Judge: Robert B. Broadbelt, Case: 20STLC00124, Date: 2023-04-03 Tentative Ruling

Case Number: 20STLC00124    Hearing Date: April 3, 2023    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTY:                 Plaintiff and cross-defendant Perez Reconstruction Contractors, Inc., d/b/a PRC  

RESPONDING PARTY:       Unopposed

Motion to Compel Arbitration and Stay Proceedings

The court considered the moving papers filed in connection with this motion.  No opposition papers were filed.

REQUEST FOR JUDICIAL NOTICE

The court grants plaintiff and cross-defendant Perez Reconstruction Contractors, Inc., d/b/a PRC’s request for judicial notice.  (Evid. Code, § 452, subd. (d).)

DISCUSSION

Plaintiff Perez Reconstruction Contractors, Inc., d/b/a PRC (“PRC”) filed this action as a limited civil action on January 7, 2020, against defendant Tracey Rene Washington a/k/a Tracey Washington (“Washington”).  PRC’s Complaint alleges five causes of action for (1) breach of written contract; (2) open book account; (3) common counts; (4) quantum meruit recovery; and (5) foreclosure of mechanic’s lien.

Washington filed her operative First Amended Cross-Complaint against PRC and Business Alliance Insurance Company on April 17, 2020, alleging five causes of action for (1) breach of contract; (2) good faith and fair dealing; (3) slander of title; (4) recovery on license bond; and (5) declaratory relief.  On September 15, 2020, the court sustained PRC’s demurrer to the third cause of action without leave to amend.

On March 17, 2022, the court granted Washington’s motion to reclassify and ordered that this action was reclassified as a civil unlimited jurisdiction case.

PRC now moves the court for an order (1) compelling Washington to arbitrate all causes of action arising out of the contract entered into by and between Washington and PRC, and (2) staying this action pending completion of arbitration.

1.     Existence of a Written Agreement to Arbitrate

“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 the court finds that the right to compel arbitration has been waived by the petitioner or that grounds exist for rescission of the agreement.  (Code Civ. Proc., §¿1281.2.) 

“‘ “The party seeking to compel arbitration bears the burden of proving the existence of an arbitration agreement, while the party opposing the petition bears the burden of establishing a defense to the agreement’s enforcement.” ’”  (Beco v. Fast Auto Loans (2022) 86 Cal.App.5th 292, 302.)  The burden of production as to this finding shifts in a three-step process.¿ (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165.)¿ First, the moving party bears the burden of producing prima facie evidence of a written agreement to arbitrate, which can be met by attaching a copy of the arbitration agreement purporting to bear the opponent’s signature. (Ibid.)  If the moving party meets this burden, the opposing party bears, in the second step, the burden of producing evidence to challenge its authenticity.  (Ibid.)  If the opposing party produces evidence sufficient to meet this burden, the third and final step requires the moving party to establish, with admissible evidence, a valid arbitration agreement between the parties.  (Ibid.) 

The court finds that PRC has met its burden of producing prima facie evidence of a written agreement to arbitrate.  (Gamboa, supra, 72 Cal.App.5th at p. 165.) 

PRC submits the “Home Improvement Contract” entered into by PRC and Washington on August 15, 2019.  (Garcia Decl., Ex. A.)  The contract contains various “TW” initials and purports to bear the signature of Washington.  (Garcia Decl., Ex. A, pp. 1 [signature of “Tracey Was”], 5 [Notice of Right to Cancel signed by Washington].)  The history of the document shows that the contract was e-signed by Washington on August 16, 2019 at 1:07 a.m. G.M.T.  (Id. at p. 9.)

The contract includes a provision entitled “Arbitration of Disputes” (the “Arbitration Agreement”), which states as follows:  “Any claim, dispute, or controversy involving damages or claims for a sum greater than Twenty-Five Thousand Dollars ($25,000) arising out of or relating to this contract, the work or the performance of the Work shall be decided by arbitration in accordance with the Construction Industry Rules of the American Arbitration Association that are in effect at the time of the filing of the arbitration & judgment may be entered on the award of the arbitrator.”  (Garcia Decl., Ex. A, ¶ 25.)  Below this provision is a second section entitled “ARBITRATION OF DISPUTES,” which includes an acknowledgment that, by initialing the paragraph, the signee is “agreeing to have any dispute, involving damages or claims for a sum greater than $25,000, arising out of the matters included in the ‘Arbitration of Disputes’ provision, decided by neutral arbitration as provided by California state law . . . .”  (Garcia Decl., Ex. A, p. 3.)  This section purports to bear the initial of Washington.  (Ibid. [“Owner’s Initials: TW”].)  

The court further finds that the Arbitration Agreement encompasses the causes of action asserted (1) by Washington in her First Amended Cross-Complaint against PRC, and (2) by PRC in its Complaint against Washington.

PRC contends that, because Washington now seeks damages in excess of $25,000, the Arbitration Agreement applies to this controversy.  The court agrees.  Although Washington’s operative cross-complaint does not include a specified amount of damages, Washington (1) has prayed for “all damages sustained” based on PRC’s conduct, as well as punitive damages, and (2) moved to reclassify this action on the ground that she discovered additional property damage after this case was filed, and, as a result, “an award to [Washington] in excess of $25,000 is not only obtainable, but is highly likely.”  (FACC, Prayer, ¶¶ 1, 3; RJN Ex. 1, Mot. for Reclassification filed by Washington on December 15, 2021, p. 4:20-23.)  Washington’s causes of action are based on PRC’s alleged breach of the parties’ home improvement contract and therefore arise out of or relate to the “contract, the work or the performance of the Work….”  (FACC ¶¶ 18, 22, 28, 29, 47-50, 52-55, 59, 62; Garcia Decl., Ex. A, ¶ 25.)  Similarly, PRC’s Complaint arises from Washington’s alleged breach of the parties’ home improvement contract and the work performed thereunder.  (Compl., ¶¶ 7, 10, 12-13, 16, 20, 22.) 

Thus, the court finds that the controversy between PRC and Washington involves damages or claims for a sum greater than $25,000 and is therefore encompassed by the Arbitration Agreement.

The court finds that Washington has not met her burden of producing evidence to challenge the authenticity or enforceability of the Arbitration Agreement.  Plaintiff has not filed opposition papers or other evidence with the court disputing that she signed the contract or that the Arbitration Agreement is unenforceable.

The court finds that there is a valid, enforceable agreement to arbitrate the controversy and therefore grants PRC’s motion. 

ORDER

The court grants plaintiff and cross-defendant Perez Reconstruction Contractors, Inc., d/b/a PRC’s motion to compel arbitration and stay proceedings.

The court orders (1) plaintiff and cross-defendant Perez Reconstruction Contractors, Inc., d/b/a PRC and defendant and cross-complainant Tracey Rene Washington to arbitrate the claims alleged in (i) cross-complainant Tracey Rene Washington’s First Amended Cross-Complaint against cross-defendant Perez Reconstruction Contractors, Inc., d/b/a PRC, and (ii) plaintiff Perez Reconstruction Contractors, Inc., d/b/a PRC’s Complaint against Tracey Rene Washington, and (2) this action is stayed until arbitration is completed.  (Code Civ. Proc., §§ 1281.2, 1281.4.)

The court vacates the Case Management Conference set in this action on April 27, 2023. 

The court sets an Order to Show Cause re completion of arbitration for hearing on ________________, 2023, at 11:00 a.m., in Department 53.

The court orders plaintiff and cross-defendant Perez Reconstruction Contractors, Inc., d/b/a PRC to give notice of this ruling.

IT IS SO ORDERED.

DATED:  April 3, 2023

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court