BILL ANALYSIS Ó
AB 456
Page 1
ASSEMBLY THIRD READING
AB 456 (Wagner)
As Amended April 12, 2011
Majority vote
JUDICIARY 10-0
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|Ayes:|Feuer, Wagner, Atkins, | | |
| |Dickinson, Silva, Huber, | | |
| |Huffman, Jones, Monning, | | |
| |Wieckowski | | |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Clarifies procedures for certain stays of litigation.
Specifically, this bill clarifies that mechanics' lien claimants
in construction disputes may seek a stay of litigation pending
the outcome of arbitration to which the parties agree, without
any necessity to move for an order to compel arbitration,
provided that if any party opposes the motion to stay the action
on the ground that the party objects to arbitration of the
dispute, the court shall determine whether the claim of lien or
any relevant issue, question or dispute is subject to
arbitration before staying the action.
FISCAL EFFECT : None
COMMENTS : The author argues that this bill is needed to clarify
existing law regarding the stay of litigation pending
arbitration of certain construction disputes.
Code of Civil Procedure Section 1281.5 deals with arbitration of
construction disputes when there is a right to a mechanics lien.
It allows the lien foreclosure lawsuit to be filed to satisfy
the statute of limitations and notice to potential purchasers,
but requires that the arbitration be commenced promptly and
allows the lawsuit to be stayed.
According to the author, the statute has caused some confusion
because it has not been clear in some cases whether the claimant
must also file a motion to compel arbitration. Supporters state
that such a motion is frequently unnecessary because the parties
do not dispute that the claim is arbitrable.
AB 456
Page 2
In these circumstances, it is sensible to stay any court
proceeding while the arbitration, once started, continues to be
prosecuted. The sponsors contend that requiring a motion to
compel arbitration is not only superfluous but only serves to
"clog up" the courts.
The author's recent amendments largely clarify and refocus the
bill appropriately. However, the Judiciary Committee recently
received further suggested revisions from the Judicial Council.
The author and sponsor have committed to continuing to work with
the Judiciary Committee and the Judicial Council to ensure that
any remaining concerns are addressed satisfactorily.
Analysis Prepared by : Kevin G. Baker / JUD. / (916) 319-2334
FN: 0000233