MKJA Inc. v. 123 Fit Franchising, LLC

I.

INTRODUCTION

Code of Civil Procedure section 1281.4 1 requires that a court impose a stay of litigation whenever that court, or another court, has ordered arbitration of a controversy that is an issue in the litigation. The court in which the litigation is pending is required to “stay the action or proceeding until an arbitration is had in accordance with the order to arbitrate or until such earlier time as the court specifies.” (Ibid.)

In this case, the trial court lifted a stay of litigation that had been imposed pursuant to section 1281.4, on the ground that plaintiffs could not afford to pay the costs associated with arbitration. We conclude that a party’s inability to afford to pay the costs of arbitration is not a ground on which a trial court may lift a stay of litigation that was imposed pursuant to section 1281.4. Accordingly, we reverse the trial court’s order lifting the stay.

*648 II.

FACTUAL AND PROCEDURAL BACKGROUND

A. Plaintiffs’ complaint

In September 2006, MKJA, Inc., Kris Roberts, Mike Roberts, Julie Dominguez, Inc., Julie Dominguez, John R. Dominguez, Jr., Corefit, Inc., Lezlie Martin, and Krista Crocker (plaintiffs) filed this action against…