Judge: Latrice A. G. Byrdsong, Case: 24STLC00051, Date: 2024-05-22 Tentative Ruling

*** Please Note that the Judicial Officer Presiding in Department 25 is Commissioner Latrice A. G. Byrdsong ***
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Case Number: 24STLC00051    Hearing Date: May 22, 2024    Dept: 25

Hearing Date:                         Wednesday, May 22, 2024

Case Name:                             Levelworks Construct & Renovate, Inc v. Ron Green, et al.

Case No.:                                24STLC00051

Motion:                                   Compel Arbitration and Stay Proceedings

Moving Party:                         Defendants Ron Green and Brenda Green (“Defendants”)

Responding Party:                   Plaintiff Levelworks Construct & Renovate, Inc. (“Plaintiff” or             “Levelworks”)

Notice:                                    OK

Recommended Ruling:         Defendants Motion to Compel Arbitration and Stay

Proceedings is GRANTED.

Defendants request for attorney’s fees is GRANTED IN PART, in a reduced amount of $1,850.00. Plaintiff is ordered to pay Defendants sanctions in the amount of $1,850.00 for their reasonable attorney’s fees within 20 days of this Court’s order.

Civil proceedings are STAYED pending the parties’ completion of arbitration.

Post-Arbitration Status Conference is set for 12/04/2024 at 9:30 a.m. in Department 25 of the Spring Street Courthouse.

Counsel are ordered to electronically file a JOINT Report Re:  Status of Arbitration (5) court days prior to 12/04/2024.

The 07/03/2025 Trial is advanced to this date and hereby taken off calendar/vacated.

BACKGROUND

Plaintiff, Levelworks Construct & Renovate, Inc. and Defendants Ron Green and Brenda Green, entered into a contract on or about May 3, 2023, in which Levelworks was to perform construction work on the Greens’ residence (“Contract”) located at 26239 Beecher Lane, Stevenson Ranch, California 91381 (“Property”).

Levelworks completed all work under the Contract on the Greens’ Property. The Greens claim they made oral change orders to the Contract that changed the scope of work Levelworks was supposed to perform and that those changes reduce the amount owed to Levelworks. However, it is alleged that no agreement as to a reduction in price was ever made between the Greens and Levelworks. Levelworks completed the work under the Contract, yet the Greens have refused to pay the final invoice.

On January 4, 2024, Plaintiff Levelworks Construct & Renovate, Inc. (“Plaintiff”) filed a complaint against Defendants Ron Green, Brenda Green  (collectively, “Defendants”) and Does 1 through 50 for (1) breach of contract, (2) quantum meruit, (3) common count – account stated, (4) common count – open book, and (5) to enforce mechanics lien.

On April 2, 2024, Defendants filed the instant motion.

On May 9, 2024, Plaintiff filed its opposition.

On May 15, 2024, Defendants filed their reply.

MOVING PARTY POSITION

            Defendants seek an order compelling Levelworks to arbitrate the claims set forth in the Complaint and stay proceedings because of the Paragraph 26 arbitration provisions of the Agreement. (Not. of Mot. at p.4.) Defendants also seek an award of reasonable attorney’s fees and costs in the amount of $2,580.00 for attorney’s fees and $50.00 in filing fees for having to file this motion because Paragraph 25.8 of the Agreement allows for attorney’s fees. (Id.)

OPPOSITION

            In Opposition, Plaintiff concedes that it is not opposed to arbitration and requests attorney’s fees and costs incurred as a result of opposing this motion. (Opp’n. at pp. 4-5.) However, Plaintiff argues that the Agreement requires that the parties first go through mediation. (Id. at p. 4.) Alternatively, Plaintiff seeks an order requiring mediation prior to arbitration. (Id. at p.5) Moreover, Plaintiff argues that in order to preserve its mechanics lien rights, it was forced to file the lawsuit enforcing the mechanics lien. (Id. at pp. 3-4.)

REPLY

            In Reply, Defendants state that Plaintiff conceded that arbitration is required. (Reply at p. 1.) Defendants argue that the arbitration provision in the agreement is enforceable. (Reply at p. 5.) Therefore, Defendants argue that they are entitled to any award of attorney fees and costs as they were forced by Plaintiff to bring this petition in order to enforce their rights. (Id.)

ANALYSIS

I.          Motion to Compel Arbitration and Stay Proceedings

B.        Legal Standard

            “On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such 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 (b) Grounds exist for the revocation of the agreement.” (Code Civ. Proc. §1281.2, subds. (a), (b).)

            A proceeding to compel arbitration is in essence a suit in equity to compel specific performance of a contract. (Freeman v. State Farm Mutual Auto Insurance Co. (1975) 14 Cal.3d 473, 479.) Such enforcement may be sought by a party to the arbitration agreement. (Code Civ. Proc., § 1280, subd. (e)(1).)

            The petition to compel arbitration functions as a motion and is to be heard in the manner of a motion, i.e., the facts are to be proven by affidavit or declaration and documentary evidence with oral testimony taken only in the court’s discretion. (Code Civ. Proc., §1290.2; Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413–414.) The petition to compel must set forth the provisions of the written agreement and the arbitration clause verbatim, or such provisions must be attached and incorporated by reference. (Cal. Rules of Court, rule 3.1330; see Condee, supra, 88 Cal.App.4th at 218.)

            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, supra, 88 Cal.App.4th at 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.)

II.        Discussion

            Defendants move to compel arbitration on the ground that an agreement to arbitrate exists which covers the controversies in Plaintiff’s case against Defendants. Ultimately, the motion will be granted.

            Here, Plaintiff concedes to arbitration with the caveat that mediation occur before arbitration. (Opp’n. at p. 4.)

            The arbitration provision states: “Arbitration of Disputes: 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. Claims within the monetary limit of the small claims court shall be litigated in such court at the request of either party, so long as both parties limit their right to recovery to the jurisdiction of the small claims court . . ..” (Schreiber Decl. ¶ 2;Ex. 1.) Notably, Plaintiff does not dispute the existence of the arbitration clause or claim that it is unenforceable. Therefore, arbitration is warranted. Plaintiff argues that mediation is required prior to arbitration.

            Plaintiff’s reliance on the mediation provision is misguided. Provision 25.5 states “[a]ny dispute or claim in law or equity arising out of this agreement or any resulting transaction, including disputes or claims involving the parties to this agreement, their officers, agents, or employees, shall be submitted to neutral, non-binding private mediation prior to the commencement of litigation. The parties to the dispute or claim agree to act in good faith to participate in mediation, and to identify a mutually acceptable mediator. All parties to the mediation shall share equally in its cost. The parties may proceed to litigation should the dispute or claim not resolve with mediation.” (emphasis added.) (Schreiber Decl. ¶ 2;  Ex. 1 – Provision 25.5.) Here, Plaintiff filed its complaint on January 4, 2024 and did not attempt to engage in mediation attempts until February 26, 2024. (Nash Decl. ¶ 7.) Therefore, the mediation provision is inapplicable, and mediation is not required because Plaintiff failed to engage in mediation prior to filing the complaint.

            Thus, the Motion to Compel Arbitration and Stay Proceedings is GRANTED.

            Attorney’s Fee Award

            Defendants argue that they are entitled to an award of attorney fees and costs as they were forced by Plaintiff to bring this petition in order to enforce their rights. Defendants seek attorney’s fees in the amount of $2,580.00 plus filing fees of $50.00.

            Here, attorney’s fees for Defendants are warranted. Paragraph 25.8 provides: "In any litigation, arbitration, or other proceeding by which one party either seeks to enforce its rights under this Agreement (whether in contract, tort, or both) or seeks a declaration of any rights or obligations under this Agreement, the prevailing party shall be awarded its reasonable attorney fees, and costs and expenses incurred.” (emphasis added.) (Schreiber Decl. ¶ 2;  Ex. 1 – Provision 25.8.) Here, the Motion to Compel Arbitration and Stay Proceedings will be granted which will make Defendants the prevailing party. Pursuant to Paragraph 25.8, Defendants are entitled to attorney’s fees for bringing this motion. Nevertheless, the Court finds the amount sought is excessive due to the simplicity of the motion. The Court awards attorney’s fees in the reduced amount of $1,850.00 which includes 1.5 hours drafting the Motion, 1.5 hours for drafting the reply and hearing appearance, at a $600.00 hourly rate, plus the $50.00 filing fee. (Schreiber Decl. ¶ 6.)

III.       Conclusion

            In all, Defendants’ Motion to Compel Arbitration and Stay Proceedings is GRANTED.

                                                                                               Additionally, Defendants request for attorney’s fees is GRANTED IN PART, in a reduced amount of $1,850.00. Plaintiff is ordered to pay Defendants Sanctions in the amount of $1,850.00 for their reasonable attorney’s fees within 20 days of this Court’s order.

            Civil proceedings are STAYED pending the parties’ completion of arbitration.

The Court sets a Post- Arbitration Status Conference for December 4, 2024, at 9:30am in Department 25 in the Spring Street Courthouse. 

Counsel are ordered to electronically file a JOINT Report Re:  Status of Arbitration Proceedings (5) days prior to 12/04/2024.

The 07/03/2025 Trial is advanced to this date and hereby taken off calendar/vacated.

            Moving Party to give notice.