Judge: Robert B. Broadbelt, Case: BC662798, Date: 2022-10-27 Tentative Ruling

Case Number: BC662798    Hearing Date: October 27, 2022    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTIES:              Defendants Erla Dogg Ingjaldsdottir, Tryggvi Thorsteinsson, Minarc, Inc., and MNM Mod. Corp.

RESPONDING PARTIES:    Plaintiffs Greg Mooradian and Debra A. Mooradian

Motion for Order Staying Proceedings

The court considered the moving, opposition, and reply papers filed in connection with this motion.

BACKGROUND

Plaintiffs Greg Mooradian and Debra A. Mooradian, individually and in their capacaties as trustees of the Greg and Debra Mooradian Family Trust (“Plaintiffs”), filed this action on May 26, 2017. 

Plaintiffs filed their operative First Amended Complaint on August 8, 2017, against defendants Erla Dogg Ingjaldsdottir, aka Erla Dogg; Tryggvi Thorsteinsson; Minarc, Inc.; MNM Mod Corp., aka MNMmod, aka mnmMOD, dba MNMmod Building Solutions; C.W. Howe Partners, Inc.; Carl William Howe, aka Carl W. Howe; Core Construction and Development; Michael Theodore Stayer, aka Mike Stayer; and SureTec Indemnity Company.  The First Amended Complaint asserts five causes of action for fraud based on intentional and negligent misrepresentation.

REQUEST FOR JUDICIAL NOTICE

The court grants Plaintiffs’ request for judicial notice.  (Evid. Code, § 452, subd. (d).)

DISCUSSION

Defendants Erla Dogg Ingjaldsdottir, Tryggvi Thorsteinsson, Minarc, Inc., and MNM Mod Corp. (“Defendants”) move the court for an order staying proceedings as against them pending resolution of their appeal of the court’s order lifting the stay in this action, filed on January 13, 2022.

Plaintiffs and Defendants previously stipulated to arbitrate their claims before the AAA.  (September 12, 2017 Stipulation re Arbitration, pp. 2-3.)  Thereafter, the court ordered that the claims against Defendants be submitted to arbitration, and stayed the action as to Defendants.  (Id. at p. 4 [Order on Stipulation re Arbitration]; September 19, 2017 Minute Order.)  Plaintiffs also stipulated to arbitrate their claims with other, nonmoving defendants, pursuant to stipulations executed between those parties.  (See October 19, 2017 Stipulation re Arbitration and Order Thereon; March 21, 2018 Stipulation re Stay of Proceedings as Against Defendant SureTec Indemnity Company.)  On December 16, 2021, the court granted Plaintiffs’ motion to lift the stay of this action, and ordered that the stay of this action pending completion of the arbitration pursuant to the court’s September 12, 2017, September 19, 2017, October 19, 2017, and March 21, 2018 orders was lifted.  Defendants filed a Notice of Appeal on January 13, 2022, stating that they appeal from the court’s order lifting the stay of proceedings and returning this action to the civil active list.

            Defendants contend that their appeal of the court’s December 16, 2021 order automatically stays all further trial court proceedings on the merits as to Defendants, and therefore request the court order that this action is stayed as to Defendants pending resolution of their appeal.

            Subject to various exceptions, “the perfecting of an appeal stays proceedings in the trial court upon the judgment or order appealed from or upon the matters embraced therein or affected thereby, including enforcement of the judgment or order, but the trial court may proceed upon any other matter embraced in the action and not affected by the judgment or order.”  (Code Civ. Proc., § 916, subd. (a).)  The purpose of this automatic stay provision “‘is to protect the appellate court’s jurisdiction by preserving the status quo until the appeal is decided.  The [automatic stay] prevents the trial court from rendering an appeal futile by altering the appealed judgment or order by conducting other proceedings that may affect it.’”  (Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 189.)

Defendants argue that (1) because the purpose of their appeal is to determine whether Plaintiffs and Defendants must resolve their dispute through arbitration, requiring Defendants to proceed in the trial court would be inconsistent with a possible outcome on appeal, and (2) the court’s order granting the motion to lift the stay was “tantamount to ‘denying a petition to compel arbitration’” because it was the first judicial denial of Defendants’ attempt to have Plaintiffs’ claims submitted to arbitration.  (Mot., p. 5:2-8; Reply, p. 3:11-13.)  In opposition, Plaintiffs contend that (1) Defendants have not perfected an appeal since they have appealed from a nonappealable order and therefore cannot rely on section 916, and (2) Defendants’ Civil Case Information Sheet, filed by Defendants with the Court of Appeal, identifies section 1294, subdivision (a) as the legal authority that authorizes their appeal, which is inapplicable to the circumstances here.  (RJN Ex. A, p. 1, ¶ A, subd. (1).)

The court finds that there has been no “perfecting of an appeal” since Defendants have appealed from a nonappealable order.  The court therefore denies Defendants’ motion for a stay of proceedings.

As set forth above, “the perfecting of an appeal stays proceedings in the trial court….”  (Code Civ. Proc., § 916, subd. (a).)  The automatic stay provided by section 916 only “arises upon a ‘duly perfected’ appeal.”  (Hearn Pacific Corp. v. Second Generation Roofing, Inc. (2016) 247 Cal.App.4th 117, 146.)  If an “order is nonappealable, the appeal was never perfected and the trial court retain[s] jurisdiction over the issue.”  (Pazderka v. Caballeros Dimas Alang, Inc. (1998) 62 Cal.App.4th 658, 666.)  Thus, an invalid appeal does not affect the trial court’s jurisdiction to proceed.  (Hearn Pacific Corp., supra, 247 Cal.App.4th at p. 146.)

The court finds that its December 16, 2021 order lifting the stay in this action upon a finding that arbitration had been had is nonappealable.  “[A]n appeal from a litigation stay order that is unaccompanied by a motion or petition to compel arbitration is not appealable.”  (Gastelum v. Remax International, Inc. (2016) 244 Cal.App.4th 1016, 1024 (“Gastelum”).)  The court finds the circumstances presented here to be analogous to Gastelum, which also involved the dismissal of arbitration following the nonpayment of arbitration costs and the trial court’s subsequent order lifting its prior order staying the litigation upon motion by the plaintiff.  (Id. at p. 1018.)  After the defendants appealed the trial court’s order lifting the litigation stay, the Gastelum Court concluded that the defendants—who did not file a contemporary motion or petition seeking an order compelling resumption of the arbitration proceeding, and who were not parties to pending arbitration—appealed “from a nonappealable order.”  (Ibid.) 

Here, like Gastelum, Defendants (1) appealed from this court’s order lifting the litigation stay upon a finding that arbitration had been had, and (2) did not file a motion to compel arbitration.  The court notes that the Gastelum defendants relied on section 1294, subdivision (a), while Defendants cite section 916, subdivision (a) in their moving papers.  (Gastelum, supra, 244 Cal.App.4th at p. 1022; Mot., p. 2:5-7.)  However, the court finds the principles in Gastelum to be relevant, since (1) Defendants’ Civil Case Information Sheet, filed with the Court of Appeal, indicates that the authority on which Defendants rely for their appeal is section 1294, subdivision (a), and (2) Defendants, in reply, state that the court’s order granting the motion to lift the stay was tantamount to denying a petition to compel arbitration and that the issue on appeal is whether Plaintiffs can be compelled to arbitrate their claims against Defendants.  (RJN Ex. A, p. 1, § A, subd. (1); Reply, p. 3:11-12, 3:18-20.)

While the court recognizes that a party may appeal from “[a]n order dismissing or denying a petition to compel arbitration[,]” and that such an appeal “automatically stays all further trial court proceedings on the merits,” Defendants did not bring a motion or petition to compel arbitration, and the court’s December 16, 2021 order did not deny such a motion.  (Code Civ. Proc., § 1294, subd. (a); Varian, supra, 35 Cal.4th at p. 190.)  The court instead (1) explained that, under Code of Civil Procedure section 1281.4, a court may lift a stay if arbitration has been had, and (2) concluded that arbitration “ha[d] been ‘had’ in accordance with” the parties’ stipulation and the court’s order, and therefore ordered the stay be lifted.  (Dec. 16, 2021 order, p. 7:9-11.)  Thus, the court did not deny any attempt by Defendants to compel arbitration because the court found that the arbitration had already been completed.  (Ibid; Id. at p. 8:20-22.)  

The court finds that the court’s December 16, 2021 order does not amount to a denial of a motion to compel arbitration and therefore is an order lifting a stay of litigation pursuant to Code of Civil Procedure section 1281.4.  Such an order is nonappealable.  (Gastelum, supra, 244 Cal.App.4th at p. 1023 [“an appeal from a litigation stay order which is unaccompanied by a motion or petition to compel arbitration is not appealable”].)  The court thus finds that it retains jurisdiction over the issues in this action.  (Hearn Pacific Corp., supra, 247 Cal.App.4th at p. 146.) 

The court therefore denies Defendants’ motion for stay of proceedings.  (Code Civ. Proc., § 916, subd. (a).)

ORDER

The court denies defendants Erla Dogg Ingjaldsdottir, Tryggvi Thorsteinsson, Minarc, Inc., and MNM Mod Corp.’s motion for stay of proceedings.

The court orders plaintiffs Greg Mooradian and Debra A. Mooradian to give notice of this order.

IT IS SO ORDERED.

DATED:  October 27, 2022

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court