Superior Court of California 

County of Los Angeles – West District  

Beverly Hills Courthouse / Department 205 

 

 

 

BACKGROUND 

This case arises from a dispute between a homeowner and its interior design company.   Denmix is the owner of the real property located at 1152 Calle Vista, Beverly Hills, CA 90212 (“Property.”)  (Compl. ¶8.)  Denmix purchased the Property for $13.5M, with the intent of developing the Property and subsequently selling it.  (Id. ¶9.)   

Denmix retained Defendant Advanced Home Services Inc. (“AHS”) to update existing design plans which the general contractor and other retained professionals would rely on to build and develop the Property.  (Id. ¶14.)  AHS is an interior design, space planning and project management company based in North Hollywood, California 91605.  Defendant Amy Simonyan is AHS’s Chief Executive Officer.  (Simonyan Decl. ¶¶ 1-2.) 

The parties entered into a written contract (the “Agreement”).  (Ex. 1 to Compl.)  Pursuant to the Agreement, Plaintiff paid a retainer in the amount of $40,000.  Immediately after payment of the retainer, Plaintiff claims Ms. Simonyan became unavailable and non-responsive.  (Id. ¶18.)   

To the extent any drawings were provided, they were allegedly of such poor quality, below industry standards, and lacking in the most basic of items, that they were unusable and the general contractor and other trade professionals could not implement them.  (Id. ¶19.)  Further, Plaintiff claims Defendants were non-responsive and uncooperative with the general contractor and trade professionals, when they sought clarity.  (Id. ¶20.)   

These failures caused an eight (8) month delay in the construction of the Property, while Plaintiff was burdened with carrying costs, the costs of previously retained professionals who were going to be relying on the work product of Defendants, and lost time of the general contractor.  (Id. ¶21.)  Ultimately, Plaintiff fired Defendants on August 8, 2023.  (Id. ¶22.)   

This action ensued.  The operative complaint alleges three claims for (1) breach of contract, (2) violation of Bus. & Prof. Code § 17200, and (3) fraud.   

This hearing is on Defendants’ motion to compel arbitration.  Defendants argue that the very agreement on which Plaintiff is suing requires Plaintiff to submit its claims to arbitration.  (Ex. 1 to Compl. at pp. 4-5.) 

LEGAL STANDARD 

California¿law¿reflects a strong public policy in favor of arbitration as a relatively quick and inexpensive method for resolving disputes.  (Ericksen, Arbuthnot, McCarthy, Kearney & Walsh, Inc. v. 100 Oak Street¿(1983) 35 Cal.3d 312, 323.)  “[D]oubts concerning the scope of arbitrable issues are to be resolved in favor of arbitration. Therefore, in the absence of indication of contrary intent, and where the arbitration clause is reasonably susceptible of such an interpretation, claims … will be deemed subject to arbitration.” (Id., fn. omitted.) 

   

To further the policy favoring arbitration,¿Code Civ. Proc., § 1281.2¿requires a trial court to enforce a written arbitration agreement unless one of three limited exceptions applies.  Those statutory exceptions arise where (1) a party waives the right to arbitration; (2) grounds exist for revoking the arbitration agreement; and (3) pending litigation with a third party creates the possibility of conflicting rulings on common factual or legal issues. (Code of Civ. Proc., § 1281.2;¿Acquire II, Ltd. v. Colton Real Estate Group (2013) 213 Cal.App.4th 959, 967.)  

In deciding a motion or petition to compel arbitration, trial courts must first decide whether an enforceable arbitration agreement exists between the parties and then determine whether the claims are covered within the scope of the agreement.¿(Omar v. Ralphs Grocery Co. (2004) 118 Cal.App.4th 955, 961.)   

The moving party bears the burden of proving the existence of a valid arbitration agreement, and the opposing party has the burden to establish any defense to enforcement.  (Gatton v. T-Mobile USA, Inc. (2007) 152 Cal.App.4th 571, 579.) 

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

DISCUSSION 

Existence of Arbitration Agreement 

In ruling on a motion to compel arbitration, the Court must first determine whether the parties actually agreed to arbitrate the dispute. (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, Defendants argue Plaintiff signed an arbitration agreement, agreeing to submit to final and binding arbitration all disputes arising from the Agreement.  The Court agrees. 

The Agreement provides: 

“All disputes arising from this Agreement shall be resolved by binding private arbitration in Los Angeles County, with each party to bear its owns fees and costs.”  

 

(Ex. 1 to Compl. at p. 5.)  

 

The Agreement also provides: 

“Any controversy or claim arising out of or relating to this Contract or the breach thereof shall be settled by arbitration in the city where the Client is located in accordance with the rules of the American Arbitration Association then in effect before a single arbitrator, and judgment may be entered in any court having jurisdiction hereof. Notwithstanding the foregoing, either party may bring a lawsuit in Small Claims Court, or the equivalent thereof, in the applicable jurisdiction to resolve any claim that satisfies the jurisdictional limits of such Small Claims Court, or its equivalent.”   

 

(Ex. 1 to Compl., at p. 4.)  Accordingly, Defendants have met their burden to establish the existence of an arbitration agreement.    

Plaintiff argues that the arbitration agreement attached to the motion to compel is unsigned, and Plaintiff is not identified as the contracting party.  Plaintiff ignores the agreement attached to its own complaint, which contains the same arbitration clauses and which Plaintiff maintains is the parties’ agreement.  Plaintiff cannot on the one hand argue that the agreement attached to their Complaint is enforceable, and on the other hand seek to avoid the arbitration clauses in that same contract.       

Scope of Arbitration Agreement 

Defendants argue that the arbitration provision here covers the claims alleged by Plaintiff.  The Court agrees. 

“[T]he decision as to whether a contractual arbitration clause covers a particular dispute rests substantially on whether the¿clause in question is ‘broad’ or ‘narrow.’” (Rice v. Downs, 248 Cal.App.4th at 186.)  Clauses providing for arbitration of disputes ‘arising from’ or ‘arising out of’ an agreement have generally been¿interpreted to apply only to disputes regarding the interpretation and performance of the agreement.  (Id.¿at 186–187; see¿Elijahjuan v. Superior Court¿(2012) 210 Cal.App.4th 15, 20–21¿(arbitration provision applicable to any dispute that “arises with regard to the Agreements’ application or interpretation” did not cover alleged employees’ misclassification claims, which were based on Lab. Code violations).)¿ 

On the other hand, arbitration clauses (like the one in this case) that use the phrase “arising under¿or related to” (italics added) have been construed more broadly.¿ (See¿Larkin v. Williams, Woolley, Cogswell, Nakazawa & Russell¿(1999) 76 Cal.App.4th 227, 229 ¿(arbitration clause covering “[a]ny controversy or claim arising out of or relating to any provision of this [partnership] [a]greement or the breach thereof” covered dispute as to partnership dissolution);¿Dream Theater, Inc. v. Dream Theater¿(2004) 124 Cal.App.4th 547, 553, fn. 1¿(“any claim arising out of or relating to¿… ‘is very broad’”);¿Khalatian, 237 Cal.App.4th at 659–660¿(arbitration agreement covering “‘any controversy or claim between the parties arising out of or relating to this Agreement’” was broad and covered alleged employees’ statutory misclassification claims).)¿ 

For a party’s claims to come within the scope of such a clause, the factual allegations of the complaint “need only ‘touch matters’ covered by the contract containing the arbitration clause.” (Simula, Inc. v. Autoliv, Inc.¿(9th Cir. 1999) 175 F.3d 716, 721¿(arbitration clause¿containing phrase “‘arising in connection with’ reaches every dispute between the parties having a significant relationship to the contract and all disputes having their origin or genesis in the contract”); see¿also Rice v. Downs, 248 Cal.App.4th at 186¿(same).)¿ 

Further, courts have interpreted agreements with broad arbitration clauses like the one in this case to encompass tort, statutory, and contractual disputes that “have their roots in the relationship between the parties which was created by the contract.” (Izzi v. Mesquite Country Club¿(1986) 186 Cal.App.3d 1309, 1315–1316, overruled on other grounds in¿Sandquist v. Lebo Automotive, Inc.¿(2016) 1 Cal.5th 233, 250; see¿Coast Plaza, 83 Cal.App.4th at 686¿(“It has long been the rule in California that a broadly worded arbitration clause … may extend to tort claims that may arise under or from the contractual relationship.”);¿Khalatian, 237 Cal.App.4th at 659–660¿(arbitration clause applying to controversies “arising out of or relating to” contract covered statutory wage and hour claims).) 

Here, there can be no serious dispute that Plaintiff’s fraud and UCL claims have their roots in the parties’ contractual relationship.  These tort claims relate to the provision of services under the Agreement.   

In sum, because there is an agreement to arbitrate that covers the claims alleged by Plaintiff, the Court compels arbitration of these claims.   

CONCLUSION 

Based on the foregoing, the Court GRANTS Defendants’ motion to compel arbitration and stays the action pending the completion of arbitration proceedings.   

 

IT IS SO ORDERED. 

 

DATED: September 26, 2024 ___________________________ 

Edward B. Moreton, Jr. 

Judge of the Superior Court