Superior Court of California 

County of Los Angeles – West District  

Beverly Hills Courthouse / Department 205 

 

 

BACKGROUND 

 

  This case arises from a dispute over work performed pursuant to a software development services contract (the “Agreement”).  Petitioner Aimprosoft is a Ukrainan company that specializes in information technology.  Respondent Waterlee Productions, Inc. is a California Corporation that provides services to musicians over the internet.  In December 2021, the parties entered into a written contract for services related to the expansion and development of Respondent’s website.   

During the performance of the Agreement, a dispute arose regarding payment.  The parties agreed to use contractual arbitration to resolve the dispute.  (Petitioner’s Exhibit 1.)  An arbitration was held in September 2022.  The arbitrator provided its final award on November 16, 2022, and the award was served on all parties by AAA on the same day.  (Petitioner’s Exhibit 3.)  Petitioner prevailed on its claims at the arbitration and was awarded $44,235.00 plus 10% interest starting on December 16, 2022.  (Petitioner’s Exhibit 3.) 

This hearing is on Petitioner’s motion to confirm the arbitration award.  Petitioner argues that the award should be confirmed because the parties voluntarily agreed to contractual arbitration; Petitioner prevailed in the arbitration, and Respondent’s motion to vacate the arbitration award is untimely. ¿¿ 

DISCUSSION 

 

The crux of the parties’ dispute is whether Respondent’s motion to vacate is timely, and if untimely, whether the Court should extend the time for filing the petition based on equitable tolling principles.  The Court concludes the motion to vacate is untimely, and it declines to extend the time to file the motion. 

Respondent argues that the motion to vacate was timely because it was filed as a response to a petition to confirm.  This is not consistent with a plain reading of Code Civ. Proc. § 1288.2 which requires that “A response requesting that an award be vacated shall be served and filed not later than 100 days after the date of service of a signed copy of the award upon (a) The respondent if he was a party to the arbitration.”  

Respondent’s authority, Law Finance Group LLC v. Key (2023) 14 Cal.5th 932, 946 supports this reading.  In Key, the California Supreme Court held that “[u]nder the plain terms of sections 1288 and 1282, Key had 100 days from the service of the final award to request that the arbitration award be vacated – whether she chose to do so via a standalone petition to vacate or via a response to Lender’s petition to confirm the award.”  (Id. at 946 (emphasis added).)  “Reading the 100-day limitations period as a statutory outer boundary on the timeliness of a vacatur request, even when the request is¿made in response to a petition to confirm, respects the Legislature's evident purpose to promote the efficient final resolution of disputes decided in arbitration.”  (Id. at 948.) 

Here, there is no dispute the award was served on all parties on November 16, 2022.  The 100th day after November 16, 2022 is February 24, 2023.  The petition to vacate was filed on November 10, 2023.  Accordingly, the petition was filed more than eight months late. 

The Court next considers whether the time to file should be extended based on equitable tolling.  The California Supreme Court has held that the 100 day limitation in Code Civ. Proc. § 1288.2 is not jurisdictional and is subject to equitable tolling.  (Id. at 956.) ¿ 

The doctrine of equitable tolling permits courts, “‘in carefully considered situations’ [citation], to exercise their inherent equitable powers to ‘soften the harsh impact of technical rules’ [citation] by tolling statutes of limitations.” (Saint Francis Memorial Hosp. v. State Dep’t of Public Health (2020) 9 Cal.5th 710, 724.)  Equitable tolling applies “when three ‘elements’ are present: ‘[(1)] timely notice, and [(2)] lack of prejudice, to the defendant, and [(3)] reasonable and good faith conduct on the part of the plaintiff.’ [Citation.]  These requirements are designed to ‘balanc[e] … the injustice to the plaintiff occasioned by the bar of [its] claim against the effect upon the important public interest or policy expressed by the [operative] limitations statute.’” (Id.¿at pp. 724–725.) 

Here, Respondent argues it provided timely notice by failing to pay the arbitration award.  Timely notice requires that the “party’s actions caused the defendant to be ‘fully notified within the [statute of limitations] of plaintiffs’ claims and their intent to litigate.”  (Id. at 727.)  Respondent’s mere failure to pay the award does not in and of itself provide notice that Respondent intended to challenge the arbitration award.  Respondent provided no notice that it intended to vacate the award until Petitioner moved to confirm the award.   

Respondent argues there is no prejudice because there are grounds for its motion to vacate, including that the arbitrator did not accept Respondent’s expert witness declaration or continue the hearing to allow Respondent’s expert witness to testify in person.  This argument is misguided.  The focus of the prejudice inquiry is on prejudice to Petitioner, not prejudice to Respondent.  It cannot be seriously disputed that Petitioner would be prejudiced if the Court were to rule on the merits of the motion to vacate, as Petitioner has already incurred considerable time and expense to obtain the arbitration award.   

Finally, as to the third element, the California Supreme Court explained that it “encompass[es] two distinct requirements: A plaintiff's conduct must be objectively reasonable and subjectively in good faith.” (Saint Francis, 9 Cal.5th at p. 729.) Whereas the objective component focuses “on whether [the] party's actions were fair, proper, and sensible in light of the circumstances,” the subjective component focuses on the party’s intentions, that is, whether the “late filing … was the result of an honest mistake or was instead motivated by a dishonest purpose.” (Id.) 

Respondent argues it engaged in reasonable, good faith conduct because it relied on its attorney, who did not timely forward the award, nor advise Respondent on the time limits to challenge the award.  There is no declaration from counsel to this effect.  In any event, Respondent fails to meet the other two elements of equitable tolling, and therefore, even if its reliance on counsel could support a finding of good faith conduct, Respondent would still not be entitled to equitable tolling.   

 

CONCLUSION 

  For the foregoing reasons, the Court GRANTS the petition to confirm the arbitration award and DENIES the motion to vacate.    

          

DATED:  December 15, 2023 ___________________________ 

Edward B. Moreton, Jr. 

Judge of the Superior Court