Judge: Maurice A. Leiter, Case: 24STCV13271, Date: 2025-02-19 Tentative Ruling

Case Number: 24STCV13271    Hearing Date: February 19, 2025    Dept: 54

Hearing Date: February 19, 2025 

Department 54, Judge Maurice A. Leiter 

Motion to Compel Arbitration and Motion to Stay  

Moving Party: Defendant Pickford Escrow Company 

Responding Party: Plaintiffs Maria Divina Ortanez Enderes and Courtney Ortanez 

T/R:    DEFENDANT’S MOTION TO COMPEL ARBITRATION IS GRANTED.  

THE MOTION TO STAY IS GRANTED. 

DEFENDANT 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, opposition, and reply.  

BACKGROUND 

On May 28, 2024, Plaintiffs Maria Divina Ortanez Enderes and Courtney Ortanez, as trustees of the CLO Irrevocable Trust filed a complaint against Defendants Paul Salazar, Paul Salazar Group, Hilton & Hyland Real Estate, Inc. and Pickford Escrow Company, Inc., asserting causes of action for (1) breach of fiduciary duty; and (2) negligence. Plaintiffs and Defendants entered into agreements for the purchase of real property. Plaintiffs allege Defendants’ computer networks were hacked by cyber criminals who instructed Plaintiffs to wire $2.3 million to their account. Plaintiffs allege Defendants breached their duties to Plaintiffs by failing to warn Plaintiffs of potential scams and by failing to secure their email networks despite knowing they had been previously compromised by hackers.  

On August 9, 2024, Pickford Escrow Company, Inc. filed a cross-complaint against Plaintiffs Maria Divina Ortanez Enderes and Courtney Ortanez and Defendants Paul Salazar, Paul Salazar Group, Hilton & Hyland Real Estate, Inc. for equitable indemnity and contribution. 

ANALYSIS 

“On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate a controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists….”  (CCP § 1281.2.)  The right to compel arbitration exists unless the court finds that the right has been waived by a party’s conduct, other grounds exist for revocation of the agreement, or where a pending court action arising out of the same transaction creates the possibility of conflicting rulings on a common issue of law or fact.   (CCP § 1281.2(a)-(c).)  “The party seeking arbitration bears the burden of proving the existence of an arbitration agreement, and the party opposing arbitration bears the burden of proving any defense, such as unconscionability.”  (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236.)  

A. Existence of Arbitration Agreement 

Defendant moves to compel arbitration based on the arbitration agreement executed by Plaintiff Maria Divina Ortanez Enderes on October 6, 2022. (Mot. Exh. 1.) The agreement provides, “any dispute between [plaintiffs] and [Pickford], regardless of when it arises or arose, will be resolved using the following arbitration procedures. The Agreement also defines a dispute as including, but not limited to, “any closing claim or controversy of any kind, including those based on broken promises or contracts, closing charges, tort (injury caused by negligent or intentional conduct), breach of fiduciary duty, fraud, or other wrongful actions.” (Id.)  

Defendant has met its burden to establish an agreement to arbitrate. The burden shifts to Plaintiffs to establish any defenses to enforcement. 

B. Enforceability of Agreement 

                Plaintiffs assert that the agreement should not be enforced because only Plaintiff Maria and Defendant Pickford are parties to the agreement because Pickford has waived its right to arbitrate. The Court will not deny arbitration because only one Plaintiff as trustee for the buyer trust signed the agreement. The Plaintiffs are co-trustees and either may bind the trust.  

“The question of waiver is one of fact.” (Augusta v. Keehn & Associates (2011) 193 Cal.App.4th 331, 337 (quoting Berman v. Health Net (2000) 80 Cal.App.4th 1359, 1363-64).) “There is no single test for waiver of the right to compel arbitration, but waiver may be found where the party seeking arbitration has (1) previously taken steps inconsistent with an intent to invoke arbitration, (2) unreasonably delayed in seeking arbitration, or (3) acted in bad faith or with willful misconduct.” (Id.)  

Plaintiffs assert that Defendant has waived the right to arbitrate by answer the complaint, filing a cross-complaint and responding to discovery. These actions are insufficient to show waiver. Defendant has not used the Court for any substantive rulings and has not otherwise engaged the litigation machinery of the Court.  

Defendant’s motion to compel arbitration is GRANTED. The action is STAYED.