Judge: Serena R. Murillo, Case: 22STCV06267, Date: 2023-05-08 Tentative Ruling

Case Number: 22STCV06267    Hearing Date: May 8, 2023    Dept: 31

TENTATIVE

 Plaintiff’s unopposed motion for an order withdrawing the action from arbitration is GRANTED.

 

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.