Judge: Theresa M. Traber, Case: 19STCV05281, Date: 2025-03-10 Tentative Ruling

Case Number: 19STCV05281    Hearing Date: March 10, 2025    Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE:     March 10, 2025                                  TRIAL DATE: VACATED

CASE:                         Vivera Pharmaceuticals, Inc. v. Robert C. Blaine, et al.

CASE NO.:                 19STCV05281, consol. w/ 20STCV01610 & 19STCV19489           

MOTION TO BE RELIEVED FROM STIPULATION TO ARBITRATE

MOVING PARTY:               Plaintiff/Cross-Defendant Vivera Pharmaceuticals, Inc.; Cross-Defendant Paul Edalat

RESPONDING PARTY(S): Defendants Dr. Robert C. Blaine, Blaine Laboratories, Inc., and Blaine Holding & Development, LLC

CASE HISTORY:

·         02/19/19: Complaint filed [lead case].

·         03/04/19: Cross-Complaint filed [lead case].

·         03/15/19: First Amended Complaint filed [lead case].

·         04/25/19: First Amended Cross-Complaint filed by Blaine Laboratories as to Paul Edalat et al. [lead case].

·         05/10/19: Second Amended Complaint filed [lead case].

·         06/05/19: Complaint filed [19STCV19489].

·         09/24/19: Cross-Complaint filed by Paul Edalat as to Blaine Laboratories.

·         01/14/20: Complaint filed [20STCV01610].

·         04/12/21: Second Amended Cross-Complaint filed by Blaine Laboratories as to Paul Edalat et al. [lead case].

·         06/14/21: First Amended Complaint filed [20STCV01610]

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

            This is a breach of contract and misappropriation of trade secrets action involving multiple consolidated and related actions and cross-actions.

Plaintiff Vivera Pharmaceuticals and Cross-Defendant Paul Edalat move to be relieved from the stipulation to arbitrate entered by the parties and approved by the Court on May 30, 2023.

TENTATIVE RULING:

            Plaintiff and Cross-Defendant’s Motion to be Relieved from Stipulation to Arbitrate is DENIED.

DISCUSSION:

Plaintiff Vivera Pharmaceuticals and Cross-Defendant Paul Edalat move to be relieved from the stipulation to arbitrate entered by the parties and approved by the Court on May 30, 2023.

            It is well settled that, where a litigant is “unable to share in the cost of the arbitration,” the Court may order the opposing party “to either pay that [litigant]’s share of the arbitration cost and remain in arbitration or waive its right to arbitrate that [litigant]’s claim.” (Roldan v. Callahan & Blaine (2013) 219 Cal.App.4th 87, 96.) Before doing so, the Court must “make express findings concerning [the party’s] claimed inability to share the cost of arbitration.” (Id.) “Specifically, the trial court must estimate the anticipated cost of the arbitration proceeding previously ordered, and then determine whether any of these plaintiffs are financially able to pay their pro rata share of that cost.” (Id.) The Court may issue such an order only “[if] sufficient evidence is presented on these issues and the court concludes the party’s financial status is not a result of the party’s intentional attempt to avoid arbitration.” (Weiler v. Marcus & Millichap Real Estate Inv. Servs. Inc. (2018) 22 Cal.App.5th 970, 971.)

            Plaintiff and Cross-Defendant Edalat argue that he is no longer able to bear the fees of arbitration. However, the only evidence presented by the moving parties in support of this contention is three vague paragraphs in the Declaration of Paul Edalat in support of this motion asserting (1) that Vivera and Cross-Defendant Edalat “are in poor financial condition at this time due to various reasons” and Cross-Defendant has “also suffered extensive financial losses” (Declaration of Paul Edalat ¶ 15), (2) that Vivera has had to borrow money to pay the arbitration fees and seek extensions (¶ 16) and (3) Vivera and Cross-Defendant “simply do not have the money and are unable even to borrow any more” to pay the fees. (¶ 17.) Plaintiff and Cross-Defendant also point to a series of unpaid liens as proof that Vivera cannot pay the arbitration costs. Defendants argue in opposition that the evidence presented by Plaintiff and Cross-Defendant is not sufficient to warrant issuance of a Roldan order. Indeed, the three paragraphs in the Edalat Declaration do not provide substantial details regarding the poor financial condition of the parties, and the motion has not furnished the court with any documentary evidence of the parties’ financial condition. Further, Defendants offer evidence in the form of bank statements and public records indicating that Vivera transferred substantial assets to other entities and resolved a tax debt of more than $450,000 around August 2024. (Declaration of Mark J. Yost ISO Opp. Exhs. A-B.)

            The Court is not persuaded that Plaintiff and Cross-Defendant Edalat has offered sufficient evidence for the Court to issue a Roldan order. Three vague paragraphs by Paul Edalat do not establish the inability of the moving parties to cover their pro-rata portion of the arbitration costs—nor, for that matter, do they offer the Court any basis to estimate what those costs might be. Further, the existence of unpaid liens and judgments are not strongly probative of a party’s lack of ability to meet its financial obligations, only that the obligations have gone unmet. Moreover, the evidence presented by Defendants supports an inference that Plaintiff and Cross-Defendant are intentionally attempting to avoid arbitration by redistributing assets away from Vivera. On this record, the Court cannot reach the findings that would be required to relieve Plaintiff and Cross-Defendant from their stipulation to arbitrate.

CONCLUSION:

            Accordingly, Plaintiff and Cross-Defendant’s Motion to be Relieved from Stipulation to Arbitrate is DENIED.

            Moving Parties to give notice.

IT IS SO ORDERED.

Dated:  March 10, 2025                                  ___________________________________

                                                                                    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.