Appealability: Second District, Div. 5 Holds Order Lifting Litigation Stay Is Unappealable

A Different Story If Order Lifting Stay Had Been Accompanied By Appealable Order Or Judgment

     The scenario in our next case arises from a circumstance that is not so rare:  one of the parties to arbitration refuses to pay the costs of arbitration.  That can lead to the end of the arbitration, as it did here, when defendant broker Remax, after acknowledging that arbitration agreements, which were employer-promulgated, intended that Remax pay costs of arbitration, and then declined to do so.  Because the arbitration fees remained unpaid, the American Arbitration Association administratively closed the arbitration proceeding.

     So far, the scenario is uncluttered.  However, there was an individual defendant, one Mr. Garcia-Yanez, as to whom litigation had been stayed pursuant to Cal. Code of Civ. Proc., section 1281.4, because Mr. Garcia-Yanez was not a party to an arbitration agreement with plaintiff.  Plaintiff moved to lift the stay, arguing that Remax’s conduct by failing to pay arbitration filing fees, terminated the arbitration proceeding.  Agreeing with plaintiff, the trial court lifted the stay, and an appeal followed. 

     Held:  an order setting aside a litigation stay is unappealable under Code of Civ. Proc., section 904.1, and only appealable under section 1281.4 (one of the arbitration statutory provisions) when there is another appealable order or judgment.  Gastelum v. Remax International, Inc., B263213 (2/5 Feb. 11, 2016) (Turner, Kriegler, Kumar).  Here, there was no other appealable order or judgment; indeed, there was no pending arbitration.

     COMMENT:  If the arbitrator believes a party is obligated to pay for the arbitration, and the party does not do so, the arbitrator may pull the plug on the arbitration.  With that in mind, the non-paying party needs to carefully weigh the advantages of the arbitral forum against the cost of paying for that forum.  The conventional wisdom is that employers do better in front of an arbitrator than in front of a jury, a consideration that the employer needs to take into account when deciding whether to pay.