Notice Of Hearing On Petition To Compel Arbitration And Stay The Case Pending Outcome Of Arbitration
SF Superior Court - Law & Motion / Discovery Dept 301 - CGC26634923 - June 29, 2026 Hearing date: June 29, 2026 Case number: CGC26634923 Case title: KRISTEN POWERS VS. AIDALY CARE CALIFORNIA LLC ET AL Case Number: | | CGC26634923 | Case Title: | | KRISTEN POWERS VS. AIDALY CARE CALIFORNIA LLC ET AL | Court Date: | | 2026-06-29 09:00 AM | Calendar Matter: | | Notice Of Hearing On Petition To Compel Arbitration And Stay The Case Pending Outcome Of Arbitration | Rulings: | | On the Law & Motion/Discovery calendar for Monday, June 29, 2026, Line 9, DEFENDANTS AIDALY CARE CALIFORNIA LLC A CALIFORNIA LIMITED LIABILITY COMPANY, AIDALY CORPORATION, MARGARET NORRIS' Notice Of Hearing On Petition To Compel Arbitration And Stay The Case Pending Outcome Of Arbitration.
Defendants' motion to compel arbitration and stay is denied. The issue on this motion is whether defendants Aidaly Care California LLC, Aidaly Corporation, and Margaret Norris waived arbitration by failing to timely pay arbitration fees.
On August 6, 2025, plaintiff made a demand for arbitration that named Aidaly Care California, LLC, a dissolved entity that Defendants contend never employed plaintiff, and Margaret Norris. (Norris Decl., par. 14, Ex. C.) On August 13, 2026, Norris received an amended demand that named Aidaly Care California, LLC, Aidaly Corporation, and Norris. (Norris Decl., par. 15, Ex. D.) After being informed on several occasions that the arbitration fees were due, defendants failed to post the fees because they contended that Aidaly Care California, LLC was an improper party. (Haulk Decl., pars. 6-7, 11-12, 15-19.)
Under California Code of Civil Procedure, section 1281.97, subd. (a)(1), where an employer is required to pay fees to initiate an employment arbitration, payment must be made within thirty days after the due date. Section 1281.97, subdivisions (b) and (c), provide that the failure to pay in a timely fashion is a material breach of the arbitration agreement and the employee may withdraw the claim from arbitration and proceed in court. The Legislature devised this statutory scheme to prevent employers from using nonpayment as a strategic device or delay tactic. (Hohenshelt v. Superior Court (2025) 18 Cal.5th 310, 322.)
The California Supreme Court has authoritatively construed this statute, holding that the right to arbitrate is extinguished "when nonperformance is willful, grossly negligent, or fraudulent." (Hohenshelt, supra, 18 Cal.5th, at p. at 323.) On the other hand, an employer will not be stripped of the right to arbitrate "where nonpayment of fees results from a good faith mistake, inadvertence, or other excusable neglect." (Id.)
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In this case, the court finds that defendants' nonpayment was willful; they engaged in a "strategic nonpayment of arbitration fees." (Id. [emphasis removed].) Defendants made the calculated litigation decision not to pay the fees because they believed that Aidaly Care California, LLC was not a proper party. Whether that entity could be liable was a merits issue for the arbitrator to decide. Moreover, defendants Aidaly Corporation and Margaret Norris were properly named and they may not invent conditions before complying with their mandatory payment obligation. Defendants were not prejudiced by any alleged misjoinder. By their own admission, the LLC was dissolved and it is unclear how the properly named defendants would be harmed by plaintiff pursuing claims against a non-existent entity.
The motion is DENIED since defendants were in "material breach of the arbitration agreement" and "waive[d]" the right to compel arbitration. (Code Civ. Proc., section 1281.98, subd. (a)(1).) Plaintiff may seek monetary sanctions per Code of Civil Procedure, section 1281.99, by separate noticed motion. (Part 1 of 2, tentative ruling continues in Part 2 of 2) | |