1

Filed 9/8/23

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION THREE

JANE DOE,

Petitioner,

v.

THE SUPERIOR COURT OF THE 

CITY AND COUNTY OF SAN 

FRANCISCO,

Respondent;

NA HOKU, INC., et al.,

Real Parties in Interest.

 A167105

 (San Francisco

 City & County Super. Ct. 

 Case No. CGC-21-596749)

Petitioner Jane Doe sued real parties in interest – her former employer 

Na Hoku, Inc. and former manager Ysmith Montoya (collectively real parties) 

– asserting multiple claims arising from Montoya’s alleged sexual 

harassment and assault of Doe. Real parties successfully compelled the case 

to arbitration.

September 1, 20221 was the “due date” for real parties to pay certain 

arbitration fees and costs to the arbitrator. Under Code of Civil Procedure

section 1281.98, subdivision (a)(1) (section 1281.98(a)(1))2, these fees and 

costs had to be “paid within 30 days after the due date” – or by October 3 – to 

1 All dates hereafter refer to the year 2022 unless otherwise stated.

2 All statutory references are to the Code of Civil Procedure unless 

otherwise stated.
2

avoid breaching the arbitration agreement. Instead, the arbitrator received 

the payment on October 5, two days after the statutory 30-day grace period 

expired. This delay was because real parties opted to mail a check on Friday, 

September 30 for the full amount due on Monday, October 3 even though 

payment could be submitted by credit card, electronic check (also referred to 

as “ECheck”), or wire transfer. 

Petitioner moved to vacate the order compelling arbitration on the 

basis that real parties failed to pay their arbitration fees and costs within 30 

days of the due date as required by section 1281.98(a)(1). After the trial court

denied the motion, thus precluding petitioner from withdrawing from the 

arbitration and pursuing her claims in court, she filed a petition for writ of 

mandate in this court. 

In this writ proceeding, we strictly enforce the 30-day grace period in 

section 1281.98(a)(1) and conclude fees and costs owed for a pending 

proceeding must be received by the arbitrator within 30 days after the due 

date. We do not find that the proverbial check in the mail constitutes 

payment and agree with petitioner that real parties’ payment, received more 

than 30 days after the due date established by the arbitrator, was untimely. 

We therefore grant the writ petition.

FACTUAL AND PROCEDURAL BACKGROUND

On November 22, 2021, petitioner filed a complaint against real parties

asserting multiple claims arising from several incidents in which Montoya 

allegedly sexually harassed and assaulted her. Real parties successfully 

moved to compel arbitration, and the court ordered the case to binding 

arbitration.

On May 16, the American Arbitration Association (AAA) sent the 

parties a letter confirming the rules for arbitration and seeking payment of 
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the initial administrative fees. AAA explained: “This letter shall serve as the 

invoice pursuant to California Code of Civil Procedure Section 1281.97. 

Payment is due upon receipt of this letter. As this arbitration is subject to 

California Code of Civil Procedure 1281.97, payment must be received by 

June 15th, 2022 or the AAA will close the parties’ case. Pursuant to 

California Code of Civil Procedure 1281.97, the AAA cannot grant any 

extensions to this payment deadline. [¶] Please note payment should be 

submitted by credit card or electronic check.” (Underscoring omitted.) On 

May 24, real parties timely paid their initial administrative fees by credit 

card. 

On September 1, AAA sent the parties another letter and invoice 

seeking a deposit to cover the arbitrator’s anticipated compensation and 

expenses for the arbitration. The letter stated in relevant part: “Payment in 

the amount of $22,500 is due upon receipt of this notice for preliminary 

matters. . . . The case management fee [$750] is also due and reflected on 

your invoice. As this arbitration is subject to California Code of Civil 

Procedure 1281.98, payment must be received 30 days from the date of 

this letter to avoid closure of the parties’ case. Pursuant to California Code 

of Civil Procedure 1281.98, the AAA cannot grant any extensions to this 

payment deadline unless agreed upon by all parties.” (Emphasis in original.) 

The total amount owed was $23,250. The letter provided instructions for 

online payment and the invoice included a separate page of “Payment 

Options” which listed three ways to pay: (1) credit card or eCheck; (2) wire 

transfer; or (3) check to an address in Dallas, Texas. The invoice also noted: 

“Unless instructed otherwise, invoice balance due upon receipt.” 

On September 28, AAA e-mailed real parties the following message: 

“This is a courtesy reminder neutral compensation deposits in the amount of 
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$23,250 in the above-referenced matter were due as of September 1, 2022. 

An invoice is attached for your reference. As this arbitration is subject to 

California Code of Civil Procedure 1281.97 and 1281.98, payment must be 

received within 30 days of the due date. The AAA cannot grant any 

extension to this deadline. The last day to remit payment is October 3rd.” 

The same invoice and “Payment Options” enclosure listing credit card or 

eCheck, wire transfer, or check were included with the email.

On Friday, September 30, Na Hoku mailed a check for $23,250 to the 

Texas address provided. On Monday, October 3, counsel for real parties 

informed AAA that payment had been mailed. On October 5, AAA received

real parties’ payment and applied it to the case.

Petitioner moved to vacate the trial court’s order compelling arbitration

on the grounds that real parties had failed to pay their arbitration fees and 

costs within 30 days of the due date as required by statute. She argued their 

late payment was a material breach of the arbitration agreement and waived

their right to compel arbitration. 

Following further briefing and a hearing, the trial court denied the 

motion. Observing that “the provider’s demand was for payment remitted by 

October 3,” the court ruled that real parties “indisputably complied” with the 

date “having remitted (i.e., sent) the sum in by that date.” The court 

recognized the possible “ambiguity as to whether a ‘due’ date meant the day 

the sum had to be remitted or received by the provider” but concluded AAA’s 

second communication “clarified this: The date was for the remitting of the 

sum.” In the trial court’s view, because real parties’ remittance of payment 

by October 3 “satisfied the due date imposed by the provider, and that being 

so, § 1281.98 was complied with as well.” The court added, “§ 1281.98 
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requires the sum to be ‘paid’ – not necessarily ‘received’ – within the 30 day 

period. This was done here.” 

Petitioner filed the instant petition for writ of mandate or prohibition, 

or other appropriate relief, requesting we vacate the trial court order denying 

her motion to vacate. Upon our request, real parties filed an informal 

response to the petition. Petitioner filed an informal reply. We thereafter 

issued an alternative writ of mandate directing respondent superior court to 

set aside and vacate its order denying petitioner’s motion to vacate the order 

compelling arbitration, and to enter a new and different order granting the 

motion and addressing the request for sanctions in petitioner’s motion.

The trial court issued an order declining to comply with the alternative 

writ. Real parties filed a return to the petition, to which petitioner filed a 

reply (traverse). We now turn to the merits of the petition.

DISCUSSION

Petitioner argues the trial court misinterpreted section 1281.98 in 

allowing real parties more than 30 days to pay arbitration fees and costs. We 

agree. 

I. Applicable Law

Ordinarily, a trial court’s determination that a party waived the right 

to arbitrate is subject to substantial evidence review. (Burton v. Cruise

(2010) 190 Cal.App.4th 939, 946.) However, where the parties do not dispute 

the factual support for the trial court’s ruling, but instead dispute the proper 

interpretation of section 1281.98, the appellate court’s review is de novo.

(De Leon v. Juanita’s Foods (2022) 85 Cal.App.5th 740, 749–750 (De Leon); 

Carmel Development Company, Inc. v. Anderson (2020) 48 Cal.App.5th 492, 

503 [“We review a trial court’s interpretation and application of statutes de 

novo.”].)
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“In 1961, the California Legislature enacted the California Arbitration 

Act (CAA) (§ 1280 et seq.) as a way to protect the right of private parties to 

resolve their disputes through the ‘efficient, streamlined procedures’ of 

arbitration.” (Gallo v. Wood Ranch USA, Inc. (2022) 81 Cal.App.5th 621, 633

(Gallo).) In 2019, the California Legislature added sections 1281.97 and 

1281.98 to the CAA. (Gallo, supra, at p. 633.) Section 1281.97 sets forth the 

procedures by which a company that has included a predispute arbitration 

provision in a contract with an employee must pay its share of initiation fees 

or costs for the arbitration. (§§ 1281.97, subd. (a); 1280, subd. (e).) Section

1281.98, subdivision (a) (section 1281.98(a)) sets forth the procedures for a

company’s payment of fees and costs while an arbitration proceeding is 

pending. Section 1281.98(a)(1) provides in relevant part: “In an employment 

or consumer arbitration that requires . . . that the drafting party pay certain 

fees and costs during the pendency of an arbitration proceeding, if the fees or 

costs required to continue the 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 the employee or consumer to proceed with that arbitration as a result 

of the material breach.” (§ 1281.98, subd. (a)(1).)

Section 1281.98, subdivision (a)(2) (section 1281.98(a)(2)) states the 

arbitration provider “shall provide an invoice for any fees and costs required

for the arbitration proceeding to continue to all of the parties to the 

arbitration. The invoice shall be provided in its entirety, shall state the full 

amount owed and the date that payment is due, and shall be sent to all 

parties by the same means on the same day. 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 
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arbitration provider shall issue all invoices to the parties as due upon receipt. 

Any extension of time for the due date shall be agreed upon by all parties.” 

(§ 1281.98, subd. (a)(2).)

A company’s breach of its payment obligation in section 1281.98(a) 

confers upon the employee the choice of (1) withdrawing the claim from 

arbitration and proceeding in a court of appropriate jurisdiction; (2) 

compelling arbitration but requiring the company to pay reasonable 

attorney’s fees and costs related to the arbitration; (3) petitioning the court 

for an ordering compelling the company to pay all arbitration fees it is 

obligated to pay under the arbitration agreement or rules provided by 

arbitrator; or (4) paying the company’s fees and proceeding with the 

arbitration. (§ 1281.98, subds. (b)(1)–(4).)

A company that materially breaches an arbitration agreement under 

section 1281.98(a) is also required to pay the “reasonable expenses, including 

attorney’s fees and costs, incurred by the employee . . . as a result of the 

material breach” (§1281.99, subd. (a)), and may also suffer an evidentiary, 

terminating, or contempt sanction unless it “acted with substantial 

justification” or “other circumstances make the imposition of the sanction 

unjust” (§ 1281.99, subd. (b)).

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II. Analysis

September 1 was the “due date” for payment of the arbitration fees and 

costs at issue in this appeal. Section 1281.98(a)(2) allows the parties to agree

3 The procedures set forth in section 1281.98 for the payment of costs for 

a pending arbitration largely parallel those set forth in section 1281.97 for 

the payment of costs associated with initiating an arbitration. (See 

§§ 1281.97, subds. (a)–(d); Gallo, supra, 81 Cal.App.5th at p. 633, fn. 4 [noting 

its analysis of section 1281.97 “applies with equal force to the parallel 

provisions of section 1281.98”].)
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to a due date for payment of any required fees or costs in their arbitration 

agreement and allows the parties to agree to an extension of the due date;

neither party identifies any such agreement. Therefore, pursuant to section 

1281.98(a)(2), any required fees or costs were “due upon receipt” of the 

invoice issued to the parties. (§ 1281.98, subd. (a)(2).) As September 1 was 

the day the relevant invoice was e-mailed to the parties, that date –

September 1 – was the “due date” for payment. 

Under section 1281.98(a)(1), real parties had to pay necessary fees and 

costs to continue the arbitration “within 30 days after the due date” to avoid 

breach. (§ 1281.98, subd. (a)(1).) Since September 1 was the due date, the 

statutory 30-day grace period expired no later than October 3.4 Indeed, 

AAA’s September 1 letter emphasized that “payment must be received within 

30 days from the date of this letter” and its September 28 courtesy reminder 

email stated October 3 was the last day to remit payment. Neither party ever 

objected to these deadlines. 

There is no dispute that real parties mailed a check to AAA for $23,250

on September 30 and that AAA received and applied the payment on October 

5. The issue before us is whether real parties’ payment was “paid within 30 

days after the due date” and thus was timely within the meaning of section 

1281.98. According to petitioner, section 1281.98 “must be interpreted to 

require receipt of payment within the 30-day deadline,” and since real 

parties’ payment was not received until October 5 – two days after the grace 

period expired – real parties breached the arbitration agreement and waived 

their right to arbitrate. Real parties, on the other hand, counter that 

4 Thirty days after the September 1 due date was October 1, which fell 

on a Saturday. While the relevant provisions of the CAA do not discuss 

extensions when a performance deadline falls on a weekend or holiday, no 

party rejects Monday, October 3 as the extended deadline for payment. 
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remitting payment by October 3 made for a timely payment, and thus, the 

check it mailed on September 30 was on time regardless of its actual receipt 

date (October 5). 

A. Statutory Construction

Since we are called on to interpret what “paid within 30 days after the 

due date” in section 1281.98 means, we do so according to well-established 

principles of statutory construction. “ ‘As in any case involving statutory 

interpretation, our fundamental task here is to determine the Legislature’s 

intent so as to effectuate the law’s purpose. [Citation.] We begin by 

examining the statute’s words, giving them a plain and commonsense 

meaning.’ [Citation.] ‘[W]e must first look to the words of the statute 

because they are the most reliable indicator of legislative intent. [Citation.]

If the statutory language is clear and unambiguous, the plain meaning of the 

statute governs.’ [Citation.] [¶] ‘If, however, the language supports more 

than one reasonable construction, we may consider “a variety of extrinsic 

aids, including the ostensible objects to be achieved” ’ and the statute’s 

legislative history.” (De Leon, supra, 85 Cal.App.5th at p. 750.)

1. Plain Meaning

Here, the statutory language is not clear. While some terms in the 

statutory scheme are defined (see § 1280), there is no definition for the term 

“paid” in the clause “if the fees or costs required to continue the arbitration 

proceeding are not paid within 30 days after the due date.” (§ 1281.98, subd. 

(a)(1).) Absent a statutory definition, we may turn to dictionaries to look for 

a word’s usual, ordinary meaning. (Wasatch Property Management v. Degrate

(2005) 35 Cal.4th 1111, 1121–1122.) In the case before us, that inquiry does 

not lead us to a definitive conclusion. Webster provides a number of 

definitions for “pay” (including “to make due return to for services rendered 
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or property delivered,” “to give in return for goods or service,” and “to make a 

disposal or transfer of (money)”) and “paid” as “marked by the receipt of pay,” 

or “being or having been paid or paid for.” (Merriam-Webster Dict. Online,

(2023) <https://www.merriam-webster.com/dictionary/pay>, 

<https://www.merriam-webster.com/dictionary/paid>, [as of September 8, 

2023].) Black’s Law Dictionary has no separate entry for “paid” but offers 

multiple definitions of “pay”: “1. To give money for a good or service that one 

buys . . . . 2. To transfer money that one owes to a person, company, etc. . . .

3. To give (someone) money for the job that he or she does . . .” (Black’s Law 

Dict. (11th ed. 2019).) 

Hence, and while we acknowledge that most service providers would 

not consider themselves “paid” until they received payment, the term “paid” 

is reasonably subject to more than one interpretation. We therefore turn to 

extrinsic aids including the statute’s legislative history to reach an 

interpretation that best comports with the Legislature’s purpose.

2. Legislative History

In 2019, when section 1281.97 and 1281.98 were added to the CAA with 

the passage of Senate Bill No. 707 (SB 707), the Legislature recognized that a 

“ ‘company’s failure to pay the fees of an arbitration provider’ ” as required by 

an arbitration agreement or applicable law “ ‘hinder[ed] the efficient 

resolution of disputes and contravene[d] public policy.’ ” (De Leon, 85 

Cal.App.5th at p. 750.) SB 707 aimed to solve a very specific problem –

namely, the “procedural limbo and delay workers and consumers face when 

they submit to arbitration, pursuant to a mandatory arbitration agreement,

but the employer fails or refuses to pay their share of the arbitration fees.”

(Assem. Floor Analysis, 3d reading analysis of Sen. Bill No. 707 (2019-2020 

Reg. Sess.) as amended May 20, 2019, p. 2; see also Gallo, supra, 81 
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Cal.App.5th at pp. 633–634.) The Legislature noted that when an employer 

“fails to properly pay for the arbitration, existing law does not provide the 

employee and customer with a clear means to redress their harms. Although 

courts have held that such failures to pay for arbitration may be grounds to 

invalidate an arbitration agreement, state law does not provide clear 

guidance for courts and litigants in the event a drafting party fails to 

properly pay to commence arbitration in a timely manner.” (Assem. Comm. 

on Judiciary, analysis of Sen. Bill 707 (2019-2020 Reg. Sess.), as amended 

May 20, 2019, p. 6.)

According to the bill’s author: “SB 707 [ensures that] individuals who 

have been forced to submit to mandatory arbitration to resolve an 

employment or consumer dispute would be provided with procedural options 

and remedies . . . when a company stalls or obstructs the arbitration 

proceeding by refusing to pay the required fees.” (Sen. Floor Analysis, 3d 

reading analysis of Sen. Bill No. 707 (2019-2020 Reg. Sess.) as amended Apr. 

30, 2019, p. 6.) Foremost among the remedies provided by SB 707 is that “if 

the fees or costs to initiate or continue 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 pursuant to existing law.” (Assem. Floor 

Analysis, 3d reading analysis of Sen. Bill No. 707 (2019-2020 Reg. Sess.) as 

amended May 20, 2019, p. 1.) Analysis of the bill further provided: “In light 

of the extreme hardship that needlessly delaying arbitration may cause to

plaintiffs, the material breach and sanction provisions of this bill would seem 

to be a strict yet reasonable method to ensure the timely adjudication of 

employee and consumer claims that are subject to arbitration.” (Assem. Com. 
12

on Judiciary, Analysis of Sen. Bill No. 707 (2019-2020 Reg. Sess.), as 

amended May 20, 2019, p. 9.)

While we identified nothing in the legislative history that addresses

whether payment of arbitration costs “within 30 days after the due date” 

means received or remitted within the 30-day grace period, the legislative 

purposes in enacting sections 1281.97 and 1281.98 help inform our 

construction. One of the Legislature’s main objectives was to deter employers 

from strategically withholding payment of arbitration fees so that they could 

no longer stymie the ability of employees to assert their legal rights. To do 

this, the Legislature established strict breach provisions for nonpayment that 

did not involve any inquiry into the intent or good faith of an employer or the 

reasons for nonpayment. Any untimely payment constituted a material 

breach regardless of the circumstances or status of the arbitration 

proceedings. The Legislature further sought to provide employees clear 

guidance in the event of untimely payment and to have such breaches strictly 

enforced. 

Courts that have considered the legislative history of sections 1281.97 

or 1281.98 share these views. The court in De Leon, supra, 85 Cal.App.5th 

740, observed that section 1281.98’s “30-day deadline establishes a clear-cut 

rule for determining if a [company] is in material breach of an arbitration 

agreement.” (De Leon, at p. 755.) The statute’s “legislative history indicates 

the California Legislature sought a clear and unambiguous rule for courts to 

apply in determining whether late payment of arbitration fees by a drafting 

party constituted a material breach of an arbitration agreement.” (Id. at p. 

756.) The court in Cvejic v. Skyview Capital, LLC (2023) 92 Cal.App.5th 1073

(Cvejic), observed that “the Legislature sought a clear rule for determining 

whether the late payment of a fee by a drafting party constituted a material 
13

breach” and further observed that the legislative history and caselaw directed 

strict enforcement of section 1281.98. (Cvejic, supra, at p. 1078.) In 

construing section 1281.97, the court in Espinoza v. Superior Court (2022) 83 

Cal.App.5th 761 (Espinoza), remarked: “[T]he Legislature intended the 

statute to be strictly applied whenever a drafting party failed to pay by the 

statutory deadline.” (Id. at p. 776.) In short, the courts that have examined 

the legislative history agree the Legislature sought to establish a clear and 

unambiguous rule for determining a breach based on nonpayment as well as 

strict enforcement of the statute.

Here, the construction offered by petitioner, i.e., payment made and 

received within 30 days of the due date, best effectuates this legislative 

purpose. (See Beal Bank, SSB v. Arter & Hadden, LLP (2007) 42 Cal.4th 

503, 508 [when statutory language is ambiguous, the court adopts the 

interpretation that best effectuates the legislative intent].) This construction 

provides a clear, bright-line rule for determining compliance with the 30-day 

statutory grace period as the arbitrator can readily and definitively 

determine whether funds have been received to satisfy any outstanding fees 

or costs owed for a pending arbitration. If such fees are not received by the 

conclusion of the statutory grace period, an employee may immediately elect 

to pursue options for relief.

The alternative construction endorsed by real parties, i.e., sending 

funds within 30 days of the due date satisfies the deadline, risks delay and 

uncertainty as to the timeliness of payment given possible delays and the 

need to allow for an appropriate period for delivery. It therefore precisely 

invites the types of issues the Legislature sought to avoid with a bright-line 

rule. Because this construction is more prone to leave an employee with 
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uncertainty and hinder the efficient resolution of a dispute, both of which run 

counter to the legislative intent, we decline to adopt it.

3. Case Law Supporting Strict Construction

Our construction is further supported by recent case law in which 

courts have strictly enforced the statutory deadlines of 1281.97 and 1281.98. 

These cases have uniformly rejected invitations to consider discretionary 

factors, e.g., the intent of the employer or prejudice to the employee, in 

determining compliance with the statutes or materiality of the breach.

In Espinoza, supra, 83 Cal.App.5th 761, the appellate court reversed 

the trial court’s conclusion that a defendant’s late payment of an arbitration 

provider’s invoice was “in ‘substantial[ ] compliance’ with the arbitration 

agreement and ‘not in material breach,’ because the delayed payment was 

due to ‘ “clerical error,” ’ and the delay did not prejudice plaintiff.” (Id. at p. 

775.) The court found the “language of section 1281.97 is unambiguous. . . . 

[T]he triggering event is nothing more than nonpayment of fees within the 

30-day period—the statute specifies no other required findings, such as 

whether the nonpayment was deliberate or inadvertent, or whether the delay 

prejudiced the [employee]. The plain language therefore indicates the 

Legislature intended the statute to be strictly applied whenever a [company]

failed to pay by the statutory deadline.” (Espinoza, at p. 776.)

In De Leon, supra, 85 Cal.App.5th 740, the parties agreed the employer 

did not pay the outstanding arbitration fees within 30 days after the due date 

set by the arbitrator. (Id. at p. 748.) Relying on the plain language of section 

1281.98, the trial court concluded that “ ‘a defendant is automatically in 

material breach of the arbitration agreement once the defendant fails to pay 

the arbitration fees or costs within 30 days of the due date.” (De Leon, at pp. 

748–749.) It declined the employer’s request to consider additional factors 
15

beyond the late payment, such as whether it caused delay in the proceedings 

or otherwise prejudiced the plaintiff, to determine whether the employer 

materially breached the agreement. (Ibid.) The appellate court affirmed the 

trial court order vacating the earlier order compelling arbitration. (Id. at p. 

758.) In doing so, it rejected the employer’s argument that the trial court’s 

construction was a “ ‘hyper-technical reading’ of section 1281.98 that failed to 

account for whether a late payment caused delay or prejudiced the employee.” 

(De Leon, at p. 752.) Finding the language in section 1281.98 “clear and 

unambiguous,” the court explained it “establishes a simple bright-line rule 

that a [company’s] failure to pay outstanding arbitration fees within 30 days 

after the due date results in its material breach of the arbitration 

agreement.” (De Leon, at pp. 753, 755 [the statute’s “30-day deadline 

establishes a clear-cut rule for determining if a drafting party is in material 

breach of an arbitration agreement”].) 

In Williams v. West Coast Hospitals, Inc. (2022) 86 Cal.App.5th 1054

(Williams), the trial court granted the plaintiffs’ motion to withdraw from 

arbitration because the hospital, which was being sued for elder abuse among 

other claims, had not timely paid its share of arbitration fees under section 

1281.98. (Williams, at p. 1063.) In affirming the order allowing the plaintiffs 

to withdraw, the court acknowledged that the hospital’s “belated payment 

was unintentional” and that “the ensuing delay amounted to a few days” but 

concluded that “nothing in section 1281.98 as drafted depends on the intent 

or good faith of a particular [company] in a specific case. [Citations.] To 

further its stated purpose, the Legislature in enacting sections 1281.97 and 

1281.98 chose to neither require nor permit an inquiry into the reasons for a 

drafting party’s nonpayment.” (Williams, at pp. 1074–1075.)
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While none of these cases addresses whether payment of arbitration 

costs “within 30 days after the due date” means received or remitted, they 

clearly reflect that section 1281.98 has been construed to provide a 

straightforward, clear, and unambiguous rule for when the payment 

obligation is breached and emphasize the legislative intent for the statute’s

strict enforcement. (See also Gallo, supra, 81 Cal.App.5th at p. 644 [section 

1281.97 “statutorily defines a material breach as a matter of law to be failure 

to pay anything less than the full amount due by the expiration of the 

statutory grace period, rather than leaving materiality as an issue of fact for 

the trier of fact to determine”].)

Our construction and rejection of real parties’ interpretation is also in 

line with the general principle that the depositing a check in the mail does 

not constitute payment. (See Navrides v. Zurich Ins. Co. (1971) 5 Cal.3d 698, 

706 [“the mere giving of a check payable to the agent does not constitute 

payment”]; Cornwell v. Bank of America (1990) 224 Cal.App.3d 995, 999 

[“ ‘Payment is not effectuated by sending the amount due to the creditor by 

mail or other public carrier until the remittance gets into the hands of the 

creditor, unless he expressly or by implication directs or consents that 

payment be so made, or such mode of payment is according to the usual 

course of dealings between the parties, from which the creditor’s assent can 

be inferred.’ ”]; Nguyen v. Calhoun (2003) 105 Cal.App.4th 428, 439–440 

[“ ‘The deposit of a payment check in the mail does not constitute payment. 

The borrower assumes the risk that the deposited payment will be delivered 

and received by the beneficiary. When a creditor directs a debtor to mail 

payment, it is deemed that the payment is made when it is deposited in the 
17

mail. Otherwise, the payment is not effective until received by the 

creditor.’ ”].)5

4. Real Parties’ Counterarguments

Real parties contend the trial court correctly determined AAA’s 

instructions governed the payment of fees and costs they owed because the 

Legislature gave the arbitrator the authority to state the date payment is 

due. Therefore, AAA’s instruction that October 3 was the last day to remit 

payment established both the deadline and that sending payment in the form 

of a check by that deadline would constitute timely payment. Real parties 

further argue the plain meaning of “remit” is to send or transmit and does 

not involve delivery or receipt. None of these arguments are persuasive or 

compel a different result.

First, real parties overstate the arbitration provider’s ability to set 

payment deadlines or to dictate the terms of payment. As set forth in section 

1281.98(a)(2), “[t]he arbitration provider shall provide an invoice for any fees 

and costs required for the arbitration proceeding to continue to all of the 

parties to the arbitration. The invoice shall be provided in its entirety, shall 

state the full amount owed and the date that payment is due, and shall be 

sent to all parties by the same means on the same day. 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 

5 Civil Code section 1476, which creates an exception when the creditor 

directs payment in a particular manner, provides: “If a creditor, or any one of 

two or more joint creditors, at any time directs the debtor to perform his 

obligation in a particular manner, the obligation is extinguished by 

performance in that manner, even though the creditor does not receive the 

benefit of such performance.” (Civ. Code, § 1476.) Real parties do not argue 

this provision applies, so we do not consider it.
18

upon receipt. Any extension of time for the due date shall be agreed upon by 

all parties.” (§ 1281.98, subd. (a)(2).) The statute directs arbitrators to set 

invoices as “due upon receipt” barring agreement by the parties, provides for 

an automatic 30-day statutory grace period, and only contemplates 

extensions of the due date by agreement of the parties, not by the arbitration 

provider. (§ 1281.98, subds. (a)(1)–(2).) Once the due date has been set, there 

is no provision in section 1281.98 which contemplates any extension of the 

statutory 30-day grace period. Therefore, once AAA set the due date as 

September 1 – the day it emailed the relevant invoice to the parties – and 

triggered the 30-day grace period, it had no authority to alter the due date 

absent the parties’ agreement. When AAA emailed its September 28 courtesy 

reminder, it has no authority to adjust the statutory 30-day grace period 

either. 

Second, even if the final sentence in AAA’s courtesy reminder noting 

that “the last day to remit payment [was] October 3rd” created some 

unfortunate confusion as to whether payment had to be received or could 

simply be sent by that date, there is no basis for this instruction to have 

controlled how payment must be made or to have superseded AAA’s earlier 

instructions which clearly notified real parties payment needed to be 

“received.” Real parties identify no provision in the statute which allows the 

arbitration provider to set terms, including how payment is made, which 

alter payment deadlines.6 

6

In any event, real parties’ heavy reliance on the “remit” instruction also 

overlooks the explicit text in AAA’s letter of September 1 emphasizing in bold 

that “payment must be received 30 days from the date of this letter” 

(italics added), and the earlier sentence in the courtesy reminder email 

repeating that “payment must be received within 30 days of the due date.” 

Across its two communications about the invoice, AAA did not consistently 
19

 Third, we do not quarrel with real parties’ plain meaning analysis of 

the term “remit” and the authorities it relies on construing the term to mean 

send. But “remit” is not part of the text of section 1281.98 and does not 

control our construction of what the Legislature meant by “paid within 30 

days of the due date” in that statute.

Finally, we understand the payments in Espinoza, De Leon, and 

Williams were indisputably late, in contrast to our situation in which real 

parties contend their mailed check was timely. Even so, these cases 

underscore the need to strictly construe and enforce the terms of section 

1281.98 without exception. 

DISPOSITION

Let a peremptory writ of mandate issue commanding respondent in 

Doe v. Na Hoku, Inc., et al. (Super. Ct. S.F. City and County, No. CGC-21-

596749), to set aside and vacate its order of December 5, 2022 denying 

petitioner’s motion to vacate order compelling arbitration, and to enter a new 

and different order granting the motion and addressing the request for 

sanctions in petitioner’s motion. All parties shall bear their own costs 

associated with this writ proceeding. (Cal. Rules Court, rule 8.493(a).)

use the term “remit” when discussing compliance with the payment deadline. 

Further, they cite no authority to support their contention that the remit-byOctober 3 language superseded these instructions simply because it appeared 

last.
20

_________________________

Petrou, J.

WE CONCUR:

_________________________

Tucher, P.J.

_________________________

Fujisaki, J.

A167105/Doe v. Superior Court of the City and County of San Francisco
21

Trial Court: San Francisco County Superior Court

Trial Judge: Hon. Curtis Karnow

Counsel: Alexander Morrison + Fehr, Tracy L. Fehr; Malk Law Firm, 

Michael Malk for Petitioner.

Lewis Brisbois Bisgaard & Smith, Melissa Daugherty, 

Lann McIntyre, Caroline Chan, and Irene Gharapet for 

Real Parties in Interest.