Baumgarten v. EOTFR CA2/3

Filed 5/18/22 Baumgarten v. EOTFR CA2/3
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION THREE
SPENCER BAUMGARTEN, B309612
Plaintiff and Respondent, Los Angeles County
Super. Ct. No.
v. 20STCV24086
EOTFR, LLC et al.,
Defendants and Appellants.
APPEAL from an order of the Superior Court of Los
Angeles County, Lia Martin, Judge. Affirmed.
Latham & Watkins, Marvin S. Putnam, Laura R.
Washington, and Elizabeth A. Greenman for Defendants and
Appellants.
Shegerian & Associates, Carney R. Shegerian and Jill
McDonell for Plaintiff and Respondent.
_______________________________________
INTRODUCTION
Defendants EOTFR, LLC d/b/a ICM Partners (ICM), Cindy
Ballard, and Chris Silbermann appeal from the trial court’s order
denying their motion to compel plaintiff Spencer Baumgarten to
arbitrate his claims arising out of his employment at the
company.1 ICM contends the court erred in finding the parties
did not enter into an agreement containing an arbitration
provision. We affirm.
FACTUAL BACKGROUND
1. Baumgarten’s Employment and First Lawsuit
In late 2016, Baumgarten signed a four-year contract to
work as a partner at ICM in the company’s motion picture
department. Baumgarten stopped working at ICM in late
summer or fall of 2019, not long after Ballard, the chief of ICM’s
human resources department, accused Baumgarten of defecating
on the floor of a gender-neutral bathroom in ICM’s New York
office.
In October 2019, Baumgarten filed a complaint against
ICM and Ballard (Baumgarten I). The original complaint in
Baumgarten I asserted, among other claims, causes of action for
violation of the California Fair Employment and Housing Act
(FEHA) (Gov. Code, § 12900 et seq.) and defamation. In that
complaint, Baumgarten alleged that he negotiated a four-year
contract with ICM to become a partner at the company.
1At times, we refer to ICM, Ballard, and Silbermann collectively as
ICM.
2
ICM and Ballard moved to compel Baumgarten to arbitrate
his claims. They argued Baumgarten signed a four-year “Member
Agreement” and an “ICM Operating Agreement,” before
beginning his employment at the company. They also contended
that the member agreement incorporated an arbitration provision
included in the company’s operating agreement. Baumgarten
opposed the motion to compel arbitration. The court continued
the hearing on the motion to allow Baumgarten to produce
evidence showing he never agreed to arbitrate any dispute with
ICM.
After the court continued the hearing on the motion to
compel arbitration, Baumgarten filed a first amended complaint.
Baumgarten later filed a declaration in which he claimed he
never saw or signed any agreement that included an arbitration
provision before he joined ICM.
In June 2020, Baumgarten dismissed the Baumgarten I
lawsuit.2
2. The Second Lawsuit and Motion to Compel Arbitration
In late June 2020, Baumgarten filed a new lawsuit against
ICM, Ballard, and Silbermann.3 The operative complaint asserts
15 causes of action, including claims for defamation and violation
of FEHA, as well as claims for declaratory relief establishing that
2 On November 12, 2021, ICM filed a request for judicial notice of
several documents and court filings from Baumgarten I. We deny the
request because those documents are duplicative of other documents
included in the appellate record or are unnecessary to our analysis.
3This case was eventually reassigned to the same judge the parties
appeared before in Baumgarten I. The new lawsuit added Silbermann
as a defendant; he was sued as a managing partner of ICM.
3
the parties never agreed to arbitrate their disputes and that the
purported arbitration provision was unenforceable. Unlike in his
original complaint filed in Baumgarten I, Baumgarten omitted
any allegations that he negotiated a four-year contract with ICM
before his employment began.
In August 2020, ICM, Ballard, and Silbermann moved to
compel Baumgarten to arbitrate his claims against them. They
asserted Baumgarten signed a “Member Agreement” and an
“Operating Agreement” when he accepted employment with ICM.
They also asserted that the member agreement established
Baumgarten’s pay structure and defines several terms of
Baumgarten’s membership with the company. Further, the entire
member agreement was incorporated into the operating
agreement, and several provisions of the operating agreement,
including Section 16.6, which is an arbitration provision, were
incorporated into the member agreement. ICM quoted verbatim
in the motion the terms of Section 16.6, the operating
agreement’s arbitration provision. ICM argued that
“Baumgarten’s membership at [the firm] was effective upon the
execution of his Member Agreement and the Operating
Agreement.” (Italics added.) Although they were not signatories
to either agreement, Ballard and Silbermann argued they were
entitled to enforce the parties’ arbitration provision as ICM’s
agents.
In support of their motion to compel arbitration, ICM filed
a declaration executed by Richard Levy, ICM’s general counsel.
Levy asserted he was involved in negotiations with Baumgarten’s
lawyer over the member agreement and the operating agreement,
including explaining how the operating agreement worked for all
members of ICM. Levy claimed Baumgarten signed both
4
agreements at the conclusion of negotiations.4 Levy attached to
his declaration what he claimed was the signature page from the
operating agreement that Baumgarten signed. The signature
page includes what appears to be Baumgarten’s signature, a
footer stating “Signature Page – Operating Agreement,” and the
page number “3.” Levy didn’t include the rest of the agreement to
which the signature page was purportedly attached, nor did ICM
otherwise provide the rest of the agreement as part of their initial
papers supporting the motion to compel arbitration.
ICM also filed a declaration by one of the lawyers
representing the company in this lawsuit. The lawyer attached to
her declaration several documents from Baumgarten I.
In opposition to the motion to compel arbitration,
Baumgarten objected to most of ICM’s evidence and argued he
never signed an agreement containing an arbitration provision or
otherwise agreed to arbitrate any claim arising out of his
employment at ICM. Baumgarten also argued that, among other
things, the arbitration provision quoted in ICM’s moving papers
was procedurally and substantively unconscionable and did not
apply to any statutory or non-contract claims Baumgarten
asserted against the company.
In support of his opposition, Baumgarten filed a declaration
in which he claimed he was never given the opportunity to
negotiate the terms of an arbitration provision and he never
“knowingly or willingly agree[d] to arbitrate claims related to
[his] employment.” According to Baumgarten, when he signed his
new hire paperwork, he was “provided with paperwork that did
4Levy didn’t testify that he was present when Baumgarten signed the
agreements.
5
not contain an arbitration agreement for claims related to [his]
employment.” Baumgarten acknowledged the signature on the
signature page attached to Levy’s declaration appeared to be his,
but he could not recall when he signed it. He “[did] not recall
signing and [did] not believe [he] signed any arbitration
agreement with ICM.”
Warren Dern, the lawyer who helped negotiate the terms of
Baumgarten’s employment at ICM, submitted a declaration in
support of Baumgarten’s opposition. Dern negotiated only
Baumgarten’s “salary, benefits, and stock options” without
“receiving an Operating Agreement,” and he never otherwise
reviewed an operating agreement before Baumgarten started
working at ICM. Dern’s conversations with Levy “were limited
and communications centered on Baumgarten’s salary package
and guaranteed term of employment.” Dern did not negotiate or
comment on “the entirety of any agreement or contract ICM
wanted Baumgarten to sign,” nor did Dern discuss an arbitration
agreement during his negotiations over Baumgarten’s salary
package.
Baumgarten also filed a copy of a “Sixth Amended and
Restated Operating Agreement of EOTFR, LLC,” dated January
1, 2019, signed by one of ICM’s managing partners but no one
else. The 2019 agreement includes a Section 16.6, which contains
an arbitration provision identical to the one ICM quoted in their
motion to compel arbitration. Baumgarten argued he couldn’t
have agreed to arbitrate under the terms of the 2019 agreement
because that agreement was never presented to him before he
joined the company in 2016.
In support of their reply, ICM provided a copy of a “T2-B
Member Agreement” (Member Agreement) with Baumgarten’s
6
signature. The Member Agreement is a four-year contract that
established, among other things, Baumgarten’s pay structure.
The Member Agreement makes several references to an
“Amended and Restated Operating Agreement … dated as of
April 23, 2015, as amended on May 2, 2016 …” (April 2015
Operating Agreement). The Member Agreement states that it is
incorporated into the April 2015 Operating Agreement and
incorporates several sections of the operating agreement,
including Section 16.6. Section 12 of the Member Agreement,
entitled “Effectiveness,” states that the Member Agreement
“shall be effective as of the Effective Date, subject to, and
conditioned upon, the execution of [the Member Agreement] and
the Operating Agreement … by [Spencer Baumgarten] and
[ICM].”
In addition to the Member Agreement, ICM provided an
unsigned copy of the April 2015 Operating Agreement. That
agreement includes a watermark with the name “Baumgarten”
across every page and a footer that is different from the one
appearing on the signature page that Levy attached to his
declaration. The April 2015 Operating Agreement includes a
Section 16.6, which contains an arbitration provision identical to
the one ICM quoted in the motion to compel arbitration. ICM also
provided a copy of a November 18, 2016 email from Robin Weitz,
an ICM employee, to Baumgarten and Dern stating that a copy of
the operating agreement was attached to the email.
Baumgarten objected to the evidence ICM filed in support
of their reply as, among other things, untimely.
On November 24, 2020, the court issued a tentative ruling
on ICM’s motion to compel arbitration. The court refused to
consider the evidence ICM submitted in support of their reply
7
“for due process reasons,” while noting that none of the evidence
included a complete operating agreement that was signed by
Baumgarten. The court explained that because Baumgarten
denied signing any operating agreement, and because ICM
provided only a signature page that the company claimed
Baumgarten signed without providing the rest of the agreement,
it could not determine whether an arbitration provision was
contained in any agreement Baumgarten signed. The court
ordered ICM to provide an “unredacted complete signed copy of
the operating agreement [Baumgarten] and ICM signed in 2016,”
otherwise it would deny ICM’s motion to compel arbitration.5
On December 1, 2020, ICM filed a “Notice of Lodging” and a
second declaration executed by Levy, to which he attached five
exhibits. The first exhibit is another copy of the Member
Agreement that includes Baumgarten’s signature. The second
exhibit is another copy of the unsigned April 2015 Operating
Agreement that includes the “Baumgarten” watermark on every
page, which Levy stated was the agreement “in effect in
November 2016.” The third exhibit is a copy of a November 18,
2016 email from Weitz to Dern stating that a nondisclosure
agreement, a member agreement, and a signature page to an
operating agreement, all of which Weitz claimed were signed by
Baumgarten, were attached to the email. The fourth exhibit is a
copy of what appears to be the same signature page that Levy
5In its tentative ruling, the court also addressed and rejected
Baumgarten’s arguments that the arbitration provision quoted in
ICM’s moving papers was procedurally and substantively
unconscionable. In addition, the court found that, in the event the
parties are compelled to arbitrate, any issues concerning the scope of
the arbitration provision should be left to the arbitrator.
8
attached to his declaration filed in support of ICM’s initial
moving papers. Notably, although the signature page appears to
include Baumgarten’s signature, it does not include a watermark
like the one included on the copy of the unsigned April 2015
Operating Agreement, and it includes a different footer from the
one included in the unsigned April 2015 Operating Agreement.
The fifth exhibit is a copy of an undated signature page with
Levy’s signature that Levy claims was attached to “the Operating
Agreement.” The document with Levy’s signature includes the
same footer as the copy of the unsigned April 2015 Operating
Agreement, but a different footer from the one included on the
page with Baumgarten’s signature, and it does not include the
“Baumgarten” watermark.
Baumgarten objected to Levy’s declaration and all the
exhibits attached to the notice of lodging.
On December 2, 2020, the day after ICM filed their notice
of lodging exhibits in response to the court’s November 24, 2020
tentative ruling, the court denied ICM’s motion to compel
arbitration for the reasons stated in its previous order and
tentative ruling.
ICM appeals from the order denying their motion to compel
arbitration.
DISCUSSION
1. Applicable Law and Standard of Review
California and federal law favor arbitration. (St. Agnes
Medical Center v. PacifiCare of California (2003) 31 Cal.4th 1187,
1195.) That policy does not apply, however, where the parties
have not agreed to arbitrate their dispute. (Espejo v. Southern
9
California Permanente Medical Group (2016) 246 Cal.App.4th
1047, 1054.)
Under Code of Civil Procedure section 1281.2,6 a court must
grant a petition to compel arbitration “if it determines that an
agreement to arbitrate the controversy exists.” The court makes
this determination in a summary proceeding (§ 1290.2), sitting
“ ‘as a trier of fact, weighing all the affidavits, declarations, and
other documentary evidence … to reach a final determination.’ ”
(Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th
158, 164 (Gamboa), quoting Engalla v. Permanente Medical
Group, Inc. (1997) 15 Cal.4th 951, 972.) The party seeking to
compel arbitration carries the burden of persuasion to show, by a
preponderance of the evidence, that the parties agreed to
arbitrate their dispute. (Rosenthal v. Great Western Fin.
Securities Corp. (1996) 14 Cal.4th 394, 413.)
The summary procedure under section 1290.2 involves a
three-step burden shifting process. (Gamboa, supra, 72
Cal.App.5th at p. 165.) The moving party carries the initial
burden to present prima facie evidence of an arbitration
agreement. (Ibid.) The moving party can attach to its motion a
copy of the arbitration agreement “purporting to bear the
[opposing party’s] signature.” (Bannister v. Marinidence Opco,
LLC (2021) 64 Cal.App.5th 541, 543–544 (Bannister).) Or the
moving party can set forth verbatim in its motion the
agreement’s provisions. (Gamboa, at p. 165; see also Cal. Rules of
Court, rule 3.1330 [“The provisions must be stated verbatim or a
copy must be physically or electronically attached to the petition
and incorporated by reference.”].) At this step, “it is not necessary
6 Undesignated statutory references are to the Code of Civil Procedure.
10
to follow the normal procedures of document authentication.”
(Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th
215, 218 (Condee).) If the moving party establishes the existence
of an arbitration agreement and the nonmoving party doesn’t
challenge the agreement’s validity or otherwise establish an
exception to arbitration, the court must order the parties to
arbitrate their dispute. (Id. at pp. 218–219.)
Once the moving party meets its prima facie burden of
proving the arbitration agreement’s existence, the nonmoving
party carries the burden of producing evidence challenging the
agreement’s validity or establishing another defense to enforcing
the agreement. (Gamboa, supra, 72 Cal.App.5th at p. 165.) The
nonmoving party can challenge the arbitration agreement’s
validity by testifying or declaring under oath that he never
signed or saw the agreement or does not remember seeing or
signing the agreement. (Ibid.; see, e.g., Bannister, supra, 64
Cal.App.5th at p. 546 [employee declared she never saw or signed
the arbitration agreement]; Ruiz v. Moss Bros. Auto Group, Inc.
(2014) 232 Cal.App.4th 836, 846 (Ruiz) [although employee didn’t
dispute the signature on the agreement was his, he placed the
arbitration agreement’s authenticity at issue by claiming he
could not recall signing the agreement and would not have signed
it had he seen it].)
If the nonmoving party produces evidence challenging the
agreement’s authenticity, the burden of proof shifts back to the
moving party to prove that there is a valid arbitration agreement
between the parties. (Gamboa, supra, 72 Cal.App.5th at pp. 165–
166.) Generally, when the nonmoving party challenges the
agreement’s authenticity, the court should allow the moving
party to submit on reply evidence establishing the agreement’s
11
validity since the moving party was not required to submit such
evidence at the initial stage when making a prima facie showing
of the agreement’s existence. (See Sprunk v. Prisma LLC (2017)
14 Cal.App.5th 785, 794 [court properly admitted moving party’s
evidence submitted on reply because nonmoving party placed the
arbitration agreement’s validity at issue in his opposition
papers]; see also Condee, supra, 88 Cal.App.4th at p. 219 [at the
first step of the burden-shifting process, California Rules of
Court, rule 3.1330 “does not require the petitioner to introduce
the agreement into evidence or provide the court with anything
more than a copy or recitation of its terms”].)
Generally, we review a court’s order denying a motion to
compel arbitration for abuse of discretion, unless the appeal
raises only a pure question of law, in which case we apply a de
novo standard of review. (Laswell v. AG Seal Beach, LLC (2010)
189 Cal.App.4th 1399, 1406.) Where the court’s decision rests on
findings of fact, we review those findings for substantial evidence.
(Ibid.)
But where, as here, the court’s decision is based on a
finding that the moving party failed to prove a valid arbitration
agreement exists, we must determine whether the court’s ruling
was erroneous as a matter of law. (Gamboa, supra, 72
Cal.App.5th at p. 166, quoting Fabian v. Renovate America, Inc.
(2019) 42 Cal.App.5th 1062, 1066 (Fabian).) Specifically, we must
determine whether the moving party’s evidence was (1)
uncontradicted and unimpeached and (2) of such a character and
weight as to leave no room for a judicial determination that it
was insufficient to support a finding in the moving party’s favor.
(Fabian, at p. 1067.) Unless the court made specific findings of
fact in favor of the moving party, we must presume the court
12
found that party’s evidence lacked sufficient weight and
credibility to carry the party’s burden of proof. (Ibid.) We also
can’t reevaluate witness credibility or reweigh the competing
evidence. (Ibid.) In other words, all conflicts generally must be
resolved in favor of the court’s ruling. (Ibid.)
2. The court did not err in denying ICM’s motion to
compel arbitration.
While not explicit, the court’s ruling makes clear that it
found ICM met their first-step burden to make a prima-facie
showing that ICM and Baumgarten agreed to arbitrate any
dispute arising out of Baumgarten’s employment at the company.
The court also found Baumgarten met his second-step burden
when it explained that he “denie[d] signing” any operating
agreement that included an arbitration provision and stated that
it could not determine whether an arbitration provision was
contained in any operating agreement that Baumgarten signed.7
Substantial evidence supports both of those findings.
7 ICM asserts that the court “did not find that Mr. Baumgarten met
his [second-step] burden.” We disagree. While the court didn’t use the
term “find” or some variation of it in its tentative ruling, the court
clearly found Baumgarten met his evidentiary burden to raise an issue
as to whether he ever signed an arbitration agreement or otherwise
agreed to arbitrate his dispute with ICM. That is, to the extent the
court didn’t make an express finding that Baumgarten met his second-
step burden, we presume such an implied finding was made based on
the court’s conclusion that ICM didn’t prove Baumgarten agreed to
arbitrate his dispute with the company. (Ruiz, supra, 232 Cal.App.4th
at p. 842 [where a statement of decision was available but not
requested, “we apply the doctrine of implied findings and presume the
court made all factual findings necessary to support its order—to the
extent substantial evidence supports such findings”].)
13
ICM met their initial burden by quoting in their motion to
compel arbitration the terms of the arbitration provision they
claimed was included in an operating agreement that
Baumgarten signed and incorporated into a member agreement
that Baumgarten also signed. (Cal. Rules of Court, rule 3.1330.)
At the second step, Baumgarten met his burden by filing a sworn
declaration in which he asserted that, although the signature on
the page attached to Levy’s declaration appeared to be his, he
could not recall signing any agreement that included an
arbitration provision and he did not otherwise agree to arbitrate
his claims against ICM.8 (Ruiz, supra, 232 Cal.App.4th at p. 846.)
The burden, therefore, shifted back to ICM to produce evidence
proving the existence of a valid arbitration agreement between
8 We reject ICM’s assertion that the court couldn’t have found
Baumgarten met his second-step burden because the only evidence he
submitted was a “self-serving declaration as to his memory years after
he signed his onboarding agreements with ICM.” The case law in this
area is clear that a party opposing arbitration can raise a factual
dispute as to the validity of an arbitration agreement by filing a sworn
declaration in which that party claims he did not sign, could not recall
signing, or otherwise did not agree to be bound by, an agreement
including or incorporating an arbitration provision. (See, e.g., Gamboa,
supra, 72 Cal.App.5th at p. 165; Bannister, supra, 64 Cal.App.5th at p.
546; Ruiz, supra, 232 Cal.App.4th at p. 846; see also Fabian, supra, 42
Cal.App.5th at p. 1067 [“Because Fabian declared that she did not sign
the Contract, however, Renovate then had ‘the burden of proving by a
preponderance of the evidence that the … signature was authentic.’ ”].)
This rule applies even where the party acknowledges a signature
appears to be his but declares that he cannot recall either signing an
agreement that included an arbitration provision or agreeing to be
bound by such a provision. (Ruiz, at p. 846.)
14
Baumgarten and the company. (Fabian, supra, 42 Cal.App.5th at
p. 1067.) As we explain, ICM didn’t meet that burden. Put
another way, ICM cannot show the evidence they produced below
compelled a finding, as a matter of law, that Baumgarten agreed
to arbitrate his disputes with the company. (Gamboa, supra, 72
Cal.App.5th at p. 166.)
In its tentative ruling, the court ordered ICM to provide a
complete copy of the April 2015 Operating Agreement signed by
Baumgarten, otherwise it would deny ICM’s motion to compel
arbitration. Without objecting to the court’s tentative ruling, ICM
expressly agreed to comply with the court’s order to produce a
complete signed copy of the April 2015 Operating Agreement. But
in the end, ICM never filed a complete copy of the April 2015
Operating Agreement that was signed by Baumgarten, or a
signed copy of any other operating agreement that included an
arbitration provision. Instead, ICM filed another copy of the
unsigned April 2015 Operating Agreement and another copy of
the signature page containing Baumgarten’s signature without
any attached agreement. Because ICM failed to comply with the
court’s tentative ruling—a ruling they never objected to—the
court properly denied ICM’s motion to compel arbitration for that
reason alone. (Espejo v. The Copley Press, Inc. (2017) 13
Cal.App.5th 329, 362 (Copley Press) [a party cannot claim error
on appeal when that party expressly or implicitly agreed or
acquiesced to the ruling it now claims is erroneous].) Regardless,
the fact that ICM produced a lone signature page containing
Baumgarten’s signature and an unsigned agreement containing
an arbitration provision, did not necessarily establish that
Baumgarten agreed to arbitrate his claims against the company.
15
ICM insists Levy’s declarations connected the dots between
the lone signature page and an operating agreement containing
an arbitration provision. We disagree. While Levy claimed the
signature page was part of an “Operating Agreement,” he never
identified which operating agreement the signature page
belonged to or otherwise stated that the corresponding operating
agreement contained the same arbitration provision incorporated
into the Member Agreement and quoted in ICM’s motion to
compel arbitration. “[I]t is not sufficient for the party seeking to
compel arbitration to show the parties generally agreed to
arbitrate their disputes by incorporating some arbitration
provision into their contract. Rather, the party must establish the
precise arbitration provision the parties incorporated into their
agreement to govern their disputes.” (Avery v. Integrated
Healthcare Holdings, Inc. (2013) 218 Cal.App.4th 50, 68.) Levy’s
declarations failed to establish the precise arbitration provision
by which Baumgarten agreed to be bound.
Even if Levy’s declarations could be interpreted to state
that the attached signature page was originally part of the April
2015 Operating Agreement or another operating agreement
including an arbitration provision, the court reasonably could
have discredited that testimony for several reasons. First, while
Levy stated he was “involved in negotiations relating to Spencer
Baumgarten’s contract” and claimed that Baumgarten signed a
member agreement and operating agreement “[a]t the conclusion
of negotiations,” Levy never testified that he was present when
Baumgarten signed the agreements or how he otherwise
confirmed that Baumgarten signed them.
Second, and more importantly, there were notable
differences between the signature page attached to Levy’s
16
declarations and the unsigned April 2015 Operating Agreement
that ICM claims is the same agreement that Baumgarten signed.
Unlike every page of the unsigned April 2015 Operating
Agreement, the signature page attached to Levy’s declarations
did not contain a “Baumgarten” watermark. In addition, the
signature page attached to Levy’s declarations included a
different footer from the one included on the signature page of
the unsigned April 2015 Operating Agreement. ICM made no
effort to explain these discrepancies below. Based on these
obvious discrepancies, the court reasonably could have found that
the signature page attached to Levy’s declarations did not
correspond to the April 2015 Operating Agreement. And ICM did
not otherwise produce any evidence conclusively establishing the
signature page belonged to an agreement that included an
arbitration provision. (Fabian, supra, 42 Cal.App.5th at p. 1067.)
ICM next contends the court should have compelled
Baumgarten to arbitrate his claims against the company under
the doctrine of incorporation. Specifically, ICM insists that
because the Member Agreement, which Baumgarten signed,
incorporates by reference the arbitration provision included in
the April 2015 Operating Agreement, Baumgarten necessarily
agreed to arbitrate any dispute he has with the company related
to his employment. In other words, ICM claims it is immaterial
whether Baumgarten signed the April 2015 Operating
Agreement, or any other operating agreement, because an
arbitration provision was incorporated into the Member
Agreement that Baumgarten signed. We disagree.
As a preliminary matter, ICM has forfeited this claim of
error on appeal. In their motion to compel arbitration, ICM
asserted that Baumgarten signed both the Member Agreement
17
and “the ICM Operating Agreement.” ICM also claimed that
“Baumgarten’s membership at ICM was effective upon the
execution of his Member Agreement and the Operating
Agreement—both of which he signed.” Consistent with ICM’s
representations, the court’s tentative ruling makes clear that it
found that while Baumgarten may have signed the Member
Agreement, ICM needed to prove that Baumgarten also signed an
operating agreement that included an arbitration provision to
establish a valid arbitration agreement between the parties. The
court ordered ICM to file additional evidence—i.e., a complete
copy of the April 2015 Operating Agreement that ICM claimed
Baumgarten signed—to prove Baumgarten was required to
arbitrate his claims against the company, otherwise the court
would deny ICM’s motion to compel arbitration. At the hearing
on the motion, ICM’s counsel stated, without objecting to the
court’s ruling, “We will submit on the tentative and per your
tentative lodge the agreement with the court. We believe that Mr.
Baumgarten signed the agreement, and we can do that so that
the court has it.”
By arguing the court should have compelled Baumgarten to
arbitrate based solely on the fact that he signed the Member
Agreement, ICM challenges the court’s ruling that the company
was required to also prove that Baumgarten signed the April
2015 Operating Agreement. By not objecting to the court’s
tentative ruling and expressly agreeing to provide the court with
a complete copy of the April 2015 Operating Agreement signed by
Baumgarten, ICM cannot now complain on appeal that the court
erred in requiring such proof before it could grant the company’s
motion to compel arbitration. “ ‘[A]n appellant waives [the] right
to attack error by expressly or implicitly agreeing or acquiescing
18
at trial to the ruling or procedure objected to on appeal.’ ” (Copley
Press, supra, 13 Cal.App.5th at p. 362.)
In any event, this claim fails on the merits. To be sure, a
party can be compelled to arbitrate a dispute even if the
agreement the party signed does not expressly provide for
arbitration, so long as the signed agreement incorporates by
reference another document that includes an arbitration
provision. (See Serpa v. California Surety Investigations,
Inc. (2013) 215 Cal.App.4th 695, 705; Boys Club of San Fernando
Valley, Inc. v. Fidelity & Deposit Co. (1992) 6 Cal.App.4th 1266,
1271 [“An agreement need not expressly provide for arbitration,
but may do so in a secondary document which is incorporated by
reference.”].) And, as ICM correctly points out, the Member
Agreement that Baumgarten signed includes a provision (Section
14) that incorporates the arbitration provision included in Section
16.6 of the April 2015 Operating Agreement. But what ICM fails
to point out in their opening brief (and did not address below) is
that the Member Agreement also includes Section 12, which
provides that the Member Agreement doesn’t become effective
unless Baumgarten and ICM sign both that agreement and the
April 2015 Operating Agreement.
Thus, by the Member Agreement’s terms, Section 14’s
incorporation by reference of an arbitration provision into the
Member Agreement could only go into effect once Baumgarten
executed not just the Member Agreement, but also the April 2015
Operating Agreement. In other words, to establish Baumgarten is
bound by any arbitration provision incorporated into the Member
Agreement, ICM needed to prove Baumgarten signed the April
2015 Operating Agreement. As we explained above, ICM hasn’t
shown the court erred when it found the company did not prove
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Baumgarten signed the April 2015 Operating Agreement. The
court, therefore, properly refused to apply the doctrine of
incorporation to compel Baumgarten to arbitrate his dispute with
ICM.
Finally, ICM contends the court abused its discretion when
it refused to consider evidence that ICM submitted in support of
their reply. We need not decide whether the court should have
considered that evidence because, assuming the court did err,
ICM has not shown the error was prejudicial. Two of the exhibits
that ICM filed on reply—a copy of the signed Member Agreement
and a copy of the unsigned April 2015 Operating Agreement—
were included in ICM’s notice of lodging filed in response to the
court’s tentative ruling. Thus, those exhibits were duplicative of
other evidence the court considered before denying the motion to
compel arbitration. As for the third exhibit—an email from Weitz
to Baumgarten and Dern in which Weitz claimed a copy of the
operating agreement was attached—the email wouldn’t establish
Baumgarten signed the April 2015 Operating Agreement. At
most, the email shows Baumgarten received a copy of an
operating agreement, but it does not establish that he signed an
operating agreement containing an arbitration provision. Finally,
nothing in the declaration accompanying the exhibits establishes
that Baumgarten signed the April 2015 Operating Agreement.9
9The declaration was executed by Joseph R. Trofino, Deputy General
Counsel for ICM. Trofino testified that he had personal knowledge of
all matters stated in his declaration. Trofino never claimed, however,
that Baumgarten signed the April 2015 Operating Agreement or any
other operating agreement that included an arbitration provision.
Rather, he stated that a copy of the April 2015 Operating Agreement
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Thus, any error by the court in refusing to consider the evidence
ICM submitted on reply was harmless.
In short, ICM has not shown that the evidence presented
below required the court, as a matter of law, to find Baumgarten
agreed to arbitrate his dispute with ICM. (Fabian, supra, 42
Cal.App.5th at p. 1067.)10 The court, therefore, did not err in
denying ICM’s motion to compel arbitration.
DISPOSITION
The order denying ICM’s motion to compel arbitration is
affirmed. Spencer Baumgarten shall recover his costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
LAVIN, J.
WE CONCUR:
EDMON, P. J.
KALRA, J. *
was emailed to Baumgarten and otherwise only identified the
documents that were attached to his declaration.
10In light of our conclusion, we do not address the parties’ other
contentions.
*Judge of the Los Angeles Superior Court, assigned by the Chief
Justice pursuant to article VI, section 6 of the California Constitution.
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