Judge Cynthia A Freeland, Case 37-2023-00042707-CU-WT-NC 2024-02-16 Tentative Ruling

Judge: Cynthia A Freeland, Case: 37-2023-00042707-CU-WT-NC, Date: 2024-02-16 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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SOUTH BUILDING TENTATIVE RULINGS - February 15, 2024

02/16/2024 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) 37-2023-00042707-CU-WT-NC MCLAUGHLIN VS. MEDICELL TECHNOLOGIES, LLC [IMAGED] CAUSAL DOCUMENT/DATE FILED: Notice - Other, 01/19/2024

Defendant Medicell Technologies, LLC ('Defendant')'s petition to compel arbitration and stay proceedings is granted.

Defendant employed Plaintiff Brad McLaughlin ('Plaintiff') as an Associate Director of e-Commerce from September 1, 2022 to May 25, 2023. See First Amended Complaint, ¶¶ 7, 20. On March 12, 2023, Plaintiff electronically signed an Arbitration Agreement. See Wood Decl., ¶ 5, Ex. A. The Arbitration Agreement provides relevant part that: All claims, controversies or disputes arising under, in connection with or relating to Employee's employment with Medicell Technologies, LLC/DefenAge, and Progenitor Biolgics ('The Company')(and its respective employees, officers, directors, managers, attorneys, and other agents), whether sounding in contract or tort, including arbitrability and any claim that this Agreement was induced by fraud (collectively, the 'Covered Claims'), will be resolved by binding arbitration in San Diego, California . . . .

Ibid. The Arbitration Agreement concludes with the following paragraph directly above the signature lines: By signing below, I certify that I am entering into this agreement voluntarily and of my own free will. It has been explained to me that my signature to this agreement is not a condition of employment and that the Company will not retaliate against me if I refuse to sign this Agreement. I have also been provided the opportunity to ask any questions I have about the agreement and to have the agreement reviewed by a lawyer of my own choosing.

Ibid. The Arbitration Agreement purportedly contains the electronic signatures of Plaintiff as well as Mr.

Wood on Defendant's behalf. Given this, Defendant has moved to compel Plaintiff to arbitrate his dispute with Defendant, which dispute falls within the purview of the 'Covered Claims' as defined by the Arbitration Agreement.

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 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 Calendar No.: Event ID: TENTATIVE RULINGS

3078487 CASE NUMBER: CASE TITLE: MCLAUGHLIN VS. MEDICELL TECHNOLOGIES, LLC [IMAGED] 37-2023-00042707-CU-WT-NC 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; Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal. App. 4th 836, 842. Defendant bears 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 his defense. See Lane v. Francis Capital Management LLC (2014) 224 Cal. App. 4th 676, 683.

The court finds that Defendant has satisfied its initial burden of proving the existence of an arbitration agreement. See Wood Decl., ¶ 5, Ex. A. Defendant has provided a copy of the Arbitration Agreement that Plaintiff electronically signed. 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.

The burden thus shifts to Plaintiff to prove by a preponderance of the evidence any facts necessary to preclude enforcement of the Arbitration Agreement. Toward that end, Plaintiff contends that the Arbitration Agreement is not valid and/or not enforceable because Defendant has: (1) failed to properly authenticate Plaintiff's electronic signature on that document, and (2) waived its right to pursue arbitration by availing itself of the court's 'litigation apparatus,' failing to produce the Arbitration Agreement, and delaying discovery of the Arbitration Agreement in an effort to delay this case. The court respectfully disagrees.

As set forth in Condee, Defendant only needed to attach a copy of the Arbitration Agreement with the parties' respective electronic signatures to satisfy its initial burden. Plaintiff thus needs to identify a factual dispute as to the Arbitration Agreement's existence, for example, by disputing the signatures' authenticity(ies). 'To meet this burden, the arbitration opponent must offer admissible evidence creating a factual dispute as to the authenticity of their signatures. The opponent need not prove that his or her purported signature is not authentic, but must submit sufficient evidence to create a factual dispute and shift the burden back to the arbitration proponent who retains the ultimate burden of proving, by a preponderance of the evidence, the authenticity of the signature.' Iyere v. Wise Auto Group (2023) 87 Cal. App. 5th 747, 755 (citing Espejo v. Southern California Permanente Medical Group (2016) 246 Cal. App. 4th 1047, 1060).

In this case, Plaintiff denies signing the Arbitration Agreement. See McLaughlin Decl., ¶ 3. In the face of Plaintiff's denial, Defendant has the burden of proving by a preponderance of the evidence that the signature is authentic (see Cal. Evid. Code § 1401). See Ruiz, 232 Cal. App. 4th at 846. As the Ruiz court explained: any writing must be authenticated before the writing, or secondary evidence of its content, may be received in evidence. (Evid. Code, § 1401; People v. Valdez (2011) 201 Cal.App.4th 1429, 1435, [135 Cal.Rptr.3d 628]; People v. Goldsmith (2014) 59 Cal.4th 258, 271, [172 Cal.Rptr.3d 637, 326 P.3d 239].) 'Authentication of a writing means (a) the introduction of evidence sufficient to sustain a finding that it is the writing that the proponent of the evidence claims it is or (b) the establishment of such facts by any other means provided by law.' (Evid. Code, § 1400, italics added; People v. Valdez, supra, at p. 1435, 135 Cal.Rptr.3d 628 [proponent meets its burden of producing evidence to show authenticity of writing ' 'when sufficient evidence has been produced to sustain a finding that the document is what it purports to be.' ']; People v. Skiles (2011) 51 Cal.4th 1178, 1187, [126 Cal.Rptr.3d 456, 253 P.3d 546] ['[w]riting can be authenticated by circumstantial evidence and by its contents.'].) Ibid., at 843. California Civil Code § 1633.9(a) provides that '[a]n electronic record or signature is attributable to a person if it was the act of the person. The act of the person may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable.' Cal. Civ. Code § 1633.9(a).

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3078487 CASE NUMBER: CASE TITLE: MCLAUGHLIN VS. MEDICELL TECHNOLOGIES, LLC [IMAGED] 37-2023-00042707-CU-WT-NC In this case, Defendant has submitted a declaration and a supplemental declaration from its Executive Vice President and Chief Financial Officer, Ray Wood. Mr. Wood declares that he, in his role with Defendant, is responsible for overseeing and maintaining Defendant's personnel files and employee records, including the Plaintiff's employment records. See Wood Supp. Decl., ¶ 2. Mr. Wood explains that Defendant implemented a mutually binding arbitration agreement for its employees on or about January 1, 2023, which agreement was placed at the end of Defendant's Employee Handbook and required a separate employee signature. Ibid., ¶ 4. Mr. Wood further explains that Defendant utilizes a digital signature application called 'Zoho Sign' to secure employee signatures on various documents, including the Arbitration Agreement. Ibid., ¶¶ 5. Mr. Wood further explains that he used the Zoho Sign application to send the Arbitration Agreement to Plaintiff at Plaintiff's company email for signature and review. Ibid., ¶¶ 6-7, 9. Mr. Wood states that he has knowledge that the electronic signature applied to the Arbitration Agreement necessarily was the act of Plaintiff because: (1) Plaintiff was the only person who accessed the contents sent to the company email assigned to Plaintiff (brad@defenage.com); (2) Defendant uses a two-factor authentication process through its electronic mail provider, Zoho Mail, which requires Plaintiff to input a unique code sent to the Zoho mail application linked to Plaintiff's personal mobile phone; and (3) Plaintiff would have to select the correct code to log in successfully to the brad@defenage.com account. Ibid., ¶ 8. Finally, Mr. Wood declares that Defendant's records show that: (1) Plaintiff viewed the Arbitration Agreement on March 12, 2023 at 11:43 a.m.; (2) Plaintiff viewed the Arbitration Agreement; and (3) Plaintiff successfully signed the Arbitration Agreement and returned it for Mr. Wood's countersignature. Ibid., ¶¶ 9-13, Exs. 2-8. Accordingly, the court finds that Defendant properly has authenticated Plaintiff's electronic signature and consequently has met its burden of proving the existence of an arbitration agreement between the parties.

Plaintiff's remaining argument, namely that Defendant waived its right to pursue arbitration, is not well taken. As the California Supreme Court has explained: State law, like the FAA, reflects a strong policy favoring arbitration agreements and requires close judicial scrutiny of waiver claims. (Christensen v. Dewor Developments (1983) 33 Cal.3d 778, 782, 191 Cal.Rptr. 8, 661 P.2d 1088.) Although a court may deny a petition to compel arbitration on the ground of waiver (§ 1281.2, subd. (a)), waivers are not to be lightly inferred and the party seeking to establish a waiver bears a heavy burden of proof. (Christensen v. Dewor Developments, supra, 33 Cal.3d at p. 782, 191 Cal.Rptr.8, 661 P.2d 1088; see also Doers v. Golden Gate Bridge etc. Dist. (1979) 23 Cal.3d 180, 189, 151 Cal.Rptr. 837, 588 P.2d 1261 (Doers).) Saint Agnes Medical Center v. PacifiCare of California (2003) 31 Cal. 4th 1187, 1195. In determining whether a party has waived its right to arbitration, courts consider, among other things, the following factors: (1) whether the party's actions are inconsistent with the right to arbitrate; (2) whether 'the litigation machinery has been substantially invoked' and the parties 'were well into preparation of a lawsuit' before the party notified the opposing party of an intent to arbitrate; (3) the proximity in time between the request for arbitration and the trial date; (4) whether a defendant seeking arbitration filed a counterclaim without asking for a stay of the proceedings; (5) 'whether important intervening steps [e.g., taking advantage of judicial discovery procedures not available in arbitration] had taken place'; and (6) whether the delay 'affected, misled, or prejudiced' the opposing party. Ibid., at 1196 (citing Sobremonte v. Sup. Ct.) (1998) 61 Cal. App. 4th 980. Against this backdrop, the court must conclude that Plaintiff has not satisfied the heavy burden of demonstrating a waiver.

More specifically, Plaintiff filed the operative pleading on October 2, 2023. See ROA No. 1. Defendant was served via substitute service on October 20, 2023. See ROA No. 8. Plaintiff thereafter filed and served his First Amended Complaint on December 13, 2023. See ROA No. 9. On January 17, 2024 – without filing a responsive pleading or any cross-complaint and well before any trial and trial-related deadlines have been set – Defendant filed the pending petition. See ROA No. 16. Based on the foregoing, the court finds that Defendant has not engaged in any conduct that is inconsistent with the right to arbitrate. Plaintiff has not demonstrated that the 'litigation machinery has been substantially invoked,' nor has Plaintiff established that Defendant took any steps that would be inconsistent with Calendar No.: Event ID: TENTATIVE RULINGS

3078487 CASE NUMBER: CASE TITLE: MCLAUGHLIN VS. MEDICELL TECHNOLOGIES, LLC [IMAGED] 37-2023-00042707-CU-WT-NC procedures not available to the parties in arbitration. Finally, Plaintiff has not shown that he has been, or otherwise will be, prejudiced by the submission of his claims to arbitration. In sum, the court finds that Plaintiff has not met his burden of demonstrating that Defendant waived its right to arbitrate the claims set forth in the operative pleading.

In light of the foregoing, the court grants Defendant's petition to compel arbitration. This action is stayed pending the outcome of the arbitration hearing. See Cal. Code Civ. P. § 1281.4.

This is the tentative ruling for the hearing at 1:30 p.m. on Friday, February 16, 2024. If no party appears at the hearing, this tentative ruling will become the order of the court as of February 16, 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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