Marcus Jackson Williams, et al. v. Kenneth Farley, et al.

Judge of the Superior Court | Parties who intend to submit on this tentative must send an email to the Court at [email protected] indicating intention to submit on the tentative as directed by the instructions provided on the court website at www.lacourt.org. Please be advised that if you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the matter. Unless you receive a submission from all other parties in the matter, you should assume that others might appear at the hearing to argue. If the Court does not receive emails from the parties indicating submission on this tentative ruling and there are no appearances at the hearing, the Court may, at its discretion, adopt the tentative as the final order or place the motion off calendar.

OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES - NORTHEAST DISTRICT MARCUS JACKSON WILLIAMS, et al., Plaintiff(s), vs. KENNETH FARLEY, et al., Defendant(s). |))))))))))) | CASE NO.: 26STCP02138 [TENTATIVE] ORDER RE: PETITION TO VACATE ARBITRATION AWARD; MOTION TO CONFIRM ARBITRATION AWARD AND ENTER JUDGMENT Dept. 3

8:30 a.m. August 20, 2026 | |) | | I. INTRODUCTION On June 9, 2026, petitioners Marcus Jackson Williams and Glory Curtis Williams (collectively, "Sellers") filed this this petition to vacate a contractual arbitration award assigned by the Honorable Terry Friedman (Ret.) in respondents Kenneth Farley and Sarah Deschenes' (collectively, "Buyers") favor. The Final Award (the "Award") was issued on May 25, 2026, following a 3-day evidentiary hearing and post-hearing proceedings. On June 24, 2026, Buyers filed a response to Sellers' petition and filed a notice of related case.

On July 8, 2026, Buyers filed a motion to confirm the Award, enter judgment pursuant to the Award, and deny Sellers' Petition. Buyers' response to the petition to vacate is fully encompassed within their motion to confirm the Award, thus citations to Buyers' arguments will refer to Buyers' motion, reply brief, and supporting papers. Sellers filed a brief opposing Buyers' motion to confirm on August 3, 2026. On August 7, 2026, Buyers filed a brief opposing Sellers' petition to vacate as well as a reply brief in support of their motion to confirm.

On August 11, 2026, Sellers filed a reply brief in support of their petition to vacate. II. SELLERS' PETITION TO VACATE This petition arises from an arbitration proceeding initiated by Buyers arising from their purchase of a home sold by Sellers for $2.6 million. In a 31-page decision, the arbitrator found that Buyers established all four of their arbitral claims - concealment, intentional misrepresentation, negligent misrepresentation, and negligence. The arbitrator awarded Buyers $1,775,036.12, consisting of damages, prejudgment interest, and reasonable attorneys' fees, costs, and expenses.

Buyers alleged that Sellers did not fully and honestly disclose that a prior owner of the home, Eddie Turner ("Turner"), had been convicted of mortgage fraud, lost the house to foreclosure, and, after being released from prison in 2021, was seen loitering around the property. (Award, pp. 4, 16.) Turner's actions and threats disturbed

Sellers to the point that they filed for a two-year civil harassment restraining order, which was eventually granted on May 12, 2022. (Id., pp. 4-5.) Buyers claimed Sellers deceived them by providing a "cleverly crafted... uninformative sentence obscured by its location and spacing on the SPQ [Seller Property Questionnaire] that was intended not to alert them to the threat that Turner presented to occupants of the Property." (Id., p. 16.) Sellers' disclosures did not name Turner, identify the restraining order case they brought, or describe their fear of Turner and their knowledge of his violent, criminal conduct and threats. (Id.)

The fragment only stated, "Restraining order against previous owner who was fore-closed and convicted of mortgage fraud in approx. 2013 and who was observed loitering near the home in 2022." Sellers, on the other hand, contended that Buyers negligently failed to read the fragment stated on the SPQ and that their explanation was sufficient notice of Turner's impact on the value and desirability of the Property. (Id.) Sellers' petition to vacate presents two issues: (1) whether the Federal Arbitration Act ("FAA") applies, and (2) whether there exist grounds to vacate the Award because the arbitrator manifestly disregarded the law in concluding that the Buyers relied on any affirmative misrepresentation or concealment of a material fact.

A. Whether the FAA Applies to Sellers' Petition The arbitration agreement between Buyers and Sellers is contained in Attachment 4(b) of the Petition, which is a copy of the California Residential Purchase Agreement and Joint Escrow Instructions ("RPA"). Paragraph 31, on page 14 of the RPA, provides, in relevant part: "Enforcement of, and any motion to compel arbitration pursuant to, this agreement to arbitrate shall be governed by the procedural rules of the Federal Arbitration Act, and not the California Arbitration Act, notwithstanding any language seemingly to the contrary in this Agreement." (Petition, Attachment 4(b), p. 14.)

Sellers argue that since enforcement of the arbitration agreement is governed by the FAA, vacatur of the Award is allowed pursuant to 9 U.S.C. Sec. 10(a)(4) where "the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made." An arbitrator's decision may be subject to vacatur under this provision if it is "completely irrational" or "constitutes manifest disregard of the law." (Comedy Club, Inc. v.

Improv West Associates (9th Cir. 2009) 553 F.3d 1277, 1288 (" Comedy Club ").) Buyers argue that the parties only agreed to be bound by the FAA's procedural rules in "enforcing" the agreement to arbitrate via a motion to compel arbitration and that California law does not allow for judicial review of the Award on its merits. Buyers' interpretation of the word "enforcement" is not persuasive because it would render the phrase "and any motion to compel arbitration pursuant to" superfluous. Accordingly, the Court proceeds to analyze whether the Award was issued in "manifest disregard of the law."

B. Whether There Exists a "Manifest Disregard of the Law" "[F]or an arbitrator's award to be in manifest disregard of the law, [i]t must be clear from the record that the arbitrator[] recognized the applicable law and then ignored it." (Comedy Club, supra, 553 F.3d at p. 1290; Collins v. D.R. Horton, Inc. (9th Cir. 2007) 505 F.3d 874, 879.) The law ignored must be "well defined, explicit, and clearly applicable" and the error must have been "obvious and capable of being readily and instantly perceived by the average person qualified to serve as an arbitrator." (Carter v.

Health Net of Cal., Inc. (9th Cir. 2004) 374 F.3d 830, 838; Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Bobker (2d Cir. 1986) 808 F.2d 930, 933.) Sellers argue the arbitrator exhibited a "manifest disregard of the law" on reliance. Reliance is necessary to establish the causal relationship between the alleged deception and the claimed injury. (Mirkin v. Wasserman (1993) 5 Cal.4th 1082, 1091-1092 (Mirkin).) "Reliance exists when the misrepresentation or nondisclosure was an immediate cause of the plaintiff's conduct which altered his or her legal relations, and when without such misrepresentation or nondisclosure he or she would not, in all reasonable probability, have entered into the contract or other transaction." (Alliance Mortgage Co. v.

Rothwell (1995) 10 Cal.4th 1226, 1239.) Reliance serves to "establish a complete causal relationship" between the alleged misrepresentation and the harm claimed to have resulted therefrom. (Mirkin at p. 1092.) In ruling in Buyers' favor on their concealment claim, the arbitrator identified 8 material facts that Sellers concealed when they filled out their disclosure statements. (Award, pp. 17-18.) The arbitrator referred to Buyers' testimony that "they did not notice the buried explanation fragment, but had they read it they would have asked [Sellers] questions that would have led to answer that would have convinced them not to purchase the Property." (Id., p. 18.)

Sellers argue that the arbitrator departed from the law because he admitted that Sellers made a disclosure and therefore could not have found that Buyers relied on an omission. (Petition, p. 16.) Sellers also argue that there is no actionable reliance for purpose of affirmative misrepresentation because Buyers cannot rely on disclosures that they did not read. Buyers argue that Sellers' argument is meritless because the arbitrator did not base his conclusion solely on the Sellers' explanation fragment on the SPQ.

Rather, the arbitrator also considered that Sellers repeatedly responded "NO" to questions on their transfer disclosure statement ("TDS") when they should have checked "YES." The questions highlighted by the arbitrator include whether Sellers were aware of "Neighborhood noise problems or other nuisances" and "Any lawsuits by or against Seller threatening to or affecting this real property." (Buyers' Mot., p. 14; Award, p. 7.) The arbitrator also pointed out that Sellers checked the "No" box when asked if they knew of any matters "affecting the title of the Property" or "Material facts or defects affecting the Property not otherwise disclosed to Buyer." (Award, pp. 8-9.)

Moreover, to the extent

the Sellers argued that their disclosures were sufficient, the arbitrator disagreed because the three-line explanation fragment was "buried" after a long string of "no" answers, was "sneaky," "spaced in a way to make it hard to see," and failed to include material information. (Award, p. 18.) Based on the arbitrator's extensive recitation of facts that he "found to be true, considered and relied on, and deemed material to the Award", Sellers' claim that the arbitrator manifestly disregarded the law on the element of reliance is unpersuasive. (Award, pp. 3-11, 12.)

Accordingly, the motion to vacate is DENIED. III. BUYERS' MOTION TO CONFIRM Buyers argue that their motion should be granted because the Response to the Petition to Vacate satisfies sections 1285.4 and 1285.5 of the California Code of Civil Procedure. Since the parties agreed to abide by the FAA's procedural rules, the motion should have been brought under 9 U.S.C. Sec.

9. Therefore, the motion to confirm is DENIED without prejudicing Buyers' ability to bring a motion to confirm the arbitration award pursuant to the applicable statute. The Court recognizes the highly technical nature of this ruling and Sellers should not treat it as an opportunity to relitigate the matter. IV. CONCLUSION The Petition to vacate the arbitration award is DENIED. The motion to confirm the arbitration award is DENIED without prejudice. Buyers to give notice. Dated this 20th day of August 2026 | | | William A.

Crowfoot Judge of the Superior Court | Parties who intend to submit on this tentative must send an email to the Court at [email protected] indicating intention to submit on the tentative as directed by the instructions provided on the court website at www.lacourt.org. Please be advised that if you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the matter. Unless you receive a submission from all other parties in the matter, you should assume that others

might appear at the hearing to argue. If the Court does not receive emails from the parties indicating submission on this tentative ruling and there are no appearances at the hearing, the Court may, at its discretion, adopt the tentative as the final order or place the motion off calendar. | Home -->)" -->