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SB-33 Arbitration agreements.(2017-2018)

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Date Published: 06/13/2017 09:00 PM
SB33:v94#DOCUMENT

Amended  IN  Assembly  June 13, 2017
Amended  IN  Senate  May 16, 2017
Amended  IN  Senate  May 09, 2017
Amended  IN  Senate  April 24, 2017
Amended  IN  Senate  March 23, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 33


Introduced by Senator Dodd
(Principal coauthor: Senator Wieckowski)
(Principal coauthor: Assembly Member Dababneh)
(Coauthor: Senator Hertzberg)
(Coauthor: Assembly Member Chiu)

December 05, 2016


An act to amend Section 1281.2 of the Code of Civil Procedure, relating to arbitration.


LEGISLATIVE COUNSEL'S DIGEST


SB 33, as amended, Dodd. Arbitration agreements.
Existing law requires a court, on petition of a party to an arbitration agreement alleging (1) the existence of a written agreement to arbitrate a controversy and (2) that a party to the agreement refuses to arbitrate the controversy, to order the petitioner and the respondent to arbitrate the controversy if the court determines that an agreement to arbitrate exists, unless the court makes other determinations.
This bill would add to these determinations instances in which a financial institution, as defined, seeks to apply a written agreement to arbitrate, contained in a contract consented to by a consumer, to a purported contractual relationship with that consumer created fraudulently by the petitioner without the consumer’s consent and by unlawfully using the consumer’s personal identifying information, as defined.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 1281.2 of the Code of Civil Procedure is amended to read:

1281.2.
 On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists, unless it determines that:
(a) The right to compel arbitration has been waived by the petitioner; or
(b) Grounds exist for the revocation of the agreement.
(c) A party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact. For purposes of this section, a pending court action or special proceeding includes an action or proceeding initiated by the party refusing to arbitrate after the petition to compel arbitration has been filed, but on or before the date of the hearing on the petition. This subdivision shall not be applicable to an agreement to arbitrate disputes as to the professional negligence of a health care provider made pursuant to Section 1295.
(d) The petitioner is a financial institution that, on or after January 1, 2018, seeks to apply a written agreement to arbitrate, contained in a contract consented to by a consumer, to a purported contractual relationship with that consumer created fraudulently by the petitioner without the consumer’s consent and by unlawfully using the consumer’s personal identifying information, as defined in Section 1798.92 of the Civil Code. For purposes of this subdivision, “financial institution” means a person who is licensed or regulated pursuant to Division 1.1 (commencing with Section 1000), Division 5 (commencing with Section 14000), or Division 7 (commencing with Section 18000) of the Financial Code, or Division 1 (commencing with Section 25000) of Title 4 of the Corporations Code; is a federally chartered depository institution; or is a broker, dealer, or investment advisor required to register with the Securities and Exchange Commission.
If the court determines that a written agreement to arbitrate a controversy exists, an order to arbitrate such controversy may not be refused on the ground that the petitioner’s contentions lack substantive merit.
If the court determines that there are other issues between the petitioner and the respondent which are not subject to arbitration and which are the subject of a pending action or special proceeding between the petitioner and the respondent and that a determination of such issues may make the arbitration unnecessary, the court may delay its order to arbitrate until the determination of such other issues or until such earlier time as the court specifies.
If the court determines that a party to the arbitration is also a party to litigation in a pending court action or special proceeding with a third party as set forth under subdivision (c) herein, the court (1) may refuse to enforce the arbitration agreement and may order intervention or joinder of all parties in a single action or special proceeding; (2) may order intervention or joinder as to all or only certain issues; (3) may order arbitration among the parties who have agreed to arbitration and stay the pending court action or special proceeding pending the outcome of the arbitration proceeding; or (4) may stay arbitration pending the outcome of the court action or special proceeding.