Filed 7/15/26 Vanowen Realty v. Houston CA2/7
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
VANOWEN REALTY LLC et al., B344553
Plaintiffs and Respondents, (Los Angeles County
Super. Ct. No. 24 STCV05197)
v.
PLOENPIDH HOUSTON et al.,
Defendants and Appellants.
APPEAL from an order of the Superior Court of
Los Angeles County, Kerry Bensinger, Judge. Affirmed.
Wood, Smith, Henning & Berman, Sam L. McDermott,
Jade N. Tran and Zeana A. Zoreikat for Defendants and
Appellants.
Law Offices of Patrick Torsney, Patrick Torsney; Cochran,
Davis & Associates and Lisa Kralik Hansen for Plaintiffs and
Respondents.
________________________
INTRODUCTION
This matter involves a commercial lease between Vanowen
Realty LLC as the lessor and Ploenpidh Houston as the lessee.
Vanowen sued Houston, Houston Hospitality LLC (Houston
Hospitality), a company owned by Houston’s two sons, and NBK
Branded Entertainment, Inc. (NBK) for various tort and contract
causes of action. Houston and Houston Hospitality moved to
compel arbitration pursuant to an arbitration provision in the
lease, and they appeal from the trial court’s denial of that motion.
We affirm because Vanowen’s claims do not fall within the scope
of the arbitration provision.
FACTUAL AND PROCEDURAL BACKGROUND
A. The Lease
Vanowen and a number of individuals own a commercial
property located in Hollywood.1 On June 1, 2016, Houston leased
1 The owners of the property and the plaintiffs and
respondents in this matter are: Vanowen Realty LLC; Arthur J.
Saffir, Trustee of the Arthur J. Saffir Living Trust Dated
February 9, 2000 and Restated September 8, 2011; Donna M.
Zenobia Saffir, Trustee Of The Donna M. Zenobia Saffir Living
Trust Dated February 9, 2000 and Restated September 8, 2011;
Oliver S. Saffir & Patricia J. Saffir, Trustees of the Oliver S.
Saffir & Patricia J. Saffir Trust Agreement Dated June 25, 1990;
Warren Faubel & Priscilla Faubel, as Trustees of the Faubel
Family Trust U/T/D Dated March 4, 1992 as Restated September
12, 2012; and Pandora Victor, as Trustee Under the Pandora
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the property from Vanowen for the purpose of operating a
restaurant. The commercial lease between Vanowen and
Houston specified a term of 10 years and 18 days, commencing on
May 17, 2016, and ending on May 31, 2026. The lease allowed for
regular rental increases pursuant to a schedule, but it provided,
“These rental amounts shall only apply if Ploenpidh P. Houston
remains the Lessee on this lease. In the event that this lease is
assigned, the rental amount due each month shall be determined
by paragraphs 6 and 7 of the addendum to this lease.”
Paragraphs 6 and 7 of the lease addendum specified that the
lease rates were below market and could be extended only to
Houston’s sons with Vanowen’s consent. Other parties seeking to
sublet or rent the property would be subject to higher rates.
Paragraph 11A of the commercial lease (paragraph 11A)
required Vanowen to make repairs within 60 days in the event of
“a partial destruction of said premises.” Paragraph 11A further
set out circumstances under which Houston would be entitled to
a proportionate deduction in rent while such repairs were being
made or a proportionate rebate in rent if the repairs exceeded
60 days. Either party could terminate the lease if Vanowen
elected not to make “such repairs which cannot be made within
sixty (60) days, or such repairs cannot be made under such laws
and regulations . . .” Finally, section 11A set out an agreement to
Victor Trust Agreement Dated May 22, 1997 as Restated on
March 29, 2011.
Vanowen Realty LLC is the only signatory to the lease
agreement with Houston. For ease of reference, we refer to the
plaintiffs and respondents collectively as Vanowen.
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arbitrate: “In the event of any dispute between Lessor and
Lessee relative to the provisions of this paragraph, they shall
each select an arbitrator, the two arbitrators so selected shall
select a third arbitrator and the three arbitrators so selected
shall hear and determine the controversy and their decision
thereof shall be final and binding on both Lessor and Lessee who
shall bear the cost of such arbitration equally between them.”
Consistent with paragraphs 6 and 7 of the lease addendum,
paragraph 12 of the lease prohibited Houston from assigning the
lease or subletting all or part of the property “without the written
consent of Lessor first had and obtained. . . . Any such
assignment or subletting, whether by operation of law or
otherwise, without such written consent first had and obtained
shall be void, and shall, at the option of Lessor, terminate this
lease.”
B. The Unlawful Detainer Action
On January 26, 2024, Vanowen served Houston with a 30-
Day Notice to Quit, stating Houston breached the lease because
“on or about September 15, 2022, your unauthorized subtenant
negligently caused a grease fire to destroy the kitchen area of the
premises.” On July 12, 2024, Vanowen filed a form complaint for
unlawful detainer against Houston seeking $616 per day from
February 27, 2024, as fair rental value of the property. Vanowen
also requested forfeiture of the agreement and reasonable
attorney fees.
On October 16, 2024, Houston moved to compel arbitration
of the unlawful detainer action, citing paragraph 11A of the
lease. She argued, “This is not an unlawful detainer action for
non-payment of rent or any other statutory basis, but rather it is
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an action seeking the court to enforce a termination provision
that explicitly provides for arbitration.” Although Vanowen
initially resisted arbitration, it later agreed to arbitrate the
unlawful detainer action. The record before us is silent regarding
the result of the arbitration.
C. The Underlying Action
On March 1, 2024, after it had served Houston with the 30-
day notice to quit, but before it filed the unlawful detainer
complaint, Vanowen sued Houston, Houston Hospitality, and
NBK for negligence, breach of contract, intentional interference
with contract, fraud, and intentional and negligent interference
with prospective economic advantage. Vanowen alleged Houston
allowed Houston Hospitality, a company owned and operated by
Houston’s children, to “act as the tenant” and sublet the property
to NBK without Vanowen’s consent. NBK allegedly operated a
club on the property called Beetlehouse. According to Vanowen,
Houston and Houston Hospitality profited from the below market
rent given to Houston by subletting the property to NBK at a
higher rate. Vanowen discovered the sublet in September 2022.
The complaint further alleged Houston stopped paying rent in
March 2020 but made one payment of $215,568 in May 2023 to
stave off eviction. Vanowen further alleged Houston failed to
make any subsequent payments and allegedly owed it over
$425,000 in back rent.
The first cause of action against all defendants alleged they
were negligent in their use of the property “such that they caused
a hostile fire to spread inside the property.” The second cause of
action against Houston alleged a breach of multiple terms of the
lease agreement, including causing property damage, subletting
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the property without permission, failing to obtain the required
liquor license, altering the property without permission, and
failing to maintain sufficient insurance as required. The third
cause of action against Houston Hospitality alleged it
intentionally interfered with Vanowen’s contractual relationship
with Houston. The fourth cause of action against Houston and
Houston Hospitality for fraud alleged they “entered into a
conspiracy to subvert the lease and obtain more favorable terms
without processing the subletting rules outlined in the lease.”
The fifth and sixth causes of action against Houston Hospitality
alleged intentional and negligent interference with prospective
economic advantage. As damages, Vanowen sought the
additional rental value that NBK paid to use the property;
$750,000 in property damage; loss of use of the property in the
amount of $20,338 per month; punitive damages; and attorney
fees.
The defendants answered the complaint. On August 28,
2024, Houston and Houston Hospitality moved to compel
arbitration under paragraph 11A and stay the action pending
arbitration. Houston’s counsel stated in her declaration in
support of the motion that Houston had sought to arbitrate the
unlawful detainer matter after receiving the 30-day Notice to
Quit, and Vanowen’s lawyer agreed to arbitration. She further
stated that Vanowen then retained new counsel, who filed this
complaint against Houston, Houston Hospitality, and NBK.
Vanowen opposed arbitration, asserting paragraph 11A applied
only to issues of possession or cancellation of the lease, which was
not at issue in the case. Further, its complaint included
defendants who were not signatories to the lease. On October 8,
2024, the trial court ruled that the unlawful detainer action and
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this underlying action were not related under California Rules of
Court, rule 3.300.
The trial court denied the motion to compel arbitration,
concluding that paragraph 11A limited arbitration to disputes
concerning repairs, deductions in rent, and termination of the
lease. The court reasoned, “None of those issues are implicated
by Plaintiffs’ claims in this action (as opposed to the unlawful
detainer action). While the fire may be what caused the damage,
the relief sought in the complaint does [not] come within the
scope of Paragraph 11A.” Houston and Houston Hospitality
timely appealed.
DISCUSSION
A. Governing Law and Standard of Review
“Where, as here, the parties to a lawsuit have executed an
arbitration agreement, a ‘threshold question . . . presented by
every motion or petition to compel arbitration’ is ‘whether the
parties’ dispute falls within the scope of that agreement.’ ”
(Mondragon v. Sunrun Inc. (2024) 101 Cal.App.5th 592, 601.)
“ ‘In determining the scope of an arbitration [agreement], “[t]he
court should attempt to give effect to the parties’ intentions, in
light of the usual and ordinary meaning of the contractual
language and the circumstances under which the agreement was
made.” ’ ” (Id. at p. 602, accord, Victoria v. Superior Court (1985)
40 Cal.3d 734, 744.) “The scope of arbitration is, of course, a
matter of agreement between the parties,” although “doubts
concerning the scope of arbitrable issues are to be resolved in
favor of arbitration.” (Ericksen, Arbuthnot, McCarthy, Kearney &
Walsh, Inc. v. 100 Oak Street (1983) 35 Cal.3d 312, 323; accord,
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Duran v. EmployBridge Holding Co. (2023) 92 Cal.App.5th 59,
65–66 [“California has a strong public policy favoring arbitration
and, as a result, ambiguities or doubts about the scope of the
arbitration provision should be resolved in favor of arbitration.”].)
“The policy favoring arbitration, however, does not apply when
unambiguous language shows the parties did not agree to
arbitrate all or a part of the dispute.” (Duran, at p. 66; accord,
Eminence Healthcare, Inc. v. Centuri Health Ventures, LLC
(2022) 74 Cal.App.5th 869, 876.) “ ‘ “[W]hile California public
policy favors arbitration, ‘ “ ‘there is no policy compelling persons
to accept arbitration of controversies which they have not agreed
to arbitrate.’ ” ’ ” ’ ” (Mar v. Perkins (2024) 102 Cal.App.5th 201,
212.)
“ ‘ “Whether an arbitration agreement applies to a
controversy is a question of law to which the appellate court
applies its independent judgment where no conflicting extrinsic
evidence in aid of interpretation was introduced in the trial
court.” ’ ” (Ahern v. Asset Management Consultants, Inc. (2022)
74 Cal.App.5th 675, 687; accord Rice v. Downs (2016)
248 Cal.App.4th 175, 185 [appellate court is “ ‘not bound by the
trial court’s construction or interpretation’ ”].)
B. Vanowen’s Complaint Against Houston, Houston
Hospitality, and NBK Does Not Come Within the Scope of
the Arbitration Provision in Paragraph 11A
Here, there is no dispute as to what “the provisions of”
Paragraph 11A address. Houston states that “Section 11A of the
Lease . . . addresses the parties’ rights and obligations in the
event of partial destruction of the Premises, requiring repairs,
including the Respondents’ duty to make repairs, time-to-repair
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options, rent deductions during repairs, potential termination if
repairs cannot be made within 60 days, and a requirement that
‘in the event of any dispute between Landlord and Tenant
relative to the provisions of this paragraph,’ the parties shall
submit the dispute to arbitration.” Thus, arbitration is required
only when a dispute “is relative to” repairs, rent deductions
during repairs, and termination if repairs cannot be made within
60 days.
Vanowen’s complaint does not allege that it had any duty to
make repairs but was excused from doing so, that it exercised any
time-to-repair options, or that Houston was not entitled to rent
deductions during repairs. Nor does the complaint allege
Vanowen is exercising its option to terminate the lease because
repairs cannot be made within 60 days. Additionally, Houston
does not argue any of her rights under paragraph 11A are
defenses or counterclaims to Vanowen’s complaint. Moreover,
five of the six causes of action are alleged against nonsignatories
NBK and Houston Hospitality for their separate tortious
conduct.2 Under these circumstances, Vanowen’s claims in this
matter do not fall within the scope of the arbitration clause
contained in paragraph 11A.
Houston focuses on the kitchen fire as a catalyst for
Vanowen’s complaint, arguing that “[a]ll of Respondents’ causes
2 Houston argues NBK and Houston Hospitality, although
nonsignatories to the lease, may compel Vanowen to arbitration,
citing Boucher v. Alliance Title Co., Inc. (2005) 127 Cal.App.4th
262. We need not decide whether NBK and Houston Hospitality
may do so because we conclude Vanowen’s claims against
Houston, Houston Hospitality, and NBK do not fall with the
scope of the arbitration provision in paragraph 11A.
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of action arise from the same nucleus of fact: damage to the
Premises caused by the Fire, the alleged failure to make timely
repairs, and the resulting disputes over rent deductions and lease
termination rights.” She further asserts, “but for the Lease and
the parties’ repair-related obligations triggered by the Fire, none
of Respondents’ claims would exist.”
Houston’s argument ignores Vanowen’s primary complaint
that she sublet the property in violation of the lease. These
allegations are independent of causes of action arising from the
kitchen fire and form the basis for breach of contract (second
cause of action), interference with contract (third cause of action),
fraud (fourth cause of action) and interference with prospective
economic advantage (fifth and sixth causes of action). Although
Vanowen’s first cause of action for negligence arises from the
allegation that all three defendants’ actions led to the kitchen
fire, these allegations say nothing about repair obligations, rent
reductions, or termination of the lease based on failure to repair.
Nor does Houston argue her rights or obligations under
paragraph 11A serve as defenses or counterclaims to the
negligence claim.
For the same reason, Houston’s expansive interpretation of
the phrase “relative to” as encompassing Vanowen’s tort and
contract causes of action fails. While similar language, such as
“ ‘ “arising out of or relating to,” ’ ” has been broadly construed
(EFund Capital Partners v. Pless (2007) 150 Cal.App.4th 1311,
1327), here the phrase cannot be so broadly read. The
unauthorized sublet allegations are simply not “relative to” the
repair and lease termination provisions of paragraph 11A.
Indeed, the complaint alleged the unauthorized sublet existed
before the kitchen fire occurred. Additionally, the topic of
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subletting is addressed in paragraph 12 of the lease and
paragraphs 6 and 7 of the lease addendum. Extending the
arbitration provision to other parts of the lease would render
meaningless the provision that arbitration is limited to disputes
“relative to the provisions of this paragraph.”
Houston next argues that this case is subject to arbitration
because Vanowen alleged she owed it over $425,000 in back rent.
We are not persuaded this allegation alone brings the entire
complaint within the scope of the arbitration agreement. While
paragraph 11A allows for a reduction in rent during repairs, it is
undisputed that no repairs were made. In all events, Vanowen
sought to recover the fair rental value of the property in its
unlawful detainer action. Any dispute associated with reductions
in rent may be resolved in that matter.3
Houston also argues arbitration is required because
Vanowen’s claims in this action are “intertwined” with the
provisions of paragraph 11A. Houston cites Boucher v. Alliance
Title Co., Inc. (2005) 127 Cal.App.4th 262 (Boucher) for the
proposition that “[c]laims that rely upon, make reference to, or
are intertwined with claims under the subject contract are
arbitrable.” Boucher does not stand for this proposition. There,
the plaintiff filed suit against his employer, with whom he had an
employment contract containing an arbitration clause, and the
employer’s corporate successor entity, who did not have an
employment contract with the plaintiff. Boucher held the
successor entity could enforce the arbitration agreement: “a
nonsignatory defendant may invoke an arbitration clause to
3 We do not imply or reach any conclusions as to the effect of
the arbitration of Vanowen’s unlawful detainer action on this
matter.
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compel a signatory plaintiff to arbitrate its claims when the
causes of action against the nonsignatory are ‘intimately founded
in and intertwined’ with the underlying contract obligations.”
(Id. at p. 271.) Houston may not rely on Boucher to bootstrap
Vanowen’s nonarbitrable claims to arbitration.
Finally, Houston argues the Federal Arbitration Act (FAA;
9 U.S.C. § 1 et seq.) applies because “the lease evidenced
interstate commerce in operating a restaurant, including
procurement of supplies across state lines.” Even assuming the
FAA applies to this matter, “the FAA does not require parties to
arbitrate when they have not agreed to do so, . . . nor does it
prevent parties who do agree to arbitrate from excluding certain
claims from the scope of their arbitration agreement. . . . It
simply requires courts to enforce privately negotiated agreements
to arbitrate, like other contracts, in accordance with their terms.”
(Volt Info. Sciences, Inc. v. Bd. of Trustees of the Leland Stanford
Junior University (1989) 489 U.S. 468, 478.) We have determined
the parties did not agree to arbitrate the claims brought by
Vanowen in this action and whether the FAA applies does not
change that result.4
4 Because we conclude this action did not come within the
scope of the arbitration provision of paragraph 11A, we need not
address Vanowen’s argument that Houston and Houston
Hospitality waived their rights to compel arbitration.
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DISPOSITION
The order denying the motion to compel arbitration is
affirmed. Vanowen may recover its costs on appeal.
MARTINEZ, P. J.
We concur:
FEUER, J.
STONE, J.
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