Judge: Mark A. Young, Case: 22SMCV00604, Date: 2024-05-08 Tentative Ruling
Case Number: 22SMCV00604 Hearing Date: May 8, 2024 Dept: M
CASE NAME: Li, v. Jenkins, et al.
CASE NO.: 22SMCV00604
MOTION: Petition/Motion
to Compel Arbitration
HEARING DATE: 5/8/2024
Legal
Standard
Under California and federal law,
public policy favors arbitration as an efficient and less expensive means of
resolving private disputes. (Moncharsh
v. Heily & Blase (1992)
3 Cal.4th 1, 8-9; AT&T Mobility
LLC v. Concepcion (2011) 563 U.S. 333, 339.) Accordingly, whether an
agreement is governed by the California Arbitration Act (“CAA”) or the Federal
Arbitration Act (“FAA”), courts resolve doubts about an arbitration agreement’s
scope in favor of arbitration. (Moncharsh, supra, 3 Cal.4th at 9;
Comedy Club, Inc. v. Improv West
Assocs. (9th Cir. 2009) 553 F.3d 1277, 1284; see also Engalla v. Permanente Med. Grp., Inc.
(1997) 15 Cal.4th 951, 971-972 [“California law incorporates many of the basic
policy objectives contained in the Federal Arbitration Act, including a
presumption in favor of arbitrability [citation] and a requirement that an
arbitration agreement must be enforced on the basis of state law standards that
apply to contracts in general”].) “[U]nder both the FAA and California law,
‘arbitration agreements are valid, irrevocable, and enforceable, save upon such
grounds as exist at law or in equity for the revocation of any contract.’ ” (Higgins v. Superior Crout (2006) 140 Cal.App.4th 1238, 1247.)
“Code of
Civil Procedure section 1281.2 requires a trial court to grant a petition to
compel arbitration if the court determines that an agreement to arbitrate the
controversy exists.” (Avery v.
Integrated Healthcare Holdings, Inc. (2013) 218 Cal.App.4th 50, 59,
quotations omitted.) Accordingly, “when presented with a petition to compel
arbitration, the court’s first task is to determine whether the parties have in
fact agreed to arbitrate the dispute.” (Ibid.) A petition to compel arbitration is in essence a suit in equity
to compel specific performance of a contract. (Id. at 71.) As with any other specific performance claim, “a
party seeking to enforce an arbitration agreement must show the agreement’s
terms are sufficiently definite to enable the court to know what it is to
enforce.” (Ibid. [internal citations omitted].) “Only
the valid and binding agreement of the parties, including all material terms
well-defined and clearly expressed, may be ordered specifically performed.” (Ibid.) An arbitration agreement “must be so interpreted as to give
effect to the mutual intention of the parties as it existed at the time of
contracting, so far as the same is ascertainable and lawful.” (Civ. Code, §
1636.) The language of the contract governs its interpretation if it is clear
and explicit. (Civ. Code, § 1368.) If uncertainty exists, “the language of a
contract should be interpreted most strongly against the party who caused the
uncertainty to exist.” (Civ. Code, § 1654.)
The party
seeking to compel arbitration bears the burden of proving the existence of a
valid arbitration agreement by the preponderance of the evidence. (Engalla
v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972.) It would
then be plaintiff’s burden, in opposing the motion, to prove by a preponderance
of the evidence any fact necessary to her opposition. (See Ibid.) “In
these summary proceedings, the trial court sits as a trier of fact, weighing
all the affidavits, declarations, and other documentary evidence, as well as
oral testimony received at the court’s discretion, to reach a final
determination.” (Ibid.)
Analysis
Defendants Bongo LLC, Jeff Jenkins
Productions, LLC, and Jeff Jenkins move to arbitrate Plaintiff Kelly Li’s
claims. Defendants assert that the instant claims must be arbitrated because
Plaintiff signed an arbitration agreement covering her claims. Based upon the papers, there is no dispute that
Plaintiff’s claims are subject to a valid arbitration clause. Plaintiff only
argues that Defendants have waived their contractual right to arbitrate through
their litigation efforts in this action.
Waiver
“California courts have found
a waiver of the right to demand arbitration in a variety of contexts, ranging
from situations in which the party seeking to compel arbitration has previously
taken steps inconsistent with an intent to invoke arbitration [citations] to
instances in which the petitioning party has unreasonably delayed in
undertaking the procedure. [Citations.] The decisions likewise hold that the
‘bad faith’ or ‘wilful misconduct’ of a party may constitute a waiver and thus
justify a refusal to compel arbitration. [Citations.]” (Engalla v. Kaiser
Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 983, quoting Davis
v. Blue Cross of Northern California (1979) 25 Cal.3d 418.)
“Whether a party to an arbitration agreement has waived
the right to arbitrate is a question of fact, and a trial court’s determination
on that matter will not be disturbed on appeal if supported by substantial
evidence . . .. Since arbitration is a strongly favored means of resolving
disputes, courts must ‘closely scrutinize any claims of waiver.’” (Sobremonte
v. Superior Court (1998) 61 Cal. App. 4th 980, 991 [citations omitted].)
“No single test delineates the nature of the conduct that will constitute a
waiver of arbitration.” (St. Agnes Medical Center v. PacifiCare of
California (2003) 31 Cal. 4th 1187, 1195.) “In determining waiver, a court
can consider (1) whether the party’s actions are inconsistent with the right to
arbitrate; (2) whether the litigation machinery has been substantially invoked
and the parties were well into preparation of a lawsuit before the party
notified the opposing party of an intent to arbitrate; (3) whether a party
either requested arbitration enforcement close to the trial date or delayed for
a long period before seeking a stay; (4) whether a defendant seeking
arbitration filed a counterclaim without asking for a stay of the proceedings;
(5) whether important intervening steps [e.g., taking advantage of judicial
discovery procedures not available in arbitration] had taken place; and (6)
whether the delay affected, misled, or prejudiced the opposing party.” (Sobremonte,
supra, 61 Cal. App. 4th at 992 [citation omitted].)
Plaintiff filed this lawsuit on
April 28, 2022. On June 2, 2022, Defendants answered and asserted arbitration
as an affirmative defense. Rather than immediately filing this motion,
Defendants filed a timely special motion to strike under Code of Civil Procedure
section 425.16 (the “Anti-SLAPP"). The Court denied the Anti-SLAPP on
December 16, 2022. Defendants timely appealed the Anti-SLAPP ruling on January
17, 2023. The court of appeal affirmed the anti-SLAPP ruling. The Court
received the remittitur on November 15, 2023. Defendants moved for arbitration
on January 31, 2024.
Plaintiff argues that this
constitutes a twenty-one-month delay in prosecuting this case. However, the Court
would not count that entire time period against Defendants. First, Defendants
immediately notified Plaintiff of their arbitration defense in their June 2,
2022, answer. Second, the action was stayed upon appeal of the anti-SLAPP ruling
from January 17, 2023, through November 15, 2023. This time would generally be
excluded from calculating how long the suit has been pending and should also be
excluded from this time computation. Defendant filed this motion approximately
two and a half months later, on January 31, 2024. At worst, Defendant delayed
in bringing this motion by about ten months—from June 2, 2022, through January
17, 2023; and from November 15, 2023, through January 31, 2024.
Plaintiff only cites an
anti-SLAPP motion as unavailable in arbitration. The Court would not view
filing an anti-SLAPP alone as substantially invoking litigation machinery, unfairly
seeking relief unavailable at arbitration, or fundamentally incompatible with
the right to arbitrate. Arbitration and anti-SLAPP motions both promote similar
policies of effective and quick resolution of claims. (See Newport
Harbor Ventures, LLC v. Morris Cerullo World Evangelism (2018) 4
Cal.5th 637 [the purpose of the Anti-SLAPP statute is to resolve cases early
and efficiently].) Anti-SLAPP motions must be made within 60 days after the
filing of the targeted complaint. (Id.) No cited authority found a waiver
of an arbitration provision from a 60 day delay. Counsel may not have
the opportunity to obtain the relevant arbitration agreement, meet and confer
with opposing counsel regarding their willingness to arbitrate, and draft a
motion to arbitrate within that short time period. If the Court required an
arbitration motion to be made prior to an anti-SLAPP motion, the Court
would undermine the purpose of the anti-SLAPP statute to resolve meritless
claims before substantial litigation occurs.
The Court notes that no trial
date is set. Plaintiff has not cited any other litigation efforts undertaken, including
discovery that would be unavailable at arbitration. Defendants have sought no
counter claims against Plaintiff. Critically, Plaintiff also cites no prejudice
stemming from the anti-SLAPP or the delay caused thereby. Plaintiff only notes
that they have had to expend fees litigating the action, which is not the type
of prejudice required for waiver. (See St. Agnes Med. Ctr. v. PacifiCare of
California (2003) 31 Cal. 4th 1187, 1203 [“merely participating in
litigation, by itself, does not result in a waiver, courts will not find
prejudice where the party opposing arbitration shows only that it incurred
court costs and legal expenses”].) Otherwise, Plaintiff only cites the delay
itself as the prejudice, which is a circular argument.
Accordingly, Defendants’ motion is
GRANTED and the Court orders Plaintiff’s claims to arbitration, as discussed
above. The entire action is STAYED pending the completion of the arbitration.
(CCP § 1281.4.) The Court will set a status
conference re arbitration for April 3, 2025 at 8:30 a.m.