Law Finance Group, LLC v. Key
67 Cal.App.5th 307
Cal. Ct. App.2021Background
- Sarah Plott Key borrowed about $2.4 million from Law Finance Group (LFG) to fund probate litigation; the loan agreement included monthly compound interest (1.53%), various fees, and an arbitration clause.
- Key prevailed in the probate action, repaid principal but refused interest and fees, claiming the loan violated the California Financing Law.
- A three-arbitrator panel found the loan was a consumer loan, struck unlawful compound interest/servicing fees, awarded LFG $778,351 in simple interest plus attorney fees and costs; a modified award was served September 19, 2019.
- LFG filed a petition to confirm the arbitration award on October 1, 2019. Key filed a petition to vacate on January 27, 2020 (130 days after service) and a response to LFG’s petition on February 5, 2020.
- The superior court vacated the arbitration award on the merits, but the Court of Appeal reversed, holding Key’s requests to vacate were untimely under Code Civ. Proc. §§ 1288/1288.2 and that the trial court lacked jurisdiction to consider them; the award must be confirmed.
Issues
| Issue | Plaintiff's Argument (LFG) | Defendant's Argument (Key) | Held |
|---|---|---|---|
| Whether a request to vacate an arbitration award filed in response to a petition to confirm is governed by the 100-day limit in §1288.2 or by the 10-day response period in §1290.6 | §1288 and §1288.2 impose a firm, jurisdictional 100-day deadline for any request to vacate; §1290.6 cannot override it | If a petition to confirm is filed within 100 days, §1290.6’s 10-day response period governs timing of a vacatur request; parties’ agreement about scheduling made Key’s filing timely | Held §1288/1288.2’s 100-day rule is jurisdictional; both the 10-day response rule and the 100-day outer limit apply — Key’s vacatur request was untimely and jurisdictionally barred |
| Whether LFG waived or is estopped from asserting the 100-day deadline by agreeing to coordinate hearing dates and filing schedules | Parties cannot by agreement change a statutory jurisdictional deadline; LFG did not waive or estop enforcement of §1288/1288.2 | The parties agreed in writing to coordinate timing and delay filing; LFG’s conduct should estop or waive the deadline | Held no waiver or estoppel: parties may not confer or alter jurisdictional time limits; Key (and counsel) could not reasonably rely on an agreement to extend a jurisdictional deadline |
| Whether the trial court should reach the arbitrators’ substantive ruling that the loan was a consumer loan and whether arbitrators exceeded powers | LFG argued the trial court should not reweigh arbitrators’ factual/legal conclusions absent timely, proper grounds to vacate; timeliness threshold must be resolved first | Key argued arbitrators exceeded powers by finding consumer loan but not voiding all charges under Financial Code §§22750–22752, justifying vacatur | Held court did not reach the merits: because Key’s vacatur requests were untimely, the trial court lacked jurisdiction to consider substantive challenge; arbitration award must be confirmed |
Key Cases Cited
- Santa Monica College Faculty Assn. v. Santa Monica Community College Dist., 243 Cal.App.4th 538 (Cal. Ct. App. 2015) (100-day statutory deadline for vacatur is jurisdictional).
- Douglass v. Serenivision, Inc., 20 Cal.App.5th 376 (Cal. Ct. App. 2018) (response seeking vacatur must be filed within 100 days).
- Apple, Inc. v. Superior Court, 56 Cal.4th 128 (Cal. 2013) (statutory interpretation reviewed de novo).
- Eternity Investments, Inc. v. Brown, 151 Cal.App.4th 739 (Cal. Ct. App. 2007) (explains rationale for 100-day vacatur deadline vs four-year confirmation period).
- Rockefeller Technology Investments (Asia) VII v. Changzhou SinoType Technology Co., Ltd., 9 Cal.5th 125 (Cal. 2020) (parties cannot expand statutory jurisdictional limits by agreement).
- Law Offices of David S. Karton v. Segreto, 176 Cal.App.4th 1 (Cal. Ct. App. 2009) (confirmation under §1286 is mandatory absent timely vacatur/correction).