Judge: Ronald F. Frazier, Case: 37-2022-00051938-CU-FR-CTL, Date: 2023-10-06 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - October 05, 2023

10/06/2023  08:30:00 AM  C-65 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Ronald F. Frazier

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Civil - Unlimited  Fraud Motion Hearing (Civil) 37-2022-00051938-CU-FR-CTL GO STAFF INC VS VELAZQUEZ [IMAGED] CAUSAL DOCUMENT/DATE FILED:

Defendants Brooke S. Velazquez and KV Investments LLC dba Bright Sky's Petition to Compel Arbitration and Stay Civil Proceedings is granted in part and denied in part.

Defendants' motion to compel arbitration is granted as to Plaintiff's claims against Brooke S. Velazquez and denied as to Plaintiff's claims against KV Investments LLC ('KVI'). (ROA #13). Plaintiff and Ms.

Velazquez are ordered to arbitration and this action is STAYED for all parties until completion of arbitration.

Plaintiff has not challenged the existence or enforceability of the arbitration agreement between Plaintiff and Brooke Velazquez, but rather contend that KVI was not party to the agreement and therefore cannot compel Plaintiff to arbitrate its claims against KVI.

Under a theory of equitable estoppel, 'as applied in 'both federal and California decisional authority, a non-signatory defendant may invoke an arbitration clause to compel a signatory plaintiff to arbitrate its claims when the causes of action against the non-signatory are 'intimately founded in and intertwined' with the underlying contract obligations.'' (JSM Tuscany, LLC v. Superior Court (2011) 193 Cal. App. 4th 1222, 1237.) Claims are not sufficiently 'intertwined' if the plaintiff could have a claim independent of the contract.

(Kramer v. Toyota Motor Corp. (9th Cir. 2013) 705 F.3d 1122, 1131; Goldman v. KPMG, LLP (2009) 173 Cal.App.4th 209, 230 [no basis for equitable estoppel when the claims are fully viable without reference to the terms of the agreement].) Here, Plaintiff is alleging four causes of action against both Defendants: (1) Misappropriation of Trade Secrets; (2) Breach of Fiduciary Duties; (3) Unfair Competition; and (4) Computer Fraud. While these claims relate to or stem from Ms. Velazquez's employment with Plaintiff, they are not reliant on any violation of the terms of Ms. Velazquez's contracts with Plaintiff and are independent of Plaintiff's cause of action for breach of contract. As such, the claims are not sufficiently 'intertwined' to warrant forcing Plaintiff to arbitrate its claims against KVI, even though it did not agree to such arbitration.

Defendants have requested that the Court stay Plaintiff's case against KVI pending arbitration of the claims against Ms. Velazquez.

While an arbitration agreement may rely on the FAA rather than California arbitration law, California law still applies to pending court actions which are not subject to arbitration under the FAA. Rodriguez v. American Technologies, Inc. (2006) 136 Cal.App.4th 1110, 1122. As such a court may properly exercise Calendar No.: Event ID:  TENTATIVE RULINGS

2943792  23 CASE NUMBER: CASE TITLE:  GO STAFF INC VS VELAZQUEZ [IMAGED]  37-2022-00051938-CU-FR-CTL its discretion under CCP § 1281.2 to stay an action involving the parties not subject to the arbitration agreement pending the outcome of arbitration. (Id.) The Court, in its discretion, grants Defendants' request to stay this case against KVI.

The Court sets a status conference for June 7, 2024 at 10:15 a.m.

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