Judge: Craig Griffin, Case: "Ascentium Capital LLC v. Mitchell Street Dental Group PC, et al.", Date: 2022-10-31 Tentative Ruling

Cross-Defendants, Zeltiq Aesthetics, Inc. (“Zeltiq”) and Jeanine Rogers (“Rogers”) (collectively, “Cross-Defendants”) Motion to Compel Arbitration is GRANTED.

A party seeking to compel arbitration pursuant to Code of Civil Procedure section 1281.2 must plead and prove (1) the existence of a written arbitration agreement and (2) that the other party has refused to arbitrate.  (Code Civ. Proc., § 1281.2; Mansouri v. Sup. Ct. (Fleur Du Lac Estates Ass’n) (2010) 181 Cal.App.4th 633, 640-641.)  Here, Cross-Complainants’ opposition concedes that they have refused to arbitrate.

Cross-Defendants have shown that a valid written agreement to arbitrate exists.  The arbitration agreement is contained at attachment A to the Master Sales Agreement (“MSA”), which is attached as Exhibit 1 to the Finkelstein Declaration.  In the MSA, Higgins acknowledged that he received the attachments containing the terms and conditions of the sale, including the arbitration clause.  (Ex. 1 to Finkelstein Decl., pg. 1.)

In his opposition, Higgins contends that there was no mutual agreement to arbitrate because he was never presented with the attachments to the MSA prior to signing, and he never saw or agreed to the arbitration provision.  (Higgins Decl. ¶¶ 3-4.) 

Importantly, Higgins does not dispute that he signed the MSA or that he received the first page of the MSA containing his signature.  He only claims that he never received or saw the attachments to the MSA, which include the arbitration provision.  However, as noted above, the MSA states, directly above Higgins signature, that Higgins “explicitly acknowledges receipt of the Attachments.”  Further, in response to Higgins’ contentions in the opposition, Cross-Defendants submitted with their reply brief a declaration of their Regional Sales Director to support the existence of a written arbitration agreement.  (See ROA 390.)  The Court finds the above sufficient to support the existence of an agreement under Code Civ. Proc § 1281.2. 

It has long been the rule in California that a party is bound by a contract even if he did not read the contract before signing it.  That rule applies to all contracts, including arbitration agreements.  (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236 [“An arbitration clause within a contract may be binding on a party even if the party never actually read the clause.”]; Madden v. Kaiser Foundation Hospitals (1976) 17 Cal.3d 699, 710 [general rule is one who assents to a contract is bound by its provisions and cannot complain of unfamiliarity with the language]; 24-Hour Fitness, Inc. v. Superior Court (1998) 66 Cal.App.4th 1199, 1215 [“ ‘ “A party cannot use his own lack of diligence to avoid an arbitration agreement.” ’ ”].)

Here, Higgins signed and agreed to be bound by the provisions of the MSA, which include the subject arbitration agreement.  The MSA, which he does not dispute signing, explicitly stated that he acknowledged receipt of the attachments to the MSA.  Based on the above, the Court finds that Cross-Defendants met their burden of establishing a valid arbitration agreement.

Cross-Complainants also argue that the Court should not enforce the arbitration provision because it is inconspicuous and if the party signing does not know of its existence, then that party did not agree to arbitrate.  As Cross-Defendants point out, Cross-Complainants’ cited authority does not support this argument.  Metters v. Ralphs Grocery Co., (2008) 161 Cal.App.4th 696 and Windsor Mills, Inc. v. Collins & Aikman Corp. (1972) 25 Cal.App.3d 987 both involve situations in which the writing at issue did not appear to be a contract and the terms were not called to the attention of the recipient.  By contrast, here, the MSA is clearly a contractual agreement.  Lawrence v. Walzer & Gabrielson (1989) 207 Cal.App.3d 1501 involved the scope of the arbitration clause at issue, not whether an agreement existed.  In addition, as Cross-Defendants note, Lawrence involved the fiduciary duty of attorneys to clients, which is distinct from an arm’s length transaction between a customer and merchant.

Moreover, the California Supreme Court has held that a party seeking to enforce an arbitration agreement in a consumer contract has no duty to point out the arbitration clause.  (Sanchez v. Valencia Holding Co., LLC (2015) 61 Cal.4th 899, 914 [the defendant “was under no obligation to highlight the arbitration clause of its contract, nor was it required to specifically call that clause to [the plaintiff's] attention”].)  The Sanchez court cited its previous holding in Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 424, that “even when a customer is assured it is not necessary to read a standard form contract with an arbitration clause, ‘it is generally unreasonable, in reliance on such assurances, to neglect to read a written agreement before signing it.’ ” (Sanchez, 61 Cal.4th at 915.)

Thus, Cross-Complainants’ argument that the arbitration clause is unenforceable because Higgins did not know of its existence fails.

Cross-Complainants’ final argument is that the motion should be denied because the arbitration clause lacks authentication.  This argument also fails.  (See Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 218-219.)  In Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158 (cited by Cross-Complainants), the Court of Appeal noted: “[p]roperly understood, Condee holds that a petitioner is not required to authenticate an opposing party's signature on an arbitration agreement as a preliminary matter in moving for arbitration or in the event the authenticity of the signature is not challenged.”  (Id. at p. 168.)

In Gamboa, the defendant had offered an arbitration agreement purportedly signed by the plaintiff.  The plaintiff submitted a declaration that she did not remember the arbitration agreement at all.  The court held that this was sufficient to challenge the authenticity of the agreement and that the defendant had failed to offer admissible evidence that the plaintiff saw or signed the arbitration agreement because the trial court sustained the plaintiff’s objections to defendant’s proffered evidence.  By contrast, here, there is no dispute that Higgins entered into the MSA, within which the arbitration clause is contained.  Cross-Complainants also do not challenge the authenticity of Higgins’ signature.  Thus, Gamboa does not support Cross-Complainants’ position.

Code of Civil Procedure section 1281.2 requires the court to order arbitration pursuant to a written agreement to arbitrate unless the court determines (1) the right to compel arbitration has been waived by the party seeking to compel arbitration, (2) grounds exist for rescission of the agreement to arbitration or (3) 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.  (Code Civ. Proc., § 1281.2, subds. (a)-(c).)

Cross-Complainants make no argument regarding waiver and the Court does not find a waiver to exist in this matter.  Cross-Complainants also make no argument regarding rescission other than the arguments set forth above related to Higgins allegedly not receiving the attachments to the MSA, which as explained are not sufficient to deem the agreement unenforceable.

Cross-Complainants also do not dispute that all remaining parties may be subject to the arbitration agreement or that the arbitration clause in the MSA covers the claims at issue.

Based on the foregoing, Cross-Defendants’ Motion is GRANTED. 

The case is stayed pending completion of arbitration.  (Cal. Civ. Proc. Code § 1281.4.)

Moving Party to give notice.