Judge: Joel R Wohlfeil, Case: 37-2023-00045312-CU-WM-CTL, Date: 2024-01-19 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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TENTATIVE RULINGS - January 17, 2024

01/19/2024  09:00:00 AM  C-73 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Joel R. Wohlfeil

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Civil - Unlimited  Writ of Mandate Motion Hearing (Civil) 37-2023-00045312-CU-WM-CTL HUNTER VS 24/7 REALITY INC [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion - Other, 11/20/2023

1. The Motion (ROA # 19, 47) of Respondents Troy Moritz and 24 / 7 REALTY, INC. (via the Joinder - ROA # 26) (collectively 'Respondents') for an order compelling arbitration of all issues and / or claims involved in the above-captioned action and staying this action pending said arbitration, is GRANTED.

Arbitration is strictly a matter of consent and, therefore, a party cannot be required to arbitrate a dispute that it has not agreed to submit to arbitration. Eminence Healthcare, Inc. v. Centuri Health Ventures, LLC (2022) 74 Cal. App. 5th 869, 875.

Stated another way, the parties may freely delineate in their contract which disputes will be arbitrated and which will not. Id. Whether the parties agreed to arbitrate all or a portion of a controversy turns on the language of the arbitration clause. Id. The June 1, 2022 'Stock Purchase Agreement' and the June 1, 2022 'Joinder Agreement' makes Petitioner FELICITY HUNTER ('Petitioner') a party to the terms and conditions set forth in the May 1, 2022 'Shareholders Agreement.' See Respondent Moritz's Exs. A - C.

Section 10.1 of the Shareholders Agreement requires mediation 'of any dispute, disagreement, controversy, or claim between the Shareholders concerning the Company ....' Section 10.2 provides: 'If any Dispute between the Shareholders is not resolved by nonbinding mediation as set forth above, the Dispute shall be resolved by binding arbitration.' This is a broad agreement encompassing any potential disagreement. This action involves a disagreement respecting the obligation to permit a shareholder to inspect and copy corporate records.

This action also seeks to 'appoint Cheryl Kessler to audit the books and records of Respondent corporation and to investigate the property, funds, and affairs of Respondent corporation and to report thereon as the court may direct.' Thus, this action also involves a disagreement over the use of corporate property and funds. The broad arbitration provision encompasses the disputes alleged in this action and arbitration of this action must be compelled.

Article V, Section 3 of the Bylaws (D'Amico declaration at Ex. A) memorializes the statutory right of any Calendar No.: Event ID:  TENTATIVE RULINGS

3054085 CASE NUMBER: CASE TITLE:  HUNTER VS 24/7 REALITY INC [IMAGED]  37-2023-00045312-CU-WM-CTL shareholder to inspect corporate records. However, this provision does not state that a dispute or controversy arising out of such a demand is beyond the scope of a shareholder's obligation to participate in binding arbitration. The opposition brief also does not cite legal authority removing a dispute over this statutory right from the obligation to participate in binding arbitration.

The Court stays this action, pending the arbitration, and sets a Status Conference on Friday October 4, 2024 at 2:30 PM for the limited purpose of tracking the disposition of the arbitration.

_____ 2. The Petition (ROA # 1, 11, 38, 43, 45, 47) of Petitioner FELICITY HUNTER ('Petitioner') for Writ of Mandate to Permit Inspection of Corporate Records and Postponement of Shareholders Meeting of Respondent 24 / 7 REALTY, INC., a California Corporation ('Respondent' or '24 / 7 REALTY'), is DENIED without prejudice.

The Petition is referred to binding arbitration for resolution pursuant to the concurrent ruling granting the Motion to compel arbitration.

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3054085