Judge Christopher K. Lui, Case 22STCV14490 2023-03-07 Tentative Ruling

Pursuant to California Rule of Court 3.1308(a)(1), the Court does not desire oral argument on the motion addressed herein. As required by Rule 3.1308(a)(2), any party seeking oral argument must notify ALL OTHER PARTIES and the staff of Department 76 of their intent to appear and argue. Notice to Department 76 may be sent by email to smcdept76@lacourt.org or telephonically at 213-830-0776. If notice of intention to appear is not given and the parties do not appear, the Court will adopt the tentative ruling as the final ruling.

Plaintiff alleges that she was repeatedly sexually assaulted by Defendant Marvin Bunoan while Plaintiff was a patient resident at Defendant’s facility following a stroke.

Defendant San Pedro Convalescent Home, Inc.’s motion to compel arbitration is GRANTED.

However, the Court stays its order compelling arbitration until the litigation against Defendant Marvin Bunoan is concluded.

Plaintiff’s request that the Court take judicial notice of the court’s ruling denying San Pedro’s identical motion to compel arbitration in Jane Roe 2’s case LASC 22STCV14494 is GRANTED per Evid. Code, § 452(d)(court records).

Under California law, arbitration agreements are valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. (Blake v. Ecker (2001) 93 Cal.App.4th 728, 741 overruled on other grounds by Le Francois v. Goel (2005) 35 Cal.4^th 1094.) A party petitioning to compel arbitration has the burden of establishing the existence of a valid agreement to arbitrate and the party opposing the petition has the burden of proving, by a preponderance of the evidence, any fact necessary to its defense. (Banner Entertainment, Inc. v. Superior Court (1998) 62 Cal.App.4th 348, 356-57.)

On January 27, 2017, Plaintiff Resident—whose real name is revealed in Exhibit A attached to Defendant’s memorandum of points and authorities—signed the Arbitration Agreement, which she does not dispute.

As set forth herein, both parties agree to arbitrate disputes as described in clauses 5.1 (medical malpractice) and 5.2 (all other disputes or claims)

1.1 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 or not 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. The type of award request (e.g„ treble damages, punitive damages or attorneys fees) shall not affect whether a dispute is subject to arbitration by this Agreement.

1.2 It is also understood that any and all other disputes, controversies, demands or claims that relate or arise out of the provision of services or health care or any failure to provide services or health care by Facility, the Admission Agreement and/or this Agreement, the validity, interpretation, construction, performance and enforcement thereof', including, without limitation, claims that allege; breach of contract; unpaid nursing home charges; fraud; deceptive trade practices; misrepresentation; negligence; gross negligence; Health and Safety Code section 1430 claims; violations of the Hider Abuse and Dependent Adult Civil Protection Act, the Unfair Competition Act, the Consumer Legal Remedies Act, and/or any right granted to Resident by law or by the Admission Agreement will be determined by submission to arbitration 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. The type of award requested (e.g,, treble damages, punitive damages or attorneys' fees) shall not affect whether a dispute is subject, to arbitration by this Agreement. Notwithstanding anything in this paragraph, any appeals made by Resident concerning his/her transfer or discharge, as provided under State and Federal law and any dispute not justiciable in a court of law will not be governed by this Agreement.

1.7 As this Agreement relates to the Resident's admission in the Facility, and the

Facility, among other things, participates in the Medicare and/or Medi-Cal programs and/or procures supplies from out-of-state vendors, the parties acknowledge and agree that the Resident's admission and these other events evidence transactions affecting or involving interstate commerce governed by the Federal Arbitration Act. This Agreement shall be construed and enforced in accordance with and governed by the Federal Arbitration Act and the procedures set forth in the Federal Arbitration Act shall govern any petition to compel arbitration.

upon execution, any and all disputes or claims as to medical malpractice (that is, whether any medical services rendered during the Resident's admission were unnecessary or unauthorized or were improperly, negligently or incompetently rendered, or not rendered) will be determined by submission to neutral arbitration, and not by a lawsuit or court process, except as California law provides for judicial review of arbitration proceedings. Such arbitration will be governed by this Arbitration Agreement.

AGREEING TO HAVE ANY ISSUE OP MEDICAL MALPRACTICE DECIDED BY NEUTRAL AR8ITRATION AND YOU ARE GIVING UP YOUR RIGHT TO A JURY OR COURT TRIAL. SEE ARTICLE I OF THIS CONTRACT.

5.2 The parties further acknowledge and agree that any and all disputes, controversies, demands or claims that relate or arise out of the provision of services or health care or any failure to provide services or health care by Facility, the Admission Agreement and/or this Agreement, the validity, interpretation, construction, performance and enforcement thereof, including,

without limitation, claims that allege: medical practice; breach of contract; unpaid nursing home charges; fraud, deceptive trade practices, misrepresentation, negligence, gross negligence, Health and Safety Code section 1430 claims; violations of the Elder Abuse and Dependent Adult Civil Protection Act, the Unfair Competition Act, the Consumer Legal Remedies Act; and/or any right

granted to Resident by law or by the Admission Agreement, which seeks an award of treble damages, punitive damages or attorneys’ fees, will be determined by submission to neutral arbitration, and not by a lawsuit or court process, except as California law provides for judicial review of arbitration proceedings. Such arbitration will be governed by this Arbitration Agreement.

Plaintiff asserts the following claims against moving party San Pedro Convalescent Home, Inc. (“SPCH”): (1) Dependent Adult Abuse—Welfare & Institutions Code, § 15610.07; (2) Intentional Infliction of Emotional Distress; (3) Negligent Hiring, Supervision, and Retention; (4) Negligence; (5) Sexual Harassment; (6) Violation of Patient’s Bill of Rights—Health and Safety Code, § 1430(b).

Contrary to Plaintiff’s argument, the arbitration clause is not limited to medical malpractice claims: there are two separate arbitration clauses—one pertaining to medical malpractice claims, and one pertaining to other claims. The second clause, found at ¶ 1.2, applies to:

any and all other disputes[which are not for medical malpractice], controversies, demands or claims that relate or arise out of the provision of services or health care or any failure to provide services or health care by Facility, . . . including, without limitation, claims that allege; . . . negligence; gross negligence; Health and Safety Code section 1430 claims; violations of the Elder Abuse and Dependent Adult Civil Protection Act. . . .

Plaintiff’s claims fall within the scope of this clause, which covers “any and all other disputes” which include torts and statutory violations, without regard to intent.

Plaintiff argues that the arbitration agreement does not purport to include any of SPCH’s employees or any claims arising from employees’ intentional conduct. However, to the extent Plaintiff is seeking to hold SPCH liable for the conduct of its employee, Bunoan, the arbitration clause would encompass such claims against SPCH.

The critical question, however, is whether CCP § 1281.2(c) applies. If that statute applies, the logical approach here would be to deny arbitration because Defendant SPCH’s liability is largely derivative of the primary acts of Marvin Bunoan committed against Plaintiff. CCP § 1281.2(c) provides:

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:

(c) A party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact. For purposes of this section, a pending court action or special proceeding includes an action or proceeding initiated by the party refusing to arbitrate after the petition to compel arbitration has been filed, but on or before the date of the hearing on the petition. . . .

Defendant argues that the Federal Arbitration Act preempts CCP § 1281.2(c). The answer to the preemption question depends upon whether the parties have agreed that their arbitration agreement will be governed by the law of California:

The FAA governs contracts in interstate commerce. Unlike its California counterpart, the FAA “contains no provision permitting a court to stay arbitration pending resolution of related litigation involving third parties not bound by the arbitration agreement.” (Volt Info. Sciences v. Leland Stanford Jr. U. (1989) 489 U.S. 468, 472 [103 L. Ed. 2d 488, 109 S. Ct. 1248] (Volt).) However, the United States Supreme Court has expressly held that the FAA does not preempt the California statute, Code of Civil Procedure section 1281.2, subdivision (c) (hereafter, section 1281.2(c)), “where the parties have agreed that their arbitration agreement will be governed by the law of California.” (489 U.S. at p. 470.) The court explained that the FAA “does not confer a right to compel arbitration of any dispute at any time; it confers only [*1326] the right to obtain an order directing that ‘arbitration proceed in the manner provided for in [the parties’] agreement.’ ” (489 U.S. at pp. 474–475, quoting 9 U.S.C. § 4.) So, even if the FAA applies because the subcontract affects interstate commerce—a point we need not discuss—the parties may agree that California law governs their agreement to arbitrate.

Our own Supreme Court also has held that, where the parties both provided that California law would govern their arbitration agreement and agreed that the designation of California law would “ ‘not be deemed an election to preclude application of the [FAA], if it would be applicable,’ ” the FAA did not preempt the application of section 1281.2(c). (Cronus Investments, Inc. v. Concierge Services (2005) 35 Cal.4th 376, 380 [25 Cal. Rptr. 3d 540, 107 P.3d 217] (Cronus).)

The prime contract contained an arbitration provision covering any claim arising out of or related to the contract. It also provided, in section 13.1.1, that the contract “shall be governed by the law of the place where the Project is located.”

On these facts, we conclude that Best and M&S agreed that California law would apply to any disputes arising under the subcontract. Accordingly, under the teachings of Volt and Cronus, there is no basis to conclude the FAA preempts the application of California procedural law, including section 1281.2(c). Cronus, which involved a clause calling for application of the FAA “if it would be applicable,” brings the point home. The court observed: “Under United States Supreme Court jurisprudence, we examine the language of the contract to determine whether the parties intended to apply the FAA to the exclusion of California procedural law and, if any ambiguity exists, to determine whether section 1281.2(c) conflicts with or frustrates the objectives of the FAA.” (Cronus, supra, 35 Cal.4th at p. 383.) The court found the FAA's procedural provisions applied only in federal court proceedings (Cronus, supra, 35 Cal.4th at pp. 388–389), and did not conflict with Code of Civil Procedure section 1281.2. (35 Cal.4th at p. 390.) The court concluded: “Our opinion does not preclude parties to an arbitration agreement to [*1328] expressly designate that any arbitration proceeding should move forward under the FAA's procedural provisions rather than under state procedural law. We simply hold that the language of the arbitration clause in this case, calling for the application of the FAA ‘if it would be applicable,’ should not be read to preclude the application of 1281.2(c), because it does not conflict with the applicable provisions of the FAA and does not undermine or frustrate the FAA's substantive policy favoring arbitration.” (Cronus, supra, 35 Cal.4th at p. 394.)

(Best Interiors, Inc. v. Millie & Severson, Inc. (2008) 161 Cal.App.4th 1320, 1325-28 [bold emphasis added].)

Here, the parties agreed that the Federal Arbitration Act and the procedures set forth therein shall govern any petition to compel arbitration. (Arbitration Agreement, § 1.7.) Notably, however, for medical malpractice claims, the parties specified that California law would govern the “submission to arbitration.” (Arbitration Agreement, § 1.1.) On the other hand, for non-medical malpractice claims, the parties did not specify that California law would govern “submission to arbitration.” (Arbitration Agreement, § 1.2.) The difference between § 1.1 and § 1.2 must be read to give effect to the language in § 1.1 regarding California law that is missing from § 1.2, otherwise such language in § 1.1 would be mere surplusage. “We must give significance to every word of a contract, when possible, and avoid an interpretation that renders a word surplusage.” (Citation omitted.)” (Advanced Network, Inc. v. Peerless Ins. Co. (2010) 190 Cal.App.4th 1054, 1063 .)

In so construing § 1.1 and § 1.2, the Court finds that the parties agreed that California law would only apply to motions to compel arbitration of medical malpractice claims, but not as to non-medical malpractice claims. Thus, because Plaintiff is not asserting medical malpractice claims, California law—including CCP § 1281.2(c)—does not apply to her claims, which come within § 1.2.

In this regard, Plaintiff has not offered a persuasive reason to deny the motion to compel arbitration. In this regard, the motion to compel arbitration is GRANTED.

However, the Court stays its order compelling arbitration until the litigation against Defendant Marvin Bunoan is concluded. “[T]he court has the inherent power to control the proceedings before it and to make orders which prevent the frustration, abuse, or disregard of the court's processes. (Citation omitted.)” (Conn v. Superior Court (1987) 196 Cal. App. 3d 774, 785.) It is impractical and illogical for arbitration to proceed against SPCH only, when its liability depends, at least in part, upon Bunoan’s liability. Once the claims against Bunoan are resolved, then those findings will apply in the context of SPCH’s derivative liability for Bunoan’s actions.[1]

[1][1] It is true that the negligence-based actions against SPCH are direct claims based upon SPCH’s own negligence:

“An employer may be liable to a third person for the employer's negligence in hiring or retaining an employee who is incompetent or unfit. [Citation.]” (Roman Catholic Bishop v. Superior Court (1996) 42 Cal.App.4th 1556, 1564–1565 [50 Cal. Rptr. 2d 399].) Negligence liability will be imposed upon the employer if it “knew or should have known that hiring the employee created a particular risk or hazard and that particular harm materializes.”

(Doe v. Capital Cities (1996) 50 Cal.App.4th 1038, 1054.)

However, if Defendant Bunoan is found not to have committed any wrongdoing, this is relevant to causation of damages arising from any negligence by SPCH.