However, CCP Section 1281.99 Sanctions Award Was Affirmed For Employee’s Time Incurred To Pursue Efforts Based On Employer’s Tardiness.
We predicted that many decisions under the employer payment deadline of Civil Code sections1281.97 and 1281.98 would be reversed or reversed/remanded under the peculiar circumstances of a matter after the California Supreme Court decided Hohenshelt v. Superior Court, 18 Cal.5th 310 (2025), which found that inadvertence or excusable neglect circumstances would excuse returning a case to court under CCP section 1281.98 [arbitration fees required to continue an arbitration already in progress]. The next case confirms that our prediction is coming to fruition.
In Wilson v. VXI Global Solutions, LLC, Case No. B340615 (2d Dist., Div. 1 Oct. 7, 2025) (unpublished), the lower court decided that an employer’s failure to timely pay arbitration fees under CCP section 1281.97 [fees to initiate an arbitration], despite acknowledging an operational error with respect to miscommunication between in-house counsel of the defense and the accounts receivable department, meant the case had to return to court based on a pre-Hohenshelt strict interpretation of section 1281.97. The lower court also awarded $6,315 in sanctions under section 1281.99 for employer’s fees incurred to initiate the arbitration and bring the motion to return to court under section 1281.97.
The 2/1 DCA reversed the decision to return the matter to court, but it affirmed the section 128199 sanctions award. The panel found Hohenshelt required reversal of the return to court order because the lower court found the tardy payment was inadvertent, because it found Hohenshelt equally applied to the sister statute codified in section 1281.97 (even though Hohenshelt dealt with section 1281.98). However, with respect to section 1281.99, the sanctions award to employee was affirmed given that Hohenshelt determined that this section was designed to make employee whole for employer’s material breach in not timely paying notwithstanding whether the nonpayment was willful or not. (18 Cal.5th at pp. 330-340.)