Judge Michael T. Smyth, Case Number: 37-2023-00038284-CU-WT-CTL, Date: 2024-04-12 Tentative Ruling

Judge: Michael T. Smyth, Case: 37-2023-00038284-CU-WT-CTL, Date: 2024-04-12 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - April 11, 2024

04/12/2024 09:00:00 AM C-67 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Michael T. Smyth

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Civil - Unlimited Wrongful Termination Motion Hearing (Civil) 37-2023-00038284-CU-WT-CTL RAFATI VS INNOVASYSTEMS INTERNATIONAL LLC [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion - Other, 01/08/2024

Defendant Innovasystems International, LLC's Motion to Compel Arbitration is GRANTED. Defendant's request for judicial notice is granted. (ROA 17.) 1. Enforceability of Arbitration Agreement Code of Civil Procedure section 1281.2 provides 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 such 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 determines that: (a) The right to compel arbitration has been waived by the petitioner; or (b) Grounds exist for the revocation of the agreement. (c) 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....

(Code Civ. Proc., � 1281.2.) The moving party must prove by a preponderance of the evidence the existence of the arbitration agreement and that the dispute is covered by the agreement. (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413.) The burden then shifts to the resisting party to prove by a preponderance of the evidence a ground for denial, e.g., unconscionability or waiver.

(Ibid.) Doubts about the applicability of an arbitration agreement to a particular dispute should be resolved in favor of sending the parties to arbitration. (Serv. Emps. Int'l Union v. City of L.A. (1994) 24 Cal.App.4th 136, 143.) Here, there is no dispute that the arbitration agreement was signed by Plaintiff. (E.g., ROA 16, Chapman Decl., Ex. 3 [email from Plaintiff sending signed employment agreement back to Defendant].) Thus, the burden shifts to Plaintiff to prove a ground for denial.

Nor has Plaintiff disputed that the contract and his employment 'involved interstate commerce, the parties' arbitration agreement is covered by the FAA.' (Nixon v. AmeriHome Mortgage Company, LLC (2021) 67 Cal.App.5th 934, 947 [finding that FAA applied despite a provision stating that the agreement was to be governed by 'the laws of the State of California notwithstanding any California or other conflict of law provision to the contrary'].) Section 8's statement that California law applies does not displace the FAA. Both state and federal law require that arbitration be compelled.

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3092490 11 CASE NUMBER: CASE TITLE: RAFATI VS INNOVASYSTEMS INTERNATIONAL LLC [IMAGED] 37-2023-00038284-CU-WT-CTL 2. Defendants Did Not Waive Arbitration Plaintiff argues that Defendant waived its right to compel him to arbitration because it did not vigorously pursue arbitration prior to litigation.

'Arbitration is not a matter of absolute right and it can be waived. In determining waiver, a court can consider (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.' (Garcia v. Haralambos Beverage Co. (2021) 59 Cal.App.5th 534, 541-542 [quoting St. Agnes Medical Center v. PacifiCare of California (2003) 31 Cal.4th 1187, 1196] [citations and quotation marks omitted].) Plaintiff's arguments fail to overcome the presumption against waiver. (St. Agnes Med. Ctr. V. PacifiCare of California (2003) 31 Cal.4th 1187, 1195 ['any doubts regarding a waiver allegation should be resolved in favor of arbitration'].) The complaint was filed on September 5, 2023 and served on November 5, 2023. Defendant sent a meet and confer letter demanding arbitration days after being served with the complaint. (See ROA 15, Woo Decl., � 2, Ex. 1.) Plaintiff requested time to respond in writing as well as extensions to said time, but no written response was apparently provided. (Id., �� 2-6.) The motion to compel arbitration was brought approximately four months after the complaint was filed, before any other motion practice, discovery, or hearings in this court. The machinery of litigation had not been invoked, there was no trial date, no counterclaims, or any other unfair advantage gained by Defendant. This was Plaintiff's claim and Plaintiff was bound by an arbitration agreement. Plaintiff's suggestion that Defendant should have initiated an arbitration prior to any litigation being filed or that Defendant should have done something more to preserve its right to arbitration is without merit.

Defendant has not waived its right to arbitration.

3. The Arbitration Agreement Is Not Materially Ambiguous Plaintiff also points to three potential ambiguities in the arbitration agreement: (1) the provision erroneously refers to a Section 9 where there is no; (2) the terms 'arbitration/arbitrator'; and (3) AAA is not defined. None of these errors is significant enough to vitiate the underlying purpose of the agreement that the parties arbitrate their dispute which plainly states that '[t]he parties shall submit all disputes relating to this Agreement to binding arbtiration.' (ROA 16, Chapman Decl., Ex. 2, � 7; ROA 34, Ex. 8, � 7; Western Bagel Company, Inc. v. Superior Court of Los Angeles County (2021) 66 Cal.App.5th 649, 668 [ambiguity construed in favor of binding arbitration].) With respect to the designation of AAA as the arbitral forum, Plaintiff argues that it is improper because AAA's discovery restrictions are impermissible. Thus, in the event the court compels arbitration, Plaintiff has requested in the alternative that JAMS be designated. To avoid further dispute, Defendant has agreed to this alternative designation.

Accordingly, the case is ordered to arbitration before JAMS.

The case is hereby stayed pursuant to Code of Civil Procedure section 1281.4.

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3092490 11