I decree that anything having to do with franchises or arbitration agreements is generally complex. Thus, a franchise law case in which arbitration issues are at issue is guaranteed to be complex litigation. That said, this next case is easy to summarize. In MKJA, Inc. v. 123 Fit Franchising, LLC (January 4, 2011), the Court of Appeal (Fourth Appellate District, Division One) considered whther a trial court properly lifted a stay of litigation that had been imposed pursuant to section 1281.4, on the ground that the plaintiffs could not afford to pay the costs associated with arbitration.
The plaintiffs sued for violation of the California Franchise Investment Law (Corp. Code, § 3100 et seq.), breach of contract, unfair business practices (Bus. & Prof. Code, § 17200 et seq.), and fraudulent inducement. The defendant filed a motion to stay pursuant to Code of Civll Procedure § 1281.4 on the ground that it had filed a petition in Colorado to compel arbitration of the disputes. The Court did note that section 1281.4 contained language that had not been interpreted by any California Court:
We assume, for purposes of this decision, that a trial court possesses some amount of discretion to lift a stay imposed pursuant to section 1281.4, prior to the completion of an ordered arbitration. However, the statute does not address the scope of that discretion. Based on the purpose of section 1281.4 as stated by the Federal Ins. Co. court and the context in which the operative statutory language appears, we conclude that a trial court may not lift a stay of litigation merely because a party cannot afford the costs associated with arbitration.
Slip op., at 20.