Carter v. Francisco













Filed 4/17/13 Carter v. Francisco CA4/3















NOT TO BE PUBLISHED IN OFFICIAL REPORTS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(b). This
opinion has not been certified for publication or ordered published for
purposes of rule 8.1115.







IN THE COURT OF
APPEAL OF THE STATE OF CALIFORNIA



FOURTH APPELLATE
DISTRICT



DIVISION THREE




>

JOHN R. CARTER et al., Plaintiffs and Respondents, v. RENIERO FRANCISCO et al., Defendants and Appellants.

G047234 (Super. Ct. No. 30-2012-00563015) O P I N I O N

Appeal from an order of
the Superior Court
of href="http://www.adrservices.org/neutrals/frederick-mandabach.php">Orange
County, Kirk Nakamura, Judge.
Affirmed.

Alavi & Broyles,
Samuel G. Broyles, Jr., and Max Alavi, for Defendants and Appellants Reniero
Franciso, Cynthia Francisco, and Bendisyon, Inc.

Law Offices of Frank N.
Masino, Frank N. Masino, for Defendants and Appellants Abdul Sultan Walji,
Arista LLC, and Calpension, Inc.

Law Offices of Thomas E.
Francis and Thomas E. Francis for Plaintiffs and Respondents.



* * *

This is an appeal from
an order denying arbitration. The
appellants are defendants Abdul Sultan Walji, individually and as trustee of
the Stone Lamm Trust, Arista LLC, Calpension, Inc., Reniero Francisco, Cynthia
Francisco and Bendisyon, Inc. Other
defendants, who did not join in the appeal, are LPL Financial Corporation,
Milagros Investments, LLC, and Investment Resource Partners, Inc. The respondents are plaintiffs John R. Carter
and Carmen Carter. We affirm the court’s
denial of the motions to compel arbitration under Code of Civil Procedure
section 1281.2, subdivision (c).



STATE OF THE RECORD



At the outset, we take
note of problems with the record. We
have a clerk’s transcript (two volumes) and a supplemental clerk’s transcript
(three volumes). Although they contain
mostly the same documents, different page numbers pertain to different
documents. Furthermore, the page
numbering on both sets of transcripts is confusing to say the least. The pages of each transcript initially
contain a printed page number. In the
clerk’s transcript, starting with printed page number 101, the printed numbers
are blocked out and replaced with a different handwritten number through
printed page number 276, creating duplicate page numbers within the same transcript. In the supplemental clerk’s transcript the
substitute paging starts on printed page number 105, and continues through
printed page number 283. On some of
these pages we can decipher the printed number; on many more, we cannot. When page numbers are given in the briefs, it
is unclear which of these page numbers are intended.

The subject of this
appeal, the motion to compel arbitration,
together with its supporting documents covers over 200 pages; we did not find a
table of contents. Although we attempted
to make sense of the record, it is not our responsibility to plow through
several hundred pages of material to try and find support for appellants’
contentions. A fundamental principle of
appellate law is the judgment or order of the lower court is presumed correct
and the appellant must affirmatively show error by an adequate record. (Bianco
v. California Highway Patrol (1994) 24 Cal.App.4th 1113, 1125.) This includes a requirement that each factual
allegation be supported by a reference to the exact page where such a fact may
be found. (Evans v. Centerstone Development Co. (2005) 134
Cal.App.4th 151, 166-167.) Should
we have overlooked a document in our analysis, the appellants failure to provide
us with specific page references is to blame.



FACTUAL AND PROCEDURAL
BACKGROUND



Plaintiffs sued the
appellants and the non-appealing defendants purporting to assert some 13 causes
of action. The complaint alleges various
relationships between the numerous defendants.
The gist of the 29-page complaint is that plaintiffs invested funds on
the recommendation of some of the defendants and that they lost in excess of $1
million as a result of the misdeeds of some of the defendants. Other defendants are alleged to be liable to
plaintiffs because of their relationships with the defendants with whom
plaintiffs dealt directly.

Appellants Reniero
Francisco and Cynthia Francisco filed a motion “to compel arbitration and to
stay proceedings pending completion of arbitration proceedings.” Appellant Bendisyon, Inc. filed a “notice of
joinder . . . in the notice of motion . . . by Reniero Francisco and Cynthia
Francisco to compel arbitration . . . .”
There is no indication in the record supplied that any other defendants,
including appellants Walji, Arista LLC, or Calpension, Inc., joined in the
motion; yet these latter three defendants are also appealing the denial of the
motion. Moving parties apparently relied
on an arbitration clause contained in a 38-page document entitled “Arista, LLC
Operating Agreement.” Although the
document was attached to the motion, we did not find any declaration
authenticating it. The exhibit
consisting of this document bears the typewritten name “Abdul S. Walji,
President” but is unsigned. “Calpension,
Inc.” is typed above his name. The
notice of motion states that “defendant Francisco” (without specifying which of
the two Franciscos) is a principal of Arista LLC. But no evidence was presented to support this
contention. Separate documents bear the
signature of plaintiffs. But there is no
declaration indicating that these documents pertain to the very document
containing the arbitration clause.

Walji’s opening brief
states that he is the “managing member” of Arista LLC. But the record reference for this statement
is “SCT 10:5-10,” which we interpret as supplemental clerk’s transcript, page
10, lines five to ten. But printed page 10 of the supplemental
clerk’s transcript is a page from the register of actions and handwritten page
10 of the same transcript, bears no line numbers and is a page from the Arista
LLC subscription agreement; we fail to see any reference to Walji on this page
either.



DISCUSSION



As far as we are able to
ascertain, the arbitration clause is
located in an unsigned document that identifies Abdul S. Walji as president of
Arista LLC. The only declarations we
could locate in support of the motion to compel arbitration are the declaration
of Cynthia Francisco and the declaration of one of the lawyers, Samuel G.
Broyles. The Francisco declaration
merely states that she and her husband, Reniero Francisco, are members of
Arista LLC. The Broyles’s declaration
merely makes the conclusionary statement that “the claims alleged in the
complaint are subject to the arbitration provisions of the Arista LLC Operating
Agreement.”

With respect to other
defendants, the motion seems to be based on relationships between the parties
as alleged in the complaint. But, because
the parties apparently have not filed a responsive pleading (at least none is
contained in the record), we cannot determine whether these allegations are
contested or not. Even if they are not
contested, the mere fact some of the appellants were “members” of Arista LLC
would not compel the conclusion they are parties
to the document containing the arbitration clause that is contained in the
record. We also note some, but not all
defendants sought to compel arbitration.
During oral argument on the motion to compel arbitration, counsel for
the Franciscos acknowledged that not all the defendants were parties to the
arbitration agreement. The Walji
appellants acknowledge in their brief “the Carters had no contact or agreement
with either Calpension, Inc. or the Stone Lamm Trust.”

And the Franciscos and
Bendisyon, Inc. defendants implicitly acknowledge in their brief that another
defendant, LPL Financial Corporation is not subject to the arbitration
clause. They state plaintiffs “can
proceed on a separate track regarding any duty LPL Financial may have had to
the[m], and if such duty was found to have been breached, the remainder of the
claims related to the claimed actions of Reniero Francisco can be separated and
tried after the arbitration of the Carter claims against the Appellants.”

The court expressed
concern about the same case having to be tried twice if the motion was
granted. And the minute order indicates
it denied the motion “under CCP § 1281.2(c).” Code of Civil Procedure section 1281.2 provides
the authority for the court to order arbitration to parties to an arbitration
agreement unless an exception applies.
But subdivision (c) creates such an exception where “[a] party to the
arbitration agreement is also a party to a pending court action . . . with a
third party, arising out of the same transaction or series of related
transactions and there is a possibility of conflicting rulings on a common
issue of law or fact.” This is the
situation that prevails here. (See >Lindemann v. Hume (2012) 204 Cal.App.4th
556, 566.) The appellants’ contention
arbitration could be had first, followed by a trial against the parties who are
not subject to the arbitration agreement cannot be denied. But the mere fact such a resolution is
possible does not demonstrate the trial court abused its discretion in
rejecting the employment of that procedure here.

Appellants Walji, Arista
LLC, and Calpension, Inc. also base their argument on the Federal Arbitration
Act. They did not make this argument in
the trial court, and thus waived it. “When a party does not raise an argument at trial, he may not do
so on appeal.” (People v. Clark (1993) 5 Cal.4th 950, 988, fn. 13, disapproved on
other grounds as stated in People v.
Doolin (2009) 45 Cal.4th 390, 421, fn. 22) “Points not raised in the
trial court will not be considered on appeal.”
(Hepner v. Franchise Tax Bd. (1997) 52 Cal.App.4th 1475, 1486.) The mere fact these appellants cited some
United States Supreme Court cases in their points and authorities does not establish
the issue of applicability of the Federal Arbitration Act was properly argued
in the trial court. Even if we were to conclude these appellants timely raised
the issue in the trial court, no evidence was presented to support a claim that
the parties engaged in interstate commerce or were otherwise subject to href="http://www.fearnotlaw.com/">federal arbitration law.

Walji’s
argument based on equitable estoppel is also partially supported by references
to federal law, not applicable here. As
to state law, for its equitable estoppel argument, the Walji appellants rely
largely on language contained in Goldman
v. KPMG, LLP (2009) 173 Cal.App.4th 209. But that case makes it clear “[e]quitable
estoppel applies ‘when the signatory to a written agreement containing an
arbitration clause “must rely on the terms of the written agreement in
asserting [its] claims” against the nonsignatory.’” (Id.
at p. 218) There is no showing
plaintiffs “must rely” on the terms of the Arista LLC document to establish
their case against defendants who bore no relationship to that document. In fact, the record is devoid of any evidence
supporting such a contention.

There
also is an argument that there is a related case, Roode, et al. v. Arista LLC, where arbitration had been
ordered. But nothing in the record
supports this assertion other than a “notice of related case.”





DISPOSITION



The
order denying arbitration is affirmed.
Respondents shall recover their costs on appeal.









RYLAARSDAM,
J.



WE CONCUR:







O’LEARY, P.
J.







IKOLA, J.