Judge Kerry Bensinger, Case Number: 24STCP00797, Date: 2024-04-30 Tentative Ruling

This is a contract dispute. Petitioner Alprop LLC (“Alprop”) is the owner of a warehouse. Alprop leased the warehouse to Respondent Oasis AG LLC (“Oasis”) for the use of medical cannabis growth operations. The parties entered into a written contract. Thereafter, Oasis defaulted on the rent and facility fee payments. Alprop attempted to resolve the dispute without resorting to arbitration. Oasis did not respond. Alprop later opened an arbitration case with JAMS as provided under the parties’ agreement. However, Oasis did not respond to any notice or correspondence from JAMS to participate in the arbitration proceedings.

On March 14, 2024, Alprop filed this Petition for an Order to Compel Arbitration (the “Petition”). Alprop seeks an order appointing an arbitrator.

Under both the Federal Arbitration Act and California law, arbitration agreements are valid, irrevocable, and enforceable, except on such grounds that exist at law or equity for voiding a contract. (Winter v. Window Fashions Professions, Inc. (2008) 166 Cal.App.4th 943, 947.) The party moving to compel arbitration must establish the existence of a written arbitration agreement between the parties. (Code Civ. Proc. § 1281.2.) In ruling on a motion to compel arbitration, the court must first determine whether the parties actually agreed to arbitrate the dispute, and general principles of California contract law help guide the court in making this determination. (Mendez v. Mid-Wilshire Health Care Center (2013) 220 Cal.App.4th 534, 541.)¿

Once petitioners allege that an arbitration agreement exists, the burden shifts to respondents to prove the falsity of the purported agreement, and no evidence or authentication is required to find the arbitration agreement exists. (See Condee v. Longwood Mgt. Corp. (2001) 88 Cal.App.4th 215, 219.) However, if the existence of the agreement is challenged, “petitioner bears the burden of proving [the arbitration agreement's] existence by a preponderance of the evidence.” (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413; see also Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1058-1060.)¿¿¿

“With respect to the moving party's burden to provide evidence of the¿existence¿of an agreement to arbitrate, it is generally sufficient for that party to present a copy of the contract to the court.” (Condee, supra, 88 Cal.App.4th at p. 218; see also Cal. Rules of Court, rule 3.1330 [“A petition to compel arbitration or to stay proceedings pursuant to Code of Civil Procedure sections 1281.2 and 1281.4 must state, in addition to other required allegations, the provisions of the written agreement and the paragraph that provides for arbitration. The provisions must be stated verbatim or a copy must be physically or electronically attached to the petition and incorporated by reference”].) Once such a document is presented to the court, the burden shifts to the party opposing the motion to compel, who may present any challenges to the enforcement of the agreement and evidence in support of those challenges. [Citation]” (Baker v. Italian Maple Holdings, LLC¿(2017) 13 Cal.App.5th 1152, 1160.)¿

Petitioner moves for an order (1) compelling arbitration of Petitioner’s claims in accordance with the terms of the parties’ written agreement to arbitrate, and (2) appointing an arbitrator.

Arbitration. If the parties do not agree on a written resolution of a Dispute pursuant to the procedures set forth in Section 17.1 by the end of the First Meeting, then, except as otherwise provided in this Agreement, any dispute shall be submitted to binding arbitration in Los Angeles County, California by a single arbitrator mutually chosen by the parties in writing, who shall be a retired judge or litigator with ten (10) years or more of experience with claims similar to the Dispute (provided, that lack of experience with claims involving the cannabis industry shall not be a cause for disqualification). If the parties cannot agree on an arbitrator, JAMS shall provide a list of six (6) candidates, and each party shall take turns striking candidates (beginning with the party who received the notice of arbitration until there is a single arbitrator. The costs of the arbitration, including any JAMS administration fee, the arbitrator's fee, and costs for the use of facilities during the hearings, shall be born equally by the parties to the arbitration; provided that all costs and expenses of the dispute, including arbitrator fees and reasonable attorneys' fees and costs incurred, shall be awarded to the prevailing or most prevailing party as determined by the arbitrator. The arbitrator shall not have any power to alter, amend, modify or change any of the terms of this Agreement nor to grant any remedy which is either prohibited by the terms of this Agreement, or not available in a court of law. The arbitrator shall render a written opinion not later than thirty (30) days after conclusion of the arbitration proceedings setting forth a determination of award, if any, and the basis or awarding (or not awarding) the relief sought by the parties, including findings of fact and, conclusions of law. If JAMS refuses to arbitrate a Dispute, the parties shall cooperate in good faith to find an alternative arbitrator reasonably acceptable to the parties in writing. An arbitrator exceeds his or her powers by voiding or refusing to enforce any contracts or arbitration agreements between Parties based solely on the cannabis-related nature of the contract.

The court finds that Petitioner has met its burden of proving the existence of an arbitration agreement between the parties.¿ Respondent did not file an opposition to the Petition. As such, Respondent fails to present any evidence or argument in support of a defense to the Petition.

“In the absence of an agreed method [to appoint an arbitrator], or if the agreed method fails or for any reason cannot be followed ... the court, on petition of a party to the arbitration agreement shall appoint the arbitrator.” (Code Civ. Proc. § 1281.6) Given Respondent’s failure to respond to any notice or correspondence from JAMS to participate in the selection of an arbitrator, JAMS may select the arbitrator to be appointed by the court.

The unopposed Petition for an Order to Compel Arbitration is GRANTED.¿ JAMS is authorized to select the arbitrator consistent with JAMS guidelines.

The court sets a Status Conference re: Arbitration for October 25, 2024, at 9:00 am.

Kerry Bensinger

Judge of the Superior Court