BARISTO LLC, et al. vs. WABASH MANAGER 1, LLC, et al.

(Stanley Mosk Courthouse: Dept. 309) August 20, 2026 DEPARTMENT 309 LAW AND MOTION RULINGS

County of Los Angeles DEPARTMENT 17

BARISTO LLC, et al. vs. WABASH MANAGER 1, LLC, et al. | Case No.: 25STCV23135 Hearing Date: August 20, 2026 | Defendants' motion to compel arbitration is GRANTED. This action is stayed pending completion of proceedings. Plaintiffs' motion for leave to amend is GRANTED.

On 8/6/2025, Plaintiff Baristo LLC and Wabash 1 LLC (collectively, Plaintiffs) initiated this action.

On 10/16/2025, Plaintiffs filed a first amended complaint (FAC) against Wabash Manager 1, LLC, Mark Silver, Todd Jacobs, and Bold Partners, LLC, alleging: (1) breach of contract; (2) breach of fiduciary duty; (3) professional negligence; (4) intentional misrepresentation; (5) negligent misrepresentation; (6) fraudulent concealment; (7) declaratory relief; (8) constructive fraud; (9) breach of covenant of good faith and fair dealing; and (10) constructive trust.

On 4/23/2025, Plaintiffs dismissed individual Defendants Mark Silver and Todd Jacobs from the action.

On 6/4/2025, remaining Defendants moved to compel arbitration.

On 6/15/2026, Plaintiffs moved for leave to amend to file a second amended complaint (FAC).

Legal Standard

Where the Court has determined that an agreement to arbitrate a controversy exists, the Court shall order the petitioner and the respondent to arbitrate the controversy ...unless it determines that... grounds exist for rescission of the agreement." (Code Civ. Proc., Sec. 1281.2.)

Among the grounds which can support rescission are fraud, duress, and unconscionability. (Tiri v. Lucky Chances, Inc. (2014) 226 Cal.App.4th 231, 239.)

The Court may also decline to compel arbitration wherein there is possibility of conflicting rulings on a common issue of law or fact. (Code Civ. Proc., Sec. 1281.2 (c).)

Discussion

The party moving to compel arbitration "bears the burden of proving [the] existence [of an arbitration agreement] by a preponderance of the evidence." (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413.)

The moving party also bears the burden of demonstrating that the claims fall within the scope of the arbitration agreement. (O mar v. Ralphs Grocery Co. (2004) 118 Cal.App.4th 955, 961.)

Defendants submitted evidence that Plaintiffs signed a Limited Liability Company Operating Agreement of Wabash 1 LLC dated 2/2/2018 (the Operating Agreement) which contains a binding, enforceable arbitration provision in section 12.15. (Jew Decl. P. 3, Exh. A.)

Section 12.15 of the Operating Agreement states: Any dispute, claim or controversy arising out of or relating to this Agreement or to the breach, termination, enforcement, interpretation or validity thereof shall be by binding arbitration in Los Angeles, California before one arbitrator." (See id., Ex. 2 at Ex. 1, Sec. 12.15).

In opposition, Plaintiffs do not dispute signing the agreement, but rather argue that Defendants lack standing to enforce the Agreement: Here, the motion to compel arbitration has been brought by Bold Partners, a nonsignatory of the Operating Agreement against Plaintiff Wabash 1, LLC, which did not sign the Operating Agreement.

What is more, the intent of the parties was to limit the arbitration agreement to "the Members." The arbitration agreement explicitly refers to "the Members" exercising rights under the provision.

Under the arbitration agreement between Baristo and Wabash Manger, 1, LLC, the sole members, it provides: "Provided, however, the arbitrator shall enter findings of fact and conclusions of law. If JAMS is unwilling or unable to serve as the provider of arbitration or to enforce any provision of this arbitration clause, the Members shall agree upon another arbitration organization with similar procedures to serve as the provider of arbitration." See FAC, Ex. 2 at Ex. 1, Sec. 12.15) (Opp., 4: 23-27.)

However, as noted by Defendants, there is nothing in the language of Section 12.15 that limits arbitration to disputes solely "between Members."

Plaintiffs rely instead on a later sentence stating that if JAMS is unavailable, "the Members shall agree upon another arbitration organization with similar procedures to serve as the provider of arbitration." (Opp. 9:1-8).

But that sentence concerns only the administrative fallback mechanism for selecting a substitute arbitral forum. It does not narrow the broad scope of the clause requiring arbitration of "[a]ny dispute, claim or controversy arising out of or relating to this Agreement."

California law requires arbitration clauses to be interpreted liberally, with "any doubts regarding the arbitrability of a dispute . . . resolved in favor of arbitration." (Weeks v. Crow (1980) 113 Cal.App.3d 350, 353)

Defendants also argue that Plaintiffs' arguments related to Jacobs and Silvers are moot because Plaintiffs voluntarily dismissed them from the action.

Moreover, even assuming Plaintiffs' pending motion for leave to re-add these Defendants was granted, both of those Defendants indicate they would consent to arbitration. (See Declaration of Todd Jacobs filed concurrently herewith P. 2; see also Declaration of Mark Silver filed concurrently herewith P. 2.)

As such, the Court agrees that Plaintiffs cannot show any genuine risk that claims involving Jacobs or Silver would proceed in court while the same issues proceed in arbitration.

Plaintiffs do not advance any convincing argument that the FAC's substantive claims do not arise out of or relate to the Operating Agreement.

Accordingly, given that Defendants have established by a preponderance of the evidence that an arbitration agreement exists, and that Plaintiffs' claims are covered by that agreement, the burden shifts to the Plaintiffs to establish that the arbitration clause should not be enforced. (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236. (Pinnacle).)

II. Plaintiffs' Burden

The party opposing arbitration bears the burden of proving, by a preponderance of the evidence any defense, such as unconscionability or duress. (Id.)

Here, Plaintiffs argue that the arbitration agreement is procedurally unconscionable because it was founded on oppressive fraud and misconduct.

Plaintiffs argue that the agreement is substantively unconscionable because "[t]he provision limits the liability of the Manager while permitting an unlimited recovery of Manager against any of the members to the agreement, while includes Baristo." (Opp., 10: 12-14.)

However, as noted by Defendants, Plaintiffs' unconscionability argument does not challenge the arbitration clause itself.

Plaintiffs argue generally that they were induced into the transaction and attack a separate limitation-of-liability provision in section 3.6(b), not the arbitration provision in section 12.15.

That is not a basis to invalidate the arbitration clause, but rather speaks the enforceability of the overall contract--an issue not properly put before the Court via a motion to compel arbitration.

Based on the foregoing, Defendants' motion to compel arbitration is granted.

This action is stayed pending completion of proceedings.

In reaching this conclusion, the Court finds no meaningful prejudice will result if Defendants Silvers and Jacobs are added as Defendants, given that this case is in its infancy. (Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 761.)

Accordingly, the Court grants Plaintiffs' motion for leave to amend.

It is so ordered.

Dated: August, 2026 Hon. Jon R. Takasugi Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court at [email protected] by 4 p.m. the day prior as directed by the instructions provided on the court website at www.lacourt.org.

If a party submits on the tentative, the party's email must include the case number and must identify the party submitting on the tentative.

If all parties to a motion submit, the court will adopt this tentative as the final order.

If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar.

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