Judge Elaine W. Mandel, Case Number: 23SMCV04139, Date: 2024-09-24 Tentative Ruling

Judge: Elaine W. Mandel, Case: 23SMCV04139, Date: 2024-09-24 Tentative Ruling

Case Number: 23SMCV04139 Hearing Date: September 24, 2024 Dept: P

Tentative Ruling

Slalom v. Aspiration Partners, Case no. 23SMCV04139

Hearing date September 24, 2024

Defendant Aspiration Partners’ Motion to Compel Arbitration

Plaintiff Slalom’s Application for Writ of Attachment

Plaintiff Slalom sues defendant Aspiration for breach of written contract, for work, labor, services and materials and account stated based on the parties’ agreement for plaintiff to provide consulting services to defendant. Plaintiff alleges defendant failed to pay 15 invoices and owes $2,617,224.85, plus interest.

Defendant moves to compel arbitration based on the parties’ written master services agreement (MSA). Plaintiff will stipulate to arbitration but applies for a writ of attachment and argues the court has jurisdiction to hear its application prior to sending the matter to arbitration.

Plaintiff’s Application for Writ of Attachment

A writ of an attachment may issue on a claim for money based on contract where the amount owed exceeds $500, and the amount sought is “fixed or readily ascertainable” by reference to the contract. A writ of attachment may only issue against a natural person when the claim arises out of the conduct of a “trade, business, or profession.” Cal. Code Civ. Proc. §483.010. A writ of attachment will only issue if (1) the claim is based is one upon which an attachment may be issued, (2) plaintiff established the probable validity of the underlying claim, (3) the attachment is not sought for a purpose other than the recovery on the claim upon which the attachment is based, and (4) the amount to be secured by the attachment is greater than zero. Cal. Code Civ. Proc. §484.090.

Plaintiff’s claims arise from the MSA, statements of work and change orders signed and executed by both parties. Compl., exhs. 1, 2. Plaintiff established existence of a contract, and amount owed is ascertainable by reference to the contract and invoices. The claim on which the writ is based is one on which attachment can issue. Plaintiff provides evidence defendant failed to pay and owes $2,617,224.85. Compl. ex. 3. Plaintiff’s requested request judicial notice of five judgments/defaults against defendant showing decreasing solvency starting 2/2/2024 is granted. Taken together, this establishes the probable validity of the claim, and plaintiff meets its burden in seeking a writ of attachment.

Defendant asserts plaintiff has not met the requirements of Code Civ. Proc. §1281.8(b) which states “A party to an arbitration agreement may file in the court in which the arbitration proceeding is pending … an application for a provisional remedy in connection with an arbitrable controversy, but only upon the ground that the award would be rendered ineffectual without provisional relief.” Id. Defendant argues plaintiff has not shown an arbitration award may be rendered ineffectual, and as such has not met the heightened burden.

The court disagrees; judicial notice was granted as to various judgments/defaults against the defendant, showing decreasing solvency. The arbitrator cannot issue a writ of attachment; such remedy is available only in superior court. Thus, the defendant’s delay in seeking arbitration would prejudice the plaintiff if plaintiff were sent to arbitration, thereby depriving it of the right to seek the writ of attachment. Therefore, the court will issue the writ of attachment and then consider the issue of enforcement of the arbitration agreement.

Defendant asserts that plaintiff failed to meet its statutory requirements, as Code Civ. Proc. §489.210-.220 requires plaintiff to file an undertaking of at least $10,000 before a writ can issue, which plaintiff has not done.

For the foregoing reasons, the court finds plaintiff has established the probable validity of the claim. The writ is GRANTED, contingent upon plaintiff posting an undertaking of $10,000 within 30 days.

Defendant’s Motion to Compel Arbitration

California public policy strongly favors arbitration as an efficient alternative to litigation. Code of Civ. Proc. §1280 et seq., Madden v. Kaiser Found. Hosps. (1976) 17 Cal.3d 699, 706. A party waives its right to arbitrate when it “substantially invokes” the litigation machinery before moving to arbitrate, resulting in prejudice to the opposing party. Hoover v. American Income Life Ins. Co. (2012) 20 Cal.App.4th 1193, 1204. Filing an answer does not waive the right to seek arbitration. Christensen v. Dewor Developments (1983) 33 Cal.3d 778, 782.

Per the MSA, the parties agreed to a dispute resolution procedure, including mandatory arbitration of disputes that remain unresolved following good faith negotiation and non-binding mediation. The provision covers “any dispute, claim or controversy (a “Dispute”) arising out of or relating to this Agreement.” Id. (MSA §12.1). An arbitration agreement exists.

Plaintiff states it does not oppose arbitration, if a writ of attachment issues. As per above, the application for the writ of attachment is granted. The motion to compel arbitration is GRANTED without opposition, based upon the parties’ agreement.

Once the writ of attachment issues, the matter is referred to arbitration. Should plaintiff fail to pay the undertaking, the court will address the matter on its merits.