Arbitration: Filing A Complaint Relieves A Party From Proving The Other Party Refused.

Two businesses entered into an agreement which provided that disputes would be subject to arbitration. Plaintiff sued defendant, and defendant moved to compel arbitration. Under Code of Civil Procedure section 1281.2, a party requesting arbitration must prove the other party refused to arbitrate the controversy. The trial court denied the motion to compel on the ground defendant failed to allege it demanded arbitration and plaintiff refused. In reversing, the appellate court stated: “We hold that [defendant] was not required to make a formal demand for arbitration because [plaintiff]’s filing of a complaint invoked the protections and procedures of the court system, and thus was an effective refusal of arbitration. [Defendant] met its burden under section 1281.2.” (Hyundai Amco America, Inc. v. S3H, Inc. (Cal. App. Fourth Dist., Div. 3; December 17, 2014) 232 Cal.App.4th 572, [181 Cal.Rptr.3d 470].)