§ 90-342. Delinquent fees—Arbitration.

In the event a franchisee fails to pay franchise fees pursuant to sections 90-337 or 90-338, above, or the board of directors of the commission determines that a franchisee has paid franchise fees in a lower amount or amounts than prescribed, written notice thereof shall be mailed to the franchisee. The notice shall show the basis for the determination that fees are owing, and the amount thereof, if known, and may show the amount of interest and penalties accumulated to date.

Within 30 calendar days following the date of mailing of such notice, the franchisee may pay any amount stated in the notice, plus interest and penalties, without protest. Any payment made without accompaniment of a written statement of protest shall be deemed to have been made without protest, and shall constitute a waiver of the right to request arbitration or other relief respecting any and all amounts so paid.

Within 30 calendar days following the date of mailing of such notice, the franchisee may, alternatively, file a written request for arbitration with the clerk of the board of directors of the commission objecting to payment, and specifically identifying why objection is made and wherein the franchisee disagrees with the determination. At the time of filing such a request for arbitration, the franchisee may deposit with the commission, under protest, any amount, including interest and penalties, which the franchisee estimates to be in dispute. Any such deposit shall be accompanied by a written statement by the franchisee stating that the amount deposited is pursuant to protest and a request for arbitration. From and after the date of any such deposit, interest and penalties as prescribed by section 90-341, above, on the amount deposited shall terminate, and no such interest or penalties on such amount shall accrue subsequent to the date of deposit. In the event it is finally determined that the whole or any portion of an amount so deposited under protest was not owing by the franchisee, such amount, without interest, shall be credited against and reduce the amount of franchise fees which become owing by the franchisee subsequent to the date of such final determination; provided that no such future payment shall be reduced as such a credit by an amount greater than ten percent of the franchise fee payment otherwise owing; and provided further that in no event shall the commission, county or cities become or be liable to the franchisee for reimbursement of any portion of an amount so deposited under protest except as a credit against any future franchise fees which become owing.

If the notice to the franchisee by the commission shows the amount of franchise fees owing, including interest and penalties, the board's determination shall become final and conclusive, not subject to judicial review or reversal by any authority and judicially enforceable, unless the franchisee requests arbitration within the time and in the manner prescribed above.

If the franchisee fails to either pay the franchise fees without protest or request arbitration and if the notice by the commission does not specify the amount of franchise fees, including interest and penalties, owing, or if the franchisee pays an amount without protest and the board of directors of the commission disagrees that the amount paid is the amount owing, the board of directors, at its sole discretion, may request arbitration by mailing written notice of its election to arbitrate to the franchisee.

If arbitration is requested, the arbitration panel shall be selected, the hearing scheduled within the time prescribed, notice given, the hearing conducted, decision made and costs divided in the manner prescribed by sections 90-469 through 90-474, inclusive of subdivision III of division 5 below. The discovery provisions of the California Arbitration Act (Code of Civil Procedure § 1280 et seq.) shall be applicable to arbitration proceedings under this section. The questions which may be submitted to the arbitration panel and jurisdiction of the arbitration panel shall be limited to the following:

a.

The interpretation of the provisions of the franchise documents solely in relation to the decision required by subparagraph "b," below; and

b.

The amount, if any, owing by the franchisee. The franchisee shall immediately pay any amount determined to be owing by the arbitration panel. The arbitration award may be judicially enforced, shall be final, binding and conclusive upon the parties and shall not be subject to judicial review or vacation except on grounds set forth in Code of Civil Procedure § 1286.2.

(Ord. No. 97-12, § 2(5.50.612), 2-13-1997; Ord. No. 97-21, § 2, 12-10-1997)