Allen v. Belillti CA2/4 ( 2020 )

Filed 11/23/20 Allen v. Belillti CA2/4
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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(a). This
opinion has not been certified for publication or ordered published for purposes of rule 8.1115(a).
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FOUR
DIAHANNA ALLEN, B304455
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No.
v. 19GDCV00161)
ORAN BELILLTI, et al.,
Defendants and Appellants.
APPEAL from an order of the Superior Court of Los
Angeles County, Ralph C. Hofer, Judge. Affirmed.
Levison Arshonsky & Kurtz, David Krol, for Plaintiff and
Respondent.
Collins, Ford, Michael D. Collins for Defendants and
Appellants.
INTRODUCTION
Plaintiff and respondent Diahanna Allen is the owner of
two residential properties in Glendale: 1538 Highland Avenue
(the 1538 Property) and 1613 Highland Avenue (the 1613
Property). Allen hired defendant and appellant Ortam
Construction, Inc. (Ortam) to remodel both properties, and signed
a series of contracts in connection with the remodeling projects.
Based on allegedly defective, shoddy, and incomplete work, Allen
sued Ortam, as well as defendants and appellants Oran Belillti
(CFO of Ortam), Shalom Belillti (Oran’s father and CEO of
Ortam), and Sandra Belillti and Jacqueline Belillti (the spouses
of Oran and Shalom, respectively)1, for elder abuse2, breach of
contract, and unfair business practices.
Ortam and Oran moved to compel arbitration based on
arbitration provisions in the home improvement contracts. The
trial court denied the motions, holding: (1) no arbitration
agreement exists for the 1613 Property based on the explicit
language in the contracts; and (2) the arbitration agreement for
the 1538 Property is unconscionable, and therefore
unenforceable.
Ortam and the Individual Defendants do not challenge the
trial court’s ruling that the 1613 Property contract does not
contain an enforceable arbitration provision, and appeal only
from the trial court’s denial of arbitration of claims relating to the
1538 Property contract. In their opening brief, however, they fail
to address the dispositive issue: whether substantial evidence
supported the trial court’s finding that the arbitration provision
in the 1538 Property agreement was unenforceable due to
1 Because they share a surname, we will refer to Belillti
family members by their first names only when referring to any
of them individually, and as the “Individual Defendants” when
referring to them collectively.
2 Allen was 87 years old at the time she filed her complaint.
2
unconscionability. We conclude appellants forfeited their
argument on unconscionability, and therefore affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Allen filed the operative complaint alleging causes of action
against Oran and the Individual Defendants for (1) elder abuse,
seeking treble damages and punitive damages; (2) breach of
contract (1538 Property); (3) breach of contract (1613 Property);
and (4) and unfair business practices.
The complaint alleges, in 2012, Allen met with Oran and
Shalom to discuss a remodeling project for the 1538 Property. In
January 2013, Allen also signed a kitchen remodeling contract for
the 1613 Property. In 2013, Ortam “began performing services in
connection with the 1538 Property . . . but did not sign a home
improvement contract with respect to the 1538 Property until
May[] 2014.” The complaint further alleges: “[r]ecognizing that
[Allen] had financial resources at her disposal, [Allen] is informed
and believes, and on that basis alleges, that Oran and Shalom
repeatedly visited [Allen] at the 1538 Property in order to extract
payments from her and to have her sign extremely confusing
contracts/change orders for the 1538 and 1613 Properties,
without performing the services which Defendants promised to
perform.” The Individual Defendants took her to dinner
approximately once a month and “although [the Individual
Defendants] did so under the pretense of friendship, they were in
reality acting in order to further a scheme of elder abuse.” The
complaint alleges Ortam and the Individual Defendants
“extracted nearly $900,000 from [Allen] in connection with the
1538 and 1613 Properties, but [Allen] received minimal, if any,
value for the services which were performed at either Property.”
Ortam moved to compel arbitration based on arbitration
provisions in the home improvement contracts. Allen opposed the
motion, arguing (1) Ortam failed to meet its burden of
3
establishing the existence of an agreement to arbitrate; (2) the
arbitration agreements were procedurally and substantively
unconscionable; and (3) the causes of action against the
Individual Defendants were not arbitrable and those claims arise
out of the same series of transactions and create a possibility of
conflicting rulings. Allen submitted a declaration in support of
her opposition, stating she “did not understand” the terms of the
contracts, but she “signed the contract documents related to the
1538 Property wherever [Oran] told [her] to because [she] trusted
him, and because [she] believed [she] had no choice but to sign
them, because Ortam and its representatives had begun
performing services in connection with the 1538 Property back in
2013.” Oran filed a separate motion to compel arbitration, and
the Individual Defendants (other than Oran) filed joinders in
Ortam’s and Oran’s motions.
In its tentative ruling, the court granted Ortam’s motion
“only as to matters encompassed in the Additional Description
Form dated May 15, 2014 [for the 1538 Property] between
plaintiff Allen and moving party Ortam Construction, Inc.” and
denied the “motion as to all other matters.” The court also denied
Oran’s motion because he “failed to meet his burden to establish
the existence of an agreement to arbitrate, as discussed above, as
the only agreement to arbitrate established by the contract
documents is the Additional Description Form dated May 15,
2014, between plaintiff Allen and defendant Ortam Construction,
Inc., which Oran Belillti has consistently argued is a contract
only between Allen and Ortam, and not with defendant Belillti.”
Finally, the court explained the Individual Defendants’ joinder
“does not seek affirmative relief on behalf of the joining
defendants, and the joining parties have not filed separate
motions to establish an agreement exists entitling them to an
order compelling arbitration.”
After hearing argument, however, the court reversed part
of its tentative ruling. At the hearing, the court stated: “The court
4
is going to reverse its tentative as to defendant Ortam
Construction in finding that that arbitration agreement is not
enforceable due to procedural and substantive
unconscionability.”3 Accordingly, the court denied Ortam’s and
Oran’s motions to compel arbitration in their entirety.
Ortam and the Individual Defendants appeal from the
order with respect to the 1538 Property. As noted above, they “do
not appeal from the part of the trial court’s order as it pertains to
the 1613 [P]roperty.”
DISCUSSION
Under Code of Civil Procedure section 1281.2,4 on petition,
a court “shall order” arbitration “if it determines that an
agreement to arbitrate the controversy exists, unless it
determines that” one of three specified exceptions applies: (1) the
petitioner has waived the right to compel arbitration (§ 1281.2,
subd. (a)); (2) grounds exist for revoking the agreement (§ 1281.2,
subd. (b)); or (3) a party to the agreement is also a party to a
pending legal proceeding with a third party that arises out of the
same transaction, and a possibility exists of conflicting rulings on
common legal or factual issues (the third-party litigation
exception) (§ 1281.2, subd. (c)).
Appellants contend the trial court erred by denying
Ortam’s petition to compel arbitration of claims related to the
3 Appellants did not provide a reporter’s transcript of the
hearing on the motions to compel arbitration. On October 7, 2020,
we ordered appellants to provide a reporter’s transcript of the
November 8, 2019 hearing, or indicate no reporter’s transcript
could be provided. Appellants filed the reporter’s transcript on
October 13, 2020. On our own motion, we augment the record to
include the reporter’s transcript. (Cal. Rules of Court, rules
8.130(a)(4), 8.155.)
4 All further undesignated statutory references are to the
Code of Civil Procedure.
5
1538 Property because “the trial court implicitly exercised
discretion” under section 1281.2, subdivision (c) “where it did not
have such discretion.” Specifically, appellants argue the court
should have concluded “that Ortam and the individual Appellants
were not third party defendants under [s]ection 1281.2[,
subdivision] (c) or, in the alternative, that Allen was estopped
from asserting [the third-party litigation exception] by alleging
facts and theories in support of her elder abuse claim with her
claims of breach of contract, such that the allegations and the
individual non-signatory parties are inextricably intertwined.”
As noted above, the November 8, 2019 minute order
indicated the trial court tentatively granted Ortam’s motion to
compel arbitration only as to the matters encompassed in a
contract for the 1538 Property, and between Allen and Ortam.
The minute order stated, without further explanation, that the
trial court departed from its tentative: “The matter is argued and
the Court departs from its tentative ruling. Specially Appearing
Defendant Ortam Construction, Inc.’s Motion to Compel
Arbitration of Complaint and Stay Proceedings is Denied in its
entirety.” The minute order cannot be understood without
reference to the reporter’s transcript. The reporter’s transcript
clarifies that the court denied Ortam’s motion to compel
arbitration on the ground the arbitration agreement was not
enforceable “due to procedural and substantive
unconscionability.”5
It is unclear whether appellants were unaware of the
existence of the reporter’s transcript, or deliberately ignored it. In
any event, their opening brief ignores the lower court’s reason for
denying the motion to compel arbitration of matters encompassed
by the 1538 Property contract — unconscionability — and
instead focuses solely on one of the three exceptions to section
1281.2 — the third-party litigation exception. Although
5 Appellants could have requested a statement of decision,
but did not. (See § 1291.)
6
appellants contend “[t]here is nothing in the record to otherwise
suggest or imply that the arbitration provisions of the 1538
Contract violated [Business & Professions Code section 7191],”6
appellants fail to address whether Allen’s evidence of procedural
and substantive unconscionability constitutes substantial
evidence.7
We reject appellants’ attempt to address the issue for the
first time in their reply. (See Telish v. State Personnel Bd. (2015)
234 Cal. App. 4th 1479, 1487, fn. 4 [“An appellant’s failure to raise
an argument in the opening brief [forfeits] the issue on appeal
[Citations.] . . . .” Arguments “raise[d] for the first time in [the]
reply brief have been [forfeited].”].) Because they have forfeited
their arguments, appellants have failed to meet their burden of
showing the court erred in denying their motion to compel
arbitration on unconscionability grounds. (See In re S.C. (2006)
138 Cal. App. 4th 396, 408 [“it is appellant’s burden to
affirmatively show error [citation]” by “present[ing] meaningful
legal analysis supported by citations to authority and citations to
facts in the record that support the claim of error. [Citations.]”];
Satchmed Plaza Owners Assn. v. UWMC Hospital Corp. (2008)
6 This provision lists requirements for arbitration provisions
in home improvement contracts.
7 As discussed above, Allen submitted a declaration stating
she did not understand the contract documents related to the
1538 Property and she believed she had no choice but to sign
them. Allen also argued “the contract for the 1538 Property
contains numerous provisions which violate public policy,
including a provision eliminating the delayed discovery rule
which applies to Mrs. Allen[’s] elder abuse and contract claims,
and a non-severable provision limiting all damages to the
contract price.”
7
167 Cal. App. 4th 1034, 1045 [“We must uphold the decision of the
trial court if it is correct on any ground. [Citation.]”].)8
DISPOSITION
The order denying appellants’ motion to compel arbitration
is affirmed. Allen is awarded her costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
CURREY, J.
We concur:
MANELLA, P.J.
WILLHITE, J.
8 In her respondent’s brief, Allen requests this court to
impose sanctions against appellants and their attorney for filing
a frivolous appeal. A request to impose sanctions, however,
cannot be made in the respondent’s brief; a separate motion is
required. (Cal. Rules of Court, rule 8.276(b)(1).) Therefore, we
deny her request.
8