Judge: Cherol J. Nellon, Case: 21STCV39370, Date: 2023-04-06 Tentative Ruling

Case Number: 21STCV39370    Hearing Date: April 6, 2023    Dept: 28

Defendant Claremont Manor Care Center’s Motion to Compel Arbitration

Having considered the moving papers, the Court rules as follows. 

BACKGROUND

On October 26, 2021, Plaintiff Ethel Morrison (“Plaintiff”) filed this action against Defendants Claremont Manor Care Center (“CMCC”) and San Antonio Regional Hospital (“SARH”) for general negligence and elder abuse.

On November 15, 2022, Plaintiff filed the FAC.

On February 1, 2023, SARH field an answer.

On February 17, 2023, CMCC filed a Motion to Compel Arbitration to be heard on April 6, 2023.

Trial is currently set for April 25, 2023.

PARTY’S REQUESTS

CMCC requests the Court compel arbitration and stay or dismiss the proceedings pending the outcome of arbitration.

LEGAL STANDARD

A petition to compel arbitration must allege both (1) a “written agreement to arbitrate” the controversy, and (2) that a party to that agreement “refuses to arbitrate” the controversy. (Code Civ. Proc., § 1281.2.) The Court shall grant the petition unless the petitioner waived the right to compel arbitration, or other grounds exist for rescission of the agreement. (Id.) 

California Code of Civil Procedure § 1290.4, subdivision (b) requires a petition to compel arbitration under § 1281.2 to be served on the parties as provided in their arbitration agreement or, if no method was agreed to, in the same manner required for service of summons, if the party to be served has not previously appeared in the proceeding and has not previously been served in accordance with this subdivision. (Miranda v. 21st Century Ins. Co. (2004) 117 Cal.App.4th 913, 928.)

Waiver of the right to arbitrate is assessed through a number of factors, including: (1) whether the party’s actions are inconsistent with the right to arbitrate; (2) whether “the litigation machinery has been substantially invoked” and the parties “were well into preparation of a lawsuit” before the party notified the opposing party of an intent to arbitrate; (3) whether a party either requested arbitration enforcement close to the trial date or delayed for a long period before seeking a stay; (4) whether a defendant seeking arbitration filed a counterclaim without asking for a stay of the proceedings; (5) “whether important intervening steps [e.g., taking advantage of judicial discovery procedures not available in arbitration] had taken place”; and (6) whether the delay “affected, misled, or prejudiced” the opposing party. (St. Agnes Medical Center v. PacificCare of California (2003) 41 Cal. 4 th 1187, 1196.)

So long as an arbitration agreement is clear and explicit in meaning, an arbitration agreement can encompass incidents or claims that occurred or accrued prior to the agreement. (Salgado v. Carrows Restaurants, Inc. (2019) 33 Cal.App.5th 356, 356, 360-361.) 

Under California law, an arbitration agreement must be in some measure both procedurally and substantively unconscionable in order for the agreement to be unenforceable. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114.) “But they need not be present in the same degree. . . . [T]he more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.” (Id.) 

Procedural unconscionability focuses on two factors: oppression and surprise. (A & M Produce Co. v.  FMC Corp. (1982) 135 Cal.App.3d 437, 486.) Oppression is an “inequality of bargaining power which results in no real negotiation and ‘an absence of meaningful choice.’” (Id.) Surprise involves the extent to which the agreed upon terms are hidden away “by the party seeking to enforce the disputed terms.” (Id.)

Substantive unconscionability does not have a precise definition, but generally a contract is found to be “substantively suspect if it reallocates the risks of the bargain in an objectively unreasonable or unexpected manner.” (Id. at 487.) 

CCP § 1295 provides the following: (a) Any contract for medical services which contains a provision for arbitration of any dispute as to professional negligence of a health care provider shall have such provision as the first article of the contract and shall be expressed in the following language:  "It is understood that any dispute as to medical malpractice, that is as to whether any medical services rendered under this contract were unnecessary or unauthorized or were improperly, negligently or incompetently rendered, will be determined by submission to arbitration as provided by California law, and not by a lawsuit or resort to court process except as California law provides for judicial review of arbitration proceedings.  Both parties to this contract, by entering into it, are giving up their constitutional right to have any such dispute decided in a court of law before a jury, and instead are accepting the use of arbitration."
   (b) Immediately before the signature line provided for the individual contracting for the medical services must appear the following in at least 10-point bold red type:
   ‘NOTICE:  BY SIGNING THIS CONTRACT YOU ARE AGREEING TO HAVE ANY
ISSUE OF MEDICAL MALPRACTICE DECIDED BY NEUTRAL ARBITRATION AND YOU ARE GIVING UP YOUR RIGHT TO A JURY OR COURT TRIAL.  SEE ARTICLE 1 OF THIS CONTRACT.’”

DISCUSSION

On October 9, 2020, Plaintiff and CMCC entered into an arbitration agreement that stated any controversy arising out of the provisions of care and services by CMCC are to be determine exclusively by binding arbitration. According to CMCC, there is no doubt that Plaintiff was authorized and capable of acting her own behalf in singing the agreement; this is supplemented by Plaintiff’s doctor’s notes from only 10 days prior, noting she was able to understand and make decisions.  

In order to compel arbitration, a party must present a written agreement to arbitrate and a party that refuses to arbitrate despite that agreement. CMCC’s provided arbitration agreement clearly shows that Plaintiff signed the arbitration agreement, as every applicable section is signed by Plaintiff. There is evidence of both a written agreement to arbitrate and a refusal to arbitrate, as Plaintiff brought forward this complaint. However, in reviewing the subject agreement, the Court is unaware if the agreement wrote the required sections in red type, as required by CCP § 1295, in arbitration agreements relating to medical malpractice. This has been a requirement since at least January 1, 2019, meaning that the contract was not signed prior to the introduction of this requirement. The Court is unaware if the lack of red type is due to CMCC producing only the gray version of this document or if it does not actually comply with the CCP § 1295 requirements.

The Court continues the hearing on the motion, ordering CMCC to provide a color version of the contract or evidence indicating that it complied with the CCP requirements. Failure to abide with the CCP requirements may be indicative of unconscionability and may result in the Court finding there is not an enforceable contract. CMCC may also appear at the hearing with a color version of the contract, at which point the Court will issue its ruling.

CONCLUSION

Defendant Claremont Manor Care Center’s Motion to Compel Arbitration is CONTINUED to April 17, 2023, at 1:30 p.m. in Department 28 of the Spring Street Courthouse.

            Moving party is ordered to give notice of this ruling.

Moving Party is ordered to file the proof of service of this ruling with the Court within five days.

The parties are directed to the header of this tentative ruling for further instructions.