Judge: Theresa M. Traber, Case: 22STCV14435, Date: 2023-02-06 Tentative Ruling

Case Number: 22STCV14435    Hearing Date: February 6, 2023    Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE:     February 6, 2023                   TRIAL DATE: NOT SET

CASE:                         Synergy Development Alliance, LLC v. Novian & Novian, LLP et al.

CASE NO.:                 22STCV14435           

 MOTION TO COMPEL ARBITRATION 

MOVING PARTY:               Defendants Novian & Novian, LLP, Farhad Novian, Judith Manouchehri, and Elliot Kermani

RESPONDING PARTY(S): Plaintiff Synergy Development Alliance, LLC.

CASE HISTORY:

·         12/16/22: Case deemed related to 22SMCP00239 (this is lead case).

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

            This legal malpractice case was filed on April 9, 2022, alleging that Defendants misled Plaintiff as to the fees for drafting a partnership agreement for a residential project.  A First Amended Complaint was filed on October 27, 2022. 

Defendants move to compel this matter to arbitration and stay proceedings pending resolution of the arbitration.        

TENTATIVE RULING:

Defendants’ motion to compel arbitration is GRANTED. All pending hearing dates are vacated and all motions are placed off calendar.

The Court sets a status conference regarding the outcome of arbitration for February 1, 2024 at 8:30 AM.

DISCUSSION:

Defendants move to compel arbitration and to stay the proceedings pending resolution of the arbitration.

Defendants’ Request for Judicial Notice

Defendants request that the Court take judicial notice of (1) the Petition to Compel Arbitration in the matter of Novian & Novian, LLP v. Synergy Development Alliance, LLC, LASC Case No. 22SMCP00239; (2) the Opposition to the petition in that same case; and (3) the Order granting the petition in that case. Defendants’ requests are GRANTED pursuant to Evidence Code section 452(d) (court records).

Applicability of the FAA

Neither party contends that the agreement is governed by the Federal Arbitration Act. The Court therefore concludes that the arbitration provision at issue is governed by the California Arbitration Act. (Code Civ. Proc. § 1280 et seq.)

Analysis

Defendants move to compel arbitration and to stay the proceedings pending resolution of the arbitration based on the arbitration provision in the retainer agreement covering the legal services in dispute in this case.

Under California law, arbitration agreements are valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. (Blake v. Ecker (2001) 93 Cal.App.4th 728, 741 (overruled on other grounds by Le Francois v. Goel (2005) 35 Cal.4th 1094).) A party petitioning to compel arbitration has the burden of establishing the existence of a valid agreement to arbitrate, and the party opposing the petition has the burden of proving, by a preponderance of the evidence, any fact necessary to its defense. (Banner Entertainment, Inc. v. Superior Court (1998) 62 Cal.App.4th 348, 356-57.)

Defendants present a letter from Defendants to Plaintiff’s Managing Partner, Alireza Zandiyeh, entitled “Engagement Regarding General Corporate Representation,” dated January 11, 2021. (Declaration of Farhad Novian ISO Mot. Exh. 1.) Attached to and referenced in the letter is Defendants’ Standard Terms of Engagement. (Id p. 3.) Mr. Zandiyeh’s signature is affixed to the bottom of the letter, before the attachment, under the words “Agreed and accepted,” and the agreement is dated January 13, 2021. (Id. p. 2.)

Section 11 of the Terms of Engagement is the Arbitration provision, which states:

Although we think it is unlikely, a dispute could arise between us regarding some aspect of the engagement and NNLLP’s representation of the Client. Any such dispute, whether a claim by the Client against NNLLP or by NNLLP against the Client, including claims for unpaid fees and charges, negligence, quality of services, breach of contract or fiduciary duty, fraud or any other claims relating to any aspect of the engagement and our representation of the Client is referred to herein as a “Dispute”. If we are not able to resolve any Dispute ourselves, Client and NNLLP agree to resolve such Dispute through confidential binding arbitration as set forth below; provided, however, that the Client will have the right to elect nonbinding arbitration under Article 13 of the California State Bar Act for disputes concerning fees or costs before such disputes will be considered Disputes subject to the binding arbitration provisions of this Section 11.

The arbitration provisions of this Section 11 shall apply to Disputes and shall survive termination of this Agreement or the Engagement. The Client understands the consequences of agreeing to binding arbitration under this Section 11, including giving up any constitutional rights to have the Dispute determined by a court of law or by a jury and the Client’s right under Article 13 of the State Bar Act to have a trial de novo by a court after nonbinding arbitration of a dispute concerning fees or costs; that discovery of information in arbitration may be limited; and that the arbitration decision will be final and binding, except to the limited extent that judicial review might be available.

The party wishing to initiate arbitration hereunder (the “initiating party”) will deliver to the other party (the “other party”) a written demand for arbitration setting forth the basis of the initiating party’s claim and the dollar amount of damages sought. Any arbitration hereunder will (i) be heard and determined by an arbitrator who will be a retired state or federal judge with at least five years judicial experience, selected by the parties from a list of neutrals provided by ADR Services, and if the parties cannot agree, by ADR Services itself; (ii) take place in Century City, California; and (iii) be conducted in accordance with ADR Services Arbitration Rules (or any successor rules and procedures), in effect at the time the initiating party delivers to the other party the demand for arbitration required hereunder. In determining a claim, the arbitrator will apply the laws of the State of California. The arbitration proceedings and the award of the arbitrator will be confidential. Each party in the arbitration will pay such party’s own costs and fees, and the parties will split the fees of the arbitrator. The ruling of the arbitrators will be final and binding on both parties, and no appeal may be taken. The ruling of the arbitrators may be entered and enforced as a judgment by a court of competent jurisdiction. The arbitration provisions of this Agreement may be enforced by any court of competent jurisdiction, and the party seeking enforcement shall be entitled to an award of all costs, fees and expenses, including attorneys’ fees, to be paid by the party against whom enforcement is ordered.

(Novian Decl. Exh. 1. p. 9-10.) The Court therefore finds that Defendants have satisfied their burden to establish that a valid agreement to arbitrate exists.

            Defendants argue that this matter was previously compelled to arbitration in Novian & Novian LLP v. Synergy Development Alliance, LLC, LASC Case No. 22SMCP00239, wherein Defendants had petitioned to compel arbitration of this exact dispute. (See RJN Exh. 3.) In opposition, Plaintiff does not dispute that these issues were previously ruled on, but instead argues that the underlying contract is invalid or subject to rescission based on fraudulent inducement. This argument was previously raised, litigated, and rejected by the Court. (RJN Exh. 3.) Plaintiff contends that the previous ruling was decided based on a lack of evidence that has since been remedied. The Court is not persuaded by this argument. Plaintiff’s failure to present necessary evidence in a previous motion does not render the ruling on the Petition a matter that is not binding on Plaintiff in this context. Further, Plaintiff’s contention that the Ruling on the Petition addressed only a fee dispute and not claims against the individual Defendants for malpractice is directly contradicted by Plaintiff’s own filings in opposition to the Petition and is not supported by the text of the ruling. (RJN Exhs. 2-3.)

In sum, the Court sees no reason to depart from the previous ruling that these issues were properly the subject of arbitration. The Court therefore finds that this case should likewise be ordered to arbitration in the same proceeding.

CONCLUSION:

Accordingly, Defendants’ motion to compel arbitration is GRANTED. All pending hearing dates are vacated and all motions are placed off calendar.

The Court sets a status conference regarding the outcome of arbitration for February 1, 2024 at 8:30 AM.

Moving Parties to give notice.

IT IS SO ORDERED.

Dated: February 6, 2023                                 ___________________________________

                                                                                    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.