Judge: Daniel M. Crowley, Case: 22STCV21632, Date: 2022-10-25 Tentative Ruling

Case Number: 22STCV21632    Hearing Date: October 25, 2022    Dept: 28

Motion to Compel Arbitration

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

BACKGROUND

Defendant Buddy Bar Casting Corporatino (BBCC) employed plaintiff Maria Arellano from 1995 through 2020. (Compl. ¶¶ 10-12.) In March 2020, BBCC laid off a group of five employees, including Arellano, purportedly “due to the [COVID-19] pandemic.” (Id. ¶ 15.) Arellano alleges BBCC used the pandemic’s impact as a pretext to lay off its older employees. (Ibid.)

            Arellano now sues BBCC for twelve causes of action arising from her employment. Her claims include discrimination on the basis of age, retaliation, harassment, failure to prevent same, violation of California whistleblower statutes, negligent retention, breach of contract, breach of the implied covenant of good faith and fair dealing, and intentional infliction of emotional distress.

            BBCC moved to compel Arellano to arbitrate her claims against it on September 9, 2022. BBCC offers the declaration of “Payroll Personnel” Marcella Plascencia, who states that “[i]n August 2019, Buddy Bar rolled out an arbitration agreement and had all existing employees sign the agreement.” (Declaration of Marcella Plascencia [Plasc. Decl.] ¶ 2.) Plascencia authenticates a copy of the arbitration agreement (Agreement) signed by Arellano. (Id., Ex. A.) The Agreement signed by Arellano is in Spanish. (Ibid.) BBCC has also filed a copy of the Agreement translated into English by a certified court translator. (Declaration of Conchita B. Lozano [Lozano Decl.] ¶¶ 1-2 and Ex. C.) Arellano does not dispute the authenticity of the Agreement or its translation, nor does she dispute that she signed the Agreement.

            The parties to the Agreement, BBCC and Arellano, agree that “[e]ach … is entering willingly and knowingly into the Agreement to obtain the benefits of a fast and impartial dispute resolution.” (Id. Ex. C, p. 1.) The parties “authorize the resolution by way of binding arbitration of all claims or controversies by which a … court would otherwise be authorized to grant relief….” (Ibid.) Paragraph 2 of the Agreement defines “claims and controversies” expansively in a manner that encompasses all the claims raised in Arellano’s complaint. (Id. at pp. 1-2.) The Agreement provides for arbitration by a third-party neutral conducted according to the American Arbitration Association’s employment arbitration rules. (Id. at pp. 2-4.)

            Arellano has submitted written argument, but no testimony or evidence, in response to BBCC’s motion.

            Trial is set for January 2, 2024.

PARTY’S REQUESTS

            Defendant BBCC requests that the Court enforce the Agreement by (1) issuing an order compelling plaintiff to arbitrate her claims, and (2) dismissing the instant action.

            Plaintiff Arellano asks that defendant’s motion be denied because the Agreement is procedurally and substantively unconscionable.

LEGAL STANDARD

Under California and federal law, public policy favors arbitration as an efficient and less expensive means of resolving private disputes. (Moncharsh v. Heily & Blasé (1992) 3 Cal.4th 1, 8-9; AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333, 339.) Accordingly, whether an agreement is governed by the California Arbitration Act or the Federal Arbitration Act, courts resolve doubt about an arbitration agreement’s scope in favor of arbitration. (Moncharsh, supra, 3 Cal.4th at p. 9; Comedy Club, Inc. v. Improv West Associates (9th Cir. 2009) 553 F.3d 1277, 1284; see also Engalla v. Permanente Med. Grp., Inc. (1997) 15 Cal.4th 951, 971-72 [“California law incorporates many of the basic policy objectives contained in the Federal Arbitration Act, including a presumption in favor of arbitrability [citation] and a requirement that an arbitration agreement must be enforced on the basis of state law standards that apply to contracts in general [citation].”].) “[U]nder both the FAA and California law, ‘arbitration agreements are valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.’ (Armendariz [v. Foundation Health Psychcare Services, Inc. (2000)] 24 Cal.4th [83,] 98…[Armendariz].).” (Higgins v. Superior Court (2006) 140 Cal.App.4th 1238, 1247.) 

            “Code of Civil Procedure section 1281.2 requires a trial court to grant a petition to compel arbitration ‘if the court determines that an agreement to arbitrate the controversy exists.’ (Code Civ. Proc. § 1281.2.)”  (Avery v. Integrated Healthcare Holdings, Inc. (2013) 218 Cal.App.4th 50, 59.) Accordingly, “when presented with a petition to compel arbitration, the court’s first task is to determine whether the parties have in fact agreed to arbitrate the dispute.” (Id. at p. 59.) Generally, on a petition to compel arbitration, the court must grant the petition unless it finds either (1) no written agreement to arbitrate exists; (2) the right to compel arbitration has been waived; (3) grounds exist for revocation of the agreement; or (4) litigation is pending that may render the arbitration unnecessary or create conflicting rulings on common issues. (Ibid.; see also Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 218-219.) “In these summary proceedings the trial court sits as a trier of fact, weighing all the affidavits, declarations, and other documentary evidence, as well as oral testimony received at the court’s discretion, to reach a final determination.” (Avery, supra, at p. 59; accord Rosenthal, supra, 14 Cal.4th 394, 413.)

            The party seeking to compel arbitration bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence.  (Engalla, supra, 15 Cal.4th 951, 972.)  A petition to compel arbitration must allege both a “written agreement to arbitrate” the controversy, and that a party to that agreement “refuses to arbitrate” the controversy. (Code Civ. Proc. § 1281.2.) It then becomes plaintiff’s burden, in opposing the motion, to prove by a preponderance of the evidence any fact necessary to her opposition. (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413, citing Strauch v. Eyring (1994) 30 Cal.App.4th 181, 186.)

Since binding arbitration is a matter of contract, the parties may freely delineate the area of its application, and a proceeding to compel arbitration is in essence a suit in equity to compel specific performance of a contract.  (Freeman v. State Farm Mutual Auto Insurance Co. (1975) 14 Cal.3d 473, 479; Morris v. Zuckerman (1967) 257 Cal.App.2d 91, 96.)  Arbitration, as a general rule, should be upheld by the court, unless it can be said with assurance that an arbitration clause is not susceptible to an interpretation covering the asserted dispute.  (Bos Material Handling, Inc. v. Crown Controls Corp. (1982) 137 Cal.App.3d 99, 105; O’Malley v. Wilshire Oil Co. (1963) 59 Cal.2d 482, 490-491.)  The court should give effect to the parties’ intentions in light of the usual and ordinary meaning of the contractual language and the circumstances under which the agreement was made.  (Victoria v. Superior Court (1985) 40 Cal.3d 734, 744.) 

JUDICIAL NOTICE

            The court on its own motion takes judicial notice of the Employment Arbitration Rules and Mediation Procedures of the American Arbitration Association, amended and effective November 1, 2009, attached as Exhibit A to the Declaration of Jason M. Guyser in support of the instant motion.

DISCUSSION

Defendant has presented prima facie evidence of an enforceable arbitration agreement.

            Defendant has alleged and presented an arbitration agreement signed by both parties, covering the subject matter of the dispute in question. (E.g. Mot. 6:7-8.) Plaintiff does not question the authenticity of the arbitration agreement. Defendant also alleges plaintiff has refused to arbitrate the instant dispute. (Id. 6:4-6.)

“[A]n arbitration agreement is lawful if it ‘(1) provides for neutral arbitrators, (2) provides for more than minimal discovery, (3) requires a written award, (4) provides for all of the types of relief that would otherwise be available in court, and (5) does not require employees to pay either unreasonable costs or any arbitrators’ fees or expenses as a condition of access to the arbitration forum. Thus, an employee who is made to use arbitration as a condition of employment ‘effectively may vindicate [his or her] statutory cause of action in the arbitral forum.’ (Cole [v. Burns Int. Sec. Services (1997) 105 F.3d 1465,] 1482, italics omitted.)” (Armendariz, supra, 24 Cal.4th 83, 102.)

The Agreement satisfies all five Armendariz factors, either by its own terms or by reference to the Employment Arbitration Rules and Mediation Procedures of the American Arbitration Association (AAA Rules). Paragraph 4 of the Agreement states that “[a]ny arbitration of disputes will be conducted by a neutral arbitrator.” (Lozano Decl. Ex. C, p. 2.) Paragraph 13 of the Agreement permits discovery according to the AA Rules; AAA Rule 9 states grants the neutral arbitrator “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….” (Lozano Decl. Ex. C, p. 3; AAA Rules (2009) at p. 14.) Paragraph 14 of the Agreement states that “[t]he Arbitrator will issue an award in writing, establishing the award and the basis for the same”, and “[t]he Arbitrator shall have the power to grant any other type of relief available in a court of competent jurisdiction.” (Lozano Decl. Ex. C, p. 4.) Finally, the Agreement provides that BBCC will pay costs of arbitration in excess of ordinary filing fees. (Id. at p. 3.)

The Court finds defendant has alleged the existence of a written agreement to arbitrate this controversy and plaintiff refuses to so arbitrate. The Court finds that an agreement to arbitrate exists. Defendant has carried its prima facie burden.

Plaintiff has not established any defense to enforcement of the arbitration agreement.

As set forth above, the party resisting arbitration bears the burden of establishing a defense to enforcement once its opponent presents prima facie evidence of an agreement to arbitrate. (Rosenthal, supra, 14 Cal.4th 394, 414.) The party must establish its defense based on a preponderance of the evidence based on affidavit, declaration, or documentary evidence. (Ibid.) Plaintiff filed papers opposing defendant’s motion on October 17, 2022. She filed no declaration or other evidence supporting her motion.

(In fact, the Court notes many of the unsupported factual contentions in the opposition papers appear to refer to a different set of facts than those contemplated in the complaint or defendant’s motion. For instance, Arellano argues “[i]t is evident Plaintiff ‘agreed’ to arbitration with no real bargaining power” because “[t]he arbitration agreement is contained in Plaintiff’s Applicant Statement, a contract he had no opportunity to negotiate.” (Opp. at p. 7.) There is no “Applicant Statement” involved in this matter. The document Arellano signed is captioned “Arbitration Agreement”, not “Applicant Statement.” According to the complaint and the undisputed declarations offered by defendant, Arellano signed the Agreement when she had already been working for BBCC for more than twenty years. The opposition papers also repeatedly refer to Arellano as “he”, whereas the complaint refers to Arellano almost without exception as “she”, which, though not problematic by itself, raises further confusion when combined with irrelevant facts in the absence of testimony.)

            Arellano has not offered any evidence in support of her contention that the Agreement is unconscionable, procedurally or substantively. She has not carried her burden. The Court finds that none of the exceptions stated in Code of Civil Procedure section 1281.2, subdivisions (a) through (d), exist.

The Court dismisses the action.

            Where all of one party’s claims are subject to arbitration, such that “nothing would remain to litigate” in court following arbitration, there is “no legitimate reason” for the court not to dismiss as to that party upon sustaining a motion to compel arbitration. (24 Hour Fitness v. Superior Court (1998) 66 Cal.App.4th 1199, 1209.) Such is the case here. None of plaintiff’s claims fall outside the scope of the arbitration agreement; in fact, plaintiff has not argued any of her claims fall outside the Agreement’s scope. Nor has she argued the case should not be dismissed in the event the Court grants the instant motion.

            The Court finds that all plaintiff’s claims are subject to the Agreement. Plaintiff has not contended otherwise. The Court stays the instant matter pending the outcome of the arbitration.

CONCLUSION

            The motion is GRANTED. The Court stays the instant matter pending the outcome of the arbitration.  The Court sets a Conference regarding the status of the arbitration on April 28, 2023 at 8:30 a.m. in Dept. 28. 

            Plaintiff is ordered to give notice of this ruling to all parties and file proof of service of the ruling with the Court within five days.

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