Judge: Christopher K. Lui, Case: 22STCV24567, Date: 2022-10-25 Tentative Ruling

Case Number: 22STCV24567    Hearing Date: October 25, 2022    Dept: 76

Pursuant to California Rule of Court 3.1308(a)(1), the Court does not desire oral argument on the motion addressed herein.  As required by Rule 3.1308(a)(2), any party seeking oral argument must notify ALL OTHER PARTIES and the staff of Department 76 of their intent to appear and argue.  Notice to Department 76 may be sent by email to smcdept76@lacourt.org or telephonically at 213-830-0776.  If notice of intention to appear is not given and the parties do not appear, the Court will adopt the tentative ruling as the final ruling.

            Plaintiff client alleges that, as a result of the underlying litigation, Defendant attorneys took 50 percent of the damages award collected and all of the statutory fee award, thereby depriving Plaintiff of $1,750.355.48. 

            Defendants move for an order staying proceedings pending a determination of the motion to compel arbitration.

TENTATIVE RULING

            Defendants Ebby S. Bakhtiar, P.C. and Ebby S. Bakhtiar motion to stay this action, including discovery, pending a determination of the motion to compel arbitration is GRANTED.

Motion To Stay Action Pending Arbitration

Defendants Ebby S. Bakhtiar, P.C. and Ebby S. Bakhtiar  move to stay this litigation, including discovery, pending a determination of the motion to compel arbitration, which is set for hearing on March 28, 2023.

CCP § 1281.4 provides in pertinent part:

If an application has been made to a court of competent jurisdiction, whether in this State or not, for an order to arbitrate a controversy which is an issue involved in an action or proceeding pending before a court of this State and such application is undetermined, the court in which such action or proceeding is pending shall, upon motion of a party to such action or proceeding, stay the action or proceeding until the application for an order to arbitrate is determined and, if arbitration of such controversy is ordered, until an arbitration is had in accordance with the order to arbitrate or until such earlier time as the court specifies.

(Civ. Proc. Code § 1281.4 [bold emphasis and underlining added].)

Plaintiff argues that she needs discovery to prove that the arbitration agreement is void. Plaintiff argues that the fee agreement does not include a written disclosure to Plaintiff that Defendants did not have legal malpractice insurance as required under the Rules of Professional Conduct. Nor is there any other writing that disclosed Defendants’ lack of malpractice insurance. Defendants apparently have no insurance that would have covered any professional liability claims arising out of the representation. The failure to make this disclosure would void the agreement, including the arbitration provision, as a matter of law.

Plaintiff argues that she must be permitted discovery to ascertain, under oath, that Defendants did not have insurance and that they failed to make that disclosure to Ramirez in order to marshal evidence in opposition to the motion to compel arbitration. Once Ramirez establishes that Defendants did not have insurance and failed to disclose that fact, Ramirez can establish that the agreement is void and that there is no binding arbitration clause. 

            Plaintiff’s position is not well-taken.. Whether or not Defendants made certain written disclosures will appear on the face of the agreement. Moreover, Plaintiff may raise the absence of legal malpractice insurance in the opposition to the motion to compel arbitration, and Defendants will have to produce evidence of such in connection with such motion. Plaintiff certainly has not demonstrated why the stay mandate set forth in CCP § 1281.4 can be ignored. 

As such, the motion to stay this action, including discovery, pending a determination of the motion to compel arbitration is GRANTED.