Cvejic v. Skyview Capital

California Court of Appeal Jun 28, 2023 No. B318880Published

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Holding. The court held that a drafting party's failure to pay arbitration fees by the statutory deadline constitutes a material breach of the arbitration agreement, entitling the employee to unilaterally withdraw from arbitration and proceed in court. The statute removes authority from arbitrators to cure such breaches or prevent withdrawal.

Issues

Whether a drafting party's failure to pay arbitration fees by the statutory deadline constitutes a material breach under Code of Civil Procedure section 1281.98.
Whether a trial court or an arbitrator has the authority to determine a party's right to withdraw from arbitration under section 1281.98.
Whether an arbitrator has the authority to cure a material breach caused by the late payment of arbitration fees.

Disposition. Affirmed

Quotations verified verbatim against the opinion

“The statute deems this failure to be a material breach and entitles the claimant to withdraw unilaterally from arbitration.”

“The statute does not empower an arbitrator to cure a party’s missed payment.”

“The point was to take this issue away from arbitrators, who may be financially interested in continuing the arbitration and in pleasing regular clients.”

Filed 6/28/23 CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION EIGHT

MILAN CVEJIC, B318880

Plaintiff and Respondent, Los Angeles County Super. Ct. No. 19SMCV00537 v.

SKYVIEW CAPITAL, LLC, et al.,

Defendants and Appellants.

APPEAL from an order of the Superior Court of Los Angeles County, Helen Zukin, Judge. Affirmed. Troutman Pepper Hamilton Sanders, Jeffrey M. Goldman and Matthew H. Ladner for Defendants and Appellants. Henry|Lacey, Stephen F. Henry, Mary Kay Lacey; The Jadhavji Law Firm and Alishan A. Jadhavji for Plaintiff and Respondent. ____________________ A statute gave Milan Cvejic the option to get out of arbitration if Skyview was tardy in paying its arbitration fees.

Skyview was tardy in paying its arbitration fee. Cvejic was entitled to get out. Citations are to the Code of Civil Procedure. I Plaintiff Cvejic worked for Defendant Skyview Capital, LLC. He sued this entity and others in state court after his termination. We refer to the defendants as Skyview. Skyview moved to compel arbitration. The trial court granted the motion and stayed proceedings. The case went before a panel of three arbitrators through the American Arbitration Association under the rules for commercial cases. After at least one continuance, the final hearing on the merits was set to begin August 5, 2021. Skyview had to pay arbitration fees ahead of the hearing. The fees were due June 4, 2021. On July 7, 2021, Cvejic’s counsel asked the case manager whether Skyview had paid the deposits. On July 8, 2021, the case manager confirmed by email that Skyview had not paid. The manager scheduled a call to address the situation. During the call, Skyview’s counsel reported there was “no further explanation” for his clients’ failure to pay the fees. Cvejic reserved his rights to proceed under the Code of Civil Procedure. The panel stated “[t]he Hearing fees have been requested and the deadline for making the deposits has passed.” It set a new deadline of July 14th for payment of the fees. Within about an hour of the call, Cvejic’s counsel wrote the panel to say Cvejic was withdrawing from the arbitration under section 1281.98. The panel chair responded that Cvejic’s request was “premature”—presumably because the deadline was now July 14th. Thereafter the panel ruled section 1281.98 was not in play because Skyview “came into compliance with the Panel’s

Cvejic v. Skyview Capital

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION EIGHT

MILAN CVEJIC, B318880

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