Judge: Daniel M. Crowley, Case: 23STCV17105, Date: 2024-02-20 Tentative Ruling

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Case Number: 23STCV17105    Hearing Date: February 20, 2024    Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

Defendants North Palms Rehabilitation & Wellness Centre LP dba Country Villa North Convalescent Center’s; Pursue Health, LLC’s, and Shlomo Rechnitz’s motion to compel Plaintiffs Jacquelyn Snead’s, by and through her Successor in Interest, Alfred Snead, and Alfred Snead’s claims in their Complaint to arbitration is denied.

Defendants North Palms Rehabilitation & Wellness Centre LP dba Country Villa North Convalescent Center [erroneously sued as RRT Enterprises L.P.] (“Country Villa”), Pursue Health, LLC (“Pursue Health”), and Shlomo Rechnitz (“Rechnitz”) (collectively, “Defendants”) move to compel Plaintiffs Jacquelyn Snead, by and through her Successor in Interest, Alfred Snead (“Jacquelyn”), and Alfred Snead (“Alfred”) (collectively, “Plaintiffs”) to arbitrate all their claims alleged in their complaint (“Complaint”) and to stay all proceedings in this action pending completion of arbitration.  (Notice Motion, pgs. 1-2; 9 U.S.C. §§1 et seq.; C.C.P. §§1290 et seq., 1281.4, 1292.8.)

          Background

On July 21, 2023, Plaintiffs filed the operative Complaint in the instant action against Defendants alleging four causes of action: (1) Elder Abuse and Neglect (Welfare and Institutions Code §15600 et seq.); (2) Negligence; (3) Violation of Resident’s Bill of Rights (Health & Safety Code §1430); and (4) Wrongful Death (Code of Civil Procedure §377.60).  Plaintiffs’ causes of action stem from Jacquelyn’s admission to Country Villa (“Facility”) on September 20, 2022.  (Complaint ¶30.)

On October 12, 2023, Defendants filed the instant motion.  Plaintiffs filed an opposition on October 19, 2023.  Defendants filed their reply February 9, 2024.

Motion to Compel Arbitration

1.     Enforceability of the Arbitration Agreement

Federal law provides for enforcement of this Arbitration Agreement. The Federal Arbitration Act, 9 U.S.C. §1, et seq. (“FAA”), establishes a strong federal policy in favor of arbitration of disputes where a written arbitration agreement exists. Section 2 of the FAA provides, in pertinent part that “[a] written provision . . . to settle by arbitration a controversy thereafter arising out of such contract . . .  shall be valid, irrevocable, and enforceable.”  (9 U.S.C. §2.)  The purpose of the FAA is to “reverse the longstanding judicial hostility to arbitration agreements.” (Gilmer v. Interstate/Johnson Lane Corp. (1991) 500 U.S. 20, 24.)  The FAA places arbitration agreements “on an equal footing with other contracts and [requires courts] to enforce them according to their terms.”  (AT&T Mobility, LLC v. Concepcion (2011) 563 U.S. 333, 339; see also Rent-A-Center West, Inc. v. Jackson (2010) 561 U.S. 63, 67 [“The FAA reflects the fundamental principle that arbitration is a matter of contract.”].)  The FAA will preempt not only a state law that “discriminat[es] on its face against arbitration,” but also a state law that “covertly accomplishes the same objective by disfavoring contracts that (oh so coincidentally) have the defining features of arbitration agreements.”  (Kindred Nursing Centers Limited Partnership v. Clark (2017) 137 S.Ct. 1421, 1426.)

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 . . . 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).  Indeed, the U.S. Supreme Court has stated that the phrase “involving commerce” “cover[s] more than ‘only persons or activities within the flow of interstate commerce,’” but is rather the “functional equivalent of the phrase ‘affecting commerce,’” which signals “Congress’ intent to exercise its commerce power to the full.”  (See Allied-Bruce Terminix Companies, Inc. v. Dobson (1995) 513 U.S. 265, 268, 274, citing United States v. American Building Maintenance Industries (1975) 422 U.S. 271, 276).  In legislating and passing the FAA, Congress intended for any matter that “affects commerce” to be settled by arbitration when the parties have contracted to be bound by such agreements.  (See id.)

The FAA restricts a court’s inquiry related to compelling arbitration to two threshold questions: (1) whether there was an agreement to arbitrate between the parties; and (2) whether the agreement covers the dispute.  (Howsam v. Dean Witter Reynolds, Inc. (2002) 537 U.S. 79, 84.)  Here, both criteria are satisfied. First, Jacquelyn agreed to arbitration when she entered into the Arbitration Agreement (“Agreement”) that contained the relevant arbitration clause.  (Decl. of Crespo ¶¶3, 5, Exhs. 2-3.) [1]  Second, the Agreement expressly covers “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 or not rendered” between Jacquelyn and Country Villa and “any and all other disputes, controversies, demands or claims that relate or arise out of the provision of services or health care or any failure to provide services or health care by Facility.”  (Decl. of Crespo ¶2, Exh. 2 at §§1.1-1.2.) 

California law also favors arbitration for dispute resolution. The California Arbitration Act (“CAA”), codified at C.C.P. §1281 et seq., provides, “A written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract.”  (C.C.P. §1281; see also Grafton Partners L.P. v. Superior Court (2005) 36 Cal.4th 944, 955 [“[U]nlike predispute jury waivers, predispute arbitration agreements are specifically authorized by statute.”].) 

“California law, like federal law, favors enforcement of valid arbitration agreements.” (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 97, 99.)  The public policy in favor of arbitration is so strong that California courts have held that an employee is “bound by the provisions of the [arbitration] agreement regardless of whether [he] read it or [was] aware of the arbitration clause when [he] signed the document.”  (Brookwood v. Bank of America (1996) 45 Cal.App.4th 1667, citing Macaulay v. Norlander (1992) 12 Cal.App.4th 1.)  The only prerequisite for a court to order arbitration is a determination that the parties have entered into an agreement to arbitrate the dispute.  (United Transportation Union v. Southern California Rapid Transit District (1992) 7 Cal.App.4th 804, 808.)  Thus, arbitration must be ordered “unless the agreement clearly does not apply to the dispute in question.” (Vianna v. Doctors’ Management Co. (1994) 27 Cal.App.4th 1186, 1189.)

Defendants submitted evidence that on October 21, 2022, Jacquelyn signed the Agreement.  (Decl. of Crespo ¶2, Exh. 2.)  Pursuant to C.C.P. §1281.2, Defendants demonstrated they made a formal demand for arbitration on October 5, 2023, and that earlier, on September 20, 2023, Plaintiff sent correspondence to Defendants offering to stipulate to arbitration with terms and conditions outside of the terms and conditions detailed in the Agreement.  (Decl. of Crespo ¶¶4, 6, Exhs. 4, 6.)  Defendants therefore shift the burden to Plaintiffs to challenge the authenticity of the agreement.  (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165.)

Plaintiffs’ arguments regarding the validity of the Agreement are well taken.  An arbitration agreement cannot be authenticated merely by producing a declaration from a company manager who “summarily asserted” the opposing party entered into the contract.  (Fabian v. Renovate America, Inc. (2019) 42 Cal.App.5th 1062, 1069.)  In Fabian, the petitioner presented a declaration which only stated the opposing party entered into the contract on specific date.  (Id. at pg. 1070.)  However, the declaration failed to state whether the alleged signatory was presented with a physical or electronic copy, the specific location where or time when the contract was signed, or how the electronic signature could have only been placed by the opposing party.  (Id.)  The Fabian Court held the petition was properly denied since the petitioner failed to provide any specific details about the circumstances surrounding the contract’s execution.  (Id.)

Here, like the situation in Fabian, the declaration of Dalia Medina provides no specific details regarding the alleged execution of the agreement.  Medina’s declaration summarily asserts that she witnessed Jacquelyn sign the arbitration agreement.  (Decl. of Crespo, Exh. 3 at ¶9.)  However, the declaration does not state that the attached agreement is the one Medina witnessed Jacquelyn sign.  Further, the declaration is void of specific facts surrounding the alleged execution of the agreement.  Medina does not state the time of execution or the specific location where it was executed, if Jacquelyn was presented with a physical or electronic copy of the agreement or how the electronic signature would have been placed by Jacquelyn, and the declaration contains no facts regarding Defendants’ security protocols which would ensure that the electronic signature could have only been made by Jacquelyn.

Further, evidence produced by Plaintiffs demonstrating Jacquelyn electronically signed the Admission Agreement on November 1, 2022, contradicts Medina’s declaration stating Jacquelyn signed the Admission Agreement before she signed the Arbitration Agreement, dated October 21, 2022.  (Decl. of Crespo, Exh. 3 at ¶8; Decl. of Petersen ¶3, Exh. B.)

Based on the foregoing, Defendants did not meet their burden to prove the existence of a valid Agreement that is enforceable by Defendants.

2.     Conclusion

Defendants’ motion to compel arbitration is denied.

Moving Party to give notice.

Dated:  February _____, 2024