Superior Court of California

County of Los Angeles

JALAL KAZEMI,

Plaintiff,

vs.

HOOMAN KAZEMI, et al.,

Defendants.

Case No.: 23STCV26144

DEPARTMENT 45

[TENTATIVE] RULING

Complaint Filed: 10/25/23

Trial Date: N/A

Hearing date: May 7, 2024

Moving Party: Defendant TD Ameritrade, Inc. (“TDAI”)

Responding Party: Plaintiff Jalal Kazemi

Motion to Compel Arbitration and to Dismiss or Stay Proceedings

The Court has considered the moving, opposition, and reply papers.

The motion is GRANTED.

Background

This is an action arising the alleged improper access and the unauthorized disbursement of funds from the personal TD Ameritrade account of Plaintiff Jalal Kazemi (“Plaintiff”). (Complaint, ¶ 7.) Plaintiff alleges that the disbursement was orchestrated by Defendants Hooman Kazemi, Heshmat Doorgari, and was done with the negligent oversight of Defendant TD Ameritrade, Inc. (“TDAI”). (Complaint, ¶ 7.)

On October 25, 2023, Plaintiff filed a Complaint against Defendants Hooman Kazemi, Heshmat Doorgari, TDAI (collectively, the “Defendants”), as well as DOES 1 through 50, inclusive, alleging causes of action for: (1) conversion; (2) unjust enrichment; (3) trespass to chattels; (4) breach of fiduciary duty; and (5) negligence. Only the fifth cause of action is asserted against Defendant TDAI.

On January 5, 2024, Defendant TDAI filed and served the instant Motion to Compel Arbitration and to Dismiss or Stay Proceedings. The motion is made on the grounds that Plaintiff agreed in writing to submit all disputes against Defendant TDAI, including the present lawsuit, to binding arbitration before the Financial Industry Regulatory Authority (“FINRA”). Defendant TDAI seeks an order dismissing or staying these proceedings pending the outcome of the FINRA arbitration.

On March 1, 2024, Plaintiff filed an opposition to the motion, to which Defendant TDAI filed a reply on April 23, 2024.

Legal Standard

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.) “A contract may validly include the provisions of a document not physically part of the basic contract.” (Williams Const. Co. v. Standard-Pacific Corp. (1967) 254 Cal.App.2d 442, 454.)

The FAA applies to any contract evidencing a transaction involving interstate commerce which contains an arbitration clause. (Wolls v. Superior Court (2005) 127 Cal.App.4th 197, 211.) Section 2 of the FAA provides that arbitration provisions shall be enforced, save upon grounds as exist at law or in equity for the revocation of any contract. (Ibid.) A state court may refuse to enforce an arbitration clause on the basis of generally applicable contract defenses, such as fraud, duress, or unconscionability. (Ibid.) A state court, however, may not defeat an arbitration clause by applying state laws applicable only to arbitration provisions. (Ibid.)

For the FAA to apply, a contract must involve interstate commerce. (Ibid.) When it applies, the FAA preempts any state law rule that stands as an obstacle to the accomplishment of the FAA’s objectives. (Carbajal v. CWPSC, Inc. (2016) 245 Cal.App.4th 227, 238.) A party asserting FAA preemption bears the burden to present evidence establishing a contract with the arbitration provision affects interstate commerce, and the failure to do so renders the FAA inapplicable. (Ibid.) Evidence must be presented, in the form of declarations or other evidence, that establishes that the contract affects interstate commerce. (Ibid.) “[S]ince arbitration is a matter of contract, the FAA also applies if it is so stated in the agreement.” (Davis v. Shiekh Shoes, LLC (2022) 84 Cal.App.5th 956, 963.)

“If a court of competent jurisdiction . . . has ordered arbitration of a controversy which is an issue involved in an action or proceeding pending before a court of this State, the court in which such action or proceeding is pending shall, upon motion of a party to such action or proceeding, stay the action or proceeding until an arbitration is had in accordance with the order to arbitrate or until such earlier time as the court specifies.” (Code Civ. Proc., § 1281.4.)

Discussion

Plaintiff’s Arguments in Opposition to the Motion

Initially, the Court notes that Plaintiff only raises two arguments in opposition to the motion. First, Plaintiff argues that the Court may exclude irrelevant and collateral evidence that is prejudicial. Second, Plaintiff argues that Defendant TDAI failed to meet and confer pursuant to California Rules of Court, Rule 3.724.

As to Plaintiff’s argument that the Court should exclude Exhibits A, B, and C attached to the declaration of Garrett R. Wynne in support of the motion, the Court finds that Plaintiff should have filed evidentiary objections to such documents. Cal. Rules of Court, Rule 3.1354 requires that “[a]ll written objections to evidence must be served and filed separately from the other papers . . . in opposition to the motion.” (Cal. Rules of Court, Rule 3.1354(b).) Plaintiff did not file separate evidentiary objections and therefore his purported objections in the opposition brief are procedurally improper. Thus, the Court will not exclude or disregard any evidence in support of the motion.

As to Plaintiff’s argument that Defendant failed to confer as required under Cal. Rules of Court, Rule 3.724, such rule of court does articulate a meet and confer requirement prior to filing a motion to compel arbitration. (Cal. Rules of Court, Rule 3.724.) Irrespective of such fact, Defendant has presented evidence that it corresponded with Plaintiff requesting that he dismiss his claims against Defendant TDAI and submit his individual claims to arbitration. (Decl. of David Piper, ¶¶ 2-3; Exhs. 1-2.)

As such, the Court rejects the sole two arguments raised in opposition to the motion. To the extent that Plaintiff failed to respond to the arguments raised in the moving papers, the Court finds that Plaintiff has conceded to such arguments as “[c]ontentions are waived when a party fails to support them with reasoned argument and citations to authority.” (Moulton Niguel Water Dist. v. Colombo (2003) 111 Cal.App.4th 1210, 1215.) The Court acknowledges that Plaintiff is representing himself in pro per; however, a pro per litigant is “held to the same standards as attorneys.” (Kobayshi v. Superior Court ( 2009) 175 Cal.App.4th 536, 543.)

The Existence of an Agreement to Arbitrate

The right to arbitration depends upon contract; a petition to compel arbitration is simply a suit in equity seeking performance of that contract. (Engineers & Architects Assn. v. Community Development Dept. (1994) 30 Cal.App.4th 644, 653.) There is no public policy favoring arbitration of disputes which the parties have not agreed to arbitrate. (Ibid.) The FAA does not force parties to arbitrate when they have not agreed to do so. (Cronus Investments, Inc. v. Concierge Services (2005) 35 Cal.4th 376, 385.)

a. Evidence in Support of the Motion

In support of the motion, Garrett R. Wynne (“Wynne”), provides a declaration. Mr. Wynne states the following: Plaintiff opened and maintained three separate accounts at TD Waterhouse, which became Defendant TDAI. (Wynne Decl., ¶ 2.) At or around the time he opened the Accounts, Plaintiff signed account applications, each of which contained a pre-dispute arbitration clause. (Wynne Decl., ¶ 2.) Set apart in bold font directly above his signature on his TD Waterhouse IRA Account Application, signed January 25, 2000, Plaintiff agreed to the Agreement to Arbitrate Controversies which provides that: “I agree that any controversy relating to any of my accounts or any agreement that I have with you will be submitted to arbitration conducted only under the provisions of the Constitution and Rules of the New York Stock Exchange, Inc. or pursuant to the code of the Arbitration of the National Association of Securities Dealers, Inc.” (Wynne Decl., ¶ 3; Exh. A.) Plaintiff agreed to the same terms when he executed his TD Waterhouse Individual Account Application on October 14, 1999. (Wynne Decl., ¶ 4; Exh. B.) Plaintiff also agreed to the same language in the Customer Agreement, which was attached to the Account Application. (Wynne Decl., ¶ 5; Exh. C.) On October 25, 2023, Plaintiff filed a Complaint against Defendant TDAI alleging negligence-based damages with respect to one of his TD Ameritrade accounts. (Wynne Decl., ¶ 6.)

b. Evidence in Opposition to the Motion

Plaintiff presents no evidence in opposition to the motion.

c. Analysis

The Court finds that Defendant TDAI has met its burden in showing the existence of a

valid agreement to arbitrate between the parties. Here, Defendant TDAI has presented the IRA Account Application, Plaintiff’s Individual TD Waterhouse Account Application, and the Customer Agreement, all which set forth or incorporate the language of the Agreement to Arbitrate Controversies.

However, the Court notes that none of the agreements containing the Agreement to Arbitrate Controversies explicitly state that the FAA shall apply to such agreements. Moreover, the declarations in support of the motion do not state facts evidence a transaction affecting interstate commerce. Defendant TDAI’s citation to Cohen v. Wedbush, Noble, Cooke, Inc. (1988) 841 F. 2d 282 is inapposite. The Court therefore finds that the FAA does not govern the agreements to arbitrate at issue; however, Defendant TDAI has shown the existence of a valid agreement to arbitrate. As such, the Court will assess the appropriateness of compelling arbitration under California law.

Coverage of Claims Alleged

The Court references its recitation of the declaration of Mr. Wynne from above and incorporates it herein.

Here, the negligence cause of action asserted against Defendant TDAI arises from Plaintiff’s account with such entity. (Complaint, ¶¶ 49-54.) Plaintiff agreed to arbitrate any disputes related to any of his accounts or any agreement with Defendant TDAI. (Wynne Decl., ¶ 3; Exh. A.) Thus, the Agreement to Arbitrate Controversies covers the claim alleged against Defendant TDAI in the Complaint.

As such, the Court finds that the Agreement to Arbitration Controversies covers the controversy between Plaintiff and Defendant TDAI.

Plaintiff has not presented any evidence in opposition to the motion and therefore has not met his burden of proving, by a preponderance of the evidence, any fact necessary to his defense. (Banner Entertainment, Inc., supra, 62 Cal.App.4th 348, 356-357.)

Accordingly, the motion to compel arbitration filed by Defendant TDAI is GRANTED. The Court stays this action pending the completion of arbitration between Plaintiff and Defendant TDAI. (Code Civ. Proc., § 1281.4.)

It is so ordered.

Dated: May 7, 2024

_______________________

MEL RED RECANA

Judge of the Superior Court