Jeronimo v. Swanson-Fahrney Ford Sales

In the case at bench, there is no dispute as to whether the arbitration agreement exists or whether the dispute is covered by the agreement. Rather the plaintiff argues the motion should be denied pursuant to Code of Civil Procedure section 1281.97 and that defendant has waived the right to compel arbitration.

Code of Civil Procedure § 1281.97

Code of Civil Procedure section 1281.97 provides, in pertinent part: 5

In an employment or consumer arbitration that requires, either expressly or through application of state or federal law or the rules of the arbitration provider, the drafting party to pay certain fees and costs before the arbitration can proceed, if the fees or costs to initiate an arbitration proceeding are not paid within 30 days after the due date the drafting party is in material breach of the arbitration agreement, is in default of the arbitration, and waives its right to compel arbitration under Section 1281.2.

On November 10, 2025, plaintiff initiated arbitration pursuant to the RISC with AAA and was assigned a case number. (Chavez Decl., ¶ 4.) On December 5, 2025, AAA declined to administer the arbitration, advising that before plaintiff filed the arbitration defendant was not in compliance with AAA policies regarding consumer claims. (Id., ¶ 6.) Plaintiff later learned defendant was not in good standing with AAA because it had not paid a 2025 renewal fee. (Ibid.)

Here, the fee at issue, to register defendant’s arbitration clause for 2025, was not a fee to initiate the arbitration proceeding as contemplated by the statute. Further, defendant was not given an opportunity to pay an invoice or 30 days to pay before administration of the arbitration was summarily declined. The circumstances do not support finding the drafting party in breach of the arbitration agreement under Code of Civil Procedure section 1281.97.

Waiver

Waiver is the “intentional relinquishment or abandonment of a known right.” (Morgan v. Sundance, Inc. (2022) 596 U.S. 411, 417, quoting United States v. Olano (1993) 507 U.S. 725, 733.) When considering whether waiver has occurred, the United States Supreme Court has noted the focus is on the actions of the party who held a right. (Ibid.) In its ruling in Morgan, the Supreme Court has clarified that prejudice is not a requirement when considering the federal rule of waiver in the arbitration context. (Id. at p. 1714.) State and federal law both have a policy of favoring arbitration agreements and doubts regarding whether a waiver has occurred are to be resolved in favor of arbitration. (St. Agnes Medical Center v. PacifiCare of California (2003) 31 Cal.4th 1187, 1195.)

When determining whether a party holding the right to arbitrate has waived said right, the courts consider, 1) whether the party’s actions are inconsistent with that right, 2) how far along the parties are in litigation before notice of an intent to arbitrate, 3) any delays in seeking arbitration, 4) whether the party seeking arbitration has filed a counterclaim, and 5) whether important intervening steps have occurred.2 (St. Agnes Medical Center v. PacifiCare of California, supra, 31 Cal.4th at p. 1196.)

Plaintiff argues that defendant has acted inconsistently with the right to arbitrate because it did not timely enter into a stipulation to stay this action pending arbitration when offered, failed to cure the defects with AAA, and only through its most recent Case

2 California case law also has included whether the other party was prejudiced, but as noted in

Morgan, there should be no prejudice requirement when considering waiver in an arbitration context. 6

Management Conference Statement offered NAM as an alternative arbitration administration. Plaintiff argues these actions demonstrate defendant has failed to pursue the timely arbitration of plaintiff’s claims.

The court does not find that the delay in moving for arbitration, due in part to plaintiff’s submission of the dispute to AAA, adequately evinces the intention to relinquish the right to compel arbitration or to abandon it. (Hofer v. Boladian (2025) 111 Cal.App.5th 1, 10.)

Plaintiff has not met his burden to demonstrate a waiver of the right to compel arbitration.

Accordingly, the court intends to enforce the arbitration provision within the RISC and compel the plaintiff to arbitrate his claims against defendant Swanson-Fahrney Ford Sales.

Defendant requests the court order arbitration to proceed with AAA. The language of the agreement allows arbitration to proceed with AAA or National Arbitration and Mediation, or if the parties agree, a different arbitration organization. There is no “default” to AAA. The court anticipates the parties will comply with the language of the arbitration agreement in determining where the proceed with arbitration.

Pursuant to California Rules of Court, rule 3.1312(a), and Code of Civil Procedure section 1019.5, subdivision (a), no further written order is necessary. The minute order adopting this tentative ruling will serve as the order of the court and service by the clerk will constitute notice of the order.

Tentative Ruling

Issued By: JS on 8/4/2026. (Judge’s initials) (Date)

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