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RALPH ROGARI (SBN 139422) REHM AND ROGARI 12121 Wilshire Boulevard Suite 600 Los Angeles, CA 90025 (310) 207-0059 Attorneys for plaintiff Gary Brown, as Trustee of the Estelle Brown Trust


GARY BROWN, as Trustee of the Estelle Brown Trust

) ) ) Plaintiff, ) ) v. ) ) BARRY BAYAT, a individual; UBS ) FINANCIAL SERVICES, INC., a corporation, ) DOES 1 - 50, inclusive, ) ) Defendants. ) ______________________________________ )

CASE NO. SC 109123



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Plaintiff GARY BROWN, as Trustee of the Estelle Brown Trust, submits the following in opposition to the petition to compel arbitration filed by defendants Barry Bayat and UBS Financial Services, Inc. (UBS) :


Introduction Plaintiff, Gary Brown, brings this action as trustee of the Estelle Brown

Trust. (Complaint; 1) Estelle Brown, the beneficiary of the trust, is Gary


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Browns elderly mom. Ms. Brown is approaching ninety years of age. (Complaint; 2) As of December, 2006, defendants Bayat and UBS were entrusted with investing more than $600,000.00 of Ms. Browns money. (Complaint; 8) Through self-dealing, unlawful, unfair, and fraudulent business acts or practices from December, 2006 through 2008, Bayat and UBS lost more than $300,000.00 of her money. (Complaint; s 8, 9, 10, 11, 13, 16, 1) Now, without answering the complaint, Bayat and UBS ask the court to compel arbitration. It is not clear whether defendants petition is under the Federal Arbitration Act (FAA) or California Code of Civil Procedure 1281.2. Although the Motion is entitled Petition, there is no Petition. The moving papers consist of: (1) Notice of Motion and Motion; (2) Memorandum of Points and Authorities; (3) Declaration of Evelyn Best; (4) Compendium of NonCalifornia Authorities. 1 As discussed in the following authorities, whether brought under the FAA or the California Code of Civil Procedure, the motion should be denied. Defendants have failed to present evidence that plaintiff, Gary Brown, agreed to arbitrate this dispute with either defendant Barry Bayat or defendant UBS Financial Services, Inc.


Defendants Bayat and UBS have failed to establish an agreement to arbitrate with plaintiff Gary Brown. In California, public policy does not favor the arbitration of disputes

which parties have not agreed to arbitrate. Freeman v. State Farm Mut. Auto. Ins. Co. (1975) 14 Cal.3d 473, 481, 121 Cal.Rptr. 477, 535 P.2d 341; Cione v. Foresters Equity Services, Inc. (1997) 58 Cal.App.4th 625, 634, 68 Cal.Rptr.2d 167.) Consequently, a party petitioning a California Court to compel arbitration
None of the listed cases are attached to the Compendium. PLAINTIFFS OPPOSITION TO MOTION TO COMPEL ARBITRATION 2

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must prove, by a preponderance of evidence, the existence of an arbitration agreement. Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972, 64 Cal.Rptr.2d 843, 938 P.2d 903 (party seeking to compel arbitration bears the burden of proving the existence of a valid arbitration agreement by a preponderance of the evidence.); Olvera v. El Pollo Loco, Inc. (2009) 173 Cal.App.4th 447. 93 Cal.Rptr.3d 65. Here, it is not clear whether the defendants seek relief under the provisions of the CCP or the FAA. Between the two, there is one big difference. Under the FAA, a jury decides if the defendants have proved the existence of an agreement to arbitrate between the parties. Under the CCP, a Judge decides. See e.g. Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 58 Cal.Rptr.2d 875, 926 P.2d 1061 Regardless, since the defendants have not offered sufficient evidence of an agreement to arbitrate, there is nothing for a jury to decide and the motion should be denied. A. The documents attached to the declaration of attorney Evelyn

Best are hearsay, and cannot be considered. Here, defendants Bayat and UBS argue at length that the two documents attached as exhibits A and B to the declaration of their attorney, Evelyn Best, prove that Gary Brown agreed to arbitrate this dispute. However, as set forth more particularly in the accompanying objection to the declaration of Evelyn Best, exhibits A and B are not admissible. Ms. Best does not have personal knowledge of any agreement between Gary Brown and UBS Financial Services, Inc. The exhibits attached to her declaration are hearsay. See Cullincini v. Deming (1975) 53 Cal.App.3d 908, 915 (counsel's declaration stating that the plaintiff was a secured creditor properly disregarded as inadmissible hearsay because counsel was not a party to the agreement in dispute and such information was not shown to be within counsel's personal

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knowledge). 2 Since the exhibits are not admissible, defendants have failed to meet their burden of proving an agreement to arbitrate and the motion must be denied. B. The exhibits do not show consent to arbitrate between

plaintiff Gary Brown and either defendant Barry Bayat or defendant UBS Financial Services, Inc. Even if the court could consider defendants exhibits, those two exhibits do not establish consent by Gary Brown to arbitrate this dispute. At most, the exhibits demonstrate consent between Robert Brown and UBS PaineWebber, Inc. to arbitrate a dispute. However, neither Robert Brown, nor UBS PaineWebber, Inc. are parties to this case. "An 'arbitration agreement is subject to the same rules of construction as any other contract....' " Duffens v. Valenti (2008) 161 Cal.App.4th 434, 443, 74 Cal.Rptr.3d 311. For any contract, the parties' consent is a basic element. Civ.Code, 1550. In addition, the parties' consent must be communicated to one another. Civ.Code, 1565. Thus, a party's consent is essential to "the contractual underpinning of the arbitration procedure...." Herman Feil, Inc. v. Design Center of Los Angeles, 204 Cal.App.3d at p. 1414, 251 Cal.Rptr. 895. "[T]he asserted absence of contractual consent renders arbitration, by its very definition, inapplicable to resolve the issue." Ibid. In moving to compel arbitration, defendants concede that plaintiff, Gary Brown, is not a signatory to the documents. Defendants gloss over this important admission by asserting in a footnote that Gary Brown is a successor trustee who they claim is bound by the agreement Robert Brown allegedly signed with UBS PaineWebber, Inc. Instead of evidence, defendants argue

2 Plaintiff objects to any attempt by the defendants to provide new declarations or evidence in reply to this opposition. Doing so deprives plaintiff of due process of law.


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Herbert v. Superior Court (1985) 169 Cal.App.3d 718 holds that a successor trustee can be bound by the agreement of a predecessor. First of all, Herbert, is not on point. It concerned whether heirs could be bound in a wrongful death action by an agreement the decedent made with a health care provider to arbitrate. The holding of Herbert was legislatively superceded by part of MICRA, California Code of Civil Procedure 1295. Now, arbitration agreements in the arena of medical malpractice , are considered in light of the provisions of MICRA. See Ruiz v. Podolsky (2010) 50 Cal.4th 838, 237 P.3d 584. More importantly, even if there could be circumstances where a successor trustee could be bound by an agreement to arbitrate made by a former trustee, defendants have not presented evidence on the circumstances surrounding the relationship of the parties at the relevant times so that this court could determine if the law allows Gary Brown to be held to that agreement. See e.g. Melchor Investment Co. v. Rolm Systems (1992) 4 Cal.Rptr.2d 343, 3 Cal.App.4th 587 (In determining whether arbitration agreement exists, court may also need to determine who are parties to agreement.) Thus, while defendants argue that Gary Brown succeeded Robert Brown, there is no evidence of that. Indeed, defendants exhibit A shows in a box in the upper right hand corner that at the time that document was signed by Robert Brown, there is more than one trustee for the account. Yet the only trustee information statement attached is for Robert Brown. In short, the exhibit is insufficient to determine who the trustees of the Brown Trust were in 2002, much less that Gary Brown was a successor trustee or that Robert Brown and UBS PaineWebber, Inc. agreed that all such trustees would be bound by arbitration. In addition, the exhibits relate to understandings between Robert Brown and UBS PaineWebber, Inc. in 2002. (See page 16 of exhibit B copyright)

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However, the subject lawsuit does not allege any misconduct of UBS PaineWebber, Inc. Indeed, the complaint alleges misconduct of a completely different entity, UBS Financial Services, Inc. Misconduct that occurred in December, 2006, almost five years after the date of the exhibits upon which defendants rely. Consequently, even if this court could assume that the exhibits are true and correct copies of an account Robert Brown opened on behalf of the Trust with UBS PaineWebber, Inc. in February, 2002, the defendants offer no evidence whatsoever when or how the monies ended up with the present defendants, much less what communications then took place between the parties such that it could be found that the then trustee(s) then consented to arbitration.3 The question of a party's consent deserve[s] a careful factual inquiry.... Trabuco Highlands Community Ass'n v. Head (2002) 96 Cal.App.4th 1183, 1191, 117 Cal.Rptr.2d 842. Defendants have failed to provide sufficient information such that the required careful factual inquiry could take place. Since, defendants have failed to establish by a preponderance of the evidence that Gary Brown ever consented to arbitration with either UBS Financial Services, Inc., or Barry Bayat, the motion should be denied.


If the court believes that Defendants Bayat and UBS have meet their initial burden of proof, plaintiff should be permitted to undertake discovery to demonstrate defenses to the motion. As set forth above, defendants are seeking to require plaintiff to arbitrate

his claims based on actions a different trustee, Robert Brown, took years ago

3 In footnotes 3 and 4, defendants make assertions that various words in the exhibits provide notice of the terms of the arbitration provision. At best, those words provided constructive notice to Robert Brown. There is no showing that these documents were ever provided to plaintiff Gary Brown.


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with respect to a different entity, UBS PaineWebber, Inc. Although the defendants filed a bare bones motion which does not meet their burden of proof, should the court disagree, plaintiff then has the burden to establish any defenses to enforcement. Rosenthal, supra, 14 Cal.4th at p. 413 As set forth in the attached declaration of Ralph Rogari, most of the knowledge concerning the alleged arbitration agreement and the relationship of the parties, lies within defendants personal knowledge. Robert Brown, who defendants contend signed the disputed exhibits, is dead. He died three years ago. However, although plaintiff requested that the defendants submit to discovery before making this motion, they have refused. In Rosenthal, the Supreme Court recognized the right to conduct discovery as follows: Because a Code of Civil Procedure section 1281.2 petition to compel arbitration falls within the provisions of the Code of Civil Procedure for special proceedings of a civil nature, the Civil Discovery Act's provisions apply to Code of Civil Procedure section 1281.2 proceedings. Accordingly, parties to a Code of Civil Procedure section 1281.2 proceeding have discovery rights under the Civil Discovery Act, subject to the relevancy requirement and other provisions limiting the scope and timing of that discovery. Id. at 412-13 Thus, in Bouton v. USAA Cas. Ins. Co. (2008) 167 Cal.App.4th 412, 84 Cal.Rptr.3d 152, after the Supreme Court reversed a determination that an arbitrator, not the trial court, must determine if the plaintiff was an insured under a policy calling for arbitration, the appeals court remanded the case back to the trial court with instructions to permit discovery as a matter of procedural fairness: to grant USAA procedural fairness, the trial court should allow the parties to conduct discovery on the question whether Bouton is an insured

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under the Policy and to thereafter submit new (as well as previously submitted) evidence on that issue. Id. at 427. Here, while the defendants have failed to meet their burden of proof and the petition should therefore be denied, should this court disagree, plaintiff would respectfully request that he be permitted to take discovery.

Date: September 279, 2010


By ______________________ RALPH ROGARI, Attorney for plaintiff, Gary Brown, as Trustee of the Estelle Brown Trust.


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DECLARATION OF RALPH ROGARI 1. I am an attorney at law duly licensed before all the courts of the State of California and attorney of record for the plaintiff Gary Brown. If called upon to testify, I could do so competently to the facts set forth in this declaration of my own personal knowledge. 2. When I received the letter attached to the declaration of Evelyn Best as exhibit C was the first knowledge that I had that the defendants in this case contended there was an agreement to arbitrate. Indeed, prior to filing this lawsuit, I had multiple communications with Edmund Shea, Assistant General Counsel for UBS Financial Services, Inc. and not once did he state or even suggest that the parties had agreed to arbitrate this dispute. 3. I have also reviewed correspondence between my client, Gary Brown and Mr. Edmund Shea that predated my involvement, and not once is there any mention of an agreement to arbitrate. 4. On or about September, 30, 2010, I had a conversation with Evelyn Best. At the time I spoke with Ms. Best, I had only received her letter and had not received the instant motion. During I conversation, I informed Ms. Best that if what she claimed about an agreement to arbitrate was true, then I needed to take discovery from her clients since Robert Brown was dead. I asked Ms. Best to give me dates to take depositions of the people with knowledge, including defendant Barry Bayat. Ms. Best refused, stating that her clients would not submit to any discovery unless and until the court denied her petition to compel arbitration. I declare under penalty of perjury that the foregoing is true and correct and that this declaration was executed this 27 th day of September, 2010 at Los Angeles, CA.

____________________________________________ Ralph Rogari