Judge: Lynne M. Hobbs, Case: 20STCV41541, Date: 2025-05-08 Tentative Ruling
Case Number: 20STCV41541 Hearing Date: May 8, 2025 Dept: 61
JUDY SELBERG vs THOMAS V GIRARDI, et al.
Tentative:
Plaintiff Judy Selberg’s Motion to Waive Arbitration Fees is DENIED.
Defendants to provide notice.
Analysis:
I. MOTION TO WAIVE COSTS OF ARBITRATION
When this court granted Defendant’s motion to compel arbitration, it addressed Plaintiff’s argument that the arbitration expenses were unaffordable by referring to the case Roldan v. Callahan & Blaine (2013) 219 Cal.App.4th 87. That case held that a party could object to arbitration on a showing that the expenses were unaffordable:
If, as plaintiffs contend, they lack the means to share the cost of the arbitration, to rule otherwise might effectively deprive them of access to any forum for resolution of their claims against Callahan. We will not do that. Of course, as the trial court recognized, we cannot order the arbitration forum to waive its fees, as a court would do in the case of an indigent litigant. Nor do we have authority to order Callahan to pay plaintiffs' share of those fees. What we can do, however, is give Callahan a choice: if the trial court determines that any of these plaintiffs is unable to share in the cost of the arbitration, Callahan can elect to either pay that plaintiff's share of the arbitration cost and remain in arbitration or waive its right to arbitrate that plaintiff's claim.
Admittedly, this resolution may result in Callahan paying a greater share of the arbitration cost than its retainer agreements otherwise required. But given the financial condition of these clients at the time they signed those retainer agreements, Callahan could not have been confident they would ever be able to pay a great deal toward the cost of arbitration in the event of a dispute. In fact, it might be fair to say Callahan had more of a hope than an expectation that arbitration costs would ever actually be shared with these plaintiffs. And when we balance that mere hope against the very real possibility these plaintiffs might be deprived of a forum if they are accorded no relief from these costs, it is clear which consideration must prevail.
(Id. at p. 96.)
Plaintiff Judy Selberg (Plaintiff) here seeks an order requiring either that the costs of arbitration be waived as to her and borne entirely by Defendant Alexa F. Galloway (Galloway), or else that Galloway be estopped from seeking to compel arbitration of Plaintiff’s claims against her, per the authority cited above. Plaintiff presents a declaration stating that her monthly income consists of $3,470.00 per month, less than 300% of the federal poverty line, which renders her eligible for waiver of arbitration costs under Code of Civil Procedure § 1284.3. (Selberg Decl. ¶ 6; Motion at pp. 9–10.)
Galloway in opposition argues that this court lacks authority to require her to either bear the costs of arbitration or waive the right thereto, relying on case authority stating that an arbitration stay, once entered, cannot be dismissed by a trial court for inability to pay. (Opposition at pp. 4–5, citing MKJA, Inc. v. 123 Fit Franchising, LLC (2011) 191 Cal.App.4th 643, 661.) Galloway argues that the issue of fee or cost allocation should be addressed by the arbitrator itself, assuming arbitration is ordered. (Opposition at pp. 7–8.) And Galloway argues that Plaintiff’s declaration as to her ability to pay the costs of arbitration is conclusory, and itself fails to disclose not only income but also the receipt of payments amounting to $150,000 in the years preceding this motion. (Opposition at pp. 8–10.)
Galloway’s argument concerning this court’s inability to consider Plaintiff’s ability to pay for arbitration is unpersuasive. The case that Galloway relies upon does not contradict other authority holding that a party’s inability to pay may warrant the imposition of a pay-or-litigate choice upon the party seeking arbitration. Rather, Galloway’s case law stands only for the proposition that inability to pay does not furnish a basis to lift an arbitration stay and remove a case from arbitration once an arbitration stay has been entered under Code of Civil Procedure § 1281.4. (See MKJA, Inc., supra, 191 Cal.App.4th at p. 661 [“[P]ermitting a trial court to lift a stay merely upon a determination that a party cannot afford arbitration would be inconsistent with well established case law holding that a trial court retains only a very narrow scope of jurisdiction with respect to an action that has been stayed pending arbitration.”].) No arbitration has yet been ordered in this matter and no stay pending arbitration has been entered.*
However, Plaintiff’s own motion discloses that it is unnecessary for this court to order Galloway to bear the costs of arbitration here, because to the extent Plaintiff is entitled to such relief, she may seek it pursuant to statutory procedures from the arbitrator under Code of Civil Procedure § 1284.3. which states: “All fees and costs charged to or assessed upon a consumer party by a private arbitration company in a consumer arbitration, exclusive of arbitrator fees, shall be waived for an indigent consumer.” (Code Civ. Proc. § 1284.3, subd. (b)(1).) That statute prescribes the forms by which an indigent consumer may seek relief from fees and costs from the arbitrator. “Consumer” is elsewhere defined as “an individual who seeks, uses, or acquires, by purchase or lease, any goods or services for personal, family, or household purposes,” which would describe arbitration pursuant to a clause in Plaintiff’s retainer agreement with Defendants, pursuant to which she was to receive legal services. (Code Civ. Proc. § 1280, subd. (c).) Plaintiff maintains that she meets the definition of indigency described in the statute. (Motion at p. 10.)
The motion is therefore DENIED.
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*Defendants Thomas V. Girardi and Girardi & Keese brought an earlier motion to compel arbitration, which was taken off-calendar on March 4, 2021, because of the Girardi Defendants’ bankruptcy stay, entered on January 5, 2021.