Judge Lynne M. Hobbs, Case Number: 23STCV21153, Date: 2024-08-08 Tentative Ruling

Judge: Lynne M. Hobbs, Case: 23STCV21153, Date: 2024-08-08 Tentative Ruling

Case Number: 23STCV21153 Hearing Date: August 8, 2024 Dept: 61

KRISTIN SEYMOUR vs BURNS NATIONAL, LLC

TENTATIVE

Defendant Blackfish Capital, LLC’s Motion to Compel Arbitration is GRANTED.

Moving party to provide notice.

DISCUSSION

On petition of a party to an arbitration agreement to arbitrate a controversy, a court must order the petitioner and respondent to arbitrate the controversy if it determines the arbitration agreement exists, unless (1) the petitioner has waived its right to arbitrate; (2) grounds exist for the revocation of the agreement; or (3) “[a] party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact.” (Code Civ. Proc., § 1281.2.)

“[T]he party moving to compel arbitration bears the burden of establishing the existence of a valid agreement to arbitrate, and the party opposing arbitration bears the burden of proving by a preponderance of the evidence any fact necessary to its defense. The role of the trial court is to sit as a trier of fact, weighing any affidavits, declarations, and other documentary evidence, together with oral testimony received at the court's discretion, to reach a determination on the issue of arbitrability.” (Hotels Nevada v. L.A. Pacific Center, Inc. (2006) 144 Cal.App.4th 754, 758.)

Defendant Blackfish Capital LLC (Defendant) moves to compel arbitration of Plaintiff Kristin Seymour’s (Plaintiff) claims based on an arbitration agreement executed by Plaintiff on May 29, 2021. (Tauscher Decl. Exh. 1.) Plaintiff has in fact filed a demand for arbitration, but with JAMS rather than AAA, the only arbitration provider mentioned in the agreement. (Tauscher Decl. ¶ 3.) The operative provision states as follows with regard to the arbitration provider:

You [Plaintiff] may choose the American Arbitration Association, 1633 Broadway, 10th Floor, New York, New York 10019 (www.adr.org), or any other organization to conduct the arbitration subject to our approval.

(Tauscher Decl. Exh. 1.)

Plaintiff argues that this provision allows Plaintiff the choice of any forum, subject to the other party’s approval, and that AAA does not afford any special place in the agreement. (Opposition at p. 5.) This argument is unpersuasive, as AAA is listed as the only arbitration provider that Plaintiff may choose regardless of Defendant’s post agreement consent. There is one clause describing Plaintiff’s ability to select AAA, a comma, and then another clause allowing the selection of any other arbitrator provided that Defendant consents. Thus the agreement prescribes AAA as the default if the parties cannot otherwise agree on a choice of forum.

Plaintiff argues that Defendant’s refusal to hear Plaintiff’s suggestions for an alternative forum evidences a violation of the covenant of good faith and fair dealing. (Opposition at pp. 6–10.) But Plaintiff does not show that the choice of AAA as a forum is unreasonable. (See Badie v. Bank of America (1998) 67 Cal.App.4th 779, 796 [“[T]he covenant of good faith can be breached for objectively unreasonable conduct, regardless of the actor's motive.”].) As noted above, the contract designates AAA as the default forum. Contrary to the non-binding federal authority cited by Plaintiff, the provision designating AAA is not one-sided, as it merely designates a default forum, already agreed to by the parties, or any other forum to which the parties agree. (Trueblood Decl. Exh. 12.) Even if the agreement required Defendant’s agreement for any and all choice of forum, this would merely require resort to statutory provisions governing the selection of an arbitrator where the parties fail to agree. (See, e.g., Code Civ. Proc. § 1281.6.) But because the arbitration agreement already designates AAA, no invocation of such a procedure is necessary.

Plaintiff argues the AAA choice is unreasonable because it does not provide for the discovery provided in other arbitration services, rendering all exchange of documents discretionary with the arbitrator. (Trueblood Decl. Exh. 11, Rule 22.) However, the arbitrator retains discretion to permit further discovery if the arbitrator “determines further information exchange is needed to provide for a fundamentally fair process.” (Ibid.) Plaintiff does not present any evidence or argument to suggest that the more expansive discovery permitted by other providers would be necessary to litigate her claims, and she does not argue that this provision is unconscionable or otherwise barred by applicable authority. Finally, Defendant presents a reason for its preference for AAA: costs. Defendant presents evidence that JAMS and ADR Services could cost Defendant over $80,000.00, while AAA arbitrations are generally less expensive. (Supp. Sirfy Decl. ¶ 3.)

The motion is therefore GRANTED.