Hobson’s Choice? – Defendant Can Choose To Pay Arbitration Fees If Trial Court Determines Plaintiffs Are Unable To Pay
“The only issue before us is whether plaintiffs, each of whom were subsequently 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.” That’s the holding in Roldan v. Callahan & Blaine, G047306 (4th Dist. Div. 3 Aug. 26, 2013) (Rylaarsdam, J. author 3:0) (published).
All the plaintiffs – elderly, of limited means, and relying on section 8 housing – settled the underlying case involving toxic mold, but reluctantly, after their attorneys (now defendants) unsuccessfully attempted to have their clients declared legally incompetent so that a guardian ad litem could be appointed to cooperate with the attorneys’ efforts. Plaintiffs sued their attorneys, based on the allegedly inadequate settlement, and attorney conduct. Defendants/attorneys successfully moved to compel arbitration.
The Court of Appeal refused “to effectively deprive [plaintiffs] of access to any form for resolution of their claims against Callahan.” An interesting comparison is the recent United States Supreme Court majority opinion, holding that the Federal Arbitration Act does not permit courts to invalidate a contractual waiver of class arbitration just because the plaintiff’s cost of individually arbitrating a federal statutory claim exceeds the potential recovery. American Express Co. et al. v. Italian Colors Restaurant et al., No. 12-133 (June 20, 2013). “Just too darn bad,” is how Justice Kagan, dissenting, described the Supreme Court majority opinion allowing arbitration and waiver of class action, even if the result was to effectively deprive plaintiffs of a viable forum – leaving them with a right but not an effective remedy.
Quotation of the day:
“In theory, a written contract is the embodiment of a fully and fairly negotiated agreement setting forth the terms and conditions governing a particular transaction or relationship. It reflects the mutual intentions and expectations of both parties, who have an equal understanding of the contract’s legal and practical effect. However, in cases where parties to the contract have widely divergent levels of sophistication, a written contract is often less the embodiment of true mutual agreement than it is the product of the drafting party’s desire and a series of legal fictions.”
Above: Rich and poor. Sol Eytinge. 1873. Library of Congress.