Tithe20, LLC v. S&S 126 Investment, LLC, et al.

MOTION TO (1) VACATE AUGUST 17, AND 19 2023 ORDERS TO ARBITRATE; (2) DISMISS THE ARBITRATION WITHOUT PREJUDICE; AND (3) LIFT THE STAY;

 

MOVING PARTY: Plaintiff Tithe20, LLC

RESPONDING PARTY(S): None

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

Plaintiff Tithe20, LLC, brings this action against Defendants S&S 126 Investment, LLC, Malekan Eshagh, and Behrouz Saffary. Plaintiff alleges it entered into a lease with Defendant S&S for the possession and option to purchase the property at 1500 W. Pacific Coast Highway, Long Beach, California 90810. Plaintiff alleges Defendants made material misrepresentations in order to induce Plaintiff to enter into the lease.  Plaintiff brings causes of action for (1) fraud, (2) false promise, (3) constructive trust, (4) negligent misrepresentation, (5) Unfair Business Practices, and (6) declaratory relief.

Defendant S&S 126 Investment, LLC, has Cross-Complained against Tithe20, LLC, for (1) breach of lease and (2) breach of guarantee.

On August 17, 2023, this court granted Defendant S&S Investment, LLC’s motion to compel arbitration and stayed the matter in this court. [FN 1]

Plaintiff now moves to vacate the arbitration and lift the stay. No opposition was filed. [FN 2] 

TENTATIVE RULING:

Plaintiff’s Motion to Vacate, etc. is DENIED WITHOUT PREJUDICE.  Plaintiff is free to file the appropriate motion under the correct code section(s), to wit, CCP §§1281.97, 1281.99 and 1281.99.

Moving party is ordered to give notice.

DISCUSSION:

Motion to Vacate Arbitration and Lift Stay

Analysis

Plaintiff moves to withdraw from arbitration, lift the stay, and proceed with this matter in court. This court retains the power to consider this motion under its “vestigial jurisdiction,” and Plaintiff need not seek consent of the arbitrator. (Williams v. W. Coast Hosps., Inc. (2022) 86 Cal. App. 5th 1054, 1068-1069.)

First, Plaintiff represents that Defendant S&S 126 Investment and Defendant Saffary did not pay their initial JAMS retainer of $4,000 each. (Jackson Decl. ¶ 12.) Plaintiff paid these fees for Defendants. (Id. ¶ 15.)

Second, Plaintiff represents that Defendants also have not paid the second retainer of $22,950 the Defendants owe collectively. (Id. ¶ 35.) Plaintiff represents that it “cannot afford” to pay Defendant’s share of these fees. (Id. ¶ 43.) As a result of Defendants’ nonpayment of fees, the arbitration set to be heard in December of 2024 did not occur.

In support of this motion, Plaintiff first relies on CCP 1281.2(a), which provides in relevant 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…” (Emphasis added.) Relying on this code section, Plaintiff contends that Defendants’ failure to pay fees constitutes a “waiver” of their right to arbitrate. [FN 3]

However, section 1281.2 appears to contemplate waiver in the context of a petition to compel arbitration. This is not a petition to compel arbitration. Plaintiff has not provided any authority applying it in the context of an arbitration that is already proceeding. 

Plaintiff goes on to rely on CCP section 128 [giving courts various powers control their proceedings], the California Constitution, and the court’s “inherent powers” to control its proceedings. (See Mtn. p. 10-11.) 

But again, this court is unaware of any Court applying these laws or authorities in the present context or as a basis to vacate a pending arbitration—Plaintiff has provided none. Therefore, at this time, Plaintiff has failed to establish grounds to vacate the arbitration. 

It is noted that Plaintiff represents that the parties were “trying” to schedule an arbitration hearing in mid-January “as to the status of the arbitration.” (Mtn. 9: 11-13.) Assuming this arbitration hearing occurred, the parties may update the court on any new developments. 

Accordingly, Plaintiff’s Motion to Vacate, etc. is DENIED WITHOUT PREJUDICE.

Of course, Plaintiff is free to file the appropriate motion under the correct code section(s), to wit, CCP §§1281.97, 1281.99 and 1281.99, which specifically appear to be on point in this particular situation.  [See specifically the enumerated remedies listed in CCP §1281.98 (b)]

IT IS SO ORDERED.

Dated:   February 27, 2025 ___________________________________

Judge of the Superior Court

FN 1 - The court’s order granting arbitration only required arbitration between the moving party, Defendant S&S 126 Investments, and Plaintiff. (See August 17, 2023 Final Ruling.) It appears that Defendant Saffary later agreed to be a party to arbitration. Defendant Eshagh is not a party to the arbitration.

FN 2 - Plaintiff served the motion on Defendant S&S 126 Investment and Defendant Behrouz Beck Saffary (the parties in the arbitration) electronically on January 7, 2025. (See Proof of Service.) 

FN 3 - It is noted that Plaintiff has not relied on CCP 1281.98 (nor have even mentioned that section) which allows a party to withdraw from “an employment or consumer arbitration” where the opposing party has failed to pay the required fees.