Court of Appeal:
First District Says Defendant Law Firm Must Pay Entire Cost or Litigate in Court
By a MetNews Staff Writer
A law firm that successfully moved for an order compelling arbitration of a malpractice action against it will have to pay the entire fee of the arbitrator itself or litigate the action in court if the plaintiff can show an inability to pay his share of the fee, the First District Court of Appeal held yesterday.
San Francisco Superior Court Judge Jeffrey S. Ross, siting on assignment, wrote the opinion for Div. Four. It reverses an order by San Francisco Superior Court Judge Ethan P. Schulman.
“We address a narrow issue, which the trial court certified for appellate resolution…: Does a trial court that granted a defendant’s petition to compel arbitration have jurisdiction to lift the stay of trial court proceedings where a plaintiff demonstrates financial inability to pay the anticipated arbitration costs? If so, may the court require defendant either to pay plaintiffs share of arbitration costs or to waive the right to arbitration? We answer both questions in the affirmative….”
Benefitting from the decision is Gerald Aronow who claims that he is indigent. The defendants are the San Francisco firm of Emergent LLP and two of its members.
Schulman noted that there was conflicting authority as to whether a trial court could lift a stay that was imposed upon shunting a case to arbitration and followed the case he thought represented the better view: MKJA, Inc. v. 123 Fit Franchising, LLC, decided Jan. 4, by the Fourth District’s Div. One. In that case, Justice Cynthia Aaron said that when a court stays an action pursuant to Code of Civil Procedure §1281.4 based on an order for arbitration, a party’s inability to pay the arbitrator’s fee is not a ground for lifting the stay.
In embracing MKJA, Schulman rejected contrary authority, namely the Sept. 18, 2013 opinion by the Fourth District’s Div. Three in Roldan v. Callahan & Blaine. There, Justice William F. Rylaarsdam (now deceased) wrote:
“The only issue before us is whether plaintiffs, each of whom were…granted permission to proceed in forma pauperis in the trial court, could likewise be excused from the obligation to pay fees associated with arbitration. We conclude they could.
“If, as plaintiffs contend, they lack the means to share the cost of the arbitration, to rule otherwise might effectively deprive them of access to any forum for resolution of their claims against [the defendant]. We will not do that.”
In following MKJA rather than Roldan, Ross declared, Schulman made the wrong choice.
“[I]t appears the parties did not advise the trial court that our Supreme Court had recently cited Roldan with approval and relied upon it in reaching its holding in Jameson v. Desta,” he wrote. In Jameson, handed down on July 5, 2018, Chief Justice Tani Cantil-Sakauye wrote for a unanimous court in reversing the Court of Appeal’s rejection of an appeal because the appellant had not provided a reporter’s transcript, the omission stemming from the party’s inability to afford the cost of securing the services of a court reporter.
Cantil-Sakauye listed Roldan as among the decisions that “have afforded indigent civil litigants the ability to obtain meaningful access to the judicial process in a great variety of contexts” and discussed it extensively, with approbation.
“With the benefit of the Supreme Court’s approval of Roldan’s rationale and result,” Ross wrote, “we find it to be the better reasoned opinion and will follow its approach.”
The case is Aronow v. Superior Court, A162662.
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