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Liability for fees and costs under CCP 1281.97-1281.99

The following summaries are of recent published decisions of the California appellate courts, the Ninth Circuit, and the United States Supreme Court. The summaries are presented without regard to whether Severson & Werson represented a party in the case.

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Hernandez v. Sohnen Enterprises, Inc. (2024) 102 Cal.App.5th 222

Following Belyea v. GreenSky, Inc. (N.D. Cal. 2022) 637 F.Supp.3d 745, 756, this decision holds that the FAA preempts CCP 1281.97 (which requires a finding of material breach and waiver of arbitration if the party compelling arbitration doesn't pay arbitration fees within 30 days) because that section treats arbitration agreements and performance under them less favorably than other types of… Read More

Hohenshelt v. Superior Court (2024) 99 Cal. App. 5th 1319

An arbitration administrator or arbitrator cannot extend the statutory 30 day period within which a drafting party must pay arbitration fees or forfeit its right to arbitration.  (CCP 1281.98.) The drafting party must pay within 30 days from the date that the fees initially become due.  A later invoice or other attempt to extend the deadline is ineffective.  See also… Read More

Suarez v. Superior Court (2024) 99 Cal. App. 5th 32

After successfully moving to compel arbitration of Suarez's wage-and-hour claim, the defendant employer failed to pay its share of the initial arbitration fee.  This decision grants the employee's petition to vacate the order denying his motion to withdraw the dispute from arbitration on the ground that non-payment of the fee within 30 days of its due date was a breach… Read More

Espinoza v. Superior Court, 83 Cal. App. 5th 761 (2022)

CCP 1281.97(a)(1) provides that the party that drafted a consumer or employee arbitration agreement must pay its share of the arbitration fees within 30 days of the payment due date.  Failure to do so is a material breach of the arbitration agreement, allowing the opposing party to elect out of arbitration.  This decision holds that the 30-day deadline is firm,… Read More