Ruvalcaba v. Henkels & McCoy West, LLC

(Pomona Courthouse South: Dept. H) September 9, 2026 DEPARTMENT H LAW AND MOTION RULINGS

Henkels & McCoy West, LLC, Case No. 26PSCV00209 ORDER ON MOTION TO VACATE ARBITRATION ORDER Plaintiff Andy Ruvalcaba's Motion to Vacate Order Compelling Arbitration is DENIED.

Background

Plaintiff Andy Ruvalcaba ("Plaintiff") alleges that Defendant Henkels & McCoy West, LLC ("Defendant") terminated his employment as a full-time truck driver and laborer on June 3, 2025, less than 24 hours after he contacted Defendant's Human Resources department to inquire about baby-bonding leave under the California Family Rights Act ("CFRA"). On January 20, 2026, Plaintiff filed a complaint, asserting causes of action against Defendant and Does 1-50 for: (1) CFRA Retaliation, (2) Wrongful Termination in Violation of Public Policy, and (3) Unfair Competition in Violation of Business and Professions Sec.Sec. 17200, et seq.

On March 3, 2026, a "Joint Stipulation to Submit Case to Binding Arbitration and Stay the Civil Action; Order" was entered. A Status Conference Re: Arbitration is set for October 20, 2026. Legal Standard "In an employment or consumer arbitration that requires . . . 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." (Code Civ.

Proc., Sec. 1281.97, subd. (a)(1).) "If the drafting party materially breaches the arbitration agreement and is in default under subdivision (a), the employee or consumer may do either of the following: (1) Withdraw the claim from arbitration and proceed in a court of appropriate jurisdiction. (2) Compel arbitration in which the drafting party shall pay reasonable attorney ' s fees and costs related to the arbitration." (Code Civ. Proc.,Sec. 1281.97, subd. (b).) "If the employee or consumer proceeds with an action in a court of appropriate jurisdiction, the court shall impose sanctions on the drafting party in accordance with Section 1281.99."(Code Civ.

Proc., Sec. 1281.97, subd. (d).)

Discussion

Plaintiff moves the Court, pursuant to Code of Civil Procedure sections 1281.97 and 1281.98, for an order vacating the order compelling arbitration and awarding Plaintiff sanctions against Defendant in the amount of $2,250.00. Plaintiff proffers the following facts in support of its request: On March 3, 2026, the parties stipulated to binding arbitration and to stay proceedings. (Zadykyan Decl., P. 4, Exh. A). On March 24, 2026, Plaintiff submitted his demand for arbitration to the American Arbitration Association ("AAA") to initiate the arbitration process. (Id., P. 5.)

On April 21, 2026, the AAA sent Defendant an invoice for its arbitration filing fee. (Id., P. 6, Exh. B.) The payment was due within 30 days, on May 21, 2026. (Id.). No payment was received by the AAA by the deadline. (Id., P. 7.) On June 23, 2026, the AAA closed Plaintiff's matter for Defendant's failure to pay its filing fee. (Id., P. 8, Exh. C.) In opposition, Defendant argues that it did not fraudulently or strategically withhold payment; rather, it failed to pay because it did not receive proper notice that the initiation fee was due.

Defendant states the AAA sent its fee demand to defense counsel Staci Clark ("Clark"), while she was on leave, despite the fact that the AAA and Plaintiff were given a three-person service list which included counsel Jacqueline Beaumont and Connie Valles ("Valles"). (Beaumont Decl., P. 9.) Clark's email generated a response, which informed the AAA that she was unavailable and that responses should be directed to Valles. (Beaumont Decl., Exh. F.) However, the AAA transmitted fee demands from an automated "noreply" address that did not accept responses.

Defendant further argues that the AAA did not re-send the demand to the other counsel on the service list but instead closed the matter when the payment deadline expired. Lastly, Defendant states it had no notice of the missed payment deadline until Plaintiff's counsel's service of the instant motion. In Hohenshelt v. Superior Court (2025) 18 Cal.5th 310, the California Supreme Court disapproved several Court of Appeal decisions that had held that section 1281.98 must be applied strictly, regardless of whether the drafting party acted in good faith. (Id. at pp. 6, 18.)

The Court explained that while "under general contract law principles as under section 1281.98, a drafting party cannot avoid discharging the other party's contractual duty to proceed in arbitration if it willfully withholds fees necessary to move arbitration forward [,] . . . if the drafting party acted in good faith, it may seek relief under the above statutes, and its claim should be evaluated under the usual principles in law and equity governing relief from forfeiture or default, including whether the other party has been prejudiced." (Id. at p. 18.) "The Legislature enacted section 1281.98 to deter strategic nonpayment and thereby remedy a 'concerning and troubling trend' of delay." (Id. at p. 18.)

Here, the Court cannot conclude Defendant engaged in willful or strategic nonpayment as contemplated by the legislature when it enacted section 1281.97. Unlike the cases relied on in Hohenshelt, the

circumstances of this case point to "excusable neglect," rather than willful tactics on the part of Defendant to purposely delay arbitration. Accordingly, Plaintiff's motion to vacate arbitration order is denied. | Home -->)" -->