Judge: Colin Leis, Case: 22AHCV00325, Date: 2022-09-28 Tentative Ruling

Case Number: 22AHCV00325    Hearing Date: September 28, 2022    Dept: 3

SUPERIOR COURT OF CALIFORNIA

COUNTY OF LOS ANGELES – NORTHEAST DISTRICT

DEPARTMENT 3

MOVING PARTY:                Defendant Filevine, Inc.

RESPONDING PARTY:       Plaintiff DeWitt Algorri & Algorri, LLP

Motion to Stay and Compel Arbitration

The court considered the moving papers, opposition, and reply filed in connection with this motion.

BACKGROUND

            Plaintiff DeWitt Algorri & Algorri, LLP filed this action on June 1, 2022 against Defendant Filevine, Inc. The operative First Amended Complaint (“FAC”) was filed on July 13, 2022, and asserts causes of action for (1) breach of contract, (2) promissory fraud, (3) rescission, (4) unfair business practices, (5) false advertising, and (6) money had and received arising out of an agreement for the implementation of a legal case management platform and related services.

            Defendant moves to compel arbitration of all of Plaintiff’s claims and to stay the action pending completion of arbitration.

EVIDENCE

            The court overrules Plaintiff’s objection nos. 1 and 2.

DISCUSSION

A.   Existence of Arbitration Agreement

Under California law, a party moving to compel arbitration must prove by a preponderance of evidence the existence of the arbitration agreement and that the dispute is covered by the agreement. The burden then shifts to the resisting party to prove by a preponderance of evidence a ground for denial (e.g., fraud, unconscionability, etc.). (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413-414; Hotels Nevada v. L.A. Pacific Center, Inc. (2006) 144 Cal.App.4th 754, 758.) This is in accord with federal law under the Federal Arbitration Act (“FAA”), which governs contracts involving interstate commerce.[1] (Chiron Corp. v. Ortho Diagnostic Systems, Inc. (9th Cir. 2000) 207 F.3d 1126, 1130 [“The court’s role under the [FAA] is therefore limited to determining (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue.”].)

Defendant submits evidence that the parties entered into the Sales Order and License Agreement (the “Agreement”) on or about August 11, 2021. (FAC, ¶ 8, Ex. A; Dowdle Decl., ¶ 4, Ex. A.) Under the Agreement, Plaintiff purchased a license to use case management services (“CMS”) provided by Defendant. On the first page of the Agreement is a provision incorporating the Terms of Service as part of the Agreement. (Dowdle Decl., ¶ 4, Ex. A, p. 1.[2]) Section 12.3 of the Terms of Service[3] is entitled “Dispute Resolution.” That section provides, in pertinent part, as follows:

“Except for: (i) the right of either party to apply to a court of competent jurisdiction for a temporary restraining order, a preliminary injunction, or other equitable relief to preserve the status quo or to prevent irreparable harm; or (ii) the right of Filevine to enforce its right to collect amounts due under this Agreement, any claim or controversy arising out of or relating to these Terms and Conditions or to a breach of these Terms and Conditions, shall be finally, and exclusively, settled by binding arbitration in Salt Lake City, Utah. …. The arbitrator shall apply the substantive law of the State of Utah, except that the interpretation and enforcement of this arbitration provision shall be governed by the Federal Arbitration Act.”

(Dowdle Errata Decl., Ex. A.)

Plaintiff’s causes of action fall within the broad scope of this arbitration provision because the causes of action arise out of or relate to the agreement for Defendant to provide case management services and for Plaintiff to pay for those services. (See Vianna v. Doctors’ Management Co. (1994) 27 Cal.App.4th 1186, 1189 (noting that “arbitration agreements should be liberally interpreted, and arbitration should be ordered unless the agreement clearly does not apply to the dispute in question”).) Nevertheless, Plaintiff argues that the causes of action for unfair business practices, false advertising, and money had and received are equitable in nature and so cannot be compelled to arbitration because they are exempted by the arbitration provision. But the exemption applies only to the parties’ right to seek a temporary restraining order, a preliminary injunction, or other equitable relief to preserve the status quo or to prevent irreparable harm. While Plaintiff does include a prayer for injunctive relief in the FAC, Plaintiff fails to demonstrate that its prayer for injunctive relief is for the purpose of preserving the status quo or preventing irreparable harm.

Next, Plaintiff argues that Defendant has failed to demonstrate that an arbitration agreement exists for three reasons.

First, Plaintiff points out that the version of the Agreement attached to the Declaration of Sean Dowdle filed in support of Defendant’s motion omits key language concerning the arbitration provision. But it is clear that the key language is missing due to being cut off, not because it does not exist. In response, Defendant filed a corrected Declaration of Sean Dowdle that purports to attach the full and complete arbitration provision. Plaintiff counters that the “corrected” version of the Agreement shows that the Terms of Service were last updated on January 12, 2022, long after the Agreement was signed. (Dowdle Errata Decl., p. 38 of 39.) In reply, Defendant filed a Second Declaration of Sean Dowdle. Mr. Dowdle attests to the fact that attaching the January 12, 2022 version of the Terms of Service was a mistake on his part. (2nd Dowdle Decl., ¶¶ 8-9.) The actual Terms of Service that were in effect in August 2021 (when the Agreement was signed) are attached as Exhibit A to the Second Declaration of Sean Dowdle. Mr. Dowdle also attests to the fact that the arbitration provisions in both versions of the Terms of Service are identical. (2nd Dowdle Decl., ¶ 11.)

Second, Plaintiff contends that the Agreement submitted by Defendant is unsigned. But a signature is clearly apparent on page 2 of the Agreement. (Dowdle Errata Decl., Ex. A, p. 2.)

Third, Plaintiff contends that the Agreement is not property authenticated. A party moving to compel arbitration can establish that an arbitration agreement exists simply by attaching a copy of the agreement to its petition without necessarily following the “normal procedures of document authentication.” (Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1058; see also Condee v. Longwood Management Corp., supra, 88 Cal.App.4th at p. 219 [“A plain reading of the statute indicates that as a preliminary matter the court is only required to make a finding of the agreement’s existence, not an evidentiary determination of its validity.”].)

Therefore, the Court finds that Defendant has established that an arbitration agreement exists and that it covers the claims asserted by Plaintiff in this lawsuit.

CONCLUSION

Based on the foregoing, the court grants Defendant’s motion to compel arbitration.

The court orders that this action is stayed pending completion of arbitration of Plaintiff’s arbitrable claims.

The court sets an arbitration completion status conference on September 28, 2023, at 8:30 a.m. in Dept. 3. The parties are ordered to file a joint report regarding the status of the arbitration by September 16, 2023.  

Defendant is ordered to give notice of this ruling.

IT IS SO ORDERED.

DATED:  September 28, 2022

_____________________________

Colin Leis

Judge of the Superior Court