Tillman v. Tillman

Parties stipulated to arbitration with each side bearing a portion of arbitration fees, but plaintiff ran out of money, defendant declined to pick up her share of the fees, and arbitration terminated without a ruling on the merits; this combination of circumstances freed plaintiff to pursue her claims in court.  The parties agreed to, and the district court compelled, arbitration under AAA rules which allow the arbitrators to terminate the arbitration if one party fails or is unable to pay arbitration fees and the other party refuses to advance the entire cost.  Plaintiff initially paid her share of the arbitration costs, but eventually stopped because, as she later proved to the district court, she could no longer afford the arbitration costs.  Defendant refused to pick up her share of the costs.  The arbitration was terminated without an award on the merits.  Held, in this situation, an arbitration has been held in accordance with the parties’ arbitration agreement, so the stay pending arbitration under FAA sec. 3 is dissolved.  Accord:  Pre-Paid Legal Services, Inc. v. Cahill (10th Cir. 2015) 786 F.3d 1287.  And since no provision of the FAA requires dismissal of the plaintiff’s claims in this situation, she may pursue those claims in federal court.

Ninth Circuit Court of Appeals (Berzon, J.); June 15, 2016; 2016 WL 3343785

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