L.A. Superior Court Appellate Division Reverses Trial Court’s Denial of a Petition to Compel Arbitration of Rosenthal Claims

A recent appellate decision in a Los Angeles case serves as a reminder to businesses with Accounts Receivables to take a close look at arbitration clauses in their agreements.

In the matter, Plaintiff filed a Complaint alleging a single cause of action for violation of the Rosenthal Act in the L.A. Superior Court relative to attempting to collect on a past due balance for cable television service. Defendant’s service agreement with its customers contains an arbitration provision. Thus, after Plaintiff refused to stipulate to submit this dispute to Arbitration pursuant to the parties service agreement, Defendant filed a Petition to Compel Arbitration.

In opposition to the Petition, Plaintiff argued that § 1788.33 prohibits the waiver of any right provided for by the Rosenthal Act. Thus, the arbitration agreement was an unenforceable waiver of the right to a jury trial. The Trial Court agreed and Defendant appealed.

The Appellate Division reversed the trial court finding that enforcing an arbitration agreement did not constitute a waiver of any right afforded under the Rosenthal Act because there is no such right provided for in the Rosenthal Act itself. The Appellate Court also awarded Defendant its costs on appeal.

Any business that has Accounts Receivable should examine their agreements to ensure there is an arbitration provision contained within the agreements and pursue arbitration at the outset of any claim against the company.

Sean Flynn of Foley & Mansfield’s Los Angeles office served as trial counsel, and as co-appellate counsel with the firm of White and Case.

For more information, E-mail Sean at sflynn@foleymansfield.com.

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