Judge: Jon R. Takasugi, Case: 20STCV41456, Date: 2023-02-06 Tentative Ruling

Case Number: 20STCV41456    Hearing Date: February 6, 2023    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

Defendant’s motion to compel arbitration is GRANTED. This matter is ordered stayed pending the completion of arbitration proceedings.

On 10/28/2020, the Law Firm of Fox and Fox, a general partnership composed of Frank O. Fox and Claire S. Fox filed suit against Joy Fuller-Smith (Defendant), alleging: (1) breach of contract; and (2) common counts.

            On 10/12/2022, the Court granted Defendant’s motion to set aside the entry of default.

            Now, Defendant moves to compel arbitration of the Complaint.

Legal Standard

Where the Court has determined that an agreement to arbitrate a controversy exists, the Court shall order the petitioner and the respondent to arbitrate the controversy …unless it determines that…  grounds exist for rescission of the agreement.” (Code Civ. Proc., § 1281.2.) Among the grounds which can support rescission are fraud, duress, and unconscionability. (Tiri v. Lucky Chances, Inc. (2014) 226 Cal.App.4th 231, 239.) The Court may also decline to compel arbitration wherein there is possibility of conflicting rulings on a common issue of law or fact. (Code Civ. Proc., § 1281.2 (c).)

Discussion

The party moving to compel arbitration “bears the burden of proving [the] existence [of an arbitration agreement] by a preponderance of the evidence.” (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413.) The moving party also bears the burden of demonstrating that the claims fall within the scope of the arbitration agreement. (Omar v. Ralphs Grocery Co. (2004) 118 Cal.App.4th 955, 961.)

A.    Existing Agreement

      Plaintiff submitted a copy of the Retainer Agreement signed by Defendant on 5/15/2019. (Defendant Decl., ¶ 3.)

      The arbitration provisions, which were initialed by both Defendant and Plaintiffs, provides:

 In the event CLIENT and ATTORNEY have a dispute with regard to the services performed on CLIENT’S behalf, to resolve that dispute as speedily, privately and economically as possible, if either ATTORNEY and CLIENT timely elects, said dispute will be resolved by binding arbitration before The Beverly Hills bar Association, unless arbitration has been waived as herein set forth. This Arbitration provision applies to any claim for legal malpractice as well as to fees charged. It is understood that any dispute as to legal malpractice, that is as to whether any legal services rendered under this contract were unnecessary or unauthorized, or were improperly, negligently or incompetently rendered, will be determined by submission to The Beverly Hills Bar Association and not by a lawsuit or resort to court process except as California law provides for judicial review of Arbitration proceedings. Both parties to this contract, by entering into it, are giving up their constitutional right to have any such dispute decided in a court of law before a jury, and instead are accepting the use of Arbitration. Any judgment on an award rendered in arbitration may be entered in any court having CLIENT’S INITIALS /s/ ATTORNEY’S INITIALS /s/ jurisdiction thereof. However, if the dispute involves our ATTORNEY’S fees, under California law, ATTORNEY and CLIENT have the right to request that the dispute be determined first by The Beverly Hills Bar Association. Absent a waiver, if non-binding arbitration is selected and either ATTORNEY or CLIENT is unhappy with the result, the dispute will then be determined by binding arbitration. The rights under the law to non-binding arbitration, pursuant to Section 6200 et seq. of the Business and Professions Code, are different. If non-binding arbitration is requested, it will take place before any binding arbitration, which is provided for herein. The arbitration to which CLIENT AND ATTORNEY are agreeing replaces litigation in court before a judge or jury. CLIENT has been advised to seek independent legal counsel before agreeing to binding arbitration.

            Given that Plaintiffs’ claims arise out of their representation of Defendant, the claims fall within the scope of the agreement.

            In opposition, Plaintiffs do not dispute the existence of an arbitration agreement, or that their claims fall within the scope of the provision. Rather, Plaintiffs argue that Defendant has waived her right to arbitration by filing an answer on 8/25/2022. However, Defendant’s answer was filed while default was entered against her. As a party in default, Defendant could not file a valid answer. (See Devlin v. Kearny Mesa AMC/Jeep/Renault, Inc. (1984) 155 Cal.App.3d 381, 385-86, noting that the entry of default terminates a defendant’s rights to take any further affirmative steps in litigation until either his default is set aside or a default judgment is entered.) Accordingly, Defendant’s filed answer was null and void, and the setting aside of default does not imbue the answer with valid status. Rather, because it was filed when Defendant was not entitled to take any affirmative steps in litigation, the answer is considered not to exist.

            In opposition, Plaintiffs also argue that Defendant waived her right to arbitration by participating in mediation in lieu of arbitration. However, Plaintiffs have not established this by a preponderance of the evidence. In reply, Defendant submitted an email from the mediator, Sindee M. Smolowitz, which stated, “I have not heard back from Mr. Fox. At this point I believe the next step is to attend arbitration….” (Defendant’s Motion to Compel, Exh. E.) Defendant also submitted evidence that Mr. Fox himself signed an Attorney's Reply to Clients Request for Arbitration which states in Paragraph 5 that "If the matter does not resolve through mediation, it will then proceed to arbitration Plaintiff then clearly selects "I WOULD like to Mediate this dispute." (Defendant Decl. ¶4.) As such, the preponderance of evidence does not indicate that participation in mediation was meant to be in lieu of arbitration, such that Defendant waived her right to arbitration.

            Taken together, the Court finds insufficient evidence that Defendant has waived her right to arbitration of this matter. Plaintiffs did not identify any other basis for not enforcing the arbitration agreement which they drafted.

      Based on the foregoing, Defendant’s motion to compel arbitration is granted. This matter is ordered stayed pending the completion of arbitration proceedings.

It is so ordered.

Dated:  February    , 2023

   Hon. Jon R. Takasugi
   Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court at smcdept17@lacourt.org by 4 p.m. the day prior as directed by the instructions provided on the court website at www.lacourt.org.  If a party submits on the tentative, the party’s email must include the case number and must identify the party submitting on the tentative.  If all parties to a motion submit, the court will adopt this tentative as the final order.  If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar. 

            Due to Covid-19, the court is strongly discouraging in-person appearances.  Parties, counsel, and court reporters present are subject to temperature checks and health inquiries, and will be denied entry if admission could create a public health risk.  The court encourages the parties wishing to argue to appear via L.A. Court Connect.  For more information, please contact the court clerk at (213) 633-0517.  Your understanding during these difficult times is appreciated.