Judge: Ralph C. Hofer, Case: 23GDCV01512, Date: 2024-02-02 Tentative Ruling
Case Number: 23GDCV01512 Hearing Date: February 2, 2024 Dept: D
TENTATIVE RULING
Calendar: 5
Date: 2/2/2024
Case No.: 23 GDCV01512 Trial Date: None Set
Case Name: Sarkisian v. NRG Clean Power, Inc., et al.
MOTION TO COMPEL ARBITRATION
Moving Party: Defendants NRG Clean Power, Inc. and American Contractors Indemnity Company
Responding Party: Plaintiff Jack Sarkisian (No Opposition)
FACTUAL BACKGROUND:
Plaintiff Jack Sarkisian alleges that he is the owner of a residence in Glendale, and that in May of 2020, plaintiff entered into a written agreement with defendant NRG Clean Power, Inc. (NRG) pursuant to which NRG was to serve as direct solar contractor and provide all labor and materials in connection with the construction of a solar carport at plaintiff’s property.
Plaintiff alleges that as the general contractor for the project, NRG had the contractual responsibility for the day-to-day prosecution of the work, direction of the work of the subcontractors, and to make sure the work was completed in a professional manner and in compliance with the project design, specifications, schedule and all relevant codes and industry standards, and to complete the project on time. Plaintiff alleges that NRG failed in its duties as it took half the contract amount up front, failed to provide a design that could actually fit cars into the carport and improperly kept $68,000 for two years without performing (producing a defective carport). The complaint alleges that plaintiff is entitled to compensation for the damages or losses incurred as a result of these issues with the project.
The complaint also alleges that defendant NRG violated various provisions of the Business & Professions Code with respect to construction projects, and fraudulently induced plaintiff to enter into the contract.
It is also alleged that defendant American Contractors Indemnity Company (ACIC) issued a surety bond to NRG for the protection of persons that contracted with NRG and for whom NRG’s services were ultimately rendered, and that plaintiff is authorized by Business & Professions Code section 7071.5 to pursue a bond claim against defendant ACIC for those damages caused by NRG.
The complaint alleges causes of action for breach of written contract, breach of express and implied warranties, violation of Business & Professions Code, negligence, negligence per se, fraud, and claim on contractor’s bond.
ANALYSIS:
Procedural
No Opposition
There is no timely opposition to this motion. Under CCP § 1290.6, a response to a petition to compel arbitration “shall be served and filed within 10 days of the service of the petition.” Here, the motion was served on October 30, 2023, by mail and electronic transmission. Allowing two days for service by email, opposition was due on or before November 11, 2023, over two months ago. Opposition has also not been filed within nine court days of the date set for hearing, as required for standard motions under CCP §1005(b), which would have been on January 22, 2024. The court could grant the motion on the ground no timely opposition has been served or filed, but the court elects not to do so.
Substantive
Defendants NRG and ACIC seek an order compelling plaintiff to arbitrate his claims in accordance with an arbitration agreement with NRG and to stay this action pending the outcome of the arbitration.
CCP § 1281.2, governing orders to arbitrate controversies, provides, in pertinent part:
“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 determines that:
(a) The right to compel arbitration has been waived by the petitioner; or
(b) Grounds exist for rescission of the agreement.”
Under the Federal Arbitration Act, arbitration agreements “shall be valid, irrevocable and enforceable, save upon such grounds that exist at law or in equity for the revocation of a contract.” 9 U.S.C. section 2.
There is a strong public policy in favor of arbitration of disputes and any doubts concerning the scope of arbitrable disputes should be resolved in favor of arbitration. Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 9 (“courts will ‘indulge every intendment to give effect to such proceedings.’”) (quotation omitted). “[A]rbitration agreements should be liberally interpreted, and arbitration should be ordered unless the agreement clearly does not apply to the dispute in question.” Vianna v. Doctors’ Management Co. (1994) 27 Cal.App.4th 1186, 1189, quoting Weeks v. Crow (1980) 113 Cal.App.3d 350, 353. See also AT&T Mobility, LLC v. Concepcion (2011) 563 U.S. 333, 339.
In this case, defendants have submitted a copy of a Home Improvement Contract between NRG as Contractor and plaintiff Sarkisian, Home Owner, as Customer, which appears to be the same Contract filed by plaintiff as an exhibit to the Complaint. [Tamir Decl., para. 5, Ex. B; Complaint, Ex. 1].
The Contract, which was executed by both plaintiff as Home Owner and the Contractor’s Representative, includes an arbitration provision in its Terms and Conditions, which provides:
“11. Any controversy or claim arising out of or related to this contract, or the breach thereof, shall be settled by binding arbitration in accordance with the construction industry arbitration rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. Notwithstanding the foregoing, claims within the monetary limit of the small I claims court shall be litigated in such court at the request of either party, so long as both parties limit their right to recovery to the jurisdiction of the small claims court. Any claim filed in small claims court shall not be deemed to be a waiver of the right to arbitrate, and if a counter claim more than the jurisdiction of the small claims court is filed in the municipal or superior court, then the party filing in small claims court may demand arbitration pursuant to this paragraph.
By initialing in the space provided above in the Home Improvement Contract, Customer is agreeing to have any dispute arising out of the matters included in paragraph 11 above decided by neutral arbitration as provided by California law and is giving up any rights to have the dispute litigated in a court or by jury trial. By initialing in the space provided above Customer is giving up judicial rights to discovery and appeal, unless those rights are specifically included in paragraph 11 above. If Customer refuses to submit to arbitration after agreeing to this provision, Customer may be compelled to arbitrate under the authority of the business and professions code or other applicable laws. Customer's agreement to this arbitration provision is voluntary. Customer has read and understands the foregoing and agrees to submit disputes arising out of the matters included in paragraph 11 to neutral arbitration. If Customer has not initialed the space above, then it shall be conclusively agreed, without a subsequent written agreement by all parties, that neither party agrees to arbitrate, and paragraph 11 shall not be deemed to be a part of this contract.”
[Tamir Decl., paras. 5, 6, Ex. B, Terms and Conditions, para. 11].
The Contract on a previous page with plaintiff’s initials further states:
“Customer has reviewed and fully understands the Terms and Conditions on the back of this form, which are incorporated by reference into and part of this contract. Customer has read and agrees to arbitation terms expressed in Paragraph 11 in the Terms and Conditions. In effort to ensure fair and honest public feedback, your signature on this document prohibits you from taking any action that negatively impacts NRG Clean Power Inc., by the publishing of libelous or untrue on-line content.”
[Tamir Decl., Ex. B, p. 3]
This showing is sufficient to establish the existence of an agreement to arbitrate between defendant NRG and plaintiff.
The declaration of counsel for defendants also indicates that on October 3, 2023, counsel sent a letter to counsel for plaintiff requesting that plaintiff stipulate to submit the matter to arbitration, but that counsel for defendants has yet to receive any communication from plaintiff’s attorney. [Tamir Decl., paras. 5, 7]. A copy of the letter is attached as Exhibit C, and requests that the parties proceed with arbitration in accordance with the agreement between NRG and plaintiff. [Tamir Decl., para. 5, Ex. C]. The declaration of defendants’ counsel further states, “Additionally, I’ve made several attempts to reach out to them over the phone. However, the number provided in their complaint appears to be out of service. This has made it challenging to establish direct communication and address the matter at hand.” [Tamir Decl., para. 7].
There is no opposition to the motion to dispute this evidence, and, in fact, under CCP § 1290, “The allegations of a petition are deemed to be admitted by a respondent duly served therewith unless a response is duly served and filed.”
The complaint here clearly falls within the provision’s language as “Any controversy or claim arising out of or related to this contract, or the breach thereof.”
Absent opposition showing a waiver or rescission of this agreement, the court must order NRG and plaintiff to arbitrate.
Again, under CCP § 1281.2:
“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…”
The court has determined that an agreement to arbitrate the controversy exists as between plaintiff and NRG, and so must order the parties to arbitrate the controversy.
However, to the extent this motion is also brought by defendant American Contractor Indemnity Company, the moving papers have not shown that this party is a party to a written agreement to arbitrate a controversy. This defendant is not a signatory or named party to the Home Improvement Contract, and the moving papers make no legal argument that plaintiff should be required to arbitrate with this defendant. The court will hear argument with respect to why this motion is brought by both defendants under the circumstances.
The appropriate order here is to order arbitration between plaintiff and defendant NRG as agreed, and stay this matter in its entirety, including as to defendant ACIC, pending the outcome of the arbitration.
Under CCP § 1281.4, where the court has ordered arbitration of a controversy, the court:
"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."
Defendants have requested in the motion that the action be stayed. The resolution of the matters to be determined in arbitration may impact the action as against the bond issuer here, and the entire action accordingly is stayed pending arbitration.
RULING:
[No Opposition]
Defendant NRG Clean Power, Inc. and American Contractor Indemnity Company’s Motion to Compel Arbitration is GRANTED IN PART. The motion is GRANTED as brought by moving defendant NRG Clean Power, Inc., and DENIED as brought by defendant American Contractor Indemnity Company.
The Court notes that it received no timely opposition to the motion to compel, as required by CCP § 1290.6. Accordingly, pursuant to CCP §1290, the allegations of the motion are deemed to be admitted by plaintiff.
The Court finds that as to defendant NRG Clean Power, Inc. and plaintiff Jack Sarkisian, an agreement to arbitrate the controversy exists, that there is no showing that there has been any waiver of the right to compel arbitration, and no showing that the agreement has been rescinded or that grounds exist for rescission of the agreement.
The Court orders plaintiff Jack Sarkisian and defendant NRG Clean Power, Inc. to arbitrate this matter according to the agreement to arbitrate included in the Terms and Conditions of the Home Improvement Contract between them dated 5/27/2020.
The Court further orders pursuant to CCP § 1281.4 that this action shall be stayed in its entirety until an arbitration has been had according to this order.
DEPARTMENT D IS CONTINUING TO CONDUCT AND ENCOURAGE
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