Case Number: 19SMCV01863 Hearing Date: February 18, 2020 Dept: P

Barber v. Guggenheim Partners Case No. 19SMCV01863

Hearing Date: February 18, 2020

Defendants’ Motion to Compel Arbitration

TENTATIVE RULING

Plaintiff’s complaint is ambiguous, alleging “fraudulent contract” and “perjury under oath,” but providing no specific facts. Plaintiff worked as a receptionist for defendant Guggenheim, and her employment agreement contained an arbitration clause. Defendants move to compel arbitration.

California has a strong public policy in favor of arbitration. Coast Plaza Doctors Hosp. v. Blue Cross of California (2000) 83 Cal.App.4th 677, 686. If an arbitration agreement was obtained via fraud in the execution, the contract is void, and there was no agreement to arbitrate. If, however, an arbitration agreement was formed via fraud in the inducement, the agreement is voidable and must be rescinded. Whether an agreement is voidable and subject to rescission is to be determined by the arbitrator, whereas a void agreement has no legal force and will not be submitted to an arbitrator. Duffens v. Valenti (2008) 161 Cal.App.4th 434, 448-449.

Guggenheim’s employment agreement is signed by plaintiff. It includes an arbitration provision which states: “This Arbitration Agreement shall apply to: (a) all disputes and claims of any nature that you may have against the Company, Guggenheim, or any of their respective officers, directors, employees or agents in their capacity as such, including any and all statutory, contractual, and common law claims[.]” Aronova Decl., Exh. A at pg. 4. On its face, the arbitration clause applies to plaintiff’s claims.

In opposition, plaintiff argues “all contracts signed with Guggenheim Partners Investment Management Holdings LLC are Fraudulent and Therefore Unenforceable.” Opp. at pg. 3. Plaintiff argues her employment agreement is unenforceable because Guggenheim “had no intention of abiding by their promise and their agreement to [plaintiff]” and because defendants “engaged willfully in a material breach of contract that has irreparably broke the heart of the contract.” Id. at pgs. 3-4.

Plaintiff appears to argue agreement is tainted by fraud in the inducement defendants did not intend to fulfill their contractual responsibilities when the agreement was made. Plaintiff does not argue, however, that she was unaware she was signing a contract or was deceived as to its terms. Under Duffens, supra, whether plaintiff can rescind the contract and its arbitration clause is to be determined by the arbitrator.

Further, even if fraud in the inducement was a valid basis to treat the contract as void in its entirety, the opposition provides no evidence that defendants committed fraud. Plaintiff states only that defendants did not intend to fulfill the agreement at the time it was formed. Defendant’s only obligations under the agreement, however, were to allow plaintiff to work for them and pay her an agreed salary. Plaintiff admits she worked for defendants for over a year and does no allege they failed to pay her according to her contract.

Finally, while plaintiff alleges wrongdoing throughout her employment, none of these allegations is relevant to the enforceability of the employment agreement. The employment agreement and its arbitration clause are enforceable, so the court need not address plaintiff’s arguments regarding enforceability of the later separation agreement, which also included a (redundant) arbitration clause. GRANTED.