Judge: Mark A. Young, Case: 22SMCV01564, Date: 2023-04-28 Tentative Ruling
Case Number: 22SMCV01564 Hearing Date: April 28, 2023 Dept: M
CASE NAME: Johnson v. Taghavi,
et al.
CASE NO.: 22SMCV01564
MOTION: Petition/Motion
to Compel Arbitration
HEARING DATE: 4/28/2023
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.)
EVIDENTIARY ISSUES
Plaintiff’s objections are OVERRULED.
Analysis
This is a legal malpractice case,
arising from divorce/child custody proceedings. On April 28, 2017,
Plaintiff initiated the divorce case In Re: Marriage of Natasha and David
Johnson ("underlying action") against her former spouse for judicial
determination of issues involving domestic violence, the validity of their
premarital agreement, division of the marital estate, child custody and
visitation, child support, and spousal support. (Compl., ¶ 12.) Plaintiff was represented by
Defendants Taghavi and TLG LLP from February 2018 through December 2019.
(Compl., ¶ 5.) After TLG fired Taghavi, Defendants Taghavi and the Law Office
of Roxana Taghavi (LORT) represented Plaintiff in the underlying action from
approximately December 2019 through August 2021. (Compl., ¶ 6.) In August 2021,
Taghavi formed another law firm, VT LLP. Thereafter, Taghavi and VT represented
plaintiff in the underlying action.
Defendants Roxana Taghavi,
Valencia-Taghavi LLP, and LORT move to compel Plaintiff’s claims against them
and Defendant TLG to arbitration.
Valid Arbitration Agreement
Defendants
assert that the instant claims are required to go to arbitration because
Plaintiff signed an arbitration agreement covering their claims. As with any contract, mutual assent or
consent is necessary for the formation of a valid arbitration agreement. (Civ.
Code, §§ 1550, 1565.) “Consent is not mutual, unless the parties all agree upon
the same thing in the same sense.” (Civ. Code, § 1580.) The moving party bears
the initial burden of showing the existence of an agreement to arbitrate by a
preponderance of the evidence. (Mitri
v. Arnel Mgmt. Co. (2007) 157 Cal.App.4th 1164, 1169 [“Because the
existence of the agreement is a statutory prerequisite to granting the
petition, the petitioner bears the burden of proving its existence by a
preponderance of the evidence.”].)
Defendants present multiple
agreements, signed by Plaintiff, relating to Defendants’ representation of Plaintiff
in the underlying proceedings. Each contains arbitration clauses.
The TLG retainer agreement between
Plaintiff references Taghavi by name and specifically states “Roxana Taghavi’s
currently hourly rate is $495.” (Taghavi Decl., Ex. B.) As alleged in the
complaint, Taghavi was an attorney with TLG at the time. She signed the TLG
retainer agreement on behalf of TLG. The arbitration clause in the TLG retainer
agreement specifically reads as follows:
“14. All disputes between us
regarding any aspect of our attorney-client relationship will be resolved by
binding arbitration pursuant to Sections 1280 et seq., of the Code of Civil
Procedure and not by litigation in Court. This provision applies to all
disputes whether they are about financial matters (fees and costs) or about the
quality of our services (malpractice). By this provision, we are both giving up
our right to have any such dispute decided by judge or jury.”
Further:
“If th[is] clause[] w[as] not in
our retainer agreement both of us would have the right to a trial by jury in
the event of any litigation between us. By signing the retainer agreement, you
specifically intend to waive that right. If you do not wish to give up the
right to a court or jury trial in any potential dispute you may later have with
us, do not sign the retainer agreement and you should then seek other counsel
promptly.”
(Id., ¶7, Exhibit C.)
In December 2019, Taghavi formed
her own firm, Law Office of Roxana Taghavi. (Id., ¶ 8.) On December 20, 2019,
Plaintiff and signed a retainer agreement with Taghavi (“Taghavi retainer
agreement”). (Id., ¶9.) This agreement contains an express arbitration clause,
as follows:
15. THEREFORE, IN THE EVENT OF A
DISPUTE BETWEEN YOU AND ME REGARDING ANY MATTER (EXCEPT AS SPECIFICALLY SET
FORTH ABOVE) RELATING TO OR ARISING OUT OF MY ENGAGEMENT BY YOU, OR YOUR OR MY
PERFORMANCE OF THE AGREEMENT PURSUANT TO WHICH MY SERVICES ARE PERFORMED,
INCLUDING THE QUALITY OF THE SERVICES WHICH I RENDER AND CLAIMS OF PROFESSIONAL
NEGLIGENCE, OR ANY CLAIM OF INTENTIONAL OR NEGLIGENT INFLICTION OF EMOTIONAL
DISTRESS OR ANY CLAIM OF BREACH OF CONTRACT, BREACH OF FIDUCIARY DUTY, BREACH
OF CONFIDENTIAL RELATIONSHIP. FRAUD, MISREPRESENTATION OR ANY INTENTIONAL OR
NEGLIGENT TORT CLAIM. THE DISPUTE SHALL BE DETERMINED, SETTLED AND RESOLVED BY
BINDING ARBITRATION IN LOS ANGELES, CALIFORNIA ACCORDING TO THE PROCEDURES SET
FORTH IN CALIFORNIA CODE OF CIVIL PROCEDURE §1281. I WILL SEND YOU WRITTEN
NOTICE OF MY DESIRE TO ARBITRATE ANY SUCH DISPUTES, AND YOU MAY ALSO PROVIDE MY
OFFICE WITH WRITTEN NOTICE OF YOUR DESIRE TO ARBITRATE SUCH DISPUTES.
16. YOU UNDERSTAND AND AGREE THAT
SUCH AN ARBITRATION WILL RESULT IN YOUR NOT BEING ABLE TO HAVE YOUR COMPLAINTS
OR DISPUTES ABOUT ANY OF THE MATTERS REFERRED TO ABOVE, INCLUDING YOUR
COMPLAINTS ABOUT THE QUALITY OR NATURE OF MY LEGAL REPRESENTATION OF YOU,
DECIDED BY A COURT WITH OR WITHOUT A JURY. YOU UNDERSTAND THAT ALL ISSUES WILL
BE DECIDED BY THE ARBITRATOR, AND NOT BY A COURT OR JURY.
17. YOU UNDERSTAND THAT, EXCEPT FOR
THIS BINDING ARBITRATION PROVISION IN OUR ENGAGEMENT AGREEMENT, YOU WOULD HAVE
HAD THE RIGHT TO HAVE ALL SUCH COMPLAINTS OR DISPUTES TRIED AND DECIDED BY THE
LOS ANGELES SUPERIOR COURT AND DETERMINED BY A JURY.
18. BECAUSE THERE IS NO PROVISION
FOR JURY TRIALS IN AN ARBITRATION PROCESS, BY ENTERING INTO THIS AGREEMENT WITH
THIS BINDING ARBITRATION PROVISION, YOU ARE WAIVING YOUR RIGHT TO A JURY TRIAL.
LIKEWISE, WE ARE WAIVING THE RIGHT TO A JURY TRIAL BY ENTERING INTO THIS
BINDING ARBITRATION AGREEMENT. BECAUSE THIS IS AN IMPORTANT WAIVER, PLEASE PUT
YOUR INITIALS AT THE BOTTOM OF THIS PARAGRAPH INDICATING THAT YOU UNDERSTAND
THE CONTENTS OF THE ABOVE PARAGRAPHS AND AGREE TO THE CONTENTS OF THESE
PARAGRAPHS, INCLUDING THE WAIVER SET FORTH IN THIS PARAGRAPH. YOU ALSO
ACKNOWLEDGE THAT I HAVE INFORMED YOU THAT I WOULD NOT ACCEPT YOUR CASE WITHOUT
THIS ARBITRATION PROVISION BEING PART OF OUR AGREEMENT.
It further provides for the procedure to initiate
arbitration and selecting an arbitrator:
21. SELECTION OF THE ARBITRATOR:
You or I may demand binding arbitration of a dispute by serving written notice
to the other. Such notice shall be sent by prepaid first class United States
Mail and/or by email and this notice shall contain the names of three qualified
arbitrators, which will be called the first list. The party sending the demand
for arbitration shall be the demanding party and the party receiving the demand
shall be the receiving party.
a. Within ten days
of receipt of the demand for arbitration containing the list of three qualified
arbitrators the receiving party shall respond to the demanding party as to who
they wish to select from the first list. If the receiving party fails to
respond within ten days of the date of mailing, the demanding party may file a
Petition to Compel Binding Arbitration pursuant to Code of Civil Procedure
§1281.2. The demanding party may also seek the appointment of an arbitrator
pursuant to Code of Civil Procedure §1281.6.
b. If the receiving
party does not accept any of the proposed arbitrators on the demanding party’s
first list then the receiving party shall serve a second list of three
different qualified arbitrators. If after 10 days upon receipt of the second
list the parties are unable to agree upon an arbitrator either party may file a
Petition pursuant to Code of Civil Procedure §1281.6 for the appointment of an
arbitrator.
Further:
“If th[is] clause[] w[as] not in
our retainer agreement both of us would have the right to a trial by jury in
the event of any litigation between us. By signing the retainer agreement, you
specifically intend to waive that right. If you do not wish to give up the
right to a court or jury trial in any potential dispute you may later have with
us, do not sign the retainer agreement and you should then seek other counsel
promptly.”
(Id., ¶10, Exhibit “E.”)
There is no
reasonable dispute that the claims here fall under the scope of the broad
arbitration provision above. The agreement specifically outlines that claims arising
out of the representation are subject to arbitration, including malpractice,
billing disputes, and fraud. Each of the five causes of action relate to such
matters. Plaintiff alleges that
Defendants committed malpractice and fraud throughout the representation.
Defendants committed malpractice by a) repeatedly failing to perform
legal services for Plaintiff with the required level of competence; b) failing
to promptly inform Plaintiff of potential and actual conflicts of interest and
failing to acquire Plaintiff’s informed written consent regarding such
conflicts; c) improperly handling, safeguarding, disclosing, and using for
their own interests, Plaintiff's confidential information; and d) upon being terminated
by Plaintiff, failing to promptly deliver all her client materials and
property. (Compl., ¶¶52-58.) The
fraud cause relates to Defendants overbilling for the legal services,
misrepresenting their skill and degree of expertise, and concealing the fact
that they had not actually performed necessary legal services in the underlying
action. (See ¶¶65-73.) The conversion cause relates to Defendants’ alleged
failure to return, and destroying portions of, her client file. (¶¶
85-91.) The other two claims are derivative of the malpractice claim.
Plaintiff argues that neither Valencia-Taghavi LLP
nor Taghavi produced an arbitration agreement to which they are signatories.
However, Taghavi is a signatory to all the agreements above. At a minimum, she
is a third-party beneficiary of the initial TLG agreement. “A third party
beneficiary may enforce a contract expressly made for his benefit. [Citation.]
And although the contract may not have been made to benefit him alone, he may
enforce those promises directly made for him. [Citations.]” (Murphy v.
Allstate Ins. Co. (1976) 17 Cal.3d 937, 943.) With regard to arbitration
clauses, a third party beneficiary wishing to invoke an arbitration clause has
to show that the arbitration clause itself was made expressly for its benefit.
(Ronay Family Limited Partnership v. Tweed (2013) 216 Cal.App.4th 830,
838.) It is clear that the parties intended the agreements to specifically
cover Taghavi’s representation of Plaintiff. For example, Taghavi is
clearly identified in the TLG agreement, and she even signed the agreements
herself. The direct benefit of the agreement to arbitrate malpractice claims
would run to Taghavi, as the agreement expresses that she was Plaintiff’s
intended counsel for the underlying dispute. Thus, Taghavi is an intended third
party beneficiary of that agreement with standing to bring this motion.
Furthermore, the Taghavi
Agreement’s arbitration provision would also apply to VT. As noted, Plaintiff
brings claims against VT that are inextricably tied with Taghavi’s
representation, which arose from the TLG and Taghavi Agreements. In
circumstances such as this, the doctrine of estoppel is applicable and can be
properly used to compel arbitration of this matter. (See Suh v. Superior
Court (2010) 181 Cal.App.4th 1504, 1513.) Arbitration is required under the
estoppel principle if plaintiff has asserted claims that are “dependent upon,
or inextricably intertwined with, the obligations” imposed by the agreement
containing the arbitration clause. (JSM Tuscany, LLC v. Superior Court
(2011) 193 Cal.App.4th 1222, 1239; Goldman v. KPMH, LLP (2009) 173
Cal.App.4th 209, 229-230 [the test is whether the cause of action “relies on
the agreement” containing the arbitration provision].) The record here shows
that VT was Taghavi’s new law firm formed during the pendency of the underlying
action. Plaintiff and VT apparently operated off of the Taghavi Agreement during
the course of its representation. (Compl., ¶¶ 7, 21-34.) Plaintiff sues for
malpractice, fraud and conversion, which arose from the attorney-client
relationship that formed from said agreements. Thus, Plaintiff should be
estopped from arguing that the arbitration provisions do not apply to the
claims against VT.
Accordingly, Defendants demonstrate
that there is a valid arbitration agreement between the parties which apply to
the claims at hand. Plaintiff must demonstrate a defense.
Unconscionability
Plaintiff argues that the agreement
is unconscionable. The doctrine of unconscionability refers to “an absence of
meaningful choice on the part of one of the parties together with contract
terms which are unreasonably favorable to the other party.” (Sonic-Calabasas
A, Inc. v. Moreno (2013) 57 Cal.4th 1109, 1133.) It consists of
procedural and substantive components, “the former focusing on oppression or
surprise due to unequal bargaining power, the latter on overly harsh or
one-sided results.” (Ibid.) Although both components of
unconscionability must be present to invalidate an arbitration agreement, they
need not be present in the same degree. (Armendariz v. Found Health Psychcare Servs., Inc. (2000) 24
Cal.4th 83, 114.) “Essentially a sliding scale is invoked which disregards the
regularity of the procedural process of the contract formation, that creates
the terms, in proportion to the greater harshness or unreasonableness of the
substantive terms themselves. [Citations.]
In other words, the more substantively unconscionable the contract term, the
less evidence of procedural unconscionability is required to come to the
conclusion that the term is unenforceable, and vice versa.” (Ibid.) “The party resisting arbitration bears the burden of proving
unconscionability.” (Pinnacle
Museum Tower Assn. v. Pinnacle Market Dev. (US), LLC (2012) 55
Cal.4th 223, 247.)
As to procedural unconscionability,
the Court finds little surprise or oppression. Plaintiff argues that LORT had
superior bargaining power over Plaintiff, since after Taghavi left her
employment with TLG, Taghavi formed LORT and took Plaintiff’s case with her. At
that time, Plaintiff’s divorce proceedings were being intensely litigated and
was heading to trial. Thus, Plaintiff had no realistic option but to execute
LORT’s retainer agreement. While this may present a small degree of adhesion as
to those circumstances, this ignores the fact that Plaintiff was not under said
pressure when she initially signed the TLG agreement, which also contains an
arbitration clause. Plaintiff cannot claim that she had no meaningful
opportunity to negotiate that agreement. The Court also would not find that
Plaintiff had to follow Taghavi, and had the opportunity to seek new
counsel. Thus, the arbitration agreements here do not appear to have any
substantial degree of procedural unconscionability and Plaintiff must show a
very high degree of substantive unconscionability to prevail.
As to substantive
unconscionability, an agreement is substantively unconscionable if it imposes
terms that are “overly harsh,” “unduly oppressive,” “unreasonably favorable,”
or “so one-sided as to ‘shock the conscience.’ ” (Sanchez
v. Valencia Holding Co., LLC (2015)
61 Cal.4th 899, 910-911.) “All of these formulations point to the central idea
that unconscionability doctrine is concerned not with ‘a simple old-fashioned
bad bargain’ [citation], but with terms that are ‘unreasonably favorable to the
more powerful party.’ [Citation.]” (Id. at 911.) “These include ‘terms that
impair the integrity of the bargaining process or otherwise contravene the
public interest or public policy; terms (usually of an adhesion or boilerplate
nature) that attempt to alter in an impermissible manner fundamental duties
otherwise imposed by the law, fine-print terms, or provisions that seek to
negate the reasonable expectations of the nondrafting party, or unreasonably
and unexpectedly harsh terms having to do with price or other central aspects
of the transaction.’ ” (Ibid.)
Plaintiff argues that LORT’s
arbitration clause would require Plaintiff to pay an hourly fee to an
arbitrator. Plaintiff does not show that this would be an unfair provision,
even if she has already paid legal fees to Taghavi (which she seeks to recover
in this suit). Plaintiff does not demonstrate that this would be a unique
hourly cost, or unjust by some other measure. Plaintiff also notes that the
claims stated in the arbitration agreement do not apply to the case at hand. As
discussed above, this is not true. The agreement specifically mentions any
causes of action “RELATING TO OR ARISING OUT OF [LORT’s] ENGAGEMENT BY YOU, OR
YOUR OR MY PERFORMANCE OF THE AGREEMENT PURSUANT TO WHICH MY SERVICES ARE
PERFORMED, INCLUDING THE QUALITY OF THE SERVICES WHICH I RENDER AND CLAIMS OF
PROFESSIONAL NEGLIGENCE, OR ANY CLAIM… FRAUD, MISREPRESENTATION OR ANY
INTENTIONAL OR NEGLIGENT TORT CLAIM.” The Court therefore finds no substantive
unconscionability.
Plaintiff also requests the Court
calculate the estimated costs of arbitration and Plaintiff’s ability to pay. Plaintiff
contends that if any party is unable to pay its share, the moving party can
elect either to pay that portion of the arbitration cost or to waive its right
to arbitrate that party's claim. (Roldan v. Callahan & Blaine (2013)
219 Cal.4th 87, 96.) However, Plaintiff references no evidence or information
regarding this issue. Thus, Plaintiff has not shown that she cannot pay her
fair share of arbitration costs. Perplexingly, she notes that she has paid $1.2
million to Defendants in attorneys’ fees. Plaintiff has also hired another
attorney to prosecute this action. These facts strongly suggest that Plaintiff
does have the ability to pay for arbitration.
Waiver
The Court is not inclined to find a
waiver based on Defendants’ litigation conduct or delay in bringing this
motion. “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.]” (Davis v. Blue Cross of
Northern California (1979) 25 Cal.3d 418.)
“A party seeking to prove waiver of
a right to arbitration must show ‘(1) knowledge of an existing right to compel
arbitration; (2) acts inconsistent with that existing right; and (3) prejudice
to the party opposing arbitration . . . .’ [Citation.]” (Cinel v. Barna
(2012) 206 Cal.App.4th 1383, 1389-1390.) That said, “no single test delineates
the nature of the conduct that will constitute a waiver of arbitration.” (St.
Agnes Center v. PacifiCare of California (2003) 31 Cal.4th 1187, 1195.)
Trial courts should conduct a totality-of-the-circumstances analysis that takes
into account “(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. (Id.
at p. 1196, quoting Sobremonte v. Superior Court (1998) 61 Cal.Ap.4th
980.)
Plaintiff cites the following
conduct by moving Defendants. On December 14, 2022, Defendants LORT, VT, and
Taghavi filed a notice of joinder to TLG’s pending demurrer, motion to strike,
and requests for judicial notice. On December 14, 2022, Defendants LORT, VT,
and Taghavi filed their own demurrer and motion to strike, set for hearing on
June 6, 2023. On April 3, 2023, the instant motion was filed. Thus, Plaintiff
demonstrates that Defendants delayed filing this motion by over four months.
Otherwise, Defendants have not apparently engaged in any discovery, they have
not answered, trial is not set, they filed no counterclaims, and there have
been no important intervening steps that are unavailable in arbitration.
Critically, there is no indication that the four-month delay prejudiced
Plaintiff in any way. As such, the Court is not inclined to find a knowing and
voluntary waiver by Defendants limited litigation conduct of filing a demurrer.
Risk of Conflicting
Rulings
Code of Civil Procedure section
1281.2 provides:
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] 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.
In other words, courts may refuse arbitration where a party to
the arbitration agreement is involved in litigation with a third party, if the
litigation arises out of the same transaction or series of transactions as the
arbitration; and there is a possibility of conflicting rulings on common issues
of law or fact. To avoid inconsistent results and the possibility that each
defendant will seek to escape liability by blaming the other, the court can
refuse to compel arbitration and order all parties joined in a single action. (Mercury Ins. Group v. Superior Court
(1998)19 Cal.4th 332, 339–340.) In such cases, the parties to the arbitration
agreement are forced to litigate a dispute that they had agreed to arbitrate. (Id. at 347–350.) The right to
arbitration, created by agreement, is not absolute: “it may have to yield if
there is an issue of law or fact common to the arbitration and a pending action
or proceeding with a third party and there is a possibility of conflicting
rulings thereon.” (Id.
at 348.)
Plaintiff argues that because TLG
has not petitioned for arbitration and is continuing to proceed in this action
and Plaintiff’s causes of action overlap with each Defendant, there is a
significant risk that if Plaintiff’s claims against Moving Defendants are
compelled to arbitration, that the arbitrator will reach conflicting rulings in
relation to this Court’s rulings regarding Plaintiff’s claims against TLG. There
is no risk of conflicting rulings. Notably, TLG is also ordered
to join the arbitration, since they are also being targeted with this motion
and are subject to their signed arbitration agreement. Even if TLG were not
ordered to join, the Court would use its discretion to stay this action until
the resolution of any arbitration proceedings, thereby eliminating the risk of
conflicting rulings.
Conclusion
Defendants meet their burden to
demonstrate the existence of an arbitration agreement between the parties that
covers Plaintiff’s claims. Plaintiff, in turn, fails to demonstrate that the
agreement is unconscionable or any other defense to enforcement. Defendant’s
motion is therefore 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.)