Pellitteri v. Wellquest International CA2/2

Filed 1/29/15 Pellitteri v. Wellquest International CA2/2 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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 TWO

MARCIA PELLITTERI, B255062

Plaintiff and Respondent, (Los Angeles County Super. Ct. No. BC490541) v.

WELLQUEST INTERNATIONAL, INC., et al.,

Defendants and Appellants.

APPEAL from a judgment of the Superior Court of Los Angeles County. Mark V. Mooney, Judge. Reversed with directions.

Quinn Emanuel Urquhart & Sullivan, Steven G. Madison, Prashanth Chennakesavan for Defendants and Appellants.

Krane & Smith, Jeremy D. Smith for Plaintiff and Respondent.

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Appellants contend that the trial court improperly denied their motion to compel arbitration of a lawsuit brought by respondent. We find that the trial court read a controlling arbitration provision too narrowly and should have ordered certain issues be submitted to arbitration. Other issues, however, fall outside of the arbitration provision and therefore may be litigated in court. FACTUAL AND PROCEDURAL BACKGROUND Plaintiff Marcia Pellitteri filed this action in August 2012. Her first amended complaint (FAC), filed in August 2013, names as defendants Wellquest International, Inc. (WQ), Edward Mishan, Michael Ackerman, Knott Direct, Inc., Emson, Inc., and E. Mishan & Sons, Inc. Pellitteri alleges that all defendants are interrelated, and that each is the agent, principal, alter ego, and/or representative of the other. She further alleges she is a successor in interest to and assignee of Progressive Consulting Services, Inc. (PCS). According to the FAC, Pellitteri is in the business of developing new products and advertising the products by, among other means, television infomercials. In 2002, Pellitteri agreed with Mishan and Ackerman to introduce to them third parties who developed various products so that Mishan and Ackerman could produce, package, and market the products. Mishan and Ackerman and affiliated entities were to pay Pellitteri and her affiliated entities royalties based on sales of the products. Along those lines, PCS entered into a written agreement with WQ in September 2002, whereby WQ would pay PCS royalties based on sales of third parties’ products. The FAC alleges that from 2002 to 2011 Pellitteri and/or PCS received compensation from defendants. In 2011, however, Pellitteri discovered that defendants breached their obligations by failing to pay royalties, by misrepresenting sales of products, by entering into undisclosed arrangements with third parties to circumvent the agreements between plaintiff and defendants, and by misappropriating plaintiff’s intellectual property and product designs. The FAC contains a total of 11 causes of action pertaining to this alleged conduct, labeled as follows: (1) breach of oral joint venture agreement; (2) breach of written agreement; (3) breach of fiduciary duty; (4)