Judge Stephen P. Pfahler, Case 22CHCV00092 2023-03-22 Tentative Ruling

Judge: Stephen P. Pfahler, Case: 22CHCV00092, Date: 2023-03-22 Tentative Ruling

Case Number: 22CHCV00092 Hearing Date: March 22, 2023 Dept: F49

Dept. F-49

Date: 3-22-23 (a/f 5-5-23 via 1-31-23 minute order)

Case #22CHCV00092

ARBITRATION

MOVING PARTY: Defendant, D/R Welch Attorneys at Law

RESPONDING PARTY: Unopposed/Plaintiff, Jason Bolding

RELIEF REQUESTED

Motion to Compel Arbitration

SUMMARY OF ACTION

Plaintiff Jason Bolding alleges defendants David Welch and D/R Welch Attorneys at Law provided legal services in order to obtain a cannabis business license with the City of Los Angeles. Rather than submitting an application, Defendants sought to broker an investment agreement with an existing cannabis business also in the process of obtaining cannabis business licensing. Plaintiff alleges Defendants were in fact engaged representing the seller as well, without disclosing said relationship to Plaintiff, thereby creating a conflict of interest. Defendants subsequently disclosed the relationship, and Plaintiff signed the waiver of a conflict “under duress.” No licenses were ever obtained. The third parties never provided any financial or other promised support.

On February 10, 2022, Plaintiff filed a complaint for Legal Malpractice, Breach of Fiduciary Duty, Breach of Written Contract, and Fraud – Concealment. Defendants answered the complaint on August 12, 2022.

RULING: Granted.

Defendant D/R Welch Attorneys at Law (“D/R”) moves to compel arbitration. D/R moves to compel based on the Retainer Agreement arbitration provision. The court electronic filing system shows no opposition or reply on file at the time of the tentative ruling publication cutoff.

“A written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract.” (Code Civ. Proc., § 1281.) “On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such 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 it determines that: (a) The right to compel arbitration has been waived by the petitioner; or (b) Grounds exist for the revocation of the agreement.” (Code Civ. Proc., § 1281.2.)

The law creates a general presumption in favor of arbitration. In a motion to compel arbitration, the moving party must prove by a preponderance of evidence the existence of the arbitration agreement and that the dispute is covered by the agreement. The burden then shifts to the resisting party to prove by a preponderance of evidence a ground for denial (e.g., fraud, unconscionability, etc.). (Rosenthal v. Great Western Fin'l Securities Corp. (1996) 14 Cal.4th 394, 413-414; Hotels Nevada v. L.A. Pacific Ctr., Inc. (2006) 144 Cal.App.4th 754, 758.) Any challenges to the formation of the arbitration agreement should be considered before any order sending the parties to arbitration. The trier of fact weighs all evidence, including affidavits, declarations, documents, and, if applicable, oral testimony to determine whether the action goes to arbitration. (Hotels Nevada v. L.A. Pacific Ctr., Inc., supra, 144 Cal.App.4th at p. 758.)

“‘Under “both federal and state law, the threshold question presented by a petition to compel arbitration is whether there is an agreement to arbitrate.”’” (Long v. Provide Commerce, Inc. (2016) 245 Cal.App.4th 855, 861.) “Private arbitration is a matter of agreement between the parties and is governed by contract law. (Platt Pacific, Inc. v. Andelson (1993) 6 Cal.4th 307, 313.) In a motion to compel arbitration, the moving party must prove by a preponderance of evidence the existence of the arbitration agreement and that the dispute is covered by the agreement. The burden then shifts to the resisting party to prove by a preponderance of evidence a ground for denial (e.g., fraud, unconscionability, etc.). (Rosenthal v. Great Western Fin'l Securities Corp. (1996) 14 Cal.4th 394, 413-414; Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 164–165; Hotels Nevada v. L.A. Pacific Ctr., Inc. (2006) 144 Cal.App.4th 754, 758.)

The motion itself presents a purported representation of the arbitration clause, without any declaration in support. The purported agreement provides in relevant part:

“Any controversy, claim, or dispute arising out of or relating to this Agreement, or the breach, termination, enforcement, interpretation, or validity thereof, or relating otherwise to the Firm’s representation of you, including the determination of the scope or applicability of this specific arbitration provision, shall be determined through binding arbitration to be administered by JAMS in Los Angeles, California by a sole arbitrator. The Award shall be in writing and shall specify the factual and legal bases for the Award. Judgment on the Award may be entered in any court having jurisdiction. The prevailing party in any arbitration or litigation will be entitled to recover all attorneys’ fees (including if the Firm is the prevailing party, the value of the time of all professionals in our Firm who perform legal services in connection with the dispute, computed at their normal billing rates), all experts’ fees and expenses and all costs (whether or not these costs would be recoverable under Calif. Code of Civil Procedure or other applicable law) that may be incurred in obtaining or collecting any judgment and/or arbitration award, in addition to any other relief to which that party may be entitled. In addition, the arbitrator shall, in the Award, allocate all the costs of the arbitration, including the fees of the arbitrator, against the party who did not prevail. In agreeing to binding arbitration, you and the Firm voluntarily give up important rights to trial by judge or jury, as well as rights to appeal. You have the right to have an independent attorney of your choice and at your sole expense review this arbitration provision prior to signing this Agreement. By signing this Agreement, you represent and agree that you have had a reasonable opportunity to consult such independent attorney and - whether or not you have chosen to consult such attorney - you expressly agree that the Firm shall have the lien as specified above.”

The motion comes under the presumption that the dispute arises from the provision of legal services, and is therefore subject to arbitration. In the absence of any opposition, the court declines to make any contrary determination regarding the authenticity of the agreement or the propriety of the circumstances. The court also declines to consider any possibility of waiver.

The action is therefore ordered to arbitration in compliance with the terms of the agreement. If applicable, and if the parties cannot agree on a specific arbitrator within the JAMS organization, the court orders the parties to submit a list of one to two arbitrators from each party, where the court will select the arbitrator. The parties have 30 days from the date of this order to begin the selection process.

“If a court of competent jurisdiction, whether in this State or not, has ordered arbitration of a controversy which is an issue involved in an action or proceeding pending before a court of this State, the court in which such action or proceeding is pending shall, upon motion of a party to such action or proceeding, stay the action or proceeding until an arbitration is had in accordance with the order to arbitrate or until such earlier time as the court specifies.” (Code Civ. Proc., § 1281.4.) The court orders the action stayed.

The court will set an OSC re: Status of Arbitration and Stay at the time of the hearing.

Moving party to give notice to all parties.