Filed 9/27/21

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

BANC OF CALIFORNIA, 

NATIONAL ASSOCIATION,

Petitioner,

v.

THE SUPERIOR COURT OF 

LOS ANGELES COUNTY,

Respondent;

N977CB HOLDINGS, LLC et al.,

Real Parties in Interest.

 B310190

 (Los Angeles County

 Super. Ct. No. 19SMCV01580)

ORIGINAL PROCEEDINGS in mandate. H. Jay Ford III

Judge. Petition granted.

Grignon Law Firm LLP, Margaret M. Grignon, Anne M. 

Grignon; Kibler Fowler & Cave LLP, Michael Kibler, Matthew J. 

Cave, Adam C. Pullano for Petitioner.

No appearance for Respondent.
2

Skylar Kirsh, LLP, Justin M. Goldstein, Louise D. Nutt for 

Real Parties in Interest.

__________________________

Banc of California, National Association (Banc) loaned 

N977CB Holdings, LLC (Holdings) $3.5 million to facilitate 

Holdings’s purchase of a commercial aircraft (aircraft). The 

parties executed seven documents in connection with the loan 

(loan documents) and an eighth agreement, executed seven weeks

later, concerning Banc’s charter of Holdings’s aircraft through a 

charter company, Jet Edge (aircraft usage agreement).1 After 

Holdings allegedly defaulted on the loan, Banc filed this action 

alleging Holdings breached the terms of the loan documents in 

various respects. Banc also alleged it had a right to sell the 

aircraft in the possession of Jet Edge as collateral for the loan 

and to recover money owed by Jet Edge to Holdings based on a 

subordination agreement. Banc asserted additional claims for 

breach of the aircraft usage agreement and conversion, alleging 

Holdings refused to return Banc’s remaining deposit under the 

aircraft usage agreement.

Holdings and Jet Edge petitioned to compel arbitration and 

stay the litigation based on an arbitration clause in the aircraft

usage agreement. Although Banc later dismissed its two causes 

of action based on the aircraft usage agreement (leaving only the 

claims based on breach of the loan documents), the trial granted 

the petition as to the threshold question of arbitrability, finding 

the American Arbitration Association (AAA) rules provided for 

1 Banc named as a defendant Western Air Charter, Inc., 

doing business as Jet Edge.
3

delegation of the determination of whether the parties’ dispute 

arose out of the arbitration clause, and therefore the arbitrator 

should decide whether Banc’s claims were arbitrable.

Banc seeks a writ of mandate compelling the trial court to 

vacate its order granting Holdings’s petition to compel 

arbitration. Banc asserts the trial court erred in relying on the 

Supreme Court’s decision in Henry Schein, Inc. v. Archer and 

White Sales, Inc. (2019) ___ U.S. ___ [139 S.Ct. 524, 529] (Schein), 

which held that where an arbitration clause contains a delegation 

provision, the arbitrator should decide the threshold issue of 

arbitrability even if the argued basis for arbitration is “wholly 

groundless.” We agree with Banc. In Schein, the court 

considered who should decide whether the parties’ dispute 

arising from a specific contract with an arbitration clause was 

arbitrable; here, the question on Holdings’s petition to compel 

arbitration was whether the parties agreed to arbitrate their 

dispute over the loan documents, which did not have arbitration

clauses, a question the court must decide in the first instance. 

We grant the petition.

FACTUAL AND PROCEDURAL BACKGROUND

A. The Agreements Between Banc and Holdings

On June 29, 2016 Banc loaned Holdings $3.5 million to 

facilitate Holdings’s purchase of an aircraft. In connection with 

the loan, the parties executed seven documents on June 29. 

First, Holdings executed and delivered to Banc a promissory note 

for $3.5 million, providing for 4.25 percent interest on the unpaid 

principal balance. Holdings agreed to make monthly interest 

payments and yearly payments of principal starting on July 5, 
4

2017, with payment of all outstanding principal plus interest on 

July 5, 2021. The promissory note included a clause providing 

with respect to the promissory note and related documents that 

“[i]f there is a lawsuit,” Holdings consented to jurisdiction in any 

court in Idaho or Los Angeles County. Further, the parties 

waived their right to a jury trial “in any action, proceeding, or 

counterclaim brought by either [Banc] or [Holdings] against the 

other.”

Second, Banc and Holdings executed an aircraft and 

business loan agreement (loan agreement). The loan agreement 

required Holdings to provide specified financial reports to Banc 

each year. Further, the loan agreement provided that “any 

dispute, claim or controversy . . . between [Banc] and [Holdings] 

or related to the Loan, whether sounding in contract, tort or 

otherwise, that becomes the subject of a judicial action shall be 

heard by a referee pursuant to Section 638 of the California Code 

of Civil Procedure,”2 and that the referee “may (i) hear and 

determine all of the issues, whether of fact or law, and (ii) 

ascertain any fact necessary to enable the court to determine an 

action or proceeding in any Controversy or matter related to a 

Controversy.” The parties agreed the loan agreement would 

serve as a “reference agreement” under section 638 and could be 

filed with the court as the basis for a motion for the controversy 

to be heard by a referee. A venue provision stated, “If there is a 

lawsuit, [Holdings] agrees upon [Banc’s] request to submit to the 

jurisdiction of the courts of Los Angeles County, State of 

California.” Further, the parties waived their right to a jury 

trial.

2 All further undesignated statutory references are to the 

Code of Civil Procedure.
5

Third, Holdings executed an aircraft security agreement 

(security agreement) granting Banc a security interest and lien 

on the aircraft (a specific Gulfstream jet), two engines, and other 

aircraft parts, as well as specified documents relating to the 

aircraft, engines, and parts. Under the agreement, Holdings was 

required to obtain insurance naming Holdings and Banc as 

insureds. Banc perfected its security interest by recording it, 

providing notice to the Federal Aviation Administration, and 

filing a Uniform Commercial Code (UCC) financing statement 

with the Delaware Secretary of State. The security agreement 

included a venue provision stating, “If there is a lawsuit, 

[Holdings] consents to the jurisdiction of all state and federal 

courts located within California.” The parties also waived their 

right to a jury trial.

Fourth, Holdings executed and delivered to Banc on the 

same date a collateral assignment of rights (assignment 

agreement), assigning to Banc a security interest in the fifth 

agreement, an aircraft services and charter management 

agreement between Holdings and Jet Edge (charter agreement). 

The assignment agreement required Holdings to obtain Banc’s 

consent before settling any dispute under the charter agreement. 

Further, Banc was authorized on behalf of Holdings to enforce 

any rights Holdings had to collect amounts due to Holdings under 

the charter agreement. The assignment agreement incorporated

the terms of the jury waiver in the loan agreement. The charter 

agreement provided that the parties to the agreement “submit to 

the non-exclusive jurisdiction for litigation arising out of this 

Agreement to the courts of Delaware.” Banc perfected its 

security interest in the charter agreement by filing a UCC 

financing statement with the Delaware Secretary of State.
6

Sixth, Holdings executed and delivered to Banc an 

agreement to provide insurance (insurance agreement), under 

which Holdings agreed to insure the collateral set forth in the 

security agreement. The one-page agreement did not address 

jurisdiction. And seventh, Banc, Holdings, and Jet Edge

executed a subordination and standstill agreement

(subordination agreement), providing that in consideration of the 

$3.5 million loan, Jet Edge agreed to subordinate “any and all 

claims or liens now or hereafter attaching to the [c]ollateral 

arising from [Jet Edge’s] [i]nterest or otherwise . . . .” The 

subordination agreement provided that “[i]f there is a lawsuit,” 

Jet Edge consents to jurisdiction in all California state and 

federal courts and venue in Los Angeles County, California. 

None of the seven loan documents contained an arbitration 

agreement.

Seven weeks later—on August 18, 2016—Banc and 

Holdings entered into the aircraft usage agreement, which 

allowed Banc and its authorized purchasers to charter air 

transportation on Holdings’s aircraft at a discounted price based 

on Banc’s planned usage of at least 150 hours of flight time in

each 12-month period following execution of the agreement. The 

agreement provided that Banc would give Holdings a $480,000 

deposit upon execution of the agreement and annually thereafter.

The aircraft usage agreement included an arbitration 

provision in section 6.5 that stated, “In the event of any dispute 

or controversy between the Parties relating to this Agreement 

(other than a dispute or controversy seeking injunctive or 

equitable relief), the matter shall be submitted to arbitration for 

resolution, which arbitration shall be conducted in Los Angeles, 

CA, before one arbitrator, in accordance with the rules of the 
7

American Arbitration Association (Commercial) then in effect.” 

The “Agreement” was defined as the “Aircraft Usage Agreement.” 

The aircraft usage agreement also contained a clause titled 

“Governing Law and Court Jurisdiction” under which Banc and 

Holdings consented to jurisdiction in California federal courts if 

the courts had jurisdiction, and if not, to California state courts.

The aircraft usage agreement provided for a one-year term, 

to be automatically renewed unless either party gave notice of 

termination within 30 days of the agreement’s anniversary date. 

However, the agreement provided that several provisions, 

including the arbitration clause in section 6.5 would “survive 

beyond the end of the Term of this Agreement.” Banc terminated 

the agreement by its July 17, 2017 “Notice of Non-Renewal.” In 

the notice of non-renewal, Banc requested Holdings return the 

remaining deposit held by Holdings, in the amount of 

$189,761.71.

B. The Lawsuit and Petition To Compel Arbitration

On September 10, 2019 Banc filed this action against 

Holdings, Jet Edge, and 20 Doe defendants. The first amended 

complaint alleged in the first cause of action that Holdings 

breached the promissory note, the loan agreement, the security 

agreement, the assignment agreement, the insurance agreement, 

the UCC financing statements, the notices filed with the Federal 

Aviation Administration, “and all other documents executed in 

connection with the Bank’s Loan to [Holdings].” Banc sought 

$3 million owed on the loan; the right to sell or otherwise dispose 

of the aircraft to enforce Banc’s security interest under the 

security agreement; and the right to enforce any rights Banc held 
8

under the charter agreement, including to recover of any 

amounts owed to Holdings under that agreement.

The second cause of action alleged Jet Edge’s breach of the 

charter agreement and subordination agreement, including the 

failure of Jet Edge to pay to Banc amounts Jet Edge owed to 

Holdings under the charter agreement.

The third cause of action against Holdings alleged breach of 

the aircraft usage agreement arising from Holdings’s refusal to 

return $189,761.71 that Holdings held in deposit for Banc after 

Banc gave notice it was not renewing the agreement. The fourth 

cause of action alleged a claim for conversion against Holdings 

based on Holdings’ refusal to return the remaining deposit under 

the aircraft usage agreement.

On April 3, 2020 Holdings filed a petition to compel 

arbitration under section 1281.2 to arbitrate Banc’s claims based 

on the arbitration clause in the aircraft usage agreement. 

Holdings asserted that “[w]ithout question” the third and fourth 

causes of action were subject to arbitration, and even if the first

and second causes of action were not subject to arbitration, they 

should be stayed pending completion of the two arbitrable claims. 

Jet Edge, which was not a party to the aircraft usage agreement,

joined the petition and motion to stay. On August 5, 2020, 

instead of filing an opposition to the petition, Banc voluntarily 

dismissed without prejudice its third cause of action for breach of 

the aircraft usage agreement and fourth cause of action for

conversion. In its reply brief, Holdings asserted the arbitration 

clause in the aircraft usage agreement applied to the parties’

disputes regarding the loan documents because the loan 

documents related to the aircraft usage agreement and the 

documents were signed “around the same time.” Holdings argued 
9

the language in the arbitration clause requiring arbitration of 

“any dispute or controversy between the Parties relating to this 

Agreement” should be construed broadly to include the dispute

over the loan documents.3 (Underlining and boldface omitted.) 

Further, Holdings asserted the AAA rules (applicable under the 

arbitration clause) delegated to the arbitrator the power to decide 

the scope and validity of the arbitration clause and the 

arbitrability of any claim.

Banc filed a sur-reply brief, arguing Holdings improperly 

raised new arguments in its reply brief as to why the first and 

second causes of action had not become moot by dismissal of the 

third and fourth causes of action. Banc asserted the arbitration 

clause in the aircraft usage agreement limited its application to 

disputes relating to “this Agreement.” Further, the loan 

documents were not related to the aircraft usage agreement, and 

most of the loan documents provided for the courts to resolve any 

disputes. Moreover, the court, not the arbitrator, should decide 

the threshold question of the arbitrability of Banc’s claims.

On August 18, 2020 the trial court issued a tentative ruling 

denying Holdings’s petition to compel arbitration. However, the 

court allowed the parties to file supplemental briefs. Holdings 

argued in its supplemental brief that where there is a delegation 

clause, the arbitrator must decide the threshold issue of 

3 Holdings also relied on the declaration of Robert Estrin 

filed with its petition in which Estrin stated that Banc’s counsel 

on a telephone call “told [him] that [Banc] agreed to provide the 

loan to [Holdings] in part because of the Aircraft Usage 

Agreement.” The trial court in its initial tentative ruling rejected 

Holdings’s argument, finding the declaration was “insufficient” to 

conclude the arbitration provision applied to breach of the loan 

documents.
10

arbitrability, even if the argument for arbitration is “wholly 

groundless,” citing to Schein, supra, 139 S.Ct. at page 529. In 

response, Banc argued that four of the seven loan documents 

contained choice-of-venue provisions requiring Holdings to 

submit to the jurisdiction of the California courts. Banc 

distinguished Schein on the ground it involved a single 

agreement with an arbitration clause, whereas Holdings sought 

to compel arbitration of claims arising from unrelated

agreements that did not contain arbitration clauses.

After a hearing on September 17, 2020, the court adopted 

its revised tentative ruling granting the petition to compel 

arbitration as to the threshold issue whether Banc’s remaining 

causes of action were subject to arbitration under the aircraft 

usage agreement. The court explained that by incorporating the 

AAA rules requiring the arbitrator to decide questions of 

arbitrability under the aircraft usage agreement, the “parties 

clearly and unmistakably delegated the question of the 

arbitrability of the 1st and 2nd causes of action under [§] 6.5 [of 

the aircraft usage agreement] to the arbitrator.” Further, the 

parties’ consent to jurisdiction in the California courts under the 

loan documents was “not inconsistent with the parties’ intention 

to submit the question of arbitrability under [§] 6.5 of the Aircraft 

Usage Agreement to the arbitrator, as reflected by the 

incorporation of the AAA Commercial rules. Indeed, it is not 

uncommon for a lawsuit to be filed first and a petition to compel 

arbitration is filed in response, such that consent to jurisdiction 

would not necessarily be irreconcilable with a mandatory 

arbitration clause.”

Banc filed a motion for reconsideration based on the recent

decision in Moritz v. Universal City Studios LLC (2020) 
11

54 Cal.App.5th 238, 241 (Moritz) that upheld the denial of a 

motion to compel arbitration of a contract that did not contain an 

arbitration clause even though earlier contracts between the 

parties contained arbitration clauses. After a hearing on 

December 4, 2020, the trial court denied the motion for 

reconsideration. The court entered an order on January 19, 2021 

granting the petition to compel arbitration and motion to stay the 

action.

C. The Petition for Writ of Mandate

On February 3, 2021 Banc filed a petition for writ of 

mandate challenging the trial court’s January 19, 2021 order 

compelling the parties to arbitration and staying the action. On 

February 24, 2021 we issued an order to show cause why relief 

should not be granted. Holdings and Jet Edge filed a return, and 

Banc filed a reply.

DISCUSSION

A. Principles of Arbitration

Section 1281.2 requires the trial court to order arbitration 

of a controversy “[o]n petition of a party to an arbitration 

agreement alleging the existence of a written agreement to 

arbitrate a controversy and that a party to the agreement refuses 

to arbitrate such controversy . . . if it determines that an 

agreement to arbitrate the controversy exists.” Whether there is 

a written agreement to arbitrate “is a matter of contract, and 

courts must enforce arbitration contracts according to their 

terms.” (Schein, supra, 139 S.Ct. at p. 529; accord, Rent-ACenter, West, Inc. v. Jackson (2010) 561 U.S. 63, 67 [The Federal 
12

Arbitration Act (FAA) “reflects the fundamental principle that 

arbitration is a matter of contract”]; Pinnacle Museum Tower 

Assn. v. Pinnacle Market Development (US), LLC (2012) 

55 Cal.4th 223, 236 (Pinnacle) [“‘“[A] party cannot be required to 

submit to arbitration any dispute which he has not agreed so to 

submit.”’”].)4

“[P]arties may agree to have an arbitrator decide not only 

the merits of a particular dispute but also ‘“gateway” questions of 

“arbitrability,” such as whether the parties have agreed to 

arbitrate or whether their agreement covers a particular 

controversy.’” (Schein, supra, 139 S.Ct. at p. 529; accord, Rent-ACenter, West, Inc. v. Jackson, supra, 561 U.S. at pp. 68-69.)

“Unless the parties clearly and unmistakably provide otherwise, 

4 The arbitration clause does not specify whether the FAA or 

California Arbitration Act (CAA) applies. The substantive 

provisions of the FAA apply if the applicable arbitration clause is 

in “a contract evidencing a transaction involving commerce . . . .” 

(9 U.S.C. § 2; see Volt Information Sciences, Inc. v. Board of 

Trustees of Leland Stanford Junior University (1989) 489 U.S. 

468, 476 [“It is undisputed that this contract falls within the 

coverage of the FAA, since it involves interstate commerce.”]). 

Although it is undisputed that Banc is a national banking 

association, neither party addressed in the trial court or in this 

writ proceeding whether the FAA applies (or whether Schein, 

supra, 139 S.Ct. 524 controls if the CAA applies). We do not 

reach these issues because even if we assume Schein applies, as 

do the parties, under either the FAA or the CAA, it was for the 

trial court in the first instance to decide whether the parties 

agreed to arbitrate their dispute.
13

the question of whether the parties agreed to arbitrate is to 

be decided by the court, not the arbitrator.” (AT&T Technologies, 

Inc. v. Communications Workers of America (1986) 475 U.S. 643, 

649; accord, Granite Rock Co. v. Int’l Broth. of Teamsters (2010) 

561 U.S. 287, 296 [“It is . . . well settled that where the dispute at 

issue concerns contract formation, the dispute is generally for 

courts to decide.”]; First Options of Chicago, Inc. v. Kaplan (1995) 

514 U.S. 938, 939.)

The party seeking to compel arbitration bears the burden of 

proving by a preponderance of the evidence an agreement to 

arbitrate a dispute exists. (Pinnacle, supra, 55 Cal.4th at p. 236; 

Rosenthal v. Great Western Fin. Securities Corp. (1996) 

14 Cal.4th 394, 413.) Where the evidence is not in conflict, we 

review de novo the trial court’s ruling on a petition to compel 

arbitration. (Pinnacle, at p. 236; accord, Wilson-Davis v. SSP 

America, Inc. (2021) 62 Cal.App.5th 1080, 1087 [“Because the 

basic facts underlying [defendant’s] motion to compel arbitration 

are undisputed, this appeal presents a purely legal issue, which 

we review de novo.”]; Moritz, supra, 54 Cal.App.5th at p. 245

[same].)

B. Schein and Its Progeny

The United States Supreme Court in Schein, supra, 

139 S.Ct. at pages 527 to 528, held the arbitrator should resolve 

the threshold question whether an arbitration agreement applies 

to a particular dispute where the arbitration agreement delegates 

to the arbitrator the question of arbitrability, regardless of 

whether the argument for arbitration is “‘wholly groundless.’” 

(Id. at p. 528.) In Schein, the plaintiff filed suit for violation of 

federal and state antitrust laws. (Ibid.) The relevant contract 
14

contained an arbitration clause that provided that “[a]ny dispute 

arising under or related to this Agreement (except for actions 

seeking injunctive relief [and other specified exceptions]) shall be 

resolved by binding arbitration in accordance with the arbitration 

rules of the American Arbitration Association.” (Ibid.) The 

defendant requested the court refer the case to arbitration, but 

the plaintiff objected on the ground the complaint sought 

injunctive relief, which was excluded from the terms of the 

arbitration agreement. (Ibid.) The court observed the AAA rules 

delegate to the arbitrator the power to resolve arbitrability 

questions. (Ibid.) In rejecting the plaintiff’s contention the court 

should decide the threshold issue of arbitrability notwithstanding 

the delegation provision, the court explained, “When the parties’ 

contract delegates the arbitrability question to an arbitrator, a 

court may not override the contract. In those circumstances, a 

court possesses no power to decide the arbitrability issue. That is 

true even if the court thinks that the argument that the 

arbitration agreement applies to a particular dispute is wholly 

groundless.” (Id. at p. 529.)

Banc relies on the decision of our colleagues in Division 

One of this district in Moritz, supra, 54 Cal.App.5th at page 248 

to support its argument Schein does not control. In Moritz, the 

producer of The Fast and the Furious film and its sequels entered 

into eight written producer contracts with a studio setting forth 

the terms of the producer’s work on the films. (Id. at p. 241.) The 

first seven contracts contained valid arbitration clauses. (Id. at 

p. 242.) The contract governing the eighth through tenth films 

provided that the terms of the seventh contract (with its 

arbitration clause) would “apply to any movie constituting a 

‘sequel’ or ‘remake’ of earlier films in the franchise.” (Id. at 
15

p. 241.) A dispute arose concerning a later “spinoff film” that 

would be based on characters from the prior films but was 

neither a sequel nor a remake. (Id. at pp. 242-243.) The 

producer sued the studio, alleging the parties had an oral 

agreement the studio breached. (Id. at p. 243.) The studio moved 

to compel arbitration under the arbitration clause in the seventh 

contract. (Id. at p. 244.) The Court of Appeal affirmed the trial 

court’s denial of the motion, explaining Schein “presupposes a 

dispute arising out of the contract or transaction, i.e., some 

minimal connection between the contract and the dispute. That 

is so because under the FAA, contractual arbitration clauses are 

‘valid, irrevocable, and enforceable’ if they purport to require 

arbitration of any ‘controversy thereafter arising out of such 

contract.’ (9 U.S.C. § 2.) Schein expressly understood that the 

Act requires enforcement of arbitration clauses with respect to 

disputes ‘“thereafter arising out of such contract.”’ [Citation.]

The FAA requires no enforcement of an arbitration provision 

with respect to disputes unrelated to the contract in which the 

provision appears. Appellants’ argument that an arbitration 

provision creates a perpetual obligation to arbitrate any 

conceivable claim that Moritz might ever have against them is 

plainly inconsistent with the FAA’s explicit relatedness 

requirement.” (Moritz, at p. 248.)

Division One revisited Schein in Bautista v. Fantasy 

Activewear, Inc. (2020) 52 Cal.App.5th 650, 656, again concluding

Schein’s holding that the arbitrator must decide the threshold 

question of arbitrability did not apply to the parties’ dispute. In 

Bautista, the plaintiffs asserted representative claims on behalf 

of the state under the Private Attorneys General Act (PAGA; Lab. 
16

Code, § 2698 et seq.).5 The plaintiffs were putative class 

members in an earlier wage and hour class action against the 

employer that resulted in a settlement agreement containing an 

arbitration clause. (Bautista, at p. 654.) The arbitration clause 

provided the arbitrator with the authority to determine 

“‘arbitrability issues as a preliminary matter.’” (Ibid.) The 

defendant employer petitioned to compel arbitration of the 

plaintiffs’ PAGA claims pursuant to the settlement agreement. 

(Ibid.) The Court of Appeal affirmed the trial court’s denial of the 

employer’s petitions (filed as to each of the plaintiffs) because the

plaintiffs were not acting as agents of the state when they settled 

their prior claims and entered into the settlement agreement. 

(Id. at 657; id. at 655 [“[A]rbitration agreements entered into 

before a plaintiff has been deputized for purposes of a PAGA 

representative action [are] not enforceable for purposes of the 

PAGA representative action.”].) Thus, on the threshold question 

of “‘whether there is an agreement to arbitrate’” between the 

employer and the real party in interest, the Court of Appeal 

concluded there was not. (Bautista, at p. 658; cf. 

Communications Workers of America v. AT&T Inc. (D.C. Cir. 

2021) 6 F.4th 1344, 1346 [concluding in reviewing action to 

compel arbitration of dispute under specific contract, under 

Schein “[t]he question whether the parties’ dispute falls within 

the contract’s arbitration clause, then, is for an arbitrator, not a 

court, to decide”].)

5 The initial complaint also alleged class claims, but the 

plaintiffs dismissed their claims after the employer filed its 

petition to compel arbitration.
17

C. The Trial Court Erred in Compelling Arbitration of the 

Threshold Question of Arbitrability

As discussed, Schein instructs that “[w]hen the parties’ 

contract delegates the arbitrability question to an arbitrator,” it 

is for the arbitrator, not the court, to decide the threshold 

arbitrability issue. (Schein, supra, 139 S.Ct. at p. 529.) But

unlike in Schein, where the court considered who should decide 

whether the parties’ dispute fell within the scope of a specific 

contract, here the trial court was tasked with deciding in the first 

instance whether there was an agreement to arbitrate at all. 

(See Granite Rock Co. v. Int’l Broth. of Teamsters, supra, 561 U.S. 

at p. 296; AT&T Technologies, Inc. v. Communications Workers of 

America, supra, 475 U.S. at p. 649.) We agree with the reasoning 

in Moritz and Bautista that where a party seeks to arbitrate a 

dispute that arises from a contract without an arbitration clause, 

the court is not required under Schein to defer to the arbitrator 

on the threshold determination of arbitrability. (See Bautista, 

supra, 52 Cal.App.5th at p. 656; Moritz, supra, 54 Cal.App.5th at

p. 248.) Rather, where the party moving to compel arbitration 

asserts a different contract with an arbitration provision shows 

the parties’ intent to arbitrate, the question of the parties’ intent 

is for the court to resolve. As the Bautista court explained in 

finding the holding in Schein did not apply, “The question here is 

not whether claims are arbitrable under an agreement among the 

parties, but rather whether there exists an agreement among the 

parties to arbitrate.” (Bautista, at p. 656.)

Here, the only agreement that contained an arbitration 

clause was the aircraft usage agreement entered into almost two 

months after execution of the loan documents. The aircraft usage 

agreement incorporated the AAA rules, which delegated the 
18

question of arbitrability to the arbitrator.6 But once Banc 

dismissed its third and fourth causes of action, the remaining 

causes of action related only to the seven loan documents, none of 

which contained an arbitration clause. As discussed, the first 

cause of action alleged a breach of the seven loan documents, 

including a failure to pay over $3 million owed on the loan, the 

right to sell the aircraft, and the right to enforce Banc’s rights 

under the charter agreement. The second cause of action alleged 

Jet Edge’s breach of the charter agreement and subordination 

agreement. Further, the arbitration clause in the aircraft usage 

agreement provided that all disputes “between the [p]arties 

relating to this Agreement” shall be submitted to arbitration, but 

the “Agreement” was narrowly defined to mean the “Aircraft 

Usage Agreement.” By contrast, five of the seven loan 

documents, including the pivotal loan agreement and promissory 

note, specified which courts would have jurisdiction “[i]f there is a 

lawsuit.” The promissory note, loan agreement, security 

agreement, and assignment agreement also provided for a jury 

waiver, and the loan agreement provided that any disputes would 

be heard by a referee. Given the parties’ clear expression of 

which courts (or referee) would hear any lawsuit arising from the 

loan documents, the parties’ failure to specify in the loan 

6 The AAA rules provide, “The arbitrator shall have the 

power to rule on his or her own jurisdiction, including any 

objections with respect to the existence, scope, or validity of the 

arbitration agreement or to the arbitrability of any claim or 

counterclaim.”
19

documents that the disputes would be decided by an arbitrator 

shows the parties’ contrary intent.7

Holdings argues we should interpret the language in the 

aircraft usage agreement requiring arbitration of any dispute 

“relating to this Agreement” broadly, relying on Ramos v. 

Superior Court (2018) 28 Cal.App.5th 1042, 1052. The court in 

Ramos observed that arbitration clauses using the phrase 

“‘arising under or related to’ . . . have been construed more 

broadly” than arbitration clauses providing for arbitration of 

disputes “‘arising from’” or “‘arising out of’” an agreement. (Ibid.)

Further, Holdings asserts, because the seven loan documents and 

the aircraft usage agreement are “interrelated,” this supports 

arbitration. But even if the loan documents had some 

relationship to the aircraft usage agreement, the question for the 

trial court was whether the parties’ dispute related to the aircraft 

usage agreement. It did not. Nothing in the record (as alleged in 

the first amended complaint or submitted with the petition to 

compel arbitration) shows the breach of the loan documents was

in any way related to the aircraft usage agreement, which simply 

provided the terms for Banc to obtain a discounted price for flight 

time on Holdings’s aircraft. While it may well be that the 

incentive for Banc to make the loan to Holdings was a future 

discounted rate on a charter of Holdings’s aircraft, this does not 

show that the parties’ dispute—over Holdings’ alleged breach of 

7 As the trial court noted, it is common for a lawsuit to be 

filed before a motion to compel arbitration is made, which 

scenario was envisioned in the aircraft usage agreement, but the 

parties’ inclusion in the loan documents of jurisdiction provisions 

but not arbitration clauses shows the parties’ intent a court (or 

referee) resolve any disputes.
20

the loan documents—was in any way related to the aircraft usage 

agreement.8

Holdings’s reliance on the stray allegations in the 

complaint containing facts that previously supported the sincedismissed third and fourth causes of action is similarly 

misplaced. It is true that paragraph 6 of the first amended 

complaint alleges that Holdings wrongfully transferred 

possession of the remaining deposit under the aircraft usage 

agreement to Does 11 through 20 without Banc’s approval. But 

this allegation is contained in the section of the amended 

complaint identifying the parties, and Does 11 through 20 are 

only named in the third and fourth causes of action. Likewise, 

although paragraphs 61 through 81 address the aircraft usage 

agreement, these allegations were contained in the third and 

fourth causes of action that have since been dismissed.

Thus, Holdings did not meet its burden to show the parties 

had “clearly and unmistakably” agreed to arbitrate their dispute 

over the loan documents based on the arbitration clause in the 

aircraft usage agreement. (AT&T Technologies, Inc. v. 

Communications Workers of America, supra, 475 U.S. at p. 649.) 

Absent an agreement to arbitrate, the trial court erred in 

granting Holdings’s petition to compel arbitration on the issue of 

arbitrability.

8 As discussed, in the trial court Holdings pointed to Estrin’s 

declaration in which he stated that Banc’s counsel on a telephone 

call told him that Banc agreed to provide the loan in part because 

of the aircraft usage agreement. Holdings does not argue in its 

return that this statement attributed to Banc shows the parties’ 

dispute over the loan documents was related to the aircraft usage 

agreement.
21

DISPOSITION

The petition is granted. A peremptory writ of mandate 

shall issue directing respondent superior court to vacate its 

January 19, 2021 order granting Holdings’s petition to compel 

arbitration and motion to stay the action and to enter a new 

order denying the petition and motion. Banc is to recover its 

costs in this writ proceeding.

FEUER, J.

We concur:

PERLUSS, P. J.

SEGAL, J.