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This case was last updated from Los Angeles County Superior Courts on 02/12/2020 at 12:43:10 (UTC).

POINTE ASSESTS, LLC VS. BENSON INDUSTRIES, INC., ET AL.

Case Summary

On 11/07/2017 POINTE ASSESTS, LLC filed a Contract - Other Contract lawsuit against BENSON INDUSTRIES, INC . This case was filed in Los Angeles County Superior Courts, Burbank Courthouse located in Los Angeles, California. The Judges overseeing this case are DONNA FIELDS GOLDSTEIN and RALPH C. HOFER. The case status is Pending - Other Pending.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****7583

  • Filing Date:

    11/07/2017

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Contract - Other Contract

  • Court:

    Los Angeles County Superior Courts

  • Courthouse:

    Burbank Courthouse

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judges

DONNA FIELDS GOLDSTEIN

RALPH C. HOFER

 

Party Details

Plaintiff

POINTE ASSETS LLC

Defendants

VIRACON INC.

QUANEX I.G. SYSTEMS INC.

TRUSEAL TECHNOLOGIES INC.

BENSON INDUSTRIES INC.

QUANEX I.G. SYSTEMS INC

VIRACON INC

Others

HAIGHT BROWN & BONESTEEL LLP

FOX ROTHSCHILD LLP

Attorney/Law Firm Details

Defendant and Plaintiff Attorneys

MALEY JOHN R

MOTT GARRETT M.

HANSON BRIDGETT LLP

HENNIGH SCOTT E.

HENNIGH SCOTT EDWARD

JOHN J. SHAEFFER

BARNES & THORNBURG LLP

JENNIFER K. STINNETT ESQ.

FOX ROTHSCHILD LLP

CHRISTENSEN HSU SIPES LLP

HAIGHT BROWN & BONESTEEL LLP

SHAEFFER JOHN J.

HINKLE LAWRENCE

WAHL JOSEPH M.

WAHL JOSEPH MATTHEW

SHAEFFER JOHN JOSEPH

STINNETT JENNIFER KAY

ALLEN DAVID C

 

Court Documents

Notice Re: Continuance of Hearing and Order

7/17/2018: Notice Re: Continuance of Hearing and Order

Legacy Document - LEGACY DOCUMENT TYPE: Motion for an Order

9/24/2018: Legacy Document - LEGACY DOCUMENT TYPE: Motion for an Order

Proof of Service (not Summons and Complaint)

9/24/2018: Proof of Service (not Summons and Complaint)

Motion re: - Motion re: for Non-Monetary and Monetary Sanctions, Memorandum of Points and Authorities, Declaration

11/26/2018: Motion re: - Motion re: for Non-Monetary and Monetary Sanctions, Memorandum of Points and Authorities, Declaration

Opposition - Opposition to defendant's viracon, inc. motion to compel

12/3/2018: Opposition - Opposition to defendant's viracon, inc. motion to compel

Opposition - Opposition to defendant viracon, inc. ex parte application

12/13/2018: Opposition - Opposition to defendant viracon, inc. ex parte application

Supplemental Declaration - Supplemental Declaration of Joseph M. Wahl in Support of Quanex I.G. systems, Inc. and Truseal Technologies, Inc.'s Reply in Support of Motion to Compel Arbitration

12/7/2018: Supplemental Declaration - Supplemental Declaration of Joseph M. Wahl in Support of Quanex I.G. systems, Inc. and Truseal Technologies, Inc.'s Reply in Support of Motion to Compel Arbitration

Summons

11/8/2017: Summons

Proof of Service of Summons and Complaint

11/13/2017: Proof of Service of Summons and Complaint

Proof of Service of Summons and Complaint

11/13/2017: Proof of Service of Summons and Complaint

Proof of Service (not Summons and Complaint)

11/22/2017: Proof of Service (not Summons and Complaint)

Application to be Admitted Pro Hac Vice

11/22/2017: Application to be Admitted Pro Hac Vice

Minute Order - Minute order entered: 2018-01-26 00:00:00

1/26/2018: Minute Order - Minute order entered: 2018-01-26 00:00:00

Memorandum of Points & Authorities

2/23/2018: Memorandum of Points & Authorities

Legacy Document - LEGACY DOCUMENT TYPE: Notice

3/12/2018: Legacy Document - LEGACY DOCUMENT TYPE: Notice

Notice of Motion -

7/23/2018: Notice of Motion -

182 More Documents Available

 

Docket Entries

  • 07/13/2020
  • Hearing07/13/2020 at 08:30 AM in Department D at 600 East Broadway, Glendale, CA 91206; Order to Show Cause Re: Status of Arbitration

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  • 01/15/2020
  • DocketNotice (NOTICE OF HEARING); Filed by POINTE ASSETS, LLC (Plaintiff)

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  • 01/14/2020
  • Docketat 08:30 AM in Department D; Order to Show Cause Re: (Status of Arbitration) - Held - Continued

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  • 01/14/2020
  • DocketMinute Order ( (Order to Show Cause Re: Status of Arbitration)); Filed by Clerk

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  • 09/26/2019
  • DocketRequest For Copies; Filed by Clerk

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  • 09/18/2019
  • Docketat 08:30 AM in Department D; Order to Show Cause Re: (reStatus of Arbitration Conference) - Held - Continued

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  • 09/18/2019
  • DocketMinute Order ( (Order to Show Cause Re: re: Status of Arbitration Conference)); Filed by Clerk

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  • 09/18/2019
  • DocketNotice (NOTICE OF FURTHER ARBITRATION STATUS CONFERENCE); Filed by POINTE ASSETS, LLC (Plaintiff)

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  • 07/22/2019
  • DocketNotice (of Withdrawal of Counsel); Filed by QUANEX I.G. SYSTEMS INC (Defendant); Quanex I.G. Systems, Inc., (Defendant); TRUSEAL TECHNOLOGIES INC. (Defendant) et al.

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  • 06/07/2019
  • Docketat 08:30 AM in Department D; Hearing on Motion for Leave (To File a First Amended Complaint filed on behalf of plaintiff Pointe Assets, LLC) - Not Held - Advanced and Vacated

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293 More Docket Entries
  • 11/13/2017
  • DocketProof of Service of Summons and Complaint

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  • 11/13/2017
  • DocketProof of Service of Summons and Complaint

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  • 11/13/2017
  • DocketProof of Service of Summons and Complaint

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  • 11/08/2017
  • DocketNotice of Case Management Conference; Filed by Court

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  • 11/08/2017
  • DocketSummons; Filed by Plaintiff

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  • 11/07/2017
  • DocketNotice of Case Assignment - Unlimited Civil Case

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  • 11/07/2017
  • DocketComplaint; Filed by POINTE ASSETS, LLC (Plaintiff)

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  • 11/07/2017
  • DocketCivil Case Cover Sheet

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  • 11/07/2017
  • DocketNotice of Case Management Conference; Filed by Court

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  • 11/07/2017
  • DocketNotice (of order to show cause RE failure to comply with trial court delay reduction act); Filed by Court

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Tentative Rulings

Case Number: EC067583    Hearing Date: December 11, 2020    Dept: D

TENTATIVE RULING

Calendar: 19

Date: 12/11/2020

Case No: EC067583 Trial Date: None Set

Case Name: Pointe Assets, LLC v. Benson Industries Inc., et al.

MOTION TO VACATE ARBITRATOR’S RULING

Moving Party: Defendant Viracon, Inc.

Responding Party: Plaintiff Pointe Assets, LLC

RELIEF REQUESTED:

Vacate arbitrator’s May 4, 2020 ruling on Pointe Assets’ motion objecting to the arbitrator’s jurisdiction

SUMMARY OF FACTS:

Plaintiff Pointe Assets, LLC, the successor in interest to Catalina Media Development, LLC (“CMD”), alleges that CMD owns real property in Burbank, commonly referred to as “The Pointe,” an office building and parking garage. Plaintiff alleges that in early 2006, plaintiff entered into an agreement with Krismar Construction Co. concerning construction of the Pointe, which, in turn, for the benefit of CMD, entered into a subcontract with defendant Benson to design and build an exterior curtain wall glazing system. Benson then hired for the benefit of CMD, defendant Viracon, which manufactured and supplied certain IG Units for the curtain wall glazing system. Plaintiff alleges that a sealant for the system, PIB, was manufactured and supplied to Viracon by defendants Quanex and/or Truseal.

Plaintiff alleges that the project was substantially complete in April of 2009, but in April of 2016 a tenant notified CMD’s property manager of a dirty window. It was then discovered that the problem was not dirt but film formation comprised of PID forming between the panes of class in the sealed IG units, so that there is no way to clean the film formation or repair the PIB without damaging the IG Units, and the exterior curtain wall glazing system.

The pleading alleges that Benson acknowledged in the subcontract that CMD is a third party beneficiary of that contract, and plaintiff alleges breaches of the warranties of that subcontract, as well as various theories of product liability, negligence and breach of warranty against defendants.

On April 13, 2018, the court heard a motion to compel arbitration brought by defendant Benson. There were two “joinder” documents filed. One by defendants Quanex I.G. Systems, Inc. and Truseal Technologies, Inc., and one by defendant Viracon, Inc.

On April 10, 2018, plaintiff filed a Request for Dismissal, without prejudice, of defendant Benson Industries Inc., which dismissal was entered as requested the same date.

At the hearing, the court was informed of the dismissal, and plaintiff argued that the motion to compel arbitration was accordingly moot, as defendant Benson had been dismissed and the only two defendants with an arbitration agreement were no longer in the case.

The court informed counsel that several defendants had joined in the motion to compel arbitration, and the court would continue the motion to compel arbitration from the other defendants concerning whether the motion was moot, or was to go forward. Supplemental briefing was ordered, and the matter continued to June 22, 2018.

At the hearing on June 22, 2018, the court’s tentative ruling was that the motion to compel arbitration was moot in light of the dismissal of the moving party, and to deny the “joinders” without prejudice, and indicated that if the joinder defendants represented that they would file new stand-alone motions to compel arbitration, the court would keep the stay of the matter in place pending the court’s adjudication of those motions, so long as such motions were filed within 30 days of the hearing date. At the hearing, the court asked counsel if any of the joined parties were considering filing their own motion, there was a response in the positive, and the minute order states, “Court orders the stay to remain in effect.” The minute order also states, “Court remarks that you have thirty (30) days to do so.”

On July 20, 2018, defendant Viracon filed a motion to compel arbitration, which was set for hearing on November 30, 2018. On July 23, 2018, defendants Quanex and Truseal filed a motion to compel arbitration and joinder in Viracon’s motion, which was also set for hearing on November 30, 2018.

The matters were continued to December 14, 2018, and heard. The court granted the motion by defendant Viracon, and ordered: “Plaintiff Pointe Assets, LLC and Defendant Viracon, Inc. are ordered to arbitrate this matter according to the Agreement set forth in the subject Subcontract.”

The court denied that motion to compel arbitration and joinder filed by defendants Quanex and Truseal.

The court also ordered that this action was stayed until an arbitration was had according to the court’s order.

ANALYSIS:

Defendant Viracon, Inc brings this motion arguing that an order entered in the arbitration, granting a motion objecting to the jurisdiction of the arbitrator to determine the controversy ordered to arbitration, should be vacated, based on the arbitrator here having exceeded his powers.

CCP § 1286.2 provides

“(a) Subject to Section 1286.4, the court shall vacate the award if the court determines any of the following:

(1) The award was procured by corruption, fraud or other undue means.

(2) There was corruption in any of the arbitrators.

(3) The rights of the party were substantially prejudiced by misconduct of a neutral arbitrator.

(4) The arbitrators exceeded their powers and the award cannot be corrected without affecting the merits of the decision upon the controversy submitted.

(5) The rights of the party were substantially prejudiced by the refusal of the arbitrators to postpone the hearing upon sufficient cause being shown therefor or by the refusal of the

arbitrators to hear evidence material to the controversy or by other conduct of the arbitrators contrary to the provisions of this title.

(6) An arbitrator making the award either: (A) failed to disclose within the time required for disclosure a ground for disqualification of which the arbitrator was then aware; or (B) was subject to disqualification upon grounds specified in Section 1281.91 but failed upon receipt of timely demand to disqualify himself or herself as required by that provision. However, this subdivision does not apply to arbitration proceedings conducted under a collective bargaining agreement between employers and employees or between their respective representatives.”

(Emphasis added).

"[I]n light of the strong public policy in favor of private arbitration, judicial review of an arbitrator's award is quite limited." Board of Education v. Round Valley Teachers Assn. (1996) 13 Cal.4th 269, 275.

It is the general rule that the merits of an arbitration award, either on questions of fact or of law, are not subject to judicial review. Id, citing Moncharsh v. Heily & Blase (1992) 3 Cal.4th1, 8-13.

With respect to CCP §1286.2 subdivision (4), it is recognized that great deference is due an arbitrator's decision on the merits of a controversy, but that the court retains authority to overturn awards as beyond the arbitrator's powers, "whether for an unauthorized remedy or decision on an unsubmitted issue." Advanced Micro Devices, Inc. v. Intel Corp. (1994) 9 Cal.4th 362, 375.

Defendant Viracon argues that the arbitrator in this matter in its May 4, 2020 order improperly determined that plaintiff Pointe Assets had amended its claim in the arbitration and waived its pursuit of certain claims and remedies sufficient to warrant the arbitrator to consider the amended claim and determine that what remained of the claim was not subject to arbitration. Defendant argues that this decision was in excess of the authority of the arbitrator, when the court had exclusive authority to determine arbitrability, which it had done, that a decision on the unsubmitted issue of arbitrability similarly exceeded the arbitrator’s powers, and that the arbitrator improperly failed to decide issues which were actually submitted to arbitration for determination.

This court previously ordered the matter to arbitration based on an extensive analysis of the legal authority, the allegations being pursued by plaintiff against defendant Viracon, and the conduct engaged in by plaintiff with respect to the matter, finding that plaintiff had engaged in conduct pursuant to which it was equitably estopped to deny the applicability of the arbitration provision in this matter. The court’s ruling states:

“Defendant Viracon, Inc.’s Motion to Compel Arbitration and Stay Litigation is GRANTED. The court finds that an agreement to arbitrate the controversy exists, based on a showing that equitable estoppel applies here, in that moving defendant has established that the conduct alleged in the complaint as to moving defendant is intertwined with the subject Subcontract, and that plaintiffs have alleged that this defendant had engaged in interdependent and concerted misconduct with a party to the Subcontract, Benson Industries, Inc., which is no longer a party to this matter. Plaintiff has also undertaken to amend the pleading to avoid the application of the arbitration provision, in a tacit admission that the pleading as alleged relies on interwined conduct.”

Importantly, the court’s ruling on the arbitrability was based on applicability of the Second District’s decision in Benaroya v. Willis (2018) 23 Cal.App.5th 462, which was quoted in great length in the court’s minute order of December 14, 2018, in which it ordered the controversy to arbitration, including quotation of the following critical language:

“In this appeal from the confirmation of the award, appellant contends the trial court erred because he was a nonsignatory to the arbitration agreement, and only the court, not the arbitrator, had authority to determine whether he was compelled to arbitrate as the alter ego of Benaroya. We agree and therefore reverse the judgment.” Benaroya, at 810.

….

Although a nonsignatory can be compelled to arbitrate, California caselaw is clear that “an

arbitrator has no power to determine the rights and obligations of one who is not a party to the arbitration agreement. [Citation.] The question of whether a nonsignatory is a party to an arbitration agreement is one for the trial court in the first instance.” (American Builder's Assn. v. Au-Yang (1990) 226 Cal.App.3d 170, 179, 276 Cal.Rptr. 262 (American Builder's ); see also Matthau, supra, 151 Cal.App.4th at p. 604, 60 Cal.Rptr.3d 93 [“ ‘Whether or not an arbitration agreement is operative against a person who has not signed it involves a question of “substantive arbitrability” which is to be determined by the court.’ ”]; City of Hope v. Bryan Cave, L.L.P. (2002) 102 Cal.App.4th 1356, 1369, 126 Cal.Rptr.2d 283 [“ ‘The determination of standing to arbitrate as a party to the contractual arbitration agreement is a question of law for the trial court in the first instance.’ ”].)

This rule is grounded on policy concerns explained by the court in American Builder's: “If an arbitrator, rather than a trial court, were to determine whether an arbitration provision were operative against a nonsignatory, a stranger to the agreement might be subjected to and be bound by an arbitration to which such stranger had not consented and would be without effective review.”

[Minute Order, 12/14/18, pp. 7, 8, quoting Benaroya, at 810, 812-813].

The arbitrator in this case nevertheless declined to arbitrate the controversy, based on his independent assessment, and on plaintiff having revised its claims, in a follow up to its efforts to amend the pleading, and on plaintiff representing that it was waiving all matters related to the subject subcontract. The arbitrator did not even have before him the contractual provisions at issue, as conceded in the order. In any case, the arbitrator undertook to reconsider the issue of arbitrability, when that matter and all issues it raised had been carefully considered and determined by this court, the entity with the sole authority to make that determination.

The arbitrator’s order provides, in pertinent part:

“18. Both parties acknowledge Viracon was not signatory to an arbitration agreement, however, it is significant that neither party produced any agreement between Viracon and Benson, nor disclosed the content of such agreement that might bear upon the discrete obligations of Viracon concerning the allegations in the Counterclaim and its

tie, if any, to the Krismar/Benson Agreements. Neither party drew upon such an agreement to support its positions in either the First Motion or Second Motion.

19. Upon review of the court proceedings, it is clear the court was disturbed about the motive for the different allegations in the FAC and considered the allegations in the Complaint "judicial admissions" relative to the "matter." Whatever differences exists, PA now agrees that its remedy against Viracon will not depend on the Krismar/Benson Agreements. In that respect, PA is waiving and abandoning all remedies arising from those agreements. The differences between the Complaint and PA's Viracon’s Counterclaim might give rise to potential evidence and issue preclusion disputes in future motions or at the ultimate hearing on the merits, however, this decision on the Second Motion is made without addressing those implications.

20. From the supporting documents and accepting the representations of PA's attorneys, the Arbitrator accepts PA's Counterclaim as an amended claim and concludes that PA disclaims all rights and remedies pertaining to the Krismar/Benson Agreements, will not seek any remedy against Viracon based on the Krismar/Benson Agreements and will not establish any right to recovery against Viracon based upon terms of the Krismar/Benson Agreements. As such there is no agreement requiring Viracon and PA to arbitrate the now limited remedies pertaining to the Counterclaim or the Claim.

21. Based on the foregoing, the merits of PA's Counterclaim and the amended allegations relevant to Viracon's Claim are not arbitrable, and resolution of the dispute is not within the jurisdiction and powers granted to the Arbitrator. The Second Motion is GRANTED. The COUNTERCLAIM IS DISMISSED.

22. Further, because the only claim for affirmative relief is set forth in the Counterclaim, the balance of Viracon's Claim is therefore moot. Viracon's CLAIM IS DISMISSED without prejudice.”

[Hennigh Decl., Ex. 1, Ruling on Respondents’ Second Motion Objecting to Jurisdiction, dated May 4, 2020, paras. 18-22, emphasis added].

This appears to be a decision in excess of the arbitrator’s authority in this matter, which authority was to determine the controversy between the parties, which this court had found subject to arbitration.

The moving papers also cite to Malek v. Blue Cross of California (2004) 121 Cal.App.4th 44, 56, in which it was noted, “Here, the Arbitrator exceeded his authority by reexamining whether the parties were bound by the arbitration provision…. That decision was in the province of the trial court, which had previously determined arbitrability.”

The opposition argues that given the change in the status and substance of the claim, this was appropriate, without citing any legal authority in support of such a position, particularly given this court’s previous consideration of such arguments made by plaintiff, and determination concerning the breadth of the claims to which the non-signatory was subject. The opposition seems to argue that this case is distinguishable from Benaroya and Malek because under the subject Subcontract arbitration agreement the parties agreed to follow the AAA Rules, which expressly permit the arbitrator to determine arbitrability.

As pointed out in the reply, this makes little sense, given the language in Benaroya, quoted above, which emphasizes the particular concern in cases involving non-signatories, that such a party was not afforded the opportunity to agree to permit an arbitrator to determine arbitrability. See Benaroya, at 814. Such a concern would be even weightier under the circumstances urged here, where there was no express agreement to permit the arbitrator to determine arbitrability, but a provision imposed by the arbitration rules themselves, at an even further remove from actual agreement.

Moreover, as argued in the moving papers, the Second District in Benaroya rejected an argument which relied on a corresponding JAMS rule, holding:

“Appellant contends the trial court erred in confirming the arbitration award because the decision whether a nonsignatory to an arbitration agreement can be compelled to arbitrate is a matter solely within the authority of the trial court, not the arbitrator. We agree: while the relevant JAMS rule here permits an arbitrator to determine whom among signatories to an arbitration agreement are proper parties for the dispute to be arbitrated, the rule cannot (and does not) permit the arbitrator to determine whether a nonsignatory to the arbitration agreement can be compelled to arbitrate. The authority to decide that question resides, by law, solely with the trial court.”

Benaroya, at 467.

The arbitrator here acted in excess of his jurisdiction, as a result of which the merits of plaintiff’s claims were not determined as ordered. The May 4, 2020 order will be ordered vacated.

RULING:

Motion to Vacate the Arbitrator’s May 4, 2020 Ruling is GRANTED.

The Court finds that the Arbitrator exceeded the arbitrator’s powers in declining to conduct arbitration of the claim of plaintiff, and that the award cannot be corrected without affecting the merits of the decision upon the controversy submitted, which this Court has previously found is a decision on the merits to be made in arbitration.

The Ruling on Respondents’ Second Motion Objecting to Jurisdiction, dated May 4, 2020 is vacated, and plaintiff Pointe Assets, LLC and defendant Viracon, Inc. are again ordered to submit the entire controversy between them to binding arbitration pursuant to the terms of the subject Subcontract.

The Court further orders this matter stayed in its entirety until an arbitration has been had according to this Court’s order.

GIVEN THE CORONAVIRUS CRISIS, AND TO PROMOTE APPROPRIATE SOCIAL DISTANCING, UNTIL FURTHER ORDERED, DEPARTMENT D IS ENCOURAGING AUDIO OR VIDEO APPEARANCES

Please make arrangements in advance if you wish to appear via LACourtConnect by visiting www.lacourt.org, and scheduling a remote appearance. Please note that LACourtConnect offers an audio-only appearance option at a current cost of $15.00 and a video appearance option at a cost of $23.00. Counsel and parties (including self-represented litigants) are encouraged not to personally appear, unless they have obtained advance permission of the Court. Anyone who appears in person for the hearing will be required to comply with strict social distancing measures, including, but not limited to, assigned seating, capacity limitations in the courtroom, designated waiting areas, and strictly enforced spacing in line to communicate with court staff. If no appearance is set up through LACourtConnect, or otherwise, then the Court will assume the parties are submitting on the tentative.

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