Judge: Steven A. Ellis, Case: 22STCV16906, Date: 2023-10-02 Tentative Ruling
Case Number: 22STCV16906 Hearing Date: November 1, 2023 Dept: 29
TENTATIVE
Defendant ANMOL, LLC dba Studio 6 Motel’s Motion to Compel
Arbitration is GRANTED. The proceedings in this action as against the moving Defendant
are stayed pending the outcome of the parties’ arbitration.
Background
On May 23, 2022, Plaintiff Latoya Moreno (“Plaintiff”) filed a
complaint against Defendants Studio 6 Commerce, Manager Batell, Studio 6 LA,
LLC, ANMOL, LLC dba Studio 6 Motel (erroneously sued as “Studio 6 Motel”) for a
strict liability dog bite cause of action, stemming from an incident where
Plaintiff attacked and bitten by a dog while staying as a guest at defendants’
motel. It is further alleged that the subject dog either belonged to the
defendants or to someone they knew, and that it had bitten other hotel guests
as well as defendants’ staff members.
On October 3, 2022, Defendant ANMOL, LLC dba Studio 6 Motel filed
its answer to the complaint and filed a cross-complaint against cross-defendant
Carmen Castillo Araiza, alleging the causes of action for equitable indemnity,
equitable contribution, and declaratory relief. The cross-complaint alleges
that the subject dog is owned by the cross-defendant.
On August 8, 2023, Defendant ANMOL, LLC dba Studio 6 Motel
(hereinafter, “Defendant”) filed the instant motion to compel arbitration and
stay proceedings.
On October 2, 2023, the Court continued the hearing on the instant
motion based on a service issue.
On October 10, 2023, Defendant refiled the instant motion and
addressed the service issue.
On October 19, 2023, Plaintiff filed her opposition to the instant
motion. On October 25, 2023, Defendant filed its reply.
Legal Standard
“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.)
In ruling on a motion to compel arbitration, “the trial court sits
as a trier of fact, weighing all the affidavits, declarations, and other
documentary evidence, as well as oral testimony received at the court's
discretion, to reach a final determination.” (Peng v. First Republic
Bank (2013) 219 Cal.App.4th 1462, 1468.) The court’s involvement is
limited to “determining (1) whether a valid agreement to arbitrate exists and,
if it does, (2) whether the agreement encompasses the dispute at issue.”
(See Omar v. Ralphs Grocery Co. (2004) 118 Cal.App.4th 955.)
“California has a strong public policy in favor of arbitration and any doubts
regarding the arbitrability of a dispute are resolved in favor of
arbitration.” (Coast Plaza Doctors Hosp. v. Blue Cross of Cal.
(2000) 83 Cal.App.4th 677, 686.)
“The party seeking arbitration bears the burden of proving the
existence of an arbitration agreement by a preponderance of the evidence, and
the party opposing arbitration bears the burden of proving by a preponderance
of the evidence any defense, such as unconscionability.” (Pinnacle
Museum Tower Assn. v. Pinnacle Market Dev. (US), LLC (2012) 55 Cal.4th 223,
236.)
Discussion
A.
Existence of Valid Written Agreement to Arbitrate
Defendant moves to compel Plaintiff to arbitrate her claims, arguing
Plaintiff is bound by a written agreement to arbitrate the claims arising from
her stay at Defendant’s motel.
Defendant argues
that Plaintiff is subject to arbitrate her claims against Defendant by way of
the Guest Reservation Card (“GRC”) that was signed by
Mr. Bobby Medrano because Plaintiff was a registered guest under Mr. Medrano’s
reservation. (Motion at pg. 1; Patel Decl. ¶ 7, Exh. 1.) Through Mr. Medrano’s
signature of the GRC, Plaintiff was permitted to stay at Defendant’s motel for
30 days, which she did. (Patel Decl. ¶ 11.) Under the GRC, the registered guest
agreed that “should any dispute arise from this
or any agreement, the transaction or stay, [the registered guest] will submit
the details of such dispute for confidential arbitration to the American
Arbitration Association.” (Patel Decl. ¶ 7, Exh. 1 at pg. 2.)
Based on this
evidence, the Court finds that Defendant has met its burden in showing that an
arbitration agreement exists between Defendant and Mr. Medrano. Next, the Court
will consider whether Plaintiff, as a non-signatory, is bound to this
agreement.
B.
Plaintiff is Bound to the Arbitration Provision of the
GRC
As a general
rule, “a person who is not a party to an
arbitration agreement is not bound by it.” (Flores v. Evergreen at San
Diego, LLC (2007) 148 Cal.App.4th 581, 587.) Courts
have recognized various exceptions to this general rule, however, and Defendant argues
that Plaintiff is bound to the arbitration agreement of the GRC under three
legal theories: (1) equitable estoppel, (2) agency, and (3) third party
beneficiary. (Motion at pg. 6.) Each argument will be addressed in turn.
First,
Defendant argues that Plaintiff accepted the benefits of the contract (the GRC)
by staying in a guest room in Defendant’s motel, and because she accepted the benefits
of the contract, she may not repudiate the provisions of the contract that she
has now decided that she does not like. (Motion
at pg. 6-7.) The doctrine of equitable estoppel applies where the nonsignatory
plaintiff has asserted claims that are “dependent upon, or inextricably
intertwined with,” the underlying contractual obligations of the agreement
containing the arbitration clause. (JSM Tuscany, LLC v. Superior Court
(2011) 193 Cal.App.4th 1222, 1239.) In this case, however, Defendant has not
shown how her tort claims arising out of a dog bit are dependent on, or intertwined
with, the GRC.
In other
contexts, courts have held that tort claims may be subject to arbitration when
they are dependent on or intertwined with a contract where a nonsignatory has
accepted the benefits of that contract.
For example, in Boucher v. Alliance Title Co., Inc. (2005) 127
Cal. App.4th 262, 272-273, plaintiff was required to arbitrate claims for
intentional or negligent interference with an employment agreement. Here, however, the relationship between the
dog bite tort claim and the GRC seems more attenuated.
Second,
Defendant contends that Plaintiff is bound to arbitration provision of the GRC
under an agency theory. (Motion at pg. 7.) Perhaps, but Defendant, as the party
bringing a motion seeking relief from the court, must make at least a
preliminary factual showing in support of the requested relief, and here there
is no such showing, as Defendant itself concedes. (Ibid.) On this
record, the Court does not have a sufficient, non-speculative basis to make a
finding of agency.
Lastly,
Defendant relies on the third-party beneficiary doctrine to argue that
Plaintiff is bound the arbitration agreement because Mr. Medrano intended
Plaintiff to benefit under the GRC. Defendant has shown that the GRC signed by
Mr. Medrano referenced two adult occupants and three child occupants, and it
was observed by one of Defendant’s members that Plaintiff, Mr. Medrano, and
three children stayed in one motel room. (Patel Decl. ¶ 7, 11; Exh. 1.)
In
opposition, Plaintiff argues that Defendant relies entirely on conjecture that
the GRC was associated with Plaintiff because Plaintiff’s name is not listed in
the agreement and the reference to two adults and three children is
insufficient to show that the GRC was created for Plaintiff’s benefit.
(Opposition at pp. 8-9.) Court in California have held, however, that the
question of whether a non-signatory is an intended third-party beneficiary of a
contract is “answered by interpreting the
contract as a whole and doing so in
light of the uncontradicted evidence of the circumstances and negotiations of
the parties in making the contract.” (Souza v. Westlands Water Dist.
(2006) 135 Cal. App. 4th 879, 891.) It
is “not necessary that the beneficiary be named and identified as an
individual.” (Garratt v. Baker (1936) 5 Cal.2d 745, 748.) Here, the Court finds that the evidence in the
record, and the reasonable inferences that may be drawn therefrom, establish
that Plaintiff was the second adult referenced in the GRC; that Mr. Medrano
intended for Plaintiff to benefit from his agreement with Defendant; and that Plaintiff is a
third-party beneficiary of the contract.
As a third-party beneficiary, Plaintiff is bound by
the terms of the arbitration provision within the GRC.
C. Defendant did not Waive its Right to Arbitrate
The right to compel arbitration may be waived. Under California law, “[i]n determining
waiver, a court can consider (1) whether the party's actions are inconsistent
with the right to arbitrate; (2) whether the litigation machinery has been
substantially invoked and the parties were well into preparation of a lawsuit
before the party notified the opposing party of an intent to arbitrate; (3)
whether a party either requested arbitration enforcement close to the trial
date or delayed for a long period before seeking a stay; (4) whether a
defendant seeking arbitration filed a counterclaim without asking for a stay of
the proceedings; (5) whether important intervening steps [e.g., taking
advantage of judicial discovery procedures not available in arbitration] had
taken place; and (6) whether the delay affected, misled, or prejudiced” the
opposing party.” (St. Agnes Medical Center v. PacifiCare of California¿(2003)
31 Cal.4th 1187, 1198, internal quotations omitted.)¿“Answering a complaint and
participating in litigation, on their own, do not waive the right to
arbitrate.” (Gloster¿v. Sonic Automotive, Inc.¿(2014) 226 Cal.App.4th
438, 449.)¿As arbitration is a favored method of dispute resolution, “waivers
are not to be lightly inferred and the party seeking to establish a waiver
bears a heavy burden of proof.”¿(Id.¿at¿447.)¿
Here, Plaintiff argues that Defendant waived its right to arbitrate
because Defendant failed to raise its right to arbitrate in its answer and had
ample time to raise this issue previously. (Opposition at pg. 10.) Plaintiff
further argues that she would be prejudiced if forced to arbitrate her claims
because discovery is nearly complete. (Ibid.)
In reply, Defendant contends that its delay was entirely justified
because it only learned of its right to arbitrate in January 2023, and
thereafter, it had unsuccessfully attempted to meet and confer on the issue of
arbitration before filing the instant motion. (Motion, Nguyen Decl. ¶¶ 4-10,
Exh. B; Reply at pp. 6-7.) However, Plaintiff’s counsel failed to respond to
these attempts. (Ibid.) Moreover, Defendant asserts that neither party
has engaged in discovery, and thus, the litigation machinery has not been
invoked. (Reply at pg. 7.)
Under the circumstances, the Court finds that there has been no
waiver. Defendant has not acted
inconsistently with its known right to compel arbitration.
D.
Claims Fall within Scope of
Arbitration Agreement
Plaintiff’s dog bite claim arises from the
injuries she sustained as a guest at Defendant’s motel. As provided in the GRC, her claim falls within
the scope of the arbitration provision.
Conclusion
On this record, Defendant has proven the
existence of a valid arbitration agreement to which Plaintiff is bound, that
the claims fall within the scope of the arbitration agreement, and there has
been no waiver.
Accordingly, the Court GRANTS the motion of Defendant ANMOL, LLC
dba Studio 6 Motel to compel arbitration. The proceedings in this action as they relate to the moving
defendant are stayed pending the outcome of the parties’ arbitration.
The Court
sets an OSC regarding status of the arbitration for approximately June 2024.
Moving party is ordered to give notice.