Judge: Holly J. Fujie, Case: 23STCP03185, Date: 2023-12-15 Tentative Ruling

Case Number: 23STCP03185    Hearing Date: December 15, 2023    Dept: 56

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

MOVING PARTY:  Petitioner

RESPONDING PARTY: Respondent

            The Court has considered the moving, opposition and reply papers.

BACKGROUND

            On October 23, 2023, Petitioner filed a notice of hearing on her petition to compel arbitration (the “Petition”) that was originally filed on August 30, 2023.  The Petition contends that a dispute regarding remodeling work Respondent performed on Petitioner’s residence is subject to binding arbitration pursuant to an arbitration provision (the “Arbitration Agreement”) in a written agreement entered into by Petitioner and Respondent.

DISCUSSION

The purpose of the Federal Arbitration Act (“FAA”) is to move the parties in an arbitrable dispute out of court and into arbitration as quickly and easily as possible.  (Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp. (1983) 460 U.S. 1, 23.)  The FAA is consistent with the federal policy to ensure the enforceability, according to their terms, of private agreements to arbitrate.  (Mastrobuono v. Shearson Lehman Hutton, Inc. (1995) 514 U.S. 52, 57.)  Under California Code of Civil Procedure (“CCP”) section 1281, a written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable, and irrevocable, save upon such grounds as exist for the revocation of any contract.  (CCP § 1281.)  California law, like federal law, favors enforcement of valid arbitration agreements.  (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 97.)  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 unless grounds exist not to compel arbitration.  (CCP § 1281.2.) 

Existence of Agreement to Arbitrate Petitioner’s Claims

In support of the Petition, Petitioner provides evidence of two Home Improvement Agreements that she signed that Respondent sent to her using his company’s letterhead.  (See Declaration of Susan Hoffman Hyman (“Hyman Decl.”) ¶¶ 3, 8, Exhibits B, H.)  Both contracts include a provision that provides: “Any controversy or claim arising out of or related to this contract, or breach thereof, shall be settled by binding arbitration in accordance with the construction industry arbitration rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.”  (Hyman Decl., Exhibits B, H at p. 6.) 

            On or about June 2, 2023, Petitioner commenced an arbitration proceeding to assert claims against Respondent that arise out of the work he performed on her residence.  (See Declaration of Benjamin W. Clements (“Clements Decl.”) ¶ 3.)  Respondent objected to the arbitration on or about July 6, 2023.  (Clements Decl. ¶ 7.)

            Respondent does not dispute the validity or applicability of the Arbitration Agreement, but argues that arbitration is inappropriate because of a risk of inconsistent rulings with subcontractors who performed work that is implicated by Petitioner’s claims who are not bound by the Arbitration Agreement.

 Under CCP section 1281, subdivision (c), courts are not required to order arbitration where 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, subd. (c).)  For purposes of this section, a pending court action or special proceeding includes an action or proceeding initiated by the party refusing to arbitrate after the petition to compel arbitration has been filed, but on or before the date of the hearing on the petition.  (Id.)

The third-party litigation exception of CCP section 1281.2, subdivision (c) applies when: (1) a party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party; (2) the third-party action arises out of the same transaction or series of related transactions; and (3) there is a possibility of conflicting rulings on a common issue of law or fact.  (Acquire II, Ltd. v. Colton Real Estate Group (2013) 213 Cal.App.4th 959, 967-68.)  A trial court has no discretion to deny or stay arbitration unless all three of section 1281.2, subdivision (c)'s conditions are satisfied.  (Id. at 968.)

Respondent provides names of various subcontractors who performed work on Petitioner’s residence.  (See Declaration of Carlo A. Coppola (“Coppola Decl.”) ¶ 4.)  Respondent contends that these subcontractors are not parties to an agreement to arbitrate.  (See Coppola Decl. ¶ 5.)  Respondent fails, however, to provide evidence of any currently pending proceedings with any of these subcontractors that arise from Petitioner’s claims.  Accordingly, Respondent’s evidence is insufficient to satisfy the requirements of CCP section 1281.2, subdivision (c). 

The Court finds that Petitioner has demonstrated the existence of an agreement to arbitrate, and Respondent has not articulated grounds to prevent enforcement of the Arbitration Agreement.  The Court therefore GRANTS the Petition.  The Court STAYS the action pending the conclusion of the arbitration proceedings.  The Court schedules a status conference on June 12, 2024 at 8:30 a.m. in this department.  The parties are to submit a joint status report by June 5, 2024.

Moving party is ordered to give notice of this ruling.           

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org.  If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

         Dated this 15th day of December 2023