Judge: Maurice A. Leiter, Case: 24STCV05284, Date: 2024-08-01 Tentative Ruling

Case Number: 24STCV05284    Hearing Date: August 1, 2024    Dept: 54

Hearing Date: August 1, 2024

Department 54, Judge Maurice Leiter

Motion to Compel Arbitration and Stay Proceedings

Moving Party: Defendants Cetera Investment Services LLC, Leo Li-Yuan Chien, and Ka Anson Cheong  

Responding Party: Plaintiff Deying Chen Sheng

T/R:     The Motion to Compel Arbitration and Stay Proceedings is DENIED WITHOUT PREJUDICE as MOOT.

            DEFENDANTS TO NOTICE.

If the parties wish to submit on the tentative, please email the courtroom at¿SMCdept54@lacourt.org¿with notice to opposing counsel (or self-represented party) before 8:00 am on the day of the hearing. 

The Court considers the moving papers and opposition.

BACKGROUND

On March 1, 2024, Plaintiff Deying Chen sued Defendants Cetera Investment Services, LLC; Leo Li-Yuan Chien; and Ka Anson Cheong alleging causes of action for: (1) Fraud, (2) Breach of Fiduciary Duty, (3) Breach of Contract, (4) Negligence, (5) Conversion, and (6) Unjust Enrichment. The action arises from alleged fraud pertaining to money Plaintiff invested in an investment fund.

On July 17, 2024, while the instant motion to compel arbitration was pending, Plaintiff filed the operative First Amended Complaint (“FAC”) against Defendants alleging causes of action for: (1) Fraud, (2) Breach of Fiduciary Duty, (3) Breach of Contract, (4) Negligence, (5) Conversion, (6) Unjust Enrichment, and (7) Financial Elder Abuse.

ANALYSIS

Parties may be compelled to arbitrate a dispute upon the court finding that: (1) there was a valid agreement to arbitrate between the parties; and (2) said agreement covers the controversy or controversies in the parties’ dispute.¿ (Code Civ. Proc., § 1281.2.) California law favors enforcement of valid arbitration agreements. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 97.) A party petitioning to compel arbitration has the burden of establishing the existence of a valid agreement to arbitrate and the party opposing the petition has the burden of proving, by a preponderance of the evidence, any fact necessary to its defense. (Banner Entertainment, Inc. v. Superior Court¿(1998) 62 Cal.App.4th 348, 356-357.)

            Plaintiff argues that the filing of the FAC moots Defendants’ motion to compel arbitration. Plaintiff contends that “[t]he instant [m]otion is moot because Plaintiff has filed a First Amended Complaint alleging an additional cause of action . . . for financial elder abuse pursuant to Welfare & Institutions Code Section 15610.30 . . . and stating other allegations which vitiate Defendants’ position.” (Opp’n at p. 1:24-26.)

            “A party may amend its pleading once without leave of the court at any time before the answer, demurrer, or motion to strike is filed . . . ." (Code Civ. Proc., § 472, subd. (a).) “Because there is but one complaint in a civil action . . . the filing of an amended complaint moots a motion directed at a prior complaint.” (State Compensation Ins. Fund v. Superior Court (2010) 184 Cal.App.4th 1124, 1131, citation omitted.)

Once an amended complaint is filed, a court cannot grant a motion directed at the prior complaint. (Ibid.)

The pending motion to compel arbitration is directed at Plaintiff’s initial complaint and seeks to compel arbitration of the claims asserted in it. The FAC raises new claims and asserts new facts not alleged in the initial complaint. Defendants have not yet responded to the FAC. As discussed in State Compensation Ins. Fund, supra, 184 Cal.App.4th 1124, 1131, the Court cannot rule on a motion directed at a pleading that is no longer operative.