Auto Car, Inc. vs. Silvi Rider
Nature of Proceeding:
Filed By:
Petition to Confirm Arbitration Award
Burr, Michelle A.

Petitioner Auto Car, Inc.’s petition for an order confirming arbitration award is granted. Petitioner seeks to confirm an award issued in its favor on September 6, 2012 in a JAMS arbitration between itself and Respondent Silvi Rider (“Rider”) in a dispute under a Retail Installment Sales Contract (“RISC”). Rider alleged, among other things, that the Consumer Legal Remedies Act and the Rees-Levering Act were violated in connection with her purchase of a vehicle. Rider eventually sought to appeal the award through JAMS. JAMS ordered that Petitioner pay the fees for the appeal but it refused to do so. JAMS eventually terminated the appeal proceeding based on the fact that the fees for an appeal/new arbitration were not paid.

Pursuant to CCP § 1285, “[a]ny party to an arbitration in which an award has been made may petition the court to confirm, correct or vacate the award.” The petition shall be granted “unless in accordance with this chapter it corrects the award and confirms it as corrected, vacates the award or dismisses the proceeding.” (CCP § 1286) “A petition to confirm an award shall be served and filed not later than four years after the date of service of a signed copy of the award on petitioner. A petition to vacate an award or correct an award shall be served and filed not later than 100 days after the date of the service of a signed copy of the award on the petitioner.” (CCP § 1288)

Here, the petition is filed within four years of the September 6, 2012 award in Petitioner’s favor and Rider never filed a petition to vacate or correct the award. Rider opposes the petition on the basis that the petition is untimely and that it is filed in the wrong court, and that Petitioner waived its right to arbitrate/confirm the arbitration award by failing to pay the fees for her appeal as ordered by JAMS. None of these contentions have merit.

The arbitration provision in the RISC provides that “[a]ny arbitration under this Arbitration Clause shall be governed by the Federal Arbitration Act (9 U.S.C. § 1 et seq.) and not by State law concerning arbitration.” Rider first argues that the petition is untimely and brought in the wrong court based upon 9 U.S.C. § 9. That section provides that petitions to confirm arbitration awards governed by the FAA where the parties in their agreement “have agreed that a judgment of the court shall be entered upon the award made pursuant to the arbitration, and shall specify the court, then at any time within one year after the award is made any party to the arbitration may apply to the court so specified for an order confirming the award…” (9 U.S.C. § 9 [emphasis added].)

That section also provides that where the agreement does not specify which court the petition is to be brought, it “may be made to the United States court in and for the district within such award was made.” (Id. [emphasis added].) Here, the instant petition was filed in Sacramento Superior Court on October 8, 2013, yet the award was made on September 6, 2012, more than one year prior.

The plain language of § 9 with respect to both the one year period and venue are permissive, not mandatory. This is confirmed by the numerous authorities interpreting 9 U.S.C. § 9. (E.g. Nordin v. Nutri/System, Inc. (8th Cir. 1990) 897 F.2d 339, 344; Sutter Corp. v. P & P Indus., Inc. (5th Cir. 1997) 125 F.3d 914, 920; see also Kolowski v. Blatt, Hasenmiller, Liebsker, & Moore, LLC (N.D.Ill. 2008) 2008 U.S.Dist.LEXIS 22935 at *10-11 [“The purpose and structure of the FAA better support that the one-year period stated in § 9 is permissive, not mandatory. [citations omitted] Applying the permissive reading is consistent with the venue provision of the FAA being read as permissive”].) Further, with respect to the proper court, the parties’ agreement states that “[a]ny court having jurisdiction may enter judgment on the arbitrator’s award.” (Exh. A to petition). Clearly this court has jurisdiction given the underlying dispute took place in California, is between California residents, and Rider sought relief under California law. Moreover, a federal court has no jurisdiction over this dispute. Indeed, the FAA does not automatically confer federal jurisdiction and the parties must establish an independent basis for federal jurisdiction. (General Automatic Co. v. United Nuclear Corp. (9th Cir. 1981) 655 F.2d 968, 969 [“We hold that applicants who, in federal district court, seek confirmation of an arbitration award under 9 U.S.C. § 9, must demonstrate independent grounds of federal subject matter jurisdiction”].) The Court finds this rationale of the numerous federal courts persuasive, and thus the fact that the instant petition was filed more than one year after the arbitration award and in state court does not bar the instant petition.

Rider next argues that Petitioner has essentially waived its right to have the award confirmed because it failed to pay the fees ordered by JAMS after Rider demanded a new arbitration. The Court rejects this argument for a number of reasons. First, the opposition on these grounds is essentially a motion to vacate the award because of an irregularity in the proceedings. However, a motion to vacate the award “must be served upon the adverse party or his attorney within three months after the award is filed or delivered.” (9 U.S.C. § 12 [emphasis added].) This provision not only bars petitions to vacate an arbitration award brought three months after the award but also bars attempts to vacate the award raised in opposition to a motion to confirm the arbitration award. (International Longeshoremen’s & Warehousemen’s union, Local 32 v. Pacific Maritime Association, et al.(9th Cir 1985) 773 F.2d 1012, 1019 [“Several decisions in this and other circuits have held that a party’s failure to petition to vacate an arbitration award within the relevant statutory limitations period will preclude the assertion of affirmative defenses in a subsequent action to confirm the award”]; see also Florasynth, Inc. v. Pickholz (2nd Cir. 1984) 750 F.2d 171, 175.) Even if the FAA did not apply, the opposition arguments would be untimely pursuant to CCP § 1288 which requires any motion to vacate be made not later than 100 days after the date of the service of a signed copy of the award on the petitioner. On this basis alone, given that Rider never moved to vacate the arbitration award within the mandatory time period in 9 U.S.C. § 12, or CCP § 1288, Rider’s substantive arguments in opposition to the petition to confirm are untimely and rejected.

In any event, the arguments lack merit. Relying upon Cinel v. Barna (2012) 206 Cal.App.4th 1383, Rider argues that Petitioner waived the right to arbitrate/have the award confirmed because it failed to pay the fees JAMS ordered it to pay when Rider attempted to obtain review of the arbitration award. Cinel is inapposite. There, the defendant’s petition to compel arbitration was granted by the trial court but that same defendant refused to pay the fees to commence the AAA proceeding. AAA terminated the proceeding based on the defendant’s failure to pay. The matter was returned to trial court and arbitration was again sought to be compelled. The trial court found that the right to arbitrate had been waived by failing to pay the fees required by AAA under its rules to commence the arbitration. (Id., at 1389.) By contrast here, while JAMS terminated the proceeding, specifically, the appeal from the final award, due to the failure to pay fees which it ordered Petitioner to pay, the parties fully arbitrated the matter and a final award had been issued. Moreover, as further discussed below, there was a legitimate dispute in the instant matter as to whether Petitioner was required to pay the fees for Rider’s appeal/new arbitration and there was no dispute in Cinel as to whether the party that sought to compel arbitration was responsible for fees. Further, Cinel involved the question of waiver of the right to arbitrate, not a proceeding to confirm an arbitration award.

In addition, Rider’s “waiver” argument hinges on a finding that Petitioner was required to pay her fees for an appeal in the JAMS proceeding simply because the parties selected to utilize JAMS for the subject arbitration. A review of the RISC and the surrounding circumstances shows why the Court cannot find any waiver. Under the RISC a party is allowed to demand a new arbitration in the event they received an award of zero dollars. The RISC provided such appealing party requesting a new arbitration was required to pay the filing fee and other arbitration costs. In addition, the RISC allowed the parties to select an arbitration organization and its applicable rules. Here the parties selected JAMS. The RISC also provided that if “the chosen arbitration organization’s rules conflict with this Arbitration Clause, then the provisions of this Arbitration Clause shall control.” JAMS rules contain an Optional Arbitration Appeal Procedure which provides that any appeal of a final award must be filed within 14 calendar days after the award is final. (Oppo. Exh. 7, § B(1).) This means that Rider’s appeal was due by September 20, 2012. Rider did not file an appeal/demand for new arbitration until December 2012. (Oppo. Exh. 6.) Thus, under JAMS rules, the appeal or demand for a new arbitration was untimely. However, JAMS treated the appeal as a new consumer arbitration and required

Petitioner to pay Rider’s fees pursuant to JAMS’ streamlined arbitration rules. Petitioner objected to that demand on the basis that JAMS’ rules stated that fees would be governed by the Parties’ agreement if it cover that topic, and the RISC here specifically required Rider, as the appealing party “requesting new arbitration” to pay such fees. Thus, while Rider argues that Petitioner cannot rely on any provision in the RISC regarding arbitration costs because the parties agreed to use JAMS rules and JAMS ordered Petitioner to pay the fees, as shown by Petitioner JAMS rules actually provided that the parties’ agreement governs where fees were covered in the agreement as is the case here. The Court need not make any determination as to whether JAMS was correct in demanding Petitioner pay the fees, only that under the circumstances, Petitioner’s legitimate protest and refusal to pay the JAMS fees was not a waiver of any right, specifically, the right to move to confirm the final arbitration award. Indeed, as noted in the very case cited by Rider, “[t]here is a presumption against waiver, and the party seeking to demonstrate waiver bears a heavy burden or proof.” (Cinel, supra at 1390.) In any event, the above is essentially a request to vacate the arbitration award and as such is untimely as already discussed.

The petition to confirm the arbitration award is granted.

Petitioner’s request for judicial notice is granted.

Pursuant to CRC Rule 3.1312, Petitioner shall submit an order for the Court’s signature and a judgment pursuant to CCP § 1287.4.

The notice of hearing does not provide notice of the Court’s tentative ruling system as required by CRC Rule 3.1308 and Local Rule 1.06(D). Petitioner’s counsel is ordered to notify Rider’s counsel immediately of the tentative ruling system and to be available at the hearing, in person or by telephone, in the event Rider’s counsel appears without following the procedures set forth in Local Rule 1.06(D).