Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_15-cv-00132/USCOURTS-caed-2_15-cv-00132-3/pdf.json

Nature of Suit Code: 370
Nature of Suit: Other Fraud
Cause of Action: 28:1332 Diversity-(Citizenship)

---

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

1

UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF CALIFORNIA 

DKS, INC., et al., 

Plaintiffs, 

v. 

CORPORATE BUSINESS 

SOLUTIONS, INC., et al., 

Defendant. 

No. 2:15-cv-00132-MCE-DB 

MEMORANDUM AND ORDER 

This case arises from a dispute between Plaintiff DKS INC. (“DKS”) and its 

business consultant, Defendant Corporate Business Solutions (“CBS”). Presently before 

the Court is Defendants’ second Motion to Compel Arbitration and Plaintiffs’ Motion to 

Strike Defendants’ Motion to Compel and Request for Sanctions. ECF Nos. 53 and 57. 

For the following reasons, Defendants’ Motion is STRICKEN and Plaintiffs’ Motion is 

GRANTED in part. 

BACKGROUND 

DKS contracted with CBS to receive business consultation services. Defendant 

Oliver Sintobin (“Sintobin”), CBS’s employee, acted as DKS’s primary consultant. 

Case 2:15-cv-00132-MCE-DB Document 64 Filed 08/11/16 Page 1 of 4
1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

2

Sintobin’s conduct allegedly gave rise to the claims at issue in this action. After the 

Complaint was filed, Defendants filed a Motion to Compel Arbitration. ECF No. 11. 

The arbitration clause (“Clause”) in the contract between DKS and CBS states: 

“Client and CBS expressly agree all disputes of any kind between the parties arising out 

of or in connection with this Agreement shall be submitted to binding arbitration which 

would be administered by the American Arbitration Association.” ECF No. 11-1. This 

Court denied Defendants’ first Motion to Compel for two reasons. ECF No. 32. First, 

Sintobin’s actions “were drastically different from what was presented in the contract,” 

and DKS therefore was “not able to give honest assent to the contract.” Id. Second, 

because Plaintiffs seek damages caused by conduct “that had nothing to do with the 

promises outlined in the parties’ contract[,]” the claims fell outside the scope of the 

Clause. Id. Defendants appealed this Court’s denial of their motion to compel, and that 

appeal is currently awaiting a decision from the Ninth Circuit. See ECF No. 34. The 

Court declined to stay the case in the meantime. ECF No. 47. 

In March of this year, Plaintiffs filed their FAC. ECF No. 51. Instead of replying to 

the FAC, Defendants filed another Motion to Compel Arbitration. ECF No. 53. Currently 

before this Court are this latest Motion to Compel and Plaintiffs’ subsequently filed 

Motion to Strike. ECF No. 57. Plaintiffs argue that Defendants’ current Motion is merely 

an attempt to delay the proceedings, and thus additionally request that the FAC’s claims 

be deemed admitted and monetary sanctions be imposed on Defendants’ counsel. Id. 

DISCUSSION 

Defendants’ current Motion to Compel Arbitration is frivolous for three reasons: 

(1) it is a copy-and-paste of the original motion to compel that was already denied; (2) it 

fails to address how the FAC alters the significance of the Clause in the current dispute; 

and (3) Defendants’ appeal of the first motion is still pending before the Ninth Circuit. 

/// 

Case 2:15-cv-00132-MCE-DB Document 64 Filed 08/11/16 Page 2 of 4
1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

3

Defendants’ current Motion to Compel Arbitration is a regurgitation of the same 

arguments made in their previous Motion to Compel Arbitration (ECF No. 11). The only 

non-formatting and non-grammatical difference is that the new Motion includes a section 

and argument that was previously included in Defendants’ reply papers for the previous 

motion. See ECF No. 57-3 (redlining the differences between the two motions to compel 

arbitration). This Court already considered that argument. Other than this structural 

difference, Defendants fail to distinguish the motions. 

Moreover, Defendants’ current Motion to Compel Arbitration does not address the 

only relevant circumstance that could potentially alter the germaneness of the Clause: 

the FAC’s new claims. However, since Defendants’ first motion was denied, Plaintiffs 

have moved to add new claims that, “allege[] facts even further from the reach of the 

contract that contains the arbitration clause.” ECF No. 57. The claims add four more 

parties, none of which are parties to the contract that contains the Clause. The FAC 

expands the allegations of Sintobin’s extra-contractual theft, which falls outside the 

scope of the Clause. See ECF No. 32 (“[T]he causes of action are for the damage 

incurred by Plaintiff as a result of Defendants’ extra-contractual actions.”). Plaintiffs also 

seek to include new tort claims that do not implicate the Clause. Accordingly, the FAC 

does not change the reasoning on which arbitration was originally denied. See id. 

Finally, Defendants’ re-filing of the current Motion, while simultaneously awaiting a 

decision on their appeal of their first and identical motion, demonstrates a bad-faith 

attempt to delay this dispute. The Ninth Circuit was fully briefed on the arguments to 

compel arbitration. That appeal remains pending, but Defendants’ most recent Motion 

regurgitates the same arguments as their first motion while providing no explanation as 

to why this Court’s decision should change. Accordingly, Plaintiffs accurately 

characterize the current Motion as a naked attempt to delay the proceedings. 

Defendants’ second Motion to Compel Arbitration is therefore STRICKEN and Plaintiffs’ 

Motion to Strike the motion to compel arbitration GRANTED. 

/// 

Case 2:15-cv-00132-MCE-DB Document 64 Filed 08/11/16 Page 3 of 4
1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

4

Plaintiffs’ request for sanctions, however, is DENIED. Although Defendants have 

wasted the Court’s time by filing the instant Motion, it declines to impose sanctions on 

the current record. Instead, Defendants are explicitly admonished that frivolous, bad 

faith conduct—of which the instant Motion is a prime example—will not be tolerated in 

the future. The Court will not hesitate to impose serious sanctions if Defendants persist 

in pursuing such litigation tactics. 

CONCLUSION 

For these reasons, Defendants’ Motion to Compel arbitration (ECF No. 53) is 

STRICKEN and Plaintiffs’ Motion to Strike the motion to compel arbitration and request 

for sanctions (ECF No. 57) is GRANTED in part and DENIED in part. 

 IT IS SO ORDERED. 

Dated: August 11, 2016 

Case 2:15-cv-00132-MCE-DB Document 64 Filed 08/11/16 Page 4 of 4