SIRCLES MEDIA, INC. vs STYLEOF, INC., et al.

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Tentative Ruling:

Defendants Styleof, Inc. (“Styleof”) and pro se Jon Shumate’s (“Shumate”) (collectively “Defendants”) motion to compel arbitration against Plaintiff Sircles Media, Inc.’s (“Sircles”) is ruled upon as follows.

Defendants’ notice of motion does not provide notice of the Court’s tentative ruling system, as required by Local Rule 1.06. Moving party is directed to attempt to contact opposing counsel and advise them of Local Rule 1.06 and the Court’s tentative ruling procedure and the manner to request a hearing. If moving party is unable to contact opposing counsel prior to hearing, moving party is ordered to appear at the hearing in person or remotely.

Facts

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV028760: SIRCLES MEDIA, INC., A DELAWARE CORPORATION vs STYLEOF, INC., A DELAWARE CORPORATION, et al. 02/23/2026 Hearing on Motion to Compel Arbitration in Department 28

On or about August 1, 2024, StyleOf and Sircles entered into a written Business Collaboration Agreement (the “Agreement”). (Dec. Shumate, ¶ 2.)

The Agreement contains a mandatory arbitration provision, which states in relevant part: “any disputes arising out of or in connection with this Agreement shall be resolved through binding arbitration under the rules of the American Arbitration Association, with arbitration to be held in the state of California.” (Dec. Shumate, ¶ 3, Ex. A.)

A dispute arose between StyleOf and Sircles regarding their business collaboration. In summary, Sircles is accusing Defendants of making misrepresentations regarding the amount StyleOf was paying engineering services provider Jerry Trosclaire for his work for Sircles, and comments allegedly made by Defendants regarding Trosclaire and Sircles.

StyleOf filed a Demand for Arbitration on October 7, 2025, in reliance on the Agreement. (Dec. Shumate, ¶ 19.)

On December 2, 2025, Sircles filed the instant action, alleging causes of action for fraud, intentional interference with contractual relations, slander per se, and libel per se against SyleOf and its owner, Shumate.

The StylesOf v. Sircles arbitration, AAA case no. 01-25-0005-0419 (“Related Arbitration”), was initiated by StyleOf. Sircles objected to arbitrability and represented to the AAA on November 5, 2025 that it had already filed a civil lawsuit, seeking to halt the arbitration. No stay or suspension of the arbitration was granted. (Dec. Shumate, ¶ 20.)

In January 2026, Arbitrator Jo Saxe Levy, in the Related Arbitration, issued a ruling that stated:

1. Arbitrability. Respondent first contends that the claims asserted in this matter are not within the scope of what the parties agreed to arbitrate. The agreement between the parties (“Agreement”) provides that “Any disputes arising out of or in connection with this Agreement shall be resolved through binding arbitration under the rules of the American Arbitration Association with arbitration to be held in the state of California.” Claimant’s arbitration demand states claims for breach of contract, breach of the implied covenant of good faith and fair dealing, tortious interference with contract, unauthorized use of IP, and violation of section 4.3 of the Agreement.

As alleged, each of these claims arises out of or is connected with the Agreement between the parties. Nothing in the Agreement limits the disputes to be submitted to the AAA to strictly contract claims. To the extent Respondent seeks to argue that conduct occurring after termination of the Agreement is not relevant to Claimant’s claims, it may do so at the evidentiary hearing.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV028760: SIRCLES MEDIA, INC., A DELAWARE CORPORATION vs STYLEOF, INC., A DELAWARE CORPORATION, et al. 02/23/2026 Hearing on Motion to Compel Arbitration in Department 28

Respondent has not shown that a dispositive motion to dismiss one or more of Claimant’s claims is likely to succeed.

2. Court action by Respondent. Respondent asserts that it has filed a civil complaint in court against Claimant for fraud, intentional interference, slander per se, and libel per se. Respondent’s decision to file an action against Claimant for these claims does not alter the arbitrability of the claims Claimant has asserted against Respondent. Nor does it establish good cause to delay the resolution of Claimant’s claims which, as set forth above, fall within the scope of the Agreement.

(AAA Order on Request for Leave to File a Motion.)

Defendants now move to compel arbitration of Sircles’s claims in this action pursuant to the Agreement.

The party seeking to compel arbitration bears the burden of proving the existence of a valid arbitration agreement. (Engalla v. Permanente Medical Group (1997) 15 Cal.4th 951, 972.) “Once that burden is satisfied, the party opposing arbitration must prove by a preponderance of the evidence any defense to the petition.” (Sparks v. Vista Del Mar Child and Family Svcs. (2012) 207 Cal.App.4th 1511, 1517.)

An arbitration agreement may be revoked on “such grounds as exist for the revocation of any contract.” (Civ. Code § 1281.) Further, the Court may refuse to enforce any contract or any provision of a contract determined to be unconscionable. (Civ. Code § 1670.5.)

Sircles does not dispute the existence of the arbitration agreement, but opposes the motion on the following grounds:

First, Mr. Shumate, who is not an attorney licensed to practice in the State of California, cannot file a motion on behalf of StyleOf, Inc., as a corporation must appear through licensed counsel. Second, Mr. Shumate, in his individual capacity, is not a party to the Agreement and therefore cannot invoke the arbitration provision to compel arbitration of the claims asserted against him personally. Third, the arbitration clause does not cover the claims in the Complaint. Fourth, the Motion is procedurally improper because a request to compel arbitration must be brought by petition, not by motion.

(Opposition, 2:6-12.)

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV028760: SIRCLES MEDIA, INC., A DELAWARE CORPORATION vs STYLEOF, INC., A DELAWARE CORPORATION, et al. 02/23/2026 Hearing on Motion to Compel Arbitration in Department 28

Procedural Argument

The Court first addresses Sircles’s argument that the motion is procedurally improper. Sircles asserts that Defendants have not met the requirements set forth in Code of Civil Procedure sections 1290-1294.2, because “it is not verified and does not comply with the statutory requirements governing petitions to compel arbitration. Because Defendants failed to initiate the special proceeding mandated by law, their request is procedurally improper.” (Opposition, 7:15- 18.)

This argument by Sircles is not persuasive. While Defendants title their papers a “motion” as opposed to a “petition,” this is fairly commonplace and does not, in and of itself, create good cause for the Court to deny the motion. In addition, Sircles does not explain the legal basis for asserting that the petition must be verified, nor how Defendants failed to comply with any specific statutory requirement.

StyleOf

Shumate, who is not a licensed attorney, cannot file a motion on behalf of StyleOf, Inc. (CLD Construction, Inc. v. City of San Ramon (2004) 120 Cal.App.4th 1141, 1145; Paradise v. Nowlin (1948) 86 Cal.App.2d 897, 898.)

As a result, the motion to compel arbitration as to StyleOf is DENIED, WITHOUT PREJUDICE.

Shumate

Sircles argues that Shumate, as an individual, is not a signatory to the Agreement, and as a result he may compel arbitration only if he falls within one of the narrow exceptions that allow nonsignatories to enforce an arbitration clause. Sircles acknowledges that one on these exceptions is equitable estoppel, where the signatory’s claims are founded on or intimately connected with the underlying contract.

“The sine qua non for application of equitable estoppel as the basis for allowing a nonsignatory to enforce an arbitration clause is that the claims plaintiff asserts against the nonsignatory must be dependent upon, or founded in and inextricably intertwined with, the underlying contractual obligations of the agreement containing the arbitration clause.” (Goldman v. KMPG, LLP (2009) 173 Cal.App.4th 209, 217.) The fact that a plaintiff’s claim may “reference” or “presume the existence” of the agreement containing an arbitration clause “is not enough” to establish the application of equitable estoppel. (Id. at 218.) Nor is the application of equitable estoppel always triggered where a Plaintiff’s claims allege “substantially interdependent and concerted

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV028760: SIRCLES MEDIA, INC., A DELAWARE CORPORATION vs STYLEOF, INC., A DELAWARE CORPORATION, et al. 02/23/2026 Hearing on Motion to Compel Arbitration in Department 28

misconduct” by signatory and nonsignatory defendants alike. (Id. at 219.) Rather, for a nonsignatory defendant to compel a plaintiff’s claims to arbitration, the nonsignatory defendant must show that the plaintiff’s claims “rely” upon or else are “intimately connected” with the obligations of the underlying agreement. (Ibid.)

Here, Sircles argues that equitable estoppel is unavailable because their claims against Shumate do not arise from the Agreement or any contractual duties owed under it. Sircles argues that their claims against Shumate are all based entirely on Shumate’s own independent tortious conduct.

Sircles also argues that their claims are “not based upon performance of [the Agreement’s] terms. Defendants’ misrepresentations concern StyleOf’s internal business practices, none of which arise from any contractual obligation owed to Plaintiff under the Agreement. Furthermore, Defendants’ efforts to persuade Mr. Trosclair to cease working for Plaintiff, accuse Plaintiff of wrongdoing, and disrupt his work relate to Plaintiff’s separate employment relationship with Mr. Trosclair—an entirely different agreement independent of the Agreement with StyleOf. Lastly, Defendants’ public posting of an edited Zoom recording and their false statements accusing Plaintiff of poaching, bad faith, and breach are personal torts.” (Opposition, 6:19-25.)

Defendants argue that, “All claims asserted in this action arise solely from Plaintiff’s termination of, and conduct under, the Business Collaboration Agreement. But for Plaintiff’s cancellation of that Agreement and its alleged interference with Defendants’ contractual rights, no dispute would exist at all.” (Motion, at p. 3, section III.)

Preliminarily, the Court notes that Sircles’s four causes of action are brought jointly against StyleOf and Shumate. The Court also notes that the Complaint alleges that “Defendants, and each of them, were acting as the agents, employees, partners, servants, joint venturers or coconspirators of their co-Defendants, and were acting within the course and scope of that agency, partnership, employment, conspiracy, ownership, or joint ventures. Plaintiff is further informed and believes, and thereon alleges, that the acts and conduct herein alleged of each Defendant were known to, authorized by, and/or ratified by each of the other Defendants, and that each Defendant is jointly and severally liable to Plaintiff.” (Complaint, 2:19-24.) There is no differentiation in the Complaint as to acts taken by Shumate as an individual, or acts taken by his corporation, StyleOf.

Additionally, each of Plaintiff’s causes of action both expressly reference the Agreement containing the arbitration provision at issue here and rely on the obligations contained in that Agreement. For example, the first cause of action for fraud alleges that Shumate made false statements about how the $20,000 payments called for under the Agreement would be used,

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV028760: SIRCLES MEDIA, INC., A DELAWARE CORPORATION vs STYLEOF, INC., A DELAWARE CORPORATION, et al. 02/23/2026 Hearing on Motion to Compel Arbitration in Department 28

and further alleges that Plaintiff relied on those alleged false statements in entering into the Agreement to Plaintiff’s detriment. (Complaint, ¶¶ 33; 35; 37-30.) The third and fourth causes of action for slander and libel, respectively, allege that Shumate made falsely stated both orally and in writing that Plaintiff had breached the Agreement. (Id. at ¶¶ 50; 52; 59.) Whether such oral and written statements are libelous or slanderous will necessarily require an adjudication of the parties respective obligations under the Agreement.

Accordingly, the Court concludes that Sircles’s claims against Defendants are “in connection with” the Agreement and emanate out of the collaboration between StyleOf and Sircles, controlled by the Agreement. Because Shumate is only sued by Sircles jointly with StlyeOf, arguably for actiosn taken as the purported agent of StyleOf, the Court further concludes that equitable estoppel does apply here to Shumate as a non-signatory.

The Court finds that Shumate can invoke the arbitration clause of the Agreement, and that the Agreement does cover Sircles’s claims against him.

Shumate’s motion to compel arbitration against Sircles is GRANTED. This action is stayed as to Shumate pending the outcome of the arbitration.

The minute order is effective immediately. No formal order pursuant to California Rules of Court, rule 3.1312 or further notice is required.