Judge Barbara M. Scheper, Case Number: 21STCV47149, Date: 2023-10-25 Tentative Ruling

Judge: Barbara M. Scheper, Case: 21STCV47149, Date: 2023-10-25 Tentative Ruling

Case Number: 21STCV47149 Hearing Date: February 5, 2024 Dept: 30

Dept. 30

Calendar No.

Piltan vs. Kaiser, et. al., Case No. 21STCV47149

Tentative Ruling re: Defendants’ Motion to Compel Arbitration

Defendants John J Kaiser and Kaiser Legal Services, Inc. (collectively, Defendants) move to compel Plaintiff Babak Piltan (Plaintiff) to binding arbitration and stay this action. The motion is granted.

“On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists, unless it determines that: (a) The right to compel arbitration has been waived by the petitioner; or (b) Grounds exist for the revocation of the agreement.” (Code Civ. Proc. § 1281.2, subds. (a), (b).)

A proceeding to compel arbitration is in essence a suit in equity to compel specific performance of a contract. (Freeman v. State Farm Mutual Auto Insurance Co. (1975) 14 Cal.3d 473, 479.) Such enforcement may be sought by a party to the arbitration agreement. (Code Civ. Proc., § 1280, subd. (e)(1).)

The petition to compel arbitration functions as a motion and is to be heard in the manner of a motion, i.e., the facts are to be proven by affidavit or declaration and documentary evidence with oral testimony taken only in the court’s discretion. (Code Civ. Proc., §1290.2; Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413–414.) The petition to compel must set forth the provisions of the written agreement and the arbitration clause verbatim, or such provisions must be attached and incorporated by reference. (Cal. Rules of Court, rule 3.1330; see Condee v. Longwood Mgmt. Corp. (2001) 88 Cal.App.4th 215, 218 (Condee).)

Once petitioners allege that an arbitration agreement exists, the burden shifts to respondents to prove the falsity of the purported agreement, and no evidence or authentication is required to find the arbitration agreement exists. (See Condee, supra, 88 Cal.App.4th at p. 219.) However, if the existence of the agreement is challenged, “petitioner bears the burden of proving [the arbitration agreement’s] existence by a preponderance of the evidence.” (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413; see also Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1058–1060.)

In the Complaint, Plaintiff alleges that he entered into a contract with Defendant John J Kaiser (Kaiser) for Kaiser to represent Plaintiff in two LASC cases, 19STCV14650 and 19STCV14652. (Comp. ¶¶ 6-8.) Plaintiff asserts claims against Defendants including for breach of contract, legal malpractice, and breach of fiduciary duty, based on Kaiser’s alleged misconduct in connection with the two representations.

Defendants present an “Engagement Letter” from Kaiser Legal Services dated July 13, 2020 (the 52 Letter). The Letter is addressed to “Babak Piltan on behalf of Mac Daddy Films, LLC,” and states, “KAISER LEGAL SERVICES (‘Firm’) and MAC DADDY FILMS, LLC (‘Client’) hereby agree that Firm will provide legal services to Client on the terms set forth below. … The Legal Services provided under this engagement are all litigation and trial activities in relation to representation of the Client regarding the Los Angeles County court Case #19STCV14652.” (Kaiser Decl. ¶ 4, Ex. 1.) The 52 Letter includes a section entitled “Arbitration,” which provides, “[a]ny dispute, claim or controversy arising or relating to this Agreement shall be determined by arbitration administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures. This includes: the construction, application or performance of any obligations and services including claims of malpractice…” (Id. [7].) The Letter lists the “Client Name” as “MAC DADDY FILMS, LLC,” and the “Controlling Agent’s Name” as “Babak Piltan.” (Id. [8].)

With their Reply, Defendants present a second “Engagement Letter” concerning Defendants’ representation of Plaintiff, individually, in LASC case no. 19STCV14650 (the 50 Letter). (Kaiser Reply Decl. ¶ 4, Ex. B.) This second letter contains an identical arbitration provision. (Id. [8].) Because this agreement was submitted in reply, Plaintiff was given the opportunity to file a sur-reply which the Court has considered.

Plaintiff argues that he cannot be compelled to arbitration under the 52 Letter because neither he nor Kaiser are parties to the agreement. The Court finds that the 52 Letter’s arbitration provision may be enforced against Plaintiff as a nonsignatory based on equitable estoppel.

“In the arbitration context, a party who has not signed a contract containing an arbitration clause may nonetheless be compelled to arbitrate when he seeks enforcement of other provisions of the same contract that benefit him. [Citation.] . . . [T]he equitable estoppel doctrine applies when a party has signed an agreement to arbitrate but attempts to avoid arbitration by suing nonsignatory defendants for claims that are ‘based on the same facts and are inherently inseparable’ from arbitrable claims against signatory defendants.” (Metalclad Corp. v. Ventana Environmental Organizational Partnership (2003) 109 Cal.App.4th 1705, 1713.) “Courts applying equitable estoppel against a signatory have ‘looked to the relationships of persons, wrongs and issues, in particular whether the claims that the nonsignatory sought to arbitrate were ‘intimately founded in and intertwined with the underlying contract obligations.’ ” (Ibid.) “A nonsignatory plaintiff can be compelled to arbitrate a claim even against a nonsignatory defendant, when the claim is itself based on, or inextricably intertwined with, the contract containing the arbitration clause.” (JSM Tuscany, LLC v. Superior Court (2011) 193 Cal.App.4th 1222, 1241.)

Here, Plaintiff’s claims are based on and “inextricably intertwined with” the 52 Letter presented by Defendants, as Plaintiff seeks to enforce the “contract for Defendant Kaiser to

represent Plaintiff in the 52 case.” (Comp. ¶¶ 8, 66, 73.) Consequently, Plaintiff is subject to the 52 Letter’s arbitration provision under the equitable estoppel doctrine. John Kaiser, a nonsignatory, may enforce the provision against Plaintiff as an alleged agent of Kaiser Legal Services, the signatory. (Comp. ¶ 5; Thomas v. Westlake (2012) 204 Cal.App.4th 605, 614 [“[W]hen a plaintiff alleges a defendant acted as an agent of a party to an arbitration agreement, the defendant may enforce the agreement even though the defendant is not a party thereto.”].)

The 50 Letter, signed by Plaintiff in his individual capacity (Kaiser Reply Decl. ¶ 4, Ex. B), clearly applies to Plaintiff’s claims.