Arzate v. Ace American Insurance Company, — Cal. Rptr. 3d — (2025) began as a familiar case: plaintiffs signed arbitration agreements (“Agreement”) with their employer that contained a class action waiver. But when a dispute arose, plaintiffs disregarded their Agreements and filed a class action lawsuit. The defendant filed a motion to compel arbitration. The trial court granted the motion, enforced the class action waiver, and stayed the action pending arbitration.
However, plaintiffs did not initiate arbitration. Unsurprisingly, neither did the defendant. After all, who sues themselves? Nonetheless, the trial court concluded that based on the terms of the Agreement, the defendant—not the plaintiffs—was required to initiate arbitration. And because the defendant did not do so, it waived the right to arbitrate the dispute.
The express terms of the Agreement are instructive. Specifically, the Agreement required that the “party who wants to start the [a]rbitration [p]rocedure should submit a demand,” which must be filed “within thirty (30) calendar days from the date of entry of the court order.”
The trial court reasoned that while the plaintiffs filed the class action suit and sought relief, “they have heavily contested any requirement to arbitrate these claims” and therefore never “wanted” or “demanded” arbitration. Instead, the court held that the defendant was the party who “wanted” arbitration. And because the defendant “took no action within 30 days” of the court’s...
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