Judge Michael P. Linfield, Case 20STCV49110 2023-01-13 Tentative Ruling

Judge: Michael P. Linfield, Case: 20STCV49110, Date: 2023-01-13 Tentative Ruling

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Case Number: 20STCV49110 Hearing Date: January 13, 2023 Dept: 34

SUBJECT: Motion to Compel Arbitration and Stay Proceedings Between Plaintiff Michael Waddington and Defendants Nigro Karlin Segal & Feldstein LLP and Irwin Nachimson

Moving Party: Defendants Nigro Karlin Segal & Feldstein LLP and Irwin Nachimson

Resp. Party: Plaintiff Michael Waddington

Defendants NKSF’s and Nachimson’s Motion is GRANTED. The Parties are ordered to arbitrate. The proceeding is stayed until an arbitration is had or until such earlier time as the Court specifies.

BACKGROUND:

On December 23, 2020, Plaintiff Michael Waddington, in propria persona, filed his Complaint against Defendants The Berman Law Group, APC, Brett A. Berman, and Seri Kattan-Wright on the following causes of action:

(1) Professional Negligence — Legal Malpractice;

(2) Breach of Written Agreement — Hourly Family Law Retainer;

(3) Declaratory Relief regarding Further Attorney’s Fees;

(4) Return of Excessive Attorney Fees and Costs Paid; and

(5) Equitable Indemnity.

On February 9, 2021, Plaintiff filed his First Amended Complaint against Defendants on the following causes of action:

(1) Professional Negligence — Legal Malpractice;

(2) Breach of Written Agreement — Hourly Family Law Retainer;

(3) Declaratory Relief regarding Further Attorney’s Fees;

(4) Return of Excessive Attorney Fees and Costs Paid;

(5) Equitable Indemnity;

(6) Breach of Fiduciary Duty; and

(7) Breach of the Implied Covenant of Good Faith and Fair Dealing.

On January 24, 2022, Defendants filed: (1) Answer to the First Amended Complaint; and (2) Cross-Complaint.

On July 12, 2022, pursuant to the Parties’ Stipulation, Plaintiff filed his Second Amended Complaint against Defendants The Berman Law Group, PAC, Brett A. Berman, Seri Kattan-Wright, Nigro Karlin Segal & Feldstein LLP (“NKSF”), and Irwin Nachimson on the following causes of action:

(1) Professional Negligence — Legal Malpractice;

(2) Breach of Contract;

(3) Breach of Fiduciary Duty;

(4) Professional Negligence; and

(5) Breach of Contract.

On July 21, 2022, Plaintiff amended his Second Amended Complaint to substitute Nigro Karlin Segal Feldstein & Bolno, LLC for Doe 1.

On September 28, 2022, the Court granted Defendants NKSF’s and Nachimson’s Motion to Quash Service of Summons.

On December 8, 2022, Defendants NKSF and Nachimson filed their Motion to Compel Arbitration and Stay Proceedings. Defendants concurrently filed: (1) Declaration of Irwin Nachimson; and (2) Proof of Service.

On December 9, 2022, Defendants NKSF and Nachimson filed a corrected Proof of Service, as the prior Proof of Service was not signed.

On December 19, 2022, Plaintiff filed his Opposition.

On December 23, 2022, Defendant filed its Reply.

On January 3, 2023, the Court heard this matter and continued it until January 13, 2023.

ANALYSIS:

I. Legal Standard

“A written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract.” (Code Civ. Proc., § 1281.)

“On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate that 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 [unless it makes certain determinations].” (Code Civ. Proc., § 1281.2.)

“If a court of competent jurisdiction, whether in this State or not, 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, rest of statute omitted for brevity.)

“Under both federal and state law, arbitration agreements are valid and enforceable, unless they are revocable for reasons under state law that would render any contract revocable. . . . Reasons that would render any contract revocable under state law include fraud, duress, and unconscionability.” (Tiri v. Lucky Chances, Inc. (2014) 226 Cal.App.4th 231, 239, citations omitted.)¿

“The party seeking to compel arbitration bears the burden of proving by a preponderance of the evidence the existence of an arbitration agreement.¿The party opposing the petition bears the burden of establishing a defense to the agreement's enforcement by a preponderance of the evidence.¿In determining whether there is a duty to arbitrate, the trial court must, at least to some extent, examine and construe the agreement.” (Id.)

II. Discussion

A. The Arbitration Agreements

There are two arbitration agreements at issue. The first arbitration agreement is an agreement between Plaintiff and Defendant The Berman Law Group, APC, which states:

“11. ARBITRATION. The parties hereto agree that any dispute relating to attorneys' fees under this Agreement shall be submitted to arbitration before the Los Angeles County Bar Association pursuant to California Business and Professions Code section 6200 et seq, or should that organization decline to arbitrate the dispute, then the dispute shall be resolved before the State Bar of California. Each side shall bear their own costs and attorneys' fees.

“Any other dispute (other than attorneys' fees) between the parties arising out of or relating to this Agreement for Attorneys professional services rendered to or for Client, shall be resolved by binding arbitration before the American Arbitration Association in Los Angeles, California in accordance with the commercial rules of the American Arbitration Association prevailing at the time of arbitration, and each side shall bear their own costs and attorneys' fees. Notwithstanding the above, the parties agree that the arbitrator's fee shall be divided equally between the parties.”

(Motion, Ex. A, ¶ 11.)

The second arbitration agreement is an agreement between Plaintiff and Defendant NKSF, which states:

“5. Arbitration of Disputes

“The Firm appreciates the opportunity to serve you and anticipates a productive and harmonious relationship. If you should feel for any reason that there is a problem with the services the Firm has performed or with the charges, the Firm encourages you to bring it to the Firm’s attention immediately. If the Firm perceives a problem with this engagement, the Firm will likewise endeavor to discuss it with you. Most problems should be rectified by good faith, communication and discussion.

“However, a dispute might arise between you and the Firm that cannot be resolved in this manner. It is agreed that any and all such disputes, claims or controversies arising out of or relating to this letter, or to our performance of accounting services hereunder, including but not limited to those relating to fees or the quality or appropriateness of services, shall be resolved at the request of any party hereto by final and binding arbitration before either the Judicial Arbitration and Mediation Service (“JAMS”) or, alternatively, ADR Services, Inc. (“ADR”). The arbitration will be conducted at a location determined by the arbitrator in Los Angeles, California, and shall be administered by and in accordance with either the then existing JAMS Streamlined Arbitration Rules and Procedures or, alternatively, ADR’s Arbitration Rules (a copy of such rules will be furnished to you upon request). In administering and conducting the entire proceeding, as well as in rendering the award, the arbitrator shall determine the rights, obligations and defenses of the parties according to the substantive and procedural laws of California, which shall be deemed to include, without limitation, application of any statute of limitations defense relating to ‘actions’ between parties. Neither you nor the Firm, however, will be precluded from obtaining provisional relief, including but not limited to attachment, in any court of competent jurisdiction. YOU UNDERSTAND AND ACKNOWLEDGE THAT BY AGREEING TO ARBITRATION, AMONG OTHER THINGS, YOU ARE GIVING UP (i) THE RIGHT TO A JURY TRIAL, (ii) THE TYPE OF BROAD DISCOVERY CUSTOMARILY ALLOWED TO PARTIES IN CIVIL COURT PROCEEDINGS AND (iii) VIRTUALLY ANY RIGHT TO APPEAL THE AWARD OF THE ARBITRATOR. Judgment on any arbitration award may be entered by any court of competent jurisdiction.”

(Motion, Ex. B, ¶ 5.)

Defendants NKSF and Nachimson provide the Court with a signed copy of the agreement between Plaintiff and Defendant NKSF. (Decl. Nachimson, Ex. A.) In addition, Plaintiff admitted at the last hearing in open court that he was not challenging the existence of the signed arbitration agreement.

The Court finds that Defendants NKSF and Nachimson have met their burden of proving by a preponderance of the evidence the existence of an arbitration agreement. (Tiri, supra, at 39.)

B. Analysis

Defendants NKSF and Nachimson move the Court to issue an order that: (1) compels Plaintiff and Defendants NKSF and Nachimson to arbitrate; and (2) stays any further civil proceedings between Plaintiff and Defendants NKSF and Nachimson. (Motion, pp. 10:28, 11:1–3.)

In support of their requested relief, Defendants NKSF and Nachimson argue, among other things: (1) that they have not waived the right to compel arbitration; (2) that Plaintiff cannot demonstrate that there are grounds for revocation of the agreement; and (3) that Plaintiff cannot demonstrate that the third-party litigation exception applies to the instant dispute. (Motion, pp. 5:10, 5:26–27, 9:1–2.)

Plaintiff opposes the Motion, arguing: (1) that Defendants NKSF and Nachimson are third parties within the meaning of Code of Civil Procedure section 1281.2, subdivision (c); (2) that the dispute arises out of the same transaction or series of related transactions; and (3) that “there is a possibly [sic] of conflicting rulings on a common issue of law or fact. (Opposition, pp. 2:1–2, 2:10–11, 5:1–2.)

Essentially, Plaintiff’s arguments entirely hinge upon Code of Civil Procedure section 1281.2, subdivision (c), which allows the Court to deny a motion to compel arbitration if “[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.”

The Court agrees with Defendants NKSF’s and Nachimson’s arguments.

Since Plaintiff filed his Second Amended Complaint on July 21, 2022, NKSF and Nachimson have been listed as Defendants in this matter, not third parties. This is unchanged despite the Court’s Minute Order dated September 28, 2022, which quashed service on Defendants NKSM and Nachimson purely on procedural grounds (and which explicitly noted that there appeared to be no doubt Plaintiff could properly serve these Defendants). Moreover, there is no pending court action or special proceeding separate from the action at hand. Even if Defendants NKSF and Nachimson were to arbitrate without the other Defendants in this matter, the mere possibility of a conflicting ruling on a common issue of law or fact is insufficient for the Court to deny this Motion.

The Court does this Motion to be untimely, nor does the Court find that Defendants NKSF or Nachimson have waived their right to compel arbitration. The Motion was filed less than five months after these Defendants were joined in this action and less than three months since the Court quashed service on them.

Plaintiff has not raised any other defenses to arbitrability; in particular, he has not argued that the arbitration agreements are either procedurally or substantively unconscionable. Therefore, the Court need not address these issues.

Plaintiff has not met his burden of establishing by a preponderance of the evidence a defense to the arbitration agreement’s enforcement. (Tiri, supra, at 239.)

III. Conclusion

Defendants NKSF’s and Nachimson’s Motion is GRANTED. The Parties are ordered to arbitrate. The proceeding is stayed until an arbitration is had or until such earlier time as the Court specifies.