Simmons v. Avant Garde Senior Living

• Decision Date: 17 October 2013
• Docket Number: B246967
• Court: California Court of Appeals Court of Appeals
• Parties: TOBI SIMMONS et al., Plaintiffs and Respondents, v. AVANT GARDE SENIOR LIVING, Defendant and Appellant.

TOBI SIMMONS et al., Plaintiffs and Respondents, v. AVANT GARDE SENIOR LIVING, Defendant and Appellant.

B246967

COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION FIVE

Filed: October 17, 2013

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Los Angeles County

Super. Ct. No. BC493106)

APPEAL from an order of the Superior Court of Los Angeles County, William F. Fahey, Judge. Reversed with directions.

Bonne, Bridges, Mueller, O'Keefe & Nichols, David J. O'Keefe, William R. Johnson and Vangi M. Johnson for Defendant and Appellant.

Law Offices of Maryann P. Gallagher and Maryann P. Gallagher for Plaintiffs and Respondents.

Defendant, Avant Garde Senior Living, appeals from an order denying its petition to compel arbitration. There were two grounds upon which the trial court relied in denying the petition to compel arbitration. The first was the danger of conflicting rulings with the results of proceedings pending against codefendants in the judicial forum. The second ground was the trial court's express statement that arbitration is not an efficient means of dispute resolution. We conclude these grounds were not a proper basis for denying the petition to compel arbitration. Thus, we reverse the order denying the petition to compel arbitration. There were other grounds for denying the petition that the trial court never ruled upon. Upon remittitur issuance, the parties remain free to litigate those questions.

The following are the pertinent provisions of the arbitration agreement: "10. Arbitration. By entering into this Agreement, you agree that any and all claims and disputes arising from or related to this Agreement or to your residency, care or services at the Community shall be resolved by submission to neutral, binding arbitration, except that any claim or dispute involving evictions or which is brought in small claims court shall not be subject to arbitration unless both parties agree to arbitrate such proceedings. Both parties give up their constitutional right to have any such dispute decided in a court of law before a jury, and instead accept the use of arbitration. The arbitration shall be conducted in Orange County, California, by a single neutral arbitrator selected in accordance with the California Code of Civil Procedure, unless otherwise mutually agreed. In reaching a decision, the arbitrator shall prepare findings of fact and conclusions of law. Each party shall bear its own costs and fees in connection with the arbitration. The arbitrator shall not have jurisdiction to consider evidence regarding or award punitive damages. This arbitration clause binds all parties to this Agreement and their spouse, heirs, representatives, executors, administrators, successors, and assigns, as applicable. After termination of this Agreement, this arbitration clause shall remain in full effect for the resolution of all claims and disputes that are unresolved as of that date. [¶] 11. Actions Not Subject to Arbitration. Any action arising out of or related to this Agreement that is brought by or against the Community for which arbitration is notallowed by law or that is excluded from arbitration under Section II.I.10 above, shall be brought in the appropriate court before a judge."

There are three codefendants in this case: Adleman Tarzana Investments LLC; Tarzana Royale LLC; and Country Villa East L.P., doing business as a Country Villa Sheraton Nursing & Rehab Center. Two of those defendants are currently subject to litigation in the trial court. At the hearing on the petition to compel arbitration, the trial court began by announcing its tentative ruling: "Start with the petition to compel arbitration brought by Avant Garde. I'm sure the parties are aware of the court's prior ruling on November 29th, where I declined a similar petition. I don't think the facts are different here. [¶] In particular, there is a substantial likelihood of conflicting factual determinations should a piece of this case go into arbitration and the balance remain in this court. So I've considered the papers. That's my tentative. I'll hear from counsel." After hearing from all counsel, the trial court ruled: "The court: I think Ms. Gallagher's got a right, Mr. Miletic. I'm not going to change my tentative. I think this case, more than many than as I've seen, in fact - perhaps this is as much as in any case, I've seen really cries out for having the resolution of this continuum of facts resolved in one forum. And I think that it would be a recipe for the disaster, and certainly, for conflicting rulings to have something go into arbitration, which by the way, in my experience, is now taking a couple of years. [¶] Arbitration at one time, it was supposed to be a prompt and expeditious way of dissolving disputes. As it turns out, that's not the case. The cases that, on occasion, I have sent to arbitration seem to percolate along on a three-year plan. We get cases to trial much quicker here in this - in this courthouse, so I appreciate your arguments, but I'm going to stick with the tentatives and the motion and/or petition to compel arbitration will be denied." There were other grounds asserted for invalidating the duty to arbitrate but the trial court did not rule upon them.

The first stated reason for denying the petition to compel arbitration is the risk of conflicting rulings and the need for litigation to be conducted in a single forum. This ground may not be relied upon by a state court to deny a request to arbitrate. In KPMG LLP v. Cocchi (2011) 565 U.S. _, _-_ , a complaintcontained both arbitrable and nonarbitrable claims. The Florida trial court denied the petition to compel arbitration. The Florida appellate court affirmed finding that only two of the four claims in the complaint were arbitrable.

The United States Supreme Court vacated the Florida appellate court decision and held: "In Dean Witter [Reynolds Inc. v Bird (1985) 470 U.S. 213], the Court noted that the [Federal Arbitration] Act 'provides that written agreements to arbitrate controversies arising out of an existing contract "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 470 U.S., at 218 (quoting 9 U.S.C. § 2). The Court found that by its terms, 'the Act leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed.' 470 U.S., at 218, 105 S.Ct. 1238 (emphasis in original). Thus, when a complaint contains both arbitrable and nonarbitrable claims, the Act requires courts to 'compel arbitration of pendent arbitrable claims when one of the parties files a motion to compel, even where the result would be the possibly inefficient maintenance of separate proceedings in different forums.' Id., at 217." (KPMG LLP v. Cocchi, supra, 565 U.S. at p. _ ; accord Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp. (1983) 460 U.S. 1, 20 ["the relevant federal law requires piecemeal resolution when necessary to give effect to an arbitration agreement"]; Allstate Ins. Co. v. Elzanaty (E.D.N.Y. 2013) _ F.Supp.2d _, _ ; Askenazy v. KMPG LLP (Mass.App. 2013) 988 N.E.2d 463, 469; KPMG LLP v. Cocchi (Fla.App. 2012) 88 So.3d 327, 330; Perdido Key Island Resort Development v. Regions Bank (Fla.App. 2012) 102 So.3d 1, 6-7.) Earlier in its opinion, the high court stated, "The Act has been interpreted to require that if a dispute presents multiple claims, some arbitrable and some not, the former must be sent to arbitration even if this will lead to piecemeal litigation." (KPMG LLP v. Cocchi, supra, 565 U.S. at p. _ ; Simmons v. Morgan Stanley Smith Barney, LLC (S.D.N.Y. 2012) 872 F.Supp.2d 1002, 1020; Waskevich v. Herold Law, P.A.(N.J.Super. 2013) 69 A.3d 127, 130-131; State ex rel. Johnson Controls, Inc. v. Tucker (W.Va. 2012) 729 S.E.2d 808, 819.)

The second stated reason for denying the motion was the trial court's express finding that arbitration may not be a "prompt and...