Court Can Intercede to Preserve Right of Newly Indigent to Access Arbitration

Weiler v. Marcus & Millchap Real Estate Inv. Servs., Inc., No G053953 (D4d3 Apr. 30, 2018)

Plaintiff is in an arbitration with her real estate investment advisor. But she claims she’s out of money and can no longer afford to pay her half of the arbitrators’ fees. Under Roldan v. Callahan & Blaine, 219 Cal. App. 4th 87 (2013), when a party’s inability to pay arbitrators risks denial of access to the justice system, she can seek relief with the court. If the moving party is truly unable to pay, the other party gets a choice. It can choose to front the indigent party’s costs. But if it does not want to do that, the arbitration is over and the parties can resolve their dispute in court. 

Here, the arbitrators wouldn’t rule on the Roldan issue, so Plaintiff filed a declaratory relief case. The superior court denied any relief on the grounds that the arbitration agreement was not unconscionable. But the Court of Appeal reverses. The question isn’t whether the agreement is unconscionable, but whether Plaintiff’s subsequent inability to front the costs is depriving her of access to a forum to resolve her dispute. She’s entitled to seek relief in the courts to resolve that question, despite the fact that the arbitration is ongoing. It falls under the court’s vestigial jurisdiction.

There are, however, disputed factual issues about whether Plaintiff really can’t afford to pay the arbitrators. So the trial court on remand needs to resolve those in order to determine if Plaintiff is entitled to Roldan relief.

Reversed and remanded.