JIAOJIAO (LUCY) AN INDIVIDUAL FU VS HI-TECH BUILDERS, INC., A CALIFORNIA CORPORATION, ET AL.

Tentative Rulings

Case Number: *******0122 Hearing Date: April 27, 2023 Dept: T

*******0122 JIAOJIAO (LUCY) AN INDIVIDU... vs HI-TECH BUILDERS[TENTATIVE] ORDER: Defendant Hi-Tech Builders, Inc.’s Motion to Compel Arbitration and Stay Proceedings is GRANTED.

Plaintiff Jiao Jiao Fu’s Request for Monetary Sanctions is DENIED.

Plaintiff Jiao Jiao Fu’s Request for Judicial Notice is GRANTED but not as to hearsay and facts in dispute.

The matter is stayed pending arbitration.

Case Management Conference set , 2024 at 8:30 a.m. Mandatory appearance unless case is dismissed or judgment has been entered.

Introduction

Defendant Hi-Tech Builders, Inc. (Defendant) moved to compel arbitration and stay the action filed by Plaintiff Jiao Jiao Fu (Plaintiff.)

Discussion

Defendant submitted that Plaintiff’s claims are covered under the construction contract’s arbitration agreement. (Motion, Exh. A, pg. 5, par. 2.) With the attachment, Defendant met its initial burden to show the existence of the arbitration agreement, and the burden shifts to Plaintiff to show a defense to the enforceability of the agreement. Plaintiff argued that Defendant waived their right to arbitration by litigation and unreasonable delay. Plaintiff cited to Defendant’s filing of a separate Small Claims action; the filing of an ex parte application for an extension to respond to the instant action’s Complaint and the filing of a Cross-Complaint in the instant action. At issue is whether these filings show a substantial invocation of Court processes. “Waiver does not occur by mere participation in litigation” if there has been no judicial litigation of the merits of arbitrable issues, “waiver could occur prior to a judgment on the merits if prejudice could be demonstrated.” [Internal citation omitted.]” (St. Agnes Medical Center v. PacifiCare of California (2003) 31 Cal.4^th 1187, 1203.) “Because merely participating in litigation, by itself, does not result in a waiver, courts will not find prejudice where the party opposing arbitration shows only that it incurred court costs and legal expenses. [Internal citation omitted.]” (Ibid.) “Prejudice typically is found only where the petitioning party's conduct has substantially undermined this important public policy [of a speedy and relatively inexpensive means at dispute resolution] or substantially impaired the other side's ability to take advantage of the benefits and efficiencies of arbitration.” (Id. at p. 1204.) The Small Claims action was filed on December 13, 2022 and transferred to this department on April 7, 2023. Five months passed between the filing and the transfer of the Small Claims action; however, the Court docket reflects that Plaintiff caused the delay by seeking postponement of the Small Claims trial on January 11, 2023 and February 15, 2023 and Plaintiff’s March 8, 2023 request to transfer the Small Claims action to this department. Plaintiff’s delay in defending the Small Claims action showed that Plaintiff did not suffer any prejudice, let alone, violation of the policy in favor of a speedy and inexpensive resolution to the dispute. As to the instant unlimited civil action, Plaintiff’s only facts are the filing of an ex parte application and Cross-Complaint. Neither of these litigation procedures, in and of itself, showed prejudice to Plaintiff. The instant unlimited action was filed on January 11, 2023. Defendant’s ex parte application was filed on February 10, 2023 and Defendant’s Cross-Complaint was filed on March 15, 2023 (the day before the instant motion to compel arbitration was filed.) Only two months passed from the filing of the action to Defendant seeking arbitration. The policy of a speedy resolution has not yet been undermined when reviewing the timeline as to Defendant’s conduct. The filing of the Small Claims action, the ex parte application and the Cross-Complaint are insufficient to show an undermining of the policy in support of arbitration and insufficient to show prejudice to Plaintiff. Without any prejudice to Plaintiff, there is insufficient showing that Defendant waived their right to arbitration by litigation.

Defendant cites to the California Rules of Court to argue an exemption as to Small Claims actions. However, small claims actions are exempt from being ordered to judicial arbitration. (Cal. Rules of Court, rules 3.810, 3.811(b)(3); Code Civ. Proc. sec. 1141.10 et seq.) This action involves contractual arbitration. Because judicial arbitration is not at issue, the California Rules of Court, rule 3.811 is inapplicable.

Plaintiff further argued unreasonable delay as grounds for Defendant’s alleged waiver of arbitration. A party who does not demand arbitration within a reasonable time is deemed to have waived the right to arbitration. (Spear v. California State Automobile Association (1992) 2 Cal.4th 1035, 1043.) At the earliest, Defendant could have demanded arbitration in December 2022 (i.e., rather than file the Small Claims action) but did not demand arbitration until the filing of the instant motion in March 2023. Four months is seen to be a reasonable time to demand arbitration. The chronology of Defendant’s conduct does not show unreasonable delay. Plaintiff’s arguments as to waiver are not persuasive.

Plaintiff argued that she incurred $9,756.77 in fees and costs and was thus prejudiced. However, as stated above, courts will not find prejudice where the party opposing arbitration shows only that it incurred court costs and legal expenses. Plaintiff’s incursion of fees and costs to show prejudice is not persuasive.

Plaintiff failed to meet its burden to show a defense to the demand for arbitration. The motion to compel arbitration and stay the action is GRANTED.

Plaintiff then requested sanctions of $9,756.77 based upon the fees and costs incurred in defending the small claims action and filing the instant action. (Code Civ. Proc. sec. 177.5.) The statute authorizes the Court to impose sanctions “for any violation of a lawful court order by a person, done without good cause or substantial justification.” Plaintiff’s request failed to present any facts showing that Defendant violated a court order. Without showing that Defendant violated a court order, there is insufficient grounds to impose sanctions under Code of Civil Procedure section 177.5.

Plaintiff’s request for sanctions is DENIED.

IT IS SO ORDERED, TO GIVE NOTICE.

Case Number: *******0122 Hearing Date: April 21, 2023 Dept: T

*******0122 JIAOJIAO (LUCY) AN INDIVIDU... vs HI-TECH BUILDERS, INC.

TENTATIVE RULING

PETITION TO RELEASE MECHANIC’S LIEN: MOOT

THE LIEN WAS RELEASED BEFORE THE PETITION WAS FILED

NO SANCTIONS BECAUSE THE PETITION WAS NOT NEEDED TO GET THE LIEN RELEASED

PER CIVIL CODE SECTION 8488, FEES ARE TO PREVAILING PARTY

MOVING PARTY IS NOT THE PREVAILING PARTY

MEET AND CONFER PRIOR TO FILING THE MOTION WOULD HAVE REVEALED THAT THE LIEN WAS RELEASED