Judge: Serena R. Murillo, Case: 22STCV06267, Date: 2023-05-08 Tentative Ruling
Case Number: 22STCV06267 Hearing Date: May 8, 2023 Dept: 31
TENTATIVE
Legal
Standard
Pursuant
to Code of Civil Procedure section 1281.98(a)(1),“[i]n 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.”
“If
the drafting party materially breaches the arbitration agreement and is in
default under subdivision (a), the employee or consumer may unilaterally elect
to do any of the following: (1) Withdraw the claim from arbitration and proceed
in a court of appropriate jurisdiction. If the employee or consumer withdraws
the claim from arbitration and proceeds with an action in a court of appropriate
jurisdiction, the statute of limitations with regard to all claims brought or
that relate back to any claim brought in arbitration shall be tolled as of the
date of the first filing of a claim in any court, arbitration forum, or other
dispute resolution forum.” (Code Civ. Proc. § 1281.98(b).)
“If
the employee or consumer withdraws the claim from arbitration and proceeds in a
court of appropriate jurisdiction pursuant to paragraph (1) of subdivision (b),
both of the following apply: (1) The employee or consumer may bring a motion,
or a separate action, to recover all attorney’s fees and all costs associated
with the abandoned arbitration proceeding. The recovery of arbitration fees,
interest, and related attorney’s fees shall be without regard to any findings
on the merits in the underlying action or arbitration. (2) The court shall
impose sanctions on the drafting party in accordance with Section 1281.99.
(Code Civ. Proc. § 1281.98(c).)
Code
of Civil Procedure section 1281.99(a), “[t]he 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.”
Request for
Judicial Notice
The
Court may take judicial notice of records of any court of record of the United
States. (Evid. Code, § 452(d)(2).) However, the court may only judicially
notice the existence of the record, not that its contents are the truth. (Sosinsky
v. Grant (1992) 6 Cal.App.4th 1548, 1565.)
Plaintiff
requests judicial notice of the following:
1.
Opinion in Rosa M. Quincoza Espinoza v. Superior Court
(2022) 83 Cal.App.5th 761, (hereinafter “the Espinoza case”). A true copy of
Opinion in the Espinoza case is attached hereto as Exhibit “A.”
2.
Opinion in Kail De Leon v. Juanita Food, (2022) 85
Cal.App.5th 740 (hereinafter “the De Leon case”). A true copy of Opinion in the
De Leon case is attached hereto as Exhibit “B.”
Plaintiff’s request for Judicial Notice is GRANTED.
Discussion
Plaintiff
moves an Order withdrawing the case from arbitration due to Defendant’s failure
to pay the arbitrator’s fees in violation of Code of Civil Procedure section
1981.98.
The
Court granted Defendant’s Motion to Compel Arbitration and Stay the Action on
August 09, 2022.
On
October 13, 2022, the American Arbitration Association (“AAA”) accepted the
matter for arbitration and issued its initial arbitration invoice of $1,900.00.
(Chami Decl. ¶ 5, Ex. B.) On January 18, 2023, the day after the parties’
initial scheduling conference before the arbitrator, the AA issued an invoice
to Defendant for $7,750.00 for ongoing arbitration fees. (Id. ¶ 7, Ex.
C.) On February 08, 2023, not having received payment, the AAA sent all parties
a letter reminding Defendant that the last day to timely pay the arbitration
invoice was February 17, 2023, or else Defendant would be in violation of Code
of Civil Procedure sections 1281.97 and 1281.98. (Id. Ex. D.)
On
February 24, 2022, the AAA informed the parties that Defendant had not yet paid
the arbitrator’s fees. (Chami Decl. ¶ 9, Ex. E.) That same day, Plaintiff informed
the AAA and Defendant that Plaintiff would not agree to extend the deadline for
Defendant to pay the arbitrator’s fees and would be enforcing his right to
withdraw the matter from arbitration. (Id. ¶ 10 Ex. D.) The AAA
confirmed that Defendant had submitted payment on February 24, 2023, seven days
past the February 17, 2023, deadline. (Id. ¶¶ 9, 11, Ex. E, G.)
As the
Motion is unopposed and Plaintiff has shown that Defendant did not pay the fees
to initiate the arbitration agreement, Plaintiff has established that Defendant
is in material breach of the arbitration agreement and is entitled to
“[w]ithdraw the claim from arbitration and proceed in a court of appropriate
jurisdiction.” (Code Civ. Proc., § 1981.98 subd. (b)(a)(1).)
Therefore,
the Motion is GRANTED.
Plaintiff
represents that he will move for monetary sanctions and attorney’s fees in a
separate motion pursuant to Code of Civil Procedure section 128.98 subdivision
(c)(1)-(2).
Conclusion
Plaintiff’s Motion for an Order
withdrawing the action from arbitration is GRANTED.
Moving
party is ordered to give notice.