Thompson v. SF Markets CA1/5 ( 2024 )


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  • Filed 9/23/24 Thompson v. SF Markets CA1/5
    NOT TO BE PUBLISHED IN OFFICIAL REPORTS
    California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
    publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or
    ordered published for purposes of rule 8.1115.
    IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
    FIRST APPELLATE DISTRICT
    DIVISION FIVE
    MARVIN THOMPSON,
    Plaintiff and Respondent,
    A167659
    v.
    SF MARKETS, LLC,                                                (Alameda County
    Super. Ct. No.
    Defendant and Appellant.
    22CV016673)
    Defendant SF Markets, LLC doing business as Sprouts Farmers
    Market (SF Markets) appeals from an order denying its motion to compel
    arbitration of claims asserted by plaintiff and respondent Marvin Thompson.
    The trial court ruled that SF Markets breached the parties’ arbitration
    agreement and waived its right to compel arbitration under Code of Civil
    Procedure section 1281.981 because it did not pay its share of the arbitration
    initiation fees by the statutory deadline. In so ruling, the court rejected SF
    Markets’ argument that its obligation to pay the fees had not come due,
    concluding that Thompson substantially complied with the requirements for
    initiating the arbitration. On appeal, SF Markets contends the court erred,
    1     Unless otherwise indicated, all statutory references are to the Code of
    Civil Procedure.
    1
    while Thompson argues for the first time that SF Markets’ payment of the
    fees, although late, waived any challenge to the way Thompson had initiated
    the arbitration. Because Thompson did not serve the arbitration demand in
    the manner required by the parties’ arbitration agreement and because SF
    Markets did not waive this requirement by paying the arbitration fees, we
    will reverse the order and direct the court to enter a new order compelling
    arbitration pursuant to the agreement.
    I. FACTS AND PROCEDURAL HISTORY
    A. Arbitration Agreement
    The parties entered into a “Mutual Binding Arbitration Agreement”
    (Arbitration Agreement or Agreement) in connection with Thompson’s
    employment with SF Markets. The third paragraph of the Agreement
    required Thompson to submit all “claim[s]” (as defined) to final and binding
    arbitration administered by Judicial Arbitration and Mediation Services
    (JAMS) in accordance with the JAMS Employment Arbitration Rules &
    Procedures (JAMS Procedures).
    The 10th paragraph of the Arbitration Agreement, titled “Initiation of
    Arbitration Process,” sets forth the procedure for commencing arbitration:
    “Arbitration shall be initiated upon the express written notice of either party.
    Written notice of Team Member’s claim shall be mailed by certified or
    registered mail, return receipt requested, and by U.S. Mail, to SFM, LLC,
    5455 E. High Street, Suite 111, Phoenix, AZ 85054, attn: Labor &
    Employment Counsel.” (Italics added.) Service of the notice would be
    “deemed effective on the earlier of the date the Team Member or [SF
    Markets] signs the return receipt or three days after the notice is sent by
    regular mail.” The Agreement further provided that it was “governed by the
    Federal Arbitration Act, 
    9 U.S.C. § 1
     et seq.”
    2
    B. Thompson’s Initial Class Action
    Notwithstanding the Arbitration Agreement, Thompson filed a putative
    class action against SF Markets in Alameda County Superior Court
    (Thompson v. S.F. Markets, LLC (Super. Ct. Alameda County, 2022, No.
    RG21102471)) (Thompson I), alleging claims for failure to provide meal
    periods and rest breaks, failure to pay hourly wages and overtime, violation
    of Labor Code section 227.3, inaccurate wage statements, failure to timely
    pay final wages, and unfair competition.
    In response, SF Markets moved to compel arbitration of Thompson’s
    individual claims and to dismiss his class claims. Thompson did not oppose,
    and the trial court granted the motion and referred Thompson’s individual
    claims “to binding arbitration, pursuant to the terms of the parties’ arbitration
    agreement.” (Italics added.) The court also stayed the litigation pending
    completion of the arbitration.
    1. Thompson Purports to Initiate the Arbitration
    In June 2022, approximately eight months after the trial court ordered
    Thompson’s claims to arbitration, Thompson used JAMS’ online case
    management platform (JAMS Access) to submit to JAMS a Demand for
    Arbitration (Demand) of his individual claims.
    On June 16, 2022, Thompson emailed a copy of the Demand to the
    attorneys who had represented SF Markets in Thompson I. However, he did
    not serve it “by certified or registered mail, return receipt requested, and by
    U.S. Mail, to SFM, LLC, 5455 E. High Street, Suite 111, Phoenix, AZ 85054,
    attn: Labor & Employment Counsel” as required by the Arbitration
    Agreement.
    Thompson nonetheless provided JAMS with a proof of service of the
    arbitration demand, representing that the manner of service was “[b]ased on
    3
    a court order or an agreement of the parties to accept service by electronic
    transmission.” To the contrary, neither the trial court’s order nor SF
    Markets had authorized electronic service of the Demand.
    On June 17, 2022, JAMS emailed to SF Markets’ attorneys a “Notice of
    Intent to Initiate Arbitration” letter, along with an invoice (identified as a
    Deposit Request) for a non-refundable filing fee in the amount of $1,750 “due
    upon receipt.” The Deposit Request was “[b]ill[ed] [t]o” SF Markets’ counsel;
    it was not billed or emailed to SF Markets.
    On July 28, 2022, SF Markets’ attorneys paid the Deposit Request 41
    days after it issued. SF Markets represents in its opening brief that the
    incorrect payor information on the Deposit Request accounted for payment
    not being made until July 28; the page it cites in the record, however, does
    not say this.
    On August 10, 2022, having seen on JAMS’ case management website
    that SF Markets had paid the fees, Thompson’s lawyer emailed JAMS and SF
    Markets’ attorneys to find out the date of payment. SF Markets’ attorneys
    responded to Thompson’s counsel by email the next day, complaining that
    Thompson’s arbitration demand had not complied with the requirement in
    the Arbitration Agreement to provide “written notice by certified or
    registered mail, return receipt requested, and by U.S. mail, to SFM, LLC
    5455 E. High Street, Suite 111, Phoenix, AZ 85054” and objecting to JAMS’
    issuance of the Deposit Request in light of the improper service. SF Markets
    requested that JAMS “withdraw the previously issued invoice, and re-issue
    only upon proof of service in compliance with the arbitration agreement[’s]
    notice provisions.” Meanwhile, Thompson’s lawyers told JAMS that SF
    Markets had waived arbitration by failing to pay the filing fees on time,
    4
    asked JAMS to stay the arbitration proceedings, and said Thompson would
    “move the court to set aside the arbitration order.”
    On August 22, 2022, JAMS confirmed that it received SF Markets’
    payment on July 28, 2022. JAMS paused its administration of the
    arbitration pending the parties’ agreement or court order.
    That same day, instead of moving in Thompson I to set aside the
    arbitration order as they said they would, Thompson’s lawyers filed a new
    and separate putative class action in Alameda County Superior Court
    Thompson v. S.F. Markets (Super Ct. Alameda County, 2022, No.
    22CV016673) (Thompson II).2
    2. SF Markets Moves to Compel Compliance in Thompson I
    SF Markets filed a motion in Thompson I to compel Thompson’s
    compliance with the trial court’s earlier order to arbitrate. SF Markets
    argued that Thompson had not properly initiated arbitration, so JAMS’
    invoice was premature, the fees were not yet due, and SF Markets had not
    waived arbitration. Thompson opposed, arguing that rule 4.2 of the ABA
    Model Rules of Professional Conduct (ABA Model Rule 4.2) and rule 4.2 of the
    California Rules of Professional Conduct (CRPC 4.2) prevented Thompson’s
    counsel from sending the arbitration demand directly to SF Markets, so he
    served the demand on SF Markets’ lawyers by the email method they
    2      Filing a duplicate lawsuit was improper. Although section 1281.97
    allows an employee to commence litigation if the employer does not timely
    pay its arbitration fees, it does not entitle the employee to file a second
    lawsuit (and incur another filing fee for the client) to assert claims that are
    already the subject of existing litigation and the subject of an order
    compelling their arbitration. (See Williams v. West Coast Hospitals, Inc.
    (2022) 
    86 Cal.App.5th 1054
    , 1066 (Williams).) The parties do not address
    this issue, and we need not analyze it further to resolve the appeal.
    5
    established for serving other documents in Thompson I. In a reply brief, SF
    Markets disagreed.
    The trial court denied SF Markets’ motion, stating, “It appears to this
    court that [Thompson] has complied with the court’s order.”
    C. SF Markets Moves to Compel Arbitration in Thompson II
    Following the denial of its motion in Thompson I, SF Markets filed a
    motion to compel arbitration in Thompson II. SF Markets again argued that
    Thompson had not properly initiated arbitration, so its failure to pay the
    arbitration fees on time was immaterial. It also argued that section 1281.97
    is preempted by the FAA.
    Thompson opposed the motion and again argued, as relevant here, that
    the ABA Model Rules and the CRPC prevented counsel from sending the
    arbitration demand directly to SF Markets in compliance with the
    Arbitration Agreement. Thompson further argued that the FAA did not
    preempt section 1281.97.
    The trial court denied the motion. In its written order, the court stated
    that it was “not reconsidering its finding that the arbitration is valid” but
    was considering whether the agreement should be rescinded. The court
    concluded that SF Markets “waived its rights to arbitrate this dispute as it
    materially breached the arbitration agreement by failing to pay the filing fees
    required to continue the arbitration within thirty days after the due date.”
    The trial court further ruled that SF Markets could not “resist this
    conclusion by claiming that [Thompson] did not properly initiate arbitration
    because ‘[he failed to serve the arbitration demand] by certified or registered
    mail, return receipt requested, or by U.S. mail,’ ” to the address stated in the
    Arbitration Agreement. The court reasoned: “[Thompson] substantially
    complied with the arbitration agreement’s requirements to ensure that [SF
    6
    Markets] had notice of the demand for arbitration. Under the facts of this
    case, [Thompson’s] partial performance was sufficient to initiate arbitration.
    [Citation.] Moreover, there is no doubt that [SF Markets] received timely
    notice of the initiation of arbitration through the notice provided to its
    counsel, a notice that the prior judge found sufficient to comply with his order
    to submit this matter to arbitration.”
    SF Markets timely appealed (see § 1294).
    II. DISCUSSION
    Section 1281.97, subdivision (a)(1) provides that the initial arbitration
    fees must be paid within 30 days after they become due, or the party who
    drafted the arbitration agreement will be deemed to have waived its right to
    compel arbitration. The subdivision reads: “In an employment or consumer
    arbitration that requires, either expressly or through application of state or
    federal law or the rules of the arbitration provider, 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.” (Italics added.)
    The obligation to pay the initial arbitration fees and the date for
    calculating the payment deadline are triggered by the arbitrator’s issuance of
    an invoice. (§ 1281.97, subd. (a)(2).) The invoice cannot be issued, however,
    until the claimant meets the “filing requirements necessary to initiate an
    arbitration.” Specifically, section 1281.97, subdivision (a)(2) states: “After an
    employee or consumer meets the filing requirements necessary to initiate an
    arbitration, the arbitration provider shall immediately provide an invoice for
    any fees and costs required before the arbitration can proceed to all of the
    7
    parties to the arbitration. . . . To avoid delay, absent an express provision in
    the arbitration agreement stating the number of days in which the parties to
    the arbitration must pay any required fees or costs, the arbitration provider
    shall issue all invoices to the parties as due upon receipt.” (Italics added.)
    If the initial arbitration fees are not paid within the 30 days, and the
    drafter of the arbitration agreement is deemed to have waived its right to
    arbitrate, the claimant may either “[w]ithdraw the claim from arbitration
    and proceed in a court of appropriate jurisdiction” or “[c]ompel arbitration in
    which the drafting party shall pay reasonable attorney’s fees and costs
    related to the arbitration.” (§ 1281.97, subd. (b).)3
    Strictly enforcing section 1281.97 (Espinoza, supra, 83 Cal.App.5th at
    p. 775), we find that SF Markets did not waive its right to arbitrate by failing
    to timely pay the initial arbitration fee because: (1) Thompson did not serve
    his arbitration demand in the manner required by the Arbitration
    Agreement; (2) Thompson did not substantially comply with the Agreement’s
    service requirement; and (3) nothing prevented Thompson from complying
    with that requirement. We also find that SF Markets did not waive the
    method of service required by the Agreement by paying the fee late.
    3
    The trial court did not decide SF Markets’ motion under section
    1281.97 but under section 1281.98, which imposes a similar 30-day deadline
    to pay “during the pendency of an arbitration proceeding” any fees or costs
    invoiced “for the arbitration proceeding to continue.” (§ 1281.98, subd. (a)(1),
    (2).) But because the payment pertained to the arbitration provider’s initial
    invoice, the applicable statute was section 1281.97. (Espinoza v. Superior
    Court (2022) 
    83 Cal.App.5th 761
    , 775 (Espinoza); Cvejic v. Skyview Capital,
    LLC (2023) 
    92 Cal.App.5th 1073
    , 1077; Williams, supra, 86 Cal.App.5th at
    pp. 1065―1066.) The parties’ briefs refer only to section 1281.97, and we will
    analyze the matter under that statute. (See Williams, at pp. 1065―1066 [the
    procedures and remedies under section 1281.97 and section 1281.98 are
    “ ‘largely parallel,’ however, and require no different analysis”].)
    8
    A.    Thompson Did Not Properly Initiate Arbitration
    Because Thompson did not serve his arbitration demand by mail to SF
    Markets at its office address as required by the Arbitration Agreement, SF
    Markets had no obligation to pay any arbitration fees under section 1281.97.
    Under section 1281.97, SF Markets’ statutory obligation to pay fees
    within 30 days would begin upon the issuance of the arbitrator’s invoice after
    Thompson met the “filing requirements necessary to initiate an arbitration.”
    (§ 1281.97, subd. (a)(2).) Section 1281.97 does not define the “filing
    requirements necessary to initiate an arbitration.” But it is a “ ‘fundamental
    principle that arbitration is a matter of contract,’ ” and arbitration
    agreements must be enforced “according to their terms.” (AT&T Mobility
    LLC v. Concepcion (2011) 
    563 U.S. 333
    , 339.) Therefore, in this case, the
    “filing requirements necessary to initiate an arbitration” must be found in the
    Arbitration Agreement and the JAMS Procedures it references.
    Section 3 of the Arbitration Agreement mandated that claims “shall” be
    submitted to arbitration in accordance with the JAMS Procedures. Those
    Procedures condition the initiation of arbitration on the employee filing a
    proof of service of the arbitration demand. For example, the JAMS forms
    explain that a “Demand is considered submitted for JAMS’ purposes when
    the following items have been received by JAMS: [¶] . . . Demand for
    Arbitration form or the equivalent; [¶] . . . Proof of service of the Demand on
    all other Parties; [¶] . . . Copy of the entire contract that contains the
    arbitration agreement, Court Order (if applicable), and/or Stipulation (if
    applicable); [¶] . . . Applicable Filing Fee.” (Italics added.) Rule 5 of the
    JAMS Procedures, titled “Commencing an Arbitration,” states that the
    requirements are met when JAMS receives, among other things, “evidence
    that the Demand for Arbitration has been served on all Parties.”
    9
    Moreover, the manner of service must comply with the parties’
    arbitration agreement. As JAMS instructs regarding the content of the proof
    of service, the parties should “check the terms of their arbitration contract or
    any applicable law.” (Italics added.)4 Here, paragraph 10 of the Arbitration
    Agreement—titled “Initiation of Arbitration Process”—specified that “express
    written notice” of the arbitration “shall be mailed by certified or registered
    mail, return receipt requested, and by U.S. Mail, to SFM, LLC, 5455 E. High
    Street, Suite 111, Phoenix, AZ 85054, attn: Labor & Employment Counsel.”
    (Italics added.) Service of the arbitration notice does not take effect unless a
    return receipt is signed or three days after the notice was sent by regular
    mail.
    In short, to meet the “filing requirements necessary to initiate an
    arbitration” (§ 1281.97, subd. (a)(2)), Thompson had to provide JAMS with
    proof that the Demand was served by certified or registered mail with return
    receipt requested, as well as by U.S. mail, to the address indicated in the
    Arbitration Agreement.
    Here, Thompson did not send his Demand by certified or registered
    mail with a return receipt requested. He did not serve it by U.S. mail. He
    did not send it to the party or address required by the Arbitration Agreement.
    He therefore did not properly initiate the arbitration under the Agreement,
    and service of the Demand never became effective. The proof of service
    Thompson sent to JAMS was not based on valid service of the Demand or
    proper initiation of arbitration under the parties’ Arbitration Agreement.
    4
    SF Markets filed a request for judicial notice of a bill analysis related to
    section 1281.97 and certain JAMS forms. Although the material was not
    before the trial court when it ruled on SF Markets’ motion, Thompson does
    not object to the request and his respondent’s brief cites to some of the JAMS
    materials. We therefore grant the request.
    10
    Accordingly, Thompson did not meet the “filing requirements necessary to
    initiate an arbitration” under section 1281.97. (See Luafau v. Affiliated
    Computer Servs. (N.D. Cal. Sept. 12, 2006) 
    2006 WL 2619365
    , at *2–3 [where
    the parties’ “Dispute Resolution Procedure” (DRP) required that the
    employee initiate arbitration by submitting a claim to the DRP
    administrator, “[t]he fact that no other procedure is specified means that no
    other procedure is permissible,” and the plaintiff’s failure to submit the claim
    meant the defendants were not in default for failing to pay the arbitrator’s
    filing fee].) And because Thompson did not meet the “filing requirements
    necessary to initiate an arbitration” under section 1281.97, JAMS’ invoice
    was not authorized by that statute, and SF Markets’ failure to pay by the
    statutory deadline did not waive its right to arbitrate. The trial court
    therefore erred in denying SF Markets’ motion to compel arbitration.
    B.    No Substantial Compliance
    The trial court did not find—and Thompson does not contend—that
    Thompson did what he was supposed to do under the Arbitration Agreement
    to serve the Demand and initiate the arbitration process. Instead, the court
    ruled that Thompson’s “substantial[]” compliance with the Agreement’s
    service requirements was enough. Thompson did not focus on a substantial
    compliance theory in its briefs opposing SF Markets’ motion to compel, and
    his respondent’s brief paid little attention to the court’s theory, venturing
    instead into a new and different theory of waiver (which we reject later in
    this opinion).
    In any event, even assuming for purposes of argument that the
    substantial compliance doctrine applies here, the evidence before the trial
    court did not support a conclusion that Thompson substantially complied
    with the requirements for initiating arbitration. Thompson provides no
    11
    authority that an obligation to serve an arbitration demand by certified or
    registered mail with return receipt requested, as well as by regular mail, to a
    party at a designated address, is substantially performed by sending it by
    email to someone else at a different address. The service requirements in the
    Arbitration Agreement were clear, simple, and not burdensome. Thompson’s
    decision to do something entirely different did not constitute substantial
    compliance. Indeed, SF Markets presumably required that all arbitration
    demands be sent by certified or registered mail to its inhouse “Labor &
    Employment Counsel” to ensure that a person designated by SF Markets to
    handle those demands actually received the demand in a timely fashion and
    could ensure compliance with any obligations triggered by that demand. (See
    Manderson-Saleh v. Regents of University of California (2021) 
    60 Cal.App.5th 674
    , 701 [“substantial compliance doctrine . . . is ‘commonly understood to
    mean “compliance with the substantial or essential requirements of
    something (as a statute or contract) that satisfies its purpose or objective
    even though its formal requirements are not complied with” ’ ”].)
    C.    Thompson’s Ethics Argument
    Thompson argues that CRPC 4.2 and ABA Model Rule 4.2, which
    generally preclude a lawyer from communicating with persons known to be
    represented by counsel, barred his lawyers from sending the Demand in the
    manner required by the Arbitration Agreement. As a result, he argues, his
    lawyers properly emailed the Demand to SF Markets’ counsel just as they
    served other documents by email in Thompson I. The trial court did not
    embrace this argument, and neither do we.
    CRPC 4.2(a) provides: “In representing a client, a lawyer shall not
    communicate directly or indirectly about the subject of the representation
    with a person the lawyer knows to be represented by another lawyer in the
    12
    matter, unless the lawyer has the consent of the other lawyer.” However,
    CRPC 4.2(c) states that this rule does not prohibit “communications
    otherwise authorized by law or a court order.” ABA Model Rule 4.2 is
    essentially identical.
    Nothing in CRPC 4.2 or ABA Model Rule 4.2 prohibited service of the
    Demand in accordance with the terms of the Arbitration Agreement. The
    rules govern a lawyer’s communications with a represented person;
    Thompson, who is not a lawyer, could have served the Demand directly on SF
    Markets.
    Furthermore, a lawyer’s service of a legal notice consistent with the
    terms of the parties’ contract—particularly where, as here, a court has
    ordered arbitration to be commenced in accord with that contract—falls
    within the exception under CRPC 4.2(c) for communications “authorized by
    law or a court order.”
    In addition, the rule against lawyers communicating with a
    represented person does not apply when the lawyer has the consent of the
    person’s lawyer. (CRPC, rule 4.2.) Thompson’s counsel could have asked SF
    Markets’ lawyers for permission to serve SF Markets consistent with the
    terms of the Arbitration Agreement (or for SF Markets’ lawyers to accept
    service on their client’s behalf). For all these reasons, Thompson’s urging
    that his lawyers’ ethical obligations made it impossible to comply with the
    Arbitration Agreement is meritless.
    Finally, even if the ethics rules did justify service of the Demand upon
    SF Markets’ attorneys, Thompson’s service of the Demand by email rather
    than registered or certified mail did not suffice. Thompson argues that
    counsel used email to serve each other with documents they filed with the
    trial court in Thompson I, pointing to proofs of service of court filings such as
    13
    a case management statement. But that argument is unpersuasive for two
    reasons. First, service of routine court documents is not the same as service
    of an arbitration demand; the parties’ only agreement regarding service of
    the Demand was in the Arbitration Agreement, which did not allow email
    service. Second, as a matter of law, party agreements to email service do not
    extend to documents that are to be served by certified or registered mail. (Cal.
    Rules of Court, rule 8.78(a)(1)(B) [party agreement for electronic service
    applies only to documents authorized to be served by mail, express mail,
    overnight delivery, or fax transmission]; § 1010.6, subd. (a)(2) [“If a document
    is required to be served by certified or registered mail, electronic service of
    the document is not authorized,” italics added)].)
    Accordingly, the trial court erred in denying SF Markets’ motion to
    compel arbitration.
    D.    Thompson’s New Waiver Argument
    Thompson argues that a party can waive a term of an arbitration
    agreement, such as the method of service for an arbitration demand, and that
    waiver may occur by conduct. (See Morgan v. Sundance, Inc. (2022) 
    596 U.S. 411
    , 418; Medico-Dental Bldg. Co. v. Horton & Converse (1942) 
    21 Cal.2d 411
    ,
    432.) On this basis, he contends that SF Markets’ payment of the invoiced
    fees without objecting to the invoice or Thompson’s method of service waived
    its right to challenge the way Thompson served the Demand. The argument
    is unavailing.
    In the first place, Thompson did not raise this argument in the trial
    court. As a result, the court had no opportunity to consider the argument,
    and SF Markets had no opportunity to rebut it. Furthermore, as Thompson
    acknowledges, waiver involves significant factual issues. (See DRG/Beverly
    Hills, Ltd. v. Chopstix Dim Sum Café & Takeout III, Ltd. (1994) 30
    
    14 Cal.App.4th 54
    , 60 [waiver requires clear and convincing evidence of an
    “intentional relinquishment of a known right after knowledge of the facts”].)
    The court had no opportunity to make findings on those issues.
    Thompson claims that the trial court did make “a factual
    determination that [SF Markets] waived its contractual right to enforce strict
    compliance with the provisions in the arbitration agreement with respect to
    initiating an arbitration.” But that is not true. The court’s order does not
    mention the idea of SF Markets waiving its right to challenge how Thompson
    initiated arbitration by paying the arbitration fees. Instead, it ruled that SF
    Markets “waived its rights to arbitrate this dispute”—the substantive claims
    Thompson brought in his complaint—by failing to pay the filing fees within
    30 days. It rejected SF Markets’ argument regarding Thompson’s inadequate
    attempt to initiate arbitration not on the ground of waiver, but on the ground
    that Thompson had substantially performed.
    Finally, we find no evidence that SF Markets intentionally relinquished
    a known right to argue that Thompson failed to properly initiate arbitration
    if Thompson challenged the timing of its payment. To the contrary, just one
    day after Thompson brought the tardiness of the payment to SF Markets’
    attention, SF Markets’ counsel, “specially appearing on behalf of [SF
    Markets],” responded that Thompson “had failed to properly initiate
    arbitration.” SF Markets’ counsel explained: “Pursuant to the Arbitration
    Agreement, in order to initiate arbitration [Thompson] was required to give
    written notice by certified or registered mail, return receipt requested, and by
    U.S. mail, to SFM, LLC 5455 E. High Street, Suite 111, Phoenix, AZ 85054.”
    Thompson cites no case holding that the mere payment of arbitration fees,
    without more, should be deemed a waiver of the right to contend that
    arbitration had not been properly commenced.
    15
    We will reverse the order denying SF Markets’ motion to compel.5
    III. DISPOSITION
    The order is reversed. The trial court is directed to enter a new order
    compelling arbitration pursuant to the parties’ Arbitration Agreement.
    CHOU, J.
    We concur.
    JACKSON, P.J.
    SIMONS, J.
    (Thompson v. SF Markets A167659)
    5
    Because we reverse the trial court’s decision on the ground that SF
    Markets did not waive its right to arbitrate under section 1281.97, we need
    not and do not address SF Markets’ alternative argument that section
    1281.97 is preempted by the FAA.
    16
    

Document Info

Docket Number: A167659

Filed Date: 9/23/2024

Precedential Status: Non-Precedential

Modified Date: 9/23/2024