In Cinel v. Christopher, 203 Cal.App.4th 759 (2012), the Second District, Division 1 affirmed a trial court’s order refusing to confirm as an award the arbitrator’s termination of the action for nonpayment of fees of several of the defendants. One party returned to the trial court to compel arbitration, arguing he had paid his fees, but the lower court denied a motion to compel arbitration based on the parties being unable to reach agreement on a fee allocation so that the matter had to proceed to trial.
This arbitration denial order was affirmed subsequently in Cinel v. Barna, Case No. B232380 (2d Dist., Div. 1 May 18, 2012) (unpublished).
The appellate court found that the parties’ refusal to agree among themselves to pay the fees of the nonpaying parties waived the right to arbitration given they repudiated it by failing to reach an agreement over division of fees as ordered by the arbitrator and the trial court. Unless the parties agreed to pay the pro rata share of the nonpaying parties per the AAA panel’s order, no arbitration could proceed. Simply, put the party wanting arbitration could not order another party to bear the nonpaying parties’ pro rata share absent an agreement otherwise or absent paying off the nonpaying party’s portion. (Lifescan, Inc. v. Premier Diabetic Servs., 363 F.3d 1010, 1013 (9th Cir. 2004).) Justice Johnson, writing for the 3-0 panel in this case, also would not endorse a result by which no resolution was possible because a party would refuse to pay the nonpaying parties’ portion only to keep coming back and seek successive orders to compel arbitration--something the panel would not countenance because it would amount to an “infinite loop” in delaying resolution. (Sink v. Aden Enterprises, Inc., 352 F.3d 1197, 1199-1201 (9th Cir. 2003).)