Judge: Melvin D. Sandvig, Case: 22CHCV00609, Date: 2024-01-12 Tentative Ruling

Case Number: 22CHCV00609    Hearing Date: January 12, 2024    Dept: F47

Dept. F47

Date: 1/12/24

Case #22CHCV00609

 

MOTION TO LIFT STAY & REINSTATE CASE

 

Motion filed on 7/20/23.

 

MOVING PARTY: Plaintiffs Raffi and Carin Tikidijan

RESPONDING PARTY: Defendant BMW of North America, LLC

NOTICE: ok

 

RELIEF REQUESTED: An order lifting the stay on this litigation and reinstating the case. 

 

RULING: The motion is granted.

 

SUMMARY OF FACTS & PROCEDURAL HISTORY

 

This action arises out of Plaintiffs Raffi Tikidijan and Carin Tikidijan’s (Plaintiffs) purchase of a used 2018 BMW X5 (the Vehicle) on 11/6/20 from non-party Valencia BMW pursuant to a “BMW Financial Services NA, LLC Motor Vehicle Retail Installment Contract - California)” (the Contract) which contains an arbitration clause.  (Grener Decl., Ex.A, §19).  Plaintiffs allege that the Vehicle was/is defective and Defendant BMW of North America, LLC (Defendant) has breached the express and implied warranties arising from the sale of the Vehicle by failing to repair the defects after a reasonable number of attempts and/or has failed to issue a refund or replace the vehicle.  (See Complaint ¶¶14-21, 27, 38).  Plaintiffs allege that “[t]his cause of action arises out of the breach of warranty of the vehicle in question…” and Plaintiffs seek to “revoke acceptance of the vehicle under the [Song-Beverly] Act.”  (Complaint ¶¶3, 22).  On 8/8/22, Plaintiffs filed this action against Defendant for: (1) Violation of the Song-Beverly Consumer Warranty Act; (2) Violation of the Federal Magnuson-Moss Warrant Act; and (3) Breach of Express Warranty under the California Commercial Code.   

 

On 11/14/22, Defendant filed and served a motion seeking an order compelling Plaintiffs to arbitrate all arbitrable causes of action and claims asserted against Defendant in this action and staying this action until the completion of the arbitration or until such earlier time as the Court specifies.  On 2/3/23, Plaintiffs filed an opposition to the motion and on 2/9/23, Defendant filed a reply to the opposition.  On 2/17/23, this Court granted the motion to compel arbitration and stayed this action pending the arbitration.  (See 2/17/23 Minute Order). 

 

On 2/21/23, pursuant to the arbitration clause relied on by Defendant, Plaintiffs submitted their claims to AAA, one of the arbitration companies designated in the arbitration clause, and paid the consumer filing fee.  The arbitration clause and the AAA’s rules required defendant to pay all other arbitration fees.  (Romano Decl., Ex.1).  After delaying its payment of the filing fee, Defendant was required to pay a case management fee on 6/8/23.  (Id., Ex.2).  The AAA reminded Defendant several times, including on 7/7/23, that its payment was past due and that the payment needed to be received by 7/10/23, to avoid the application of CCP 1281.97 and CCP 1281.98.  (Id., Ex.3).  Defendant still failed to pay the arbitration fee it was obligated to pay under the arbitration clause and the AAA’s rules.  (Id., Ex.4).

 

On 7/20/23, Plaintiffs filed and served the instant motion seeking an order lifting the stay on this litigation and reinstating the case.  Defendant has not opposed or otherwise responded to the motion. 

 

ANALYSIS

 

CCP 1281.97(a) provides:

 

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

(2) After an employee or consumer meets the filing requirements necessary 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. The invoice shall be provided in its entirety, shall state the full amount owed and the date that payment is due, and shall be sent to all parties by the same means on the same day. To avoid delay, absent an express provision in the arbitration agreement stating the number of days in which the parties to the arbitration must pay any required fees or costs, the arbitration provider shall issue all invoices to the parties as due upon receipt.”

 

CCP 1281.98(a)(1) provides:

 

“In an employment or consumer arbitration that requires, either expressly or through application of state or federal law or the rules of the arbitration provider, that the drafting party pay certain fees and costs during the pendency of an arbitration proceeding, if the fees or costs required to continue the 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 the employee or consumer to proceed with that arbitration as a result of the material breach.”

 

Due to Defendant’s failure to pay the case management fee as required, Defendant is in breach/default of the arbitration agreement.  As such, Defendant has waived its right to compel Plaintiffs to proceed with arbitration and Plaintiffs may withdraw the claim from arbitration and proceed in a court of appropriate jurisdiction.  See CCP 1281.97(a), (b); CCP 1281.98(a), (b); 9 U.S.C. §§1, 3; Williams (2022) 86 CA5th 1054, 1062; Pre-Paid  Legal Services, Inc. (10th Cir. 2015) 786 F.3d 1287, 128,8, 1294-1295; WorldSource Coil Coating, Inc. (6th Cir. 1991) 946 F.2d 473, 476; Sink (9th Cir. 2003) 352 F.3d 1197, 1198-1199, 1201.

 

CONCLUSION

 

The motion is granted. The order compelling arbitration and staying this action entered on 2/17/23 is vacated, the stay is lifted and the action is reinstated.