Superior Court of California 

County of Los Angeles – West District  

Beverly Hills Courthouse / Department 205 

 

 

BACKGROUND 

 This action as well as a related case (Case No. 20SMCV01681, the “Related Action”) arise out of a dispute between Plaintiff Alan Salzman and Defendant Marc Shomer, regarding the division of property between Salzman and his deceased wife, Andrea Nicole Left (“Decedent”).  Shomer, Decedent’s brother, is the personal representative of the Estate and the Trustee of the Andrea Nicole Left Living Trust. 

The division of property between Plaintiff and Decedent is governed by a pre-marital agreement (the “Agreement”) which contains an arbitration provision mandating the arbitration of “any dispute arising out of the subject matter of the Agreement.”  (Ex. A to Salzman Decl. ¶23.1.) 

The operative complaint alleges six claims for (1) breach of the Housing Costs Contract, (2) breach of fiduciary duty, (3) conversion, (4) money had and received, (5) unjust enrichment and (6) constructive trust.   

Plaintiff’s claims in this action arise from two sets of events: First, Decedent’s failure to reimburse Plaintiff for housing expenses as required in a “Housing Costs Contract” which was expressly incorporated into the Agreement.  Second, Decedent’s failure to remit proceeds and repayment of a loan Plaintiff made to Decedent’s mother, which remain Plaintiff’s separate property under the terms of the Agreement.       

The Related Action was filed by Shomer regarding the disposition of certain property pursuant to the terms of the Agreement.  Salzman filed a petition to compel arbitration based on the arbitration provision in the Agreement, and the parties stipulated to submit the Related Action to JAMS arbitration.     

This hearing is on Plaintiff’s motion to compel arbitration and to file under seal the Agreement.  As to the motion to compel arbitration, Plaintiff argues that all of his claims in this action are within the broad scope of the arbitration provision because they concern the subject matter of the Agreement, and therefore, the claims should be arbitrated.  As to his motion to seal, Plaintiff argues the Agreement contains confidential financial information; Plaintiff’s overriding interest in the privacy of this financial information outweighs any right to public access as the Agreement is a private contract; the overriding interest would be prejudiced by disclosure, and there is no less restrictive means of protecting the confidential information.      

 

 

 

MOTION TO SEAL 

An application to seal must be accompanied by a declaration containing facts sufficient to justify sealing. (Cal. Rules of Court, Rule 2.551(b)(1).)  Plaintiff has submitted the declaration of Todd J. Densen explaining the facts which justify sealing.     

A court may order records to be filed under seal when the following conditions are met: “(1) [t]here exists an overriding interest that overcomes the right of public access to the record[s]; (2) [t]he overriding interest supports sealing the record[s]; (3) [a] substantial probability exists that the overriding interest will be prejudiced if the record[s are] not sealed; (4) [t]he proposed sealing is narrowly tailored; and (5) [n]o less restrictive means exist to achieve the overriding interest.”  (Cal. Rules of Court 2.550(d).) 

In ruling on a motion to seal, the court must identify (1) the specific information claimed to be entitled to protection from public disclosure, (2) the nature of the harm threatened by disclosure, and (3) any countervailing considerations. (H.B. Fuller Co. v. Doe (2007) 151 Cal.App.4th 879, 894.) Therefore, in order to prevail on his or her motion, the moving party must present a specific enumeration of the facts sought to be withheld and the specific reasons for withholding them. (Id. at 904.) 

The California Supreme Court has held that the First Amendment provides “a right of access to ordinary civil trial and proceedings.” (NBC Subsidiary (KNBC-TV), Inc. v. Superior Court (1999) 20 Cal.4th 1178, 1212.)  The court further noted its belief that “the public has an interest, in all civil cases, in observing and assessing the performance of its public judicial system.”  (Id. at 1210.)  There is a presumption of openness in civil court proceedings. (Id. at 1217.)  Therefore, it is up to this Court to determine if that presumption has been overcome. 

Courts must find compelling reasons, prejudice absent sealing and the lack of less-restrictive means, before ordering filed documents sealed. (Hurvitz v. Hoefflin (2000) 84 Cal.App.4th 1232, 1246; KNBC-TV, 20 Cal.4th at 1208-1209 n. 25; Champion v. Superior Court (1988) 201 Cal.App.3d 777, 787.)   

A compelling reason could include the party’s right to privacy in financial records.  (Valley Bank of Nevada v. Superior Court¿(1975) 15 Cal.3d 652, 656-657 (there is a constitutional right to privacy in financial information); Cassidy v. California Board of Accountancy¿(2013) 220 Cal.App.4th 620,625¿(finding that there existed an¿overriding interest in a company's right of privacy and confidentiality in its tax and¿financial records supporting the¿sealing of such records and the company's right of privacy and confidentiality to its tax and¿financial records¿will be prejudiced if these documents are not sealed).)  

A proposed sealing must also be narrowly tailored to serve the overriding interest, such as by sealing only portions of pleadings or redacting particular text that refer to the confidential information. (In re Marriage of Burkle (2006) 135 Cal.App.4th 1045, 1052, 1070.)   

Here, Plaintiff seeks to file under seal a pre-marital agreement which reveals information about Plaintiff and Decedent’s financial assets, net worth and financial circumstances as well as information about their personal and business affairs.  (Salzman Decl. ¶ 2.)  The pre-marital agreement also includes a confidentiality provision.  (Ex. A to Salzman Decl., ¶15.)   

There is an overriding interest in protecting personal financial information.  This overriding interest overcomes the right of public access especially where as here, the pre-marital agreement is a private contract between Plaintiff and Decedent, and the parties agreed the contract would be kept confidential.  (See, e.g., Cassidy v. California Bd. of Accountancy (2013) 220 Cal.App.4th 620, 624-625 (holding that records containing private financial information should have been sealed).)   

Plaintiff’s overriding interest in maintaining the confidence of his and Decedent’s finances, as well as their personal and business affairs would be prejudiced if the pre-marital agreement were disclosed.  Additionally, the sealing order is properly tailored to seal only the document that reveals the confidential information.  And there is no less restrictive means to protect Plaintiff’s privacy interests because Plaintiff and Decedent intended the entire pre-marital agreement to be confidential.  (Ex. A to Salzman Decl., ¶15.) 

For these reasons, the Court grants Plaintiff’s motion to seal.   

MOTION TO COMPEL ARBITRATION 

Legal Standard 

Under California¿law,¿public policy favors arbitration as an efficient and less expensive means of resolving private disputes.¿ (Moncharsh¿v.¿Heily¿&¿Blase¿(1992) 3 Cal.4th 1, 8-9;¿AT&T Mobility LLC v. Concepcion,¿563 U.S. at 339.)¿ To further that policy, Code Civ. Proc. §1281.2 requires a trial court to enforce a written arbitration agreement unless it finds (1) no written agreement to arbitrate exists, (2) the right to compel arbitration has been waived, (3) grounds exist for rescission 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 a preponderance of evidence.¿ (Ruiz v. Moss Bros. Auto Group (2014) 232 Cal.App.4th 836, 841-42; Gamboa v. Northeast Community Clinic (2021), 72 Cal.App.5th 158, 164-65.)¿ It is sufficient for the moving party to produce a copy of the arbitration agreement or set forth the agreement’s provisions.¿ (Gamboa, 72 Cal.App.5th at 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, 232 Cal.App.4th at 842; Gamboa, 72 Cal.App.5th at 165.)¿ The trial court then weighs all the evidence submitted and uses its discretion to make a final determination.¿ (Id.)¿¿¿ 

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

Existence of Agreement 

In ruling on a motion to compel arbitration, the Court must first determine whether the parties actually agreed to arbitrate the dispute, and general principles of California contract law¿help guide the court in making this determination. (Mendez v. Mid-Wilshire Health Care Center (2013) 220 Cal.App.4th 534, 541; Victoria v. Superior Court (1985) 40 Cal. 3d 734, 835.)¿¿¿ 

Although “[t]he law favors contracts for arbitration of disputes between parties” (Player v. Geo. M. Brewster & Son, Inc. (1971) 18 Cal.App.3d 526, 534), “there is no policy compelling persons to accept arbitration of controversies which they have not agreed to arbitrate[.]” (Weeks v. Crow (1980) 113 Cal. App. 3d 350, 353..)¿ “[A]rbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.” (AT&T Technologies v. Communications Workers (1986) 475 U.S. 643, 648 (citations and internal quotations omitted); see also Sparks v. Vista Del Mar Child & Family Services (2012) 207 Cal.App.4th 1511, 1518¿ (“Because arbitration is a contractual matter, a party that has not agreed to arbitrate a controversy cannot be compelled to do so.”).)¿¿¿¿¿¿¿¿¿ 

Here, Plaintiff has met his burden of proving the existence of an arbitration agreement by a preponderance of the evidence.¿ The Agreement contains an arbitration clause that requires binding arbitration of “any dispute arising out of the subject matter of the Agreement.”  (Ex. A to Salzman Decl. ¶23.1)¿¿ Defendant does not dispute the existence of the Agreement.  ¿¿ 

Arbitrability of Disputes 

After deciding the existence of an arbitration agreement, the Court must next consider the second gateway issue of whether the parties’ dispute falls within the scope of the arbitration provision.¿ (Omar v. Ralphs Grocery Co. (2004) 118 Cal.App.4th 955, 961.)¿ ¿¿ 

The decision as to whether a contractual arbitration clause covers a particular dispute rests substantially on whether the clause in question is broad or narrow.  (Ramos v. Superior Court (2018) 28 Cal.App.5th 1042, 1051-52.)  A¿narrow clause such as one governing only claims “arising out of” an agreement is interpreted to cover only contract claims.  However, a broad clause – for example, one governing claims “arising out of or relating to” an agreement –covers a wide range of claims including those sounding in tort.  (Id.)  For a party’s claims to come within the scope of a broad arbitration clause, “the factual allegations of the complaint need only ‘touch matters’ covered by the contract containing the arbitration clause” or have their “roots in the relationship” created by the contract.  (Id. at 1052, 1053.)  Further, courts regularly find that a contract providing for arbitration of “any dispute” necessarily includes both contractual and tort claims.  (See, e.g., EFund Capital Partners v. Pless (2007) 150 Cal.App.4th 1311, 1322.) 

Here, the arbitration provision does not only cover disputes arising out of the contract; it covers disputes “arising out of the subject matter of the Agreement.”  This language is sufficiently broad to encompass any dispute regarding the division of property between Plaintiff and Decedent, which is the subject matter of the Agreement.   

The claims here relate to (1) Decedent’s failure to reimburse Salzman for housing costs pursuant to the terms of the Housing Costs Contract which is expressly incorporated into the Agreement, and (2) Decedent’s failure to return Plaintiff’s property when she kept in her own account, repayment proceeds from the loan made by Plaintiff to Decedent’s mother.  All of these claims touch on the division of property between Plaintiff and Decedent which is the subject matter of the Agreement.  

Defendant argues that the claim for housing costs is not within the subject matter of the Agreement because it is covered by a separate standalone agreement, the Housing Costs Contract.  But the Housing Costs Contract is expressly incorporated into the Agreement, and therefore, any claims under it arises out of the subject matter of the Agreement.  Defendant also argues that the claim involving Plaintiff’s loan to Decedent’s mother is based on a loan agreement between Plaintiff and Decedent’s mother, someone who is not a party to the Agreement.  But as the proceeds from the loan were deposited into Decedent’s account, this claim necessarily involves the allocation of property as between Plaintiff and Decedent, which is the subject matter of the Agreement.        

Enforceability Against Defendant 

Shomer is bound by the terms of the Agreement because he stands in the shoes of Decedent as the representative of her estate and trustee of her trust.  Decedent agreed that the Agreement, which includes the arbitration clause, was binding on her successors, executors and assigns: “The Agreement shall be binding on the Parties hereto and their respective heirs, legatees, devisees, assignees, successors, executors, trustees and administrators.”  (Ex. A to Salzman Decl. ¶ 13.)  Shomer falls within this provision as he is acting as Decedent’s successor, executor of her estate and trustee of her trust. 

Even absent this provision, Shomer is bound by the arbitration agreement as Decedent’s successor.  A decedent’s successor steps into the decedent’s position.  (Exarhos v. Exarhos (2008) 159 Cal.App.4th 898, 905.)  Accordingly, the successor “must also abide by the terms of any valid agreement, including an arbitration agreement, entered into by decedent.” (Thomas v. Westlake (2012) 204 Cal.App.4th 605, 613 n.5.) 

Waiver 

The Court must next consider whether Plaintiff waived his right to arbitrate by initiating this action.  ¿“In light of the policy in favor of¿arbitration, waivers are not to be lightly inferred and the party seeking to establish a waiver¿bears a heavy¿burden of proof.”  (Khalatian v. Prime Time Shuttle, Inc. (2015) 237 Cal. App. 4th 651, 662.) 

Further, “even if a party has initiated the litigation process, the court may not necessarily find a waiver” unless the court finds that both: (1) the party seeking arbitration “acted inconsistently with the right to arbitrate” and (2) the objecting party was prejudiced by such action.”  (Simms v. NPCK Enters. Inc. (2003) 109 Cal.App.4th 233, 239.)    

Here, Plaintiff argues he acted consistently with the right to arbitrate.  Plaintiff claims he had to file the complaint to preserve his claims once his creditor’s claims were rejected in the estate action (Case No. 21STPB06084, In the Matter of the Estate of Andrea Nicole Left).  (Motion at 16:10-12.)  After filing his complaint, Plaintiff claims he sought to obtain agreement from Defendant to arbitrate this dispute.  (Petition at 16:13.)  In every status conference before the Court, Plaintiff claims he has stated he has been attempting to seek agreement on mediation and arbitration and he would file a motion to compel if no agreement could be reached.  (Petition at 16:13-16.)  Unfortunately, none of these statements are supported by a declaration, but Defendant does not dispute any of these assertions in his Opposition. 

Plaintiff also argues there is no prejudice to Defendant.  Prejudice exists “where the litigation machinery was substantially invoked before the request for arbitration, where there was a long delay before arbitration was sought, where plaintiffs took advantage of judicial discovery procedures not available in arbitration or where the delay affected, misled or prejudiced the opposing party.”  (Simms, 109 Cal.App. at 241.)  Plaintiff argues that Defendant has done no more than file an answer in this action; all discovery and motion practice between the parties has thus far been confined to the arbitration in the Related Action.  (Petition at 17:20-23.)  Again, none of these claims are supported by a declaration; however, Defendant does not dispute these assertions.    

Defendant argues that Plaintiff waived any right to arbitration.  Plaintiff concedes the statutory probate scheme “does allow for reference of the matter to arbitration.”  (Petition at 16 fn. 1.)  However, Plaintiff did not refer the matter to arbitration, even though he admits that arbitration proceedings were already pending in the related matters.  Instead, he filed the current superior court action “in order to preserve his right to bring these claims in any forum.”  (Petition at 16, fn. 1.)  Defendant contends Plaintiff’s actions were an improper attempt to forum shop as Plaintiff did not assert the right to arbitrate until the arbitrator ruled in his favor on the related matter.   

On these facts, the Court cannot conclude Defendant met his burden to prove waiver.  This is not a case where the litigation machinery was substantially invoked before the request for arbitration was made or where Plaintiff took advantage of judicial discovery procedures not available in arbitration.  Nor is this a case where the delay affected, misled or prejudiced the opposing party because Plaintiff claims – and Defendant does not dispute – Plaintiff consistently sought to obtain agreement from Defendant to arbitrate the dispute and raised at every status conference before the Court, that he has been attempting to seek agreement on arbitration and he would file a motion to compel if no agreement could be reached.     

Stay of Proceedings  

Code Civ. Proc. §1281.4 provides that if the court has ordered the arbitration of a controversy, it “shall, upon motion of a party to such action or proceeding, stay the action or proceeding until an arbitration is had in accordance with the order to arbitrate or until such earlier time as the court specifies.”¿ Pursuant to Section 1281.4, therefore, the Court stays this action pending conclusion of the arbitration proceedings.¿¿¿¿ 

CONCLUSION 

For the foregoing reasons, the Court GRANTS Plaintiff’s motion to seal and motion to compel arbitration.  This action is stayed pending conclusion of the arbitration proceedings.    

 

IT IS SO ORDERED. 

 

DATED: October 3, 2023 ___________________________ 

Edward B. Moreton, Jr. 

Judge of the Superior Court