California Supreme Court:
Tardiness in Attacking Arbitration Award Not Always Fatal
100-Day Time Bar Is Not Jurisdictional, Kruger Writes; Say Equitable Relief May Be Afforded Where Appropriate
By a MetNews Staff Writer
The 100-day time limit for moving to vacate an arbitration award, contained in Code of Civil Procedure §1288, is not jurisdictional, the California Supreme Court held yesterday, reversing a contrary decision by the Court of Appeal for this district.
“If the Legislature had intended to preclude equitable tolling or equitable estoppel, it could have done so expressly, Justice Leondra Kruger wrote for a unanimous court.
Defendant Sarah Plott Key had persuaded Los Angeles Superior Court Judge Rafael A. Ongkeko to vacate a $778,351 arbitration award in favor of Law Finance Group (“LFG”). The sum represented interest on a $2.4 million loan to finance litigation (which resulted in a $20 million victory).
Key repaid the principal but resisted paying interest, maintaining that interest was statutorily barred. In vacating the award on Feb. 20, 2020, Ongkeko accepted Key’s contention that LFG was barred from asserting tardiness of the motion because the parties had agreed in writing to “come up with a briefing schedule for the Petition to Confirm and the Petition to Vacate.”
Reversal of Ongkeko’s order came in a July 30, 2021 opinion by Presiding Justice Elwood Lui of this district’s Div. Two. He said that §1288 is “jurisdictional,” declaring:
“The rule is firmly established that parties may not confer jurisdiction by agreement.”
In her opinion reversing Div. Two’s decision, Kruger set forth:
“To be sure, mandatory procedural rules—like many statutes of limitations or other filing deadlines—serve important policy goals, and courts must enforce them when properly raised….But we will not assume that the Legislature intended to imbue a time bar with jurisdictional consequences merely because the statute speaks in mandatory terms….To establish that a particular filing deadline is jurisdictional, more is required….
“Here, nothing in section 1288.2’s instructions for the timing of responses requesting vacatur clearly indicates the Legislature’s intent to remove a class of cases from the court’s fundamental jurisdiction. Section 1288.2 speaks only to obligations of the litigants and makes no reference at all to the power of the courts—in other words, the section reads as an ordinary statute of limitations.”
Kruger noted that by contrast to Code of Civil Procedure §659 and §660, rendering a court powerless to grant a new trial where the time limit for requesting that action is exceeded, §1286.4 “does not speak directly to the power of the court to act on an untimely response.”
“Instead, it speaks, more obliquely, of the power to act on a ‘duly served and filed’ vacatur request….It is not clear from the statutory text whether this ‘duly served and filed’ language incorporates procedural requirements found in other sections of the Code of Civil Procedure and, if so, which ones. Section 1286.4 does not, in short, speak with the clarity necessary to overcome the presumption that statutory deadlines do not limit the courts’ fundamental jurisdiction.”
The matter was remanded to the Court of Appeal for a determination as to whether equitable relief is appropriate.
The case is Law Finance Group, LLC v. Key, 2023 S.O.S. 2099.
Christopher L. Frost and Taylor S. Simeone of Eisner, Weinberg Gonser Frost teamed with Cynthia E. Tobisman, Alana H. Rotter and Jeffrey E. Raskin of Greines, Martin, Stein & Richland in representing Key. Appellate counsel for LFG were former Court of Appeal Justice Margaret M. Grignon and her daughter and law partner, Anne M. Grignon.
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