(a) Notice to the person, and to the member with whom the person is employed, of the decision to deny an application for or to revoke or suspend a Fidelity Corporation Certificate, shall be effective immediately upon personal delivery, or by facsimile if written acknowledgment of receipt by the member and the person is returned by facsimile, or within five days of the date of mailing, and shall become final upon expiration of the time for filing a notice of appeal or upon the conclusion of the appeal, as provided for in this section.

(b) The person whose application for a certificate has been denied, or whose certificate has been suspended or revoked may, within 15 days after notice of the decision, file with Fidelity Corporation a notice of appeal and request for a hearing, by binding arbitration or judicial action, as provided herein. Neither the notice of appeal nor the request for a hearing shall stay the decision of Fidelity Corporation under Section 17331.2. A late notice of appeal and request for a hearing may be accepted upon a showing of good cause.

(c) The hearing for the appeal may be resolved by arbitration in accordance with Chapter 1 (commencing with Section 1280) of Title 9 of Part 3 of the Code of Civil Procedure. The notice of the person’s right to appeal and notice of appeal provided by Fidelity Corporation shall contain a schedule of proposed arbitrators or of a proposed arbitration forum which provides a panel of arbitrators and method for appointing an arbitrator. The person filing the notice of arbitration may agree to submit the decision and matter to binding arbitration and accept an arbitrator whose name appears on the notice or may propose, in writing, an alternative arbitrator, but if Fidelity Corporation does not notify the person of acceptance of the proposed alternative arbitrator within 10 days, then either party may within 30 days petition the court to appoint an arbitrator, as provided by law.

(d) If the person does not agree to submit the decision and matter to binding arbitration, then the person may, within 30 days after the notice of the decision, file an action in superior court concerning the decision to deny an application for, or to suspend or revoke the certificate. The court may, on its own motion, or shall, upon the filing of an election by any or either party, order that the action be submitted to arbitration pursuant to Chapter 2.5 (commencing with Section 1141.10) of Title 3 of Part 3 of the Code of Civil Procedure, in which case the action shall be accorded that priority for hearing as circumstances permit, unless the plaintiff may otherwise request.

(e) Either Fidelity Corporation or the person whose application for a certificate has been denied, or whose certificate has been suspended or revoked, may apply to the superior court for relief to compel compliance with this section in accordance with Chapter 2 (commencing with Section 1084) of Title 1 of Part 3 of the Code of Civil Procedure.

(f) Upon the conclusion of the hearing on appeal, either the arbitrator or the court may in its discretion award to the prevailing party as an item of costs, reasonable attorneys’ fees, and costs. All other expenses and fees for the arbitration incurred prior to the decision of the arbitrator or confirmation of the decision by the court shall be shared equally by the parties except for attorneys’ fees, witness fees or other expenses incurred by either party for his or her own benefit.

(g) Upon the filing of any action in the superior court by the person whose application for a certificate has been denied, or whose certificate has been suspended or revoked, Fidelity Corporation at any time within 30 days after service of the summons may upon notice and hearing, move the court for an order requiring the plaintiff to furnish an undertaking to secure an award of costs and attorneys’ fees which may be awarded in the action. The motion shall be supported by affidavit showing that the action filed is frivolous and that there is no reasonable possibility that the prosecution of the action will benefit the plaintiff and that the moving party fully complied with this section and Section 17331.2.

At the hearing upon the motion, the court shall consider any written or oral evidence, by witnesses or affidavit, as may be material (1) to the ground or grounds upon which the motion is based, or (2) to a determination of the probable reasonable expenses, including attorneys’ fees, of the defendant and the moving party, which will be incurred in the defense of the action.

If the court determines, after hearing the evidence adduced by the parties, that the moving party has established a probability in support of any of the grounds upon which the motion is based, the court shall fix the amount of the undertaking, not to exceed twenty-five thousand dollars ($25,000), to be furnished by the plaintiff for reasonable expenses, including attorneys’ fees, which may be incurred by the moving party in connection with the action.

A ruling by the court on the motion shall not be a determination of any issue in the action or of the merits thereof. If the court, upon the motion, makes a determination that a bond shall be furnished by the plaintiff, the action shall be dismissed as to the defendant, unless the bond required by the court has been furnished within a reasonable time as may be fixed by the court. Upon the filing of a motion pursuant to this subdivision, no other pleadings need be filed by the defendant and the prosecution of the action shall be stayed until 10 days after the motion has been disposed of. The motion shall be considered pursuant to this subdivision and in accordance with Chapter 2 (commencing with Section 995.010) of Title 14 of Part 2 of the Code of Civil Procedure.

(Added by Stats. 1991, Ch. 1217, Sec. 4.)