Judge: Christopher K. Lui, Case: 24STCV14439, Date: 2024-11-20 Tentative Ruling

Case Number: 24STCV14439    Hearing Date: November 20, 2024    Dept: 76

The following tentative ruling is issued pursuant to Rule of Court 3.1308 at 1:47 p.m. on November 19, 2024. 

Notice of intent to appear is REQUIRED 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)(1), any party seeking oral argument must notify ALL OTHER PARTIES and the staff of Department 76 by 4:00 p.m. on November 19, 2024.

Notice to Department 76 may be sent by email to smcdept76@lacourt.org or telephonically at 213-830-0776.

            Plaintiff alleges that she was terminated for complaining about illegal practices in connection with her employment, including illegal evictions, wage and hour violations, failure to conform with building code regulations, and racial discrimination in security deposit requirements.

Defendants Good Health, Inc., 5500 Noho, LLC, Edwin’s Prescription Pharmacy, ABR Realty, LLC, and Stephen Samuel move to compel arbitration and stay this action.

TENTATIVE RULING 

Defendants Good Health, Inc., 5500 Noho, LLC, Edwin’s Prescription Pharmacy, ABR Realty, LLC, and Stephen Samuel’s motion to compel arbitration is GRANTED. 

The litigation is ordered stayed pending arbitration. (Code Civ. Proc., § 1281.4.) The Court sets a status conference regarding the status of arbitration for April 18, 2025 at 8:30 a.m.

ANALYSIS

Motion To Compel Arbitration and Stay Action

Plaintiff’s Evidentiary Objection

            Declaration of Stefania Cozmiuc

¶ 7: OVERRULED. Plaintiff does not dispute that her signature appears on the document, thereby sufficiently authenticating it.

Exhibit B: OVERRULED. Plaintiff does not dispute that her signature appears on the document, thereby sufficiently authenticating it.

Discussion

Defendants Good Health, Inc., 5500 Noho, LLC, Edwin’s Prescription Pharmacy, ABR Realty, LLC, and Stephen Samuel move to compel arbitration and stay this action. 

Plaintiff alleges at ¶ 1 of the Complaint that at all relevant times she was employed by Good Health, Inc., 5500 NOHO, LLC, Edwin’s Prescription Pharmacy, 550 Mission Apartments, ABR Realty, and Stephen Samuel (“Defendants”) until she was wrongfully terminated on January 24, 2024. “Throughout her employment, Defendants were Plaintiff’s employer of record and controlled many aspects of Plaintiff’s employment.” (Complaint, ¶ 1.) Plaintiff was hired on December 1, 2021 as a Resident Apartment Supervisor. (Id., ¶ 13.) 

Defendants present two arbitration agreements which Plaintiff signed in connection with her employment: one signed by Plaintiff on November 30, 2021, and another signed by Plaintiff on December 1, 2021.

The arbitration agreement signed by Plaintiff on November 30, 2021 includes the following provision at ¶ 7:

7.  Mediation. Any Claim required to be arbitrated under this Agreement shall be submitted to mediation in a manner agreed to by Employee and Employer. Employee and Employer agree to use mediation to attempt to resolve any such Claim prior to filing for arbitration under this Agreement. Employee and Employer will select a mediator agreeable to both parties. The costs of the mediation and fees of the mediator will be borne entirely by Employer. The parties will cooperate with the mediator on mediation arrangements, including time and place for mediation, who will attend or participate, and what information will be exchanged.

      (November 30, 2021 Agreement, ¶ 7 [bold emphasis and italics added].)

            Per Plaintiff’s counsel, Defendant refused to pay for the costs of mediation prior to arbitrating this matter. (Declaration of Devon M. Lyon, ¶¶ 4 – 7; Exh. B.) Because Defendant failed to satisfy this express contractual condition precedent to the right to arbitrate, Defendant is not entitled to enforce the arbitration agreement in the November 30, 2021 agreement.

            As for the December 1, 2021 arbitration agreement, Plaintiff claims that she does not remember signing it, but she does not dispute that her signature appears on that agreement. (Declaration of Jennifer Taylor, ¶ 5.) The Court finds that Plaintiff agreed to this December 1, 2021 arbitration agreement, which does not contain mediation as a condition precedent. Plaintiff argues that this December 1, 2021 agreement is unenforceable because it fails to identify the parties to the contract. This argument is without merit.

            First, the Company obviously refers to her employer, which is identified in the last paragraph as Good Health Inc.—whom Plaintiff admits was her employer. (Taylor Declaration, ¶ 2.) Moreover, Plaintiff would be the other party to the agreement, as her name and signature appears at the bottom. Further, Plaintiff admits that Defendants Good Health, Inc., 5500 NOHO, LLC, Edwin’s Prescription Pharmacy, 5500 Mission Apartments, and AB Realty were her joint employers from approximately December 1, 2021 until my employment was terminated on January 24, 2024. (Id.) Because Plaintiff has sued all of these moving Defendants as joint employers (Complaint, ¶ 1) on causes of action against an employer, Plaintiff is estopped from admitting that Defendants 5500 NOHO, LLC, Edwin’s Prescription Pharmacy, 5500 Mission Apartments, and AB Realty are entitled to enforce the arbitration agreement against Plaintiff. Indeed, the co-Defendants not named in the arbitration agreement would also arguably constitute agents of the Company for purposes of the arbitration provision.

Generally speaking, one must be a party to an arbitration agreement to be bound by it or invoke it.” (Citation omitted.) “There are exceptions to the general rule that a nonsignatory to an agreement cannot be compelled to arbitrate and cannot invoke an agreement to arbitrate, without being a party to the arbitration agreement.” (Citations omitted.)

One pertinent exception is based on the doctrine of equitable estoppel. (Citations omitted) Under that doctrine, as applied in “both federal and California decisional authority, a nonsignatory defendant may invoke an arbitration clause to compel a signatory plaintiff to arbitrate its claims when the causes of action against the nonsignatory are ‘intimately founded in and intertwined’ with the underlying contract obligations.” (Citations omitted.) “By relying on contract terms in a claim against a nonsignatory defendant, even if not exclusively, a plaintiff may be equitably estopped from repudiating the arbitration clause contained in that agreement.” (Citation omitted.) “The rule applies to prevent parties from trifling with their contractual obligations.” (Citations omitted.)

Where the equitable estoppel doctrine applies, the nonsignatory has a right to enforce the arbitration agreement. (Rowe v. Exline, supra, 153 Cal.App.4th at p. 1290.) In such cases, the nonsignatory is not a “third party” within the meaning of section 1281.2(c), and that provision simply does not apply. (Rowe v. Exline, at p. 1290.)

(Molecular Analytical Systems v. Ciphergen Biosystems, Inc. (2010) 186 Cal.App.4th 696, 706 [bold emphasis added].)

            Plaintiff’s Complaint alleges causes of action which may only be asserted against employers and/or others acting on their behalf. The Court now examines the following relevant language of the December 1, 2021 arbitration agreement:

Any controversy, dispute or claim between any employee and the Company, or its officers, agents or other employees, shall be settled by binding arbitration, at the request of either party. The arbitrability of any controversy, dispute or claim under this policy shall be determined by application of the substantive provisions of the Federal Arbitration Act (9 U.S.C. Sections 1 and 2). To the extent that the Federal Arbitration

Act is inapplicable, the arbitration law of the state in which employee works or last worked for the, Company shall apply. Arbitration shall be the exclusive method for resolving any dispute, provided, however, that either party may request provisional. relief from a court of competent jurisdiction, as provided under federal or state law. Even if the Company does not sign for its receipt or acknowledgement of this policy, the Company, like the employee, agrees to be bound by this policy and agrees to arbitrate all disputes with its employees or former employees.

The claims which are to be arbitrated under this policy include, but are not

limited to, claims for breach of trade secret law, claims regarding breaches of confidentiality, violation of non-disclosure/non-solicitation provisions,

embezzlement/conversion, employee theft, claims for wages and other compensation, claims for breach of contract (express or implied), claims for violation of public policy, wrongful termination, tort claims, claims for unlawful discrimination and/or harassment (including, but not limited to, race, religious creed, color, national origin, ancestry, physical disability, mental disability, gender identity or expression, medical condition, marital status, age, pregnancy, breastfeeding, sex or sexual orientation) to the extent allowed by law, and claims for violation of any of the federal, state, or other government law, statute, regulation, or ordinance, except for claims for workers’ compensation, unemployment insurance benefits and petitions or charges that could be brought before the National Labor Relations Board. 

BOTH THE COMPANY AND EMPLOYEES UNDERSTAND THAT BY USING ARBITRATION TO RESOLVE DISPUTES THEY ARE GIVING UP ANY RIGHT THAT THEY MAY HAVE TO A JUDGE OR JURY.TRIAL WITH REGARD TO ALL ISSUES CONCERNING EMPLOYMENT.

(December 1, 2021 Arbitration Agreement, Page 1; Declaration of Stefania Cozmiuc, Exh. B [bold emphasis added].) 

            The claims asserted by Plaintiff in the Complaint come within the scope of this arbitration provision. 

The Court will proceed to address the Armendariz factors.

Armendariz Factors:           

Where a party seeks to arbitrate nonwaivable statutory civil rights in the workplace (Fitz v. NCR Corp. (2004) 118 Cal.App.4th 702, 711-12), such as the FEHA and claim and wage and hour claims involved here, there are:

five minimum requirements for the lawful arbitration of such rights pursuant to a mandatory employment arbitration agreement. Such an arbitration agreement is lawful if it “(1) provides for neutral arbitrators, (2) provides for more than minimal discovery, (3) requires a written award, (4) provides for all of the types of relief that would otherwise be available in court, and (5) does not require employees to pay either unreasonable costs or any arbitrators’ fees or expenses as a condition of access to the arbitration forum. Thus, an employee who is made to use arbitration as a condition of employment ‘effectively may vindicate [his or her] statutory cause of action in the arbitral forum.’ “ (Citation omitted.)

(Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 102.)

Initially, we see no reason why Armendariz’s “particular scrutiny” of arbitration agreements should be confined to claims under FEHA. Rather, under the Supreme Court’s analysis, such scrutiny should apply to the enforcement of rights under any statute enacted “for a public reason.” 

(Mercuro v. Superior Court (2002) 96 Cal. App. 4th 167, 180 [bold emphasis added].) 

However,

Armendariz held that to the extent that the arbitration agreement was silent on these issues, these requirements must be implied as a matter of law. (Armendariz, supra, 24 Cal.4th at pp. 106, 107, 113 [interpreted the agreement to provide for adequate discovery, a written arbitration award, and the employer’s payment of arbitration costs].) To the extent that the agreement expressly limited these rights, Armendariz held that the agreement was contrary to public policy and unenforceable. (Id. at p. 104 [stated that a provision limiting damages was unlawful].)

(Sanchez v. Western Pizza Enterprises, Inc. (2009) 172 Cal.App.4th 154, 176 [bold emphasis added].) 

(1)  Neutral arbitrators: 

            The Arbitration Agreement provides at Page 1:

The employee and the Company will select an. arbitrator by mutual agreement. If the employee. and the Company are unable to agree on a neutral arbitrator, either party may elect to obtain a list of arbitrators from the Judicial Arbitration and Mediation Service (“ JAMS”), Alternative Dispute Resolution (“ADR”), or any other reputable dispute resolution organization. The employment rules for both JAMS and ADR may be obtained from the Human Resources department upon request or can be found online at http://www.iamsadr.com/ and http://www.adrservices.org/.

There is no indication that this would fail to provide for selection of a neutral arbitrator. This requirement is satisfied.

(2)  More than minimal discovery:

 “Adequate discovery is indispensable for the vindication of statutory claims. (Citation omitted.) “ ‘[A]dequate’ discovery does not mean unfettered discovery … .” (Citation omitted.) And parties may “agree to something less than the full panoply of discovery provided in Code of Civil Procedure section 1283.05.” (Citation omitted.) However, arbitration agreements must “ensure minimum standards of fairness” so employees can vindicate their public rights. (Citation omitted).” (Fitz v. NCR Corp. (2004) 118 Cal.App.4th 702, 715-16[bold emphasis added].)

The Arbitration Agreement provides at Page 2:

The parties shall be entitled to conduct all discovery to which they would have been entitled to had the parties’ controversy been filed in court, provided, however, that the arbitrator shall have -the discretion to issue protective orders or otherwise limit discovery where reasonably necessary, taking into account the parties’ mutual desire to have a speedy, less-formal, cost-effective dispute-resolution mechanism.

This requirement is satisfied.

 (3)  Written award:

The Arbitration Agreement states at Page 2:

Following the hearing and the submission of the matter to the arbitrator, the arbitrator shall issue a written opinion and award which shall be signed and dated. The arbitrator shall use his/her best efforts to issue the written award no later than thirty (30) days from the date the arbitration hearing concludes or the post-hearing briefs (if requested) are received, whichever is later. The arbitrator’s award shall decide all issues submitted by the parties, and the arbitrator may not decide any issue not submitted. The ;arbitrator shall prepare in writing and provide to the parties a decision and award which includes factual findings and the reasons upon which the decision is based. The arbitrator shall be permitted to award only those remedies in law or equity which are requested by the parties and allowed by law.

This requirement is satisfied.

 (4)  All types of relief available in court:

The Arbitration Agreement provides at Page 2: “The arbitrator shall be permitted to award only those remedies in law or equity which are requested by the parties and allowed by law.” 

This requirement is satisfied.

 (5)  Does not require employee to pay unreasonable costs or any arbitrator’s fees or expenses as a condition to access to arbitration:

The Arbitration Agreement provides at Page 2:

The cost ,of the arbitrator and other incidental costs of arbitration that would not be incurred in a court proceeding shall be borne by the Company, provided, however, that if the employee is the party initiating the claim, employee will contribute an amount equal to the filing fee to initiate .a claim in the court of general jurisdiction in the state in

which employee ,was last employed by the Company. . The parties shall each bear their own costs and attorneys’ fees in any arbitration proceeding, provided, however, that the arbitrator shall have the authority to require either party to pay the costs and attorneys’ fees of the other party, as is permitted under federal or state law, as a part of any remedy that may be ordered.

The filing fee limit is not an unreasonable cost. This requirement is satisfied.

Accordingly, the minimum Armendariz requirements are satisfied.

            As such, the Court finds that an agreement exists whereby Plaintiff agreed to submit all of the claims asserted in her Complaint against Defendants to mandatory arbitration.

The burden shifts to Plaintiff to demonstrate that a triable issue of material fact exists.

            Plaintiff does not argue that the agreement is unconscionable, nor does he set forth any other reason why the arbitration agreement should not be enforced, other than those addressed above.

As such, the motion to compel arbitration is GRANTED. The litigation is ordered stayed pending arbitration. (Code Civ. Proc., § 1281.4.) The Court sets a status conference regarding the status of arbitration for April 18, 2025 at 8:30 a.m.