Judge: Shirley K. Watkins, Case: 22VECV01956, Date: 2023-05-22 Tentative Ruling

If ALL parties submit on the tentative, then no appearance is necessary unless some other matter (i.e., Case Management Conference) is on calendar. It is not necessary to call the court to request oral argument. Oral argument is permitted on all tentative rulings.

Case Number: 22VECV01956    Hearing Date: May 22, 2023    Dept: T

22VECV01956 DAVID WHITE vs SIRAJ A. FAHOUM, et al.

[TENTATIVE] ORDER:  Plaintiff David White’s Motion to Compel Arbitration and Stay Proceedings is GRANTED.   Case Management Conference on Status of Arbitration is set for _________, 2024 at 8:30 a.m.  Appearance is mandatory unless case has been dismissed or judgment has been entered.

Introduction

              Plaintiff David White (Plaintiff) moved to compel arbitration and stay his action against Defendants Siraj Fahoum (Siraj ) and Pilar Fahoum (Pilar) (collectively, Defendants.)  Plaintiff’s reply was due May 15, 2023 but none was filed.

              Discussion 

              Plaintiff has the initial burden to show that a valid arbitration agreement exists and that the claims at issue fall within it.  (Coast Plaza Doctors Hospital v. Blue Cross of California (2000) 83 Cal.App.4th 677, 687.)  Plaintiff submitted the signed Commission Agreement which contains an arbitration provision.  (Plaintiff Decl. pars. 15, 17-21; Slade Decl. par. 5, Exh. D.)  Both Siraj and Pilar signed the Commission Agreement. Because parties submit to the arbitration provision, the burden transferred to Defendants to show that the arbitration provision is unenforceable.

              Defendants argued that they did not read the Commission Agreement before signing it and Plaintiff defrauded Defendants into signing the Commission Agreement.  However, “‘ordinarily one who signs an instrument which on its face is a contract is deemed to assent to all its terms. A party cannot avoid the terms of a contract on the ground that he or she failed to read it before signing….’”  (Metters v. Ralphs Grocery Co. (2008) 161 Cal.App.4th 696, 701.)  Persons capable of reading and understanding contracts may not avoid them on the basis of failure to read them before signing, unless there was fraud, coercion, or excusable neglect.  (Brown v. FSR Brokerage, Inc. (1998) 62 Cal.App.4th 766, 777; Coon v. Nicola (1993) 17 Cal.App.4th 1225, 1239; Bolanos v. Khalatian (1991) 231 Cal.App.3d 1586, 1590.)  Siraj attested that he has difficulty reading and speaking English and needed assistance in understanding written and spoken English.  (Siraj Decl. par. 10.)  However, the Court does not find the testimony credible because Siraj also testified that he participated in several property transactions for several years prior to 2019 with Plaintiff acting as Defendants’ agent.  (Siraj Decl. par. 5.)  Purchasing or selling real property requires some level of proficiency in English and the fact that Siraj bought or sold several properties over several years is evidence that he has sufficient proficiency in English to have understood that he was signing a contract.  The Court finds that Siraj’s defense based upon a failure to read the contract is unpersuasive.

              Siraj testified that Plaintiff misrepresented the purpose of the contract because Plaintiff represented that the contract was “just for the office.”  (Siraj Decl. par. 11.)  Siraj then testified that Plaintiff mispresented the term of the Commission Agreement to be six months; that the Commission Agreement was limited to a cash buyer for the vacant land; and the Commission Agreement did not include the Option Agreement with Recurrent Energy.  (Siraj Decl. par. 12.)  Defendants argued a fraud in the inducement against the Commission Agreement.  However, arbitration provisions/agreements are severable from the underlying contract.  Claims that the underlying contract was procured by fraud must be arbitrated assuming that the arbitration clause is broad in its terms.  (Ericksen, Arbuthnot, McCarthy, Kearney & Walsh, Inc. v. 100 Oak Street (1983) 35 Cal.3d 312, 319.)  The instant arbitration provision stated that the parties agreed to binding arbitration, “any dispute or claim in Law or equity arising … out of this Agreement.”  The scope of the provision includes “any” dispute arising of the agreement.  The arbitration agreement included broad enough language to require the arbitrator to determine the enforceability of the underlying contract. 

Siraj argued directly against the Arbitration Agreement by asserting that Plaintiff did not disclose the arbitration provision.  However, Siraj’s testimony is directly disputed by his initials directly below the arbitration agreement.  Siraj’s initials showed that Siraj read and understood and agreed to the arbitration agreement.  Plaintiff’s alleged failure to disclose is incompatible with Siraj’s initials directly below the arbitration agreement.  Siraj’s contention that Plaintiff failed to disclose and/or Siraj did not have notice of the arbitration agreement is unpersuasive.

Defendants did not meet their burden to show that the arbitration agreement is unenforceable.

The Motion to Compel Arbitration and Stay Action is GRANTED.