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SUPERIOR COURT OF CALIFORNIA, COUNTY OF PLACER
oN! Cor 2.
PES? We
Date: July 17,2020 Time: 8:30 AM Pwr
Judge: Michael W. Jones Dept. <
Reporter: N Fr Clerk: JEIN NALOING
) Sat re Keygen WN
Hill,Matthew et alvs.Chamberlin, Mark Patrick et al [Present
YR res,
Onions PPresentin rw Tce A
(_]And related Cross Action(s) Case # S-CV- ae
Law and Motion Minutes
Proceedings RE: Motion: Leave - (4) Pr olre__ NAiv\
(J Dropped. (J continued to [J by Plaintiff [] by Defendant ee " A
(_]by Stipulation [[]by Court “TLDs —
Matter argued and submitted.
(J Submitted on points and authorities without [_]argument [] appearance.
(| Motion/Petition granted. [_]Motion/Petition denied,
[] Demurrer [] sustained [7 overruled [] without [1]with leave to[_] amend [J answer.
LJ Counsel appointed for:
(J Taken under submission. Os a ) ) yO” | wD a (PSG | Poe:
C] Debtor issworn and retiredwith counsel for examination. l rN Ste
L] Stipulation to [Judge Pro Tem [commissioner executed inopen court.
7\eo™
(] Counsel for to prepare the written order and submit itto opposing counsel forapproval as
tocontent and form.
] other
‘Aire tentative ruling isadopted as the rulingof the court,to wit:
Plaintiffs move to compel arbitration of claims against Mark Chamberlin
and Kathryn Chamberlin. Although plaintiffs’ notice of motion
alternatively requested an order permitting them to amend their
complaint to add the Chamberlins as defendants, this request was
withdrawn in the reply brief. Plaintiffs seek to arbitrate claims
against the Chamberlins arising out of the Residential Purchase
AOA A A
Agreement (“Agreement”), including breach of contract, failure to
disclose, negligence, negligent misrepresentation, intentional
misrepresentation and fraudulent concealment,
A threshold question for any petition to compel arbitration is whether
there exists an agreement to arbitrate. Cruise v. Kroger Co. (2015)
233 Cal.App.4th 390, 396. It is the moving party that carries this
initial burden by proving, by a preponderance of the evidence, the
existence of a valid arbitration agreement. Engalla v. Permanente
Mediesl Group, Inc. (1997) 15 Cal.4th 951, 972. InGehis case, the
Agreement entered into between plaintiffs and defendant Mark Chamberlin
contains an arbitration provision which states that “(t]he Parties
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.” The arbitration provision further states that
“{e]nforcement of this agreement to arbitrate shall be governed by the
Federal Arbitration Act.”
The Chamberlins contend that plaintiffs waived their right to compel
arbitration through unreasonable delays and actions inconsistent with
an intent to arbitrate. The court does not agree that plaintiffs have
waived their arbitration rights. The complaint in this action, which
named the Chamberlins as defendants, was filed on March 7, 2018. “On
May 10, 2018, plaintiffs entered dismissals of the Chamberlins without
prejudice. According to plaintiffs, this was done because the
Chamberlins had agreed to mediation. The parties to this action then
proceeded with informal discovery including the exchange of documents
and multiple inspections of the property in advance of two full-day
mediation sessions with mediator Russ Wunderli, Esq. After the second
mediation session on July 25, 2019, the parties continued to engage
with each other and the mediator in an effort to reach a resolution.
However, these efforts were not successful and Mr. Wunderli informed
the parties that he was closing his file on March 19, 2020.
On November 27, 2018, in advance of the first scheduled mediation date,
plaintiffs’ counsel sent counsel for the Chamberlins a formal demand
for arbitration of plaintiffs’ claims “in the event that the mediation
is not successful.” After receiving Mr. Wunderli’s message that the
mediation file was being closed, plaintiffs’ counsel contacted counsel
for the Chamberlins on April 13, 2020, to discuss moving forward with
arbitration. The Chamberlins refused to agree to arbitration.
In determining waiver, a court can consider “(1) whether
the party's actions are inconsistent with the right to
arbitrate; (2) whether ‘the litigation machinery has been
substantially invoked’ and the parties ‘were well into
preparation of a lawsuit’ before the party notified the
opposing party of an intent to arbitrate; (3) whether a
party either requested arbitration enforcement close to the
trial date or delayed for a long period before seeking a
Stay; (4) whether a defendant seeking arbitration filed a
counterclaim without asking for a stay of the proceedings;
(5) ‘whether important intervening steps [e.g., taking
advantage of judicial discovery procedures not available in
arbitration] had taken place’; and (6) whether the delay
“affected, misled, or prejudiced” the opposing party.”
Sobremonte v. Superior Court (1998) 61 Cal.App.4th 980, 992 (ints enc
omit.)
The court finds that plaintiffs did not waive their right to
arbitration. Prior to the first scheduled mediation session with the
Chamberlins, plaintiffs expressly demanded arbitration “in the event
that the mediation is not successful.” ‘The Chamberlins do not dispute
that the mediation process continued for over a year while the parties
engaged in informal discovery, participated in a second full day of
mediation, and continued settlement discussions thereafter. There is
no showing that plaintiffs invoked the litigation machinery against
the Chamberlins, and the Chamberlins state that no depositions have
been taken by any party, and substantial discovery remains to be
conducted. Further, no prejudice has been demonstrated.
The Chamberlins also contend that Kathryn Chamberlin cannot be
compelled to arbitration, as she did not enter into any arbitration
agreement. The Agreement named only Mark Chamberlin as the seller of
the subject property, and only Mark Chamberlin signed the Agreement.
Three months after the Agreement was signed, Kathryn Chamberlin signed
an addendum which states “Kathryn R. Chamberlin is a co-owner and is
apart [sic] of this Contract and accepts all disclosures as
represented by Mark Patrick Chamberlin.” Nothing about the addendum
evidences an intent by Kathryn Chamberlin to be bound by the
arbitration provision in the Agreement.
Plaintiffs argue that Kathryn Chamberlin should be compelled to
arbitrate based on agency principles. Principals or agents of a party
to the arbitration agreement may be bound on ordinary agency or
contract principles. Herris v. Superior Court (1986) 188 Cal. App.3d
475, 478-479. Actual agency exists “when the agent is really employed
by the principal.” Civ. Code § 2299, “Actual authority is such as a
principal intentionally confers upon the agent, or intentionally, or
by want of ordinary care, allows the agent to believe himself to
possess.” Civ. Code § 2316. Ostensible agency exists “when the
principal intentionally, or by want of ordinary care, causes a third
person to believe another to be his agent who is not really employed
by him.” Civ. Code § 2300. “ostensible authority is such as a
principal, intentionally or by want of ordinary care, causes or allows
a third person to believe the agent to possess.” Civ. Code § 2317.
To hold a principal liable for the acts of an ostensible agent, “(t]he
person dealing with an agent must do so with a reasonable belief in
the agent's authority, such belief must be generated by some act or
neglect by the principal sought to be charged and the person relying
on the agent's apparent authority must not be negligent in holding
that belief.” Valentine v. Plum Healthcare Group, LLC (2019) 37
Cal.App.5th 1076, 1087 (cit. omit.) In this case, plaintiffs fail to
make a showing that Mark Chamberlin was acting as the actual agent for
Kathryn Chamberlin when he signed the Agreement, or that Kathryn
Chamberlin “intentionally, or by want of ordinary care” caused
plaintiffs to believe that Mark Chamberlin was acting as her agent.
Accordingly, the court finds that arbitration cannot be compelled
against Kathryn Chamberlin.
Finally, the Chamberlins assert that the motion should be denied under
Code of Civil Procedure section 1281.2(c), based on the possibility of
conflicting findings of law or fact. However, as the arbitration
provision expressly states that enforcement is governed by the Federal
Arbitration Act, the court may not look to section 1281.2(c) to deny
the motion. Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46
Cal.App.5th 337, 346-347.
Based on the foregoing, plaintiffs’ motion to compel arbitration is
granted only as to Mark Chamberlin. The motion is denied as to
Kathryn Chamberlin. The action shall be stayed pending arbitration.
Cease ee
All pending hearings, including the trial date, shall be vacated
pending completion of the arbitration. The court sets an OSC re
status of arbitration on January 19, 2021, at 11:30 a.m. in Department
40.
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SUPERIOR COURT OF CALIFORNIA, COUNTY OF PLACER oN! Cor 2. PES? We Date: July 17,2020 Time: 8:30 AM Pwr Judge: Michael W. Jones Dept. < Reporter: N Fr Clerk: JEIN NALOING ) Sat re Keygen WN Hill,Matthew et alvs.Chamberlin, Mark Patrick et al [Present YR res, Onions PPresentin rw Tce A (_]And related Cross Action(s) Case # S-CV- ae Law and Motion Minutes Proceedings RE: Motion: Leave - (4) Pr olre__ NAiv\ (J Dropped. (J continued to [J by Plaintiff [] by Defendant ee " A (_]by Stipulation [[]by Court “TLDs — Matter argued and submitted. (J Submitted on points and authorities without [_]argument [] appearance. (| Motion/Petition granted. [_]Motion/Petition denied, [] Demurrer [] sustained [7 overruled [] without [1]with leave to[_] amend [J answer. LJ Counsel appointed for: (J Taken under submission. Os a ) ) yO” | wD a (PSG | Poe: C] Debtor issworn and retiredwith counsel for examination. l rN Ste L] Stipulation to [Judge Pro Tem [commissioner executed inopen court. 7\eo™ (] Counsel for to prepare the written order and submit itto opposing counsel forapproval as tocontent and form. ] other ‘Aire tentative ruling isadopted as the rulingof the court,to wit: Plaintiffs move to compel arbitration of claims against Mark Chamberlin and Kathryn Chamberlin. Although plaintiffs’ notice of motion alternatively requested an order permitting them to amend their complaint to add the Chamberlins as defendants, this request was withdrawn in the reply brief. Plaintiffs seek to arbitrate claims against the Chamberlins arising out of the Residential Purchase AOA A A Agreement (“Agreement”), including breach of contract, failure to disclose, negligence, negligent misrepresentation, intentional misrepresentation and fraudulent concealment, A threshold question for any petition to compel arbitration is whether there exists an agreement to arbitrate. Cruise v. Kroger Co. (2015) 233 Cal.App.4th 390, 396. It is the moving party that carries this initial burden by proving, by a preponderance of the evidence, the existence of a valid arbitration agreement. Engalla v. Permanente Mediesl Group, Inc. (1997) 15 Cal.4th 951, 972. InGehis case, the Agreement entered into between plaintiffs and defendant Mark Chamberlin contains an arbitration provision which states that “(t]he Parties 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.” The arbitration provision further states that “{e]nforcement of this agreement to arbitrate shall be governed by the Federal Arbitration Act.” The Chamberlins contend that plaintiffs waived their right to compel arbitration through unreasonable delays and actions inconsistent with an intent to arbitrate. The court does not agree that plaintiffs have waived their arbitration rights. The complaint in this action, which named the Chamberlins as defendants, was filed on March 7, 2018. “On May 10, 2018, plaintiffs entered dismissals of the Chamberlins without prejudice. According to plaintiffs, this was done because the Chamberlins had agreed to mediation. The parties to this action then proceeded with informal discovery including the exchange of documents and multiple inspections of the property in advance of two full-day mediation sessions with mediator Russ Wunderli, Esq. After the second mediation session on July 25, 2019, the parties continued to engage with each other and the mediator in an effort to reach a resolution. However, these efforts were not successful and Mr. Wunderli informed the parties that he was closing his file on March 19, 2020. On November 27, 2018, in advance of the first scheduled mediation date, plaintiffs’ counsel sent counsel for the Chamberlins a formal demand for arbitration of plaintiffs’ claims “in the event that the mediation is not successful.” After receiving Mr. Wunderli’s message that the mediation file was being closed, plaintiffs’ counsel contacted counsel for the Chamberlins on April 13, 2020, to discuss moving forward with arbitration. The Chamberlins refused to agree to arbitration. In determining waiver, a court can consider “(1) whether the party's actions are inconsistent with the right to arbitrate; (2) whether ‘the litigation machinery has been substantially invoked’ and the parties ‘were well into preparation of a lawsuit’ before the party notified the opposing party of an intent to arbitrate; (3) whether a party either requested arbitration enforcement close to the trial date or delayed for a long period before seeking a Stay; (4) whether a defendant seeking arbitration filed a counterclaim without asking for a stay of the proceedings; (5) ‘whether important intervening steps [e.g., taking advantage of judicial discovery procedures not available in arbitration] had taken place’; and (6) whether the delay “affected, misled, or prejudiced” the opposing party.” Sobremonte v. Superior Court (1998) 61 Cal.App.4th 980, 992 (ints enc omit.) The court finds that plaintiffs did not waive their right to arbitration. Prior to the first scheduled mediation session with the Chamberlins, plaintiffs expressly demanded arbitration “in the event that the mediation is not successful.” ‘The Chamberlins do not dispute that the mediation process continued for over a year while the parties engaged in informal discovery, participated in a second full day of mediation, and continued settlement discussions thereafter. There is no showing that plaintiffs invoked the litigation machinery against the Chamberlins, and the Chamberlins state that no depositions have been taken by any party, and substantial discovery remains to be conducted. Further, no prejudice has been demonstrated. The Chamberlins also contend that Kathryn Chamberlin cannot be compelled to arbitration, as she did not enter into any arbitration agreement. The Agreement named only Mark Chamberlin as the seller of the subject property, and only Mark Chamberlin signed the Agreement. Three months after the Agreement was signed, Kathryn Chamberlin signed an addendum which states “Kathryn R. Chamberlin is a co-owner and is apart [sic] of this Contract and accepts all disclosures as represented by Mark Patrick Chamberlin.” Nothing about the addendum evidences an intent by Kathryn Chamberlin to be bound by the arbitration provision in the Agreement. Plaintiffs argue that Kathryn Chamberlin should be compelled to arbitrate based on agency principles. Principals or agents of a party to the arbitration agreement may be bound on ordinary agency or contract principles. Herris v. Superior Court (1986) 188 Cal. App.3d 475, 478-479. Actual agency exists “when the agent is really employed by the principal.” Civ. Code § 2299, “Actual authority is such as a principal intentionally confers upon the agent, or intentionally, or by want of ordinary care, allows the agent to believe himself to possess.” Civ. Code § 2316. Ostensible agency exists “when the principal intentionally, or by want of ordinary care, causes a third person to believe another to be his agent who is not really employed by him.” Civ. Code § 2300. “ostensible authority is such as a principal, intentionally or by want of ordinary care, causes or allows a third person to believe the agent to possess.” Civ. Code § 2317. To hold a principal liable for the acts of an ostensible agent, “(t]he person dealing with an agent must do so with a reasonable belief in the agent's authority, such belief must be generated by some act or neglect by the principal sought to be charged and the person relying on the agent's apparent authority must not be negligent in holding that belief.” Valentine v. Plum Healthcare Group, LLC (2019) 37 Cal.App.5th 1076, 1087 (cit. omit.) In this case, plaintiffs fail to make a showing that Mark Chamberlin was acting as the actual agent for Kathryn Chamberlin when he signed the Agreement, or that Kathryn Chamberlin “intentionally, or by want of ordinary care” caused plaintiffs to believe that Mark Chamberlin was acting as her agent. Accordingly, the court finds that arbitration cannot be compelled against Kathryn Chamberlin. Finally, the Chamberlins assert that the motion should be denied under Code of Civil Procedure section 1281.2(c), based on the possibility of conflicting findings of law or fact. However, as the arbitration provision expressly states that enforcement is governed by the Federal Arbitration Act, the court may not look to section 1281.2(c) to deny the motion. Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337, 346-347. Based on the foregoing, plaintiffs’ motion to compel arbitration is granted only as to Mark Chamberlin. The motion is denied as to Kathryn Chamberlin. The action shall be stayed pending arbitration. Cease ee All pending hearings, including the trial date, shall be vacated pending completion of the arbitration. The court sets an OSC re status of arbitration on January 19, 2021, at 11:30 a.m. in Department 40.