Filed 3/7/22 Ahern v. Davies Lemmis Raphaely Law CA2/7

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

SECOND APPELLATE DISTRICT

DIVISION SEVEN

APPEAL from a judgment of the Superior Court of Los Angeles County, Daniel J. Buckley, Judge. Reversed and remanded with directions.

Catanzarite Law Corporation, Kenneth J. Catanzarite, Nicole M. Catanzarite-Woodward and Eric V. Anderton for Plaintiffs and Appellants.

Marshall & Associates, John A. Marshall and Rodger C. Jensen for Defendants and Respondents.

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The superior court granted the petition filed by Merton R. Davies, Rosemary Lemmis, Shahab Raphaely and the Davies Lemmis Raphael Law Corporation (collectively Davies parties) to confirm an arbitration award dismissing the investment fraud and legal malpractice claims of Thomas Ahern and Amlap Ahern, LLC (collectively Ahern parties) as barred by governing statutes of limitations; denied the Ahern parties’ petition to vacate or correct the award; and entered judgment in favor of the Davies parties on November 25, 2020. The arbitration was conducted pursuant to the arbitration provisions in cotenancy agreements between BH & Sons, LLC, on the one hand, and tenant in common investors, including Amlap Ahern, LLC, on the other hand, who had purchased interests in improved real property in Anaheim (the Amlap property) and San Diego (the Aerovault property).

On appeal the Ahern parties argue, among other contentions, arbitration should not have been compelled because their fraud and related claims based on acquisition of their interests in the Amlap and Aerovault properties were outside the scope of the cotenancy agreements’ arbitration provisions. (The cotenancy agreements between BH & Sons and the tenant in common investors in the two projects are substantially similar, and the arbitration provisions in the two agreements are identical.)

We addressed the identical issue in Ahern v. Asset Management Consultants, Inc. (2022) 74 Cal.App.5th 675 (Ahern 2022), in which the Ahern parties’ investment fraud claims against BH & Sons and related individuals and entities had been ordered to arbitration based on the arbitration provision in the cotenancy agreement for the Amlap property. We reversed the judgment confirming the arbitration award in that case, agreeing with the Ahern parties the trial court had erred in compelling arbitration of their claims. (Id. at p. 679.)

We first explained the tenant in common purchase and sale agreement by which the investors acquired their interests in the Amlap property, allegedly due to fraudulent representations in promotional materials developed and distributed by Asset Management Consultants, Inc., and its affiliate BH & Sons, contained no arbitration provision. The cotenancy agreement, which concerned the operation and management of the Amlap property and the respective rights of the tenants in common in those decisions once the investment interests had been acquired, did require arbitration, but its language was particularly narrow. It specifically provided for arbitration only of disputes arising in connection with the interpretation and enforcement of provisions of the cotenancy agreement, omitting any general reference to disputes “related to” the agreement.[1]

We then considered various arguments advanced in support of the order compelling arbitration, concluding none had merit: “[T]he Ahern parties’ lawsuit does not involve the interpretation or enforcement of a provision of the cotenancy agreement; their claims are not ‘rooted in’ the cotenancy agreement; and applying Civil Code section 1642’s interpretative tool does not justify requiring arbitration of a dispute that relates to the acquisition of the Amlap investment, not to its management and operation.” (Ahern 2022, supra, 74 Cal.App.5th at p. 696.)

Because the arguments of the Ahern investors and the Davies parties concerning the scope of the arbitration provisions in the cotenancy agreements for the Amlap and Aerovault properties claims are essentially the same as the arguments we addressed in Ahern 2022, after we filed our opinion in Ahern 2022, we invited the parties to address in supplemental briefing why reversal of the judgment in the instant appeal was not required by the analysis and holding in that case. In response counsel for the Davies parties “acknowledge[d] that the Court’s ruling in Ahern 2022 is controlling, to the extent that the Court has found that the allegations of fraud and related claims in connection with the offer and sale of interests in the subject properties are outside the scope of the arbitration provision.” Accordingly, for the reasons discussed in Ahern 2022, the judgment is reversed.

DISPOSITION

The judgment confirming the arbitration award is reversed. The matter is remanded with directions to deny the petition to confirm the arbitration award, to grant the petition to vacate the award and to vacate the November 8, 2013 order compelling arbitration. The Ahern parties are to recover their costs on appeal.

PERLUSS, P. J.

We concur:

SEGAL, J.

FEUER, J.

[1] Paragraph 9.8 of the cotenancy agreement for the Amlap property provided, “Unless the relief sought requires the exercise of the equity powers of a court of competent jurisdiction, any dispute arising in connection with the interpretation or enforcement of the provisions of this Agreement, or the application or validity thereof, shall be submitted to arbitration.”

The arbitration provision in the cotenancy agreement for the Aerovault property, also paragraph 9.8, contained the identical language. When ordering the Ahern parties to arbitrate their claims against the Davies’ parties in November 2013, the superior court did not distinguish between the claims relating to the Amlap property and those concerning the Aerovault property. Neither the Ahern parties nor the Davies parties contend our analysis of the scope of the two arbitration provisions should be different.