Judge: Daniel S. Murphy, Case: 20STCV44744, Date: 2024-02-07 Tentative Ruling

Case Number: 20STCV44744    Hearing Date: February 7, 2024    Dept: 32

BACKGROUND

            On November 23, 2020, Plaintiff Chris Mills filed this employment action against Defendant Facility Solutions Group, Inc.

            On February 8, 2021, the Court granted Defendant’s motion to compel arbitration. Arbitration began in August 2021. On March 29, 2023, AAA issued an invoice for $23,700 to Defendant, with a deadline of October 24, 2023. To date, Defendant has not paid the arbitrator fee.

            On January 9, 2024, Plaintiff filed the instant motion to withdraw from arbitration. Defendant filed a notice of non-opposition on January 25, 2024.

LEGAL STANDARD

“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 under Section 1281.2.” (Code Civ. Proc., § 1281.97(a)(1).) “If the drafting party materially breaches the arbitration agreement and is in default under subdivision (a), the employee or consumer may . . . [w]ithdraw the claim from arbitration and proceed in a court of appropriate jurisdiction.” (Id., subd. (b).) The same applies to fees assessed during the pendency of an arbitration. (Id., § 1281.98.)

The statute is applied strictly, and the Court may not consider any other factors or mitigating circumstances. (Espinoza v. Superior Court (2022) 83 Cal.App.5th 761, 775-76; DeLeon v. Juanita Foods (2022) 85 Cal.App.5th 740, 749.) A drafting party is in breach of the arbitration agreement simply if it does not pay the requisite fees within thirty days.

DISCUSSION

            On March 29, 2023, AAA issued an invoice to the parties to pay $23,700 in arbitrator’s compensation. (Berenji Decl. ¶ 7, Ex. B.) The invoice imposed a deadline of October 24, 2023. (Ibid.) On October 26, 2023, AAA emailed the parties to remind them that payment was due thirty days from the deadline per statute, or November 24, 2023 in this case. (Id., Ex. C.) On November 29, 2023, AAA notified the parties that it still had not received the required deposits. (Id., ¶ 9.) Defendant has expressed that it will not pay the invoice. (Id., ¶ 13.) The parties were unable to agree on the specifics of a stipulation to withdraw the matter from arbitration. (Id., ¶ 10; Ayers Decl. ¶¶ 5-6.)

            Defendant has filed a notice of non-opposition and does not dispute any of the foregoing facts. The undisputed facts show that Defendant materially breached the arbitration agreement by failing to pay the requisite fees by the statutory deadline. Therefore, Plaintiff has the unilateral right to withdraw the matter from arbitration, without consideration of any other facts.    

CONCLUSION

            Plaintiff’s motion to withdraw from arbitration is GRANTED.