Filed 8/25/26 Reyes v. South Cord Holdings CA2/8
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION EIGHT
YESENIA REYES, B344457
Plaintiff and Respondent, Los Angeles County
Super. Ct. No. 23STCV12612
v.
SOUTH CORD HOLDINGS, LLC
et al.,
Defendants and Appellants.
APPEAL from a judgment of the Superior Court of Los
Angeles County, Michael Shultz, Judge. Reversed and
remanded.
Aarons Ward, Martin I. Aarons and Shannon H.P. Ward;
Westford Law Group, Jose A. Nunez for Plaintiff and
Respondent.
Law Office of Jeff Augustini, Jeff Augustini for Defendants
and Appellants.
____________________
Ysenia Reyes worked as an assistant manager at two stores
owned by Catalyst dba South Cord Holdings, LLC. After her
employment ended, she sued South Cord and related entities for
harassment, discrimination, and other causes of action. We refer
to the appellants collectively as South Cord. Code references are
to the Code of Civil Procedure.
After Reyes filed suit, the trial court granted South Cord’s
motion to compel arbitration.
In June 2024, the arbitrator set mediation to begin in
February 2025 and issued a scheduling order setting a payment
due date of 60 days prior to arbitration beginning.
In October 2024, JAMS sent out a bill that said it was “due
on receipt.” This meant payment had to be made in November.
(See § 1281.98, subds. (a)(1&2).) This statutory payment date
was earlier than the date in the arbitrator’s order.
After receiving the bill, South Cord expressed concern
JAMS’s time estimate was too high and proposed a revision.
South Cord also wanted to consolidate Reyes’s arbitration with
another arbitration matter against South Cord.
In November 2024, the arbitrator cancelled the original
arbitration date and set a status conference for January 2025.
After the statutory payment date had passed, Reyes filed a
motion requesting the trial court rescind its order for mediation
under the statute.
The trial court granted Reyes’s motion, reasoning case law
said the statute’s language was clear and the statutory due date
absolute. Citing Cvejic v. Skyview Capital, LLC (2023) 92
Cal.App.5th 1073, 1078 and several other cases, the Court said if
payment was statutorily late, it did not matter why.
South Cord appealed.
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After South Cord filed its opening brief in this appeal, the
California Supreme Court issued its ruling in Hohenshelt v.
Superior Court (2025) 18 Cal.5th 310 (Hohenshelt).
Hohenshelt instructs us forfeiture of the right to arbitration
is not automatic under section 1281.98. (Hohenshelt at p. 332.)
Rather, the burden shifts to the party who failed to pay timely to
show a good faith mistake, inadvertence, or other excusable
neglect. (Id. at p. 323.) The trial court therefore erred in
vacating the order for arbitration.
Reyes and South Cord both argue there is no need to
remand this case to the trial court because it is apparent the
other side is wrong as a matter of law. The answer is not quite so
obvious.
Reyes and South Cord each present arguments about why
South Cord missed the statutory payment deadline. Reyes
argues South Cord asked for changes to the arbitration plan to
delay having to pay its fees, and points out South Cord has yet to
make any payment at all. South Cord maintains it intended to
pay according to the deadlines set out by the arbitrator’s specific
order, which differed from statutory deadlines, and observes it
had no reason to make any payment once Reyes requested the
trial court allow her out of arbitration. South Cord also accuses
Reyes of subterfuge by participating in further scheduling
discussions while intending to move for vacation of the
arbitration order.
The trial court found only that South Cord missed the
statutory payment deadline. On that basis, the trial court
reached the legal conclusion that South Cord was in material
breach of the arbitration agreement and in default of the
arbitration, and had waived its right to compel or to proceed with
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arbitration as a result of the material breach. These are
incomplete findings because Hohenshelt instructs the trial court
to determine whether the failure to pay timely was the result of a
good faith mistake, inadvertence, or other excusable
neglect. (Hohenshelt at p. 323.)
DISPOSITION
We reverse the order and award costs to South Cord. We
remand the case to the trial court to consider whether Reyes may
exit arbitration under the guidance of Hohenshelt.
WILEY, J.
We concur:
STRATTON, P. J.
VIRAMONTES, J.
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