Judge: Edward B. Moreton, Jr, Case: 25SMCP00259, Date: 2025-06-13 Tentative Ruling

Case Number: 25SMCP00259    Hearing Date: June 13, 2025    Dept: 205

Superior Court of California

County of Los Angeles

Beverly Hills Courthouse | Department 205

Background

On May 9, 2025, Petitioners David B. Royce and Christina A. Royce, as Trustees of The Rancho Del Mar Trust dated October 7, 2014, as amended and restated on May 12, 2020 (“the Trust”) (“Petitioners”) filed the instant Petition to Compel Arbitration and for the Court to Appoint an Arbitrator (“Petition”) seeking an order compelling Respondent 538 Chautauqua, LLC (“Respondent”) to arbitrate a controversy pursuant to a written contract entered into by Petitioner and Respondent.

As of June 10, 2025, Respondent has not filed a response to the Petition.

Petition to Compel Arbitration and Appoint Arbitrator Standard

Per Code of Civil Procedure section 1281.2, generally, on a petition to compel arbitration, the court must grant the petition unless it finds that either (1) no written agreement to arbitrate exists; (2) the right to compel arbitration has been waived; (3) grounds exist for revocation 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, supra, 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, supra, 232 Cal.App.4th at 842; Gamboa, supra, 72 Cal.App.5th at 165.) Subsequently, the moving party must establish with the preponderance of admissible evidence a valid arbitration agreement between the parties. (Ibid.) The trial court then weighs all the evidence submitted and uses its discretion to make a final determination. (Ibid.) “California law, ‘like [federal law], reflects a strong policy favoring arbitration agreements and requires close judicial scrutiny of waiver claims.’” (Wagner Const. Co. v. Pacific Mechanical Corp. (2007) 41 Cal.4th 19, 31.)

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

If an arbitration agreement provides a method for appointing an arbitrator, that method shall be followed. (Code Civ. Proc., § 1281.6.) If it does not provide a method or if the agreed method fails or cannot be followed, a party may petition the Court to appoint an arbitrator.  (Ibid.) Upon a petition, the Court shall nominate five people from a list jointly supplied by the parties, and the parties may jointly select the arbitrator within five days. (Ibid.) If the parties fail to select an arbitrator within five days, the Court shall appoint an arbitrator from its nominees.  (Ibid.)

Analysis

The Trust purchased a residential property (the “Property”) from Respondent, the builder, on June 7, 2024, pursuant to a written Residential Purchase Agreement and Joint Escrow Instruction. (Pet. ¶ 3.) The Property is a new construction within the meaning of Civil Code sections 895, et seq., known as the Right to Repair Act (the “Act”). (Pet. ¶ 4.) Respondent is a “builder” within the meaning of Civil Code section 911(a) of the Act. (Ibid.)

Petitioners allege that the Trust put Respondent on notice of serious defects that resulted in substantial water intrusion into the Property via, among other things, letters sent on January 17, February 7, and April 2, 2025. (Pet. ¶ 5.) Petitioners allege that Respondent did not make repairs or otherwise follow the protocols provided for under the Act. (Pet. ¶ 9.) The Trust also demanded rescission of the Purchase Agreement, but Respondent did not agree to rescind. (Ibid.) The Trust asserts claims against Respondent for the defects/deficiencies with the Property. (Ibid.)

Petitioners allege that the Trust and Respondent subsequently entered into a written stipulation agreeing (i) to forego the mediation procedure set forth in the Purchase Agreement, and (ii) that the parties will retain rights under the Purchase Agreement to seek attorneys’ fees and costs notwithstanding the fact that they did not first mediate. (Pet. ¶10; Haley Decl., Exh. 4.)

Paragraph 31 of the Purchase Agreement contains an Arbitration Provision which states as follows:

ARBITRATION OF DISPUTES:

The Parties agree that any dispute or claim in Law or equity arising between them out of this Agreement or any resulting transaction, which is not settled through mediation, shall be decided by neutral, binding arbitration. The Parties also agree to arbitrate any disputes or claims with Agent(s), who, in writing, agree to such arbitration prior to, or within a reasonable time after, the dispute or claim is presented to the Agent. The arbitration shall be conducted through any arbitration provider or service mutually agreed to by the Parties. The arbitrator shall be a retired judge or justice, or an attorney with at least 5 years of residential real estate Law experience, unless the Parties mutually agree to a different arbitrator. Enforcement of, and any motion to compel arbitration pursuant to, this agreement to arbitrate shall be governed by the procedural rules of the Federal Arbitration Act, and not the California Arbitration Act, notwithstanding any language seemingly to the contrary in this Agreement. The Parties shall have the right to discovery in accordance with Code of Civil Procedure § 1283.05. The arbitration shall be conducted in accordance with Title 9 of Part 3 of the Code of Civil Procedure. Judgment upon the award of the arbitrator(s) may be entered into any court having jurisdiction.

(Pet., ¶ 11, Exh. 1.)

Here, Petitioners have attached to the Petition a copy of the Purchase Agreement which contains an Arbitration of Disputes paragraph. (Pet., Exh. 1.) Petitioners also set forth the language of the arbitration provision in the body of the Petition. (Pet., ¶ 11.) Furthermore, Petitioners state that their counsel has sent three different letters to Respondent on January 17, February 7, and April 2, 2025, attempting to resolve the matter by demanding rescission or arbitration. (Ibid. at ¶ 5, 9.) However, Respondent did not make repairs or agree to rescind. (Ibid.) These letters are attached to the Declaration of Andrew J. Haley as Exhibits 1, 2 and 3.

Moreover, as the parties’ Purchase Agreement does not specify an arbitration organization or a process for appointing an arbitrator other than by applicable code, Petitioners request that the Court appoint an arbitrator. (Pet., ¶ 12.)

The Court finds that Petitioners have established the existence of an arbitration agreement that covers the claims at issue. Respondent has filed no opposition. Therefore, the Court will grant the Petition and order this matter stayed pending arbitration.

As to the appointment of an arbitrator, the Court will follow the process in section 1281.6. The parties are ordered to submit a joint list of ten arbitrators in alphabetical order. Each side may contribute five names to the joint list. The parties are to file the joint list by July 13, 2025. The Court will then nominate five people from the joint list, and the parties may jointly select the arbitrator within five days. If the parties fail to select an arbitrator within five days, the Court shall appoint an arbitrator from its nominees.

Conclusion

The Petition to Compel Arbitration is GRANTED.

The parties are ordered to submit a joint list of ten arbitrators in alphabetical order. Each side may contribute five names to the joint list. The parties are to file the joint list by July 13, 2025.

Dated: June 13, 2025

__________________________________________

Edward B. Moreton, Jr.

Judge of the Superior Court