Judge: Monica Bachner, Case: 22STCV10459, Date: 2023-02-03 Tentative Ruling

Case Number: 22STCV10459    Hearing Date: February 3, 2023    Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

Defendants Monsters Ink, LLC’s and Philip Kim’s motion to compel arbitration of Plaintiff Dominie Lee’s claims in this action is granted.  The case is stayed pending arbitration.  The matter is set for a status conference regarding arbitration on February 5, 2024, at 8:30 a.m.  The parties are ordered to file a joint status report five court days in advance of the hearing.

Defendants Monsters Ink, LLC (“Monsters”) and Philip Kim (“Kim”) (collectively, “Defendants”) move for an order compelling arbitration of all claims asserted by Plaintiff Dominie Lee (“Lee”) (“Plaintiff”) in this action and staying the action pending completion of arbitration.  (Notice of Motion, pgs. 1-2; C.C.P. §1281.2(d).)

Defendants Movieland Classics, LLC’s, Cosmic-Con, LLC’s, and American Gothic Press LLC’s (collectively, “Joinder Defendants”) filed a joinder in support of Defendants’ motion to compel arbitration of Plaintiff’s claims and submit that Plaintiff’s claims should be stayed pending the outcome of the arbitrable claims.  (Joinder, pg. 1.)

Defendants argue Plaintiff’s opposition is untimely pursuant to C.C.P. §1290.6.  (Reply, pg. 1.)  However, it is not clear that the C.C.P. §1290.6 timing requirement applies to a motion to compel arbitration on a case that has already been filed.  (Correia v. NB Baker Electric, Inc. (2019) 32 Cal.App.5th 602, 613.)  Rather, the timing requirement follows the general motions statute, and as such, Plaintiff’s opposition is timely.  (Id.; C.C.P. §1005(b).) 

“Even if the petition timeline applied here, Code of Civil Procedure section 1290.6 specifically allows a court to extend the time for filing an opposition for good cause, and reviewing courts have long held trial courts are authorized to consider late-filed opposition papers for good cause if there is no undue prejudice to the moving party. [Citations]  The circumstances surrounding an untimely opposition to a petition or motion to compel arbitration should be viewed under ‘the strong policy of the law favoring the disposition of cases on the merits . . . .’ [Citation]”  (Correia, 32 Cal.App.5th at pg. 613.)

Background

On March 25, 2022, Plaintiff filed the instant action for breach of contract, various violations of the Labor Code, and unfair competition under the Business and Professions Code.  Defendants filed the instant motion to compel arbitration on June 2, 2022.  Joinder Defendants filed their joinder on June 2, 2022.  Plaintiff filed her opposition on January 23, 2023.  Defendants filed their reply on January 27, 2023.

In deciding a motion to compel arbitration, trial courts must first decide whether an enforceable arbitration agreement exists between the parties, and then determine the second gateway issue of whether the claims are covered within the scope of the agreement.  (See Omar v. Ralphs Grocery Co. (2004) 118 Cal.App.4th 955, 961.)  “The petitioner bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence, and a party opposing the petition bears the burden of proving by a preponderance of the evidence any fact necessary to its defense.  [Citation] In these summary proceedings, the trial court sits as a trier of fact, weighing all the affidavits, declarations, and other documentary evidence, as well as oral testimony received at the court’s discretion, to reach a final determination.  [Citation] No jury trial is available for a petition to compel arbitration. [Citation]”  (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972; see also Chiron Corp. v. Ortho Diagnostic Systems, Inc. (9th Cir. 2000) 207 F. 3d 1126, 1130 (“The court’s role under the [FAA] is therefore limited to determining (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue. [Citations]”).  The party opposing the petition to compel arbitration bears the burden of proving by a preponderance of the evidence any fact necessary to its defense.  (Giuliano v. Inland Empire Personnel, Inc. (2007) 149 Cal.App.4th 1276, 1284.) 

A.  Arbitration Agreement

Defendants proved the existence of an arbitration agreement with Plaintiff.  Defendants submitted evidence that on January 7, 2013, Plaintiff executed the Monsters Ink, LLC, Operating Agreement (“Agreement”) that contained a valid and enforceable arbitration clause (“Arbitration Agreement”).  (Decl. of Kim ¶6, Exh. 1 §9.2.)  The Arbitration Agreement provides:

(a) In any dispute over the provisions of this Agreement and in other disputes among the Members, if the Members cannot resolve the dispute to their mutual satisfaction, the matter shall be submitted to mediation. The terms and procedure for mediation shall be arranged by the parties to the dispute.

(b) If good-faith mediation of a dispute proves impossible or if an agreed-upon mediation outcome cannot be obtained by the Members who are parties to the dispute, the dispute may be submitted to arbitration in accordance with the rules of the American Arbitration Association. Any party may commence arbitration of the dispute by sending a written request for arbitration to all other parties to the dispute. The request shall state the nature of the dispute to be resolved by arbitration, and, if all parties to the dispute agree to arbitration, arbitration shall be commenced as soon as practical after such parties receive a copy of the written request.

(c) All parties shall initially share the cost of arbitration, but the prevailing party or parties may be awarded attorney fees, costs and other expenses of arbitration. All arbitration decisions shall be final, binding and conclusive on all the parties to arbitration, and legal judgment may be entered based upon such decision in accordance with applicable law in any court having jurisdiction to do so.

(Decl. of Kim, Exh. 1 §9.2.)

Plaintiff does not dispute that she signed the Agreement as a member of Monsters Ink, LLC, that the Federal Arbitration Act (“FAA”) governs the Arbitration Agreement, that Defendants have not waived its right to arbitrate this matter, or that Defendants have not fulfilled the condition precedent to first engage in Mediation before moving to arbitrate.  (See Opposition.)

Plaintiff argues the Agreement does not apply to her because (1) the Agreement applies to members of a limited liability company, (2) Plaintiff’s wage and hour claims are that of an employee, and (3) Plaintiff did not sign any agreement to submit her employment claims to binding arbitration.  (Opposition, pg. 3.)  Further, Plaintiff argues the dispute resolution clause in the Agreement states that arbitration is permissive and not mandatory.  (Opposition, pg. 2.)  Plaintiff did not submit an affidavit in support of her arguments nor cite law in support of her positions in opposition. However, the Agreement identifies Plaintiff as a “member” not an “employee” and one of the initial elected Managers.  (See Decl. of Kim, Exh. 1 § 2.1, §4.1.)  Moreover, the use of the phrase “may be submitted to arbitration,” should be interpreted to require arbitration rather than merely permitting it  and the permissive language  means that a party who did not want arbitration has the option to abandon the claim.  (See Erickson v. Aetna Health Plans of California, Inc. (1999) 71 Cal. App. 4^th 646,

Based on the foregoing, Defendants have proved the existence of a valid arbitration agreement that is enforceable by Defendants.

1. Covered Claims

Plaintiff does not dispute that her claims against Defendants would be covered by the Arbitration Agreement.  (See Opposition.)  Plaintiff’s claims involve a “dispute” with the other members who executed the Agreement in the  and turn on interpretating the “provisions of the Agreement.”  The Agreement sets forth the manner for distributing profits and assigning losses to members.  (See Decl. of Kim, Exh. 1 §§3.1-3.2.)  The Agreement sets forth the rights of members, including their right to compensation related to management of the LLC.  (See Decl. of Kim, Exh. 1 §§4.1-5.2.)  Plaintiff agreed in the Agreement that Defendant Kim owns all of the identified intellectual property assets in this case.  (See Decl. of Kim, Exh. 1 §8.1 [“OWNERSHIP OF ASSETS. The Ownership of the intellectual and other property which shall be used in connection with the business of the Company is and shall continue to be owned by Philip Y. Kim . . ..”]; see also Exh. 1 §1.5 [discussing ownership of IP and related assets].)  The Agreement contains an integration clause, and Plaintiff agreed that the agreement “represents the entire agreement among the Members of this LLC, and it shall not be amended, modified, or replaced except by a written instrument executed by all of the parties to this Agreement who are current Members of this LLC after the adoption of this Agreement.”  (See Decl. of Kim, Exh. 1 §9.3.)  Plaintiff’s claims are a “dispute” among the members of the LLC and necessarily involve interpreting the terms of the Agreement, making the dispute arbitrable.  Based on the foregoing, Defendant met its burden of establishing the Agreement covers the causes of action asserted in Plaintiff’s complaint.

1. Conclusion

Defendants’ motion to compel arbitration is granted.  The case is stayed pending arbitration.

Dated:  February _____, 2023

Hon. Monica Bachner

Judge of the Superior Court