Judge: Linda S. Marks, Case: 2023-01320924, Date: 2023-06-12 Tentative Ruling

Motion to Compel Arbitration

Attorneys for Defendants, S-H MRE/HCP OPCO Ventures, LLC, MBK Senior Living, LLC, S-H Huntington Terrace OPCO, LLC AND MSL Community Management, LLC (“Defendants”) Motion to Compel Arbitration is DENIED.

“When the parties to a contract agree to arbitrate any disputes before a particular forum, that provision becomes an integral part of their contract.” (Provencio v. WMA Securities, Inc. (2005) 125 Cal.App.4th 1028, 1032.) “If that forum is not available to hear the dispute, then a petition to compel arbitration may not be granted.” (Provencio v. WMA Securities, Inc. (2005) 125 Cal.App.4th 1028, 1032.)

In affirming the decision to deny a motion to compel arbitration because the selected forum in the arbitration agreement was no longer available, the court in Provencio discussed the court’s holding in Alan v. Superior Court (2003) 111 Cal.App.4th 217:

“In Alan our colleagues in Division One were confronted with a claim against a securities dealer where NASD arbitration was required, but might not be possible because NASD was no longer arbitrating in California due to a dispute over the application of the state’s ethical rules for arbitrators. Because the arbitration agreement included a choice of forum clause, and because NASD was willing to arbitrate the dispute in other states, the court of appeal held the trial court should determine under applicable choice of law standards whether arbitration in other states was appropriate. If so, a forum was available and arbitration could proceed. If not, then the required forum for arbitration was not available, and state court action could proceed.”

“If an arbitration agreement designates an exclusive arbitral forum ..., and arbitration in that forum is not possible, courts may not compel arbitration in an alternative forum by appointing substitute arbitrators.” (Martinez v. Master Protection Corp. (2004) 118 Cal.App.4th 107, 121.)

Here, the Arbitration Agreement designated the National Arbitration Forum as the exclusive arbitral forum. Plaintiff established that the National Arbitration Forum is no longer a valid forum to resolve the causes of action at issue in this case because the Consent Judgments bars the National Arbitration Forum from arbitrating “a dispute between a business entity and a private individual which relates to goods, services, or property of any kind allegedly provided by any business entity to the individual, or payment for such goods, services, or property.”

Defendant does not dispute the National Arbitration Forum’s inability to arbitrate the matters presented in the Complaint but asks the court to appoint an alternative forum. As established from the caselaw above, the court may not compel arbitration in an alternative forum by appointing substitute arbitrators.

Moreover, the caselaw above clearly establishes that designating a forum is an integral part of a contract. The language of the Arbitration Agreement at issue here supports such a finding.

For example, the Arbitration Agreement states that “[a]rbitrations shall be administered by the National Arbitration Forum under the Code of Procedure then in effect.” This establishes that (1) the arbitration is to take place before the National Arbitration Forum and (2) the arbitration is subject to the National Arbitration Forum’s Code of Procedure in effect at the time of the arbitration.

The Arbitration Agreement further states that “Arbitrations shall be conducted by a single arbitrator agreed to by the Parties, or if the Parties cannot agree upon an arbitrator, before an arbitrator assigned by the National Arbitration Forum.”

Clearly, conducting the arbitration before the National Arbitration Forum was an integral part of the Arbitration Agreement as it determined (1) the forum, (2) the rules and procedure, and (3) the arbitrator.

The Court does not need to address any further arguments made in the moving papers based on the foregoing.

Accordingly, the Motion to Compel Arbitration is DENIED.

Plaintiff to give notice.

2.Motion for Preference filed by Elizabeth Skendzic

Plaintiff’s Motion for Preference is GRANTED. Plaintiff established that preference is mandatory pursuant to Code of Civil Procedure sections 36(a) and 36.5.

Counsel should come prepared to discuss trial dates in light of the foregoing ruling.

Plaintiff to give notice.