Judge: Deirdre Hill, Case: 22TRCP00271, Date: 2022-09-13 Tentative Ruling

Case Number: 22TRCP00271    Hearing Date: September 13, 2022    Dept: M

Hearing Date:                          September 13, 2022

Moving Parties:                      T.K. & S Development, L.P.

Responding Party:                  Respondents Charles Thacker and Diana Thacker

Petition to Compel Arbitration

            The court considered the moving, opposition, and reply papers.

RULING

            The petition is DENIED WITHOUT PREJUDICE.

BACKGROUND

            On July 29, 2022, petitioner T.K. & S Development, L.P. filed a petition against Charles Thacker and Diana Thacker to compel arbitration.

LEGAL AUTHORITY

Under CCP § 1281, a “written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable and revocable, save upon such grounds as exist for the revocation of any contract.”

Under CCP § 1281.2, “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: . . . (c) A party to the arbitration agreement is also a party to a pending court action . . . with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact. . . . (d) . . . . If the court determines that a party to the arbitration is also a party to litigation in a pending court action . . . with a third party as set forth under subdivision (c) herein, the court (1) may refuse to enforce the arbitration agreement . . . ; (2) may order intervention or joinder as to all or only certain issues; (3) may order arbitration among the parties who have agreed to arbitration and stay the pending court action . . . pending the outcome of arbitration proceeding; or (4) may stay arbitration pending the outcome of the court action or special proceeding.” 

DISCUSSION

            Petitioner T.K. & S Development, L.P. requests an order compelling arbitration and to appoint an arbitrator.

            Existence of an agreement to arbitrate

“As stated in Cione v. Foresters Equity Services, Inc. (1997) 58 Cal. App. 4th 625, 634 ‘The right to arbitration depends upon contract; a petition to compel arbitration is simply a suit in equity seeking specific performance of that contract.  There is no public policy favoring arbitration of disputes that the parties have not agreed to arbitrate.’”  Lopez v. Charles Schwab & Co., Inc. (2004) 118 Cal. App. 4th 1224, 1229.

Petitioner contends that the parties entered into a written agreement to arbitrate disputes relating to or arising out of their lease agreement; all claims being asserted by petitioner against respondents are covered by their lease agreement; respondents refuse to comply with the agreement to arbitrate the parties’ dispute, despite petitioner’s demand; and the court has jurisdiction to enforce the agreement by issuing an order compelling arbitration.

The Addendum to the Standard Industrial/Commercial Multi-Tenant Lease dated November 1, 2010 contains an arbitration clause, which was initialed by respondents.  See Stephen Goldberg decl., Exh. A.

Petitioner contends that on July 19, 2022, petitioner’s counsel emailed a letter to respondents’ counsel stating in part:  “It is our understanding that the Lease calls for arbitration of disputes pertaining to the Lease, but does not specify a particular arbitration provider. . . . As the pending sale hangs in the balance, time is of the essence, so please contact me as soon as possible.  If we do not hear back from you by the close of business Friday, July 22, we will Petition the Court to Appoint an Arbitrator.”  Petitioner argues that respondents have “ignored” petitioner’s “demand” for arbitration.

Petitioner asserts that because the arbitration agreement does not specify who shall conduct the arbitration, it proposes three arbitrators (two from JAMS and one from ADR Services).

Petitioner also seeks attorney’s fees.

In opposition, respondents do not dispute that an agreement to arbitrate exists and do not oppose arbitration.  They assert though that the petition falsely states that they have refused to arbitrate and that rather than filing a petition, petitioner should have filed an arbitration demand with either JAMS or ADR Services.  Further, they argue, having the court select an arbitrator is premature. 

The court finds that although there exists an agreement to arbitrate, petitioner has not met its burden of showing that respondents have refused to arbitrate a controversy.  Moreover, the Arbitration Agreement at para. 51.C. (“Appointment of an Arbitrator”) states that “[s]uch arbitration shall be initiated by the Parties, or either of them, within ten days after either party sends written notice (the ‘Arbitration Notice’) of a demand to arbitrate by registered or certified mail to the other party and to the Arbitrator. . . . In the event the Arbitrator is not selected as provided for above for any reason, the other party initiating the arbitration shall apply to the appropriate Court for the appointment of a qualified retired judge to act as the Arbitrator.”  It does not appear that petitioner sent an “Arbitration Notice” of a demand to arbitrate by registered or certified mail.  The letter dated July 19, 2022 was sent by email and did not “demand” arbitration but only that respondents’ counsel contact petitioner’s counsel “to discuss selection of an Arbitrator.”  Further, petitioner did not initiate an arbitration. 

The petition is thus DENIED WITHOUT PREJUDICE.

Petitioner is ordered to give notice of the ruling.