opposition to motion to compel arbitration

Cal. Super. - 1st Dist.March 3, 2020

PE EL B R IM L E Y L L P 33 33 E . S E R E N E A V E N U E , S TE . 2 00 H E N D E R SO N , N E V A D A 8 90 74 (7 02 ) 9 90 -7 27 2 ♦ FA X (7 02 ) 9 90 -7 27 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Page 1 of 9 _____________________________________________________________________________________________ OPPOSITION TO MOTION TO COMPEL ARBITRATION STEVEN D. MEACHAM, ESQ. California Bar No. 169977 PEEL BRIMLEY LLP 3333 E. Serene Avenue, Suite 200 Henderson, Nevada 89074-6571 Telephone: (702) 990-7272 Facsimile: (702) 990-7273 smeacham@peelbrimley.com Attorneys for Defendant ARCHITECTURAL DESIGN & SIGNS, INC. SUPERIOR COURT OF THE STATE OF CALIFORNAI COUNTY OF SAN FRANCISCO GOLDEN GATE SIGN COMPANY, INC., Petitioner, v. ARCHITECTURAL DESIGN & SIGNS, INC., Respondent. CASE NO.: CPF-19-516679 OPPOSITION TO MOTION TO COMPEL ARBITRATION Date: October 8, 2019 Time: 9:30 am Dept. 302 Reservation No. 08291008-09 Respondent ARCHITECTURAL DESIGN & SIGNS, INC. (“AD-S”), by and through its undersigned counsel of PEEL BRIMLEY LLP, hereby opposes the Motion to Compel Arbitration (“Motion”), filed by Petitioner GOLDEN GATE SIGN COMPANY, INC. (“Golden Gate”), for the reasons set forth in the following Memorandum of Points and Authorities, the pleadings and papers on file herein, and any oral argument the Court may entertain at the hearing on the Motion. PEEL BRIMLEY LLP ________________________________________ STEVEN D. MEACHAM, ESQ. California Bar No. 169977 smeacham@peelbrimley.com Attorneys for Defendant ARCHITECTURAL DESIGN & SIGNS, INC. ELECTRONICALLY F I L E D Superior Court of California, County of San Francisco 10/01/2019 Clerk of the Court BY: YOLANDA TABO-RAMIREZ Deputy Clerk PE EL B R IM L E Y L L P 33 33 E . S E R E N E A V E N U E , S TE . 2 00 H E N D E R SO N , N E V A D A 8 90 74 (7 02 ) 9 90 -7 27 2 ♦ FA X (7 02 ) 9 90 -7 27 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Page 2 of 9 _____________________________________________________________________________________________ OPPOSITION TO MOTION TO COMPEL ARBITRATION MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION OF MOTION TO COMPEL ARBITRATION I. INTRODUCTION AND FACTUAL BACKGROUND On or about January 11, 20187, AD-S and Golden Gate entered into a Short Form Standard Subcontract, whereby Golden Gate would provide certain work, materials, and equipment for the Transbay Terminal Project (the “Project”). See “AD-S/Golden Gate Subcontract,” attached to Golden Gate’s Petition as Exhibit A, attached to the Declaration of Clint Bartizal as Exhibit C, and incorporated herein by this reference.1 Pursuant to the AD-S Golden Gate Subcontract, AD-S engaged Golden Gate to perform a portion of the work to be provided by AD-S pursuant to AD-S’ higher-tiered subcontract agreement with the general contractor (i.e., Webcor/Obayashi Joint Venture- “WOJV”) for the Project. See “WJOV/AD-S Agreement,” attached to the Petition as Exhibit B, attached to the Declaration of Clint Bartizal as Exhibit B, and incorporated herein by this reference. During the Project, certain disputes arose between AD-S and Golden Gate. Notably, Golden Gate states in the Motion that it “interprets the subject contracts to require mediation and arbitration.”2 Interpretation, however, is not required or appropriate, as there simply is no agreement to arbitrate any disputes, irrespective of Golden Gate’s flawed interpretation of the subject agreements. As set forth in more detail below, the plain language of the contract documents requires litigation as the mechanism of dispute resolution - not arbitration. As such, the Motion should be denied and Golden Gate required to pursue its claims as intended by the parties - in litigation. 1 Rather than flooding this Court with duplicate copies of the exhibits attached to the Petition and Motion, AD-S will refer to the documents as presented by Golden Gate. 2 See, Golden Gate’s Memorandum of Points and Authorities in Support of Motion to Compel Arbitration at page 2, line 1 (on file herein) (referred to hereinafter as “MPA ISO Motion”). PE EL B R IM L E Y L L P 33 33 E . S E R E N E A V E N U E , S TE . 2 00 H E N D E R SO N , N E V A D A 8 90 74 (7 02 ) 9 90 -7 27 2 ♦ FA X (7 02 ) 9 90 -7 27 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Page 3 of 9 _____________________________________________________________________________________________ OPPOSITION TO MOTION TO COMPEL ARBITRATION II. THE OPERATIVE CONTRACT DOCUMENTS. As set forth above (and in Golden Gate’s moving papers), the Transbay Joint Powers Authority (“Owner”), as the owner of the Project, entered into a construction agreement with WJOV (the “Owner/WJOV Agreement - see, Exhibit A to the Declaration of Clint Bartizal, incorporated herein by this reference). WJOV, in turn, engaged AD-S (in the WJOV/AD-S Agreement) to provide certain work, materials and equipment for the Project. Thereafter, AD-S subcontracted with Golden Gate to provide a portion of the work (i.e., the AD-S/Golden Gate Subcontract- see, Exhibit A to Petition, and Exhibit C to the Declaration of Clint Bartizal). While AD-S agrees with the evaluation process outlined by Golden Gate in the Motion, AD-S reaches a very different conclusion. As a preliminary matter, this Court should consider the language of the Parties’ agreement, i.e., the AD-S/Golden Gate Subcontract. The AD-S/Golden Gate Subcontract provides, with emphasis added: CLAIMS RESOLUTION. Any claims resolution procedure incorporated into the prime contract shall be deemed incorporated in the Agreement and shall apply to any disputes arising hereunder. In the absence of a claims resolution procedure in the prime contract, the parties hereto agree to settle any dispute through a mediation process to be conducted in the County of Riverside, California. In any dispute resolution proceedings between the parties to this Subcontract, the prevailing party shall be entitled to recover its reasonable attorney’s fees. See, Exhibit A to Petition, and Exhibit C to the Declaration of Clint Bartizal (emphasis added). Stated differently, if there is a claims resolution in the “prime contract,” AD-S and Golden Gate agreed to look to the higher-tiered agreement for guidance on dispute/claims resolution. While the “prime contract” identified in the AD-S/Golden Gate Subcontract could arguably refer either to the WJOV/AD-S Agreement or the Owner/WJOV Agreement, the conclusion is the same: there is no agreement to arbitrate. / / / / / / PE EL B R IM L E Y L L P 33 33 E . S E R E N E A V E N U E , S TE . 2 00 H E N D E R SO N , N E V A D A 8 90 74 (7 02 ) 9 90 -7 27 2 ♦ FA X (7 02 ) 9 90 -7 27 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Page 4 of 9 _____________________________________________________________________________________________ OPPOSITION TO MOTION TO COMPEL ARBITRATION In its moving papers, Golden Gate contends that the term “prime contract” is a misnomer and contends that the true prime contact is the Owner/WJOV Agreement. 3 If this is the case, the Court need only look to the plain language of the Owner/WJOV Agreement. At Article 13.02 of the Owner/WJOV Agreement, it provides: Venue. All Claims, counter-claims, disputes and other matters in question between the TJPA [i.e., Owner] and the CM/GC [i.e., WJOV] arising out of or relating to this AGREEMENT or its breach will be decided by a court of competent jurisdiction with the State of California. See Owner/WJOV Agreement at Article 13.02, Exhibit A to the Declaration of Clint Bartizal (emphasis added). Accordingly, if the AD-S/Golden Subcontract is given a plain language reading, the “prime contract” requires disputes to be resolved before a court of competent jurisdiction in the State of California - not before the American Arbitration Association. If, as Golden Gate argues, the Court deems the reference in the AD-S/Golden Gate Subcontract to reference the WJOV/AD-S Agreement, the result is the same. Despite Golden Gate’s self-serving paraphrasing of Section 17 of the WJOV/AD-S Agreement and attempts to confuse the issues, there is simply no agreement that disputes will be be resolved through arbitration at the American Arbitration Association. Instead, Section 17.2.1 of the WJOV/AD-S Agreement provides: All claims, disputes and other matters in question between the Subcontractor and the Contractor arising out of or related to the Agreement or the breach thereof, except as specifically governed by the foregoing provisions, and except for claims which have been waived by the making and acceptance of final payments, or the failure to provide timely written notice, shall be decided by litigation; provided the parties agree to take all good faith efforts to resolve such disputes through informal dispute resolution procedures prior to instituting formal litigation, including but not limited to, discussions between the parties’ principals with authority to resolve such disputes, and non-binding mediation. See, WJOV/AD-S Agreement Exhibit B to the Petition and Exhibit B to the Declaration of Clint Bartizal (emphasis added). 3 See MPA ISO Motion at §II.A.3 PE EL B R IM L E Y L L P 33 33 E . S E R E N E A V E N U E , S TE . 2 00 H E N D E R SO N , N E V A D A 8 90 74 (7 02 ) 9 90 -7 27 2 ♦ FA X (7 02 ) 9 90 -7 27 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Page 5 of 9 _____________________________________________________________________________________________ OPPOSITION TO MOTION TO COMPEL ARBITRATION While Section 17.2 of the WJOV/AD-S Agreement includes a heading titled, “Arbitration Procedures,” there is no agreement to arbitrate disputes or any language similar to Section 17.2.1 requiring disputes to be resolved by arbitration. Interestingly, Section 17.2.3 of the WJOV/AD-S is titled “Notice of Demand” and provides, “Notice of demand for arbitration shall be filed in writing with the American Arbitration Association and the other party to the Master Subcontract Agreement for a Particular Project….” See, Exhibit B (emphasis added). Throughout the WJOV/AD-S Agreement, the agreement is referred to as the “Subcontract” or alternatively, as the “Long Form Subcontract” - and not a “Master Subcontract Agreement for a Particular Project.” See, WJOV/AD-S Agreement Exhibit B to the Petition and Exhibit B to the Declaration of Clint Bartizal (emphasis added). While AD-S understands there may be have some inartful drafting of Section 17 of the WJOV/AD-S Agreement (which was drafted by WJOV, not AD-S), there is simply nothing in the WJOV/AD-S Agreement to contradict the plain language: “All claims, disputes and other matters in question between the Subcontractor and the Contractor arising out of or related to the Agreement or the breach thereof…shall be decided by litigation.” Golden Gate has asked this Court to “provide meaning to all terms” of the WJOV/AD-S Agreement, and yet, Golden Gate would have this Court ignore the operative language - “disputes…shall be decided by litigation.” In an effort to further confuse the Court, Golden Gate claims that “[l]itigation encompasses all forms of dispute actions.”4 This argument is without merit and Golden Gate provides no citation or other legal support for this incorrect statement. On the contrary, however, the common understanding of the phrase “litigation” - is, as Black’s Law Dictionary defines, “the process of carrying on a lawsuit.”5 Black’s Law Dictionary further defines “lawsuit” or “suit” as “any 4 See MPA ISO Motion at §III.B. 5 Black’s Law Dictionary 944 (7th ed. 1999). PE EL B R IM L E Y L L P 33 33 E . S E R E N E A V E N U E , S TE . 2 00 H E N D E R SO N , N E V A D A 8 90 74 (7 02 ) 9 90 -7 27 2 ♦ FA X (7 02 ) 9 90 -7 27 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Page 6 of 9 _____________________________________________________________________________________________ OPPOSITION TO MOTION TO COMPEL ARBITRATION proceeding by a party or parties against another in a court of law.”6 This Court should not give credence to Golden Gate’s theory that “litigation” really means “arbitration.” Finally, despite the contractual agreement to mediate prior to formal litigation (with such mediation required under both the WJOV/AD-S Agreement and the AD-S/Golden Gate Subcontract), the parties have not engaged in mediation as contemplated by the applicable agreements. Thus, even if arbitration was appropriate for this dispute (which it is not), Golden Gate’s petition is untimely, as it has failed to satisfy a condition precedent to further dispute resolution - i.e., mediation. LEGAL ARGUMENT Despite Golden Gate’s recitation of California Civil Code Section 1281.2, California law is clear: “Section 1281.2 expressly requires a petition to compel arbitration to allege ‘the existence of a written agreement to arbitrate a controversy…’” Mansouri v. Superior Court, 181 Cal. App. 4th 633, 641, 104 Cal. Rptr. 3d 824, 830 (2010) (citing Section 1281.2). While California has expressed a strong public policy in favor of arbitration, “the public policy is not absolute.” Peng v. First Republic Bank, 219 Cal. App. 4th 1462, 1468, 162 Cal. Rptr. 3d 545, 549 (2013), as modified (Oct. 2, 2013). Instead, “the policy favoring arbitration cannot displace the necessity for a voluntary agreement to arbitrate.” Id. (citing Victoria v. Superior Court, 40 Cal.3d 734, 739, 222 Cal.Rptr. 1, 710 P.2d 833 (1985); accord Mission Viejo Emergency Medical Associates v. Beta Healthcare Group, 197 Cal.App.4th 1146, 1153, 128 Cal.Rptr.3d 330 (2011)). In California, “[a] proceeding to compel arbitration is in essence a suit in equity to compel specific performance of a contract.” Freeman v. State Farm Mut. Auto. Ins. Co., 14 Cal.3d 473, 479, 121 Cal.Rptr. 477, 535 P.2d 341 (1975). 6 Id. at 1448. PE EL B R IM L E Y L L P 33 33 E . S E R E N E A V E N U E , S TE . 2 00 H E N D E R SO N , N E V A D A 8 90 74 (7 02 ) 9 90 -7 27 2 ♦ FA X (7 02 ) 9 90 -7 27 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Page 7 of 9 _____________________________________________________________________________________________ OPPOSITION TO MOTION TO COMPEL ARBITRATION Accordingly, pursuant to California Civil Code Section 1281.2, “a party to an agreement to arbitrate may not bring an action to compel specific performance of the arbitration provision until he or she can allege ... the existence of the agreement.” Spear v. California State Auto. Assn., 2 Cal.4th 1035, 1041-1042, 9 Cal.Rptr.2d 381, 831 P.2d 821 (1992) (emphasis added); see also, Condee v. Longwood Management Corp., 88 Cal.App.4th 215, 218, 105 Cal.Rptr.2d 597 (2001) (a party moving to compel arbitration “must allege the existence of an agreement to arbitrate the controversy”). Because there is no agreement to arbitrate - but instead, an agreement to litigate following non-binding mediation (under any of the operative contracts), AD-S respectfully requests this Honorable Court deny Golden Gate’s Petition. CONCLUSION Despite Golden Gate’s attempts to blur the issues, the simple fact is that litigation is contemplated for all disputes related to the Project. If the “prime contract” reference in the AD- S/Golden Gate Subcontract makes reference to the Owner/WJOV Agreement, venue is specifically prescribed as “a court of competent jurisdiction with the State of California.” If, as Golden Gate contends, the “prime contract” reference in the AD-S/Golden Gate Subcontract makes reference to the WJOV/AD-S Agreement, the language clearly states that “disputes…shall be decided by litigation.” As such, AD-S respectfully requests the Court deny Golden Gate’s Motion and dismiss the Petition with prejudice. Dated this 26 day of September, 2019. PEEL BRIMLEY LLP ________________________________________ STEVEN D. MEACHAM, ESQ. California Bar No. 169977 smeacham@peelbrimley.com Attorneys for Defendant ARCHITECTURAL DESIGN & SIGNS, INC. PE EL B R IM L E Y L L P 33 33 E . S E R E N E A V E N U E , S TE . 2 00 H E N D E R SO N , N E V A D A 8 90 74 (7 02 ) 9 90 -7 27 2 ♦ FA X (7 02 ) 9 90 -7 27 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Page 8 of 9 _____________________________________________________________________________________________ OPPOSITION TO MOTION TO COMPEL ARBITRATION PROOF OF SERVICE [Code of Civil Procedure §1013 et seq.] I am employed in the County of Clark, State of Nevada. I am over the age of 18 and not a party to the within action. My business address is: 3333 E. Serene Ave., Suite 200, Henderson, Nevada 89074. On the date set forth below: I served copies of following document(s), by the methods) specified in the service list, on the on the interested parties in this action identified in the service list: OPPOSITION TO MOTION TO COMPEL ARBITRATION BY US MAIL: The document(s) referenced above were placed in sealed, addressed packaging, on the above date and placed for collection and mailing. I am “readily familiar" with the firm's practice of collecting and processing correspondence for mailing, wherein correspondence is deposited with the US Postal Service in Clark County, Nevada on the same day, in the ordinary course of business, postage prepaid. I am aware that on motion of the party served, service is presumed invalid if the postal cancellation or postage meter date are more than one day after date in the affidavit. Code of Civil Procedure § 1013 et seq. BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED: The document(s) referenced above were placed in sealed, addressed packaging on the above date, with the Certified Mail, Return Receipt Requested forms attached, and placed for collection and mailing. I am “readily familiar" with the firm's practice of collecting and processing correspondence for mailing, wherein correspondence is deposited with the US Postal Service in Clark County, Nevada on the same day, in the ordinary course of business, postage prepaid. I am aware that on motion of the party served, service is presumed invalid if the postal cancellation or postage meter date is more than one day after date in the affidavit. Code of Civil Procedure § 1013 et seq. BY OVERNIGHT DELIVERY: The document(s) referenced above were placed in sealed, addressed packaging on the above date and placed for collection and overnight delivery. I am “readily familiar" with the firm's practice of collecting and processing correspondence for overnight delivery, wherein correspondence is deposited with an approved overnight delivery carrier in Orange County, California on the same day, in the ordinary course of business. Code of Civil Procedure § 1013 et seq. BY FAX: I caused the document(s) referenced above to be sent to the addressee(s) listed below by facsimile transmission, on the date listed herein, in compliance with the fax filing and service rules set forth in Code of Civil Procedure § 1013 et seq., Rule 2.300 et seq. of the California Rules of Court and/or the agreement of counsel. BY EMAIL: I caused the document(s) referenced above to be sent to the addressee(s) listed below by email transmission, on the date listed herein, in compliance with the electronic service rules provided in Code of Civil Procedure § 1013, and/or the agreement of counsel. BY ELECTRONIC SERVICE: