Judge: Upinder S. Kalra, Case: 19STCV43042, Date: 2025-02-19 Tentative Ruling

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Case Number: 19STCV43042    Hearing Date: February 19, 2025    Dept: 51

Tentative Ruling

 

Judge Upinder S. Kalra, Department 51

 

HEARING DATE:   February 19, 2025                                          

 

CASE NAME:           Equifunds, Inc., et al. v. Kenneth R. Davin, et al.

 

CASE NO.:                19STCV43042

 

PETITION TO CONFIRM ARBITRATION AWARD

 

MOVING PARTY:  Defendant Kenneth R. Davin

 

RESPONDING PARTY(S): Plaintiffs Equifunds, Inc. and John David Gessin

 

REQUESTED RELIEF:

 

1.      An Order confirming the Arbitration Award in favor of Defendant Davin and against Plaintiffs.

TENTATIVE RULING:

 

1.      Petition to Confirm Arbitration Award is GRANTED.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

 

Plaintiffs Equifunds, Inc. (“Equifunds”) and John David Gessin (“Gessin”) (collectively “Plaintiffs”) sue Defendants Kenneth R. Davin (“Davin”); Sherman D. Mitchell, individually and as trustee of the Sherman D. Mitchell and Linda Mitchell Family Trust UTD Feb. 6, 2008 (“Sherman”); Arnold L. Mitchell, individually and as trustee of the Arnold L. Mitchell and Katherine Mitchell Family Trust UTD Nov. 4, 2006 (“Arnold”) (collectively with Sherman, “the Mitchells”); DDPMMP II, Inc.; DM Phillips I, LP; Kharrazian Investments, Inc., and Kharrazian Investments LP (collectively “Kharrazian”); Johnna Beckham (“Beckham”); and Does (all collectively “Defendants”) alleging fraud, breach of fiduciary duty, and breach of contract arising from the purchase and operation of a petroleum wholesale business in Baldwin Park, California. 

 

On November 27, 2019, Plaintiffs filed a Complaint against all Defendants for the following causes of action: 

(1) Breach of Fiduciary Duty – against Davin alone; 

(2) Fraud; 

(3) Constructive Fraud; 

(4) Breach of Implied Covenant of Good Faith and Fair Dealing; 

(5) Unjust Enrichment; 

(6) Accounting;            

(7) Constructive Trust; 

(8) Conversion;  

(9) Breach of Contract; and 

(10) Promissory Estoppel. 

 

On August 3, 2020, Defendants Davin and Beckham filed a Motion to Compel Arbitration which the court GRANTED.

 

On November 30, 2020, Plaintiffs filed a First Amended Complaint (“FAC”) against Defendants for the following causes of action: 

 

(1) Breach of Fiduciary Duty – against Davin; 

(2) Fraud – against Davin; 

(3) Constructive Fraud – against Davin; 

(4) Breach of Implied Covenant of Good Faith and Fair Dealing – against all Defendants except Beckham; 

(5) Aiding & Abetting Breach of Fiduciary Duty – against all Defendants; 

(6) Accounting – against Davin, Beckham, and the Mitchells;           

(7) Conversion – against all Defendants;  

(8) Breach of Contract – against Davin; and 

(9) Promissory Estoppel – against Davin. 

 

On October 25, 2024, Defendant Davin filed a Petition to Confirm Arbitration Award which the court DENIED without prejudice.

 

On December 10, 2024, Defendant Davin filed a new Petition to Confirm Arbitration Award with Notice of Hearing. On December 20, 2024, Plaintiffs filed a response. On January 2, 2025, Davin filed a reply.

 

LEGAL STANDARD:

 

“Any party to an arbitration in which an award has been made may petition the court to confirm, correct or vacate the award.¿ The petition shall name as respondent all parties to the arbitration and may name as respondents any other persons bound by the arbitration award.” (Code Civ. Proc., (CCP) § 1285.) “If a petition or response under this chapter is duly served and filed, the court shall confirm the award as made, whether rendered in this state or another state, unless in accordance with this chapter it corrects the award and confirms it as corrected, vacates the award or dismisses the proceeding.” (CCP § 1286.)¿ 

 

ANALYSIS:

 

Filing Requirements of a Petition to Confirm Arbitration Award (CCP § 1285.4)¿¿ 

¿¿ 

Code of Civil Procedure section 1285.4 states: “A petition under this chapter shall:¿¿ 

 

a.        Set forth the substance of or have attached a copy of the agreement to arbitrate unless the petitioner denies the existence of such an agreement.¿¿ 

 

b.        Set forth the names of the arbitrators.¿¿ 

 

c.        Set forth or have attached a copy of the award and the written opinion of the arbitrators, if any.”¿¿ 

¿¿ 

(CCP § 1285.4 (emphasis added).)¿¿ 

 

Here, Davin complied with this requirement. First, they attached the Agreement which provides for arbitration. (Petition, Attachment 4(B), Article 4.) Second, the Petition sets forth the Arbitrator’s name: Judge Stephen Sundvold (ret.). Finally, the Petitioners attached a copy of the Award. (Petition, Attachment 8(C).)

 

Accordingly, this requirement is met.

 

Service of the Petition and Notice of Hearing (CCP § 1290.4)¿¿ 

¿¿¿ 

Code of Civil Procedure section 1290.4 states in pertinent part:¿¿¿ 

¿¿ 

(a) A copy of the petition and a written notice of the time and place of the hearing thereof and any other papers upon which the petition is based shall be served in the manner provided in the arbitration agreement for the service of such petition and notice.¿¿ 

¿¿ 

(c) If the arbitration agreement does not provide the manner in which such service shall be made and the person on whom service is to be made has previously appeared in the proceeding . . . service shall be made in the manner provided in Chapter 5 (commencing with Section 1010) of Title 14 of Part 2 of this code. ¿¿ 

 

(CCP § 1290.4.)¿

 

Here, Davin complied with this requirement. First, the arbitration agreement does not provide the manner in which service shall be made. Second, Plaintiffs have appeared in this action. Third, Davin served the Petition and Notice of Hearing on the Petition via electronic service which is appropriate pursuant to CCP § 1010.6.

 

Accordingly, this requirement is met.

 

Service of the Arbitration Award (CCP § 1283.6)¿¿ 

¿¿¿¿¿¿¿¿¿¿¿ 

Code of Civil Procedure section 1283.6 provides that: “The neutral arbitrator shall serve a signed copy of the award on each party to the arbitration personally or by registered or certified mail or as provided in the agreement.”¿This requirement may be satisfied by service by the arbitrator or upon proper service of the Award with the Petition. (See Murry v. Civil Service Employees Ins. Co. (1967) 254 Cal.App.2d 796, 799-800.)¿¿

 

Here, there is substantial compliance with this requirement because Davin served the Award with the Petition. (Murry, supra, 254 Cal.App.2d at p. 800.) Additionally, there is no indication of prejudice to Plaintiffs by service in this manner.

 

Accordingly, this requirement is met.

 

Timing of Service of Petition (CCP §§ 1288, 1288.4)¿¿ 

¿¿¿¿¿¿¿¿¿¿¿¿¿¿ 

A party may seek a court judgment confirming an arbitration award by filing and serving a petition no more than four years, but not less than 10 days, after the award is served. (CCP §§ 1288, 1288.4.)¿¿ 

 

Here, this requirement is met because Davin served the arbitration award on October 25, 2024 and then filed this Petition on December 10, 2024.[1] 

 

Accordingly, this requirement is met.

 

Merits of the Petition to Confirm Arbitration Award¿¿¿ 

¿¿ 

The court must confirm the award as made, unless it corrects or vacates the award, or dismisses the proceeding.¿ (CCP § 1286; Valsan Partners Limited Partnership v. Calcor Space Facility, Inc. (1994) 25 Cal.App.4th 809, 818.)¿¿ 

 

Here, Davin has demonstrated that on October 25, 2024, the arbitrator issued an award in favor of Davin and against Plaintiffs. The arbitrator awarded $399,291.85 plus $171,684.56 representing 7% interest plus $6,040.40 cost of suit.  

 

Plaintiffs argue the court should vacate the award for three reasons: (1) The DMPI Agreement is an unlawful or illegal contract; (2) Plaintiff Equifunds was not a party to it; and (3) the arbitrator substantially prejudiced Plaintiffs by failing to hear critical evidence. This court has already considered Plaintiffs’ arguments concerning contractual fraud and found them wanting. (December 10, 2020 Ruling re: Motion to Compel Arbitration.) Indeed, this question should have been resolved by the arbitrator. (Ibid.) The court is not persuaded by Plaintiffs’ third argument of substantial prejudice.

 

Accordingly, the court GRANTS Davin’s Petition to Confirm the Arbitration Award.

 

CONCLUSION:

 

            For the foregoing reasons, the Court decides the pending motion as follows:

 

1.      Petition to Confirm Arbitration Award is GRANTED.

Moving party is to give notice.

 

IT IS SO ORDERED.

 

Dated:             December 10, 2024                 __________________________________                                                                                                                Upinder S. Kalra

                                                                                    Judge of the Superior Court


[1] The court notes this was the problem with Davin’s previous Petition.