Judge: Jon R. Takasugi, Case: 23STCP03563, Date: 2024-01-16 Tentative Ruling

Case Number: 23STCP03563    Hearing Date: March 6, 2024    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

Petitioner’s petition is GRANTED. The Court awards $3,280 in fees and $640.20 in costs.

On 9/28/2023, Tom Lehman (Petitioner) petitioned the Court to compel Respondent MediaLab.Ai Inc. (Respondent) to arbitrate and pay Petitioner’s reasonable attorneys fees and costs related to his arbitration.

            Now, Petitioner moves to compel Respondent to arbitrate and pay Petitioner’s reasonable attorney fees and costs related to his arbitration.

Discussion

            Petitioner seeks to compel Respondent to participate in arbitration, and seeks attorney fees on the basis that MediaLab did not pay arbitration fees within 30 days of receipt of the invoice and thus is in material breach of the agreement to arbitrate.

            More specifically, Petitioner contends that on 6/6/2023, Mr. Lehman filed a demand for arbitration with JAMS arising out of MediaLab’s failure and ongoing refusal to pay the retention bonus payment it was required to pay by March 13, 2023. (Jacobs Decl. ¶ 3). On 6/22/2023, by email to all counsel, JAMS attached an invoice for MediaLab’s share of the case initiating fees for Mr. Lehman’s arbitration. (Id., ¶ 4, Exhs. A, B.) On 7/21/2023, JAMS sent an email to all counsel asking for an update on payment of the invoice. (Jacobs Decl., ¶ 8 and Ex. C.) MediaLab did not pay the invoice until July 25, 2023, as confirmed over email by JAMS on 9/15/2023. (Jacobs Decl., ¶ 9 and Ex. D.)

            In opposition, Respondent does not dispute that it paid the requisite fees on 7/25/2023. However, it argues that there has been no material breach, and that this petition is baseless because the JAMS arbitration is well under way. Indeed, the instant Petition was filed 65 days after Respondent paid all required arbitration fees.

            CCP section 1281.97 has been interpreted as a strict liability statute, given that it defines the very act of failing to timely pay as a material breach (emphasis added):  

(a)   In an employment or consumer arbitration that requires, either expressly or through application of state or federal law or the rules of the arbitration administrator, 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.

(b)   If the drafting party materially breaches the arbitration agreement and is in default under subdivision (a), the employee or consumer may do either of the following:

(1) Withdraw the claim from arbitration and proceed in a court of appropriate jurisdiction.

(2) Compel arbitration in which the drafting party shall pay reasonable attorney's fees and costs related to the arbitration.

            As such, despite that arbitration is now underway, the Court disagrees with Respondent that it has not committed a material breach. However, the Court agrees with Respondent that the fees and costs that are awarded for this material breach are only those fees and costs incurred as a result of the material breach:       

The court shall impose a monetary sanction against a drafting party that materially breaches an arbitration agreement pursuant to subdivision (a) of Section 1281.97 or subdivision (a) of Section 1281.98, by ordering the drafting party to pay the reasonable expenses, including attorney's fees and costs, incurred by the employee or consumer as a result of the material breach.

            (CCP § 1281.99.)

Here, Petitioner submitted a redacted billing statement which claims $3,960 in fees and $640.20 in costs incurred as a result of the material breach here.

While initially the Court intended to continue the petition to allow for unredacted billing records to be filed, the Court is persuaded that it can rule based on the unredacted amounts.

While the Court finds Petitioner’s billing records to be mostly reasonable, the Court finds minor evidence of padding, such as the $360.00 billing to calendar a hearing and prepare notices, and the estimated 3.2 hours to prepare a three-page reply brief with minimal legal analysis. The Court awards $3,280 in fees and $640.20 in costs. (Gonzalez v. City of Maywood (9th Cir. 2013) 729 F.3d 1196, 1203)

Based on the foregoing, Petitioner’s petition is granted. The Court awards $3,280 in fees and $640.20 in costs.

It is so ordered.

Dated:  March    , 2024

   Hon. Jon R. Takasugi
   Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court at smcdept17@lacourt.org by 4 p.m. the day prior as directed by the instructions provided on the court website at www.lacourt.org.  If a party submits on the tentative, the party’s email must include the case number and must identify the party submitting on the tentative.  If all parties to a motion submit, the court will adopt this tentative as the final order.  If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar.  For more information, please contact the court clerk at (213) 633-0517.