District Court (Fla.) Says That Defendant Cannot Complain about JAMS’ Classification of Arbitration under its “Consumer” Rules that Required Defendant to Pay All but $250 of the Fees; Defendant Could Not Refuse to Pay Arbitral Fees Without Defaulting

The Arbitration Agreement gave Freeman the option of choosing between two arbitral fora—the American Arbitration Association (“AAA”) or JAMS, the Resolution Experts (“JAMS”). (Doc. 16-4 at 4). She chose JAMS. The Arbitration Agreement required that Smartpay Leasing pay the initial arbitration fee. (Doc. 16-4 at 4). It further provided that each party would pay its own attorney’s fees and other “costs of the arbitration,” unless the arbitrator were to award costs and fees to the prevailing party. (Doc. 16-4 at 4). However, JAMS’s procedure for arbitration of consumer disputes requires that all but $250 of the costs be borne by the defendant—in this case, Smartpay Leasing. (Doc. 16-1 at 1). Contending that JAMS improperly classified its dispute with Freeman as a consumer dispute and that, therefore, each side should bear its own costs and fees, Smartpay Leasing refused to pay the initial filing fee. (Doc. 16-3 at 1). As a result, JAMS declined to administer the arbitration. (Doc. 16-2 at 1).  Freeman now seeks to vacate the stay and move forward with her suit in this Court. In its response, Smartpay Leasing argues that it did not refuse to arbitrate—that instead JAMS refused to hear the arbitration—and argues that the party truly at fault here is Freeman for refusing to refile the arbitration before the AAA.  The Defendant is incorrect. Having drafted an agreement requiring arbitration and designating JAMS as an acceptable forum, Smartpay Leasing was obligated to comply with JAMS’s procedures and to pay the initial filing fee. By refusing to pay the initial filing fee, Defendant has breached the Arbitration Agreement and waived its right to compel arbitration. . . .  Smartpay Leasing’s refusal to pay caused JAMS to refuse to administer the arbitration. As such, the stay is due to be lifted, because the arbitration underlying the stay “has been had in accordance with the terms of the agreement” and because Smartpay Leasing is in default in proceeding with the arbitration. See, e.g., Pre-Paid Legal Servs., Inc. v Cahill, 786 F.3d 1287, 1295 (10th Cir. 2015) (finding that district court properly lifted stay where one party refused to pay its share of arbitration fee, leading arbitrator to dismiss proceedings, on grounds that arbitration had been had in accordance with terms of agreement and non-paying party was in default). It is, therefore  ORDERED that Motion to Vacate Order Referring Case to Arbitration and to Lift Stay (Doc. 16) is GRANTED. The Order referring this case to arbitration is VACATED, and the Clerk is directed to re-open the case.