Judge: Cynthia A Freeland, Case: 37-2023-00001200-CU-NP-NC, Date: 2023-08-04 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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SOUTH BUILDING TENTATIVE RULINGS - July 20, 2023

07/21/2023  01:30:00 PM  N-27 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Cynthia A. Freeland

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Civil - Unlimited  Non-PI/PD/WD tort - Other Motion Hearing (Civil) 37-2023-00001200-CU-NP-NC MARGARET WEBB BY AND THROUGH HER SUCCESSOR-IN-INTEREST EDWARD CLARK VS MEK ESCONDIDO LLC [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion for Reconsideration, 05/19/2023

Plaintiff Margaret Webb and by through her successor in interest Edward Clarke Dailey (collectively, 'Plaintiff')'s motion for reconsideration under California Code of Civil Procedure ('CCP') § 1008(a) is denied. However, the court, having exercised its inherent authority to reconsider its May 5, 2023 order, vacates the order and denies Defendant MEK Escondido, LLC dba Escondido Post Acute Rehab ('Defendant')'s petition to compel binding arbitration without prejudice.

Plaintiff's Motion for Reconsideration Under CCP § 1008(a) On January 3, 2023, Plaintiff and others commenced this action by filing a Complaint against Defendant for: (1) statutory elder abuse/neglect; (2) negligence; (3) wrongful death; and (4) violation of California Health & Safety Code § 1430. See ROA No. 1. On March 7, 2023, Defendant moved to compel binding arbitration (the 'Petition') pursuant to the Resident – Facility Arbitration Agreement (the 'Arbitration Agreement') entered into between Defendant and Mr. Dailey, individually and on behalf of Ms. Webb, in connection with Ms. Webb's residency at Defendant's skilled nursing facility. On May 5, 2023, the court, after considering the Petition, opposition, reply, and counsels' arguments, confirmed its tentative ruling, granted the Petition, and stayed this matter pending the outcome of the arbitration hearing pursuant to 9 U.S.C. § 3 (the 'Order'). See ROA No. 20; Moore Decl., Ex. A. On May 5, 2023, Defendant electronically served Plaintiff with a Notice of Ruling which attached a copy of the court's May 4, 2023 tentative ruling.

See ROA No. 23; Moore Decl., Ex. B. Plaintiff now seeks reconsideration of the Order under CCP § 1008(a) given the May 18, 2023 decision in Kinder v. Capistrano Beach Care Center, LLC (2023) 91 Cal. App. 5th 804 ('Kinder').

As an initial matter, Defendant's contention that the court lacks jurisdiction to reconsider the Order owing to its decision to stay the matter is not well taken. Defendant is correct that as a general proposition: Once a court grants the petition to compel arbitration and stays the action at law, the action at law sits in the twilight zone of abatement with the trial court retaining merely a vestigial jurisdiction over matters submitted to arbitration. This vestigial jurisdiction over the action at law consists solely of making the determination, upon conclusion of the arbitration proceedings, of whether there was an award on the merits (in which case the action at law should be dismissed because of the res judicata effects of the arbitration award Division of Labor Standards Enforcement v. Williams (1981) 121 Cal.App.3d 302, 309, 175 Cal.Rptr. 347; Rest.2d Judgments, § 84) or not (at which point the action at law may resume to determine the rights of the parties).

Brock v. Kaiser Foundation Hospitals (1992) 10 Cal. App. 4th 1790, 1796. However, this does not Calendar No.: Event ID:  TENTATIVE RULINGS

2986298 CASE NUMBER: CASE TITLE:  MARGARET WEBB BY AND THROUGH HER  37-2023-00001200-CU-NP-NC preclude the court from entertaining the present motion. Indeed, 'the trial court has authority to reconsider orders compelling or denying arbitration.' Pinela v. Neiman Marcus Group, Inc. (2015) 238 Cal. App. 4th 227, 237. Toward that end, the First District Court of Appeal, discussing the general rule set forth in Brock, has explained: [S]uch a stay does not effect the 'ouster of the judicial power vested in the trial court of this state by our Constitution' (id. at p. 1795, 13 Cal.Rptr.2d 678). Because contractual arbitration 'dr[aws] its vitality from the contract' (id. at p. 1806, 13 Cal.Rptr.2d 678), a trial court has inherent power to revisit the foundational 'question of whether the parties are bound by a particular arbitration agreement' (Malek, supra, 121 Cal.App.4th at p. 56, 16 Cal.Rptr.3d 687), just as it may on its own motion revise any other interim ruling in the action pending before it (Le Francois, supra, 35 Cal.4th at pp. 1096-1097, 29 Cal.Rptr.3d 249, 112 P.3d 636).

Pinela, 238 Cal. App. 4th at 238. Accordingly, the court finds that it has jurisdiction to reconsider the Order notwithstanding the stay of proceedings it issued as part of the Order.

Defendant's argument that the motion is untimely likewise is unavailing. CCP § 1008(a) requires that a motion for reconsideration be filed within 10 days after service of the written notice of entry of the order.

See Cal. Code Civ. P. § 1008(a). In this case, Defendant electronically served the Notice of Ruling on May 5, 2023. Normally, Plaintiff would have had until May 17, 2023 to file and serve the present motion – she did not do so until May 19, 2023. However, Plaintiff is technically correct that Defendant never effectuated proper service of the Order. Defendant instead served a copy of the tentative ruling alongside the Notice of Ruling. A tentative ruling is not an 'order' for purposes of CCP § 1008(a). By definition, a tentative ruling is not a final order. See People v. Hatt (2018) 20 Cal. App. 5th 321, 324. Put differently, a tentative ruling is intended to allow a party an opportunity to convince the judge that the tentative ruling should not become the final order of the court. See Cowan v. Krayzman (2011) 196 Cal. App. 4th 907, 916. This is merely an academic exercise, however, because, as explained below, the court is proceeding under its inherent authority to reconsider the Order and is thus not constrained by CCP § 1008(a)'s 10-day requirement.

That being said, the court finds that Plaintiff has failed to demonstrate entitlement to reconsideration under CCP § 1008(a). CCP § 1008(a) provides that: When an application for an order has been made to a judge, or to a court, and refused in whole or in part, or granted, or granted conditionally, or on terms, any party affected by the order may, within 10 days after service upon the party of written notice of entry of the order and based upon new or different facts, circumstances, or law, make application to the same judge or court that made the order, to reconsider the matter and modify, amend, or revoke the prior order. The party making the application shall state by affidavit what application was made before, when and to what judge, what order or decisions were made, and what new or different facts, circumstances, or law are claimed to be shown.

Cal. Code Civ. P. § 1008(a).

A party seeking reconsideration must provide a sufficient explanation for failing to present the information, i.e., the purportedly new facts, circumstances, or law, at the first hearing. See Morris v. AGFA (2006) 144 Cal. App. 4th 1452, 1460; Garcia v. Hejmadi (1997) 58 Cal. App. 4th 674, 690. Even if the moving party satisfies its burden, reconsideration does not require that the court change its mind. If CCP § 1008's requirements have been met to the court's satisfaction, but the court is not persuaded that its earlier ruling was erroneous, the proper course is to grant reconsideration and to reaffirm the earlier ruling. See Blue Mountain Development Co. v. Carville (1982) 132 Cal. App. 3d 1005, 1011-1012.

In this case, the court finds that Plaintiff has failed to establish new facts, circumstances, or law warranting reconsideration under CCP § 1008(a). More specifically, the court is not persuaded that the principles set forth in Kinder represent new law that was not available to Plaintiff at the time she filed her opposition to the Petition or provided arguments at the May 5, 2023 hearing. Nevertheless, after Calendar No.: Event ID:  TENTATIVE RULINGS

2986298 CASE NUMBER: CASE TITLE:  MARGARET WEBB BY AND THROUGH HER  37-2023-00001200-CU-NP-NC reviewing Kinder and the line of cases it relies upon, the court finds, for the below reasons, that the Order is legally erroneous. On that basis, the court, on its own motion, exercises its inherent authority to reconsider the Order and correct this legal error. See, e.g., In re Marriage of Barthold (2008) 158 Cal. App. 4th 1301, 1307; Le Francois v. Goel (2005) 35 Cal. 4th 1094, 1108 Defendant's Petition to Compel Binding Arbitration On February 24, 2022, Defendant and Mr. Dailey, individually and on behalf of Plaintiff, entered into the Arbitration Agreement. See Healey Decl., Ex. A. The Arbitration Agreement states that: Article 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, 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.

Article 2. It is further understood that any dispute between Resident and Escondido Post Acute Rehab, its owners, operators, officers, directors, administrators, staff, employees, agents, and any management and administrative services company, including Healthcare Management Services, LLC, and all related entities and individuals, their staff, personnel, employees, owners, officers, directors, members, and agents that provide services to the Facility that relates to the provision of care, treatment and services the Facility provides to the Resident, (collectively referred to herein as 'Facility'), including any action for injury or death arising from negligence, intentional tort and/or statutory causes of action (including all California Welfare and Institutions Code sections and Health and Safety Code section 1430), will be determined by submission to binding arbitration and not by lawsuit or resort to court process except as California law provides for judicial review of arbitration proceedings. The parties to this agreement are giving up their Constitutional right to have all disputes decided in a court of law before a jury, and instead are accepting the use of binding arbitration. By signing this agreement, the parties waive their right to commence and/or be a party to any class or collective action in any court against the other party relating in any manner whatsoever to the Resident's residency at the Facility. Further, the parties waive their right to commence or be a party to any group, class, or collective action claim in arbitration or any other forum.

Article 4. This Agreement shall be binding for any dispute, except for disputes pertaining to collections or evictions. This Agreement is binding on all parties, including the Resident's representatives, executors, family members, and heirs who bring any claims individually or in a representative capacity. The Resident's representatives, agents, executors, family members, successors in interest and heirs who execute this Agreement below on the signature line are doing so not only in their representative capacity for the Resident, but also in their individual capacity and thus agree that any claims brought individually by any such representatives, agents, executors, family members, representatives, successors in interest and heirs are subject to binding arbitration. This Agreement may be rescinded by written notice within thirty (30) days of signature.

See the Arbitration Agreement, Articles 1-2, 4. The Arbitration Agreement, directly above the signature line, reads as follows: The Resident and/or the person executing this Agreement certifies that he/she has read this Agreement and has been given a copy of this Agreement, and affirmatively represents that he/she is duly authorized, by virtue of the Resident's consent, instruction and/or durable power of attorney, to execute this Agreement and accept its terms on behalf of the Resident and acknowledges that the Facility is relying on the aforementioned certification.

Ibid., p. 2 (the 'Agency Certification'). The Arbitration Agreement is governed by the Federal Arbitration Calendar No.: Event ID:  TENTATIVE RULINGS

2986298 CASE NUMBER: CASE TITLE:  MARGARET WEBB BY AND THROUGH HER  37-2023-00001200-CU-NP-NC Act (9 U.S.C. §§ 1 et seq.) (the 'FAA')'s substantive and procedural rules. Ibid., Article 7.

In relevant part, the FAA provides that: A written provision in . . . a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.

9 U.S.C. § 2. The court applies state contract law in determining Defendant's right to enforce the Arbitration Agreement. See Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal. 4th 223, 236 ('In determining the rights of parties to enforce an arbitration agreement within the FAA's scope, courts apply state contract law while giving due regard to the federal policy favoring arbitration.'); Giuliano v. Inland Empire Personnel, Inc. (2007) 149 Cal. App. 4th 1276, 1285 (generally applicable contract defenses may invalidate arbitration agreements provided they do not contravene § 2 of the FAA). A threshold determination in that regard is the existence of a valid arbitration agreement. See Serafin v. Balco Properties Ltd., LLC (2015) 235 Cal. App. 4th 165, 172. Defendant bears the burden of proving the existence of a valid arbitration agreement by a preponderance of the evidence. Plaintiff then bears the burden of proving by a preponderance of the evidence any facts necessary to her defense. See Lane v. Francis Capital Management LLC (2014) 224 Cal. App. 4th 676, 683.

In the Order, the court found that Defendant had satisfied its initial burden of proving the existence of a valid arbitration agreement. This finding was erroneous. Generally, a person who is not a party to an arbitration agreement is not bound by it. See Buckner v. Tamarin (2002) 98 Cal. App. 4th 140, 142.

There are numerous exceptions to this rule, however. For example, a patient who signs an arbitration agreement at a health care facility can bind relatives who present claims arising from the patient's treatment. See Mormile v. Sinclair (1994) 21 Cal. App. 4th 1508, 1511-1516. Moreover, a person who is authorized to act as the patient's agent can bind the patient to an arbitration agreement. See Garrison v. Sup. Ct. (2005) 132 Cal. App. 4th 253, 264-266. The Third District Court of Appeal has explained: An agent is one who represents another, called the principal, in dealings with third persons. In California, an agency is either actual or ostensible. Actual agency arises when the principal's conduct causes the agent reasonably to believe that the principal consents to the agent's act on behalf of the principal.

Ostensible agency arises when the principal's conduct causes the third party reasonably to believe that the agent has the authority to act on the principal's behalf . . . The burden of proving that a purported agent had the authority to act for the purported principal in a particular circumstance lies with the persons dealing with the agent.

Rogers v. Roseville SH, LLC (2022) 75 Cal. App. 5th 1065, 1074-1075 (internal quotations and citations omitted).

Regarding the burden of proof, the court agrees with Plaintiff that Kinder is apposite and controlling. In Kinder, the plaintiff was a resident at a skilled nursing facility. Upon admission, the plaintiff's adult children signed arbitration agreements on her behalf. During her residency, the plaintiff sustained injuries in a fall. She subsequently sued the facility and various entities, asserting claims for elder abuse, violation of residents' rights, and negligence. The defendants then moved to compel arbitration based on the arbitration agreements that the plaintiff's children signed. The sole evidence submitted by the defendants in support of the motion was a declaration from their attorney which attached copies of the arbitration agreements. The trial court denied the motion, concluding that the defendants had failed to prove that the plaintiff's children had actual or ostensible authority to execute the arbitration agreements on the plaintiff's behalf. The defendants appealed.

The Second District Court of Appeal was confronted with the issue of whether, under the burden shifting Calendar No.: Event ID:  TENTATIVE RULINGS

2986298 CASE NUMBER: CASE TITLE:  MARGARET WEBB BY AND THROUGH HER  37-2023-00001200-CU-NP-NC framework set forth in Gamboa v. Northeast Community Clinic (2021) 72 Cal. App. 5th 158, 164-166 ('Gamboa'), a defendant moving to compel arbitration meets its initial burden of proving the plaintiff agreed to arbitrate solely by submitting an agreement signed by a third party who states in the agreement that he or she has authority to sign on the plaintiff's behalf. In so holding, the Court explained: When a defendant contends an agreement to arbitrate is binding because it was signed by an agent of the plaintiff, the defendant bears the burden of proving the signatory was the plaintiff's actual or ostensible agent. (Rogers, supra, 75 Cal.App.5th at p. 1074, 290 Cal.Rptr.3d 760.) A defendant 'seeking to compel arbitration does not meet its burden of proving the existence of an arbitration agreement when it does not present any evidence that the purported principal's conduct caused the agent or the [defendant] to believe that the agent had the authority to bind the principal.' (id. at p. 1075, 290 Cal.Rptr.3d 760.) In particular, a defendant cannot meet its burden to prove the signatory acted as the agent of a plaintiff by relying on representations of the purported agent alone. (See Valentine v. Plum Healthcare, LLC (2019) 37 Cal.App.5th 1076, 1087, 249 Ca.Rptr.3d 905 (Valentine) [' '[o]stensible agency cannot be established by the representations or conduct of the purported agent; the statements or acts of the principal must be such as to cause the belief the agency exists' ']; Flores v. Evergreen at San Diego, LLC (2007) 148 Cal.App.4th 581, 588, 55 Cal.Rptr.3d 823 [actual agency cannot be established without evidence of the principal's conduct].) Kinder, 91 Cal. App. 5th at 812-813.

The Court in Kinder ultimately found that the defendants had failed to establish that the plaintiff's children had actual or ostensible authority to bind the plaintiff to the arbitration agreements. More specifically, the Court rejected the defendants' contention that the trial court should have found actual or ostensible agency based on the purported certification in the arbitration agreements that the signatories were 'authorized to act as Resident's agent in executing and delivering of [sic] this arbitration agreement.' Ibid., at 813. The Court, relying upon Gamboa's burden shifting scheme, further rejected the defendants' argument that they had met their initial evidentiary burden of demonstrating the existence of a valid arbitration agreement simply by submitting the arbitration agreements with their moving papers.

'Allowing the moving party to meet its initial burden by presenting an agreement signed by a third party, without more, would be inconsistent with this authority because it would not constitute prima facie evidence that the plaintiff agreed to arbitrate.' Kinder, 91 Cal. App. 5th at 815 (emphasis in original).

Such is the case here. The evidence shows that Mr. Daily purportedly signed the Arbitration Agreement on Plaintiff's behalf. Under Kinder, Defendant bears the initial burden of demonstrating that Mr. Daily had actual or ostensible authority to bind Plaintiff to the Arbitration Agreement. Defendant has not met its burden. More specifically, and much like the defendants in Kinder, the only evidence Defendant has submitted in support of the Petition is a declaration from its attorney, who has indicated that a copy of the Arbitration Agreement is attached as Exhibit A to his declaration. See the Petition, pp. 11-12.

Defendant refers the court to the Agency Certification on Page 2 of the Arbitration Agreement in support of its position that Mr. Daily was acting as Plaintiff's agent. As set forth above, this is insufficient to establish that either: (1) Plaintiff's conduct caused Mr. Dailey to reasonably believe that Plaintiff consented to Mr. Daily acting on her behalf, or (2) Plaintiff's conduct caused Defendant to reasonably believe that Mr. Daily had the authority to act on Plaintiff's behalf. Because Defendant has not met its initial burden, the burden does not shift to Plaintiff to prove by a preponderance of the evidence any facts necessary to her defense. See Goldman v. Sunbridge Healthcare, LLC (2013) 220 Cal. App. 4th 1160, 1173.

Accordingly, the court denies the Petition without prejudice.

In light of the foregoing, the court: (1) denies Plaintiff's motion for reconsideration under CCP § 1008(a); (2) vacates the court's May 5, 2023 order (see ROA No. 20) under its inherent authority; and (3) denies the Petition without prejudice. The court confirms the status conference currently set for August 4, 2023 at 9:30 a.m. in this department, which shall serve as the case management conference. All case Calendar No.: Event ID:  TENTATIVE RULINGS

2986298 CASE NUMBER: CASE TITLE:  MARGARET WEBB BY AND THROUGH HER  37-2023-00001200-CU-NP-NC management conference statements shall be filed and served no later than July 31, 2023. Defendant's response to the operative pleading shall be filed and served no later than August 3, 2023.

This is the tentative ruling for the hearing at 1:30 p.m. on Friday, July 21, 2023. If no party appears at the hearing, this tentative ruling will become the order of the court as of July 21, 2023. If the parties are satisfied with the court's tentative ruling or do not otherwise wish to argue the motion, they are encouraged to give notice to the court and each other of their intention not to appear, though this notice is not required.

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