Judge: Douglas W. Stern, Case: 22STCV32607, Date: 2023-01-18 Tentative Ruling

Case Number: 22STCV32607    Hearing Date: January 18, 2023    Dept: 68

Rosa Gonzalez v. Front Porch Communities and Services, et al., case no. 22STCV32607

MOVING PARTY:  Defendants Front Porch Communities and Services and Front Porch Communities Foundation

RESP. PARTY:        Plaintiff Rosa Gonzalez

MOTION TO COMPEL ARBITRATION

Background

On October 5, 2022, Plaintiff Rosa Gonzalez (Plaintiff) filed the instant action against her employers, Defendants Front Porch Communities and Services and Front Porch Communities Foundation (Defendants). The Complaint asserts the following causes of action:

1.      Discrimination on the Basis of Physical Disability

2.      Failure to Accommodate

3.      Failure to Engage in the Interactive Process

4.      Failure to Prevent Discrimination and Harassment

5.      Retaliation

6.      Whistleblower Violations

7.      Wrongful Termination in Violation of Public Policy

On November 9, 2022, Defendants filed the instant motion to compel arbitration. Plaintiff opposes.

Legal Standard on Motion to Compel Arbitration

California law incorporates many of the basic policy objectives contained in the Federal Arbitration Act, including a presumption in favor of arbitrability. (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 971-972.) The petitioner bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence, the party opposing the petition then bears the burden of proving by a preponderance of the evidence any fact necessary to demonstrate that there should be no enforcement of the agreement, and the trial court sits as a trier of fact to reach a final determination on the issue. (Rosenthal v. Great Western Financial Securities Corp. (1996) 14 Cal.4th 394, 413.) The Court is empowered by Code of Civil Procedure section 1281.2 to compel parties to arbitrate disputes pursuant to an agreement to do so. 

Code of Civil Procedure § 1281.2 states that:

“The court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists, unless it determines that:

(a) The right to compel arbitration has been waived by the petitioner; or

(b) Grounds exist for the revocation of the agreement.

(c) A party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact. For purposes of this section, a pending court action or special proceeding includes an action or proceeding initiated by the party refusing to arbitrate after the petition to compel arbitration has been filed, but on or before the date of the hearing on the petition. This subdivision shall not be applicable to an agreement to arbitrate disputes as to the professional negligence of a health care provider made pursuant to Section 1295.” (CCP § 1281.2.)

The party petitioning to compel arbitration under written arbitration agreement bears the burden of proving the existence of a valid arbitration agreement by a preponderance of the evidence, and party opposing petition must meet the same evidentiary burden to prove any facts necessary to its defense. The trial court acts as the trier of fact, weighing all the affidavits, declarations, and other documentary evidence. (CCP § 1281.2; Provencio v. WMA Securities, Inc., 125 Cal.App.4th 1028, 1031.) 

Evidentiary Objections

            Plaintiff objects to portions of Defendants’ declarations.

            Sustained: None

            Overruled: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10

            Defendants object to portions of Plaintiff’s declaration.

            Sustained: 3

            Overruled: 1, 2, 4, 5, 6, 7, 8, 9

Discussion

            Plaintiff argues that the parties’ arbitration agreement should not be enforced because there was no mutual assent, and the agreement is procedurally and substantively unconscionable.

A.    Mutual Assent

General principles of contract law determine whether the parties have entered a binding agreement to arbitrate.  (Avery v. Integrated Healthcare Holdings, Inc. (2013) 218 Cal.App.4th 50, 60; Chan v. Drexel Burnham Lambert, Inc. (1986) 178 Cal.App.3d 632, 640–641.)  This includes the principle that the basic goal of contract interpretation is to give effect to the parties’ mutual intent at the time of contract.  (Mitri v. Arnel Management Co. (2007) 157 Cal.App.4th 1164, 1170, quotations and citations omitted.)  Contract law also requires the parties agree to the same thing in the same sense.  (Civ. Code, §§ 1550, 1565, 1580; Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793.)  

            In opposition, Plaintiff argues that there was no mutual assent because Plaintiff was not provided with a Spanish copy of the arbitration agreement, as Spanish is her primary language, nor given time to review the document. (Opposition at pp. 4-6.)

“The fact that an individual who signs an arbitration agreement is not proficient in English, is not, by itself enough to demonstrate fraud in the inception, even if the agreement was provided only in English.” (Castillo v. CleanNet USA, Inc., 358 F.Supp.3d 912, 932 (2018).) No law requires that parties dealing at arm’s length have a duty to explain to each other the terms of a written contract. (Ramos v. Westlake Services LLC (2015) 242 Cal.App.4th 674, 686.) Thus, California courts have held that “one who accepts or signs an instrument, which on its face is a contract, is deemed to assent to all its terms, and cannot escape liability on the ground she has not read it.” (Id. (internal quotations omitted).) If a plaintiff “had reasonable opportunity to know of the character or essential terms of the proposed contract” and “fails to learn the nature of the document he or she signs, such negligence precludes a finding that the contract is void for fraud in the execution.” (Rosenthal v. Great W. Fin. Sec. Corp. (1996) 14 Cal.4th 394, 423 (internal quotations omitted).) In fact, failure to read or understand the arbitration clause is generally no defense to its enforcement. (Madden v. Kaiser Found. Hosps. (1976) 17 Cal.3d 699, 710.)

Under California law, it is axiomatic that a party who signs an agreement is presumed to have read and understood the agreement. (Roldan v. Callahan & Blaine (2013) 219 Cal.App.4th 87, 93.) Indeed, California Courts of Appeal have repeatedly held that “[a] party cannot use his or her lack of diligence to avoid an arbitration agreement. (24 Hour Fitness, Inc. v. Superior Court (1998) 66 Cal.App.4th 1199, 1215.)

Here, Plaintiff has not presented any evidence that Defendants refused or denied her the chance to further the review the document before she signed it. Nor has she presented any evidence that Defendants refused to answer questions regarding the document or denied her a translator. She signed the agreement, and under California law, that is typically enough to demonstrate that she understood what she was signing. She cannot use her own lack of diligence to obtain a finding that the agreement is void. Her purported failure to understand is not a defense to the enforcement of the agreement.

Accordingly, the Court finds that there was mutual assent.

B.     Unconscionability

Plaintiff also argues that the arbitration agreement should not be enforced because it is unconscionable. (Opposition at pp. 6-9.)

To satisfy conscionability requirements, an arbitration agreement must provide for the selection of a neutral arbitrator, allows both parties to “take all reasonable discovery provided by law;” gives the arbitrator the authority to “provide any relief available in a court of law or equity;” requires the arbitration decision to be in “writing setting forth…findings by fact and conclusion of law;” and the arbitration feeds to be paid by Defendant. (See Armendariz v. Found Health Psychcare Servs., Inc. (2000) 24 Cal.4th 83.)

Further, an arbitration agreement is unenforceable if it is both procedurally and substantively unconscionable.  (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 125; Sanchez v. Valencia Holding Co., LLC (2015) 61 Cal.4th 899, 910.)  But procedural and substantive unconscionability need not be present in the same degree. (OTO, supra, 8 Cal.5th at 125.)  Courts use a “sliding scale” approach—“the more substantively unconscionable the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.”  (Armendariz v. Found Health Psychcare Servs., Inc., supra, 24 Cal.4th at 114.)   Under general contract principles, unconscionability has both a procedural and substantive element, with the former focusing on oppression or surprise due to unequal bargaining power, and the latter focusing on overly harsh or one-sided rules. (Id.) Both procedural and substantive unconscionability must be present in order for a court to exercise its discretion to refuse to enforce a contract on the basis of unconscionability. (Stirlen v. Supercuts, Inc. (1997) 51 Cal.App.4th 1519, 1533.)

                                i.            Procedural Unconscionability

“Procedural unconscionability pertains to the making of the agreement; it focuses on the oppression that arises from unequal bargaining power and the surprise to the weaker party that results from hidden terms or the lack of informed choice.”  (Ajamian v. CantorCO2e, L.P. (2012) 203 Cal.App.4th 771, 795.) 

            Plaintiff argues that the agreement is procedurally unconscionable because Defendants presented it to Plaintiff as mandatory, Plaintiff was in a weaker bargaining position, and Plaintiff did not have the opportunity to negotiate or opt-out of the agreement. (Opposition at p. 7.) She also argues that it is procedurally unconscionable because she was not provided with the arbitration rules. (Opposition at pp. 7-8.)

            Courts have found that presenting an arbitration agreement as a condition of employment or continued employment on a take it or leave it basis is not enough by itself to bar enforcement of the agreement. (See McManus v. CIBC World Markets Corp. (2003) 109 Cal.App.4th 76, 92-103.) Courts have also found that a party’s own lack of diligence in reading an arbitration agreement does not bar its enforcement, and that a party 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.” (See Brookwood v. Bank of America (1996) 45 Cal.App.4th 1667, 1674.)

            Failure to attach arbitration rules does not render an agreement procedurally unconscionable. (See Lane v. Francis Capital Mgmt. LLC (2014) 224 Cal.App.4th 676, 691.)

Here, regardless of whether signing the document was a condition of Plaintiff’s employment, it is still enforceable. Additionally, Plaintiff was provided with the JAMS Rules, just in the form of a weblink that was in the text of the arbitration agreement. (Burton Decl. ¶ 4, Ex. 1, § 2(a).) This would not make the agreement unenforceable, either.

Accordingly, the Court finds that there is no procedural unconscionability sufficient to bar enforcement of the arbitration agreement.

                              ii.            Substantive Unconscionability

Substantive unconscionability focuses on the actual terms of the agreement and evaluates whether the terms create overly harsh or one-sided results as to shock the conscience.  (Suh v. Superior Court (2010) 181 Cal.App.4th 1504, 1515.)

            Plaintiff argues that the arbitration agreement is substantively unconscionable because the content and font of the agreement are not conspicuous and prominent enough and the substance of the arbitration rules are not provided in the text of the agreement. (Opposition at pp. 7-9.)

            While the agreement does not provide the substance of the arbitration rules beyond a hyperlink, the agreement purports to use the JAMS rules, which are fairly standard for arbitration agreements. (Burton Decl. ¶ 4, Ex. 1.) Additionally, Plaintiff argues that the font size is smaller than the required 10-point font size. While the font may be slightly smaller than this, the legibility of the document is not affected. Additionally, Plaintiff’s argument that the term “arbitration” is not in a conspicuous enough position is without merit because at the top of the document, the agreement is titled “employee acknowledgment form/arbitration agreement,” and all of the headings for the document are bolded, and several use the word “arbitration.” (Burton Decl. ¶ 4, Ex. 1.)

Accordingly, Plaintiff has not met her burden showing that the arbitration agreement is unenforceable due to substantive unconscionability. Therefore, the agreement is enforceable.

            Unconscionable Provisions May Be Severed

            The Court did not find that any provisions were unconscionable; therefore, it is unnecessary to sever any provisions.

Conclusion

Defendants’ motion to compel arbitration is granted. The case is stayed pending arbitration. (CCP §§ 1281.4, 1292.6.)