                                                               26  The  

unearned and therefore unreasonable, in compliance with Ethics Opinion 2009-1. 



panel acknowledged the "nonrefundable" term was unenforceable, noting that the term  

                                                            



on its face violated the Ethics Opinion.  The panel's subsequent determination that the  

                



         24        257 P.3d 151, 158-60 (Alaska 2011) (adopting public policy exception  



from  W.R. Grace & Co. v. Local Union 759, Int'l Union of the United Rubber, Cork,  

Linoleum & Plastic Workers , 461 U.S. 757, 766 (1983) and E. Associated Coal Corp.  

                                                        

v.  United Mine Workers, Dist. 17, 531 U.S. 57, 62-63 (2000)).  



         25        McAlpine also appears to have properly raised these arguments before the  

                                                                                            

arbitration panel and the superior court, preserving them for appeal.  Neither the panel  

                         

nor the superior court expressly ruled on the merits of the public policy argument.  



         26        The Ethics Opinion states "[e]ven if characterized as nonrefundable, an  



unearned fee must be refunded."  Alaska Bar Ass'n Ethics Comm., Ethics Op. 2009-1  

(2009).  



                                                         -12-	                                                   6866
  


----------------------- Page 13-----------------------

$75,000 flat fee was reasonable reflects its conclusion that the fee was not "unearned"     



and did not need to be refunded.  In addition, the panel referred Priddle to bar counsel  



                                                                                      

because the "nonrefundable" term "misleads clients about their ability to fire an attorney  



and  obtain  a  refund  so  they  can  seek  other  representation"  (emphasis  added).    This  



statement  implies  the  panel  believed  the  fee  agreement  established  a  refundable  fee  



notwithstanding its "nonrefundable" terms.  



                                                                         

                    Under this interpretation, the panel did not enforce a contract in violation  



of public policy because the panel interpreted the contract to provide that the fee was  



                                                            

refundable; the panel read the improper "nonrefundable" term out of the contract.  The  



public policy exception we adopted in PSEA 2011 requires a reviewing court to assess  



       

the contract "as interpreted by" the arbitrator in determining whether the court should  



                                                                 27  

                                                                                                 

refrain from enforcing the arbitration award.                        Because the panel interpreted the flat fee  



                                                                                 

in the agreement to be refundable, and refundable flat fees do not violate public policy,  



the panel's award does not violate public policy and should not be vacated.  



III.      CONCLUSION  



                    For  the  foregoing  reasons,  the  superior  court's  confirmation  of  the  



arbitration decision is AFFIRMED.  



          27        W.R.  Grace,  461  U.S.  at  766  (citing Hurd  v.  Hodge ,  334  U.S.  24,  35  



(1948)), cited with approval in PSEA 2011, 257 P.3d at 156.  



                                                             -13-                                                           6866  


----------------------- Page 14-----------------------

                         BEFORE THE ALASKA BAR ASSOCIATION
  

                                     FEE REVIEW COMMITTEE
  

                                    THIRD JUDICIAL DISTRICT
  



KALINDI McALPINE,	                                      )  

                                                        )  

                 Petitioner,	                           )  

                                                        )  

         v.	                                            )    File No. 2010F039  

                                                        )  

STEVEN J. PRIDDLE,                                      )  

                                                        )  

                 Respondent.                            )  

_________________________________  )  



                                  OPINION OF ARBITRATORS*  



I.       Case Background, Jurisdiction and Parties  



                                                                                     

                  This case was heard by the undersigned Arbitrators on April 25, 26, and 28,  



2011.  



                                                                            

                  The petitioner was Kalindi McAlpine.  She participated in the proceeding  



by telephone.  The Panel concluded she had standing to bring this petition because she  



                                                                  

entered into the fee agreement with the respondent and paid the fees incurred in this case.  



                                                                

McAlpine is the girlfriend of Jierum Duarte (see below).  They have one child together.  



                                                                                          

                  The respondent was Steven J. Priddle, Esq.   Priddle participated in the  



arbitration in person.  



                 Priddle represented Duarte in the underlying criminal cases.  Duarte was  



incarcerated in California at the time of the hearing and participated in portions of the  



proceeding by telephone.  Duarte could not participate in the entire proceeding because  



         *        This  decision  has  been  edited  to  conform  to  the  technical   rules  of  the  



Alaska Supreme Court.  The fee agreement underlying this arbitration was attached to  

the decision and referred to as "Exhibit J"; the exhibit itself has been omitted.  



Appendix A	                                 Appendix - 1 of 12                                               6866  


----------------------- Page 15-----------------------

                            

of  limitations  on  his  access  to  the  telephone.    Duarte  waived  any  attorney/client  



privileges necessary for the adjudication of the fee arbitration.  



                   None of the parties were represented by independent counsel.  Petitioner  



                                                                                                          

McAlpine  called  herself  and  Duarte  as  witnesses.    Duarte  testified  by  telephone.  



                                                                                      

Respondent called himself as a witness, as well as Joyce del Rosario, Christie Koldeway,  



Nicoli Bailey, and Sarah Martin.  The parties had an opportunity to cross-examine all  



witnesses.  



II.       Statement of the Case  



                   Respondent   Priddle   offered   into   evidence   a   written   fee   agreement  



                                                                                                             

purportedly signed by McAlpine.  The document was marked as Exhibit J, and admitted  



                                                                                                                     

into evidence.  Despite the existence of this written document there was a great deal of  



                      

conflict in the testimony between the parties about the circumstances leading up to the  



                                                       

engagement of Priddle by Duarte and McAlpine and the ultimate terms of the agreement.  



                   Duarte was arrested in early November of 2008, on federal drug conspiracy  



charges.  The exact date of arrest was subject to dispute, but court documents confirm  



the arrest was made on November 12, 2008.  Duarte asked McAlpine to assist him in  



retaining an attorney.   



                                                                                                          

                   At Duarte's direction, McAlpine contacted Steven Priddle, seeking to hire  



                                                                        

him for the purpose of defending the federal drug conspiracy charges as well as potential  



probation revocation proceedings that were expected in Alaska State Court.  McAlpine  



testified  that  she  believed  the  first  time  she  met  with  Priddle  in  his  office  was  



                                                                                         

November 13, 2008 because she gave him a credit card on which he charged $1,600.  



                                                                                                                 

McAlpine produced a Visa Card account statement showing a $1,600 charge to Priddle  



                                                                                                     

on November 13, 2008.  Priddle testified that this $1,600 charge was to cover his initial  



investigation  of  the  case  and  that  the  $1,600  fee  was  superseded  by  the  subsequent  



written agreement between the parties.  There was no written engagement agreement  



Appendix A                                       Appendix - 2 of 12                                                       6866  


----------------------- Page 16-----------------------

                                                                                                          

signed by the parties on the date that the $1,600 Visa Card charge was made.  The parties  



                             

agreed, however, that they subsequently entered into a new agreement for Priddle to  



                                                                                     

represent  Duarte  on  the  pending  cases.                       The  parties  also  agreed  that  Priddle  later  



                                               

refunded $1,600 to McAlpine for the initial Visa Card charge that was superseded by the  



agreement and payment.  



                                                                                                       

                    The parties agree that Priddle visited Duarte in jail on several occasions to  



                                                                                 

discuss Duarte's representation.  Duarte testified that Priddle agreed to take the case and  



                                                                               

would charge $25,000 if the case did not go to trial; $50,000 if the case went to trial; and  



$75,000 if the case went to trial and experts were hired.  Duarte said that he never saw  



a written fee agreement and never signed a fee agreement.  



                    Duarte further testified that he hired Priddle because he understood that  



Priddle had special expertise in federal drug cases.  In retrospect Duarte said that he  



doesn't think that Priddle had such expertise.  Duarte also testified that he was "scared"  



                                                                                                                

into hiring Priddle because Priddle had told him that his family could be in trouble and  



                                                                                                 

there was a possibility that his son could be taken away. Duarte said he was afraid to talk  



                                                                      

to his girlfriend McAlpine on the phone and was worried that she might somehow get  



                                                                 

into trouble. According to Duarte, Priddle suggested that his son not visit him in jail and  



                                                                                        

that McAlpine might want to leave the state and stay with friends or family until the case  



was over.   



                                                                                 

                    McAlpine also testified that the parties reached a verbal agreement under  



which Priddle would be paid $25,000 for his services if Duarte changed his plea before  



                                                                                        

trial; $50,000 if the case went to trial; and $75,000 if the case went to trial and experts  



                                                                            

were hired. She said that she also understood that Priddle had special expertise in federal  



drug cases.  



                                                                                                              

                    McAlpine further testified that she was told by Priddle that her home might  



be the subject of a federal search warrant and if she had a substantial amount of cash in  



Appendix A                                         Appendix - 3 of 12                                                           6866  


----------------------- Page 17-----------------------

her home it might be confiscated as evidence in the Duarte drug conspiracy case and  

                                                                                                        



could also be used to implicate McAlpine in the case.   



                     Priddle testified that he and McAlpine signed the written fee agreement on  

                                                          



November 17, 2008, the date that appears on the document. (Exhibit J) Priddle denied  

                                                      



that  the  parties  reached  a  prior  verbal  agreement  about  the  representation  that  was  



different from the terms of the written agreement.  He also denied that he held himself  

                                                             



out as having any special expertise as an attorney because the Code of Professional  



Conduct forbids attorneys from claiming special expertise in any particular area of the       



law.  



                                                                                                  

                     According to the terms of the written agreement, Duarte was to pay "a flat  



                                                                                                           

fee of $75,000" for the representation regardless of whether it went to trial or not.  The  



                                                                                                

description of services contained in the agreement was, "Fed Conspiracy, etc."  Priddle  



                                                                               

testified that Exhibit J was the standard form fee agreement that he always used with  



clients at the time.  Several of Priddle's staff witnesses corroborated this testimony.  The  



                                                                          

form had several different options for payment under different paragraphs that could be  



                                                                                                     

selected and initialed by the parties.  The options included: 4a. hourly fees; 4b. fixed  



fees; 4c. contingent fees; 4d. retainer to be held in trust and charged against on an hourly  



                                                                  

basis; 4e. interest charges; and 4f. pledge of security or collateral.  Despite calling this  



a "form," Priddle indicated he made specific changes to the document to reflect the  



                                          

circumstances of Duarte's cash payment.  He also testified that he took out the statement  



                                                                   

about nonrefundable retainers after Ethics Rule 2009-1 was issued and that bar counsel  



had reviewed his fee agreeement.  



                                                                                                 

                     Exhibit J reflects the initials "KM" at paragraphs 4b and 4e.  The document  



also purports to be executed by Kalindi McAlpine.  Paragraph 4b states:  



                                                     

                     Client shall pay this flat fee upfront regardless of whether this  

                                                                                                

                     matter  goes  to  trial;  client  enters  a  change  of  plea;  or  the  



Appendix A                                           Appendix - 4 of 12                                                            6866  


----------------------- Page 18-----------------------

                    matter is dismissed and/or resolved by the court.  This flat fee  

                    is for attorney representation only at the trial court level only.  

                                                                                               

                    For  purposes  of  appeal,  which  is  a  separate,  independent  

                                                                            

                    matter, another attorney fee shall be required.  This flat-rate  

                                                          

                    is earned and owing upon execution of this fee agreement.  

                    The flat fee only covers services of the attorney and staff in  

                    office. Outside costs such as discovery, experts, depositions,  

                                                            

                    etc.  are  not  included  in  this  flat-rate  fee  and  remain  the  

                                                                                             

                    responsibility of the client.  Should such costs be advanced  

                                                               

                    by  attorney  for  the  purpose  of  efficiency,  costs  are  to  be  

                                                                     

                    repaid  to  attorney,  subject  to  the  terms  contained  herein.  

                                                                                   

                    THIS FLAT-RATE FEE, OR ANY PART THEREOF, IS  

                    NON-REFUNDABLE AND WILL NOT BE REFUNDED/  

                                                        

                    RETURNED UNDER ANY CIRCUMSTANCES.  Client/  

                    client's representative verifies and warrants that the funds  

                                                                                                

                    paid  by  them  in  this  matter  are  their  personal  funds  and  

                                                                                

                    required/earned            in    normal       course       through        legitimate  

                    enterprise and the normal stream of commerce.  



                    McAlpine testified that she recalled signing a one-page fee agreement and  



not a three-page agreement that is reflected by Exhibit J.   She also testified that the  

                                                                                           



agreement did not reflect the prior verbal agreement of the parties with the fees ranging  

                                                               



from $25,000 to $50,000 to $75,000 depending upon whether the case went to trial and  

                                                                                                          



whether experts were hired.  McAlpine said that the signature  on  Exhibit J and the  

                                                                                                       



initials that are found on paragraphs 4b and 4e of the agreement look like her signature  



and initials, but she repeatedly testified she could not confirm their authenticity without  

                                                                 



a handwriting expert.  



                    Priddle testified that this is his standard contract similar to the one he still  

                                                                                                            



uses today.  He testified in response to questions that he has removed the language in  

                                                                                             



capital letters, but that the sentence reading "This flat-rate is earned and owing upon  



execution of this fee agreement" remains in his contract.  The panel requested a copy of  

                                                                                     



his  current  fee  agreement  which  he  failed  to  provide  before  the  close  of  evidence.  



Appendix A                                        Appendix - 5 of 12                                                         6866  


----------------------- Page 19-----------------------

                                                                                                    

McAlpine requested a copy of the fee agreement between Priddle and Joyce del Rosario  



                                                                                                 

(witness, prior client, and prior employee of Priddle) which was also not provided before  



the close of evidence.  



                    Both parties agreed that McAlpine left the office after signing a written  



                                                                     

agreement.  She returned later the same day or the next day to give Priddle $75,000 in  



                                                                                                  

cash to undertake the representation of Duarte.  Priddle testified that McAlpine actually  



                                                                                                                   

brought  $92,000  in  cash  in  a  plastic  grocery  sack.                          He      later  returned  $17,000  to  



McAlpine.  



                                  

                    Almost  everything  in  this  case  about  the  fee  agreement  was  subject  to  



                                                 

dispute  by  the  parties  except  the  fact  that  Priddle  received  $75,000  in  cash  from  



                                                  

McAlpine.  This was somewhat surprising to the Panel in light of the fact that no other  



witnesses were present and no receipt for the cash was given to McAlpine by Priddle.  



Priddle is legally blind and it was puzzling to the Panel how Priddle was able to count  



                                                                                                                      

out and verify the accuracy of such a large cash transaction.  When questioned about this  



                                                                       

by the Panel, Priddle said that his wife might have assisted him in counting the money  



but he couldn't recall.  



                                             

                    McAlpine  and  Duarte  believed  that  Priddle  changed  the  terms  of  the  



                                                                                                                        

original fee agreement with the "$25,000/$50,000/$75,000" arrangement to a fixed fee  



                                                                

arrangement  with  the  intent  to  defraud  them.    They  testified  that  they  were  never  



                                                                     

provided a copy with the fee agreement until this fee arbitration commenced.  They also  



                                                          

argued  that  Priddle  misrepresented  his  expertise  as  a  federal  drug  attorney,  used  



                                                                          

unscrupulous and unethical conduct in attaining the representation fee, failed to properly  



                                                                                     

represent Duarte, used scare tactics to get the retainer, urged Duarte to change his plea  



on the day of trial, and committed malpractice in the representation.  



                    The Petition sought the return of $50,000 of the retainer because Duarte  



entered a change of plea on the morning of trial and the case was never tried.  



Appendix A                                         Appendix - 6 of 12                                                           6866  


----------------------- Page 20-----------------------

III.      Findings and Conclusions about the Contract  



                    The Panel found it believable that neither McAlpine nor Duarte was given  



                                          

a copy of the agreement at or near the time it was signed, even though Priddle testified  



                   

otherwise.  McApline and Priddle were alone when the agreement was signed.  Money  



                                                                                             

changed hands at a subsequent meeting.  It seems likely that Priddle didn't take time or  



                                           

was too caught up in taking the large cash payment to make a copy for McAlpine at that  



                                                                          

time.  Priddle produced no letters of transmittal to either Duarte or McAlpine showing  



                                                                                                                  

that the agreement was subsequently mailed to either of them.  The panel believes that  



                                                                                                

the failure to provide a copy of the agreement to the clients at the time it was signed or  



shortly thereafter helped open the door to this dispute.  



                                                                                                                 

                    The written fee agreement on its face violates Ethics Opinion 2009-1 which  



                                                                                                      

concludes that it is misleading to describe a fee retainer in any way as "non-refundable."  



                                                                                

Although this agreement was entered into prior to the publication of Ethics Opinion  



                                                    

2009-1, Rule 1.5(a) was in effect and remained unchanged between 2008 and the time  



that Ethics Opinion 2009-1 was issued.  



                                               

                    The Panel found credible the Petitioner's testimony that Priddle counseled  



Duarte and McAlpine that if the government obtained a search warrant and discovered  



                                                            

a large amount of cash, it would likely be confiscated as evidence in the case and could  



                                                                 

perhaps link McAlpine to the conspiracy. Priddle inserted language in the fee agreement  



                                                                                                                   

in   two   places   that   indicated   the   funds   were   McAlpine's   "personal   funds   and  



acquired/earned  in  the  normal  course  through  legitimate  enterprise  and  through  the  



                                                                                              

normal stream of commerce."  The Panel is concerned about ethical implications when  



                                                                                                              

an attorney has reason to believe that the cash used to pay a retainer was earned through  



illegal means or constitutes evidence of the crime that the client is charged with.   



                    McAlpine testified that at the time she hired Priddle, she didn't think she  



                                                                 

was thinking straight and she was worried about her boyfriend in jail.  She testified that,  



Appendix A                                         Appendix - 7 of 12                                                           6866  


----------------------- Page 21-----------------------

"I usually think rationally, but not then."  Overall, the Panel found McAlpine to be an  

                 



articulate and organized advocate.   For an untrained advocate, she did a credible job of   



preparing   her   case,   cross-examining   witnesses,   articulating   her   arguments   and  



                                                                                                                   

advocating in a clear and direct style.  It was also clear from the testimony of Priddle's  



                  

prior staff members that McAlpine had been intimately involved in assisting with the  



                                                               

case, including performing research on mitigating factors to apply at sentencing and  



being  in  regular  contact  with  the  office.    But  the  Panel  did  find  it  believable  that  



McAlpine was likely under a great deal of stress at the time her boyfriend was arrested,  



                                               

and she was arranging to hire an attorney for the defense.  The Panel could understand  



                                                                                   

how the cash was probably weighing on her.  The fact that she actually brought $92,000  



to Priddle who counted out $75,000 and returned $17,000 to McAlpine, indicates that  



the cash had become something of a "hot potato" for her.   



                                                                                                                 

                    Ultimately the Panel concluded that there was nothing about Exhibit J that  



would  suggest  that  it  was  falsified,  manufactured,  or  otherwise  not  executed  by  



                                                                                                   

McApline.  The Panel found Priddle's testimony more believable than McAlpine's about  



whether she signed the agreement.  The Panel did not find McAlpine's or Duarte's  



testimony credible that the agreement was a forgery or fraudulently induced by Priddle.  



                                         

Moreover, McAlpine lost credibility when she declined to confirm the signature and  



                                                                                                

initials that appear on the document.  Finally, the Panel was unable to conclude that  



                                                                                

McAlpine's or Duarte's subjective understanding of the fee agreement should supersede  



the written terms of the agreement.   



                                                                           

                    Therefore, the Panel concludes that Exhibit J accurately reflected the terms  



of the fee agreement entered into between the parties.  In that regard, Exhibit J satisfied  



                                                                                                         

the  requirement  of  the  Code  of  Professional  Conduct  that  fee  all  agreements  be  in  



writing.    On  its  face,  the  fee  agreement  clearly  contemplates  a  fixed  fee  and  not  a  



Appendix A                                         Appendix - 8 of 12                                                           6866  


----------------------- Page 22-----------------------

                                                                                                 

graduated fee depending upon whether the case went to trial or whether experts were  



engaged.  



IV.       Reasonableness of the Fees under Bar Rule 35(a).  



                    Having concluded that the parties agreed to a $75,000 fixed fee the Panel  



turned to the question of the reasonableness of the fees under Bar Rule 35(a).  



                                                                                     

                    Priddle testified that he and his staff did not keep track of time or track the  



                                                                    

hours incurred in the case because it was not an hourly engagement.  Consequently the  



                                                                                                                         

Panel did not have very sound evidence upon which to judge the reasonableness of the  



fee.  The Panel declined to adopt the view that the attorney must always keep track of  



                                                                                                        

hours worked in order to justify the reasonableness of the fee if there is ever a dispute.  



Such a rule seems to contradict at least one of the reasons for charging a fixed fee and  



                                                       

might serve to discourage attorneys from exploring ways to provide clients with value  



                                                                                                       

for services outside the realm of the billable hour.  On the other hand, Priddle did a poor  



                                                                                                     

job of trying to demonstrate the amount of time spent on the matter or otherwise apply  



the reasonableness standards found in Bar Rule 35(a).  He made no effort to try and  



re-create his time or the time of his staff.  



                                                                                                       

                    Ultimately the evidence offered by the parties about the reasonableness of  



                                                                             

the fee was largely circumstantial and conclusory.  McAlpine testified that based upon  



                                                                                                                        

her observation of the case, she didn't think that Priddle put in more than 35 hours on the  



                                                                    

low side and maybe as many as 100 hours on the high side in this case.  Priddle testified  



that he spent hundreds of hours on the case.  



                    Neither of these estimates by the parties was particularly helpful to the  



Panel.  A client doesn't know how much time an attorney spends working on a case  



                                    

because so much work is done outside the presence of the client.  By the same token,  



                                         

attorneys rarely know how much time they spend on a matter unless they carefully track  



                                 

the hours.  In the end, the Panel relied largely upon the circumstantial evidence, common  



Appendix A                                        Appendix - 9 of 12                                                        6866  


----------------------- Page 23-----------------------

sense, and the testimony of Priddle's former staff members to discern the reasonableness  

                                                                                             



of the fee.  



                        

                    It  appears  that  the  representation  of  Duarte  lasted  at  least  ten  months  



between  the  federal  case  and  the  state  probation  revocation  case.    The  original  



                                                                                                         

engagement took place in mid-November of 2008, and the case was scheduled for trial  



on  February  9,  2009.    The  Panel  found  Priddle's  testimony  believable  that  he  was  



prepared to take the case to trial and that Duarte decided to change  his  plea  on the  



                           

morning  of  trial  because  his  co-defendant  had  changed  his  plea  the  week  before.  



                                                                                                          

Duarte's  defense  was  based  upon  sketchy  identification  evidence  and  Priddle  was  



                                                                                  

confident that he could raise a reasonable doubt about the identification of Duarte in the  



                                                                                                            

minds of the jurors.  However, once the co-defendant changed his plea, Priddle testified  



                                                                                                                         

that  he  and  Duarte  were  concerned  that  the  co-defendant  would  be  called  by  the  



                                                                                    

prosecutor to identify him as having participated in the illegal drug transaction.  Duarte  



testified that his co-defendant would never have testified against him at trial.  



                            

                    The  Panel  found  Priddle's  testimony  more  credible  than  Duarte  or  



                                                                                                                 

McAlpine that the Change of Plea resulted from Duarte's fear of going to trial after his  



                                    

co-defendant changed his plea rather than because of pressure brought by Priddle on  



Duarte.  



                                                          

                    Following the change of plea, Priddle and his staff testified that substantial  



time was spent researching and preparing for the sentencing hearing.  The main issue of  



concern to Duarte in this case was a federal law setting a mandatory minimum sentence  



of ten years for his offense.  That mandatory minimum was apparently the subject of  



                                                                          

pending legislation that would have reduced the mandatory minimum from ten years to  



five years if Duarte were sentenced after the legislation was passed.  Moreover, there  



                                                                                                           

were a number of mitigating factors that Priddle hoped might convince the judge to give  



                                                     

less than the mandatory minimum even though the statute provided otherwise.  Priddle  



Appendix A                                        Appendix - 10 of 12                                                          6866  


----------------------- Page 24-----------------------

and his staff testified that they had regular telephone conversations with McAlpine about  

                                                                                                   



the sentencing and that at her urging Priddle's office contacted a number of attorneys  



around the country faced with a similar problem in an effort to get around the mandatory   



minimum sentence.  



                    The  Panel  found  Priddle's  witnesses  who  testified  that  he  had  spent  



substantial  time  on  this  case  credible.    None  of  these  witnesses  currently  work  for  



Priddle.  All were former staff members and did not have a reason to lie for Priddle.  



           

Nicoli Bailey, a paralegal with 25 years of experience testied that although she did not  



         

have extensive experience in criminal law, based on her experience in complex civil  



matters, a $75,000 fee was not unreasonable for the amount of time that was spent on  



Duarte's case by Priddle and the paralegals.  None of the witnesses could identify any  



                                                                                                              

specific amount of time with any certainty however. They testified to ball park numbers  



                      

of  hours  and  numbers of visits to the jail to visit Duarte, and they tried to estimate  



                                                    

approximate lengths of time such tasks took, but they all admitted that their memories  



                                                                                                             

were not precise.  The witnesses corroborated that Priddle was prepared to try the case  



and gave Duarte's case substantial time and attention  



                            

                    The witnesses all testified that they did not keep any record of time spent  



                                                                                                        

on the case, gas logs for court trips and jail visits, or any other form of documentation  



on time and expenditures made for this case.  They testified that they did keep time  



records for the civil cases in the offices.  



                    Priddle  also  produced  a  large  volume  of  un-indexed  file  documents  to  



                                                                                        

support  his  claim  that  he  earned  his  fee  in  this  case.                        Those  documents  included  



approximately 150 pages of discovery in the federal case, 65 pages of mental health  



                                                        

records, information about a failed  attempt to secure third-party custody release for  



Duarte, the transcript from the 33-minute change of plea court hearing, documents from  



                                                                                   

the State parole revocation case that demonstrated there had been six brief state hearings  



Appendix A                                       Appendix - 11 of 12                                                         6866  


----------------------- Page 25-----------------------

and one five-page  sentencing memorandum submitted to the state court, and finally  

                           



approximately 300 pages of pleadings from the federal case, including routine motions  



and  requests  for  extensions.    The  pleadings  demonstrated  that  Mr.  Priddle  filed  a  



seven-page  motion  to  suppress  the  evidence  identifying  Duarte,  and  a  five-page  



sentencing memorandum with 18 pages of later-filed addendums.  



                                              

                  Therefore the Panel concluded that $75,000 was a reasonable fee to charge  



in this case based upon all of the factors contained in Bar Rule 35(a).   



V.       Referral to Bar Counsel  



                  The  Panel  determined  this  case  should  be  referred  to  bar  counsel  to  



investigate whether disciplinary proceedings are appropriate.  The issues identified by  



the Panel that warrant investigation by bar counsel include:  



                                                                      

                  1.       Whether the "non-refundable" and "already earned" language in the  



fee  agreement  signed  by  the  parties  in  this  case  should  result  in  any  disciplinary  



proceedings even though the Panel concluded that this fee was ultimately reasonable  



                                           

under Alaska Bar Rule 35(a).  Such language misleads clients about their ability to fire  



an  attorney  and  obtain  a  refund  so  they  can  seek  other  represention.    Furthermore,  



                                                                  

Priddle testified that he continues to believe that such a fee is earned when paid, and that  



he does not place the retainer in a trust account.  



                  2.       Whether an attorney has any ethical obligations when a retainer is  



paid  in  cash  in  a  case  where  the  lawyer  might  likely  conclude  that  the  money  was  



                                                                                                        

obtained from illegal sources or might be evidence in the case in which the attorney is  



retained.  



Dated June 2, 2011                                             /s/ Richard H. Foley, Jr.  



Dated June 15, 2011                                            /s/ Valerie Brown  



Dated June 8, 2011                                             /s/ Mary Kay Arthaud  



Appendix A                                   Appendix - 12 of 12                                                 6866  


----------------------- Page 26-----------------------

                IN THE SUPERIOR COURT FOR THE STATE OF ALASKA
  



                        THIRD JUDICIAL DISTRICT AT ANCHORAGE
  



KALINDI McALPINE,                                           )  

                                                            )  

                            Plaintiff,                      )    Case No. 3AN-12-04798 CI  

                                                            )  

         v.                                                 )  

                                                            )  

STEVEN PRIDDLE,                                            )  

                                                            )  

                            Defendant.                      )  



                                                     ORDER*  



I.       INTRODUCTION  



                                                                                                       

                   Jierum J. Duarte was arrested and charged in a federal drug case.  Duarte  



                                                                                                 

directed his girlfriend, Plaintiff Kalindi McAlpine, to retain attorney Steven Priddle to  



                                                                                  

represent  Duarte  in  the  federal  case  and  a  concurrent  state  criminal  proceeding.  



                                                                                                          

McAlpine paid Priddle $75,000 in cash for his services. Ultimately Duarte's case did not  



go to trial as he changed his plea on the morning trial was set to commence.  



                                                  

                  After  the  conclusion  of  Priddle's  representation,  McAlpine  brought  an  



attorney fee dispute with the Alaska Bar Association pursuant to Alaska Bar Rule 34(b).  



McAlpine sought a return of $50,000 from the amount paid to Priddle.  



                                                                

                   McAlpine contended the parties had agreed to a graduated fee arrangement  



                                                                                                               

whereby Priddle would receive $25,000 if the case did not go to trial; $50,000 if the case  



                                              

went to trial but no experts were hired; and $75,000 if the case went to trial and experts  



         *         This  decision  has  been  edited  to  conform  to  the  technical  rules  of  the  



Alaska Supreme Court.  



Appendix B                                      Appendix - 1 of 8                                                   6866  


----------------------- Page 27-----------------------

were  hired.    Priddle  contended  the  parties  had  agreed  to  a  $75,000  flat  fee  for  the  

                                                                                                                  



representation regardless of whether the case went to trial.  



                                             

                    The matter was submitted to the Bar Association's Fee Review Committee  



for arbitration.  The Fee Review Committee held an arbitration hearing.  Both parties  



                          

called witnesses and had the opportunity to cross-examine the witnesses against them.  



                                                                                                                      

The arbitration panel released its opinion on June 15, 2011. The panel relied on a written  



and executed document produced by Priddle in finding the parties' fee agreement was  



                                        

for a $75,000 flat-rate fee and concluded the fee was reasonable under Bar Rule 35(a).  



                                  

McAlpine  requested  modification  of  the  panel's  decision,  which  was  denied  on  



                                                                                          

September  9,  2011.              McAlpine  filed  the  present  motion  to  modify  the  arbitrator's  



decision in superior court.  



II.       STANDARD OF REVIEW  

                                                                                                                        1   The  

                    This action is governed by the Revised Uniform Arbitration Act. 



Alaska  Supreme  Court  has  counseled  that  judicial  review  of  arbitration  awards  is  



                                     2 

                                                                          

"closely circumscribed."   The superior court has limited authority to review awards and  



may only vacate, modify, or correct an arbitration award pursuant to "narrow statutory  



                   3                                                                                                     4  

parameters."   The court may not review the arbitrator's decision on its merits.                                            The  



                                                                                                                 

arbitrator's  findings  of fact and  law  must be  given  great deference  and  the  court  is  



          1         See Alaska Bar Rule 40(t); Haeg v. Cole , 200 P.3d 317, 318 (Alaska 2009).
     



          2         Sidney v. Allstate Ins. Co., 187 P.3d 443, 447 (Alaska 2008).
  



          3         Id.
  



          4         A. Fred Miller v. Purvis , 921 P.2d 610, 618 (Alaska 1996).
  



Appendix B                                          Appendix - 2 of 8                                                         6866  


----------------------- Page 28-----------------------

                                                                              5  

"loathe  to  vacate  an  [arbitration]  award."     The  arbitrator's  findings  of  fact  are  

unreviewable, even in the case of gross error.6  



                        Under the Act, an arbitration award may be challenged in superior court   

                                                                            7  or an application to modify or correct the  

through an application to vacate the award                                                                                            



            8  

award.   The statutory grounds for vacating an award are:  



                                                              

                                   (1) the award was procured by corruption, fraud, or  

                        other undue means;  



                                   (2)   there   was   evident   partiality   by   an   arbitrator  

                        appointed as a neutral arbitrator; corruption by an arbitrator;  

                                                                

                        or  misconduct  by  an  arbitrator  prejudicing  the  rights  of  a  

                       party to the arbitration proceeding;  



                                   (3)  an arbitrator refused to postpone the hearing on  

                        showing  of  sufficient  cause  for  postponement,  refused  to  

                        consider evidence material to the controversy, or otherwise  

                                                                              

                        conduct the hearings  contrary to [the Uniform Arbitration  

                        Act], so as to prejudice substantially the rights of a party to  

                                                                   

                        the arbitration proceeding;  



                                   (4) an arbitrator exceeded the arbitrator's powers;  



                                   (5) there was not an agreement to arbitrate . . . ; or  



                                   (6) the arbitration was conducted without proper notice  

                        [under the Arbitration Act] so as to prejudice substantially the  

                                                                        

                                                                                                        [9] 

                        rights of a party to the arbitration proceeding.  



An award may be modified or corrected under the following circumstances:  



            5          Butler v. Dunlap , 931 P.3d 1036, 1038 (Alaska 1997).  



            6          Breeze v. Sims , 778 P.2d 215, 217 (Alaska 1989).  



            7           See AS 09.43.500.  



            8           See AS 09.43.510.  



            9           AS 09.43.500(a).  



Appendix B                                                   Appendix - 3 of 8                                                                  6866  


----------------------- Page 29-----------------------

                               (1) there was an evident mathematical miscalculation  

                                                        

                     or an evident mistake in the description of a person, thing, or  

                     property referred to in the award;  



                               (2) the arbitrator has made an award on a claim not  

                     submitted to the arbitrator and the award may be corrected  

                     without  affecting  the  merits  of  the  decision  on  the  claims  

                     submitted; or  



                               (3)  the  award  is  imperfect  in  a  matter  of  form  not  

                     affecting        the     merits       of    the     decision        on     the     claims  

                                     

                                     [10] 

                     submitted.  



                                                                           

                     Therefore the court may vacate or modify the award only if it finds that she  

has proven factors under AS 09.43.500 or AS 09.43.510.11  



          A.	        McAlpine's Arguments  



                     McAlpine generally asks the court to review the merits of the arbitration  



                                                     

panel's decision including many points falling outside the narrow statutory parameters  



                                                                                                                           

for  modifying  or  vacating  an  award.    She  does  not  contend,  for  example,  that  the  



arbitration process was flawed or that the arbitrators themselves were unsuitable.  Nor  



                                                             

does  she  contend  that  the  arbitrators  made  a  mathematical  or  clerical  error  in  their  



decision.  Each of McAlpine's arguments are examined below.  



                                                                                                                               

                     1.	       The arbitration panel did not analyze the reasonableness of the  

                               fee in relation to work actually performed.  



                     The arbitration panel noted that:  Priddle's representation lasted ten months;  



                                                                                                                             

Priddle was prepared to take the case to trial; Priddle spent a substantial amount of time  



                                                               

on the issue of Duarte's sentence; some of Priddle's former employees testified Priddle  



           10	       AS 09.43.510(a).  



           11        McAlpine titled her motion a "motion to modify" the arbitration award, but       



the remedy she requests is more consistent with a motion to vacate the award.  Thus the                       

Court will treat McAlpine's motion as a motion to modify or vacate the award.  



Appendix B	                                           Appendix - 4 of 8                                                            6866  


----------------------- Page 30-----------------------

spent a substantial amount of time on the case; and Priddle produced several hundred   

pages of documents and pleadings related to Duarte's case to show his fee was earned.12  



These findings of fact are not reviewable by this court.  



                  2.	      In  determining  the  reasonableness  of  the  fee  charged,  the  

                           arbitration panel did not weigh the fact that neither McAlpine  

                                                                                

                           nor Duarte was given a copy of the fee agreement.  



                  The arbitration panel found it believable that neither McAlpine nor Duarte  

                                                                          

was given a copy of the fee agreement at the time it was signed.13  

                                                                                          The panel noted that  



Priddle's failure to provide a copy of the agreement likely opened the door to the dispute  

                                         



over  what  fee  arrangement  the  parties  had  agreed  to  but  concluded  the  written  fee  



                                                                                                     

agreement accurately reflected the fee agreement entered into between the parties.  This  



finding is not reviewable.  



                  3.	      Priddle misled his client on his experience.  



                  The panel was aware of and considered Duarte's and McAlpine's testimony  

that  they  were  misled  as  to  Mr.  Priddle's  experience  handling  federal  drug  cases.14  



                                                                                                 15  

Priddle denied making any representations as to any special expertise.                               The panel's  



factual finding regarding this issue is not reviewable.  



                  4.	      Priddle's fee was not reasonable.  



                  McAlpine repeatedly asserts that the arbitration panel erred in finding that  



Priddle's fee was reasonable.  The court must give great deference to the panel's legal  



         12       See Opinion of Arbitrators [Appendix A at 9-13].  



         13       Opinion of Arbitrators [Appendix A at 7].  



         14       See Opinion of Arbitrators [Appendix A at 3-4].  



         15       Opinion of Arbitrators [Appendix A at 4].  



Appendix B                                    Appendix - 5 of 8                                                  6866  


----------------------- Page 31-----------------------

conclusions and cannot review its factual findings.  While McAlpine may believe the  



evidence favored her position, it is not within the scope of the court's review.  



                   5.	      Priddle did not provide an accounting of the time he spent on  

                            the case.  



                   The arbitration panel noted that the evidence offered by the parties as to the  

                                                                                  



reasonableness of the fee was largely circumstantial and conclusory but found Priddle's  



                                                                             16  

                                                                                                     

testimony believable and supported by other evidence.                           These factual findings are not  



reviewable.  



                   6.	      McAlpine           contends         the     panel       could       not      assess      the  

                            reasonableness of the fee without proper timekeeping records.  



                                                                                                         

                   The arbitration panel declined to find that an attorney must keep track of  



                                                                    17  

time  spent  on  a  case  when  charging  a  flat  fee.                   The  panel  reasoned  that  requiring  



                                                              

otherwise would contradict the very point of charging a flat fee.  The court must give  



                                 

deference to this legal conclusion.  The panel ultimately determined that it could assess  



the reasonableness of the fee through other evidence.  



                   7.	      The  arbitration  panel  should  have  held  Priddle  to  a  higher  

                            standard.  



                                                     

                   McAlpine contends, as a matter of policy, that the bar must hold attorneys  



to a higher standard than the arbitration panel did in assessing the reasonableness of the  



                                                         

fee charged.  The panel's determination to uphold the fee, notwithstanding ethical issues  



                                                                            

with the fee agreement, lack of formal timekeeping, or other shortcomings alleged by  



McAlpine, is not reviewable by this court.  



          16       Opinion of Arbitrators [Appendix A at 10-13].  



         17        Opinion of Arbitrators [Appendix A at 9-10].  



Appendix B                                      Appendix - 6 of 8                                                     6866  


----------------------- Page 32-----------------------

                   8.	       The panel should have given greater weight to the fact that the                      

                             fee agreement contained provisions in violation of the rules of  

                             professional conduct.  



                   The arbitration panel referred the case to bar counsel to determine whether   



disciplinary proceedings were appropriate but still found the fee reasonable under Alaska  



                       18  

Bar Rule 35(a).            This finding is not reviewable by this court.  



                   9.	       Priddle coerced his client into making decisions and statements  

                             using fear tactics.  



                   The panel considered Duarte's testimony that he was coerced into taking  



                                                                                                            

a plea bargain in assessing the reasonableness of the fee charged.   The panel found  



                               

Priddle's  testimony  more  credible  on  this  point  and  determined  that  Duarte  likely  



                                                                                                            

changed his plea due to his fear of going to trial after his co-defendant pled out (because  

                                                                   19   The court may not review this finding  

                                                                                       

the co-defendant might testify against Duarte).  



by the panel.  



                   The panel found credible Priddle counseled McAlpine that if a large amount  



                                                                                                         

of cash was discovered it would likely be confiscated and could perhaps link McAlpine  



                                                                                                     

to a conspiracy and was concerned about taking a retainer that may have been earned  



                                20  

                                    However the court may not reweigh the panel's evaluation of  

through illegal means.                                                                          



the evidence.  



                   10.	      The fee agreement document was fraudulent.  



                   The only argument McAlpine presents that superficially meets one of the  

                                                                                                                      



statutory parameters set forth in AS 09.43.500 or AS 09.43.510 is that the award was  

                                                                                                              



procured  by  the  alleged  fraudulent  actions  of  Priddle.    McAlpine  contends  the  fee  



          18       Opinion of Arbitrators [Appendix A at 13].  



          19       Opinion of Arbitrators [Appendix A at 11].  



          20       Opinion of Arbitrators [Appendix A at 8].  



Appendix B                                        Appendix - 7 of 8                                                      6866  


----------------------- Page 33-----------------------

agreement  document  Priddle  presented  at  the  arbitration  hearing  was  a  forgery.  



                                                        

McAlpine attacks the arbitration panel's finding of fact that the fee agreement document  



was not falsified, manufactured, or otherwise illegitimate.  This finding is not reviewable  



by the court.  



III.     CONCLUSION  



                                                                                                         

                  McAlpine has not established any of the statutory grounds to vacate or  



                                                                                            

modify an arbitration award as set forth in AS 09.43.500 or .510.  McAlpine's motion  



                                                                                                          

is therefore DENIED.  The arbitration award is confirmed.  Priddle is directed to submit  



a proposed entry of judgment pursuant to AS 09.43.520.  



                  DATED at Anchorage, Alaska this 7th day of September, 2012.  



                                                      /s/ Paul E. Olson  

                                                      Superior Court Judge  



Appendix B                                    Appendix - 8 of 8                                                  6866  

Case Law
Statutes, Regs & Rules
Constitutions
Miscellaneous


IT Advice, Support, Data Recovery & Computer Forensics.
(907) 338-8188

Please help us support these and other worthy organizations:
Law Project for Psychiatraic Rights
Soteria-alaska
Choices
AWAIC