Judge: Christopher K. Lui, Case: 23STCV17554, Date: 2024-04-24 Tentative Ruling
Case Number: 23STCV17554 Hearing Date: April 24, 2024 Dept: 76
Plaintiff alleges that she suffered disability and age-related harassment and discrimination, ultimately resulting in her termination.
Defendants OnTrac Logistics, Inc. and Paola Ruiz move to compel arbitration.
TENTATIVE RULING
Defendants OnTrac Logistics, Inc. and Paola Ruiz’s motion to compel arbitration is GRANTED. However, the litigation is ordered stayed, not dismissed, pending arbitration. (Code Civ. Proc., § 1281.4.)
The Court sets a status conference regarding commencement of arbitration for October 24, 2024 at 8:30 a.m.
Motion To Compel Arbitration
Plaintiff’s Evidentiary Objections
Declaration of Amy Benbarka
No. 1: OVERRULED. Sufficient foundation; not hearsay; goes
to weight.
No. 2: OVERRULED. Sufficient foundation; not hearsay; goes
to weight.
No. 3: OVERRULED. Sufficient foundation/authentication.; not
hearsay—business records exception. (Evid. Code, § 1271.) “[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 (Citations omitted.)”
(Iyere v. Wise Auto Grp. (2023) 87 Cal.App.5th 747, 758-59 [bold
emphasis added].) Personal knowledge may be obtained from review of
business records. (People ex rel. Owen v. Media One Direct, LLC (2013)
213 Cal.App.4th 1480, 1484.)
Nos. 4 – 9: OVERRULED. See No. 3 above.
Supplemental
Declaration of Declaration of Amy Benbarka
Nos. 1 - 10: OVERRULED. See above rulings re: original
Benbarka Decl. If Plaintiff needs additional time to respond, the Court will
continue the hearing.
Supplemental
Declaration of Ashley McLachlan
No. 11: OVERRULED. There is no basis for rendering the
entire declaration inadmissible. If Plaintiff needs additional time to respond,
the Court will continue the hearing.
No. 12: SUSTAINED as to hearsay statements contained therein.
“While judicial notice may be taken of court records (Evid. Code, § 452, subd. (d)), the truth of matters asserted in such documents is not subject to judicial notice. (Arce, supra, 181 Cal.App.4th at p. 482.)” (Board of Pilot Commissioners v. Superior Court (2013) 218 Cal.App.4th 577, 597.) The rule against hearsay applies to statements contained in judicially noticed-documents. No exception to the hearsay rule has been demonstrated:
The motion judge took judicial notice of the declarations filed in these
three cases, but not of the truth of their hearsay contents. The ruling was
correct. The hearsay rule applies to
statements contained in judicially noticed documents, and precludes
consideration of those statements for their truth unless an independent hearsay
exception exists. (See 1 Witkin, Cal. Evidence (4th ed. 2000) Judicial
Notice, § 25, p. 119.)
(North Beverly Park Homeowners Assn. v. Bisno (2007) 147 Cal.App.4th 762, 778 [bold emphasis added].)
No. 13:
SUSTAINED as to hearsay statements contained therein.
No. 14:
SUSTAINED as to hearsay statements contained therein.
Request For Judicial Notice
Defendant requests that the Court take judicial notice of The Filed Secretary of State Amended Statement by Foreign Corporation filing Number A0854603, filed April 27, 2021 indicating the corporate name change of Express Messenger Systems, Inc. to OnTrac Logistics, Inc. which is publicly available for download https://bizfileonline.sos.ca.gov/search/business.
The request is GRANTED, as to the existence of the document, not the truth of the matter stated therein (i.e., the name change). Nevertheless, the Court may take judicial notice of a business entity’s corporate status as reflected in the Secretary of State’s records. (Pedus Bldg. Servs. v. Allen (2002) 96 Cal.App.4th 152, 156 n.2.)
Discussion
Defendants OnTrac Logistics, Inc. and Paola Ruiz move to compel arbitration.
Existence of Arbitration Agreement
California favors arbitration. (Haworth v. Superior Court (2010) 50 Cal.4th 372, 380.) Civ. Proc. Code, §1281.2 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
thereto refuses to arbitrate such 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 the revocation of the agreement.
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. (Cable Connection, Inc. v. DIRECTV, Inc. (2008) 44 Cal.4th 1334, 1343; Code Civ. Proc., § 1281.) 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 evidence any fact necessary to its defense. (Banner Entertainment, Inc. v. Superior Court
(1998) 62 Cal.App.4th 348, 356.) The court may weigh the evidence by
considering affidavits, declarations, documents and oral testimony. (Id. at 357.)
Defendants
introduce the following arbitration agreement:
Agreement
You and the
Company mutually agree to resolve any covered disputes between you and the
Company through final and binding arbitration instead of filing a lawsuit
in court. You and the Company expressly agree that this Agreement is
governed exclusively by the Federal Arbitration Act (9 U.S.C. SS 1-16)
("FA4'; and shall apply, including, but not limited to, any and all claims
arising out of or relating to this Agreement, your application for employment,
your employment, the payment of your wages and compensation, the termination of
this Agreement, the termination of your employment, and all other aspects of
your relationship with the Company, past, present, or future, whether arising
under federal, state, or local law, including without limitation harassment,
discrimination or retaliation claims and claims arising under or related to the
Civil Rights Act of 1964 (or its state or local equivalents), Americans with
Disabilities Act (or its state or local equivalents), Age Discrimination in
Employment Act (or its state or local equivalents), Family Medical Leave Act
(or its state or local equivalents), Fair Labor Standards Act (or its state or
local equivalents), Fair Credit Reporting Act (or its state or local
equivalents) state and local wage and hour laws, state and local statutes or
regulations addressing the same or similar subject matters, and all other
federal, state or local claims arising out of or relating to your relationship
or termination of that relationship with the Company. The Parties
expressly agree that this Agreement shall be governed by the FAA even in the
event you and/or the company are otherwise exempted from the FAA. Any disputes
in this regard shall be resolved exclusively by an arbitrator. ln the
event, but only in the event, the arbitrator determines the FAA does not apply,
the Delaware Uniform Arbitration Act shall apply, as the Parties acknowledge
that the Company is incorporated in the state of Delaware.
Covered
Disputes
Covered
disputes include, but are not necessarily limited to the following: 1) discrimination
or harassment on the basis of any protected category; 2) violations of
any common law; constitutional provision, section or amendment; regulation; or statute;
3) personal injury or negligence claims unless otherwise covered by
workers' compensation; 4) retaliation for engaging in protected conduct; 5)
breach of any express or implied contract; 6) breach of any common law duty of
loyalty; 7) exceptions to the at-will doctrine; 8) any common law claim; and 9)
claims for wages, sales commissions, bonuses or other claims for unpaid compensation.
Excluded Claims
The following
disputes are not covered: 1) performance reviews; 2) workplace disputes that
are not actionable under local, state or federal law; 3) claims for benefits
under a written pension or welfare benefit plan, 4) claims for unemployment
benefits, 5) claims for workers' compensation benefits, 6) claims for state
disability insurance; and 7) any other personnel matter that would not otherwise
be actionable in a lawsuit brought in state or federal court. This Agreement
does not apply to litigation between you and the Company pending in a state or
federal court as of the date of your receipt of this Agreement.
Additional
Terms
Only an
arbitrator, and not any federal, state, or local court or agency, shall have the
exclusive authority to resolve any dispute relating to the interpretation, applicability,
enforceability, or formation of this Agreement. However, as stated below, the preceding clause shall not
apply to the Class Action Waiver and Representative Action Waiver.
BY AGREEING
TO ARBITRATE ALL SUCH DISPUTES, THE PARTIES TO THIS AGREEMENT AGREE THAT ALL
SUCH DISPUTES WILL BE RESOLVED THROUGH BINDING ARBITRATION BEFORE AN ARBITRATOR
AND NOT BY WAY OF A COURT OR JURY TRIAL
If either Party wishes to initiate arbitration, the initiating Party must notify the other Party in writing via certified mail, return receipt requested, or hand delivery within the applicable statute of limitations period. This demand for arbitration must include (1) the name and address of the Party seeking arbitration, (2) a statement of the legal and factual basis of the claim, and (3) a description of the remedy sought. Any demand for arbitration by you must be delivered to the Company Attn: OnTrac 2501 South Price Road Suite 201 Chandler, A285286
(Declaration of Amy Benbarka, Exh. B [bold emphasis added].)
The Agreement defines the Company as Express Messenger Systems, Inc. d/b/a OnTrac. Plaintiff has sued Ontrac Logistics Inc., d/b/a OnTrac. The Supplemental Declaration of Amy Benbarka states:
OnTrac
Logistics, Inc. was formerly known as Express Messenger Systems, Inc.
Express
Messenger Systems, Inc. previously operated as "OnTrac" and is the
same entity as OnTrac Logistics, Inc. Express Messenger Systems, Inc., changed
its corporate name to OnTrac Logistics, Inc. OnTrac and Express Messenger
Systems, Inc. are the same entity.
(Suppl.
Benbarka Decl., ¶ 4.)
The Court finds this to be credible, as Plaintiff has sued “OnTrac” and this defendant has produced records pertaining to Plaintiff as an employee.
Moreover, Benbarka states in her supplemental declaration that based on her position and access to current and past policies and practices of OnTrac, she knows the procedures utilized by OnTrac at the time Plaintiff was hired in 2018. (Suppl. Benbarka Decl., ¶¶ 5, 6.)
The Arbitration Agreement purports to contain Plaintiff’s electronic signature in the form of her initials “JP” at the bottom of each page, with Plaintiff’s full name appearing at the bottom of the last page, above the date “3/3/2018.” (Benbarka Decl., Exh. B.)
In her opposing Declaration, Plaintiff states:
7. I do not recall signing the arbitration agreement, and I do not recall typing my "JP" or "Julia Pallares" on the alleged arbitration agreement.
(Declaration of Julia Pallardes, ¶ 7.)
If an employee denies signing, or even indicates a failure to recall electronically signing the agreement, the moving party has the burden of proving by a preponderance of the evidence that the electronic signature is authentic. (Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 846.)
An employer may do this by explaining how the employees name could only have been placed on the arbitration agreement by a person using the employee’s unique login ID and password, that the date and time of the signature is accurately reflected next to the electronic signature, that all employees were required to use their unique login ID and password when they logged into the HR system and signed electronic forms and agreements, and thus, the electronic signature on the arbitration agreement was apparently made by the employee. (Ruiz, supra, 232 Cal.App.4th at 844.)
Civil Code section
1633.9 addresses how a proponent of an electronic signature may
authenticate the signature—that is, show the signature is, in fact, the
signature of the person the proponent claims it is. The statute
states: “(a) An electronic record or electronic signature is attributable
to a person if it was the act of the person. The act of the person may be
shown in any manner, including a showing of the efficacy of any
security procedure applied to determine the person to which the electronic
record or electronic signature was attributable.” (Civ. Code, § 1633.9,
subd. (a), italics added.)
(Id.
at 843.)
Indeed, Main did not explain that
an electronic signature in the name of “Ernesto Zamora Ruiz” could only have
been placed on the 2011 agreement (i.e., on the employee acknowledgement form)
by a person using Ruiz's “unique login ID and password”; that the date and time
printed next to the electronic signature indicated the date and time the
electronic signature was made; that all Moss Bros. employees were required to
use their unique login ID and password when they logged into the HR system and
signed electronic forms and agreements; and the electronic signature on the
2011 agreement was, therefore, apparently made by Ruiz on September 21, 2011,
at 11:47 a.m. Rather than offer this or any other explanation of how she
inferred the electronic signature on the 2011 agreement was the act of
Ruiz, Main only offered her unsupported assertion that Ruiz was the person who
electronically signed the 2011 agreement. In the face of Ruiz's failure to
recall electronically signing the 2011 agreement, the fact the 2011 agreement
had an electronic signature on it in the name of Ruiz, and a date and time
stamp for the signature, was insufficient to support a finding that the
electronic signature was, in fact, “the act of” Ruiz. (Civ. Code, § 1633.9,
subd. (a).) For the same reason, the evidence was insufficient to support a
finding that the electronic signature was what Moss Bros. claimed it was: the
electronic signature of Ruiz. (Evid. Code, § 1400, item (a).) This was not a
difficult evidentiary burden to meet, but it was not met here.
Moss Bros. maintains that if
Ruiz “were to have his way, the evidentiary burden of enforcing an
electronically signed contract would be so much higher than hand-signed
contracts that the practical result would be to disfavor, discourage, and
ultimately disapprove of the use of electronic signatures.” We disagree. As
indicated, the burden of authenticating an electronic signature is not great.
(Civ. Code, § 1633.9, subd. (a) [an
electronic [*845] signature is attributable to a person
if it is the act of the person, and this may be shown in any
manner]; Evid. Code, § 1400, item (a); People v. Skiles, supra,
51 Cal.4th at p. 1187 [the means of authenticating a writing are not
limited to those specified in the Evid. Code; a writing can be authenticated by
circumstantial evidence and by its contents]; Newton v. American Debt
Services, Inc. (N.D.Cal. 2012) 854 F.Supp.2d 712, 731–732 [electronic
signature on arbitration agreement proved to be the plaintiff's signature
because it was made using DocuSign, a company used to electronically sign
documents in compliance with the federal Electronic Signatures in Global
and National Commerce Act (15 U.S.C. § 7001 et seq.), and the process DocuSign
used to verify the plaintiff's electronic signature was explained].)
(Ruiz, supra, 232 Cal.App.4th at 844-45.)
Together, the original and supplemental Declarations of Amy Benbarka satisfy this authentication burden. (See Benbarka Decl., ¶¶ 5 – 7; Supplemental Benbarka Decl., ¶¶ 7 – 9.) The Court finds sufficient evidence that Plaintiff electronically signed the Arbitration Agreement.
Plaintiff’s argument that Defendant Company’s signature does not appear on the agreement falls flat. Defendant Company need not have signed the arbitration agreement where Plaintiff continued to be employed by Defendant Company in light of the existence of the arbitration agreement:
[T]he writing memorializing an arbitration agreement need not be signed
by both parties in order to be upheld as a binding arbitration agreement. In
Banner Entertainment, Inc. v. Superior Court (1998) 62 Cal.App.4th 348 [72 Cal.
Rptr. 2d 598], the court explained, “it is not the presence or absence of a
signature [on an agreement] which is dispositive; it is the presence or absence
of evidence of an agreement to arbitrate which matters.” (Id. at p. 361,
original italics.) Evidence confirming the existence of an agreement to
arbitrate, despite an unsigned agreement, can be based, for example, on
“conduct from which one could imply either ratification or implied acceptance
of such a provision.” (Ibid.; see Craig v. Brown & Root, Inc. (2000) 84
Cal.App.4th 416, 420–423 [100 Cal. Rptr. 2d 818] [despite absence of a signed
writing acknowledging receipt of the memorandum and brochure containing the
arbitration provision, the employee's continued employment constituted implied
acceptance of the agreement].)
. . . [*177] . . .
Just as with any written agreement signed by one party, an arbitration
agreement can be specifically enforced against the signing party regardless of
whether the party seeking enforcement has also signed, provided that the party
seeking enforcement has performed or offered to do so. (Civ. Code, § 3388.)
Serafin does not, and cannot, dispute that Balco has at all times performed all
the duties required of it under the arbitration agreement. In this case, Balco
has carried its burden in proving the arbitration agreement is a mutually
binding agreement.
(Serafin
v. Balco Properties Ltd., LLC (2015) 235 Cal.App.4th 165, 176-177.)
Defendant
cites the delegation clause in the Arbitration Agreement, which states:
Only an arbitrator, and not any federal, state, or local court or agency, shall have the exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability, or formation of this Agreement. However, as stated below, the preceding clause shall not apply to the Class Action Waiver and Representative Action Waiver.
(Arbitration Agreement, “Additional Terms” [bold emphasis in original].)
Aanderud v. Superior Court (2017) 13 Cal.App.5th 880, 892 addressed the language in the subject arbitration clause that:
[The parties] “agree to arbitrate all disputes, claims and
controversies arising out of or relating to … (iv) the interpretation,
validity, or enforceability of this Agreement, including the determination
of the scope or applicability of this Section 5 [the
“Arbitration of Disputes” section]. …” This language delegates to the
arbitrator questions of arbitrability and is clear and
unmistakable evidence that the parties intended to arbitrate arbitrability.
(See, e.g., Malone v. Superior Court (2014)
226 Cal.App.4th 1551, 1560 [173 Cal. Rptr. 3d 241] [noting delegation
clause that provided “ ‘[t]he arbitrator has exclusive authority to resolve any
dispute relating to the interpretation, applicability, or enforceability of
this binding arbitration agreement’” was clear and unmistakable]; Momot v. Mastro (9th Cir. 2011) 652 F.3d 982,
988 [language that delegated authority to arbitrator to determine “‘the
validity or application of any of the provisions of’” the arbitration clause
was a clear and unmistakable agreement to arbitrate the question of
arbitrability].)
(Aanderud v. Superior Court (2017) 13 Cal.App.5th 880, 892 [bold emphasis and
underlining added].)
The Aanderud court used the term “arbitrability” to refer to questions of “interpretation, validity or enforceability” and “scope or applicability.” (Id. at 892.) Based upon this holding, the reference in the subject arbitration clause that the parties delegate any claim or dispute including “the interpretation and scope” of the arbitration provision, and “the arbitrability of this claim or dispute,” is a clear and unmistakable delegation of the issues of validity and enforceability, i.e., as to the defense of unconscionability, which affects validity or enforceability. “The doctrine of unconscionability is a defense to the enforcement of a contract or a term thereof. (Civ. Code, § 1670.5; California Grocers Assn. v. Bank of America (1994) 22 Cal. App. 4th 205, 213 [27 Cal. Rptr. 2d 396].)” (Marin Storage & Trucking, Inc. v. Benco Contracting & Eng'g, Inc. (2001) 89 Cal. App. 4th 1042, 1049.)
The Court finds that the delegation of the question of “arbitrability” delegates issues of scope, applicability, interpretation, validity and enforceability, including the question of unconscionability, to the arbitrator. This is reinforced by the rule of law that, where a plaintiff contends that an entire arbitration agreement–not just the delegation clause—is unenforceable, then the arbitrator decides all disputed issues:
(Mendoza v. Trans Valley Transp. (2022) 75 Cal.App.5th 748, 768 [bold emphasis added].)
However, absent a clear delegation of the question of whether third persons are entitled to enforce the arbitration agreement, the Court will decide whether moving Defendant Ruiz—who is not a party to the arbitration agreement—may enforce the arbitration agreement. The Court must decide issues of contract formation, i.e., whether the parties agreed to arbitrate at all.
[W]e conclude that although the delegation clause provides that the arbitrator “shall have exclusive authority to resolve any dispute relating to … formation of the arbitration policy,” as a matter of law, the question whether the parties entered into an agreement to arbitrate anything at all is for a court to decide.
(Mendoza v. Trans Valley Transp. (2022) 75 Cal.App.5th 748, 776.)
. . . California law permits a nonsignatory defendant to
compel a signatory plaintiff to arbitrate where there is a connection between
the claims alleged against the nonsignatory and its agency relationship with a
signatory. (See Dryer v. Los Angeles Rams (1985) 40 Cal.3d 406, 418 [220
Cal. Rptr. 807, [*864] 709 P.2d 826] [nonsignatory agents were
entitled to enforce a contract's arbitration provision where the plaintiff sued
them in their capacities as agents for the signatory and the significant issues
in the dispute arose out of the contractual relationship between the parties]; Fuentes
v. TMCSF, Inc. (2018) 26 Cal.App.5th 541, 551 [237 Cal. Rptr. 3d 256]
[nonsignatory was not entitled to compel a signatory plaintiff to arbitrate a
dispute unrelated to the nonsignatory's agency relationship with a signatory]; Smith,
supra, 153 Cal.App.4th at p. 897 [same]; see also Britton v. Co-op
Banking Group (9th Cir. 1993) 4 F.3d 742, 743 [owner-agent of the defendant
corporation could not enforce the arbitration clause of a contract signed
only by the corporation because “none of his allegedly wrongful acts arose out
of or were related to the contract”]; Knight et al., Cal. Practice Guide:
Alternative Dispute Resolution (The Rutter Group 2018) ¶ 5:266.5, p. 5-282 [nonsignatories
can enforce an arbitration agreement where the claims against the nonsignatory
“aris[e] under the contract” containing an arbitration provision, “but not
other claims” (italics omitted)].) A
connection between the causes of action alleged against the nonsignatory and
that party's agency relationship to a signatory makes it equitable to allow the
nonsignatory to enforce the arbitration provision against a signatory plaintiff.
(See County of Contra Costa v. Kaiser Foundation Health Plan, Inc., supra,
47 Cal.App.4th at p. 243; Matthau v. Superior Court, supra, 151
Cal.App.4th at p. 599.)
(Cohen v. TNP 2008 Participating Notes Program, LLC (2019) 31 Cal.App.5th 840, 863-64 [bold emphasis added].)
As such, the Court finds that both Defendants are entitled to enforce the arbitration agreement against Plaintiff. All of Plaintiff’s claims asserted in the Complaint come within the scope of the arbitration agreement.
As
such, the motion to compel arbitration is GRANTED. However, the litigation is ordered stayed, not dismissed,
pending arbitration. (Code Civ. Proc., § 1281.4.) The Court sets a status
conference regarding commencement of arbitration for October 24, 2024 at 8:30
a.m.