Judge Ashfaq G. Chowdhury, Case Number: 24GDCV00126, Date: 2024-08-08 Tentative Ruling

Judge: Ashfaq G. Chowdhury, Case: 24GDCV00126, Date: 2024-08-08 Tentative Ruling

Case Number: 24GDCV00126 Hearing Date: August 8, 2024 Dept: E

Hearing Date: 08/08/2024 – 8:30am
Case No: 24GDCV00126
Trial Date: UNSET
Case Name: FELICIDAD HONKALA, by and through her Guardian ad Litem, Rowena Anonas v. LAC VERDUGO OPERATIONS, LLC dba GLENDALE POST ACUTE CENTER; LAC SNF, LLC; CAMBRIDGE HEALTHCARE SERVICES, LLC; and DOES 1-100

TENTATIVE RULING ON MOTION TO COMPEL ARBITRATION

Moving Party: Defendants, LAC Verdugo Operations LLC dba Glendale Post Acute Center; LAC SNF, LLC; Cambridge Healthcare Services, LLC

Responding Party: Plaintiff, Felicidad Honkala

Moving Papers: Notice/Petition; Proposed Order

Opposing Papers: Opposition; Request for Judicial Notice; Objections to Evidence

Reply Papers: Reply; Response to Plaintiff’s Objections

Proof of Service Timely Filed (CRC Rule 3.1300(c)): Ok
16/21 Court Days Lapsed (CCP 1005(b)): Ok
Correct Address (CCP §1013, §1013a, §1013b): Ok

RELIEF REQUESTED
Defendants, LAC Verdugo Operations, LLC dba Glendale Post Acute Center (Glendale Post); LAC SNF, LLC (LAC SNF); and Cambridge Healthcare Services, LLC (Cambridge), petition for an order compelling Plaintiff to arbitrate the controversy alleged in the Complaint in binding arbitration and “to stay the Superior Court matter will be heard.”

The Motion is based upon this Notice, the accompanying Petition to Compel Binding Arbitration pursuant to the Federal Arbitration Act or in the alternative California Code of Civil Procedure §§ 1281, 1281.2, 1281.4, and 1290 et. seq., the Memorandum of Points and Authorities in support, the attached declaration of Custodian of Records, the attached exhibits, all pleadings, papers and records on file herein, and upon any oral argument of counsel at the time of the hearing of this Petition

LEGAL STANDARD – MOTION TO COMPEL ARBITRATION
CCP § 1281.2, governing orders to arbitrate controversies, provides in pertinent part:

On 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 that controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists, unless it determines that:

(a) The right to compel arbitration has been waived by the petitioner; or

(b) Grounds exist for recission of the agreement.

(CCP §1281.2(a)-(b).)

Under the Federal Arbitration Act, arbitration agreements “shall be valid, irrevocable and enforceable, save upon such grounds that exist at law or in equity for the revocation of a contract.” (9 U.S.C. § 2.)

There is a strong public policy in favor of arbitration of disputes and any doubts concerning the scope of arbitrable disputes should be resolved in favor of arbitration. (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 9 (“courts will ‘indulge every intendment to give effect to such proceedings.’”) (quotation omitted)). (See also AT&T Mobility, LLC v. Concepcion (2011) 563 U.S. 333, 339.)

ANALYSIS
Plaintiff, Felicidad Honkala, by and through her Guardian ad Litem, Rowena Anonas, filed the instant Complaint against Defendants Glendale Post, LAC SNF, and Cambridge on 1/23/2024.

The Complaint alleges three causes of action for (1) Elder Abuse and Neglect (Welfare and Institutions Code § 15600 et seq.), (2) Violation of Residents’ Bill of Rights (Health & Safety Code § 1430(b), and (3) Negligence.

Arbitration Agreement
Plaintiff was allegedly admitted to Glendale Post on December 9, 2018. (Kim Decl. ¶ 2.)

Defendants seek to compel all claims in the Complaint to arbitration based on the two arbitration agreements that Plaintiff signed on 12-27-18 and that Plaintiff’s representative, Rowena Anonas, signed on 12-11-18. These two arbitration agreements are attached as Exhibit A and Exhibit B to Defendants’ petition.

Further, attached to the petition is the declaration of Marie Toni Cabrera, which declares:

1. I am the Custodian of Records at Glendale Post Acute Center. As part of my duties, I oversee resident’s records, including admissions paperwork. I have personal knowledge of the facts contained herein and if called to testify I could and would do so competently.

2. Attached hereto as Exhibit “A” is a true and correct copy of the arbitration agreement “ARBITRATION OF MEDICAL MALPRACTICE DISPUTES” pertaining to Felicidad Honkala.

3. Attached hereto as Exhibit “B” is a true and correct copy of the arbitration agreement “ARBITRATION OF DISPUTE OTHER THAN MEDICAL MALPRACTICE” pertaining to Felicidad Honkala.

4. The above records are maintained in their ordinary course and scope of business.

(Cabrera Decl. ¶¶ 1-4.)

As stated in Harris v. TAP Worldwide, LLC:

California law favors enforcement of valid arbitration agreements. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 97, 99 Cal.Rptr.2d 745, 6 P.3d 669 (Armendariz ); Broughton v. Cigna Healthplans (1999) 21 Cal.4th 1066, 1074, 90 Cal.Rptr.2d 334, 988 P.2d 67.) Because arbitration is a contractual matter, a party who has not agreed to arbitrate a controversy cannot be compelled to do so. (Grey v. American Management Services (2012) 204 Cal.App.4th 803, 808, 139 Cal.Rptr.3d 210; Sparks v. Vista Del Mar Child and Family Services (2012) 207 Cal.App.4th 1511, 1518, 145 Cal.Rptr.3d 318 (Sparks ).) When the material facts are undisputed, we determine the existence of an agreement to arbitrate de novo. (Casas v. Carmax Auto Superstores Cal. LLC (2014) 224 Cal.App.4th 1233, 1235, 169 Cal.Rptr.3d 96 (Casas, hereafter); Sparks, supra, 207 Cal.App.4th at p. 1519, 145 Cal.Rptr.3d 318.) The party seeking arbitration bears the initial burden of demonstrating the existence of an arbitration agreement. (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236, 145 Cal.Rptr.3d 514, 282 P.3d 1217 (Pinnacle ); Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972, 64 Cal.Rptr.2d 843, 938 P.2d 903; Sparks, supra, 207 Cal.App.4th at p. 1518, 145 Cal.Rptr.3d 318.) Once the moving party has satisfied its burden, the litigant opposing arbitration must demonstrate grounds which require that the agreement to arbitrate not be enforced. (Pinnacle, supra, 55 Cal.4th at p. 236, 145 Cal.Rptr.3d 514, 282 P.3d 1217; Engalla v. Permanente Medical Group, Inc., supra, 15 Cal.4th at p. 972, 64 Cal.Rptr.2d 843, 938 P.2d 903; Sparks, supra, 207 Cal.App.4th at p. 1518, 145 Cal.Rptr.3d 318.)

(Harris v. TAP Worldwide, LLC (2016) 248 Cal.App.4th 373, 380-81.)

Plaintiff attempts to argue that Defendants held the initial burden to prove the contract and signatures are authentic. Plaintiff also argues that the Cabrera declaration does not provide sufficient evidence authenticating the signatures of the arbitration agreement because the declaration does not give specific details about the circumstances surrounding the agreements’ execution. Plaintiff argues that Cabrera does not state when or how the agreements were presented to Plaintiff and her representative. Plaintiff argues that the Cabrera declaration fails to state if the arbitration agreements were thoroughly explained to either Plaintiff or her representative.

The Court does not find Plaintiff’s argument (i.e., that Defendants failed to authenticate the arbitration agreements, and that the arbitration agreements are not admissible as credible evidence) availing.

As stated in Condee:

For purposes of a petition to compel arbitration, it is not necessary to follow the normal procedures of document authentication. “[T]he court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists....” (§ 1281.2.) The statute does not require the petitioner to introduce the agreement into evidence. A plain reading of the statute indicates that as a preliminary matter the court is only required to make a finding of the agreement's existence, not an evidentiary determination of its validity.

(Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 21, 218-19.)

Therefore, as a preliminary matter, Defendants met their initial burden of demonstrating the existence of an agreement to arbitrate by attaching the Cabrera Declaration and the two arbitration agreements in Exhibits A and B.

Plaintiff attempts to shift the burden to Defendants to prove the contract and signatures are authentic by relying on Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 845-46 (Ruiz) and Fabian v. Renovate America, Inc. (2019) 42 Cal.App.5th 1062, 1069 (Fabian). However, Plaintiff cites Ruiz and Fabian out of context.

In Ruiz, Ruiz submitted a declaration claiming he did not recall signing the agreement to arbitrate at any time and that he would not have signed it had it been presented to him. (Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 840 & 846.) Therefore, the court of appeal held that in light of this, Moss Bros. had the burden of proving by a preponderance of the evidence that the electronic signature was authentic. (Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 846.)

In Fabian, Fabian submitted a declaration asserting that she was not provided documents to sign, that she did not sign the contract physically or electronically, and that what purports to be her electronic signature was “placed” on the contract without her consent or authorization. (Fabian v. Renovate America, Inc. (2019) 42 Cal.App.5th 1062, 1065.) The court of appeal held that because Fabian declared that she did not sign the contract, the other party had the burden of proving by a preponderance of the evidence that the electronic signature was authentic. (Fabian v. Renovate America, Inc. (2019) 42 Cal.App.5th 1062, 1067.)

Here, Plaintiff attempts to shift the burden to Defendants to authenticate the documents by arguing that Plaintiff is challenging the validity of the arbitration agreements. However, even though Plaintiff conclusorily states it is challenging the validity of the arbitration agreements, the documents submitted, or lack thereof, show that Plaintiff is not in fact challenging the validity of the arbitration agreements.

Nowhere in the opposing papers does Plaintiff attach a declaration by Plaintiff, or her representative who also signed the arbitration agreements, attesting that they did not sign the documents. In both Ruiz and Fabian, declarations were submitted contesting the validity of the signatures on the agreements. Here, no such declarations were attached with the opposing papers that contested the validity of the signatures on the two arbitration agreements. Therefore, under Condee, Defendants met their initial burden of demonstrating the existence of an agreement to arbitrate. The burden did not shift back to Defendants to prove, by a preponderance of the evidence, that the signatures were authentic because Plaintiff never submitted declarations in Opposition actually challenging the validity of the signatures.

Plaintiff’s Signature
Both of the arbitration agreements submitted by Defendants contain signatures by both the Plaintiff and the Plaintiff’s representative.

With respect to the Plaintiff’s signature, Plaintiff argues in Opposition that both the arbitration agreements are unenforceable because Plaintiff lacked the required mental capacity to enter into an agreement when she signed it on 12-27-2018.

“All persons are capable of contracting, except minors, persons of unsound mind, and persons deprived of civil rights.” (Civil Code § 1556.)

As explained in Probate Code § 811(a)-(e):

(a) A determination that a person is of unsound mind or lacks the capacity to make a decision or do a certain act, including, but not limited to, the incapacity to contract, to make a conveyance, to marry, to make medical decisions, to execute wills, or to execute trusts, shall be supported by evidence of a deficit in at least one of the following mental functions, subject to subdivision (b), and evidence of a correlation between the deficit or deficits and the decision or acts in question:

(1) Alertness and attention, including, but not limited to, the following:

(A) Level of arousal or consciousness.

(B) Orientation to time, place, person, and situation.

(2) Information processing, including, but not limited to, the following:

(A) Short- and long-term memory, including immediate recall.

(B) Ability to understand or communicate with others, either verbally or otherwise.

(D) Ability to understand and appreciate quantities.

(E) Ability to reason using abstract concepts.

(F) Ability to plan, organize, and carry out actions in one’s own rational self-interest.

(G) Ability to reason logically.

(3) Thought processes. Deficits in these functions may be demonstrated by the presence of the following:

(A) Severely disorganized thinking.

(B) Hallucinations.

(D) Uncontrollable, repetitive, or intrusive thoughts.

(4) Ability to modulate mood and affect. Deficits in this ability may be demonstrated by the presence of a pervasive and persistent or recurrent state of euphoria, anger, anxiety, fear, panic, depression, hopelessness or despair, helplessness, apathy or indifference, that is inappropriate in degree to the individual’s circumstances.

(b) A deficit in the mental functions listed above may be considered only if the deficit, by itself or in combination with one or more other mental function deficits, significantly impairs the person’s ability to understand and appreciate the consequences of his or her actions with regard to the type of act or decision in question.

(c) In determining whether a person suffers from a deficit in mental function so substantial that the person lacks the capacity to do a certain act, the court may take into consideration the frequency, severity, and duration of periods of impairment.

(d) The mere diagnosis of a mental or physical disorder shall not be sufficient in and of itself to support a determination that a person is of unsound mind or lacks the capacity to do a certain act.

(e) This part applies only to the evidence that is presented to, and the findings that are made by, a court determining the capacity of a person to do a certain act or make a decision, including, but not limited to, making medical decisions. Nothing in this part shall affect the decision-making process set forth in Section 1418.8 of the Health and Safety Code, nor increase or decrease the burdens of documentation on, or potential liability of, health care providers who, outside the judicial context, determine the capacity of patients to make a medical decision.

(Probate Code § 811(a)-(e).)

Further, as indicated in Probate Code § 810:

(a) For purposes of this part, there shall exist a rebuttable presumption affecting the burden of proof that all persons have the capacity to make decisions and to be responsible for their acts or decisions.

(b) A person who has a mental or physical disorder may still be capable of contracting, conveying, marrying, making medical decisions, executing wills or trusts, and performing other actions.

(c) A judicial determination that a person is totally without understanding, or is of unsound mind, or suffers from one or more mental deficits so substantial that, under the circumstances, the person should be deemed to lack the legal capacity to perform a specific act, should be based on evidence of a deficit in one or more of the person’s mental functions rather than on a diagnosis of a person’s mental or physical disorder.

(Probate Code § 810(a)-(c).)

As stated in Algo-Heyres v. Oxnard Manor LP (2023) 88 Cal.App.5th 1064:

“[T]he determination of a person's mental capacity is fact specific, and the level of required mental capacity changes depending on the issue at hand ... with marital capacity requiring the least amount of capacity, followed by testamentary capacity, and on the high end of the scale is the mental capacity required to enter contracts.” (Greenway, supra, 217 Cal.App.4th at p. 639, 158 Cal.Rptr.3d 364.) “More complicated decisions and transactions ... require greater mental function.” (Andersen v. Hunt (2011) 196 Cal.App.4th 722, 730, 126 Cal.Rptr.3d 736.)

(Algo-Heyres v. Oxnard Manor LP (2023) 88Cal.App.5th 1064, 1071.)

Here, Opposition submits Exhibits A-I to support its argument that Plaintiff lacked capacity to contract.

The Court notes that it appears as if Exhibits A-F are the only relevant exhibits because the exhibits after Exhibit F pertain to dates that fall after the Plaintiff signed the arbitration agreements.

Further, the Court notes that Exhibits A-F submitted by Plaintiff appear to be from Glendale Post.

While Defendants’ reply argues that Plaintiff did not rely on declarations from medical experts, Defendants’ moving and reply papers also did not rely on declarations from medical experts. In fact, in Reply, Defendants rely on the exhibits the Plaintiff submitted in Opposition to argue that Plaintiff did in fact have capacity to contract.

Therefore, the Court will consider the Opposition’s Exhibits A-F because both parties relied on the exhibits, and Exhibits A-F appear to be the exhibits that are relevant in determining whether Plaintiff had capacity when she signed the contract on 12-27-1018.

In light of Exhibits A-F, the Court finds that Plaintiff sufficiently demonstrated that Plaintiff did not have the capacity to contract and enter into the instant two arbitration agreements.

The bottom of Exhibit B, dated 12-14-2018, which precedes Plaintiff signing the agreements, indicates that Plaintiff had impaired cognitive ability. It is unclear what Exhibit D demonstrates, but a Care Area for Cognitive Loss/Dementia was triggered on 12/21/2018, which also precedes signing the arbitration agreements. Exhibit E also indicates that the resident has impaired cognitive function/dementia or impaired thought processes “r/t Aging process.” Further, Exhibit F, which was dated 12-19-2018, which precedes signing of the arbitration agreements indicates a medical condition of “severe dementia.”

Most of this evidence appears to be diagnoses. “The mere diagnosis of a mental or physical disorder shall not be sufficient in and of itself to support a determination that a person is of unsound mind or lacks the capacity to do a certain act.” (Prob. Code § 811(d).)

However, there does appear to be evidence that Plaintiff lacked capacity to contract based on evidence of a deficit in at least one of the mental functions listed in Probate Code § 811(a)(2) – Information processing, including, but not limited, to, short- and long-term memory, including immediate recall.

Exhibit E was initialed on 12/21/2018, which precedes the signatures on the arbitration agreement. Exhibit E indicated that “the resident is able to remember one/two/three instructions, find room, read, sit for an hour, do puzzles, etc.”

Further, Exhibit C pertains to Cognition Patterns. Exhibit C shows evidence of short term memory issues because Plaintiff could only identify one of the three words she was previously recited in her cognitive patterns test.

Therefore, in light of the combination of diagnoses of mental disorders relating to cognitive ability/dementia, and Exhibits E and C showing evidence of short term memory problems that preceded the date Plaintiff signed the arbitration agreement, this Court finds that Plaintiff successfully demonstrated that she lacked capacity to sign the two arbitration agreements.

Further, even though Plaintiff’s representative also signed these arbitration agreements, Opposition argues that the representative did not have authority to bind Plaintiff. The Reply does not address the Opposition’s argument that the representative did not have the authority to bind Plaintiff; therefore, the Court finds the Opposition’s argument availing. Further, the Supreme Court of California recently held that under the power of attorney, signing an arbitration agreement was not a health-care decision that is within an agent’s power. (See Harrod v. Country Oaks Partners, LLC (2024) 15 Cal.5th 939; Petition for Certiorari Docketed by COUNTRY OAKS PARTNERS, LLC, DBA COUNTRY OAKS CARE CENTER, ET AL. v. MARK HARROD, U.S., June 28, 2024)

TENTATIVE RULING
Since Plaintiff lacked capacity to sign the arbitration agreements, and since Defendants did not oppose Plaintiff’s argument that the representative did not have the authority to bind Plaintiff, and since it appears that Plaintiff’s representative cannot bind Plaintiff to arbitration under Harrod v. Country Oaks Partners, LLC (2024) 15 Cal.5th 939, this Court DENIES Defendants’ motion to compel arbitration.