Judge: Armen Tamzarian, Case: 24STCV22035, Date: 2025-03-13 Tentative Ruling

Case Number: 24STCV22035    Hearing Date: March 13, 2025    Dept: 52

Defendants’ Motion to Compel Arbitration and Stay Proceedings

Defendants AG Seal Beach, LLC dba Seal Beach Health and Rehabilitation Center (AG), Robert Do, and Fay Guerrero move to compel arbitration of this action by plaintiffs Rhonda Singleton, individually and as successor-in-interest to Charles Vernel Magee, Andrea Magee Davis, and Kristin Magee.

Agreement to Arbitrate

            Plaintiffs argue defendants have not proven the existence of a valid arbitration agreement.  “The petitioner bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence … .”  (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972.) 

A. Plaintiff Singleton

            Defendants meet their burden of proving Singleton, as an individual, agreed to arbitrate her claims against defendants.  Defendants present a signed copy of an agreement titled, “Resident – Facility Arbitration Agreement.”  (Do Decl., ¶ 6, Ex. B, p. 1.)  The agreement identifies the “resident” as decedent Charles Magee.  (Ibid.)  It requires binding arbitration of “any dispute between Resident and AG Seal Beach, LLC” and people affiliated with AG.  (Id., art. 2.)  The agreement further provides: “This Agreement shall be binding for any and all disputes arising out of the Resident’s residency at the Facility, except for disputes pertaining to collections or evictions.  This Agreement is binding on all parties, including the Resident’s representatives, executors, family members, and heirs who bring any claims individually or in a representative capacity.  The Resident’s representatives, agents, executors, family members, successors in interest and heirs who execute this Agreement below on the signature line are doing so not only in their representative capacity for the Resident, but also in their individual capacity and thus agree that any claims brought individually by any such representatives, agents, executors, family members, representatives, successors in interest and heirs are subject to binding arbitration.”  (Id., art. 4, bold in original.) 

            Above the section for signatures, the agreement provides, “The Resident and/or the person executing this Agreement certifies that he/she has read this Agreement; it has been explained in a manner he/she understands; has been given a copy of this Agreement; understands this Agreement; and affirmatively represents that he/she is duly authorized, by virtue of the Resident’s consent, instruction and/or durable power of attorney, to execute this Agreement and accept its terms on behalf of the Resident and individually; and acknowledges that the Facility is relying on the aforementioned certification.”  (Do Decl., Ex. B, p. 2.)  Two lines for signatures state “E-SIGNED by RHONDA MAGEE” above the text “Signature on behalf of the Resident and as an Individual.”  (Ibid.)

Plaintiffs’ opposition does not adequately dispute the existence of any valid arbitration agreement.  Its arguments concern only whether Rhonda Singleton, the only party who signed the agreement, had the authority to bind the decedent.  Singleton concedes she signed the arbitration agreement.  (Singleton Decl., ¶¶ 5-10, 15-16.)  As quoted above, the agreement expressly provides that “[t]he Resident’s representatives, agents, executors, family members, successors in interest and heirs who execute this Agreement below on the signature line are doing so not only in their representative capacity for the Resident, but also in their individual capacity and thus agree that any claims brought individually by any such representatives, agents, executors, family members, representatives, successors in interest and heirs are subject to binding arbitration.”  (Do Decl., Ex. B, art. 4.)  She therefore agreed to arbitrate her individual disputes with defendants.

B. Plaintiffs Andrea Magee Davis and Kristin Magee

            Defendants meet their burden of showing the arbitration agreement also binds plaintiffs Andrea Magee Davis and Kristin Magee, the decedent’s daughters.  (Comp., ¶¶ 4-5.)  These two plaintiffs bring only the fifth cause of action for “wrongful death (negligence)” and sixth cause of action for “wrongful death (elder abuse by neglect).”  Courts generally avoid “splitting wrongful death claims among different forums.”  (Daniels v. Sunrise Senior Living, Inc. (2013) 212 Cal.App.4th 674, 685.) 

            Singleton expressly agreed to binding arbitrate of disputes “arising out of the Resident’s residency at the Facility.”  (Do Decl., Ex. B, art. 4.)  She further agreed she signed “not only in [her] representative capacity for the Resident, but also in [her] individual capacity and thus agree[d] that any claims brought individually by any such representatives, agents, executors, family members, representatives successors in interest and heirs are subject to binding arbitration.”  (Ibid.)  The arbitration agreement therefore applies to all three heirs or survivors who bring wrongful death claims in this action.

C. Decedent Charles Magee

Defendants do not meet their burden of showing decedent Charles Magee agreed to arbitrate disputes with defendants.  Defendants rely on the theory that Singleton acted as the decedent’s agent in signing the arbitration agreement on his behalf.  “Generally, a person who is not a party to an arbitration agreement is not bound by it.”  (Flores v. Evergreen at San Diego, LLC (2007) 148 Cal.App.4th 581, 587 (Flores).)  But “a person who is authorized to act as the patient’s agent can bind the patient to an arbitration agreement.”  (Ibid.)  “The law places the risk on persons who deal with agents to ‘ “ascertain[ ] the scope of [the agent’s] powers.” ’ ”  (Enmark v. KF Community Care, LLC (2024) 105 Cal.App.5th 463, 477.)

Defendants do not present sufficient evidence that Singleton acted as decedent’s agent.  “[A]n agency cannot be created by the conduct of the agent alone; rather, conduct by the principal is essential to create the agency.  Agency ‘can be established either by agreement between the agent and the principal, that is, a true agency [citation], or it can be founded on ostensible authority, that is, some intentional conduct or neglect on the part of the alleged principal creating a belief in the minds of third persons that an agency exists, and a reasonable reliance thereon by such third persons.’ ”  (Flores, supra, 148 Cal.App.4th at pp. 587-588.)  “The party seeking to compel arbitration does not meet its burden of proving the existence of an arbitration agreement when it does not present any evidence that the purported principal’s conduct caused the agent or the third party to believe that the agent had the authority to bind the principal.”  (Rogers v. Roseville SH, LLC (2022) 75 Cal.App.5th 1065, 1075.) 

Defendants present no evidence of any act by the late Charles Magee.  They rely solely on conduct by Singleton.  Defendants’ memorandum refers to “the verbal consent provided by plaintiffs’ decedent.”  (Memo, p. 16.)  Defendants present no evidence of that.  Moreover, Singleton’s declaration states the decedent “was nonverbal upon admission to the nursing home.”  (Singleton Decl., ¶ 4.)  These facts are analogous to those in Hearden v. Windsor Redding Care Center, LLC (2024) 103 Cal.App.5th 1010, 1020 (Hearden): “Although the family signatories signed them as legal representatives/agents and stated in the agreements that they were authorized to act as decedents’ agents in signing the arbitration agreements, those facts alone do not establish actual or ostensible agency because a person does not become an agent of another merely by unilaterally saying so.  [Citation.]  Conduct by the purported principal is required.”

Defendants cite two cases in support of their argument that ostensible agency does not require acts by the principal.  Assuming Kelley v. R.F. Jones Co. (1969) 272 Cal.App.2d 113 remains good law (despite numerous recent authorities cited above), it is distinguishable because the court found evidence of “subsequent ratification.”  (Id. at p. 121.) 

Defendants also cite American Cas. Co. of Reading, Pennsylvania v. Krieger (9th Cir. 1999) 181 F.3d 1113, 1121, which stated ostensible agency occurs “ ‘where the principal knows that the agent holds himself out as clothed with certain authority, and remains silent.’ ”  There is no evidence the decedent knew Singleton held herself out as clothed with authority to bind decedent to contracts, particularly an agreement to arbitrate.  Singleton testifies her late “husband was not in [her] presence when [she] was asked to sign paperwork on his behalf, and was not in [her] presence while [she] signed any documents.”  (Singleton Decl., ¶ 8.)  There is also no evidence the decedent ever learned about the arbitration agreement after Singleton signed it, which precludes a finding of ratification. 

Unconscionability

            Plaintiffs argue the arbitration agreement is unconscionable.  Generally, “[t]he burden of proving unconscionability rests upon the party asserting it.”  (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 126 (OTO).)  This defense requires both procedural and substantive unconscionability using a sliding scale.  (Id. at p. 125.)   “Procedural unconscionability focuses on the elements of oppression and surprise.”  (Serafin v. Balco Properties Ltd., LLC (2015) 235 Cal.App.4th 165, 177.)  “Substantive unconscionability focuses on the actual terms of the agreement and evaluates whether they create overly harsh or one-sided results.  (Ibid., internal quotes omitted.)

A. General Standard of Unconscionability

            Plaintiffs meet their burden of showing the agreement is unconscionable.  They show some procedural unconscionability.  “A procedural unconscionability analysis ‘begins with an inquiry into whether the contract is one of adhesion.’  [Citation.]  An adhesive contract is standardized, generally on a preprinted form, and offered by the party with superior bargaining power ‘on a take-it-or-leave-it basis.’ ”  (OTO, supra, 8 Cal.5th at p. 126.) 

It is undisputed that the agreement is a preprinted form contract.  Though the arbitration agreement has its own separate title, defendants presented it to Singleton in the same DocuSign transaction as the admission agreement.  (Singleton Decl., ¶ 7.)  Singleton testifies, “The whole thing was rushed and made me feel that it was just standard paperwork needed for Charles to be admitted to the facility.”  (Id., ¶ 8.)  Moreover, when she signed the agreement, she and her children were understandably “extremely worried for” the late Charles Magee.  (Id., ¶ 11.)  Though the agreement states it is not required as a condition of admission and allowed the resident to opt out, that does not eliminate all procedural unconscionability. 

            Substantively, plaintiffs show the agreement is highly unconscionable.  “In assessing substantive unconscionability, the paramount consideration is mutuality.”  (Pinela v. Neiman Marcus Group, Inc. (2015) 238 Cal.App.4th 227, 241, internal quotes and citations omitted.)  “An agreement may be unfairly one-sided if it compels arbitration of the claims more likely to be brought by the weaker party but exempts from arbitration the types of claims that are more likely to be brought by the stronger party.”  (Fitz v. NCR Corp. (2004) 118 Cal.App.4th 702, 724.) 

An agreement “lack[s] mutuality” when “it requires residents to arbitrate those claims they are most likely to bring against” a healthcare facility “ (medical malpractice, personal injury, elder abuse) while allowing the Facility to pursue in court the actions the Facility is most likely to bring against residents (evictions and collections).”  (Lopez v. Bartlett Care Center, LLC (2019) 39 Cal.App.5th 311, 321 (Lopez).)  Such a “provision is clearly ‘one-sided,’ benefitting only the Facility, and thus renders the agreement itself substantively unconscionable.”  (Ibid.) 

This agreement is equivalent to the one held unconscionable in Lopez.  Defendants fail to identify any type of claim they might bring against plaintiffs that would be subject to the arbitration agreement.  The agreement can only benefit defendants by requiring residents or their families to arbitrate their claims against defendants.  Defendants did not respond to plaintiffs’ argument that the agreement is not mutual. 

The court exercises its discretion not to sever the provision exempting evictions and collections from the arbitration agreement.  “[C]ourts may liberally sever any unconscionable portion of a contract and enforce the rest when: the illegality is collateral to the contract’s main purpose; it is possible to cure the illegality by means of severance; and enforcing the balance of the contract would be in the interests of justice.”  (Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5th 478, 517.)  Defendants argue the court should sever a different provision of the agreement (the clause requiring the parties to pay equal shares of the arbitration fees) if the court finds it unconscionable.  They do not address severing any provision to make the agreement mutual. 

Severance is generally not appropriate where the agreement is not mutual.  (See Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 124-125.)   The main purpose of the contract is to require only one side to arbitrate disputes.  Severing the provision that exempts evictions and collections would not serve the interests of justice.  Using severance to enforce the arbitration agreement now would bolster the non-mutual nature of the arbitration agreement.  There is no realistic circumstance in which severance would result in defendants being required to arbitrate their claims for eviction or collection against a resident.  (See Abramson v. Juniper Networks, Inc. (2004) 115 Cal.App.4th 638, 667 [where the agreement is not mutual, “selective severance would relegate only the” weaker party “to the arbitration forum”].) 

B. Exception Under Code of Civil Procedure § 1295(e)

Defendants rely in part on Code of Civil Procedure section 1295, which is “an exception to an otherwise applicable unconscionability defense.”  (Swain v. LaserAway Medical Group, Inc. (2020) 57 Cal.App.5th 59, 76.)  Defendants bear “the burden to show” the exception under Code of Civil Procedure section 1295, subdivision (e), applies.  (Ibid.)  The statute only applies to the second cause of action for medical malpractice—a claim that belongs to decedent and therefore is not subject to the arbitration agreement. 

As to the wrongful death claims by Charles Magee’s heirs, which are subject to the arbitration agreement, they do not sound in professional negligence.  “Under section 1295, a patient who signs an arbitration agreement with a health care provider may bind heirs to arbitrate a wrongful death claim in a case where the primary basis for the claim sounds in professional negligence.  [Citations.]  But if the primary basis sounds in elder abuse, section 1295 does not apply.  [Citation.]  Professional negligence is a negligent act or omission by a health care provider within the scope of licensed service that proximately causes personal injury or wrongful death.  (§ 1295, subd. (g)(2).)  Whereas elder neglect, a form of elder abuse, refers to the failure to provide medical care.”  (Hearden, supra, 103 Cal.App.5th 1010, 1018.) 

Elder neglect “includes a failure to provide for personal hygiene, food, clothing, shelter, and medical care; a failure to protect from health and safety hazards; and a failure to prevent malnutrition or dehydration.”  (Hearden, supra, 103 Cal.App.5th 1010, 1018.)  “It does not refer to substandard performance of medical services but rather the failure of those responsible for attending to the basic needs and comforts of elderly or dependent adults, regardless of their professional standing, to carry out their custodial obligations.”  (Id. at pp. 1018-1019.) 

The primary basis of the wrongful death claims is neglect, not negligent provision of healthcare.  Plaintiffs allege Charles Magee died because he “was fed eggs while laying flat on his back.”  (Comp., ¶ 31.)  They allege defendants “failed to stand by decedent during feeding, and instead, fed him eggs, the first food he has had orally in many months at this point, and then left him all alone despite the known high risk of injury or death by choking.”  (¶ 33.)  Plaintiffs further allege, “Decedent continued to choke on the eggs for two hours until he stopped breathing and died.”  (¶ 34.)  Feeding someone is not a professional healthcare service.  Failing to protect an elder from the basic safety hazard of choking on food is   Plaintiffs’ wrongful death claims thus arise from neglect and failure to provide medical care, not substandard performance of medical services.  The exception to unconscionability under Code of Civil Procedure section 1295(e) therefore does not apply.    

Disposition

Defendants AG Seal Beach, LLC dba Seal Beach Health and Rehabilitation Center (AG), Robert Do, and Fay Guerrero’s motion to compel arbitration is denied.  Defendants shall file a responsive pleading within 20 days.