Motion to Compel Arbitration in California: Your Complete Guide

Arbitration clauses appear in most construction contracts. These clauses require disputed agreements to be submitted to arbitration instead of court. The process costs less than litigation and avoids numerous court procedures.

Arbitration offers flexible options to all parties involved. Disputes resolve faster while maintaining confidentiality between the parties. However, some parties prefer traditional litigation. They want the ability to appeal rulings in an open courtroom.

Judges know their decisions are recorded for public reference. Some parties decline to arbitrate disputes before filing in court. This happens even when written arbitration agreements exist.

The party compelling arbitration must establish a valid arbitration agreement. The opposing party provides evidence to defend itself. The trial court weighs affidavits, declarations, and evidence to determine arbitrability. Arbitration agreements are valid, irreversible, and enforceable on law and equity grounds.

Our partner Solo helps you respond to debt collection lawsuits quickly.

Motion to Compel Arbitration Process in California

The party compelling arbitration establishes its demand from the other party. The other party refuses to arbitrate as demanded by California Code of Civil Procedure Section 1281.2.

When the petitioner alleges an arbitration agreement exists, the respondent must prove the contract is false. If the respondent challenges the agreement’s existence, the petitioner proves the deal exists using valid evidence.

The other party might have already filed a court complaint. The complaint may allege claims covered by the arbitration agreement. In that case, the party pursuing arbitration does not need to prove its demand. The filed complaint effectively constitutes an arbitration refusal.

You must file and serve a motion within thirty days after being summoned. The motion keeps the action pending during arbitration of any arbitrable doubt. The doubt should be relevant to enforcing the claim of lien. Failure to comply may waive your right to compel arbitration.

How California Courts Handle Complaints

The respondent carries the burden of proving the agreement is void. California law constrains courts to interpret arbitration agreement terms liberally. Courts rule in favor of arbitration whenever possible.

Law courts do not grant waivers easily. You must provide substantial reasons why a waiver should be granted. No specific determinants for waivers exist. The court decides whether to grant or deny a waiver.

California law strongly favors arbitration agreement terms. The law conducts thorough judicial investigation of parties claiming waivers. When a party fails to adhere to arbitration terms, California law determines if the disputed agreement exists.

If the court finds the agreement is valid and legal, it orders both parties to arbitrate. The court first determines whether both parties agreed to arbitration. This determination derives from California contract law general principles.

Arbitration is like a contract. One party cannot force another to arbitrate a dispute they did not agree to submit. Failure to read agreement terms carefully is not a reason to avoid arbitration.

Can the Court Nullify Arbitration?

California courts order parties not to arbitrate if:

• The petitioner has waived the right to compel arbitration
• Grounds exist for agreement revocation
• The petitioner created the contractual relationship through fraud without consent and used identification details unlawfully
• A party in the arbitration agreement is involved in another ongoing court action with a third party related to the conflict

Litigation participation does not guarantee a waiver of arbitration rights. A party participating in a lawsuit for contract breach cannot logically request arbitration later. The party seeking a waiver must prove the other party suffered detriment from delayed arbitration.

The court allows arbitration if the petitioner’s disagreements are not distinct from the disputed agreement. If the court orders arbitration, it ensures both parties perform the agreement effectively.

Who Pays for Arbitration in California?

Arbitration can cost significant money. Who is responsible for paying arbitration fees?

The arbitration clause states which party must pay for arbitration. In many cases, the debt collector is responsible for paying fees. The Consumer Financial Protection Bureau has compiled a database of credit card agreements for all banks and credit cards in the US.

You can search the arbitration clause to find out who pays for arbitration. Our partner Solo can help you understand your agreement terms.

Example of Arbitration in California

Hyundai Amco subcontracted with S3H to design and construct mechanical systems. The contract included arbitration and California choice-of-law provisions.

During construction, after Hyundai Amco paid some arrears, S3H dissolved its business. S3H abandoned the agreement’s obligations. Hyundai Amco demanded S3H settle the dispute through written communication.

Without further communications, Hyundai Amco filed a case in Orange County Superior Court. Hyundai Amco sued for contract breach, conversion, concealment, intentional fraud, and other claims.

The court initially denied S3H’s motion to compel arbitration. S3H had failed to assert Hyundai Amco refused its arbitration demand. However, the Court of Appeal overruled the verdict. The court reasoned that Hyundai Amco should have commenced arbitration proceedings instead of filing a lawsuit.

This action affirmed Hyundai Amco’s refusal to arbitrate. This ruling has increased successful motions to compel arbitration in various cases.

How to File a Motion in California

Here are the basic steps for filing a Motion in California:

• Draft the Motion using a sample template
• Pay the Motion filing fee, which is $60 in California
• Submit the document to the court and opposing attorney

Our partner Solo can help you file the motion correctly. Check out California’s legal self-help site for more information on filing Motions.

Motion to Compel Arbitration Sample

Drafting and filing a motion to compel arbitration is easier than you think. Review sample motions to see if arbitration is right for your needs. A sample motion shows you the proper format and required language.

Petition to Compel Arbitration in California

Some California courts refer to the motion to compel arbitration as a Petition to Compel Arbitration. They mean the same thing. Even California’s Rule 3.1330 uses both titles. Don’t let the legal jargon confuse you.

What Comes After a Civil Summons for Debt Collection?

The Summons is just the beginning. A series of documents can come before and after the Summons. Multiple paths exist in a debt collection lawsuit.

You have options at each stage of the process. You can respond with an Answer. You can file a motion to compel arbitration. You can negotiate a settlement with the collector.

Filing a Motion to Compel Arbitration Instead of an Answer

According to California’s rules of civil procedure, you can file a motion to compel arbitration instead of an Answer. However, if the court denies the motion, you have 15 days from the denial to respond with an Answer.

Filing a motion instead of an Answer is a strategic decision. Consider the arbitration costs and your contract terms carefully. Arbitration may discourage the creditor from pursuing the case.

What Happens in Arbitration?

Understanding the arbitration process helps you make informed decisions. Here are helpful insights from a debt lawyer:

• Filing a motion to compel arbitration transitions your case from court to private arbitration
• Arbitration can be beneficial if arbitration costs for the creditor outweigh the debt value
• High costs may lead to dismissal of a debt lawsuit case
• Arbitration can be expensive since arbitrator fees are typically divided between both parties
• The process is similar to a court trial but more informal without a jury
• If you’re being sued for less than $30,000, arbitration might be strategic
• High costs could discourage the creditor from pursuing the case
• Contract terms determine who bears arbitration fees
• If you’re responsible for costs, arbitration may not be your best option
• Showing clear intent to challenge the case incentivizes creditors to settle

You are capable of negotiating settlements without an attorney. Understanding your case gives you the power to advocate for yourself. Our partner Solo provides tools to help you respond effectively.