Judge: Layne H. Melzer, Case: 2022-01295966, Date: 2023-07-20 Tentative Ruling

Petitioners Krysten Dornik, Athena Karsant

Motion to Compel Arbitration

The Petition for Order Compelling Arbitration is granted with respect to Athena Karsant and denied with respect to Krysten Dornik.

The FAA provides that a “written provision in any . . . contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof . . . shall be valid, irrevocable and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” (9 U.S.C. § 2.) “The ‘principal purpose’ of the FAA is to ‘ensur[e] that private arbitration agreements are enforced according to their terms.’” (Lacayo v. Catalina Restaurant Group Inc. (2019) 38 Cal.App.5th 244, 257, citing AT&T Mobility LLC. v. Concepcion (2011) 563 U.S. 333, 344, 131 S.Ct. 1740.) The party seeking to compel arbitration “has the burden of proving the existence of a valid agreement to arbitrate.” “Once that burden is satisfied, the party opposing arbitration must prove by a preponderance of the evidence any defense to the petition.’” (Id.)  

After having reviewed the moving papers and opposing papers, including the supplemental briefing ordered in the 05/18/2023 Minute Order, the Court finds there is a valid and enforceable agreement to arbitrate Petitioner Karsant’s claims under the California Residential Purchase Agreement and Joint Escrow Instructions, between Petitioner Karsant, on the one hand, and Respondents Joe Chavez and Melissa Chavez, on the other hand, concerning the sale of the real property commonly known as 4301 Patrice Rd., Newport Beach, CA 92663. (ROA 2—Petition at ¶ 1; ROA 11—Sperry Decl. at ¶ 3, Exh. A.) Under “Arbitration of Disputes,” the agreement provides, in relevant part, that “[t]he Parties agree that any dispute or claim in Law or equity arising between them out of this Agreement or any resulting transaction, which is not settled through mediation, shall be decided by neutral, binding arbitration . . .”

Further, the Court finds that the purported assignment from Petitioner Karsant to Petitioner Dornik is voidable, because it did not comply with the “non-assignability, without consent” clause in the purchase agreement, which requires the buyer (i.e., Karsant) to obtain “the separate written consent of Seller to a specified assignee,” before assigning “all or any part of Buyer’s interest in this Agreement.” A non-assignability clause is “not inherently suspect” and “is routinely enforced.” (San Francisco Newspaper Printing Co. v. Superior Court (1985) 170 Cal.App.3d 438, 442.) The parties, here, have not provided any reason why the “non-assignability, without consent” clause cannot be enforced.  

Respondent Joe Chavez and his counsel expressly affirmed that, although they agreed to mediation with Petitioner Dornik, they never agreed in writing to an assignment of the arbitration provision. (ROA 26 [Joe Chavez Decl. at ¶¶ 5-6; Fratts Decl. at ¶ 10].) The Court finds no merit in their position that the assignment was valid for the purpose of the underlying claims, but not for the right to enforce arbitration, as this contention is not supported by fact or law. Having determined that the assignment is invalid, (as expressly conceded by Petitioners), only Petitioner Karsant has the right to enforce the arbitration provision against Respondents.

The parties should be prepared to address whether they are able to mutually agree upon an arbitrator. If the parties cannot come to an agreement, then the Court will set a hearing under CCP section 1281.6, and choose five nominees from the lists provided by the parties. If the parties still cannot come to an agreement, the Court will appoint one of the five nominees.