Judge: Theresa M. Traber, Case: 23STCP02025, Date: 2023-08-07 Tentative Ruling

Case Number: 23STCP02025    Hearing Date: August 7, 2023    Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE:     August 7, 2023                                   TRIAL DATE: NOT SET

CASE:                         One Up Vapor, LLC v. 5 Horseman, LLC

CASE NO.:                 23STCP02025           

PETITION TO COMPEL ARBITRATION

MOVING PARTY:               Petitioner One Up Vapor, LLC

RESPONDING PARTY(S): No response on eCourt as of 8/3/23

CASE HISTORY:

·         06/09/23: Petition to Compel Arbitration filed.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

            This is a petition to compel arbitration pursuant to a commercial lease agreement. Petitioner seeks to compel its landlord to arbitration to resolve a dispute concerning the fulfilment of the landlord’s obligations under the lease.

TENTATIVE RULING:

One Up Vapor, LLC’s petition to compel arbitration is GRANTED.

DISCUSSION:

Petitioner seeks to compel its landlord, 5 Horseman, LLC, to arbitration to resolve a dispute arising out of a commercial lease agreement.

Service of Process

The Court previously continued this matter from July 7, 2023 to this date and ordered Petitioner to either provide supplemental filings demonstrating that service was properly made, or re-serve the petition and file a new proof of service. (July 7, 2023 Minute Order.)

According to the amended proof of service filed by Petitioner on July 17, 2023, Petitioner served the petition by what is described as “substituted service” on a “Scott R, Shipping and Receiving” at an address listed as 1291 Puerta del Sol, San Clemente, CA 92673, followed by mailing a copy to that address that same date. (Amended Proof of Service.)

            A plaintiff must demonstrate reasonable diligence in attempting personal service before availing themselves of substituted service. (See, e.g., Bein v. Brechtel-Jochim Group, Inc. (1992) 6 Cal.App.4th 1387, 1391-92.) "`Ordinarily, . . . two or three attempts at personal service at a proper place should fully satisfy the requirement of reasonable diligence and allow substituted service to be made.' [Citation.]" (Espindola v. Nunez (1988) 199 Cal.App.3d 1389, 1392.)

            Petitioner has provided a printout from the Nevada Secretary of State online database establishing that Respondent is a registered entity in the State of Nevada whose registered agent has a Nevada address, but that both of its designated managers—an individual named Richard D. Kay and an entity named Cleanwave Management—are located at the San Clemente address provided, but neither of whom was the one who accepted service. (Supplemental Declaration of Daniel Solitro Exh. C.) The Amended Proof of Service states that the person with whom the documents were left “stated he was authorized to accept service,” Petitioner provides no evidence of previous attempts to actually serve the designated individual for service of process personally before attempting substitute service. That said, Petitioner has also provided an email exchange with a Michael J. Bartlett, holding himself out as legal representative for Respondent, stating that Respondent will not appear for nor oppose the petition, thus showing actual notice of this petition. (Solitro Supp. Decl. Exh. A.) Based on the proof that Petitioner located and served Respondent’s managers and the evidence of Respondent’s actual notice of this proceeding, the Court finds that Petitioner has exercised reasonable diligence before making substituted service.

Existence of Arbitration Agreement

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.)

Petitioner seeks to compel arbitration based on a lease agreement with Respondent entered into on May 17, 2022. Petitioner has provided a copy of this lease agreement bearing signatures of the representatives of both parties. (Declaration of Dustin Chang ISO Petition Exh. A.) Section 35 of the lease agreement is entitled “DISPUTE RESOLUTION” and states:

A.    MEDIATION: Tenant and Landlord agree to mediate any dispute or claim arising between them out of this agreement, or any resulting transaction, before resorting to arbitration or court action, subject to paragraph 35B(2) below. Paragraphs 35(B)(2) and (3) apply whether or not the arbitration provision is initialed. Mediation fees, if any, shall be divided equally among the parties involved. If for any dispute or claim to which this paragraph applies, any party commences an action without first attempting to resolve the matter through mediation, or refuses to mediate after a request has been made, then that party shall not be entitled to recover attorney fees, even if they would otherwise be available to that party in such action. THIS MEDIATION PROVISION APPLIES WHETHER OR NOT THE ARBITRATION PROVISION IS INITIALED.

B.   ARBITRATION OF DISPUTES: (1) Tenant and Landlord agree that any dispute or claim in Law or equity arising between them out of this agreement or any resulting transaction, which is not settled through mediation, shall be decided by neutral, binding arbitration, including and subject to paragraphs 35B(2) and (3) below. The arbitrator shall be a retired judge or justice, or an attorney with at least 5 years of real estate transactional law experience, unless the parties mutually agree to a different arbitrator, who shall render an award in accordance with substantive California Law. In all other respects, the arbitration shall be conducted in accordance with Part III, Title 9 of the California Code of Civil Procedure. Judgement upon the award of the arbitrator(s) may be entered in any court having jurisdiction. The parties shall have the right to discovery in accordance with Code of Civil Procedure §1283.05. (2) EXCLUSIONS FROM MEDIATION AND ARBITRATION: The following matters are excluded from Mediation and Arbitration hereunder: (i) a judicial or non-judicial foreclosure or other action or proceeding to enforce a deed of trust, mortgage, or installment land sale contract, as defied in Civil Code §2985; (ii) an unlawful detainer action; (iii) the filing or enforcement of a mechanic’s lien; (iv) any matter that is within the jurisdiction of a probate, small clams, or bankruptcy court; and (v) an action for bodily injury or wrongful death, or for latent or patent defects to which Code of Civil Procedure §337.1 or §337.15 applies. The filing of a court action to enable the recording of a notice of pending action, for order of attachment, receivership, injunction, or other provisional remedies, shall not constitute a violation of the mediation and arbitration provisions.

(Chang Decl. Exh. A.) The parties initialed on this section, underneath the following language in bold and block capitals:

NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.

WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION TO NEUTRAL ARBITRATION.

(Id.)

The Court finds, based on this showing, that there is a binding arbitration agreement between the parties.

Governing Law

            The plain language of the arbitration agreement states that the agreement shall be governed by substantive California law in accordance with Part III, Title 9 of the California Code of Civil Procedure, otherwise known as the California Arbitration Act. (Code Civ. Proc. §§ 1280 et seq.) Petitioner does not contend otherwise. The Court therefore finds that this agreement is governed by the California Arbitration Act.

Scope of Arbitration Agreement

“The scope of arbitration is a matter of agreement between the parties.” (See, e.g., Ericksen, Arbuthnot, McCarthy, Kearney & Walsh, Inc. v. 100 Oak Street (1983) 35 Cal.3d 312, 323.) “A party can be compelled to arbitrate only those issues it has agreed to arbitrate.” (Perez v. U-Haul Co. of California (2016) 3 Cal.App.5th 408, 419.)

Petitioner seeks to compel arbitration of claims for breach of the lease agreement and declaratory relief under the lease agreement. These claims expressly arise out of the lease agreement, and do not fall within one of the enumerated exceptions to the arbitration provision. The Court therefore concludes that the scope of the arbitration agreement encompasses Petitioner’s claims.

            Petitioner has demonstrated the existence of a binding arbitration agreement which governs the claims currently in dispute between the parties. As Respondent has not opposed the petition, the Court finds that Petitioner has demonstrated that it is entitled to an order compelling arbitration.

CONCLUSION:

Accordingly, the Petition to Compel Arbitration is GRANTED.

Moving Party to give notice.

IT IS SO ORDERED.

Dated:  August 7, 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.