Judge: Robert B. Broadbelt, Case: 19STCV24632, Date: 2022-09-07 Tentative Ruling

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Case Number: 19STCV24632    Hearing Date: September 7, 2022    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTY:                Plaintiff Veronica Torres

RESPONDING PARTY:       Defendant Glen Park at Monrovia

Motion for Order Lifting Stay

The court considered the moving, opposition, and reply papers filed in connection with this motion.

DISCUSSION

Plaintiff Veronica Torres (“Plaintiff”) filed this FEHA and wage and hour action on July 15, 2019, against defendants Samuel Hale 2, LLC, Samuel Hale, LLC, Samuel Hale Exchange, LLC, and Vensure Employer Services, Inc.  Plaintiff later identified Doe defendants 1 and 4 to be Glen Park at Monrovia (“Glen Park”) and Tillman Pink Jr., by amendment to the complaint on February 28, 2020 and March 16, 2021, respectively.

On February 15, 2022, the court granted Glen Park’s joinder to Tillman Pink Jr.’s motion to compel arbitration, and ordered (1) Plaintiff and Glen Park to arbitrate the claims alleged by Plaintiff in this action, and (2) that this action is stayed until arbitration is completed. 

Plaintiff now moves the court for an order (1) lifting the stay ordered by the court on February 15, 2022, (2) finding Glen Park in default of the arbitration pursuant to Code of Civil Procedure section 1281.97, and (3) awarding sanctions against Glen Park and in favor of Plaintiff in the sum of $9,787.50.  Plaintiff moves for this relief on the ground that, because Glen Park failed to pay the deposit request for the filing fee with JAMS, Glen Park is in default of the arbitration agreement, and has therefore waived its right to compel arbitration.

“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….”  (Code Civ. Proc., § 1281.97, subd. (a)(1).)  If the drafting party breaches the arbitration agreement and is in default, the employee may withdraw the claim from arbitration and proceed in a court of appropriate jurisdiction, or compel arbitration in which the drafting party shall pay reasonable attorney’s fees and costs related to the arbitration.  (Code Civ. Proc., § 1281.97, subd. (b).)

The parties’ Binding Arbitration Agreement (“Arbitration Agreement”) provides that, “[i]n addition to any other requirements imposed by law, the arbitrator selected shall be a retired California Superior Court Judge, or otherwise qualified individual to whom the parties mutually agree, and shall be subject to disqualification on the same grounds as would apply to a judge of such court.”  (Tsarukyan Decl., Ex. 1, Arbitration Agreement, p. 1, § 1, subd. B.)  On February 18, 2022, Plaintiff submitted her claims to arbitration with JAMS.  (Tsarukyan Decl., ¶ 9.)  On March 22, 2022, Glen Park’s counsel stated that Glen Park would not agree to using JAMS.  (Tsarukyan Decl., ¶ 12, Ex. 4.)  Also on March 22, 2022, JAMS sent a deposit request for the filing fee, indicating that the balance was due upon receipt.  (Tsarukyan Decl., ¶ 11, Ex. 3.)  Glen Park did not pay the case initiating fee as required by JAMS.  (Tsarukyan Decl., ¶ 14.)  Glen Park contends that it was not required to pay JAMS’s administration fee invoice, because Glen Park did not agree to use JAMS.

Upon consideration of the evidence and arguments presented by the parties, the court denies Plaintiff’s motion.  (Code Civ. Proc., § 1281.97.)

“‘[A]n agreement to arbitrate before a particular forum is an integral term of a contract as any other, which courts must enforce.’”  (Alan v. Superior Court (2003) 111 Cal.App.4th 217, 228.)  However, “in the absence of [a specified forum or set of rules in an arbitration clause], ‘the parties to the agreement who seek arbitration and against whom arbitration is sought may agree on a method of appointing an arbitrator…’—including the forum and rules that will govern the arbitration—or, if the parties cannot agree, ‘the court, on petition of a party to the arbitration agreement, shall appoint the arbitrator.’  (§ 1281.6.)”  (HM DG, Inc. v. Amini (2013) 219 Cal.App.4th 1100, 1110 [emphasis added].)  The selection of the arbitration rules and the location of arbitration are “part and parcel of the appointment of an arbitrator—that is, for example, if the parties were to elect to appoint an American Arbitration Association (AAA) arbitrator, that appointment would entail arbitration in an AAA forum under AAA rules.”  (Ibid.) 

The parties’ Arbitration Agreement does not provide a method for appointing an arbitrator, and does not provide which forum is to be used.  (Tsarukyan Decl., Ex. 1, p. 1, § 1, subd. B; Turner Decl., Ex. A, p. 1, § 1, subd. B.)  The Arbitration Agreement also does not provide Plaintiff with the sole authority to select the arbitral forum.  (Tsarukyan Decl., Ex. 1, p. 1, § 1, subd. B [“the arbitrator selected shall be a retired California Superior Court Judge, or otherwise qualified individual to whom the parties mutually agree”].)  Because the Arbitration Agreement does not provide a method for appointing an arbitrator or permit Plaintiff to select the forum and arbitrator on her own, the parties had two options to select an arbitrator: (1) agree on a method of appointing an arbitrator, or (2) petition the court to appoint a neutral arbitrator.  (Code Civ. Proc., § 1281.6.)  Here, Plaintiff and Glen Park did not agree to a method of appointing an arbitrator—which includes the forum and the rules that will govern the arbitration—under section 1281.6.  Instead, Plaintiff’s counsel submitted Plaintiff’s claims to JAMS, to which Glen Park objected.  (Tsarukyan Decl., ¶¶ 9, 12.) 

The court finds that, by submitting her claims to JAMS without the agreement of Glen Park, Plaintiff did not comply with (1) the terms of the parties’ Arbitration Agreement, and (2) section 1281.6.  As set forth above, the Arbitration Agreement was silent as to the forum to be used, but (1) required the parties to agree on the arbitrator, and (2) did not authorize Plaintiff to choose the forum without the input and agreement of Glen Park.  (Tsarukyan Decl., Ex. 1, p. 1, § 1, subd. B.)  In the absence of such an agreement regarding which forum was to be used, Plaintiff and Glen Park were required to either mutually agree on a method to appoint an arbitrator (which necessarily includes the forum to be used), or petition the court to appoint an arbitrator.  (Code Civ. Proc., § 1281.6; HM DG, Inc., supra, 219 Cal.App.4th at p. 1110 [holding that the absence of a specified method for appointing an arbitrator does not invalidate an arbitration agreement, and explaining that the court viewed the matters of arbitration rules and the location of the arbitration to be “part and parcel of the appointment of an arbitrator”].)

Because Plaintiff did not comply with the Arbitration Agreement and California Arbitration Act, Plaintiff was not authorized to submit her claims to JAMS, and Glen Park was not required to pay the fees and costs billed by JAMS.  The court therefore finds that Glen Park is not in default of the arbitration agreement by refusing to pay the case initiating fee billed by JAMS, and the court denies Plaintiff’s requests that the court lift the stay pending completion of arbitration and order this action to proceed in court.

“If the employee or consumer proceeds with an action in a court of appropriate jurisdiction, the court shall impose sanctions on the drafting party in accordance with Section 1281.99.”  (Code Civ. Proc., § 1281.97, subd. (d).)  Because the court denied Plaintiff’s request to proceed with her action in court, the court denies Plaintiff’s request for monetary sanctions against Glen Park.  (Ibid.)

ORDER

The court denies plaintiff Veronica Torres’s motion for order lifting stay and finding defendant Glen Park at Monrovia in default of the arbitration agreement.  (Code Civ. Proc., § 1281.97.)  The court denies plaintiff Veronica Torres’s motion without prejudice as to any party filing a petition or motion to appoint an arbitrator pursuant to the procedures set forth in Code of Civil Procedure section 1281.6.

The court denies plaintiff Veronica Torres’s request for monetary sanctions against defendant Glen Park at Monrovia.  (Code Civ. Proc., § 1281.97, subd. (d).)

The court orders defendant Glen Park at Monrovia to give notice of this order.

IT IS SO ORDERED.

DATED:  September 7, 2022

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court