Filed 1/24/24

CERTIFIED FOR PUBLICATION

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

ONECIMO SIERRA SUAREZ,

Petitioner,

v.

THE SUPERIOR COURT OF SAN 

DIEGO COUNTY,

Respondent;

 D082429

 

 (Super. Ct. No. 37-2022-00000615-

 CU-OE-CTL)

RUDOLPH & SLETTEN, INC.,

Real Party in Interest.

ORIGINAL PROCEEDING in mandate. Kenneth J. Medel, Judge. 

Petition granted.

Moon Law Group, Kane Moon, Allen Feghali, and Edwin M. 

Kamarzarian, Attorneys for Petitioner.

Nida & Romyn, Robert Nida, Matthew J. Luce, and William Schubert, 

Attorneys for Real Party in Interest. 

No appearance for Respondent.
2

Concerned with the fairness of adhesion contracts in the consumer and 

employment context that require the arbitration of disputes, beginning in 

2019 the Legislature enacted protections against delays in the arbitration 

process as a result of businesses and employers failing to pay the necessary 

fees before the arbitration can proceed. (Stats. 2019, ch., 870 (Sen. Bill No. 

707) § 1.) Amendments to these statutes in 2021 (Stats. 2021, ch. 222 (Reg. 

Sess. 2021–2022)) “obligate a company or business [that] drafts an 

arbitration agreement to pay its share of arbitration fees by no later than 30 

days after the date they are due, and specify that the failure to do so 

constitutes a ‘material breach of the arbitration agreement.’ ” (Gallo v. Wood 

Ranch USA, Inc. (2022) 81 Cal.App.5th 621, 629 (Gallo).) A material breach 

waives the contractual right to arbitration and the consumer or employee is 

permitted to litigate the dispute in court if he or she so chooses. 

After plaintiff Onecimo Sierra Suarez sued his employer for alleged 

wage and hour violations, the employer successfully moved to stay the court 

action and proceed to arbitration as provided in the employment agreement 

that the employer drafted. When the employer waited more than 30 days to 

pay its share of the arbitrator’s initial filing fee, Suarez unsuccessfully moved 

to vacate the arbitration stay. He now seeks writ relief directing the trial 

court to find that the employer has waived its right to arbitration pursuant to 

Code of Civil Procedure sections 1281.97 et seq.1 We agree and grant the 

petition. 

1 Undesignated statutory references are to the Code of Civil Procedure

unless otherwise indicated. 
3

FACTUAL AND PROCEDURAL BACKGROUND

Suarez is the plaintiff in a pending civil action in San Diego Superior 

Court. His claim asserts wage and hour violations against his former 

employer, defendant and real party Rudolph & Sletten, Inc. (R&S). In late

October 2022, on R&S’s motion, the superior court stayed the action and 

ordered the parties to arbitration. Then, in accordance with that order, 

Suarez filed his demand for arbitration, initiating the arbitration proceeding.

Less than a month later, on December 2, 2022, the arbitration provider, 

JAMS, Inc.2 issued an e-mail invoice for the initial filing fee to Suarez and 

R&S marked, “due upon receipt.” The total fee due was $1,750, allocated 

$400 to Suarez and $1,350 to R&S. Though it was not required, JAMS 

followed up on December 19, 2022 to request a status of payment. It is 

undisputed that R&S did not pay its share of the JAMS invoice until January 

4, 2023.

Within the next two weeks both parties filed competing motions in the 

superior court. R&S sought to compel compliance with the court’s earlier 

arbitration order, while Suarez filed a motion to vacate the stay of his civil 

action. Suarez contended that R&S had waived its right to arbitrate the 

dispute by failing to pay its share of the arbitration filing fee within 30 days 

as required by section 1281.97. R&S disagreed, asserting that it had until 

the close of business on January 5, 2022 to pay the invoice, making its 

January 4 payment timely. While conceding that its payment would 

normally have been due on January 1, 2023—30 calendar days after 

December 2, 2022—R&S argued that sections 12 and 1010.6 operated in 

tandem to extend the due date until January 5. The superior court agreed

2 JAMS stands for Judicial Arbitration and Mediation Services.
4

with R&S, granting the motion to compel compliance with the existing 

arbitration order and denying Suarez’s motion to lift the stay. We issued an 

order to show cause to review this issue of first impression. 

DISCUSSION

The nub of this dispute is the calculation of a statutory deadline for 

payment of arbitration filing fees, and whether any failure to meet that 

deadline constituted a material breach of the arbitration agreement. The 

superior court determined that the statutory deadline prescribed by section 

1281.97 was extended by operation of other unrelated statutes such that R&S 

made timely payment. R&S seeks to defend the court’s reasoning, but also 

argues that even if it missed the deadline, for various other reasons it was 

not in material breach of the arbitration agreement.

A. The grace period for payment of arbitration fees by R&S was not 

extended to January 5, 2023.

The Legislature enacted sections 1281.97 and 1281.98, recognizing that 

a “ ‘company’s failure to pay the fees of an arbitration provider’ ” in a timely 

manner “ ‘hinder[ed] the efficient resolution of disputes and contravene[d] 

public policy.’ ”3 (De Leon v. Juanita’s Foods (2022) 85 Cal.App.5th 740, 750

(De Leon).) Section 1281.97 requires that the provider transmit an invoice to 

the parties specifying “the full amount owed and the date that payment is 

due,” generally indicating the invoice is “due on receipt.” (Id., subd. (a)(2).) 

3 The primary difference between sections 1281.97 and 1281.98 is that 

“section 1281.97 concerns a failure to timely pay ‘the fees or costs to initiate’ 

an arbitration proceeding,” whereas “section 1281.98 concerns a failure to 

timely pay ‘the fees or costs required to continue’ an arbitration proceeding.” 

(De Leon, supra, 85 Cal.App.5th at p. 750, quoting §§ 1281.97, subd. (a)(1), 

1281.98, subd. (a)(1).) Because this case focuses on initial fees, we will refer 

primarily to section 1281.97.
5

It also allows a grace period for payment of “30 days after the due date.” 

(Id., subd. (a)(1).) 

This legislation was aimed at a very specific problem—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. 

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

amended May 20, 2019, p. 11 (Assembly Report).) Prior to the enactment, 

state law did “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.” (Id., at p. 6.) “That problem was fixed with the ‘material breach 

and sanction provisions’ of the statute, which constitute a ‘strict yet 

reasonable method to ensure the timely adjudication of employee and 

consumer claims that are subject to arbitration.’ ” (De Leon, supra, 85 

Cal.App.5th at p. 757, quoting Assembly Report, at p. 9; see also Doe v. 

Superior Court (2023) 95 Cal.App.5th 346, 357 (Doe).4) 

R&S does not take issue with the Legislature’s intent that the time 

limits in section 1281.97 be strictly enforced. Rather, it contends that two 

different provisions of the Code of Civil Procedure operated to extend the 30-

4 The overriding moral of this story may be to pay your bills on time. 

As the Doe court explained, “One of the Legislature’s main objectives was to 

deter employers from strategically withholding payments 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 . . . . Any untimely payment constituted a material breach 

regardless of the circumstances or status of the arbitration proceedings.” 

(Doe, supra, s95 Cal.App.5th at p. 357.) Moreover, the statutes contemplate 

that “such breaches [will be] strictly enforced.” (Ibid.)
6

day grace period. Agreeing that the invoice due date in this case was 

December 2, 2022, it first relies on section 12, which has the effect of 

extending certain deadlines that fall on a holiday.5 By R&S’s calculation, 

because 30 days from December 2, 2022 would be January 1, 2023, and 

because both January 1 and 2 were holidays, the grace period for payment 

was extended to January 3. 

R&S then seeks to tack on an additional two days based on section 

1010.6, which deals with the electronic service of documents. The first 

sentence of the section provides that “[a] document may be served 

electronically in an action filed with the court as provided in this section.” 

(Id., subd. (a).) If such a document “may be served by mail, express mail, 

overnight delivery, or facsimile transmission, [then] electronic service of that 

document is deemed complete at the time of the electronic transmission of the 

document or at the time that the electronic notification of service of the 

document is sent.” (Id., subd. (a)(3)(A).) At the same time, “any right or duty 

to do any act or make any response within any period . . . shall be extended 

after service by electronic means by two court days . . . .” (Id., subd. 

(a)(3)(B).)

It is this latter provision that R&S focuses on. It claims that the twoday extension provided for by subdivision (a)(3)(B) of section 1010.6 is added 

at the end of the section 12 extension to yield a revised deadline for the 

payment of arbitration fees of January 5, 2023. Because R&S made its 

payment to JAMS on January 4, it asserts the payment was timely. 

5 Section 12 provides: “The time in which any act provided by law is to 

be done is computed by excluding the first day, and including the last, unless 

the last day is a holiday, and then it is also excluded.”
7

We will assume without deciding that section 12 could potentially apply 

to extend the time for R&S’s payment of arbitration fees if the deadline for 

payment fell on a “holiday.” Even so, the major problem with R&S’s 

argument is that section 1010.6 simply does not apply to the e-mail 

transmission of a JAMS fee invoice.6 By its terms, the statute governs the 

service of documents in an action filed with the court. An arbitration 

proceeding is not “an action filed with the court,” and the invoice required by 

section 1281.97 is “provided” to the parties but is not “served.”

That an arbitration proceeding is not a court action is axiomatic. 

Private arbitration exists as an alternative to resolving disputes in the public 

court system. (See Berglund v. Arthroscopic & Laser Surgery Center of San 

Diego, L.P. (2008) 44 Cal.4th 528, 539.) Indeed, the parties’ agreement 

drafted by R&S expressly reflects this understanding, stating that “[b]oth 

[R&S] and [Suarez] understand that by using arbitration to resolve disputes 

they are giving up any right that they may have to a judge or jury trial with 

regard to all issues concerning employment.” It goes on to explain that the 

“cost of the arbitrator and other incidental costs of arbitration that would not 

be incurred in a court proceeding shall be borne by [R&S].” (Italics added.) 

6 R&S relies on language in the arbitration agreement that it claims 

“adopted the Code of Civil Procedure for a broad set of activities and motion 

practice” to suggest that incorporation of section 1010.6 was necessarily 

implied. But the language it cites is specific, incorporating the “California 

rules of civil procedure relating to pleading, . . . evidence, motions for 

summary judgment, judgment on the pleadings and judgment under Code of 

Civil Procedure Section 631.8.” This enumerated list appears to be 

exhaustive rather than illustrative. There is no reason to think the 

arbitration agreement contemplated the inclusion of other, unspecified rules 

and procedures. In any event, an arbitration invoice is not even reasonably 

related to the subjects of pleading, evidence, motions for summary judgment, 

judgment on the pleadings or judgment under section 631.8.
8

In characterizing the arbitration agreement as an alternative to the use of a 

judicial forum, and in agreeing to cover the costs of an arbitration conducted 

in lieu of a court proceeding, R&S drew a stark line of delineation between 

arbitration and an action filed with the court. Section 1010.6 applies only to 

the latter.

Moreover, as we have noted, section 1010.6 governs the electronic 

service of documents. “Service” is a legal term of art. (See generally

Sheppard v. Lightpost Museum Fund (2006) 146 Cal.App.4th 315, 323.) 

Typically, it involves sending service copies of documents filed with the court 

to opposing parties in the litigation. Even if the service procedures of section 

1010.6 somehow extended to arbitrations in general, the document that R&S 

seeks to apply it to is not something that is “served.” It is an invoice—a bill 

for anticipated services—that governs the economic relationship between the 

provider and the parties. It is not a document filed with the court or, by 

analogy, the arbitrator. Nothing in section 1281.97 (or elsewhere in the 

California Arbitration Act (CAA)) says anything about the arbitration 

provider “serving” the invoice on the parties. The statute merely requires the 

provider to “immediately provide an invoice for any fees and costs . . . to all 

the parties to the arbitration.” (§ 1281.97, subd. (a)(2).) 

B. Section 1281.97 does not make a material breach by the employer 

contingent on any payment by the employee.

R&S argues that because Suarez did not pay his portion of the initial 

arbitration fees, he never properly “initiate[d] an arbitration” within the 

meaning of subdivision (a)(2) and section 1281.97 therefore does not apply. 

But by its express terms, the statute contemplates the employee complying 

with certain “filing requirements” to initiate the arbitration before the 

provider is obligated to send an invoice. Necessarily, then, the arbitration is 
9

“initiated” before any fees are paid. Moreover, as we have already discussed, 

the focus of section 1281.97 is unmistakably on employers and not employees. 

(Doe, supra, 95 Cal.App.5th at p. 357 [statutory purpose is to “deter 

employers from strategically withholding payments of arbitration fees”

(italics added.)].) The plain language of the statute does not say anything 

about Suarez’s payment and does not create penalties for employees who do 

not pay their share of the arbitration fees. Instead, it focuses exclusively on 

the obligations of the drafter of the arbitration agreement, in this case R&S. 

The drafter is the “business or company that pushed the case into an arbitral 

forum” and, historically, burdened a consumer or employee with “ ‘ “the 

procedural limbo and delay” ’ ” the Legislature sought to address. (Gallo, 

supra, 81 Cal.App.5th at p. 634.) 

In the matter before us, R&S wanted to compel the resolution of 

Suarez’s dispute in arbitration. It sought to accomplish this by removing the 

dispute from the public court system and transferring it to the arbitral forum.

When it failed to pay its share of the arbitration fees before the expiration of 

the grace period, it created the exact problem the Legislature sought to avoid 

when it enacted sections 1281.97 and 1281.98. Now faced with the 

consequences of its tardiness, R&S improperly attempts to shift the burden 

back to its employee, giving rise to further “procedural limbo and delay.” 

(Assembly Report, supra, p. 11.)

C. The Federal Arbitration Act does not preempt section 1281.97.

Finally, R&S argues we cannot disturb the trial court’s ruling because 

section 1281.97 is preempted by the Federal Arbitration Act (FAA). It relies 

on the FAA’s equal treatment principle, asserting that although a court can 

invalidate an arbitration agreement based on normal state law contract 

rules, it cannot do so by resort to rules that “ ‘apply only to arbitration or that 
10

derive their meaning from the fact that an agreement to arbitrate is at 

issue.’ ” (Viking River Cruises, Inc. v. Moriana (2022) 142 S.Ct. 1906, 1917.)

Two recent decisions from our colleagues in the Second Appellate 

District have rejected a nearly identical argument. (Gallo, supra, 81 

Cal.App.5th at pp. 635–646; Espinoza v. Superior Court (2022) 83 

Cal.App.5th 761, 778–779.) In Gallo, the arbitration agreement incorporated 

the “procedural provisions” of the CAA, including section 1281.97. The 

employer nonetheless argued that section 1281.97 was preempted by the 

FAA. The lynchpin of Gallo’s analysis is that “a state law will not be 

preempted by the FAA merely because it is arbitration specific.” (Gallo, at 

p. 638.) Instead, state law is preempted only where it: (1) outright prohibits 

the formation or enforcement of arbitration agreements, or (2) imposes 

requirements on arbitration agreements that “discourage their formation or 

enforcement.” (Id. at pp. 637–638.) As the Gallo court explained, section 

1281.97 does neither of these things. (Id. at p. 641.) It merely specifies 

arbitration-specific procedural rules for the payment of fees. And “ ‘[t]here is 

no federal policy favoring arbitration under a certain set of rules.’ ” (Id. at 

p. 639, quoting Volt Info. Sciences v. Leland Stanford Jr. U. (1989) 489 U.S. 

468, 476.) Accordingly, states properly enact laws “that define the standard 

rules ‘governing the conduct of arbitration.’ ” (Ibid.) “Indeed, specific 

provisions of the CAA have been upheld as not preempted by the FAA, even 

though those provisions are necessarily arbitration specific.” (Gallo, at 

p. 639.) 

In Espinoza, the parties’ arbitration agreement did not expressly 

incorporate the procedural provisions of the CAA. The appellate court 

nonetheless held they “ ‘apply in California courts by default.’ ” (Espinoza, 

supra, 83 Cal.App.5th at p. 786, quoting Valencia v. Smyth (2010) 185 
11

Cal.App.4th 153, 174.) Relying on the preemption analysis in Gallo, 

Espinoza concluded that section 1281.97 is not preempted by the FAA. 

(Espinoza, at pp. 780–785.)

As in Gallo, R&S elected to fully incorporate the CAA, inclusive of 

section 1281.97, within the arbitration agreement. Notably, the arbitration 

agreement was executed after the CAA expanded to include section 1281.97. 

R&S opted into these specific rules of arbitration in lieu of resolving Suarez’s 

dispute in a court action.

We follow the precedent set in Gallo and Espinoza to conclude that 

section 1281.97 neither prohibits nor discourages the formation of arbitration 

agreements. Rather, the statute regulates the conduct of the parties to help 

“achieve the FAA’s goal of ‘safeguarding arbitration.’ ” (Espinoza, supra, 83 

Cal.App.5th at p. 783.) The rules are designed to encourage drafters of 

arbitration agreements to engage in arbitration promptly. We observe that 

in the matter before us, as in Espinoza and Gallo, waiver and material 

breach do not automatically remove a matter from arbitration. Instead, the 

employee is given the option of resolving the stagnant dispute in an action 

before the court. This rule of procedure for the conduct of the arbitration 

proceeding is not preempted by the FAA.
12

DISPOSITION

A writ of mandate shall issue directing the superior court to vacate its

May 19, 2023 order granting R&S’s motion to compel compliance with the 

existing arbitration order and denying Suarez’s motion to vacate the stay. 

The court shall then enter a new order granting Suarez’s motion and denying 

the one filed by R&S. The stay previously issued by this court on August 2, 

2023 will dissolve upon finality of this opinion. Suarez shall recover his costs 

in this writ proceeding. He is also entitled to reasonable attorney’s fees 

pursuant to section 1281.99 in an amount to be determined by the superior 

court.

DATO, J.

WE CONCUR:

O’ROURKE, Acting P. J.

DO, J.