Judge: Colin Leis, Case: 22STCV08484, Date: 2023-04-26 Tentative Ruling

Case Number: 22STCV08484    Hearing Date: April 26, 2023    Dept: 74

SUPERIOR COURT OF CALIFORNIA 

COUNTY OF LOS ANGELES – CENTRAL DISTRICT 

DEPARTMENT 74 

MOVING PARTIES:             Defendant Ford Motor Company and South Bay Ford

RESPONDING PARTY:       Plaintiff James Rees

Motion to Compel Arbitration and Stay Action

The court considered the moving papers, opposition, and reply papers filed in connection with this motion.

BACKGROUND

            This action arises from a dispute over a 2018 Ford Escape.

            On March 9, 2022, Plaintiff James Rees (Plaintiff) filed a complaint against Defendants Ford Motor Company and South Bay Ford, Inc. (Defendants), alleging “violation of Song-Beverly Act,” breach of implied warranty or merchantability, negligent repair, and misrepresentation.

            On May 24, 2022, Defendants filed this motion to compel arbitration.

            On July 27, 2022, Plaintiff informed Defendant he was amenable to arbitration. In September, Plaintiff filed an arbitration demand and notified Defendants’ counsel via email.

            On October 3, 2022, the American Arbitration Association (AAA) notified the parties that Defendants had failed to comply with AAA policies regarding consumer claims, including the Costs of Arbitration. Consequently, AAA declined to administer the claim and closed the file.

LEGAL STANDARD 

            Under Code of Civil Procedure section 1281.97, “In an employment or consumer arbitration that requires . . . the drafting party to pay certain fees and costs before the arbitration can proceed, if the fees or costs to initiate an arbitration proceeding are not paid within 30 days after the due date the drafting party is in material breach of the arbitration agreement, is in default of the arbitration, and waives its right to compel arbitration.” (Code Civ. Proc., § 1281.97, subdivision (a)(1).) After an employee or consumer meets the filing requirements to initiate an arbitration, the arbitration provider shall immediately provide an invoice for any fees and costs required before the arbitration can proceed to all of the parties to the arbitration.” (Code Civ. Proc., § 1281.97, subdivision (a)(2).) If the drafting party fails to timely pay, the employee or consumer may withdraw the claim from arbitration and proceed in a court of appropriate jurisdiction.” (Code of Civ. Proc., § 1281.97, subdivision (b)(1).)

DISCUSSION

            In light of Code of Civil Procedure section 1281.97, the court finds that Defendants have waived their right to compel arbitration. To begin, Plaintiff has met the filing requirements to initiate the arbitration. (Davoodi Decl., ¶¶ 6, 7; Ex. B; Ex. C.) Accordingly, AAA sent Defendants an invoice so that the arbitration could proceed. (Code Civ. Proc., § 1281.97, subdivision (a)(2).) Defendants failed to pay within 30 days and AAA closed the file. (Davoodi Decl., ¶ 7; Ex. C.) Since Defendants failed to timely pay the fees, they waived their right to arbitration. (Code Civ. Proc., § 1281.97, subdivision (a)(1).) Plaintiff is therefore free to withdraw his claim from arbitration and proceed in a court of appropriate jurisdiction. (Code of Civ. Proc., § 1281.97, subdivision (b)(1).)

            Defendants’ reply asserts – without citing any admissible evidence, such as a declaration signed under penalty of perjury – that Plaintiff did not properly serve his demand for arbitration on Defendants’ “service email.” (Reply, at p. 5.) But Plaintiff notified via email eight individuals at Defendants’ counsel’s firm, including Defendants’ counsel. (Davoodi Decl., ¶ 6; Ex. B.) Defendants further assert – again without citing any evidence – that they never received a request for payment from AAA. (Reply at p. 6.) However, the letter from AAA indicating that Defendants had failed to pay arbitration fees includes Defendants’ counsel’s address and email, suggesting AAA sent the bill to Defendants’ counsel. (Davoodi Decl., ¶ 7; Ex. C.)

CONCLUSION

                Based on the foregoing, the court denies Defendants’ motion to compel arbitration and stay the action.

                Plaintiff is ordered to give notice of this ruling. 

IT IS SO ORDERED. 

DATED:  ¿April 26, 2023

_____________________________ 

Colin Leis 

Judge of the Superior Court