Judge Armen Tamzarian, Case Number: 23STCV21894, Date: 2023-12-15 Tentative Ruling

Judge: Armen Tamzarian, Case: 23STCV21894, Date: 2023-12-15 Tentative Ruling

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Case Number: 23STCV21894 Hearing Date: December 15, 2023 Dept: 52

Defendant The Lobster LLC’s Motion to Compel Arbitration and Stay Action

Defendant The Lobster LLC moves to compel arbitration of this action by plaintiff Donna Pociecha.

Evidentiary Objections

Plaintiff makes 15 objections to defendant’s evidence. All 15 objections are overruled.

Existence of Agreement

Plaintiff argues defendant did not meet its burden of proving plaintiff entered the purported arbitration agreement. The party moving to compel arbitration must establish the existence of a written arbitration agreement between the parties. (CCP § 1281.2.) It can meet the “initial burden to show an agreement to arbitrate by attaching a copy of the arbitration agreement purportedly bearing the opposing party’s signature.” (Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1060.) Only after the opposing party “challenge[s] the validity of that signature” must the moving party “establish by a preponderance of the evidence that the signature was authentic.” (Ibid.) An employer can meet its burden of proving the employee signed an arbitration agreement using “a declaration from [its] custodian of records.” (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 286 Cal.Rptr.3d 891, 901.) “[T]he custodian of a document need not have been present or employed when the document was created or signed to authenticate a document in a company’s files.” (Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747, 758 (Iyere).)

Defendant presents testimony by Luis Garcia, who has been “in charge of bookkeeping and maintenance of personnel records” since 2014. (Garcia Decl., ¶ 1.) He states, “The employee file for plaintiff Donna Pociecha includes an Arbitration Agreement dated May 1, 2015, a true and correct copy of which is attached as Exhibit ‘A.’ The signature for The Lobster is that of former General Manager Jack De Nicola and I recognize Ms. Pociecha’s signature on the document, as consistent with her other signed documents for The Lobster.” (Id., ¶ 2.) This testimony by a custodian of defendant’s personnel records adequately authenticates the arbitration agreement.

Plaintiff does not effectively rebut defendant’s evidence. “[A]n individual is capable of recognizing his or her own personal signature. If the individual does not deny that the handwritten personal signature is his or her own, that person’s failure to remember signing is of little or no significance.” (Iyere, supra, 87 Cal.App.5th at p. 757.) “If a party confronted with his or her handwritten signature on an arbitration agreement is unable to allege that the signature is inauthentic or forged, the fact that that person does not recall signing the agreement neither creates a factual dispute as to the signature’s authenticity nor affords an independent basis to find that a contract was not formed.” (Id. at p. 757.)

The arbitration agreement includes a handwritten signature and Social Security Number. (Garcia Decl., Ex. A, p. 2.) The acknowledgment of receiving the employee handbook and arbitration agreement also includes a handwritten signature. (Garcia Decl., Ex. B.) Plaintiff only states she does not recall signing the arbitration agreement. (Pociecha Decl., ¶¶ 2-3.) She does not deny the signatures’ authenticity. Her testimony that she does not recall signing the documents does not suffice to rebut defendant’s evidence.

The court finds defendant meets its burden of proving plaintiff signed the agreement to arbitrate.

Delegation of Gateway Issues

Plaintiff argues the agreement is unconscionable and therefore unenforceable. Plaintiff also argues the agreement does not apply to her second cause of action for failure to hire her in 2021, as opposed to her cause of action for discrimination during prior employment that ended in 2020.

These are gateway issues of arbitrability. The parties agreed to delegate such issues to the arbitrator. “Parties to an arbitration agreement may agree to delegate to the arbitrator, instead of a court, questions regarding the enforceability of the agreement. [Citation.] They ‘can agree to arbitrate almost any dispute—even a dispute over whether the underlying dispute is subject to arbitration.’ ” (Tiri v. Lucky Chances, Inc. (2014) 226 Cal.App.4th 231, 241.) “There are two prerequisites for a delegation clause to be effective. First, the language of the clause must be clear and unmistakable. [Citation.] Second, the delegation must not be revocable under state contract defenses such as fraud, duress, or unconscionability.” (Id. at p. 242.)

1. Clear and Unmistakable Delegation

The arbitration agreement includes a clear and unmistakable delegation clause. It provides, “[T]he parties agree that the arbitrator shall decide if a claim is arbitrable and that any court action joining arbitrable claims shall be stayed pending the outcome of the arbitration of the arbitrable claims.” (Garcia Decl., Ex. A, § 1.) Using plain language, this sentence unmistakably provides that an arbitrator, not a court, must determine which claims are arbitrable.

Plaintiff’s reliance on Jack v. Ring LLC (2023) 91 Cal.App.5th 1186 is misplaced. There, the court found a delegation clause not clear and unmistakable based on the following rule: “ ‘Even broad arbitration clauses that expressly delegate the enforceability decision to arbitrators may not meet the clear and unmistakable test, where other language in the agreement creates an uncertainty in that regard.’ ” (Id. at p. 1197.) The court reasoned that, while the delegation clause stated “the arbitrator ‘shall have exclusive authority to resolve all disputes’ relating to the ‘enforceability ... of these Terms,’ including ‘any claim that all or any part of these Terms are void or voidable’ … another provision … contemplates that ‘a court’ may decide the enforceability of the subsection of the arbitration provision that requires arbitration to ‘be conducted only on an individual basis and not in a class, representative or private attorney general action.’ ” (Id. at p. 1199.) The court held, “[T]he arbitration provision points in two directions on the question whether a court or an arbitrator is to decide the enforceability of the agreement to arbitrate, at least with respect to challenges to the ‘subsection’s limitations as to a particular claim for relief’ such as plaintiffs’ claim here that the limitations are unenforceable … . Because of this uncertainty, we cannot conclude the parties clearly and unmistakably delegated to the arbitrator exclusive authority to decide whether the arbitration provision is valid.” (Ibid.)

Here, plaintiff argues paragraph 3 constitutes such an inconsistent provision because it “states the court (judicial action) will be involved with other matter and ‘forms of relief.’ ” (Opp., p. 11.) That section of the agreement provides, “The arbitrator shall be entitled to award all sums and forms of relief as could be awarded or granted in a judicial or administrative action predicated on the same claims for relief, including, as applicable, expedited and permanent injunctive relief, punitive damages, statutory penalties, and recovery of attorneys’ fees, costs and expenses (except for arbitration fees (as limited by paragraph 4 below)).” (Garcia Decl., Ex. A, § 3.)

Nothing in that section, nor any other part of the agreement, suggests that a court and not an arbitrator will determine whether claims are arbitrable, including whether the agreement is unconscionable or whether it applies to certain claims by a party. It merely provides that the arbitrator can award the same relief a court would have the power to award. As plaintiff’s opposition acknowledges (Opp., pp. 12-13), giving the arbitrator that power is required to make the agreement enforceable. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 103 (Armendariz) [“an arbitration agreement may not limit statutorily imposed remedies such as punitive damages and attorney fees”].)

Only two other parts of the arbitration agreement refer to a “court” or “judicial” proceeding. First, the delegation clause itself states “any court action joining arbitrable claims shall be stayed.” (Garcia Decl., Ex. A, § 2.) Second, the agreement provides, “Employee shall not bear any costs of arbitration beyond those which he/she would incur in filing a state court action.” (Id., § 4.) Like the provision regarding the arbitrator’s powers to award various remedies, this provision is required to make the agreement enforceable. (Armendariz, supra, 24 Cal.4th at pp. 110-111 [“when an employer imposes mandatory arbitration as a condition of employment, the arbitration agreement or arbitration process cannot generally require the employee to bear any type of expense that the employee would not be required to bear if he or she were free to bring the action in court”].) Neither provision indicates a court would decide gateway issues of arbitrability.

Finally, the agreement also includes one reference to “trial by jury.” (Garcia Decl., Ex. A, § 10.) It expressly provides the parties “are waiving and foregoing any right to a trial by jury on the claims subject to arbitration.” (Ibid.) Nothing in the agreement suggests a court would decide gateway issues. It clearly and unmistakably delegates issues of arbitrability to the arbitrator. Parties to this agreement would reasonably expect an arbitrator to determine questions of unconscionability and the scope of the agreement.

2. The Delegation Clause Is Not Revocable

The arbitration agreement’s delegation clause is not unconscionable or otherwise revocable. “If the party’s challenge is directed to the agreement as a whole—even if it applies equally to the delegation clause—the delegation clause is severed out and enforced; thus, the arbitrator, not the court, will determine whether the agreement is enforceable. In contrast, if the party is making a specific challenge to the delegation clause, the court must determine whether the delegation clause itself may be enforced (and can only delegate the general issue of enforceability to the arbitrator if it first determines the delegation clause is enforceable).” (Malone v. Superior Court (2014) 226 Cal.App.4th 1551, 1559–1560, citing Rent-A-Center, West, Inc. v. Jackson (2010) 561 U.S. 63, 70; accord Pinela v. Neiman Marcus Group, Inc. (2015) 238 Cal.App.4th 227, 245.)

Plaintiff does not challenge the delegation clause. Plaintiff only argues the entire agreement is unconscionable. Plaintiff shows low procedural unconscionability. “ ‘Arbitration contracts imposed as a condition of employment are typically adhesive.’ ” (Davis v. Kozak (2020) 53 Cal.App.5th 897, 906 (Davis).) “By itself, however, adhesion establishes only a ‘low’ degree of procedural unconscionability.” (Id. at p. 907.) Plaintiff therefore must make a greater showing of substantive unconscionability. (Serafin v. Balco Properties Ltd., LLC (2015) 235 Cal.App.4th 165, 185.) Plaintiff does not argue the delegation clause is substantively unconscionable. It is not. The delegation clause is fully mutual.

Pursuant to the delegation clause, the court therefore does not reach any other issues of arbitrability. The arbitrator must decide those gateway issues.

Disposition

Defendant The Lobster LLC’s motion to compel arbitration is granted. Plaintiff Donna Pociecha is hereby ordered to arbitrate this action against defendant The Lobster LLC. Under the agreement’s delegation clause, the arbitrator shall determine if this action or any part of it is not arbitrable. The court hereby stays the entire action pending the conclusion of the arbitration proceeding.