FCE BENEFIT ADMINISTRATORS INC. VS. KJ MILLWORKS, ET AL

One the day of the hearing (Aug. 26, 2025), Defendant Mr. Bulaya, his attorney (Mr. Cummings), and another defense witness, all appeared in person in the arbitrator’s San Jose offices, after having commuted from Sacramento. (Id.) Mr. Martini appeared on behalf of Plaintiff, but with no client or any other representative or witness. (Id.) When asked where his client was, Mr. Martini responded that “something else had come up.” (11-24-25 Cumming Decl. pp. 2-4.)

May 22, 2026 Law and Motion Calendar

HONORABLE MICHAEL L. MAU, Department 20 ________________________________________________________________________

The arbitration went forward, with Mr. Martini presenting Plaintiff’s case solely by examining the Defendant, Mr. Bulaya, and by using Defendant’s various exhibits, and then by citing to Plaintiff’s expert report. (Id.) The following day, the arbitrator issued an award in favor of Defendant. Plaintiff thereafter requested a trial de novo. (Id.)

Legal standard.

Code Civ. Proc. § 128.5 provides the Court with the discretion to sanction parties and/or their counsel for actions taken “in bad faith, that are frivolous or solely intended to cause unnecessary delay.” The statute requires subjective bad faith. (Marriage of Sahafzadeh-Taeb & Taeb (2019) 39 Cal.App.5th 124, 134- 135), which may be inferred from conduct. (Summers v. City of Cathedral City (1990) 225 Cal.App.3d 1047, 1073.) The statute applies to judicial arbitration proceedings. (§ 128.5(a).) A § 128.5 sanctions award may include attorney’s fees and costs. The statute aims to “deter repetition of the action or tactic or comparable action or tactic by others similarly situated.” (Id.)

Application.

Defendant’s request for § 128.5 sanctions against Plaintiff and Plaintiff’s counsel, Mr. Martini, is GRANTED-in-part, per the terms and for the reasons explained below.

First, although judicial arbitrations are non-binding, when a party agrees to participate in arbitration, that agreement/stipulation is generally understood as an agreement that the party, or a party representative, will personally attend. Cases also often settle at an arbitration. Where party does not even bother to attend, the chances of the parties reaching some type of resolution fall to virtually zero. Even if it does not then resolve, then a judicial arbitration is a proceeding to potentially fully resolve a dispute.

The code expressly describes the intent of a judicial arbitration:

1141.10. (a) The Legislature finds and declares that litigation involving small civil cases can be so costly and complex that efficiently resolving these civil cases is difficult, and that the resulting delays and expenses may deny parties their right to a timely resolution of minor civil disputes. The Legislature further finds and declares that arbitration has proven to be an efficient and equitable method for resolving small civil cases, and that courts should encourage or require the use of arbitration for those actions whenever possible.

(b) It is the intent of the Legislature that:

(1) Arbitration hearings held pursuant to this chapter shall provide parties with a simplified and economical procedure for obtaining prompt and equitable resolution of their disputes.

(2) Arbitration hearings shall be as informal as possible and shall provide the parties themselves maximum opportunity to participate directly in the resolution of their disputes, and shall be held during nonjudicial hours whenever possible.

Code of Civil Procedure § 1141.10 (emphasis added)

In the Court’s experience, parties who stipulate to participate in arbitration reasonably expect that the opposing party will personally attend. Section 1141.10(b)(2) states that express legislative intent that

May 22, 2026 Law and Motion Calendar PAGE 4 HONORABLE MICHAEL L. MAU, Department 20 ________________________________________________________________________ parties should “participate directly in the resolution of their disputes.” Id. Notably absent from the Opposition papers is any attempt to explain why Plaintiff’s officer, corporate representative or any witness appeared at the arbitration for Plaintiff’s case in chief. When asked at the hearing why his client did not appear, Mr. Martini apparently responded that “something else came up.” (11-24-25 Cumming Decl. pp. 2-4.)

Mr. Martini’s declaration provides no further explanation. It is unclear when Mr. Martini knew that his client could not attend the arbitration, or for that matter, whether the client even knew about the hearing, or ever planned to attend. Defendant’s argument that “plaintiff essentially blew off the arbitration” (Def. MPA, pg. 5, line 22) is well taken. The Court agrees.

Plaintiff filed this lawsuit, and whether at a judicial arbitration or at trial, plaintiff alone has the burden of proof on its case. The Defendant filed an arbitration brief and 19 exhibits. Plaintiff filed no arbitration brief, and only one exhibit (a “expert” report), which is also indicative that Plaintiff had little interest in participating in good faith. Mr. Martini argues that he was able to present a “prima facie” case at the arbitration by using Defendant’s testimony, Defendant’s exhibits, and by citing to Plaintiff’s expert report.

However, Plaintiff’s counsel can only cite to Defendant’s testimony because Defendant did what Plaintiff failed to do—i.e., show up for the hearing. At Defendant notes, had Mr. Bulaya simply refused to participate upon learning that Plaintiff failed to appear, either the arbitration would not have gone forward, or the arbitrator likely would have had to issue an award in favor of the Defendant, since Plaintiff’s counsel would have had no witness(es) to question. When considering § 128.5 sanctions, subjective bad faith can be inferred from conduct.

Mr. Martini’s failure to even address or explain his client’s failure to appear permits a reasonable inference of subjective bad faith.

The Court also agrees with Defendant’s contention that Plaintiff’s counsel essentially used the arbitration as a tool to cross-examine the Defendant, without providing defense counsel the opportunity to do the same—to actually question the Plaintiff. By doing so, Plaintiff’s counsel had everything to gain and nothing to lose, because Plaintiff could simply ignore an adverse arbitration award by requesting a trial de novo. Again, the facts here permit a reasonable inference of bad faith. Under Section 128.5, the Court has the ability to direct sanctions to a party, or to a party’s attorney, or both. Plaintiff’s attorney bears some responsibility for the sanctions requested, though Plaintiff failing to appear at all at the Arbitration is the most egregious.

The Court is cognizant of Section 128.5’s stated aim to “deter repetition of the action or tactic or comparable action or tactic by others similarly situated.” It seems obvious that if Defendant had known, from the outset, that Plaintiff would not attend the arbitration, Defendant would never have agreed to arbitration in the first place. Indeed, virtually no litigant would agree to attend a judicial arbitration, if they knew that their adversary was not making a reciprocal promise to attend, and to act in good faith.

Additionally, Plaintiff’s attorney admits to rescheduling the arbitration due to Plaintiff’s initial unavailability (Martini Decl., pg. 1, line 25-26), but later claimed he “learned that my client would be out of town on the day of the arbitration” (Martini Decl., pg. 2, line 7). Plaintiff’s attorney had an obligation to ensure that his client was fully available on the day of the arbitration. Both Plaintiff’s and Plaintiff attorney’s conduct was thus in bad faith, and needs to be addressed.

Defendant has requested total sanctions comprised of attorney’s fees of $11,475.00 (25.5 hours x $450.00 per hour) which rate is reasonable, plus various travel expenses. Defendant also sought its motion filing fee though it was mis-stated at $17.90 (Cumming Decl., pg. 6, line 3-4) and is instead per the Court Registry a cost of $90.00. The Court declines the 10 hours for the Arbitration Brief and client preparation, as ultimately this time spent can carry over to Trial preparation. The Court awards the full 7 hours for the travel time and attendance at the Arbitration. The Court awards half of the 8.5 hours for this

May 22, 2026 Law and Motion Calendar PAGE 5 HONORABLE MICHAEL L. MAU, Department 20 ________________________________________________________________________ motion, or 4.25 hours. Thus, total attorney’s fees are $5,062.50. All travel expenses are awarded in the sum of $420.20, plus the $90.00 motion fee, which sub-total is $510.20.

Defendant’s request for § 128.5 sanctions is thus GRANTED in-part against Plaintiff and Plaintiff’s attorney Alan Martini. Plaintiff FCE Benefit Administrators, Inc. is sanctioned the sum of $5,062.50. Attorney Alan Martini is sanctioned the sum of $510.20. All sanctions are to be paid to Defendant within 30 days of notice of entry of the Order after hearing.

Any party who contests a tentative ruling must email Dept20@sanmateocourt.org with a copy to all other parties by 4:00 p.m. stating, without argument, the portion(s) of the tentative ruling that the party contests.

If the tentative ruling is uncontested, it shall become the order of the Court. Thereafter, Counsel for the prevailing party shall prepare for the Court’s signature a written order consistent with the Court’s ruling pursuant to CRC Rule 3.1312 and provide written notice of the ruling to all parties who have appeared in the action, as required by law and by the CRC. Please note that Local Rule 3.403(b)(iv) states in part “prevailing party on a tentative ruling is required to prepare a proposed order REPEATING VERBATIM the tentative ruling” (emphasis added). The order should be filed or e-filed only, do not email or mail a hard copy to the Court.