Judge: Stephen I. Goorvitch, Case: 22STCV16831, Date: 2023-02-08 Tentative Ruling

Case Number: 22STCV16831    Hearing Date: February 8, 2023    Dept: 39

Original Balboa Caregivers, Inc., et al. v. Michael Moussa Yedidsion, et al.

Case No. 22STCV16831

Motion to Compel Arbitration

            Plaintiffs Original Balboa Caregivers, Inc. (“Original Balboa”) and Basil Bailey (collectively, “Plaintiffs”) filed this action against S.S.L. Investments (“Defendant SSL”), as well as Michael Moussa Yedidsion (“Defendant Yedidsion”), Pedram Salimpour (“Defendant Salimpour”), Bob Kashani (“Defendant Kashani”), Romyan Nourafchan (“Defendant Nourafchan”), Mehdi Vosogh (“Defendant Vosogh”), and 9419 Mason Partners LLC (“9419 Mason Partners”) (collectively, “Defendants”).  This action stems from Defendants’ interest in using Original Balboa’s license to operate multiple different cannabis businesses at that location.  Plaintiffs allegedly leased industrial space from Mason Partners and Defendant Nourafchan (the “Moving Defendants”).  The Moving Defendants allege that all of Plaintiffs’ claims against them necessarily arise from the lease, which contains an arbitration clause, and they move to compel arbitration.  The Moving Defendants also move to sever these claims from the remainder of the case. 

The moving party on a motion to compel arbitration “bears the burden of proving the existence of a valid arbitration agreement by a preponderance of the evidence, while a party opposing the petition bears the burden of proving by a preponderance of the evidence any fact necessary to its defense.  The trial court sits as the trier of fact, weighing all the affidavits, declarations, and other documentary evidence, and any oral testimony the court may receive at its discretion, to reach a final determination.”  (Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 842, internal citations omitted.)

The Moving Defendants advance a lease agreement, dated May 15, 2018.  (Declaration of Romyan Nourafchan, Exh. #A, ¶ 34.3.)  Bailey admits that he signed the first lease:

“After Plaintiff moved into the Mason Property, Defendant Michael Yedidsion coerced me into executing a lease dated May 15, 2018 on the Mason Property between Plaintiff and 9419 Mason Partners, LLC (“Mason Partners”) (“Lease One”).  Yedidsion told me that Lease One was needed in order to transfer Plaintiff’s license to the Mason Property location because he needed to provide evidence that Plaintiff was an owner or tenant at the Mason Property.  Yedidsion told me it was not intended to be a real lease, and that it wouldn’t be enforced.  A copy of Lease One is attached to the Declaration of Defendant Romyar Nourafchan as Exhibit A.”

(Id., ¶ 3.)  Rather, Plaintiffs argue that this lease is not enforceable because there was fraud in the inducement.  Claims of fraud in the inducement of a contract containing an arbitration clause—as distinguished from claims of fraud directed to the arbitration clause itself—are to be decided by the arbitrator and not the Court.  (See Ericksen, Arbuthnot, McCarthy, Kearney & Walsh, Inc. v. 100 Oak Street (1983) 35 Cal.3d 312, 323.)

            Plaintiffs advance a second lease, dated September 1, 2018, which does not contain the arbitration clause.  (Declaration of Basil Bailey, Exh. #1, ¶ 49.)  Plaintiffs attempt to rely on this lease as proof that there was no intent to arbitrate.  However, Bailey’s own declaration states that the second lease is invalid: “Yedidsion forged my signature on a second lease dated September 1, 2018 between Plaintiff and Mason Partners for the Mason Property (“Lease Two”).”  (Id., ¶ 5.)

            Defendants do not seek to compel arbitration of Plaintiffs’ claims against the non-Moving Defendants.  Rather, Defendants move to sever the claims and arbitrate the claims against the Moving Defendants while the claims against the remaining defendants remain in Superior Court.  Plaintiffs identify the potential of inconsistent rulings, but the solution is a stay of the Superior Court case until the parties complete their arbitration, not denial of the motion.

            Based upon the foregoing, the Court orders as follows:

            1.         Defendants’ motion to compel arbitration is granted. 

            2.         Defendants’ motion to sever is granted.

            3.         The parties shall proceed by way of arbitration with respect to Plaintiffs’ claims against Mason Partners and Defendant Nourafchan.  The parties shall meet-and-confer and schedule the arbitration forthwith.  The Court sets an Order to Show Cause why Plaintiffs’ claims against these defendants should not be dismissed following arbitration for November 27, 2023, at 8:30 a.m.  The Court provides notice that if Plaintiff’s counsel does not appear, absent good cause, the Court will assume the claims have been resolved by way of arbitration or settlement and will dismiss these defendants with prejudice.

            4.         Plaintiffs’ claims against the remaining defendants shall proceed in Superior Court.  The Court sets the following dates:

            Final Status Conference:         June 28, 2024, at 9:30 a.m.

            Trial:                                        July 9, 2024, at 9:30 a.m.

The Court estimates that this shall be a five to six day trial.  There has been a request for jury, per Code of Civil Procedure section 631.  Jury fees shall be posted within ten (10) days or the parties shall waive jury.  The parties shall comply with all courtroom procedures for Department #39.

            5.         Defendants’ counsel shall provide notice and file proof of such with the Court.