Judge: Curtis A. Kin, Case: 22STCV04997, Date: 2022-10-11 Tentative Ruling

Case Number: 22STCV04997    Hearing Date: October 11, 2022    Dept: 72

MOTION TO COMPEL ARBITRATION

Date:               10/11/22 (8:30 AM)                                       

Case:               Jose Lopez v. Solar Mosaic, Inc. et al. (22STCV04997)

TENTATIVE RULING:

Defendant Solar Mosaic, LLC’s Motion to Compel Arbitration is GRANTED.

In this motion, defendant Solar Mosaic, LLC (“Solar Mosaic”) seeks to compel arbitration of plaintiff Jose Lopez’s claims against it.

The Court finds that plaintiff agreed to arbitration of the causes of action asserted against Solar Mosaic in this action by electronically signing the Home Improvement Loan Agreement and Promissory Note (“Note”) on February 14, 2021. (Kruczynski Decl. ¶ 2 & Ex. A.) The Note is between plaintiff Jose Lopez and WebBank. WebBank uses the platform of Solar Mosaic, LLC, the successor to defendant Solar Mosaic, Inc., to offer home improvement loans to customers. (Kruczynski Decl. ¶ 5.)

Plaintiff asserts causes of action against Solar Mosaic for negligence, gross negligence, elder financial abuse, and slander of title. (Compl. ¶¶ 33-41, 52-57.) Plaintiff does not dispute signing the February 14, 2021 Note. (Lopez Decl. ¶ 4 [“On or around February 14, 2021, Defendant Gabriel arrived to my house to inform me that the renovation for my house had been approved by the city. Defendant Gabriel then gave me a tablet to sign for Loan #1. I remember only signing once that day and only one time….”].) Rather, plaintiff disputes signing a second note, dated May 20, 2021, which contains arbitration provisions that are identical to the ones contained in the February 14, 2021 Note. (Kruczynski Decl. ¶ 3 & Ex. B; Lopez Decl. ¶¶ 8-11.)

Regardless of whether plaintiff signed the second note, plaintiff’s claims regarding both notes relate to the February 14, 2021 Note. The term “arises from or relates in any way to this Note” upon which defendant relies is a broad provision that applies to extracontractual disputes between the parties. (Khalatian v. Prime Time Shuttle, Inc. (2015) 237 Cal.App.4th 651, 659 [“The language ‘arising out of or relating to’ as used in the parties' arbitration provision is generally considered a broad provision…. Broad arbitration clauses such as this one are consistently interpreted as applying to extracontractual disputes between the contracting parties”].) Here, but for plaintiff’s execution of the February 14, 2021 Note to finance renovations to his property, plaintiff would not have entered into any transaction with defendants, including moving defendant Solar Mosaic. Moreover, plaintiff alleges that defendant applied his $55,000 payment to the second note (into which he never purportedly entered), as opposed to the first Note (into which he does not deny entering). (Compl. ¶¶ 17-19.) Accordingly, even if plaintiff never agreed to the second note, plaintiff’s extracontractual claims concerning the second note relate sufficiently “relates” to the first Note, thereby subjecting plaintiff’s claims to arbitration.

Plaintiff additionally argues that the agreement to arbitrate is unenforceable because it is unconscionable. (See Civ. Code § 1670.5(a).) An arbitration agreement must be both procedurally and substantively unconscionable to be unenforceable. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114; Mission Viejo Emergency Med. Assocs. v. Beta Healthcare Group (2011) 197 Cal.App.4th 1146, 1159 [unnecessary to decide whether insurance policy was adhesion contract and procedurally unconscionable because it was not substantively unconscionable].)

With respect to procedural unconscionability, plaintiff contends the arbitration agreement was a contract of adhesion because it was presented on a take it or leave it basis. However, the February 14, 2021 Note states: “You may reject this arbitration provision by mailing a signed rejection notice to WebBank, c/o Mosaic, Attn: Arbitration Rejection Team, 300 Lakeside Drive, 24th Floor, Oakland, CA 94612 within thirty (30) calendar days after the date of this Agreement . . . . If you reject this arbitration provision, that will not affect any other part of this Agreement.” (Kruczynski Decl. ¶ 2 & Ex. A.) It is a long-standing principle of contract law that a party is bound by the contracts that it signs, regardless of whether or not they fully know or understand what they are signing. (See Steward v. Preston Pipeline, Inc. (2005) 134 Cal.App.4th 1565, fn.30; Upton v. Tribilcock (1875) 91 U.S. 45, 50; see also Bolanos v. Khalatian (1991) 231 Cal.App.3d 1586, 1590 [finding plaintiff was bound by arbitration agreement despite her not remembering signing the agreement].) Accordingly, plaintiff was not forced to agree to arbitration.

Plaintiff citation to Mohamed v. Uber Technologies, Inc. (9^th Cir. 2016) 848 F.3d 1201 for the proposition that “opt-out provisions which would require plaintiffs to waive statutory causes of action ‘before they knew any such claims existed’ are unenforceable” is unavailing. (Opp. at 9:10-12.) The issue in Mohamed was not whether the opt-out provision defeated the assertion of unconscionability but whether the Private Attorneys General Act waiver was “invalid under California law and unseverable from the remainder of the arbitration provision under the terms of the contract.” (Mohamed, 848 F.3d at 1213.) Here, plaintiff cites no authority indicating that the underlying arbitration provisions in the Note violate any public policy. 

In any event, even if the Agreement were adhesive, this alone does not render the agreement unenforceable. (Serpa v. California Sur. Investigations, Inc. (2013) 215 Cal.App.4th 695, 704; Graham v. Scissor-Tail, Inc. (1981) 28 Cal.3d 807, 817-18.)  If plaintiff had demonstrated procedural unconscionability, plaintiff nonetheless makes no arguments concerning substantive unconscionability, which is fatal to his claim that the arbitration provision is unenforceable. (Armendariz, 24 Cal.4th at 114; Mission Viejo Emergency Med. Assocs., 197 Cal.App.4th at 1159.)

For the foregoing reasons, the motion to compel arbitration of plaintiff’s claims against defendant Solar Mosaic, LLC is GRANTED. Pursuant to CCP § 1281.4, this action is STAYED pending completion of arbitration between the parties.