Judge: Daniel M. Crowley, Case: 21STCV35400, Date: 2023-02-24 Tentative Ruling

Case Number: 21STCV35400    Hearing Date: February 24, 2023    Dept: 28

Defendant Laibco, LLC’s Motion to Compel Arbitration

Having considered the moving, opposing, and reply papers, the Court rules as follows. 

BACKGROUND

On September 24, 2021, Plaintiff Mark Bullard (“Plaintiff”) filed this action against Defendant Laibco, LLC (“Defendant”) for medical malpractice. 

On January 6, 2023, Defendant filed a Motion to Compel Arbitration to be heard on February 24, 2023.  On February 9, 2023, Plaintiff filed an opposition. On February 16, 2023, Defendant filed a reply.

Trial is currently set for January 17, 2024.

PARTY’S REQUESTS

Defendants request the Court compel arbitration and stay or dismiss the proceedings pending the outcome of arbitration.

Plaintiff requests the Court deny the motion.

OBJECTIONS

Plaintiff’s Objections are OVERRULED.

LEGAL STANDARD

A petition to compel arbitration must allege both (1) a “written agreement to arbitrate” the controversy, and (2) that a party to that agreement “refuses to arbitrate” the controversy. (Code Civ. Proc., § 1281.2.) The Court shall grant the petition unless the petitioner waived the right to compel arbitration, or other grounds exist for rescission of the agreement. (Id.) 

California Code of Civil Procedure § 1290.4, subdivision (b) requires a petition to compel arbitration under § 1281.2 to be served on the parties as provided in their arbitration agreement or, if no method was agreed to, in the same manner required for service of summons, if the party to be served has not previously appeared in the proceeding and has not previously been served in accordance with this subdivision. (Miranda v. 21st Century Ins. Co. (2004) 117 Cal.App.4th 913, 928.)

Waiver of the right to arbitrate is assessed through a number of factors, including: (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) whether a party either requested arbitration enforcement close to the trial date or delayed for a long period before seeking a stay; (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. (St. Agnes Medical Center v. PacificCare of California (2003) 41 Cal. 4 th 1187, 1196.)

So long as an arbitration agreement is clear and explicit in meaning, an arbitration agreement can encompass incidents or claims that occurred or accrued prior to the agreement. (Salgado v. Carrows Restaurants, Inc. (2019) 33 Cal.App.5th 356, 356, 360-361.) 

Under California law, an arbitration agreement must be in some measure both procedurally and substantively unconscionable in order for the agreement to be unenforceable. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114.) “But they need not be present in the same degree. . . . [T]he 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.” (Id.) 

Procedural unconscionability focuses on two factors: oppression and surprise. (A & M Produce Co. v.  FMC Corp. (1982) 135 Cal.App.3d 437, 486.) Oppression is an “inequality of bargaining power which results in no real negotiation and ‘an absence of meaningful choice.’” (Id.) Surprise involves the extent to which the agreed upon terms are hidden away “by the party seeking to enforce the disputed terms.” (Id.)

Substantive unconscionability does not have a precise definition, but generally a contract is found to be “substantively suspect if it reallocates the risks of the bargain in an objectively unreasonable or unexpected manner.” (Id. at 487.) 

CCP § 1295 provides the following: (a) Any contract for medical services which contains a provision for arbitration of any dispute as to professional negligence of a health care provider shall have such provision as the first article of the contract and shall be expressed in the following language:  "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."
   (b) Immediately before the signature line provided for the individual contracting for the medical services must appear the following in at least 10-point bold red type:
   ‘NOTICE:  BY SIGNING THIS CONTRACT YOU ARE AGREEING TO HAVE ANY
ISSUE OF MEDICAL MALPRACTICE DECIDED BY NEUTRAL ARBITRATION AND YOU ARE GIVING UP YOUR RIGHT TO A JURY OR COURT TRIAL.  SEE ARTICLE 1 OF THIS CONTRACT.’”

DISCUSSION

On July 19, 2017, Decedent was admitted to Defendant’s long-term care facility. Upon admission, Decedent entered into an arbitration agreement with Defendant, that applied to both parties as well as heirs, representative, successors, etc. The arbitration agreement includes “any dispute as to medical malpractice.” (Ex. A).  It includes the required notice in bold red type. (Ex. A.) Decedent had 30 days to rescind the arbitration agreement, as provided for in CCP § 1295(c). (Ex. A.) Decedent signed both this agreement and other admissions agreements acknowledging he was capable of making such decisions. (Ex. A and B).

In order to compel arbitration, a party must present a written agreement to arbitrate and a party that refuses to arbitrate despite that agreement. Defendant’s provided arbitration agreement clearly shows that Decedent signed the arbitration agreement, as every applicable section is signed by both Decedent and Defendant’s representative. The advance directive acknowledgement provides evidence that Decedent was able to make such decisions; it was also signed by Decedent. (Ex. B). There is evidence of both a written agreement to arbitrate and a refusal to arbitrate, as Plaintiff brought forward this complaint and opposes this motion.

Plaintiff argues that the provided evidence is not admissible as it lacks foundation. Plaintiff specifically notes that the declaration providing foundation for the exhibits is not from a proper declarant—specifically the custodian of records. As stated in Defendant’s reply, a party does not need to follow normal document authentication procedures when bringing a Motion to Compel Arbitration. Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 218-219. Plaintiff does not refute the existence of the arbitration agreement or challenge it as unconscionable. Therefore, the Court grants the motion.

CONCLUSION

Defendant Laibco, LLC’s Motion to Compel Arbitration is GRANTED. The action is stayed pending the outcome of arbitration.

            Moving party is ordered to give notice of this ruling.

Moving Party is ordered to file the proof of service of this ruling with the Court within five days.

The parties are directed to the header of this tentative ruling for further instructions.