DEFENDANT’S PETITION TO COMPEL ARBITRATION AND TO STAY ACTION
June 16, 2026 Law and Motion Calendar PAGE 35 Judge: HONORABLE NANCY L. FINEMAN, Department 04 ________________________________________________________________________
2:00 PM LINE 10 26-CLJ-01333 MIDLAND CREDIT MANAGEMENT, INC. VS. MANIKANTAN SWAMINATHAN
MIDLAND CREDIT MANAGEMENT, INC. HYO JIN JULIA JUNG MANIKANTAN SWAMINATHAN PRO SE
DEFENDANT'S PETITION TO COMPEL ARBITRATION AND TO STAY ACTION
TENTATIVE RULING:
For the reasons stated below, Defendant Manikantan Swaminathan’s “Petition to Compel Arbitration and to Stay Action,” filed March 12, 2026, is GRANTED, on the terms set forth below. (Code Civ. Proc., § 1280 et. seq.)
Background. This is a collections case arising from Defendant’s alleged non-payment of a promissory note. As alleged in Plaintiff Midland Credit Management, Inc.’s (“Plaintiff”) Complaint, on February 17, 2022, Defendant Swaminathan entered into a “Loan Agreement and Promissory Note” (“Agreement”) (Cmplt., Ex. C), for a $9,000 loan. After making some of the loan payments, Defendant allegedly breached the Agreement by discontinuing the payments. (Id.) As alleged, the Note/Agreement was later assigned to Plaintiff. Plaintiff’s Complaint, which asserts a breach of contract cause of action (breach of the Note), seeks to collect the $6,477.12 allegedly owed on the Note.
Section 13 of the Agreement/Note contains a broadly-worded arbitration agreement, which requires, at the election of either party (or their assigns), that any dispute arising from the Agreement be arbitrated before the American Arbitration Association (“AAA”) or JAMs. Pursuant to Section 13, Defendant now moves to compel arbitration and to stay this case pending completion of the arbitration.
On April 28, 2026, Plaintiff filed a “Notice of Non-Opposition” to this Petition, stating that Plaintiff does not object to the case being sent to arbitration. Plaintiff, however, asks that the Court’s order granting the Petition include language stating that if Defendant does not initiate a AAA or JAMS arbitration proceeding within 45 days, that Defendant’s right to arbitrate will be deemed automatically waived. Defendant objects to this proposed automatic waiver language.
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The Petition to Compel Arbitration is GRANTED. California law strongly favors arbitration finding it a speedy and relatively inexpensive manner of dispute resolution. (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 125; Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 97.) A party to an arbitration agreement may seek a court order compelling the parties to arbitrate a dispute covered by the agreement. (Code Civ. Proc., § 1291.2.) The court must grant the petition to compel arbitration unless it finds the right to compel arbitration has been waived by the moving party; grounds exist for the revocation of the agreement; or litigation is pending that may render the arbitration unnecessary or create conflicting rulings on common issues. (Id.,
June 16, 2026 Law and Motion Calendar PAGE 36 Judge: HONORABLE NANCY L. FINEMAN, Department 04 ________________________________________________________________________ § 1281.2.) Private arbitration is a matter of agreement between the parties and is accordingly governed by contract law. (Platt Pacific, Inc. v. Andelson (1993) 6 Cal.4th 307, 313.) A proceeding to compel arbitration is in essence a suit in equity to compel specific performance of a contract. (Freeman v. State Farm Mutual Auto Insurance Co. (1975) 14 Cal.3d 473, 479.) Defendant bears the burden of proving the existence of an arbitration agreement, and the party opposing arbitration bears the burden of proving any defense. (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236 (Pinnacle) [citing Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972] (Engalla).)
Where a party moves to compel arbitration, the trial court must determine in a summary proceeding whether an “agreement to arbitrate the controversy exists.” (Code Civ. Proc., §§ 1281.2, 1290.2; Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 412– 413.) “Because the existence of the agreement is a statutory prerequisite to granting the petition, the petitioner bears the burden of proving its existence by a preponderance of the evidence.” (Rosenthal, at p. 413; accord, Engalla, supra, 15 Cal.4th 951, 972.)
The party opposing the motion bears the burden of proving by a preponderance of the evidence any fact necessary to its defense. (Pinnacle, supra, 55 Cal.4th 223, 236; Ruiz v. Moss Bros. Auto Grp. (2014) 232 Cal.App.4th 836, 842-43.) The trial court sits as the trier of fact, weighing all the affidavits, declarations, and other documentary evidence, and any oral testimony the court may receive at its discretion, to reach a final determination. (Engalla, supra, at p. 972.) “General principles of contract law determine whether the parties have entered a binding agreement to arbitrate.” (Pinnacle, supra, 55 Cal.4th at p. 236.)
Here, Defendant met his burden of showing that the parties (or in Plaintiff’s case, its predecessor) entered into an arbitration agreement that covers the asserted claims, which Plaintiff does not dispute. (See Cmplt., Ex. C, Sect. 13; March 12, 2026 Defendant’s declaration, ¶¶ 1-4.) Defendant’s Petition establishes that in February 2022, Defendant entered into a Loan Agreement and Promissory Note with Blue Ridge Bank, which included a binding arbitration provision that applies to all claims and disputes arising out of or relating to the Agreement. (Id., § 13.) This evidence meets Defendant’s initial burden. Since Plaintiff claims to have acquired rights to the Note as an assignee, Plaintiff is subject to the arbitration agreement. (Cmplt., ¶¶ 6, 14, 20.)
Further, Plaintiff does not oppose an order compelling arbitration of this dispute. (See Plaintiff’s “Notice of Non-Opposition.”) Accordingly, the Petition is granted.
Plaintiff requests, however, that the Order granting this Petition including language stating that (1) Defendant, as the party seeking arbitration, must file/initiate a AAA or JAMS arbitration proceeding within 45 days, and (2) if Defendant fails to initiate an arbitration proceeding within 45 days of service of the Order granting this Petition, Defendant’s right to arbitrate shall automatically be deemed waived.
The Court declines to impose the requested automatic waiver of Defendant’s right to arbitrate after 45 days. Plaintiff cites no authority supporting this request, and the Agreement itself imposes no such deadline or automatic waiver language. Further, the proposed 45-day deadline appears arbitrary.
June 16, 2026 Law and Motion Calendar PAGE 37 Judge: HONORABLE NANCY L. FINEMAN, Department 04 ________________________________________________________________________
Pursuant to Section 13 of the Agreement (Cmplt., Ex. C), Defendant shall initiate an arbitration proceeding with either AAA or JAMS within 60 days of this Order. Although the Court is not imposing an automatic waiver after 45 days, the Court cautions that failure by Defendant to commence an arbitration proceeding within 60 days of this Order may result in monetary sanctions, a lifting of the stay, and/or a finding of waiver upon noticed motion.
All proceedings in this action are HEREBY STAYED pending completion of arbitration. (Code Civ. Proc. § 1281.4.) The Court sets a case management conference for January 19, 2027 at 9:30 a.m. in Department 4 with a joint case management conference statement due five court days before the conference. If the parties want to advance or continue the conference, they should jointly email Department 4 with alternative dates.
If the tentative ruling is uncontested, it shall become the order of the Court. Thereafter, Defendant shall prepare a written order consistent with the Court’s ruling for the Court’s signature, pursuant to California Rules of Court, rule 3.1312, and provide written notice of the ruling to all parties who have appeared in the action, as required by law and the California Rules of Court.
POSTED: 3:00 PM