Judge Daniel M. Crowley, Case Number: 24STCV18720, Date: 2025-06-12 Tentative Ruling

Defendant Kaiser Foundation Hospital’s motion to compel arbitration of Plaintiffs Eric Herzog’s and Jennifer Lawless’ claims in this action is granted. This case is stayed pending arbitration.

Defendant Kaiser Foundation Hospitals [erroneously sued as d/b/a Kaiser Foundation Hospital – West Los Angeles] (“Kaiser”) (“Defendant”) moves for an order compelling arbitration of all claims asserted by Plaintiffs Eric Herzog (“Herzog”) and Jennifer Lawless (“Lawless”), individually and as heirs and successors in interest to Carolyn Herzog (“Decedent”) (collectively, “Plaintiffs”) and staying the instant action during the pendency of arbitration. (Notice of Motion, pg. 2; C.C.P. §1281.2, 1281.4.) Defendant moves on the grounds that a valid, enforceable, and irrevocable written agreement exists which requires arbitration of the pending dispute between Plaintiffs and Kaiser. (Notice of Motion, pg. 2.)

On July 24, 2024, Plaintiffs filed the instant action against Defendant, asserting three causes of action: (1) violations of the Elder and Dependent Adult Civil Protection Act (Welf. & Inst. Code §15600 et seq.; (2) negligence; and (3) wrongful death. (See Complaint.)

Plaintiffs’ causes of action arise from Decedent’s alleged inpatient admission to Kaiser on July 8, 2023. (Complaint ¶24.) Plaintiffs allege Decedent was an 82-year-old female with a medical history of Hypertension, Dysphagia, Muscle Weakness, Pulmonary Hypertension, Pleural Effusion, Scoliosis, Respiratory Disorders, Myocardial Infarction, Atherosclerosis of Aorta, Hyperlipidemia, Age-Related Osteoporosis Without Current Pathological Fracture, Hypothyroidism, Polymyalgia Rheumatica, Chronic Kidney Disease, Pneumonia, Acute Diastolic Heart Failure, and Unspecified Fracture of Unspecified Lumbar Vertebra, which made her dependent on Kaiser’s staff for her activities of daily living. (Complaint ¶24.)

Plaintiffs allege that when Decedent was admitted to Kaiser on July 8, 2023, her condition worsened significantly as a result of Kaiser’s failure to have sufficient staff to provide for her needs. (Complaint ¶26.) Plaintiffs allege that as a result, Decedent was taken off of dialysis on or about the end of July 2023, and died on July 21, 2023, due to Kaiser’s reckless neglect. (Complaint ¶26.)

Defendant filed the instant motion on January 31, 2025. Plaintiffs filed their opposition on May 30, 2025. On June 5, 2025, Defendant filed its reply.

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 United States Supreme Court has specifically held that the FAA applies to employment contracts: “[A]s a matter of law the answer is clear. In the Federal Arbitration Act, Congress has instructed federal courts to enforce arbitration agreements according to their terms.” (Epic Systems Corp. v. Lewis (2018) 138 S.Ct. 1612, 1619 [holding that employees must submit to arbitration agreements including those with collective action waivers].)

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, Decedent agreed to arbitration when she enrolled as a Medicare-eligible Senior Advantage member of Kaiser effective March 1, 2020, and remained continuously enrolled under the Medicare Senior Advantage Agreement/Evidence of Coverage (“EOC”), which is issued annually by Kaiser for eligible enrollees, through the time of the services at issue. (Decl. of Garcia, ¶5, Exh. A.) Kaiser provided evidence that Decedent enrolled as a Medicare Senior Advantage member of Health Plan effective March 1, 2020. (Decl. of Covarrubio ¶4, Exhs. B, C.) The 2023 Senior Advantage Agreement/EOC constitutes the contract between Health Plan and Decedent at the time of the medical services at issue and contains the relevant arbitration clause (“Arbitration Agreement”). (Decl. of Garcia ¶5, Exh. A at pgs. 214-218.) Second, the Arbitration Agreement expressly covers:

· The claim arises from or is related to an alleged violation of any duty incident to or arising out of or relating to this Evidence of Coverage or a member Party’s relationship to Kaiser Foundation Health Plan, Inc. (Health Plan), including any claim for medical or hospital malpractice (a claim that medical services or items were unnecessary or unauthorized or were improperly, negligently, or incompetently rendered), for premises liability, or relating to the coverage for, or delivery of, services or items, irrespective of the legal theories upon which the claim is asserted.

· The claim is asserted by one or more member Parties against one or more Kaiser Permanente Parties or by one or more Kaiser Permanente Parties against one or more member Parties.

· Governing law does not prevent the use of binding arbitration to resolve the claim.

(Decl. of Garcia ¶5, Exh. A at pg. 215.) The Arbitration Agreement states that it applies to “All members enrolled in a Kaiser Permanente Senior Advantage Individual Plan with an effective date of January 1, 2008 or after who have not expressly opted out of the binding arbitration process within 60 calendar days of his or her Senior Advantage effective date.” (Decl. of Garcia ¶5, Exh. A at pg. 214.)

Kaiser provides a separate notice of the arbitration provision to each Senior Advantage individual enrollee, and gives the enrollee the right and opportunity to opt-out of the arbitration program within 60 days of the enrollee’s original enrollment effective date in the plan, by submitting an opt-out form, entitled “Your Right to Opt Out of Kaiser Permanente Senior Advantage’s Arbitration Program,” which Kaiser mailed to Decedent on February 29, 2020. (See Decl. of McWilliams ¶¶3-6, Exhs. D, E.) Decedent had the right to opt-out of the binding arbitration requirement for 60 days from March 1, 2020, the effective date of her 2020 Medicare enrollment, by completing the Arbitration Opt-Out Notice and returning it to the Office of Independent Administrator (“OIA”) in an enclosed pre-addressed envelope. (See Decl. of McWilliams ¶¶3, 6, Exh. A, p. 214 [right to opt-out for 60 days following effective date of enrollment], Exh. D.) Kaiser provided evidence that the OIA’s records reflect that Decedent did not submit an Arbitration Opt-Out Notice. (Decl. of Armas ¶5.) Kaiser sufficiently demonstrated the existence of an enforceable Arbitration Agreement.

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.)

Kaiser proved the existence of an arbitration agreement with Decedent. Defendant submitted evidence that Decedent agreed to arbitration when she enrolled as a Medicare-eligible Senior Advantage member of Kaiser effective March 1, 2020, and remained continuously enrolled under the Medicare Senior Advantage Agreement/EOC, which is issued annually by Kaiser for eligible enrollees, through the time of the services at issue. (Decl. of Garcia, ¶5, Exh. A.)

Plaintiffs do not challenge the existence of the Arbitration Agreement that Decedent entered into with Kaiser, thereby conceding that such an agreement exists. (See Opposition.)

Based on the foregoing, Defendant proved the existence of a valid Arbitration Agreement that is enforceable by Defendant.

· The claim is asserted by one or more member Parties against one or more Kaiser Permanente Parties or by one or more Kaiser Permanente Parties against one or more member Parties.

· Governing law does not prevent the use of binding arbitration to resolve the claim.

(Decl. of Garcia ¶5, Exh. A at pg. 215, emphasis added.) Plaintiffs’ claims against Kaiser include claims for medical or hospital malpractice and implicate an alleged duty as Decedent’s care custodians to protect her from health and safety hazards, provide necessary care and protection in light of her vulnerable condition. (See Complaint ¶40.)

Plaintiffs, who assert a survival claim based on Decedent’s rights, and a wrongful death claim based on the medical care provided to her as a Kaiser member, are bound to arbitrate both claims against Kaiser. Claims pursued by a party’s successor-in-interest, standing in the shoes of the party, are arbitrable under the party’s agreement to arbitrate. (Thomas v. Westlake (2012) 204 Cal.App.4th 605, 613 n.5.) Wrongful death claims proximately caused by professional negligence of a healthcare provider are also subject to binding arbitration. (C.C.P. §1295(g)(2); Ruiz v. Podolsky (2010) 50 Cal.4th 838, 848-852 [“all wrongful death claimants including adult heirs are bound by arbitration agreements entered into pursuant to section 1295”]; Herbert v. Superior Court (1985) 169 Ca1.App.3d 718, 725-727 [patient’s heirs, who were not Health Plan members and not signatories to the agreement, were bound by the patient’s agreement to arbitrate their claims].)

Based on the foregoing, Kaiser met its burden of establishing the Arbitration Agreement covers the causes of action asserted in Plaintiffs’ Complaint.

“[P]rocedural and substantive unconscionability must both be present in order for a court to exercise its discretion to refuse to enforce a contract or clause under the doctrine of unconscionability.” (Armendariz, 24 Cal.4th at pg. 102.) Courts invoke a sliding scale which disregards the regularity of the procedural process of the contract formation, that creates the terms, in proportion to the greater harshness or unreasonableness of the substantive terms themselves, i.e., the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to conclude that the term is unenforceable, and vice versa. (Id., at pg. 114.) Plaintiff bears the burden of proving that the provision at issue is both procedurally and substantively unconscionable.

Plaintiffs argue the Arbitration Agreement is procedurally unconscionable because the Arbitration Agreement is a contract of adhesion. (Opposition, pgs. 6-7.)

“Procedural unconscionability focuses on the elements of oppression and surprise. [Citations] ‘Oppression arises from an inequality of bargaining power which results in no real negotiation and an absence of meaningful choice . . . Surprise involves the extent to which the terms of the bargain are hidden in a ‘prolix printed form’ drafted by a party in a superior bargaining position.’ [Citations.]” (Roman v. Superior Court (2009) 172 Cal.App.4th 1462, 1469.)

Procedural unconscionability “focuses on the unequal bargaining positions and hidden terms common in the context of adhesion contracts.” (24 Hour Fitness, Inc. v. Superior Court (1998) 66 Cal.App.4th 1199, 1212-1213.) Although agreements offered on a “take it or leave it” basis are generally considered contracts of adhesion, this alone is not enough to equate to unconscionability. (See Graham v. Scissor-Tail, Inc. (1981) 28 Cal.3d 807, 817-819 [“To describe a contract as adhesive in character is not to indicate its legal effect. It is, rather, ‘the beginning and not the end of the analysis insofar as enforceability of its terms are concerned.’”].) Adhesion contracts are “fully enforceable . . . unless certain other factors are present which under established legal rules—legislative or judicial—operate to render it otherwise.” (Id. at pgs. 819-820; Harper v. Ultimo (2003) 113 Cal.App.4th 1402, 1409 [adhesion alone does not render arbitration agreements unconscionable]; see also Armendariz, 24 Cal.4th at 114; Lagatree v. Luce, Forward, Hamilton & Scripps, LLP (1999) 74 Cal.App.4th 1105 [discussing many authorities upholding arbitration agreements contained in adhesion contracts].)

First, Plaintiffs’ argument in opposition that Decedent had no meaningful opportunity to negotiate the Arbitration Agreement is unavailing. The adhesive nature of arbitration agreement does not render an agreement unenforceable. (Madden v. Kaiser Foundation Hospitals (1976) 17 Cal.3d 699, 710-712 [rejecting argument that Kaiser’s arbitration provision was an unenforceable contract of adhesion and found that it comported with California’s strong policy in favor of private arbitration]; California Grocers Assn. v. Bank of America (1994) 22 Cal.App.4th 205, 213; Ajamian v. CantorCO2e, LP (2012) 203 Cal.App.4th 771, 796 [“Where there is no other indication of oppression or surprise, the degree of procedural unconscionability of an adhesion agreement is low[.]”].)

Decedent elected Senior Advantage enrollment through Kaiser, using her Medicare benefits. As a Medicare-eligible individual, there were many other options available to Decedent for health care coverage. (See 42 U.S.C. §1395w-21 [providing Medicare eligible individuals with many choices between original Medicare fee-for-service coverage and enrollment in various Medicare HMO and PPO plans].) Plaintiffs cite no legal authority that traditional adhesion contract analysis applies to a Medicare enrollee who is entitled to a range of health care options under the Federal Medicare Act.

Here, not only was Kaiser enrollment not forced upon Decedent, but she was given the right to “opt-out” of arbitration entirely on March 1, 2020, and for 60 days thereafter – with no effect on her enrollment status. (Decl. of McWilliams ¶¶ 3-6, Exhs. D, E.) Kaiser’s Medicare Senior Advantage enrollments utilize the Medicare-approved arbitration opt-out procedure. (See Decl. of Tome, ¶¶2-3, Exhs. F-H.) Decedent did not opt-out. (See Decl. of Armas ¶5.) The availability of the arbitration opt-out election is described in the EOC. (See Decl. of Garcia, Exh. A at pgs. 214-215 [Section 20 – Binding arbitration… “binding arbitration applies to . . . All members . . . who have not expressly opted out of the binding arbitration process within 60 calendar days of his or her Senior Advantage effective date”].)

Further, Decedent’s Kaiser Foundation Health Plan, Inc. (“Health Plan”) is a Medicare Act plan with a Medicare contract and is also licensed under the Knox-Keene Health Care Service Plan Act of 1975 (California Health & Safety Code §§1340 et seq.). The arbitration provision in the Agreement/EOC and the information set forth in the opt-out notice comply with the requirements of the Knox-Keene Act to the extent they are not preempted by the federal regulations applicable to Medicare Act programs, such as Kaiser’s Senior Advantage plan. (See 42 U.S.C. §1395w-26(b)(3) [“Relation to State laws [¶] The standards established under this part shall supersede any State law or regulation (other than State licensing laws or State laws relating to plan solvency) with respect to [Medicare Advantage (“MA”)] plans which are offered by MA organizations under this part”]; Roberts v. United Healthcare Services, Inc. (2016) 2 Cal.App.5th 132, 142-146 [“With express preemption clauses, Congress’ attempt to preempt is clear. [The court must not] disrupt the efficacy of the Center’s preapproval of marketing materials and planned coverage”]; see Clay v. Permanente Medical Group, Inc. (N.D. Cal. 2007) 540 F.Supp.2d 1101, 1110 [Medicare Act preempts application of Health & Safety Code §1363.1]; Drissi v. Kaiser Foundation Hospitals, Inc. (N.D. Cal. 2008) 543 F.Supp.2d 1076, 1079-80 [same].)

Here, Kaiser followed the Medicare-approved procedure for notice and opt-out of arbitration, and the federal Medicare Act preempts any state law requirements to the contrary. Kaiser’s compliance with the CMS-approved arbitration opt-out procedure, and Decedent’s decision not to opt-out of arbitration dispels the notion that the Arbitration Agreement was a contract of adhesion. Plaintiffs do not argue Decedent was coerced into entering into the agreement or was under any degree of time pressure when she selected the Health Plan from a variety of options under the Medicare Act.

Second, Plaintiffs’ argument that no information was provided on discovery available in arbitration is unavailing. (Opposition, pg. 7.) This argument pertains to substantive unconscionability, not procedural unconscionability, and is addressed below.

Based on the foregoing, the Court finds the Arbitration Agreement is, at most, minimally procedurally unconscionable. However, as discussed below, the Court finds the Arbitration Agreement is not substantively unconscionable.

Plaintiffs argue the Arbitration Agreement is substantively unconscionable because Decedent was “guaranteed absolutely no rights under the Arbitration Agreement.” (Opposition, pg. 9; Armendariz, 24 Cal.4th at pg. 110-111.)

“Substantive unconscionability focuses on the actual terms of the agreement and evaluates whether they create ‘overly harsh’ or ‘‘one-sided’ results’ [Citations] that is, whether contractual provisions reallocate risks in an objectively unreasonable or unexpected manner. [Citation] Substantive unconscionability ‘may take various forms,’ but typically is found in the employment context when the arbitration agreement is ‘one-sided’ in favor of the employer without sufficient justification, for example, when ‘the employee’s claims against the employer, but not the employer’s claims against the employee, are subject to arbitration.’ [Citations].” (Roman, 172 Cal.App.4th at pgs. 1469-1470.) In determining whether an arbitration agreement is unconscionable, the Court considers whether the agreement: (1) provides for a neutral arbitrator; (2) provides for reasonable discovery; (3) requires a written award; (4) provides for the same remedies that otherwise would be available in court; and (5) does not require employees to bear costs unique to arbitration. (See Armendariz, 24 Cal.4th at pgs. 102-103.)

Plaintiffs’ argument that no information was provided on discovery available in arbitration is unavailing. (Opposition, pg. 7.) The Arbitration Agreement provides:

Arbitrations shall be governed by this “Binding arbitration” section, Section 2 of the Federal Arbitration Act, and the California Code of Civil Procedure provisions relating to arbitration that are in effect at the time the statute is applied, together with the Rules of Procedure, to the extent not inconsistent with this “Binding arbitration” section.

(Decl. of Garcia ¶5, Exh. A at pg. 218.) The Arbitration Agreement therefore incorporates by reference C.C.P. §1282.2 through §1283.2 regarding the conduct of arbitration proceedings, specifically the conduct of discovery. (See C.C.P. §1282.2(a)(2)(A) [“Either party shall within 15 days of receipt of the notice of hearing have the right to demand in writing, served personally or by registered or certified mail, that the other party provide a list of witnesses it intends to call designating which witnesses will be called as expert witnesses and a list of documents it intends to introduce at the hearing provided that the demanding party provides such lists at the time of its demand. A copy of such demand and the demanding party’s lists shall be served on the arbitrator.”].) Therefore, the Arbitration Agreement sufficiently directs Plaintiffs to the applicable law regarding discovery procedures in arbitration, which applies equally to Plaintiffs and Defendant.

Based on the evidence before the Court, the terms of the Arbitration Agreement do not create overly harsh or one-sided results, satisfying the requirements for a substantively conscionable agreement.

Based on the foregoing, the Court finds the Arbitration Agreement is not substantively unconscionable.

Pursuant to C.C.P. §1281.4, if an application has been made to a court involving order to arbitrate a controversy and such application is undetermined, the court where the application is pending shall, upon motion of a party to the action, stay the action until the application for an order to arbitrate is determined. (C.C.P. §1281.4.)

The case is stayed pending arbitration. The Court sets a non-appearance case review for June 12, 2026, at 8:30 a.m. The parties are directed to submit a joint statement five calendar days in advance, apprising the Court of the status of the arbitration.

Hon. Daniel M. Crowley

Judge of the Superior Court