Judge William A. Crowfoot, Case Number: 24NNCV05804, Date: 2025-06-04 Tentative Ruling

Judge: William A. Crowfoot, Case: 24NNCV05804, Date: 2025-06-04 Tentative Ruling

On November 14, 2024, plaintiff American Express National Bank (“Plaintiff”) filed this action against defendant Roy Katan (“Defendant”) for money owed under two different accounts. On January 13, 2025, Defendant filed this motion arguing that Plaintiff should be compelled to mediate this matter. The motion is brought pursuant to Code of Civil Procedure (“CCP”) §§ 1281.2 and 1281.4.

CCP 1281.2 states, in relevant part: “On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate that controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists….” CCP 1281.4 provides, in relevant part: “If a court of competent jurisdiction, whether in this State or not, has ordered arbitration of a controversy which is an issue involved in an action or proceeding pending before a court of this State, the court in which such action or proceeding is pending shall, upon motion of a party to such action or proceeding, stay the action or proceeding until an arbitration is had in accordance with the order to arbitrate or until such earlier time as the court specifies.”

Defendant, as the moving party, argues that this action should be dismissed because Plaintiff failed to send him a claim notice and Defendant elects mediation in order to resolve this dispute. Defendant’s position is meritless.

Defendant refers to a “mandatory mediation clause” found in the Terms and Conditions of his Cardmember Agreement with Plaintiff (“Agreement”) between the parties which states:

Before beginning a lawsuit, mediation or arbitration, you and we agree to send a written notice (a claim notice) to each party against whom a claim is asserted, in order to provide an opportunity to resolve the claim informally or through mediation. Go to americanexpress.com/ claim for a sample claim notice. The claim notice must describe the claim and state the specific relief demanded. Notice to you may be provided by your billing statement or sent to your billing address. Notice to us must include your name, address and Account number and be sent to American Express ADR c/o CT Corporation System, 28 Liberty Street, New York, New York 10005. If the claim proceeds to arbitration, the amount of any relief demanded in a claim notice will not be disclosed to the arbitrator until after the arbitrator rules.

In mediation, a neutral mediator helps parties resolve a claim. The mediator does not decide the claim but helps parties reach agreement. Before beginning mediation, you or we must first send a claim notice. Within 30 days after sending or receiving a claim notice, you or we may submit the claim to JAMS (1-800-352-5267, jamsadr.com) or the American Arbitration Association ("AAA") (1-800-778-7879, adr.org) for mediation. We will pay the fees of the mediator. adr.org) for mediation.

All mediation-related communications are confidential, inadmissible in court and not subject to discovery. All applicable statutes of limitation will be tolled from the date you or we send the claim notice until termination of the mediation. Either you or we may terminate the mediation at any time. The submission or failure to submit a claim to mediation will not affect your or our right to elect arbitration.

(Motion, Ex. A, p. 7.) This section of the Agreement does not provide a basis for this motion as there is nothing in this section requiring mediation. The section specifically says that “[e]ither [party] may terminate the mediation at any time.” (Ibid.) Case law supports the view that the Court may not compel mediation. “Essential to the mediation process is the concept that the parties are in control of resolving their own dispute.” (Jeld-Wen, Inc. v. Superior Court (2007) 146 Cal.App.4th 536, 540.) “[U]nless the parties have agreed to a binding award, any party who voluntarily enters mediation may revoke its consent and withdraw from the dispute resolution process.” (Id. at 541.) “[P]arties cannot be forced or coerced over the threat of sanctions into attending and paying for private mediation as this is antithetical to the entire concept of mediation.” (Id. at 543.) Accordingly, there is no basis for the court to “compel” the parties to mediate and the motion to compel mediation is DENIED.

The Court also denies Defendant’s request for dismissal due to Plaintiff’s purported failure to send him a “claim notice” before filing this action. Plaintiff’s opposition brief includes a declaration attaching two different notices dated June 5 and 25, 2024, and a credit card billing statement with a closing date of September 24, 2024. Defendant argues that these documents are inadequate because they do not offer mediation or identify the dispute “in a legal sense.” (Reply, p. 2.) This is unpersuasive. The notices attached by Plaintiff identify the amounts owed and in the context of a credit card agreement, identifying the amount owed is sufficient to give notice of the alleged dispute. Moreover, the Agreement specifically allows for notice to the credit card holder to be “provided by [their] billing statement.” The Agreement also states that the purpose of a claim notice is to “provide an opportunity to resolve the claim informally or through mediation.” Although the documents sent by Plaintiff do not specifically reference mediation, they state that Plaintiff is “committed to working with you to identify a solution” to pay or resolve Defendant’s unpaid balance (Jun Decl., Exs. 1-2) and urge Defendant to contact Plaintiff “as soon as possible to explore possible payment solutions.” (Ex. 2.) Therefore, the documents meet the Agreement’s requirements for a “claim notice” and Defendant has forfeited his right to elect mediation by failing to initiate proceedings with JAMS or AAA within 30 days of receiving them.

In light of the forgoing, Defendant’s motion to compel mediation and dismiss the action is DENIED in its entirety.

William A. Crowfoot

Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the Court at ALHDEPT3@lacourt.org indicating intention to submit on the tentative as directed by the instructions provided on the court website at www.lacourt.org. Please be advised that if you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the matter. Unless you receive a submission from all other parties in the matter, you should assume that others might appear at the hearing to argue. If the Court does not receive emails from the parties indicating submission on this tentative ruling and there are no appearances at the hearing, the Court may, at its discretion, adopt the tentative as the final order or place the motion off calendar.