DAVID FLAHERTY VS. SEPIO CAPITAL, LLC ET AL

Matter on the Law & Motion / Discovery calendar for Friday, August 1, 2025, Line 7. 2 - DEFENDANTS SEPIO CAPITAL, LLC, AND SEPIO CAPITAL, LP's MOTION TO COMPEL ARBITRATION.

Sepio Capital LLC's ("Sepio") motion to compel arbitration and stay is granted. The arbitration agreement expressly provides that plaintiff will arbitrate disputes with "my Authorized agent/Advisor," i.e., Sepio. (McGarry Decl., Ex. B, sec. 31.) Sepio is an intended third party beneficiary of the arbitration agreement.

To show a party is an intended beneficiary, the moving party must show (1) "the third party would in fact benefit from the contract"; (2) "a motivating purpose of the contracting parties was to provide a benefit to the third party"; and (3) permitting the third party to enforce the contract "is consistent with the objectives of the contract and the reasonable expectations of the contracting parties." (Goonewardene v. ADP, LLC (2019) 6 Cal.5th 817, 830.)

The test " 'for determining whether a contract was made for the benefit of a third person is whether an intent to benefit a third person appears from the terms of the contract. [Citation.] If the terms of the contract necessarily require the promisor to confer a benefit on a third person, then the contract, and hence the parties thereto, contemplate a benefit to the third person.' " (Spinks v. Equity Residential Briarwood Apartments (2009) 171 Cal.App.4th 1004, 1022.) Providing a benefit to the third party must be a motivating purpose of the contract. (Goonewardene, supra, 6 Cal.5th at p. 830.)

The parties specifically intended to benefit Sepio and plaintiff does not contest that assertion. The court agrees that piecemeal resolution of the dispute is not the most practical and efficient way to resolve the parties' dispute, but the parties' agreement requires granting of the motion to compel arbitration and stay. (Mastick v. TD Ameritrade, Inc. (2012) 209 Cal.App.4th 1258, 1267 [compelling arbitration even though resolution in a single forum would be more practical].) For the reasons explained in the companion motion to compel arbitration and stay, the court rejects plaintiff's arguments against enforcement of the arbitration agreement.

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Counsel for the prevailing party is required to prepare a proposed order which repeats verbatim the substantive portion of the tentative ruling and must email it to contestdept301tr@sftc.org prior to the hearing even if the tentative ruling is not contested.

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