Reyes v. South Cord Holdings CA2/8

Opinion

Filed 8/25/26 Reyes v. South Cord Holdings CA2/8 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION EIGHT

YESENIA REYES, B344457

Plaintiff and Respondent, Los Angeles County Super. Ct. No. 23STCV12612 v. SOUTH CORD HOLDINGS, LLC et al., Defendants and Appellants.

APPEAL from a judgment of the Superior Court of Los Angeles County, Michael Shultz, Judge. Reversed and remanded. Aarons Ward, Martin I. Aarons and Shannon H.P. Ward; Westford Law Group, Jose A. Nunez for Plaintiff and Respondent. Law Office of Jeff Augustini, Jeff Augustini for Defendants and Appellants. ____________________ Ysenia Reyes worked as an assistant manager at two stores owned by Catalyst dba South Cord Holdings, LLC. After her employment ended, she sued South Cord and related entities for harassment, discrimination, and other causes of action. We refer to the appellants collectively as South Cord. Code references are to the Code of Civil Procedure. After Reyes filed suit, the trial court granted South Cord’s motion to compel arbitration. In June 2024, the arbitrator set mediation to begin in February 2025 and issued a scheduling order setting a payment due date of 60 days prior to arbitration beginning. In October 2024, JAMS sent out a bill that said it was “due on receipt.” This meant payment had to be made in November. (See § 1281.98, subds. (a)(1&2).) This statutory payment date was earlier than the date in the arbitrator’s order. After receiving the bill, South Cord expressed concern JAMS’s time estimate was too high and proposed a revision. South Cord also wanted to consolidate Reyes’s arbitration with another arbitration matter against South Cord. In November 2024, the arbitrator cancelled the original arbitration date and set a status conference for January 2025. After the statutory payment date had passed, Reyes filed a motion requesting the trial court rescind its order for mediation under the statute. The trial court granted Reyes’s motion, reasoning case law said the statute’s language was clear and the statutory due date absolute. Citing Cvejic v. Skyview Capital, LLC (2023) 92 Cal.App.5th 1073, 1078 and several other cases, the Court said if payment was statutorily late, it did not matter why. South Cord appealed.

2 After South Cord filed its opening brief in this appeal, the California Supreme Court issued its ruling in Hohenshelt v. Superior Court (2025) 18 Cal.5th 310 (Hohenshelt). Hohenshelt instructs us forfeiture of the right to arbitration is not automatic under section 1281.98. (Hohenshelt at p. 332.) Rather, the burden shifts to the party who failed to pay timely to show a good faith mistake, inadvertence, or other excusable neglect. (Id. at p. 323.) The trial court therefore erred in vacating the order for arbitration. Reyes and South Cord both argue there is no need to remand this case to the trial court because it is apparent the other side is wrong as a matter of law. The answer is not quite so obvious. Reyes and South Cord each present arguments about why South Cord missed the statutory payment deadline. Reyes argues South Cord asked for changes to the arbitration plan to delay having to pay its fees, and points out South Cord has yet to make any payment at all. South Cord maintains it intended to pay according to the deadlines set out by the arbitrator’s specific order, which differed from statutory deadlines, and observes it had no reason to make any payment once Reyes requested the trial court allow her out of arbitration. South Cord also accuses Reyes of subterfuge by participating in further scheduling discussions while intending to move for vacation of the arbitration order. The trial court found only that South Cord missed the statutory payment deadline. On that basis, the trial court reached the legal conclusion that South Cord was in material breach of the arbitration agreement and in default of the arbitration, and had waived its right to compel or to proceed with 3 arbitration as a result of the material breach. These are incomplete findings because Hohenshelt instructs the trial court to determine whether the failure to pay timely was the result of a good faith mistake, inadvertence, or other excusable neglect. (Hohenshelt at p. 323.) DISPOSITION We reverse the order and award costs to South Cord. We remand the case to the trial court to consider whether Reyes may exit arbitration under the guidance of Hohenshelt.

WILEY, J.

We concur:

STRATTON, P. J.

VIRAMONTES, J.