101 Cal.App.5th 967
Cal. Ct. App.2024Background
- Andrew Reynosa, a former employee of Advanced Transportation Services, Inc. (ATS), filed a complaint for damages and, per an arbitration agreement, the parties proceeded to arbitration starting in 2019.
- The arbitration agreement required ATS to pay most arbitration fees; time frames for payment of these fees were not expressly addressed in the agreement.
- ATS paid two key arbitration invoices late: a July 2021 invoice and a December 2022 invoice, both of which were due upon receipt but paid more than 30 days after the issue date.
- Reynosa filed a motion to withdraw from arbitration under California Code of Civil Procedure § 1281.98, arguing ATS's late payments constituted a material breach, allowing him to return to court.
- The Superior Court denied Reynosa’s motion, finding ATS had timely paid per agreed-upon, extended deadlines set by the arbitration provider, to which Reynosa did not object.
- Reynosa petitioned for writ relief; the appellate court considered whether silence or failure to object to unilateral extensions of the payment deadline constitutes agreement under § 1281.98.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ATS's late payments of arbitration fees constituted a material breach under § 1281.98 | ATS failed to pay fees within 30 days from the due date; payments were late, triggering statutory remedies | ATS paid according to extended deadlines set by Judicate West, which were not objected to, so payments were timely | ATS materially breached by failing to pay all fees within 30 days; statutory remedies apply |
| Whether silence or failure to object to new payment deadlines equates to agreement under § 1281.98 | Only express consent counts; silence or lack of objection does not equal agreement | Reynosa's lack of objection to provider-set deadlines amounted to agreement | Silence is insufficient; explicit agreement is required for extension of due dates |
| Whether Reynosa elected to continue with arbitration, waiving the right to withdraw | Reynosa did not know about ATS’s late payments until March 2023, so could not have knowingly elected to continue arbitration | Plaintiff elected to continue with arbitration even after late payments, signaling waiver | No waiver—election of remedies doctrine requires actual knowledge of the breach |
| Remedy for ATS's material breach, including sanctions | Request for both monetary and nonmonetary sanctions due to ATS's breach | No sanctions appropriate since payments deemed timely by trial court | Upon remand, trial court to decide sanctions under § 1281.99 |
Key Cases Cited
- Espinoza v. Superior Court, 83 Cal.App.5th 761 (Cal. Ct. App. 2022) (writ review proper to avoid needless arbitration based on erroneous law)
- Aanderud v. Superior Court, 13 Cal.App.5th 880 (Cal. Ct. App. 2017) (writ review to prevent parties being forced to arbitrate improperly)
- Medeiros v. Superior Court, 146 Cal.App.4th 1008 (Cal. Ct. App. 2007) (writ review is suitable for challenges to wrongful arbitration orders)
- Ghirardo v. Antonioli, 8 Cal.4th 791 (Cal. 1994) (legal significance of undisputed facts is reviewed de novo)
- Robert L. v. Superior Court, 30 Cal.4th 894 (Cal. 2003) (statutory language should be read in the context of the entire statute)