Judge: Cynthia A Freeland, Case: 37-2023-00023397-CU-WT-NC, Date: 2024-01-12 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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SOUTH BUILDING TENTATIVE RULINGS - January 11, 2024

01/12/2024  01:30:00 PM  N-27 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Cynthia A. Freeland

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Civil - Unlimited  Wrongful Termination Motion Hearing (Civil) 37-2023-00023397-CU-WT-NC BERRY V. VISTA WOODS HEALTH ASSOCIATES LLC [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion - Other, 09/05/2023

Defendants Vista Woods Health Associates LLC dba Vista Knoll Specialized Care Facility ('Vista Knoll'), Clay Gardner, and Vera Cordova (collectively, 'Defendants')'s motion to compel arbitration is granted.

Factual Background and Procedural History On September 3, 2019, Plaintiff Veranice Berry ('Plaintiff') submitted a signed employment application (the 'Employment Application') to Vista Knoll. See Barrett Decl., ¶ 8, Ex. 2. Directly above the signature line on the Employment Application is a box of text entitled 'Notice re Criminal Background Checks and Mandatory Agreement to Arbitrate' which states, in relevant part, that '[w]e also require that a mutual agreement to arbitrate be entered as a condition of employment.' Ibid. On September 9, 2019, Plaintiff attended a new hire orientation during which Brandi Mackey presented Plaintiff with a series of onboarding documents to review and sign. See Berry Decl., ¶ 3. Those documents included Vista Knoll's: (1) 'Policy Against Discrimination Harassment and Retaliation; (2) 'Receipt & Acknowledgement Employee Handbook – Employer Copy'; (3) 'Acknowledgement of Receipt'; and (4) 'Mutual Agreement to Arbitrate Claims' (the 'Arbitration Agreement'). See Ngo Decl., Ex. A, ¶ 3; Barrett Decl., Exs. 1, 3, ¶¶ 5-7. Plaintiff does not dispute signing each of the onboarding documents, including the Arbitration Agreement, on September 9, 2019.

Notably, the top of the Arbitration Agreement, which appears to be a template, is missing the name of the Plaintiff's employer (which is defined in the opening paragraph of the Arbitration Agreement as the 'Company'), instead merely stating '[INSERT NAME OF FACILITY/AGENCY HERE].' The Arbitration Agreement is signed by Plaintiff, as employee, and Ms. Mackey, as Vista Knoll's authorized representative. Under the Arbitration Agreement, the parties agreed to arbitrate 'any claims that the Company may have against Employee, or that Employee may have against the Company or against any of its officers, directors, employees, agents, or parent, subsidiary, or affiliated entities.' See Arbitration Agreement, p. 1, ¶ 1. More specifically, the Arbitration Agreements states as follows: The claims covered by this Agreement include, but are not limited to, claims for breach of any contract or covenant, express or implied; claims for breach of any fiduciary duty or other duty owed to Employee by Company or to Company by Employee; tort claims; claims for wages or other compensation due; claims for discrimination or harassment, including but not limited to discrimination or harassment based on race, sex, pregnancy, religion, national origin, ancestry, age, marital status, physical disability, mental disability, medical condition, gender identity, or sexual orientation; and claims for violation of any federal, state or other governmental constitution, statute, ordinance or regulation (as originally enacted and as amended), including but not limited to breach of contract, breach of the covenant of good faith and fair Calendar No.: Event ID:  TENTATIVE RULINGS

3016353 CASE NUMBER: CASE TITLE:  BERRY V. VISTA WOODS HEALTH ASSOCIATES LLC [IMAGED]  37-2023-00023397-CU-WT-NC dealing, wrongful termination in violation of public policy, infliction of emotional distress, misrepresentation, invasion of privacy, malicious prosecution, claims under Title VII of the Civil Rights Act of 1964 ('Title VII'), the Age Discrimination in Employment Act ('ADEA'), the Americans with Disabilities Act ('ADA'), the Fair Labor Standards Act ('FLSA'), the Employee Retirement Income Security Act ('ERISA'), the Consolidated Omnibus Budget Reconciliation Act ('COBRA'), the Family and Medical Leave Act ('FMLA'), the Unruh Act, the California Fair Employment and Housing Act ('FEHA'), the California Family Rights Act ('CFRA'), the California Labor Code, the California Code of Civil Procedure, the California Civil Code, the California Wage Orders, and any other statutory or common law claims relating to employment, the recruitment or application therefor and the departure therefrom. (collectively, 'Arbitrable Disputes').

Ibid., p. 1, ¶ 2. The Arbitration Agreement requires that any arbitration hearing(s) be conducted before a single arbitrator with the American Arbitration Association (the 'AAA'). Ibid., p. 2, ¶ 3. In addition, the 'Company' must pay any arbitration filing fee in excess of the amount Plaintiff would have been required to pay (if any) to file the claim in court as well as all of the arbitrator's fees and other arbitration expenses (in instances where Plaintiff is making a claim). Ibid., p. 2, ¶ 4. Furthermore, the arbitrator is authorized to award reasonable attorney's fees and costs to the prevailing party in accordance with the particular claim on which the party prevailed. Ibid. Moreover, the arbitrator is authorized to order discovery through depositions, interrogatories, document productions, or as is otherwise deemed necessary to fully and fairly adjudicate the parties' dispute. Ibid. The Federal Arbitration Act (9 U.S.C. §§ 1 et seq.) (the 'FAA')'s substantive and procedural rules govern the Arbitration Agreement. Ibid.

Plaintiff worked as an Activities Director in Vista Knoll's Neural Behavior Unit between September 19, 2019 and September 6, 2022. See Complaint, ¶ 15. On June 5, 2023, Plaintiff commenced this action by filing a Complaint against Vista Knoll and Plaintiff's supervisors, Mr. Gardner and Ms. Cordova, alleging causes of action for: (1) wrongful discharge in violation of public policy; (2) discrimination based on race in violation of FEHA; (3) harassment based on race in violation of FEHA; (4) retaliation for complaining of discrimination based on race in violation of FEHA; (5) retaliation for complaining of discrimination and harassment on the basis of gender in violation of FEHA; (6) failure to prevent harassment and discrimination under California Government Code § 12940(k); (7) whistleblower retaliation under California Labor Code § 1102.5; (8) failure to provide meal periods under California Labor Code § 226.7 and California Wage Order 5, § 11; (9) failure to provide rest periods under California Labor Code § 226.7; (10) failure to provide business reimbursement for business expense under California Labor Code § 2802; and (11) violation of California Business and Professions Code §§ 17200 et seq. See ROA No.

1.

Defendants now seek an order compelling Plaintiff to arbitrate her claims consistent with the Arbitration Agreement.

Legal Analysis 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 may resolve a motion to compel arbitration in summary proceedings. See Gamma Eta Chapter of Pi Kappa Alpha v. Helvey (2020) 44 Cal. App. 5th 1090, 1098. The court applies state contract law in determining Defendants' 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 Calendar No.: Event ID:  TENTATIVE RULINGS

3016353 CASE NUMBER: CASE TITLE:  BERRY V. VISTA WOODS HEALTH ASSOCIATES LLC [IMAGED]  37-2023-00023397-CU-WT-NC 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 an arbitration agreement. See Serafin v. Balco Properties Ltd., LLC (2015) 235 Cal. App. 4th 165, 172. Defendants bear the burden of proving the existence of an 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.

The court finds that Defendants have satisfied their initial burden of proving the existence of an arbitration agreement by providing a copy of the Arbitration Agreement signed by Plaintiff and Ms.

Mackey and containing the subject arbitration provisions. Nothing further is required to prove the Arbitration Agreement's existence. See Condee v. Longwood Management Corp. (2001) 88 Cal. App. 4th 215, 218-219 ('For purposes of a petition to compel arbitration, it is not necessary to follow the normal procedures of document authentication . . . the court is only required to make a finding of the agreement's existence, not an evidentiary determination of its validity.'); Cal. R. Ct. 3.1330.

Plaintiff argues that no valid arbitration agreement exists between the parties because: (1) Vista Knoll is not specifically identified in the Arbitration Agreement; (2) mutual assent is absent because Plaintiff did not know who she was contracting with; and (3) the Arbitration Agreement fails to identify a counter-signatory and his or her capacity to bind Vista Knoll. The court respectfully finds these arguments unavailing. The essential elements of a contract are: '1. Parties capable of contracting; 2.

Their consent; 3. A lawful object; and, 4. A sufficient cause or consideration.' Cal. Civ. Code § 1550. As to the identification of the parties, '[i]t is essential to the validity of a contract, not only that the parties should exist, but that it should be possible to identify them.' Cal. Civ. Code § 1558. As to assent, '[c]onsent is not mutual, unless the parties all agree upon the same thing in the same sense . . . .' Cal. Civ. Code § 1580. That being said, Plaintiff's representation that she did not know: (1) who her employer was, or (2) who she was contracting with, is belied by the evidence. More specifically, the evidence shows that Plaintiff was placed on notice by way of the Employment Application that executing an arbitration agreement would be a condition of her employment with Vista Knoll. Plaintiff does not dispute that she was employed by Vista Knoll or that Ms. Mackey presented Plaintiff with the onboarding documents – including the Arbitration Agreement – at the September 9, 2019 orientation. Nor does Plaintiff dispute that she signed all the onboarding documents on September 9, 2019. In addition, other onboarding documents, particularly the 'Receipt & Acknowledgement Employee Handbook – Employer Copy,' specifically refer to Vista Knoll as Plaintiff's employer.

To the extent Plaintiff argues that the references to the Ensign Compliance Hotline ('Ensign') in Defendants' 'Policy Against Discrimination Harassment and Retaliation' made it confusing as to who her employer was and/or who she contracted to arbitrate with, the court again must respectfully disagree. A plain reading of that document reveals that Vista Knoll has a system/process for its employees to report discrimination, harassment, or retaliation in the workplace. Specifically, the employee has the option of: (1) confronting the individual directly; (2) reporting the individual to a supervisor or other leader at the workplace; or (3) reporting the individual to Ensign either telephonically or electronically. Supervisors or managers also have the ability to report the matter to Ensign. Based on the foregoing, it is clear that Vista Knoll's 'Policy Against Discrimination Harassment and Retaliation' contemplates that Vista Knoll's employees can either bring a complaint within the workplace, i.e., to a Vista Knoll supervisor, or go through Vista Knoll's corporate hotline, i.e., Ensign, for addressing workplace discrimination, harassment, and/or retaliation. Further evidence that Plaintiff was aware that Vista Knoll, rather than Ensign, was her employer can be found in ¶ 53 of the Complaint, wherein Plaintiff admits that she contacted Vista Knoll's corporate hotline to submit an anonymous complaint regarding Ms. Cordova's alleged discriminatory actions against another employee. In sum, the evidence establishes that it is, in fact, possible to identify the parties to the Arbitration Agreement such that a valid agreement between Plaintiff and Vista Knoll exists.

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3016353 CASE NUMBER: CASE TITLE:  BERRY V. VISTA WOODS HEALTH ASSOCIATES LLC [IMAGED]  37-2023-00023397-CU-WT-NC The burden thus shifts to Plaintiff to prove by a preponderance of the evidence any facts necessary to preclude enforcement of the Arbitration Agreement. The court finds that Plaintiff has not met her burden.

More specifically, Plaintiff has failed to demonstrate that the Arbitration Agreement is unconscionable.

Unconscionability has substantive and procedural elements. See Armendariz v. Foundation Health Psychcare Servs., Inc. (2000) 24 Cal. 4th 83, 114. 'The prevailing view is that [procedural and substantive unconscionability] must both be present in order for the court to exercise its discretion to refuse to enforce a contract or clause under the doctrine of unconscionability.' Ibid. (quoting Stirlen v. Supercuts, Inc. (1997) 51 Cal. App. 4th 1519, 1533). However, courts employ a 'sliding scale' approach to determining unconscionability: 'the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.' Armendariz, 24 Cal. 4th at 114. The sliding scale analysis 'requires the court to examine the totality of the agreement's substantive terms as well as the circumstances of its formation to determine whether the overall bargain was unreasonably one-sided.' Sonic-Calabasas A, Inc. v. Moreno (2013) 57 Cal. 4th 1109, 1146. The pertinent inquiry is whether the contract's terms are sufficiently fair in light of all the facts and circumstances. See Sanchez v. Valencia Holding Co., LLC (2015) 61 Cal. 4th 899, 912.

First, Plaintiff has demonstrated that the Arbitration Agreement is slightly substantively unconscionable.

'Substantive unconscionability arises when a contract imposes unduly harsh, oppressive, or one-sided terms.' Ajamian v. CantorCO2e, L.P. (2012) 203 Cal. App. 4th 771, 797 (citing Armendariz, 24 Cal. 4th at 113). 'This includes consideration of the extent to which the disputed term is outside the reasonable expectation of the nondrafting party or is unduly oppressive.'' Carbajal v. CWPSC, Inc. (2016) 245 Cal. App. 4th 227, 247 (quoting The McCaffrey Grp., Inc. v. Super. Ct. (2014) 224 Cal. App. 4th 1330, 1349-1350). In this case, Plaintiff contends that the Arbitration Agreement is substantively unconscionable because it: (1) includes a prevailing party attorney's fees and costs provision, and (2) restricts Plaintiff's discovery rights. To start, the fee-shifting provision in the Arbitration Agreement reads as follows: If Employee is making a claim, the Company will pay any arbitration filing fee in excess of the amount Employee would have been required to pay (if any) to file the claim in court, and the Company will pay all of the arbitrator's fees and other arbitration expenses. If the Company is making a claim, the Company will pay all filing fees and all expenses of the arbitration, including the arbitrator's fees. Each party shall bear its, his, or her own costs of legal representation; provided, however, if any party prevails on a claim entitling the prevailing party to attorneys' fees and/or costs, the Arbitrator may award reasonable fees and/or costs to the prevailing party in accordance with such claim.

See Arbitration Agreement, p. 2, ¶ 4.

That being said, the express terms of the fee-shifting provision make clear that Plaintiff is not required to pay more than what she would have been required to pay had she filed her claims in court. This is consistent with Armendariz, which provides that '[w]hen an employer imposes mandatory arbitration as a condition of employment, the arbitration agreement or arbitration process cannot generally require the employee to bear any type of expense that the employee would not be required to bear if he or she were free to bring the action in court.' Armendariz, 24 Cal. 4th at 110-111 (emphasis in original). To the extent Plaintiff argues that the prevailing party provision is itself substantively unconscionable, the court agrees that the provision is consistent with Armendariz to the extent that it does not limit statutorily imposed remedies. Ibid., at 103. However, the provision is substantively unconscionable to the extent that it improperly gives the arbitrator the power to assess attorney's fees against Plaintiff (should she not prevail) regardless of whether the action is deemed frivolous, unreasonable, without foundation, or to have been brought in bad faith (which FEHA requires before a losing plaintiff is required to pay attorney's fees). See Trivedi v. Curexo Technology Corp. (2010) 189 Cal. App. 4th 387, 394. Moreover, the provision runs counter to FEHA's prescription that a successful plaintiff may recover attorney's fees and costs from his or her employer (but does not similarly allow an employer to recover fees and costs from an employee in most cases). See Serafin, 235 Cal. App. 4th at 183 (citing Cal. Gov't Code § 12965(b)).

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3016353 CASE NUMBER: CASE TITLE:  BERRY V. VISTA WOODS HEALTH ASSOCIATES LLC [IMAGED]  37-2023-00023397-CU-WT-NC Finally, Plaintiff's argument that the Arbitration Agreement restricts her discovery rights is not well taken.

The discovery provision in the Arbitration Agreement reads as follows: The Arbitrator shall have the authority to order such discovery by way of deposition, interrogatory, document production, or otherwise, as the Arbitrator considers necessary to a full and fair exploration of the issues in dispute, consistent with the expedited nature of arbitration.

See Arbitration Agreement, p. 2, ¶ 4.

The foregoing language tracks verbatim with the AAA employment dispute discovery rules. See Murrey v. Sup. Ct. (2023) 87 Cal. App. 5th 1223, 1249. California courts have held that '[t]here appears to be no meaningful difference between the scope of discovery approved in Armendariz and that authorized by the AAA employment dispute rules.' Roman v. Sup. Ct. (2009) 172 Cal. App. 4th 1462, 1476. In short, parties to arbitration are entitled to 'discovery sufficient to vindicate unwaivable statutory rights,' which is what the discovery provision in the Arbitration Agreement provides. See Lane, 224 Cal. App. 4th at 693 (citing Armendariz, 24 Cal. 4th at 105-106). In sum, Plaintiff fails to demonstrate how or to what extent the Arbitration Agreement restricts or limits her discovery rights in arbitration.

Accordingly, the court finds that Plaintiff has established that a low amount of substantive unconscionability permeates the Arbitration Agreement.

As set forth above, courts employ a sliding scale approach to determining unconscionability.

Consequently, because Plaintiff has shown that the Arbitration Agreement is only slightly substantively unconscionable, she must demonstrate significant procedural unconscionability to prevail. She fails to do so. Procedural unconscionability requires oppression or surprise. See Samaniego v. Empire Today LLC (2012) 205 Cal. App. 4th 1138, 1144. 'Oppression results from unequal bargaining power, when a contracting party has no meaningful choice but to accept contract terms. Unfair surprise results from misleading bargaining conduct or other circumstances indicating that party's consent was not an informed choice.' Dotson v. Amgen, Inc. (2010) 181 Cal. App. 4th 975, 980. To start, the court disagrees with Plaintiff that the Arbitration Agreement is procedurally unconscionable because Vista Knoll failed to provide Plaintiff with a copy of the AAA rules. A failure to attach an arbitration organization's rules, standing alone, is not a sufficient basis to support a finding of unconscionability. See Lane, 224 Cal. App. 4th at 690; Peng v. First Republic Bank (2013) 219 Cal. App. 4th 1462, 1472. Regardless, this alleged failure would not affect the court's unconscionability analysis where, as here, Plaintiff has not challenged AAA's rules in the first place. See Baltazar v. Forever 21, Inc. (2016) 62 Cal. 4th 1237, 1246.

The court does, however, agree with Plaintiff that the Arbitration Agreement is a contract of adhesion.

See OTO, L.L.C. v. Kho (2019) 8 Cal. 5th 111, 126 ('An adhesive contract is standardized, generally on a preprinted form, and offered by the party with superior bargaining power 'on a take-it-or-leave-it basis.'). The adhesive nature of the Arbitration Agreement gives rise to some measure of procedural unconscionability. However, '[w]here there is no other indication of oppression or surprise, the degree of procedural unconscionability of an adhesion agreement is low, and the agreement will be enforceable unless the degree of substantive unconscionability is high.' Ajamian v. CantorCO2e, L.P. (2012) 203 Cal. App. 4th 771, 794 (citing Dotson, 181 Cal. App. 4th at 981-982). Plaintiff asserts in her declaration that no one discussed the Arbitration Agreement with her and that she felt rushed during the onboarding process as she was informed that she was needed on the floor to help with patients on her first day of work. These contentions are unavailing. First, 'being pressed for sufficient time to thoroughly read and understand an arbitration agreement is not, standing alone, an indicator of procedural unconscionability .

. . .'). See Dougherty v. Roseville Heritage Partners (2020) 47 Cal. App. 5th 93, 103-104. Nor is it sufficient for Plaintiff to argue that she did not recall seeing or reading the Arbitration Agreement. See Brookwood v. Bank of America (1996) 45 Cal. App. 4th 1667, 1674 (a plaintiff may be bound by the provisions of an arbitration agreement 'regardless of whether [she] read it or [was] aware of the arbitration clause when [she] signed the document.'). Notably, Plaintiff's representations are belied by Ms. Barrett's declaration that it is Vista Knoll's standard business practice for a Vista Knoll employee, Calendar No.: Event ID:  TENTATIVE RULINGS

3016353 CASE NUMBER: CASE TITLE:  BERRY V. VISTA WOODS HEALTH ASSOCIATES LLC [IMAGED]  37-2023-00023397-CU-WT-NC usually a Human Resources representative, to attend new hire orientations and discuss all aspects of the employment relationship. Employees are given the opportunity to ask questions and consult their personal representative(s) before signing any documents, including the Arbitration Agreement.

Moreover, employees are informed at orientation that signing the Arbitration Agreement is a condition to begin or continue employment with Vista Knoll. See Barrett Decl., ¶¶ 3-6. Plaintiff provides insufficient evidence that she was lied to, placed under duress, or otherwise manipulated into signing the documents containing the Arbitration Clause. See Baltazar, 62 Cal. 4th at 1245.

Accordingly, the court finds that Plaintiff has established that a low amount of procedural unconscionability permeates the Arbitration Agreement. Coupled with the low amount of substantive unconscionability, and in light of California's strong public policy favoring arbitration, the court finds that the Arbitration is not sufficiently unconscionable to preclude its enforcement. See Coast Plaza Doctors Hosp. v. Blue Cross of California (2000) 83 Cal. App. 4th 677, 686 ('California has a strong public policy in favor of arbitration and any doubts regarding the arbitrability of a dispute are resolved in favor of arbitration.').

Conclusion In light of the foregoing, the court grants Defendants' motion to compel arbitration. This action is stayed pending the outcome of the arbitration hearing between Plaintiff and Defendants. See 9 U.S.C. § 3. The court sets a status conference in this matter for May 17, 2024 at 9:30 a.m. in this department.

This is the tentative ruling for the hearing at 1:30 p.m. on Friday, January 12, 2024. If no party appears at the hearing, this tentative ruling will become the order of the court as of January 12, 2024. 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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