Judge: Virginia Keeny, Case: 22VECV01932, Date: 2022-12-14 Tentative Ruling

Case Number: 22VECV01932    Hearing Date: December 14, 2022    Dept: W

RICHARD HOLZ, INC. v. AR TRUE LOVE, LLC

plaintiff’s motion to compel arbitration

Date of Hearing:        December 14, 2022                           Trial Date:       None set.

Department:              W                                                        Case No.:        22VECV01932

Moving Party:            Plaintiff Richard Holz, Inc.

Responding Party:     Defendant Ar True Love, LLC

BACKGROUND

Plaintiff Richard Holz, Inc. alleges Defendant Ar True Love, LLC and Plaintiff entered into an agreement whereby Plaintiff, as general contractor, would complete construction of Defendant’s property. Plaintiff alleges work on the property began December 11, 2020 but on June 3, 2022, Defendant terminated the agreement and has failed and refused to pay Plaintiff despite Plaintiff making demands Defendant do so. 

On November 9, 2022, Plaintiff filed a complaint against Defendant asserting causes of action for (1) Foreclosure Mechanic’s Lien; (2) Breach of Contract; (3) Quantum Meruit; (4) Open Book Account; (5) Accounts Stated; and (6) Declaratory Relief.

[Tentative] Ruling

Plaintiff’s Motion to Compel Arbitration is GRANTED

DISCUSSION

Plaintiff moves this court for an order compelling arbitration of Plaintiff’s claims (other than the “Foreclosure of Mechanic’s Lien” claim) against Defendant AR True Love, LLC and staying this action pending resolution of this motion and the completion of said arbitration.

Code of Civil Procedure section 1281.2 permits a party to file a petition to request that the court order the parties to arbitrate a controversy.  The trial court first determines whether an enforceable arbitration agreement exists between the parties and then whether the plaintiff’s claims are covered by the agreement.  (Omar v. Ralphs Grocery Co. (2004) 118 Cal.App.4th 955, 961.) “California has a strong public policy in favor of arbitration and any doubts regarding the arbitrability of a dispute are resolved in favor of arbitration.”  (Coast Plaza Doctors Hosp. v. Blue Cross of Cal. (2000) 83 Cal.App.4th 677, 686.) 

The party seeking to enforce the arbitration agreement bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence.  (Giuliano v. Inland Empire Personnel, Inc. (2007) 149 Cal.App.4th 1276, 1284.) The party opposing the petition to compel arbitration bears the burden of proving by a preponderance of the evidence any fact necessary to its defense.  (Id.) 

Plaintiff argues the contract between Defendant and Plaintiff contains a binding arbitration provision calling for mandatory binding arbitration to resolve parties’ disputes. The “AIA® Document A104™-2017 Standard Abbreviated Form of Agreement Between Owner and Contractor” (the “Agreement”) provides that:

§ 5.1 For any claim subject to, but not resolved by, mediation pursuant to Section 21.5, the method of binding dispute resolution shall be … Arbitration pursuant to Section 26.1 of this Agreement.

§ 21.1 Claims, disputes, and other matters in question arising out of or relating to this Contract, excluding those arising under Section 16.2, except those waived as provided for in Section 21.11 and Sections 15.7.3 and 15.7.4, shall, be subject to mediation as a condition precedent to binding dispute resolution.

§ 21.6 If the parties have selected arbitration as the method for binding dispute resolution in this Agreement, any claim, subject to, but not resolved by, mediation shall be subject to arbitration which, unless the parties mutually agree otherwise, shall be administered by the American Arbitration Association, in accordance with the Construction Industry Arbitration Rules in effect on the date of this Agreement. Demand for arbitration shall be made in writing, delivered to the other party to the Contract, and filed with the person or entity administering the arbitration. The award rendered by the arbitrator or arbitrators shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof.

(Exh. 1.)

Plaintiff contends they had no choice but to concurrently file the complaint pursuant to Code of Civil Procedure Section 1281.5. Section 1281.5 provides any person who proceeds to record and enforce a claim of lien by commencement of an action does not thereby waive any right of arbitration the person may have pursuant to a written agreement to arbitrate. (CCP §1281.5(a).) As a result, the court finds Plaintiff did not waive the right to arbitrate their controversy by filing the instant complaint.

Moreover, Plaintiff contends the arbitration provision covers all of Plaintiff’s contract related claims. As noted above, the parties are subject to arbitration of claims, disputes, and other matters in question arising out of or relating to the contract. (See Exh. 1, §§ 5.1, 21.1.) Accordingly, Plaintiff’s contract related claims against Defendant fall within the scope of the arbitration agreement and as Plaintiff’s Foreclosure of Mechanic’s Lien claim is statutory in nature, that claim shall proceed in court.

Plaintiffs note the parties will have exhausted the mediation attempts pursuant to Section 21.5 of the Agreement.

Defendant does not oppose Plaintiff’s motion.

Accordingly, Plaintiff’s motion to compel arbitration (other than the “Foreclosure of Mechanic’s Lien” claim) and stay this action immediately until the arbitration is completed is GRANTED.