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ALAN E. SWERDLOW, ESQ, (130341)
MICHAEL A. SLATER, ESQ. (318899)
BOORNAZIAN, JENSEN & GARTHE ELECTRONICALLY
A Professional Corporation FILED
555 12" Street, Suite 1800 Superior Court of California,
Oakland, CA_ 94607 County of San Francisco
Telephone: (510) 834-4350
Facsimile: (510) 839-1897 03/04/2019,
BY: EDNALEEN ALEGRE
Attorneys for Defendants 1081-1087 MISSISSIPPI Deputy Clerk
STREET HOMEOWNERS? ASSOCIATION; BRIAN REED
JOHN T. GRIFFIN, ESQ. (149713)
EDWARD J. REID, ESQ. (276872)
HALL GRIFFIN LLP
1851 E, First Street, 10" Floor :
Santa Anna, CA 92705
Telephone: (714) 918-7000
Facsimile: (714) 918-6996
Attorneys for Defendant BRIAN REED
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN FRANCISCO
OLUSOJI FANOIKI, ) Case No. CGC-18-568750
)
Plaintiff, ) REPLY BRIEF IN SUPPORT OF
) DEFENDANTS’ MOTION TO COMPEL
vs. ) ARBITRATION AND TO STAY ACTION
) [Code Civ. Proc. § 1281.2]
1081-1087 MISSISSIPPI STREET )
HOMEOWNERS’ ASSOCIATION, et al., ) Date: March 11; 2019
) Time: 9:30 a.m.
Defendants, ) Dept: S01
)
) Complaint Filed: 8/8/18
)
Defendants 1081-1087 MISSISSIPPI STREET HOMEOWNERS’ ASSOCIATION
(“HOA”) and BRIAN REED (collectively “Defendants”) hereby submit the following Reply Brief
in support of Defendants’ Motion to Compel Arbitration and to Stay Action (“Motion”).
I. INTRODUCTION
Plaintiff makes three primary arguments in his Opposition (“Oppo.”) to Defendants’
Motion. First, Plaintiff argues that the enumerated exceptions to arbitration found in Code of Civil
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Procedure (“CCP”) section’ 1281.2 apply to remove this case from the mandatory arbitration.
Second, Plaintiff argues that Article” 11.4(A) “specifically exempt[s]” from arbitration all disputes
“related to Owner discipline subject to the procedural requirements of section 3.3, alteration
approval subject to the procedural requirements of Section 6.5, or alteration non-compliance
procedural requirements of section 6.6.” Finally, Plaintiff argues that Article 11.4(D) specifically
exempts the claims alleged from mandatory arbitration, because it is a “special dispute” as defined
by the CC&Rs.
Plaintiff's Opposition arguments rely on numerous misinterpretations of the CC&Rs and
relevant case law governing arbitration agreements in California. First, contrary to Plaintiffs
contention, the exceptions to Section 1281.2'do not take the claims alleged outside the scope of the
mandatory arbitration clause found in Article 11.4(C). Next, Articles 11.4(A) and (D) do not
exempt the claims alleged from mandatory arbitration. In fact, they compel the opposite
conclusion. Accordingly, Defendants respectfully request that this Court grant their Motion to
Compel Arbitration and to Stay Action,
Il. LEGAL ARGUMENT
A. The Enumerated Exceptions to Code of Civil Procedure Section 1281.2’s Do Not
Apply to Remove Plaintiff’s Claims From Mandatory Arbitration
Section 1281.2 requires the court to order contractual arbitration in a proper case.
(Molecular Analytical Systems v. Ciphergen Biosystems, Inc. (2010) 186 Cal.App.4th 696, 704-
705.) It provides: “[o]n petition of a party to an arbitration agreement alleging the existence of a
written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such
controversy, the court shall order the. petitioner and the respondent to arbitrate the controversy if it
determines that an agreement to arbitrate the controversy exists ... ,” unless enumerated exceptions
apply. (Code Civ. Proc., § 1281.2.) In his Opposition, Plaintiff argues that enumerated exceptions
to arbitration found in Section 1281.2 apply to remove this case from mandatory arbitration.
(Oppo. 2:20-27; 6:16-7:14.) Plaintiff's interpretation and application of the enumerated exceptions
1 Al subsequent references to Sections refer to Sections of the Code of Civil Procedure unless otherwise indicated.
? All references to Articles refer to Articles of the the First Amended Declaration of Covenants, Conditions and
Restrictions of 1081-1083-1085-1087 Mississippi Street (“CC&Rs”).
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1, Code of Civil Procedure § 1281.2, subdivision (c)
One exception to arbitration is contained in Section 1281.2, subdivision (c). “Section
1281.2, [subd.] (c), addresses the peculiar situation that arises when a controversy also affects
claims by or against other parties not bound by the arbitration agreement.” (Cronus Investments,
Inc. v, Concierge Services (2005) 35 Cal.4th 376, 393.) “It is an evenhanded law that allows the
trial court to stay arbitration proceedings while the concurrent lawsuit proceeds or stay the lawsuit
while arbitration proceeds to avoid conflicting rulings on common issues of fact and law amongst
interrelated parties,” (Jbid.) (Emphasis in original.) Application of Section 1281.2, subdivision
(c), is discretionary with the trial court. (/bid.)
In his Opposition, Plaintiff argues that Section 1281.2, subdivision (c), applies to remove
this case from mandatory arbitration. (Oppo. 6:16-7:14.) Specifically, Plaintiff argues that this
lawsuit “is already pending before this Court and involves Defendants as named [third] parties,”
(oppo. 6:24-25.) thereby removing this case from arbitration under CCP § 1281.2(c). However,
neither the HOA nor Brian Reed are “third part[ies]” within the meaning of the statute. Instead,
CCP § 1281.2(c) contemplates a situation in which a party to an arbitration agreement are also in a
court action with a third party other than the party that is subject to the arbitration agreément.
(Cronus Investments, Inc. v. Concierge Services (2005) 35 Cal.4th 376, 393 [Section
1281.2(c) addresses the peculiar situation that arises when a controversy also affects claims by or
against other parties not bound by the arbitration agreement.”]) (Emphasis added.)
Here, it is undisputed that Plaintiff and Defendants are bound by the mandatory arbitration
agreement under Article 11.4(C), Accordingly, CCP § 1281.2(c) does not apply to remove
Plaintiff's claims from the mandatory arbitration.
2. Code of Civil Procedure § 1281.2, subdivision (d)
In his Opposition, Plaintiff also argues this case is not subject to mandatory arbitration
under the exception provided in CCP § 1281.2(d), which provides, in pertinent part:
If the court determines that there are other issues between the petitioner and the
respondent which are not subject to arbitration and which are the subject of a
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pending action or special proceeding between the petitioner and the respondent and
that a determination of such issues may make the arbitration unnecessary, the court
may delay its order to arbitrate until the determination of such other issues or until
such earlier time as the court specifies,
Specifically, Plaintiff argues that Plaintiff's FEHA and Unruh Civil Rights discrimination
claims “cannot be subject to mandatory arbitration,” (oppo. 5:24-28.) because “Defendant’s cannot
establish that disparate and discriminatory conduct is part of the Governing Documents or any
types of disputes enumerated therein. (Oppo. 7:7-10.) Once again, Plaintiff's interpretation and
application of CCP § 1281.2(d) cites to no authority, is misguided, and should be disregarded by
this Court.
As a preliminary matter, Plaintiff misrepresents Defendants’ burden on their Motion to
Compel Arbitration. Defendants’ burden on their Motion to Compel Arbitration is met simply by
demonstrating the existence of a bona fide arbitration agreement, not whether that agreement
specifically covers all claims petitioners want arbitrated. (Laymon v. J. Rockcliff, Inc. (2017) 12
Cal. App. Sth 812, 824 [court should not consider whether an agreement to arbitrate covers a
particular dispute in determining if plaintiff has met her burden]; see also Condee v. Longwood
Management Corp. (2001) 88 Cal. App. 4th 215, 219 [“A plain reading of [Section 1281.2]
indicates that . . . the court is only required to make a finding of the agreement’s existence, not an
evidentiary determination of its validity.”])
Further, Defendants’ maintain that any and all of Defendants’ alleged conduct was “related
to the Governing Documents [CC&Rs]” and, therefore, subject to mandatory arbitration under
Article 11.4(C). (Exhibit E Article 11.4(C).) This is because all claims raised by Plaintiff in his
Complaint relate to Defendants’ alleged violation of the Governing Documents in connection with
their Article 3.3 enforcement obligations. Specifically, Plaintiff claims that Defendants violated
the Governing Document by: entering his property without notice (id. at §§ 18, 21); failing to
follow election procedures (id. at ff 18); assessing fines against him for roof leaks (id. at ¥ 20);
assessing fines against him for failure to remove his personal property from Common Areas
(ibid,); removing his security cameras (id. at § 25); and failing to provide Plaintiff with proper
notice of HOA meetings, inspections and other matters (id. at {{ 28, 29, 33).
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Even if plausible arguments can be made that Defendants’ alleged discriminatory conduct
do not “relate to the governing documents” thereby triggering arbitration under Article 11.4(C),
which Defendants deny, as pled the claims made in the Complaint must be arbitrated. The
California Supreme Court has held that if “all of the significant issues” in an arbitration demand
“arise out of the contract,” then they are governed by the terms of the contract, “notwithstanding
the fact that many of the causes of action are framed in tort.” Dryer v. Los Angeles Rams (1985)
40 Cal. 3d 406, 418, FN 12; see also Molecular Analytical Sys. v. Ciphergen Biosystems, Inc.
(2010) 186 Cal. App. 4th 696, 712-14. Buckhorn vy. St. Jude Heritage Medical Group (2004) 121
Cal. App. 4th 1401, 1406 (“Because [defendant] failed to demonstrate his tort claims were “wholly
independent” of the employment agreement, and any doubts must be resolved in favor of
arbitration, we conclude all of [defendant’s] claims must be submitted to arbitration.”).
Accordingly, CCP § 1281.2(d) does not apply to remove Plaintiff's claims from the
mandatory arbitration.
B. Article 11.4(A) Does Not Exempt the Claims Alleged in the Complaint From
Mandatory Arbitration
Article 11.4(A) provides, in pertinent part: “In any dispute between the Association and an
Owner which is not governed by the Owner discipline procedures described in Section 3.3, the
alteration approval procedures described in Section 6.5, or the alteration non-compliance
procedures described in Section 6.6, either party may request the other party to meet and confer in
an effort to resolve the dispute.” In his Opposition, Plaintiff erroneously argues that the “internal
procedure” articulated under Article 11.4(A) “specifically exempt[s]” from arbitration all disputes
here. (Oppo. 4:2-10.)
Article 11.4(A) does not exempt the claims alleged in the Complaint from mandatory
arbitration. In fact, Article 11.4(A) does not require anything. Article 11.4(A) merely recognizes
Plaintiffs right to choose to resolve certain disputes via an “internal procedure” meet and confer
process. (Exhibit E Article 11.4(A).) Specifically excluded from the “internal procedure” meet
3 See Wolitarsky v. Blue Cross of Calif. (1997) 53 Cal. App. 4th 338, 348 [agreement to arbitrate “any dispute ...
regarding” benefits decisions upheld to include civil rights claims].)
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and confer process are those disputes that are governed by Articles 3.3, 6.5 and 6.6. Here, Article
3.3 is clearly triggered, since Defendants’ alleged conduct came pursuant to their Article 3.3
enforcement obligations. Additionally, because Plaintiff's unauthorized alterations (Article 6.5)
and non-compliance (Article 6.6) are at the heart of this dispute, the “internal procedure” in Article
11.4(A) is not available to him.’ (Exhibit E Articles 6.5 and 6.6.)
Article 11.4(A) must be ready together with Article 11.4(C), which requires arbitration. A
straightforward application of both compels the conclusion that the claims alleged in this lawsuit
are subject to mandatory arbitration.
Cc Article 11.4(D) Does Not Exempt the Claims Alleged in the Complaint From
Mandatory Arbitration
Finally, Plaintiff argues that Article 11.4(D) specifically exempts the claims alleged from
mandatory arbitration, because it is a “special dispute” as defined by the CC&Rs. (Oppo. 4:26-
5:13.) Again, Plaintiff's interpretation of the CC&Rs is misguided. The issues that are
specifically exempt from arbitration are listed in Article 11.4(D) and would apply only to
Plaintiff's motion for preliminary injunction (and only to provide interim relief pending the
outcome of the lawsuit), (Exhibit E Article 11.4(D).) Accordingly, Article 11.4(D) does not
exempt the claims alleged from mandatory arbitration under Article 11.4(C).
D. Policy and Precedent Favor Mandatory Arbitration
California maintains a strong policy favoring arbitration as an efficient and inexpensive
method of dispute resolution. See, e.g., Ericksen, Arubuthnot, McCarthy, Kearny & Walsh, Inc. v.
100 Oak Street (1983) 35 Cal. 3d 312, 322. In affirming this policy, the California Supreme Court
further instructs lower courts to “indulge every intendment [of the parties] to give effect to such
proceedings” in the face of a conflict. (Doers v. Golden Gate Bridge etc. Dist. (1979) 23 Cal. 3d
180, 189; see also Larkin v, Williams, Woolley, Cogswell, Nakazawa & Russell (1999) 76 Cal.
App. 4th 227, 230 [All “doubts as to the scope of an agreement to arbitrate are to be resolved in
* To be sure, Articles 6.5 and 6.6 do not exempt arbitration at all. In fact, these Articles refer only to a Special Owner
Meeting as the procedure for addressing Association decisions on alterations and non-compliance of the alterations
requirement, If Plaintiff argues that mandatory arbitration does not apply to disputes arising out of Articles 6.5 and
6.6, that would suggest the Special Owner meeting procedure referenced in these sections is the final procedure and
cannot be challenged further through either a civil action or arbitration.
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favor of arbitration.”]. Indeed, once the court has determined the agreement exists, the court must
grant the petition. (Code Civ. Proc. § 1281.2; see Dryer v. Los Angeles Rams (1985) 40 Cal. 3d
406, 414 [holding that courts should not deny a motion to compel arbitration pursuant to a valid
arbitration agreement “unless it may be said with positive assurance that the arbitration clause is
not susceptible of an interpretation that covers the asserted dispute. . . .”].) The California
Supreme Court has held that binding arbitration covenants in common interest development
CC&Rs operate as enforceable contracts against the homeowners’ associations and its members
despite that the homeowners are not in privity of contract. Pinnacle Museum Tower Assn. v.
Pinnacle Mkt, Dev. (US), LLC (2012) 55 Cal. 4th 223, 246.
Accordingly, policy and precedent favor this Court’s enforcement of the plain meaning of
the mandatory arbitration clause of Article 11.4(C). As such, Defendants Motion to Compel
Arbitration should be granted.
Ill. CONCLUSION
For the foregoing reasons, Defendants respectfully request that this Court issue an order
compelling Plaintiff to arbitrate the claims alleged in Plaintiffs Complaint. Defendants also move
for an order staying further proceedings in this matter pending completion of final and binding
arbitration, whether or not this Motion results in a severance of arbitrable and inarbitrable claims.
(Code Civ. Proc., § 1281.4; Madden v. Kaiser Foundation Hospitals (1976) 17 Cal.3d 699, 714
[when there is a severance of arbitrable from inarbitrable claims, the trial court has the discretion
to stay proceedings on the inarbitrable claims pending resolution of the arbitration].)
DATED: March 4, 2019 BOORNAZIAN, JENSEN & GARTHE
A Professional Corporation.
1p
ee je Lp
LAN E. SWERDLOW, ESQ.
MICHAEL A. SLATER, ESQ
Attorneys for Defendants
1081-1087 MISSISSIPPI STREET
HOMEOWNERS’ ASSOCIATION;
BRIAN REED
MAS | 28237\796760
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PROOF OF SERVICE
FANOIKI vs. 1081-1087 MISSISSIPPI
San Francisco Superior Court Superior Court Action No. CGC-18-568750
Iam employed in the County of Alameda, State of California. I am oyer the age of
18 years and not a party to the within action. My business address is 555 12" Street, Suite
1800, Oakland, CA 94607.
On the date listed below, I served the following document(s):
REPLY BRIEF IN SUPPORT OF DEFENDANTS’ MOTION TO COMPEL
ARBITRATION AND TO STAY ACTION [Code Civ. Proc. § 1281.2]
Oo By U.S. MAIL: By placing a true copy of the document(s) listed above, enclosed in a
sealed envelope, addressed as set forth below, for collection and mailing on the date and at the
business address shown above following our ordinary business practices. I am readily familiar
with this business’ practice for collection and processing of correspondence for mailing with the
United States Postal Service. On the same day that a sealed envelope is placed for collection and
mailing, it is deposited in the ordinary course of business with the United States Postal Service
with postage fully prepaid.
Oo By FACSIMILE: By having a true copy of the document(s) listed above transmitted by
facsimile to the person(s) at the facsimile number(s) set forth below before 5:00 p.m. The
transmission was reported as complete without error by a report issued by the transmitting
facsimile machine. A true and correct copy of the transmission report is attached hereto.
Oo By OVERNIGHT DELIVERY: By having a true copy of the document(s) listed
above delivered by an overnight delivery service to the person(s) at the address(es) set forth
below.
oO By ELECTRONIC SERVICE: By having the document(s) listed above transmitted
electronically to the party(ies), at the electronic mailing addresses indicated below. Said
transmission was reported as complete and without error.
BR By ELECTRONIC FILE TRANSFER INTO LEXIS NEXIS FILE & SERVE
SYSTEM: By uploading a true copy the document(s) listed above with instructions to serve
said document(s) to the service list as maintained by the Lexis Nexis File & Serve System.
(https://fileandserve.lexisnexis.com)
Attorneys for Plaintiff Co-Counsel to 1081-1087 Mississippi Street
Na’il Benjamin, Esq. HOA and Brian Reed
Allyssa Villanueva, Esq. John T. Griffin, Esq.
BENJAMIN LAW GROUP Edward J. Reid, Esq.
1290 B Street, Suite 314 HALL GRIFFIN LLP
Hayward, CA 94541 1851 E, First Street, 10th Floor
Santa Anna, CA 92705
Tel: (510) 897-9967/ Fax: (510) 439-2632
nbenjamin@benjaminlawgroup.com Tel: (714) 918-7000; Fax: (714) 918-6996
allyssa@benjaminlawgroup.com ereid@hallgriffin.com
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I declare under penalty of perjury under the laws of the State of California that the
foregoing is true and correct.
Executed at Oakland, California, on March 4, 2019. >
fo }
28237\796760
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Cem INA NH BP Dw 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ALAN E. SWERDLOW, ESQ, (130341) MICHAEL A. SLATER, ESQ. (318899) BOORNAZIAN, JENSEN & GARTHE ELECTRONICALLY A Professional Corporation FILED 555 12" Street, Suite 1800 Superior Court of California, Oakland, CA_ 94607 County of San Francisco Telephone: (510) 834-4350 Facsimile: (510) 839-1897 03/04/2019, BY: EDNALEEN ALEGRE Attorneys for Defendants 1081-1087 MISSISSIPPI Deputy Clerk STREET HOMEOWNERS? ASSOCIATION; BRIAN REED JOHN T. GRIFFIN, ESQ. (149713) EDWARD J. REID, ESQ. (276872) HALL GRIFFIN LLP 1851 E, First Street, 10" Floor : Santa Anna, CA 92705 Telephone: (714) 918-7000 Facsimile: (714) 918-6996 Attorneys for Defendant BRIAN REED SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN FRANCISCO OLUSOJI FANOIKI, ) Case No. CGC-18-568750 ) Plaintiff, ) REPLY BRIEF IN SUPPORT OF ) DEFENDANTS’ MOTION TO COMPEL vs. ) ARBITRATION AND TO STAY ACTION ) [Code Civ. Proc. § 1281.2] 1081-1087 MISSISSIPPI STREET ) HOMEOWNERS’ ASSOCIATION, et al., ) Date: March 11; 2019 ) Time: 9:30 a.m. Defendants, ) Dept: S01 ) ) Complaint Filed: 8/8/18 ) Defendants 1081-1087 MISSISSIPPI STREET HOMEOWNERS’ ASSOCIATION (“HOA”) and BRIAN REED (collectively “Defendants”) hereby submit the following Reply Brief in support of Defendants’ Motion to Compel Arbitration and to Stay Action (“Motion”). I. INTRODUCTION Plaintiff makes three primary arguments in his Opposition (“Oppo.”) to Defendants’ Motion. First, Plaintiff argues that the enumerated exceptions to arbitration found in Code of Civil -l- REPLY BRIEF IN SUPPORT OF DEFENDANTS’ MOTION TO COMPEL ARBITRATION AND STAY ACTION - Case No. CGC-18-568750 -UF WY wv Co oe ND 10 ie 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Procedure (“CCP”) section’ 1281.2 apply to remove this case from the mandatory arbitration. Second, Plaintiff argues that Article” 11.4(A) “specifically exempt[s]” from arbitration all disputes “related to Owner discipline subject to the procedural requirements of section 3.3, alteration approval subject to the procedural requirements of Section 6.5, or alteration non-compliance procedural requirements of section 6.6.” Finally, Plaintiff argues that Article 11.4(D) specifically exempts the claims alleged from mandatory arbitration, because it is a “special dispute” as defined by the CC&Rs. Plaintiff's Opposition arguments rely on numerous misinterpretations of the CC&Rs and relevant case law governing arbitration agreements in California. First, contrary to Plaintiffs contention, the exceptions to Section 1281.2'do not take the claims alleged outside the scope of the mandatory arbitration clause found in Article 11.4(C). Next, Articles 11.4(A) and (D) do not exempt the claims alleged from mandatory arbitration. In fact, they compel the opposite conclusion. Accordingly, Defendants respectfully request that this Court grant their Motion to Compel Arbitration and to Stay Action, Il. LEGAL ARGUMENT A. The Enumerated Exceptions to Code of Civil Procedure Section 1281.2’s Do Not Apply to Remove Plaintiff’s Claims From Mandatory Arbitration Section 1281.2 requires the court to order contractual arbitration in a proper case. (Molecular Analytical Systems v. Ciphergen Biosystems, Inc. (2010) 186 Cal.App.4th 696, 704- 705.) It provides: “[o]n petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such controversy, the court shall order the. petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists ... ,” unless enumerated exceptions apply. (Code Civ. Proc., § 1281.2.) In his Opposition, Plaintiff argues that enumerated exceptions to arbitration found in Section 1281.2 apply to remove this case from mandatory arbitration. (Oppo. 2:20-27; 6:16-7:14.) Plaintiff's interpretation and application of the enumerated exceptions 1 Al subsequent references to Sections refer to Sections of the Code of Civil Procedure unless otherwise indicated. ? All references to Articles refer to Articles of the the First Amended Declaration of Covenants, Conditions and Restrictions of 1081-1083-1085-1087 Mississippi Street (“CC&Rs”). -2- REPLY BRIEF IN SUPPORT OF DEFENDANTS’ MOTION TO COMPEL ARBITRATION AND STAY ACTION - Case No. CGC-18-568750 -is misguided and should be disregarded by this Court. 1, Code of Civil Procedure § 1281.2, subdivision (c) One exception to arbitration is contained in Section 1281.2, subdivision (c). “Section 1281.2, [subd.] (c), addresses the peculiar situation that arises when a controversy also affects claims by or against other parties not bound by the arbitration agreement.” (Cronus Investments, Inc. v, Concierge Services (2005) 35 Cal.4th 376, 393.) “It is an evenhanded law that allows the trial court to stay arbitration proceedings while the concurrent lawsuit proceeds or stay the lawsuit while arbitration proceeds to avoid conflicting rulings on common issues of fact and law amongst interrelated parties,” (Jbid.) (Emphasis in original.) Application of Section 1281.2, subdivision (c), is discretionary with the trial court. (/bid.) In his Opposition, Plaintiff argues that Section 1281.2, subdivision (c), applies to remove this case from mandatory arbitration. (Oppo. 6:16-7:14.) Specifically, Plaintiff argues that this lawsuit “is already pending before this Court and involves Defendants as named [third] parties,” (oppo. 6:24-25.) thereby removing this case from arbitration under CCP § 1281.2(c). However, neither the HOA nor Brian Reed are “third part[ies]” within the meaning of the statute. Instead, CCP § 1281.2(c) contemplates a situation in which a party to an arbitration agreement are also in a court action with a third party other than the party that is subject to the arbitration agreément. (Cronus Investments, Inc. v. Concierge Services (2005) 35 Cal.4th 376, 393 [Section 1281.2(c) addresses the peculiar situation that arises when a controversy also affects claims by or against other parties not bound by the arbitration agreement.”]) (Emphasis added.) Here, it is undisputed that Plaintiff and Defendants are bound by the mandatory arbitration agreement under Article 11.4(C), Accordingly, CCP § 1281.2(c) does not apply to remove Plaintiff's claims from the mandatory arbitration. 2. Code of Civil Procedure § 1281.2, subdivision (d) In his Opposition, Plaintiff also argues this case is not subject to mandatory arbitration under the exception provided in CCP § 1281.2(d), which provides, in pertinent part: If the court determines that there are other issues between the petitioner and the respondent which are not subject to arbitration and which are the subject of a 3- REPLY BRIEF IN SUPPORT OF DEFENDANTS’ MOTION TO COMPEL ARBITRATION AND STAY ACTION - Case No, CGC-18-568750 -aK Coe IN Aw 10 iat 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 pending action or special proceeding between the petitioner and the respondent and that a determination of such issues may make the arbitration unnecessary, the court may delay its order to arbitrate until the determination of such other issues or until such earlier time as the court specifies, Specifically, Plaintiff argues that Plaintiff's FEHA and Unruh Civil Rights discrimination claims “cannot be subject to mandatory arbitration,” (oppo. 5:24-28.) because “Defendant’s cannot establish that disparate and discriminatory conduct is part of the Governing Documents or any types of disputes enumerated therein. (Oppo. 7:7-10.) Once again, Plaintiff's interpretation and application of CCP § 1281.2(d) cites to no authority, is misguided, and should be disregarded by this Court. As a preliminary matter, Plaintiff misrepresents Defendants’ burden on their Motion to Compel Arbitration. Defendants’ burden on their Motion to Compel Arbitration is met simply by demonstrating the existence of a bona fide arbitration agreement, not whether that agreement specifically covers all claims petitioners want arbitrated. (Laymon v. J. Rockcliff, Inc. (2017) 12 Cal. App. Sth 812, 824 [court should not consider whether an agreement to arbitrate covers a particular dispute in determining if plaintiff has met her burden]; see also Condee v. Longwood Management Corp. (2001) 88 Cal. App. 4th 215, 219 [“A plain reading of [Section 1281.2] indicates that . . . the court is only required to make a finding of the agreement’s existence, not an evidentiary determination of its validity.”]) Further, Defendants’ maintain that any and all of Defendants’ alleged conduct was “related to the Governing Documents [CC&Rs]” and, therefore, subject to mandatory arbitration under Article 11.4(C). (Exhibit E Article 11.4(C).) This is because all claims raised by Plaintiff in his Complaint relate to Defendants’ alleged violation of the Governing Documents in connection with their Article 3.3 enforcement obligations. Specifically, Plaintiff claims that Defendants violated the Governing Document by: entering his property without notice (id. at §§ 18, 21); failing to follow election procedures (id. at ff 18); assessing fines against him for roof leaks (id. at ¥ 20); assessing fines against him for failure to remove his personal property from Common Areas (ibid,); removing his security cameras (id. at § 25); and failing to provide Plaintiff with proper notice of HOA meetings, inspections and other matters (id. at {{ 28, 29, 33). -4- REPLY BRIEF IN SUPPORT OF DEFENDANTS’ MOTION TO COMPEL ARBITRATION AND STAY ACTION - Case No, CGC-18-568750 -wK a aA w Even if plausible arguments can be made that Defendants’ alleged discriminatory conduct do not “relate to the governing documents” thereby triggering arbitration under Article 11.4(C), which Defendants deny, as pled the claims made in the Complaint must be arbitrated. The California Supreme Court has held that if “all of the significant issues” in an arbitration demand “arise out of the contract,” then they are governed by the terms of the contract, “notwithstanding the fact that many of the causes of action are framed in tort.” Dryer v. Los Angeles Rams (1985) 40 Cal. 3d 406, 418, FN 12; see also Molecular Analytical Sys. v. Ciphergen Biosystems, Inc. (2010) 186 Cal. App. 4th 696, 712-14. Buckhorn vy. St. Jude Heritage Medical Group (2004) 121 Cal. App. 4th 1401, 1406 (“Because [defendant] failed to demonstrate his tort claims were “wholly independent” of the employment agreement, and any doubts must be resolved in favor of arbitration, we conclude all of [defendant’s] claims must be submitted to arbitration.”). Accordingly, CCP § 1281.2(d) does not apply to remove Plaintiff's claims from the mandatory arbitration. B. Article 11.4(A) Does Not Exempt the Claims Alleged in the Complaint From Mandatory Arbitration Article 11.4(A) provides, in pertinent part: “In any dispute between the Association and an Owner which is not governed by the Owner discipline procedures described in Section 3.3, the alteration approval procedures described in Section 6.5, or the alteration non-compliance procedures described in Section 6.6, either party may request the other party to meet and confer in an effort to resolve the dispute.” In his Opposition, Plaintiff erroneously argues that the “internal procedure” articulated under Article 11.4(A) “specifically exempt[s]” from arbitration all disputes here. (Oppo. 4:2-10.) Article 11.4(A) does not exempt the claims alleged in the Complaint from mandatory arbitration. In fact, Article 11.4(A) does not require anything. Article 11.4(A) merely recognizes Plaintiffs right to choose to resolve certain disputes via an “internal procedure” meet and confer process. (Exhibit E Article 11.4(A).) Specifically excluded from the “internal procedure” meet 3 See Wolitarsky v. Blue Cross of Calif. (1997) 53 Cal. App. 4th 338, 348 [agreement to arbitrate “any dispute ... regarding” benefits decisions upheld to include civil rights claims].) 5. REPLY BRIEF IN SUPPORT OF DEFENDANTS’ MOTION TO COMPEL ARBITRATION AND STAY ACTION - Case No, CGC-18-568750 -WON a nA Ww and confer process are those disputes that are governed by Articles 3.3, 6.5 and 6.6. Here, Article 3.3 is clearly triggered, since Defendants’ alleged conduct came pursuant to their Article 3.3 enforcement obligations. Additionally, because Plaintiff's unauthorized alterations (Article 6.5) and non-compliance (Article 6.6) are at the heart of this dispute, the “internal procedure” in Article 11.4(A) is not available to him.’ (Exhibit E Articles 6.5 and 6.6.) Article 11.4(A) must be ready together with Article 11.4(C), which requires arbitration. A straightforward application of both compels the conclusion that the claims alleged in this lawsuit are subject to mandatory arbitration. Cc Article 11.4(D) Does Not Exempt the Claims Alleged in the Complaint From Mandatory Arbitration Finally, Plaintiff argues that Article 11.4(D) specifically exempts the claims alleged from mandatory arbitration, because it is a “special dispute” as defined by the CC&Rs. (Oppo. 4:26- 5:13.) Again, Plaintiff's interpretation of the CC&Rs is misguided. The issues that are specifically exempt from arbitration are listed in Article 11.4(D) and would apply only to Plaintiff's motion for preliminary injunction (and only to provide interim relief pending the outcome of the lawsuit), (Exhibit E Article 11.4(D).) Accordingly, Article 11.4(D) does not exempt the claims alleged from mandatory arbitration under Article 11.4(C). D. Policy and Precedent Favor Mandatory Arbitration California maintains a strong policy favoring arbitration as an efficient and inexpensive method of dispute resolution. See, e.g., Ericksen, Arubuthnot, McCarthy, Kearny & Walsh, Inc. v. 100 Oak Street (1983) 35 Cal. 3d 312, 322. In affirming this policy, the California Supreme Court further instructs lower courts to “indulge every intendment [of the parties] to give effect to such proceedings” in the face of a conflict. (Doers v. Golden Gate Bridge etc. Dist. (1979) 23 Cal. 3d 180, 189; see also Larkin v, Williams, Woolley, Cogswell, Nakazawa & Russell (1999) 76 Cal. App. 4th 227, 230 [All “doubts as to the scope of an agreement to arbitrate are to be resolved in * To be sure, Articles 6.5 and 6.6 do not exempt arbitration at all. In fact, these Articles refer only to a Special Owner Meeting as the procedure for addressing Association decisions on alterations and non-compliance of the alterations requirement, If Plaintiff argues that mandatory arbitration does not apply to disputes arising out of Articles 6.5 and 6.6, that would suggest the Special Owner meeting procedure referenced in these sections is the final procedure and cannot be challenged further through either a civil action or arbitration. -6- REPLY BRIEF IN SUPPORT OF DEFENDANTS’ MOTION TO COMPEL ARBITRATION AND STAY ACTION - Case No. CGC-18-568750 -kw VN Coe NA favor of arbitration.”]. Indeed, once the court has determined the agreement exists, the court must grant the petition. (Code Civ. Proc. § 1281.2; see Dryer v. Los Angeles Rams (1985) 40 Cal. 3d 406, 414 [holding that courts should not deny a motion to compel arbitration pursuant to a valid arbitration agreement “unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. . . .”].) The California Supreme Court has held that binding arbitration covenants in common interest development CC&Rs operate as enforceable contracts against the homeowners’ associations and its members despite that the homeowners are not in privity of contract. Pinnacle Museum Tower Assn. v. Pinnacle Mkt, Dev. (US), LLC (2012) 55 Cal. 4th 223, 246. Accordingly, policy and precedent favor this Court’s enforcement of the plain meaning of the mandatory arbitration clause of Article 11.4(C). As such, Defendants Motion to Compel Arbitration should be granted. Ill. CONCLUSION For the foregoing reasons, Defendants respectfully request that this Court issue an order compelling Plaintiff to arbitrate the claims alleged in Plaintiffs Complaint. Defendants also move for an order staying further proceedings in this matter pending completion of final and binding arbitration, whether or not this Motion results in a severance of arbitrable and inarbitrable claims. (Code Civ. Proc., § 1281.4; Madden v. Kaiser Foundation Hospitals (1976) 17 Cal.3d 699, 714 [when there is a severance of arbitrable from inarbitrable claims, the trial court has the discretion to stay proceedings on the inarbitrable claims pending resolution of the arbitration].) DATED: March 4, 2019 BOORNAZIAN, JENSEN & GARTHE A Professional Corporation. 1p ee je Lp LAN E. SWERDLOW, ESQ. MICHAEL A. SLATER, ESQ Attorneys for Defendants 1081-1087 MISSISSIPPI STREET HOMEOWNERS’ ASSOCIATION; BRIAN REED MAS | 28237\796760 -T- REPLY BRIEF IN SUPPORT OF DEFENDANTS’ MOTION TO COMPEL ARBITRATION AND STAY ACTION - Case No. CGC-18-568750 -Fw nN xa aA Ww PROOF OF SERVICE FANOIKI vs. 1081-1087 MISSISSIPPI San Francisco Superior Court Superior Court Action No. CGC-18-568750 Iam employed in the County of Alameda, State of California. I am oyer the age of 18 years and not a party to the within action. My business address is 555 12" Street, Suite 1800, Oakland, CA 94607. On the date listed below, I served the following document(s): REPLY BRIEF IN SUPPORT OF DEFENDANTS’ MOTION TO COMPEL ARBITRATION AND TO STAY ACTION [Code Civ. Proc. § 1281.2] Oo By U.S. MAIL: By placing a true copy of the document(s) listed above, enclosed in a sealed envelope, addressed as set forth below, for collection and mailing on the date and at the business address shown above following our ordinary business practices. I am readily familiar with this business’ practice for collection and processing of correspondence for mailing with the United States Postal Service. On the same day that a sealed envelope is placed for collection and mailing, it is deposited in the ordinary course of business with the United States Postal Service with postage fully prepaid. Oo By FACSIMILE: By having a true copy of the document(s) listed above transmitted by facsimile to the person(s) at the facsimile number(s) set forth below before 5:00 p.m. The transmission was reported as complete without error by a report issued by the transmitting facsimile machine. A true and correct copy of the transmission report is attached hereto. Oo By OVERNIGHT DELIVERY: By having a true copy of the document(s) listed above delivered by an overnight delivery service to the person(s) at the address(es) set forth below. oO By ELECTRONIC SERVICE: By having the document(s) listed above transmitted electronically to the party(ies), at the electronic mailing addresses indicated below. Said transmission was reported as complete and without error. BR By ELECTRONIC FILE TRANSFER INTO LEXIS NEXIS FILE & SERVE SYSTEM: By uploading a true copy the document(s) listed above with instructions to serve said document(s) to the service list as maintained by the Lexis Nexis File & Serve System. (https://fileandserve.lexisnexis.com) Attorneys for Plaintiff Co-Counsel to 1081-1087 Mississippi Street Na’il Benjamin, Esq. HOA and Brian Reed Allyssa Villanueva, Esq. John T. Griffin, Esq. BENJAMIN LAW GROUP Edward J. Reid, Esq. 1290 B Street, Suite 314 HALL GRIFFIN LLP Hayward, CA 94541 1851 E, First Street, 10th Floor Santa Anna, CA 92705 Tel: (510) 897-9967/ Fax: (510) 439-2632 nbenjamin@benjaminlawgroup.com Tel: (714) 918-7000; Fax: (714) 918-6996 allyssa@benjaminlawgroup.com ereid@hallgriffin.com -8- REPLY BRIEF IN SUPPORT OF DEFENDANTS’ MOTION TO COMPEL ARBITRATION AND STAY ACTION - Case No. CGC-18-568750 -oC oe IND 10 ie 12 13 14 15 16 17 19 20 21 2 23 24 25 26 27 28 I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed at Oakland, California, on March 4, 2019. > fo } 28237\796760 -9- REPLY BRIEF IN SUPPORT OF DEFENDANTS’ MOTION TO COMPEL ARBITRATION AND STAY ACTION - Case No. CGC-18-568750 -