Judge: Theresa M. Traber, Case: 19STCP01994, Date: 2022-12-13 Tentative Ruling

Case Number: 19STCP01994    Hearing Date: December 13, 2022    Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE:     December 13, 2022                            TRIAL DATE:  Not Set

CASE:                         Ann M. Simons, individually and as the Designated Representative of Family 3 v. The Enterprise, et al.

CASE NO.:                 19STCP01994

MOTION FOR JUDICIAL REFERENCE

MOVING PARTY:   Petitioner Ann M. Simons. 

RESPONDING PARTY(S): Respondents/Cross-Petitioners The Enterprise; Gilad Lumer, individually and as the Designated Family Representative of Family 1; Harry Lumer, Sr., individually and as the Designated Family Representative of Family 2; Stuart Rubin, individually and as a Representative of Family 4; and David Wank, individually and as the Representative of Family 5.

CASE HISTORY:

·         05/21/19: Petition to Vacate or Alter Arbitration Award filed. 

·         06/28/19: Cross-Petition to Confirm Arbitration Award filed. 

• 12/06/21 Remittitur issued

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

This action arose out of a dispute regarding a family business. The parties and their families owned a business known as “The Enterprise.” Petitioner Ann Simons was fired as part of a restructuring and initiated the underlying arbitration more than ten years ago. Phase I concluded in 2010 and the arbitration award was confirmed by Department 36 (Alarcon, J.). Phase II concluded in 2019. Phase III had yet to take place. The Court confirmed the Phase II arbitration award and Petitioner appealed. The Court of Appeal upheld the Court’s order confirming the award. The Phase III award was confirmed in November of this year, and the Final Award was confirmed on December 2, 2022.

Petitioner now moves to appoint a judicial referee pursuant to Code of Civil Procedure section 639(a)(2).

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TENTATIVE RULING:

Petitioner’s Motion for Judicial Reference is DENIED.

DISCUSSION:

Petitioner moves for an order appointing a judicial referee pursuant to Code of Civil Procedure section 639(a)(2).

Code of Civil Procedure section 639 provides, in relevant part:

(a)When the parties do not consent, the court may, upon the written motion of any party, or of its own motion, appoint a referee in the following cases pursuant to the provisions of subdivision (b) of Section 640:

. . .

(2) When the taking of an account is necessary for the information of the court before judgment, or for carrying a judgment or order into effect.

(Code Civ. Proc. § 639(a).)

            Petitioner contends that there are several accounting issues that must be resolved to give effect to the Phase II arbitration award. Petitioner alleges that Respondents violated the interlocutory judgment of the Phase II award by improperly selling real property assets rather than transferring them. Petitioner therefore asserts that an accounting is necessary to determine the value of these assets, the benefits received by Respondents, whether the assets were sold at value, and whether they could be adequately replaced by comparable assets. Petitioner also contends that an accounting is necessary because Respondents claim that Petitioner has outstanding debts to Respondents. Additionally, Petitioner contends that a referee is necessary to partition and sell the assets of The Enterprise pursuant to the Phase II Award. (See Code Civ. Proc. §§ 873.010; 873.060.)

            In opposition, Respondents contend that a referee should not be appointed because this matter is properly subject to arbitration under the Enterprise Agreement’s arbitration provision. The arbitration provision is broadly worded, and states:

ANY OWNER MAY REQUIRE THE ARBITRATION OF ANY DISPUTE ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY AGREEMENT RELATING TO ANY OF THE ENTITIES.

(Motion Exh. A § 12.12.) Respondents contend that the issues raised by Petitioner consist, broadly summarized, of two categories: (1) the effect of the Phase II award and its finality and what obligations the parties had as a result; and (2) disputes concerning the terms of the separation and a reconciliation of the financial obligations of each party. Respondents argue that the first category is subject to arbitration because that dispute arises out of the arbitration agreement itself. Respondents further argue, improperly citing Code of Civil Procedure section 1287.4, that the Phase II award itself is a contract, and is therefore an “agreement” for the purposes of the arbitration provision. Section 1287.4 merely provides that judgment entered following confirmation of an arbitration award has the same effect as a judgment in a civil action of the same jurisdictional classification. (Code Civ. Proc. § 1287.4.)

            That said, the Court agrees with Respondents that these disputes, on their face, arise under or in connection with the Enterprise agreement, as they ultimately concern the partition and distribution of assets pursuant to arbitration awards made under the arbitration provision itself. Further, the Court observes that Petitioner, in both the Motion and the Reply, characterizes this dispute as concerning the enforcement of a judgment, over which the Court, Petitioner argues, retains authority notwithstanding any arbitration provision. However, disputes concerning the partition of assets and accountings are not inherently post-judgment disputes. This interpretation is supported by Code of Civil Procedure section 639, under which Petitioner brings this motion. Subdivision (a) of that section authorizes judicial reference when, among other circumstances, “the trial of an issue of fact requires the examination of a long account,” when “a question of fact, other than upon the pleadings, arises upon motion or otherwise,” and when it is necessary “to hear and determine any and all discovery motions and disputes relevant to discovery in the action.” (Code Civ. Proc. § 639(a)(1), (3), (5).) Subdivision (a)(2), under which this motion is brought, even states expressly that judicial reference may be ordered when “the taking of an account is necessary for the information of the court before judgment, or for carrying a judgment or order into effect.” (Code Civ. Proc. § 639(a)(2) [emphasis added].)

Thus, it appears to the Court that the disputes between the parties are not post-judgment disputes as a matter of law. Therefore, even if, as Petitioner contends, post-judgment disputes are not subject to arbitration, that determination is immaterial to the disposition of these issues. Instead, the Court’s view is that these disputes are properly considered the next stage of the arbitration.  Now that the awards themselves have been entered, it is the province of the arbitrator to reconcile the issues concerning the effectuation of those awards.

CONCLUSION:

Accordingly, Petitioner’s Motion for Judicial Reference is DENIED.

Moving Party to give notice.

IT IS SO ORDERED.

Dated:   December 13, 2022                           ___________________________________

                                                                                    Theresa M. Traber

                                                                                    Judge of the Superior Court

Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept47@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.