Judge: Anne Richardson, Case: 22STCP04025, Date: 2023-04-18 Tentative Ruling

Case Number: 22STCP04025    Hearing Date: April 18, 2023    Dept: 40

Superior Court of California

County of Los Angeles

Department 40

Background

Petitioner Meyer, Olson, Lowy & Meyers, LLP brings this action against Respondent Erik C. Oh pursuant to a November 9, 2022 Verified Petition to Compel Binding Arbitration and for Court Appointment of an Arbitrator based on the grounds that Petitioner represented Respondent Oh in a dissolution of marriage action under the terms of a written retainer agreement that provided that if any dispute(s) arose as to fees and costs to which Petitioner was entitled, such dispute(s) would be submitted to arbitration, and that such a fee dispute has in fact arisen between the parties, prompting Petitioner to seek a court order appointing one of four retired judges—the Honorable Aviva Bobb, the Honorable Hank Goldberg, the Honorable Elizabeth Feffer, or the Honorable John Ouderkirk—as the arbitrator for the parties’ fees and costs dispute.

On November 14, 2022, the petition was scheduled for hearing on January 25, 2023 but was later continued by the Court to April 18, 2023.

On February 14, 2023, Respondent Oh—acting in pro per—filed a demurrer against the petition on the grounds that the Court has no jurisdiction over this action because the proper venue for any dispute between the parties is Riverside County—where the retainer agreement was signed and where the dissolution proceedings were litigated—and because the petition fails to state a valid cause of action against Respondent Oh.

The demurrer indicates that it was scheduled for hearing on April 18, 2023, but no such registration appears on the Court’s calendar.

Respondent Oh has not opposed the Petitioner’s petition.

Neither has Petitioner—after meet and confer efforts detailed in Respondent Oh’s declaration—opposed Respondent Oh’s demurrer.

The petition and demurrer are now before the Court.

Demurrer: OVERRULED.

Respondent Oh demurs to the petition to compel arbitration and appoint arbitrator on two grounds: improper venue and failure to state a claim. (Demurrer, pp. 1-3.)

Petitioner Meyer, Olson, Lowy & Meyers, LLP has failed to oppose the demurrer.

The Court notes that while the face of the demurrer sets forth a hearing date of April 18, 2023, such a hearing is not reflected in the Court’s calendar.

Moving to the merits, the Court finds that the issue of venue has been waived. Respondent Oh filed his demurrer without simultaneously moving for a change of venue. Respondent waives the issue of improper venue by filing an answer or demurrer without also filing a separate motion for change of venue. (Dugar v Happy Tiger Records, Inc. (1974) 41 Cal.App.3d 811, 819-820; see, e.g., Northern Cal. Dist. Council of Hod Carriers v Pennsylvania Pipeline, Inc. (1980) 103 CA3d 163, 173-174 [filing response to petition to confirm arbitration award without also filing change of venue resulted in waiver].)

The Court next finds that a general sufficiency demurrer is not proper here because the petition at issue does not allege claims against Respondent Oh so much as it petitions for an order compelling arbitration of a fees and costs dispute between the parties pursuant to the arbitration agreement between the parties.

Therefore, calendaring issues aside, the Court OVERRULES Respondent Oh’s Demurrer.

Petition to Compel Arbitration: GRANTED.

Legal Standard

Pursuant to Code of Civil Procedure §1281.2, generally, on a petition to compel arbitration, the court must grant the petition unless it finds that (1) no written agreement to arbitrate exists, (2)¿the right to compel arbitration has been waived, (3) grounds exist for revocation of the agreement, or (4) litigation is pending that may render the arbitration unnecessary or create conflicting¿rulings on common issues.

When seeking to compel arbitration, the initial burden lies with the moving party to demonstrate the existence of a valid arbitration agreement by preponderance of the evidence. (Ruiz v. Moss Bros. Auto Group (2014) 232 Cal.App.4th 836, 841-842; Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 164-165.) It is sufficient for the moving party to produce a copy of the arbitration agreement or set forth the agreement’s provisions. (Gamboa v. Northeast Community Clinic, supra, at p. 165.) The burden then shifts to the opposing party to prove by a preponderance of evidence any defense to enforcement of the contract or the arbitration clause. (Ruiz v. Moss Bros. Auto Group, supra, at p. 842; Gamboa v. Northeast Community Clinic, supra, at p. 165.) Subsequently, the moving party must establish with the preponderance of admissible evidence a valid arbitration agreement between the parties. (Gamboa v. Northeast Community Clinic, supra, at pp. 165-166.)

The trial court then weighs all the evidence submitted and uses its discretion to make a final determination. (Ibid.) “California law, ‘like [federal law], reflects a strong policy favoring arbitration agreements and requires close judicial scrutiny of waiver claims.’” (Wagner Const. Co. v. Pacific Mechanical Corp. (2007) 41 Cal.4th 19, 31.)

If the court orders arbitration, then the court shall stay the action until arbitration is completed. (See Code Civ. Proc., § 1281.4.)

Analysis

Petitioner Meyer, Olson, Lowy & Meyers, LLP petitions the Court for an order compelling arbitration of a fees and costs dispute between the parties pursuant to an arbitration agreement between the parties and Business & Professions Code sections 6200 et seq. (Petition, pp. 4-5.)

The Mandatory Fee Arbitration Act (“MFAA,” Bus & Prof. Code § 6200 et seq.) is an arbitration scheme that applies to disputes between clients and attorneys over legal fees, costs, or both. (Rosenson v. Greenberg Glusker Fields Claman & Machtinger LLP (2012) 203 Cal.App.4th 688, 693.) Unlike arbitration under the California Arbitration Act, which is based on a written agreement of the parties, “arbitration under the MFAA is based on statute and does not require a prior agreement. [Citations.]” (Ibid.) A client may elect to initiate MFAA arbitration, and the attorney is bound to participate if the client does so. (Bus. & Prof. Code § 6200, subd. (c); Schatz v. Allen Matkins Leck Gamble & Mallory LLP (2009) 45 Cal.4th 557, 565.) However, the award is only binding if the parties agree in writing to make it so. (Schatz v. Allen Matkins Leck Gamble & Mallory LLP, supra, at p. 559; see Bus. & Prof. Code § 6204, subd. (a).)

An attorney must send a written notice to the client before or at the time of service of summons or claim in an action against the client for the recovery of fees and costs, or before or at the commencement of any other proceeding against the client under a contract between them that provides for an alternative to arbitration under the MFAA for the recovery of fees and costs (e.g., contractual arbitration). (Bus. & Prof. Code § 6201, subd., (a). The notice must include a statement of the client’s right to arbitration under the MFAA where a failure to give this notice is a ground for dismissal of the action or other proceeding. (Bus. & Prof. Code § 6201, subd. (a); Law Offices of Dixon R. Howell v Valley (2005) 129 Cal.App.4th 1076, 1090 [court has discretion to dismiss action or proceeding for payment of fees when attorney fails to give notice].) An attorney is not required to give notice, however, before initiating mediation of the dispute. (Bus. & Prof. Code § 6201, subd., (a).)

Petitioner here gave notice to Respondent Oh regarding his right to arbitration. (Petition, Ex. B.) Petitioner has also provided a copy of the parties’ arbitration agreement, wherein the parties agreed to arbitrate “[a]ll disputes between [the parties] regarding any aspect of [the] attorney-client relationship,” including “disputes … about financial matters ([e.g.,] fees and costs].” (Petition, Ex. A, Retainer Agreement, ¶¶ 12-13 & April 6, 2019 Letter [clarifying paragraphs 12 and 13].)

The Court determines that Petitioner has met its burden of showing that an agreement to arbitrate fees and costs disputes exists between the parties. Further, nothing before the Court indicates that Petitioner has waived its right to invoke this arbitration agreement. Respondent Oh has failed to oppose this petition, such that no defense has been presented to permit this Court to conclude that an order compelling arbitration in this action should not be granted in favor of Petitioner.

The Court therefore GRANTS Petitioner’s petition to compel arbitration of the parties’ fees and costs dispute. That arbitration shall be binding according to the terms of the parties’ agreement. (Petition, Ex. A, Retainer Agreement, ¶ 12; see Schatz v. Allen Matkins Leck Gamble & Mallory LLP, supra, 45 Cal.4th at p. 559; see also Bus. & Prof. Code § 6204, subd. (a).)

Aside from proceedings related to the appointment of an arbitrator discussed below, this action is STAYED pending the outcome of the binding arbitration proceedings. (Code Civ. Proc., § 1281.4.)

Petition to Appoint Arbitrator: SUBMITTED.

Legal Standard

Code of Civil Procedure section 1281.6 provides:

If the arbitration agreement provides a method of appointing an arbitrator, that method shall be followed. If the arbitration agreement does not provide a method for appointing an arbitrator, the parties to the agreement who seek arbitration and against whom arbitration is sought may agree on a method of appointing an arbitrator and that method shall be followed. In the absence of an agreed method, or if the agreed method fails or for any reason cannot be followed, or when an arbitrator appointed fails to act and his or her successor has not been appointed, the court, on petition of a party to the arbitration agreement, shall appoint the arbitrator.

When a petition is made to the court to appoint a neutral arbitrator, the court shall nominate five persons from lists of persons supplied jointly by the parties to the arbitration or obtained from a governmental agency concerned with arbitration or private disinterested association concerned with arbitration. The parties to the agreement who seek arbitration and against whom arbitration is sought may within five days of receipt of notice of the nominees from the court jointly select the arbitrator whether or not the arbitrator is among the nominees. If the parties fail to select an arbitrator within the five-day period, the court shall appoint the arbitrator from the nominees.

Analysis

A review of the parties’ arbitration agreement fails to show a method for appointing an arbitrator. (Petition, Ex. A, Retainer Agreement, ¶¶ 12-13 & April 6, 2019 Letter.) Per Petitioner’s request, the Court therefore undertakes the task of appointing the arbitrator. (Code Civ. Proc., § 1281.6.)

Petitioner has already provided the name of four potential arbitrators: the Honorable Aviva Bobb, the Honorable Hank Goldberg, the Honorable Elizabeth Feffer, or the Honorable John Ouderkirk. (Petitioner, p. 5.) The Court also proposes the Honorable Christina Byrd as an arbitrator.

The Court SUBMITS the petition for appointment of an arbitrator. Within five days of notice of this order, the parties may agree to any of the above-listed arbitrators or jointly elect a different arbitrator. If the parties fail to jointly elect an arbitrator, the Court will elect one of the five arbitrators at a follow-up Order to Show Cause hearing on this subject, at which time the Court will grant this portion of Petitioner’s petition.

Conclusion

Respondent Erik C. Oh’s Demurrer to Complaint is OVERRULED because any venue challenge to Petitioner’s petition has been waived and the demurrer’s general sufficiency challenge is not applicable to the petition’s subject matter.

Petitioner Meyer, Olson, Lowy & Meyers, LLP’s Petition to Compel Arbitration is GRANTED because Petitioner has shown a valid arbitration agreement exists between the parties, the agreement covers fees and costs disputes, a fees and costs dispute has arisen between the parties, Petitioner has properly invoked its right to petition an order compelling arbitration, and no waiver or defenses exist against the granting of this portion of the petition.

Petitioner Meyer, Olson, Lowy & Meyers, LLP’s Petition to Appoint Arbitrator is SUBMITTED. Within five days of notice of this order, the parties may agree to any of the above-listed arbitrators or jointly elect a different arbitrator. If the parties fail to jointly elect an arbitrator, the Court will elect one of the five arbitrators at a follow-up Order to Show Cause hearing on this subject, at which time the Court will grant this portion of Petitioner’s petition.

The Court STAYS this action as to all matters other than those related to the appointment of an arbitrator to be selected by the parties jointly within five days of notice of this order or by the Court in the absence of the parties’ joint agreement.