Arbitration: Where Defendant Paid On Last Day But There Was A Lag Due to Electronic Payment Transmission, Plaintiff Was Not Entitled To CCP Section 1281.98 Late Payment Fees

Defense Conduct Was Not Willful, Grossly Negligent, or Fraudulent Under Hohenshelt.

We have now one of first opinions, although unpublished, which deals with how CCP section 1281.98 tardy payment of fees are dealt with, given the California Supreme Court’s recent opinion in Hohenshelt v. Superior Court, 18 Cal.5^th 310 (2025).

In Wilson v. TAP Worldwide, Inc., Case No. B334533 (2d Dist., Div. 1 Sept. 22, 2025) (unpublished), defendant sent electronic payment of fees on the 30^th day deadline, but the arbitrator provider did not receive until 3 days later due to electronic payment “lag.”  The trial court, based on some intermediate appellate decisions before Hohenshelt was issued by the California Supreme Court, awarded plaintiff fees of $11,000 for the “tardy” payment.

The 2/1 DCA reversed.  Because Hohenshelt only penalizes a willful, grossly negligent, or fraudulent conduct by the defense, it cannot be said that these circumstances justified such a conclusion by the lower court.