Judge: H. Jay Ford, III, Case: 22SMCV00239, Date: 2022-09-06 Tentative Ruling

Case Number: 22SMCV00239    Hearing Date: September 6, 2022    Dept: O

  Case Name:  Novian & Novian LLP v. Synergy Development Alliance LLC, et al.

SUBJECT:               PETITION TO COMPEL ARBITRATION

MOVING PARTY:  Petitioner Novian & Novian, LLP

RESP. PARTY:        Respondent Synergy Development Alliance

TENTATIVE RULING

            Petitioner Novian & Novian LLP’s Petition to Compel Arbitration is GRANTED.

            Petitioner’s evidentiary objections—SUSTAINED as to all objections.

I.  Applicable Law

            “On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate that 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:

(a) The right to compel arbitration has been waived by the petitioner; or (b) Grounds exist for rescission of the agreement. (c) A party to the arbitration agreement is also a party to a pending court action or special proceeding 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.”  CCP §1281.2.

            “The trial court may resolve motions to compel arbitration in summary proceedings, in which the trial court sits as a trier of fact, weighing all the affidavits, declarations, and other documentary evidence, as well as oral testimony received at the court's discretion, to reach a final determination.  The party seeking arbitration bears the burden of proving the existence of a valid arbitration agreement by a preponderance of the evidence, and the party opposing arbitration bears the burden of proving any defense, such as unconscionability by a preponderance of the evidence.”  Mendoza v. Trans Valley Transport (2022) 75 Cal.App.5th 748, 718 (trial court properly decided plaintiff’s challenge to arbitration agreement despite delegation clause where plaintiff attacked contract formation and very existence of agreement to arbitrate). 

II. Petition to Compel Arbitration is GRANTED.

            Respondent filed an opposition to this petition on 8-23-22. Respondent’s opposition is untimely.  A response to a petition to compel arbitration is due within 10 days of after service of the petition.  See CCP §1290.6.  The Court may disregard late-filed papers under CRC Rule 3.1300(d) at its discretion.  CRC Rule 3.1300(d).  If the Court exercises this discretion, it must so indicate in the minute order.

            The parties entered into a legal engagement agreement on January 13, 2021.  See Petition, Dec. of F. Novian, ¶3, Ex. 1.  Under ¶11 of the Engagement Agreement, parties agreed to binding arbitration of claims for unpaid fees arising from the Engagement Agreement.  Id. at Ex. 1, p. 7, ¶11.  The agreement was executed by Alireza Zandiyeh, managing partner of Respondent Synergy Development Alliance, LLC.  Id.  

            The arbitration agreement applies to Petitioner’s fee dispute with Respondent.  Respondent fails to establish that the arbitration is unenforceable or inapplicable for any reason.  Respondent argues the arbitration agreement was not explained to it and buried or hidden in the Engagement Agreement.

            The Engagement Agreement consists of a two-page letter agreement with the 7-page “Standard Terms of Engagement” attached.  See Petition, Dec. of F. Novian, ¶3, Ex. 1.  The document is not long.  The arbitration provision is not hidden and appears in the same font as the rest of the document.  The font is not small or difficult to read. 

            Respondent claims Petitioner did not point out or explain the arbitration provision to it.  Respondent is a corporate entity, not an individual consumer.  Respondent also fails to submit any admissible evidence regarding contract formation.  No declaration from Alireza Zandiyeh is provided.  The declaration of Babak Sinai is irrelevant, because he did not sign the agreement.  See Petition, Dec. of F. Novian, ¶3, Ex. 1; Respondent’s Opposition, Dec. of A. Sinai. 

            Moreover, the Engagement Letter references the Standard Terms attached to the letter agreement several times.  Respondent fails to submit any admissible evidence that Zandiyeh did not read or understand the arbitration provision before signing it on Respondent’s behalf.    

            Lawrence v. Walzer & Gabrielson is distinguishable.  In Lawrence, the Court found the client had never agreed to arbitration of her legal malpractice claim, because the arbitration provision expressly applied to disputes “regarding fees, costs or any other aspect of our attorney-client relationship.”  The court found that the language of the provision “appears to be limited to disputes concerning financial matters such as fees and costs and is most likely to be so viewed by a prospective client to whom the proposed agreement is tendered by the law firm.”  Lawrence v. Walzer & Gabrielson (1989) 207 Cal.App.3d 1501, 1506.

            Here, the language of the arbitration provision unambiguously includes fee disputes like Petitioner’s fee dispute with Respondent.  Moreover, there is no admissible evidence that the signatory did not understand or consent to arbitration of fee disputes, unlike Lawrence where the client who signed the arbitration agreement testified that she did not consent to arbitration of legal malpractice. 

            Likewise, Berman v. Freedom Fin. Network 30 F.4^th 849 is factually distinguishable.  The arbitration provision in Berman was contained in an online document.  There, the court found that consumers did not manifest unambiguous consent to the arbitration provision, because the consumers’ consent was not clear from the act of clicking a green “continue” button on the website.  See Berman, supra, 30 F.4^th at 857-858. 

            Here, the Engagement Agreement made explicitly clear that the Standard Terms of Engagement were included and that they would govern the parties’ relationship.  Unlike a “continue” button, signing the agreement is a clear and unambiguous manifestation of consent to the Engagement Agreement’s terms, including the arbitration provision contained in the Standard Terms of Engagement. 

            Petitioner establishes the existence of an applicable arbitration agreement under CCP §1281.2.  Respondent fails to raise any defense to enforcement of the arbitration agreement, e.g. waiver or unconscionability.  Petitioner’s Petition to Compel Arbitration is GRANTED.