Judge: John J. Kralik, Case: 24NNCV01085, Date: 2024-08-23 Tentative Ruling
Case Number: 24NNCV01085 Hearing Date: August 23, 2024 Dept: NCB
North
Central District
|
karine
gevorgyan, Plaintiff, v. andre ohanian., et al., Defendants. |
Case No.: 24NNCV01085 Hearing
Date: August 23, 2024 [TENTATIVE]
order RE: motion to compel Arbitration |
BACKGROUND
A.
Allegations
Plaintiff Karine Gevorgyan (“Plaintiff” or
“Gevorgyan”) alleges that she entered into a contract with Defendant High Rise
Inc. (“High Rise”), which is owned and operated by Defendant Andre Ohanian
(“Ohanian”), for a home improvement project located at 821 Eton Drive, Burbank,
CA 91504. Plaintiff alleges that Ohanian
breached the contact by failing to complete the project within the agreed-upon
timeframe and by refusing to address the defects in the work. Plaintiff alleges that Ohanian was aware of
and exploited her vulnerable situation during an ongoing divorce proceeding, by
inviting her to dinners (which Plaintiff rejected) and encroaching on her
during the entire project, such that he attempted to take the professional
working relationship into an inappropriate and unprofessional personal
relationship. Plaintiff alleges that she
withheld $6,000 out of the total $81,000 until defects were corrected, but on
October 17, 2023, Ohanian came unannounced and made inappropriate comments
about her appearance, yelled, used abusive language, and attempted physical
aggression on Plaintiff. Plaintiff
alleges that he also made ominous, threatening statements, and forced entry and
intentionally broke the lock and door frame.
Plaintiff alleges that on October 18, 2023, she applied for a
restraining order against Ohanian, which was issued on October 19, 2023, but
Ohanian disobeyed the terms and contacted Plaintiff by phone. On December 8, 2023, Plaintiff’s application
for a restraining order against Ohanian for a term of 1 year was granted.
The complaint, filed April 19, 2024,
alleges causes of action for: (1) assault; (2) negligence; (3) gender
violation; (4) invasion of privacy; and (5) IIED.
B.
Cross-Complaint
On May 24, 2024, Cross-Complainant Highrise,
Inc. filed a cross-complaint against Cross-Defendant Gevorgyan for: (1) breach
of contract; (2) breach of the implied covenant of good faith and fair dealing;
(3) goods and services rendered; and (4) unjust enrichment.
C.
Motion on Calendar
On June 25, 2024, Gevorgyan filed a motion
to compel arbitration of the cross-complaint and to stay the proceedings.
On August 2, 2024, High Rise filed an
opposition brief.
On August 13, 2024, Gevorgyan filed a
reply brief.
DISCUSSION
Gevorgyan moves to compel
arbitration of the cross-complaint and to stay the proceedings of the
cross-complaint pending the resolution of the arbitration.
A.
Terms of the Arbitration Agreement
Gevorgyan moves to
compel arbitration based on the construction contract, which is attached as
Exhibit A to the cross-complaint. The
contract states on the fourth page:
ARBITRATION
Any controversy or claim arising out of or
related to this contract, or the breach thereof, shall be settled by
arbitration in accordance with the Construction Industry Rules of American
Arbitration Association, any judgment on the award rendered by the
Arbitrator(s) may be entered in any court being jurisdiction thereof. Disputes
within the monetary limit of the Small Claims Court shall be litigated in such
court at the request of either party.
In the event that it becomes necessary to
retain the services of an attorney in order to enforce any of the provisions of
this Agreement the prevailing party shall be entitled to recover reasonable
attorneys’ fees and costs.
(Cross-Complaint, Ex. A.) The contract is signed by Contractor Highrise
Inc. through Ohanian (President) on July 20, 2023.
High
Rise’s claims for breach of contract, breach of the implied duty of good faith
and fair dealing, goods and services rendered, and unjust enrichment are
controversies or claims arising out of or related to the construction
contract. Thus, the scope of the
arbitration agreement is sufficient to cover High Rise’s causes of action in
the cross-complaint.
In
opposition, High Rise does not dispute that there is an agreement to arbitrate. However, the parties dispute whether Gevorgyan
waived her right to arbitrate the claims.
B.
Waiver
Public policy favors arbitration such that
claims of waiver receive “close judicial scrutiny” and the party seeking to
establish waiver bears a heavy burden. (Lewis v. Fletcher Jones Motor Cars, Inc.
(2012) 205 Cal.App.4th 436, 444.) Waiver
in the arbitration context does not require a voluntary relinquishment of a
known right; rather, a party may be said to waive its right to arbitration by
an untimely demand, without intending to give up that remedy. (Id.) In this context, waiver is more like a forfeiture
arising from the nonperformance of a required act. (Id.) Relevant factors to consider in determining
whether a party waived its right to arbitrate claims include: “(1) whether
the party's actions are inconsistent with
the right to arbitrate; (2) whether ‘the litigation machinery
has been substantially invoked’ and the parties ‘were well into preparation of
a lawsuit’ before the party notified the opposing party of an intent
to arbitrate; (3) whether a party either
requested arbitration enforcement close to the trial date or delayed
for a long period before seeking a stay; (4) whether a defendant
seeking arbitration filed a counterclaim without asking for a stay of
the proceedings; (5) whether important intervening steps [e.g., taking advantage
of judicial discovery procedures not available in arbitration] had taken
place; and (6) whether the delay ‘affected, misled, or prejudiced’ the opposing
party.” (Id. at 444 [internal quotation marks omitted].)
As an initial matter, High Rise argues
that Gevorgyan has waived her right to compel arbitration because she did not
file a motion to compel arbitration within 30 days of High Rise filing its
cross-complaint on May 24, 2024, pursuant to CCP § 1281.5. High Rise argues that Gevorgyan was required
to file the motion by June 24, 2024, but she filed the motion on June 25,
2024. CCP § 1281.5(c) states: “The failure of a defendant to file a petition pursuant to Section 1281.2 at
or before the time the defendant answers the complaint filed pursuant to
subdivision (a) is a waiver of the defendant's right to compel arbitration.” This section involves mechanic’s liens but,
here, no mechanic’s lien has been recorded or enforced. (See CCP § 1281.5(a).) As such, this section is not applicable and
this argument by High Rise on this point lacks merit.
Next, the Court
notes that High Rise does not dispute that the elements of waiver are not
present. In its opposition, High Rise does
not address whether Gevorgyan’s actions are inconsistent with the right to
arbitrate (other than the untimeliness argument), whether the parties are well
into the preparation of the lawsuit, whether the arbitration is close to the
trial date or was delayed, the status of discovery, or whether it would be prejudiced
if the cross-complaint was arbitrated. In
her motion papers, Gevorgyan argues that the litigation is at its earliest
stages (the action was filed on April 19, 2024), discovery responses have not
been exchanged, the merits of the cross-complaint have not been addressed or
adjudicated, and there is no indication that the parties have used the
litigation process to unfairly gain information that would otherwise not be
available in arbitration. (Mot. at
pp.10-11; Balayan Decl., ¶¶4-5.)
Based on the Court’s review, the elements
of waiver are not present. High Rise has
not shown that Gevorgyan’s actions were inconsistent with the right to
arbitrate. Although she filed the
complaint (filed April 19, 2024) based on allegations of assault, negligence,
gender violence, invasion of privacy, and IIED, High Rise thereafter filed its
cross-complaint on May 24, 2024 based on non-payment under the construction
contract. Gevorgyan then filed this
motion on June 25, 2024. No other
procedures have occurred in this action.
As such, the “litigation machinery” has not been substantially invoked
nor does it appear that the parties are well into preparing the lawsuit or the
cross-claims. In addition, while a case
management conference has been set for September 17, 2024, there is no trial
date in this action nor has there been a delay in filing the motion. Further, as represented by Gevorgyan, the
parties have not engaged in active discovery.
Finally, High Rise has not presented arguments that it was affected, misled,
or prejudiced by any delay in Gevorgyan seeking arbitration of the
cross-complaint’s claims.
For these reasons, the Court finds that High Rise has not
established that Gevorgyan waived her right to arbitrate the claims in the
cross-complaint.
C.
CCP § 1281.2(c)
Most of High Rise’s opposition arguments
rely on CCP § 1281.2(c). High Rise argues that: (1) the complaint and
cross-complaint arise from the same transaction or occurrence; and (2) there is
a substantial risk of inconsistent/conflicting rulings on fact issues common to
both the complaint and cross-complaint.
CCP § 1281.2
states in relevant part:
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
…
(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. 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. …
(CCP
§ 1281.2 [underline added].)
High Rise argues
that Gevorgyan’s
complaint and High Rise’s cross-complaint arise from the same transaction or
occurrence. However, there is no
separate case between Gevorgyan and a “third party.” The parties to this
proceeding are the same, and any rulings can be reconciled and given preclusive
effect since all the parties are the same. Moreover, this matter is not yet set
for trial so that in all likelihood the arbitration will occur before the trial
in this matter. CCP § 1281.2 has no application here.
The cross-complaint will be stayed pending
the outcome of the arbitration.
CONCLUSION
AND ORDER
Plaintiff/Cross-Defendant Karine Gevorgyan’s
motion to compel arbitration of the Cross-Complaint is granted. The Cross-Complaint will be stayed pending
the outcome of the arbitration. The
remainder of action (Plaintiff’s complaint) may proceed in Court.
The Court sets a Status Conference re:
Arbitration of the Cross-Complaint for March 12, 2025 at 8:30 a.m.
Plaintiff shall give notice of
this order.
DATED: August 23,
2024 ___________________________
John
Kralik
Judge
of the Superior Court