Judge: Frank M. Tavelman, Case: 21BBCV00642, Date: 2023-02-03 Tentative Ruling

Case Number: 21BBCV00642    Hearing Date: February 3, 2023    Dept: A

LOS ANGELES SUPERIOR COURT

NORTH CENTRAL DISTRICT - BURBANK

DEPARTMENT A

MOTIONS TO COMPEL ARBITRATION & STAY MATTER

ALLEGATIONS: 

Gloribel Baires (“Gloribel”), individually and as successor-in-interest to and on behalf of Maria Baires (“Decedent”), together with Mirna Vanegas (“Vanegas”) and Samuel Baires (“Samuel”) (collectively, “Plaintiffs”) filed suit against RG Legacy I LLC dba Golden Rose Care Center (“Golden Rose”) & Two Palms Skilled Care LLC dba Two Palms Care Center (“Two Palms,” collectively “Defendants”), alleging that Decedent received substandard care as a resident at Defendants’ facilities.  

Plaintiffs filed a Complaint on October 3, 2022, alleging three causes of action: (1) Elder Abuse and Neglect (Welf. & Ins. Code § 15600 et seq.); (2) Negligence; and (3) Wrongful Death.

HISTORY: 

The Court received Motions to Compel Arbitration and Motions for Stay from both golden Rose and Two Palms on December 1, 2022; the oppositions to these motions were filed by Plaintiffs on January 23, 2023; both replies were filed on January 27, 2023. 

RELIEF REQUESTED: 

Defendants move for an order compelling Plaintiff to submit the entire Complaint to binding arbitration. 

Defendants move to stay the proceedings pending the Court’s final ruling on the motion to compel arbitration, and pending the results of the binding arbitration between the parties. 

ANALYSIS: 

Compel Arbitration 

I.          LEGAL STANDARD 

C.C.P. § 1281.2 states a court shall order a controversy to arbitration when a written agreement to arbitrate exists and a partyrefuses to arbitrate a covered controversy.  A party seeking to compel arbitration must show by a preponderance of the evidence the existence of a valid and enforceable arbitration agreement. (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972.) After meeting this initial burden, then the burden shifts to respondents to prove the falsity or unenforceability of the arbitration agreement. (Ibid.) 

II.        MERITS 

Defendants argue that the Complaint’s survivor claims are based on Decedent having received subpar care at Defendants’ facilities, and that at the time Decedent was admitted to their facilities, Decedent indicated approval for her daughter, Gloribel, to review and sign the admissions documents. Defendants further argue that Gloribel indicated she was familiar with the documents and thereafter signed them, including the arbitration agreement.

In opposition, Plaintiffs argue that: (1) Vanegas and Samuel did not sign the Arbitration Agreement (“Agreement”) and have not agreed to arbitrate their claims, (2) the agreement is procedurally and substantively unconscionable and therefore unenforceable, (3) Gloribel is not subject to the agreement in her individual capacity, and (4) the presence of nonarbitrable claims by third parties as well as third party defendants, presents the probability of inconsistent rulings on common issues of fact and law, necessitating that the entire action be adjudicated in Superior Court.

Defendants’ Burden to Show Enforceable Arbitration Agreement 

The arbitration agreement (“the agreement”) submitted by Defendants is signed by Gloribel as legal representative of Decedent (Exh. A.) The agreement covers claims for medical malpractice and for any other claims arising out of the provision of service by the Facility, admission agreement, or which allege elder abuse or which seek punitive damages. (Id. at pgs. 9-10.) The agreement explains that parties bound are:

“any and all family members who would have a right to bring a claim in state court on behalf of the resident or the resident's estate, a legal representative, including a power of attorney for healthcare and/or financial matters or a court appointed guardian, or any other person whose claim is derived through or on behalf of the resident, including, in addition to those already listed in this definition, any parent, spouse, child, executor, administrator, heir or survivor entitled to bring a wrongful death claim”

This language demonstrates that the agreement applies to Gloribel, Samuel and Vanegas, as family members of Decedent whose claims arise out of Decedent’s claims.

Defendants submit the declaration of Clara Howard (“Howard”) who works in the admissions department of Two Palms. Howard states that on March 18, 2022, she met with Decedent and Gloribel to discuss admissions paperwork. Howard asked Decedent if she wished Gloribel to review and sign the paperwork, to which Decedent responded by nodding her head. (Howard Decl. ¶ 5.) Gloribel indicated to Howard that she was familiar with these documents from a previous nursing facility and thereafter signed the documents. (Howard Decl. ¶ 6.) Howard states that signature of the arbitration agreement was not a condition of Decedent’s admission to the facility but does not state that Gloribel was informed as such.

Plaintiffs argue in their opposition that Defendants have not met their burden in showing the existence of an arbitration agreement. Plaintiffs state that Defendants must “authenticate the documents on which it relies, establish that there is an actual agreement between the parties at issue, and establish that Plaintiff did not opt out of the agreement. Defendant fails to satisfy the burden placed on it.” (Oppo. p. 3.) However, Plaintiffs offer no explanation as to how Defendants have failed to do any of these requirements. Therefore, Defendants established, by a preponderance of the evidence, the existence of a valid, enforceable arbitration agreement between the parties.

Plaintiffs’ Burden to Show Unenforceability

Plaintiffs’ arguments against the existence of an agreement are that Gloribel did not sign the contract in her individual capacity and that Mirna Vanegas and Samuel Baires are not bound as non-signatories. Both arguments explicitly address Gloribel, Mirna, and Samuel’s wrongful death claims. 

C.C.P. §1295 permits patients consenting to arbitration to bind their heirs in wrongful death claims when the agreement manifests an intent to bind. Section 1295 is part of California's Medical Injury Compensation Reform Act (MICRA) which created certain requirements for arbitration agreements of “any dispute as to professional negligence of a health care provider.” It defines “professional negligence” as “a negligent act or omission to act by a health care provider in the rendering of professional services, which act or omission is the proximate cause of a personal injury or wrongful death, provided that such services are within the scope of services for which the provider is licensed and which are not within any restriction imposed by the licensing agency or licensed hospital.” (C.C.P. §1295(g)(2).)

In Ruiz v. Podolsky (2010) 50 Cal.4th 838, 849, the California Supreme Court held that Section 1295 permitted patients who consented to arbitration to bind their heirs in actions for wrongful death. (Id. at p. 841.) It concluded that “all wrongful death claimants are bound by arbitration agreements entered into pursuant to section 1295, at least when, as here, the language of the agreement manifests an intent to bind these claimants. (Id.; Avila v. Southern California Specialty Care, Inc. (2018) 20 Cal.App.5th 835, 841-842.) However, this applies only when the wrongful death claim is a result of professional negligence as defined under MICRA.

In wrongful death cases, the heirs are only bound when the underlying wrongful death is based on professional negligence. (Avila, supra, 20 Cal.App.5th at 841-842.) When the primary basis is based on the Elder Abuse and Dependent Adult Civil Protection Act (Welf. & Inst. Code, § 15600 et seq.), then C.C.P. §1295 does not apply. (Id. at 842.) The arbitration agreement was signed by Gloribel on behalf of the Decedent. Plaintiffs claim that Gloribel did not sign the arbitration agreement in her individual capacity. Regardless, she may still be bound by the agreement as Decedent’s heir. The determining factor is whether the FAC’s wrongful death claim is primarily based on professional negligence or physical elder abuse.

Although the Complaint does not state an explicit claim for professional negligence, Avila’s holding does not turn on whether the pleading states a claim for professional negligence, but rather whether the “primary basis” for the wrongful death claim sounds in professional negligence or elder abuse. It would not make sense for a plaintiff to be able to avoid being bound by arbitration by alleging claims for professional negligence, but simply not stating an express cause of action for professional negligence. The Court of Appeals in Avila instructs that the difference between the two claims rests on whether the pleading alleges a failure to provide medical services, which reads as elder abuse; or the substandard performance of medical services that were provided. (Id. at 843.) The Complaint alleges a great deal of wrongdoing by Defendants, however the Court must focus on those facts which specifically relate to treatment of Decedent. The facts alleged regarding Defendants’ treatment of Decedent primarily relate to a series of five falls suffered by Decedent at the facility. Plaintiffs allege that these falls would not have occurred but for Defendants failure to provide a number of measures such as a lower bed, floor mat, and adequate supervision/assistance. Plaintiffs explain at length the measures which Dr. Danny Farahmandian ordered to prevent further falls and allege that the Defendants thereafter failed to adequately implement those measures. Other allegations of Elder Abuse such as failure to monitor bowel movements, failure to monitor pressure ulcer risk, and failure to document other alleged injuries also sound in professional neglect. Although Plaintiffs do allege outright failure to provide medical care, such as the failure to develop treatment plans, there are many more allegations of failure to provide care to an adequate standard.

The Court thus finds that Plaintiff does not satisfy his burden to show that Plaintiffs’ cause of action for wrongful death has a “primary basis” in elder abuse, rather than professional negligence. The Court finds that the wrongful death cause of action is arbitrable. 

Plaintiffs’ Burden to Show Falsity

Plaintiffs argue the agreement is both procedurally and substantively unconscionable and as such cannot enforced. Defendants contend in reply that the agreement is neither procedurally, nor substantively unconscionable. Additionally, Defendants argue that both procedural and substantive unconscionability are required to deny binding arbitration.

Procedural Unconscionability

Plaintiffs argue that the agreement is procedurally unconscionable in that it does contain adequate warning that the legal representative signee is also signing in their individual capacity. As such, Plaintiffs argue that Gloribel cannot be said to have signed the agreement in her individual capacity. Plaintiffs cite to Lopez v. Bartlett Care Center, LLC (2019) 39 Cal.App.5th 311 where the court found that an agreement which did not contain a warning of signing in individual capacity was unenforceable.

The Court finds that the agreement here is not analogous to agreement in Lopez nor the agreement in Magno v. College Network, Inc. (2016) 1 Cal.App.5th 277. The agreement in Lopez contained absolutely no warning of binding in individual capacity, where the agreement in Magno hid such disclosures in the back page of carbon copy forms. Here the agreement contains the phrase:

“In signing this Agreement, the Legal Representative or Family Member binds both the Resident and themselves individually.”

This phrase is printed in bold typeface and is located directly above the signature of Gloribel on the legal representative signature field. (Exh. A, p. 8.) The Court does not find that this disclosure to be hidden such that it would be oppressive or surprising to the signee. As such, the agreement is not procedurally unconscionable on these grounds.

Plaintiffs similarly argue that the agreement was procedurally unconscionable by virtue of being presented on a “take it or leave it basis.” It is unclear to the Court what Plaintiffs’ argument is here. Plaintiffs claim that the contract was presented on a “take it or leave it” basis because it was only presented for signature after Decedent was admitted.  If this were true, then Plaintiffs would need to show that Decedent would have been rejected for failure to sign the agreement. Plaintiffs make no arguments to this effect. Defendants reiterate in their reply that the agreement was not a condition to Decedent’s admission. The Court finds that Plaintiffs have not satisfied their burden in showing the contract was procedurally unconscionable.   

Substantive Unconscionability

The agreement provides that arbitration be submitted either to the National Arbitration Forum (“NAF”) or the Judicial Arbitration and Mediation Service (“JAMS”). Plaintiff points out that here the arbitration would necessarily go to JAMS as NAF no longer takes consumer cases. The agreement provides that 10% of the arbitration costs are to be covered by Plaintiffs, and 90% to be covered by Defendants.

Plaintiffs argue the Agreement is procedurally unconscionable as a result of subjecting Plaintiffs to unaffordable arbitration fees. In support of this argument Plaintiffs cite Penilla v. Westmont Corp. (2016) 3 Cal. App. 5th 205 which in turn relies on the ruling in Gutierrez v. Autowest, Inc. (2003) 114 Cal.App.4th 77. The court in Gutierrez found that arbitration agreements which require unaffordable fees to initiate the arbitration process could be challenged as unconscionable. Likewise, the Penilla court found that an agreement which required the advance of hefty arbitration fees to be unconscionable. In both of these cases plaintiffs made a showing that they lacked the financial capacity to upfront these costs.

The Court finds that facts here to be inapposite to those in Penilla and Guiterrez. Plaintiffs submit the declaration of Gloribel as to her income which they estimate to be insufficient to cover her costs in a JAMS arbitration. Defendants argue in reply that the agreement provides that 10% of the arbitration costs are to be covered by Plaintiffs, but it does not require exorbitant upfront fees. Plaintiffs have submitted estimates as to the cost of the entire arbitration, but they make no showing as to the cost to initiate the proceedings. The Court notes that the JAMS Policy on Consumer Arbitrations Pursuant to Pre-Dispute Clauses Minimum Standards of Procedural Fairness states:

“With respect to the cost of the arbitration, when a consumer initiates arbitration against the company, the only fee required to be paid by the consumer is $250, which is approximately equivalent to current Court filing fees. All other costs must be borne by the company, including any remaining JAMS Case Management Fee and all professional fees for the arbitrator's services.”

Absent any showing to the contrary, the court finds that the arbitration agreement is not substantively unconscionable on grounds of presenting prohibitive fees

Lack of Mutuality

Plaintiffs allege that the contract lack mutuality by virtue of the provision of a monetary limit on claims that are arbitrable. Plaintiffs once again cite to Lopez where the court found that an arbitration agreement which explicitly exempted claims of collections and eviction from the arbitration process to be unconscionable.

The Court finds the agreement here to be inapposite to the facts in Lopez. Here, there is no explicit exclusion of certain types of claims. Instead, Plaintiffs argue that by requiring a claim to exceed $50,000 to be arbitrable, Defendants are leaving themselves free to pursue collections and evictions actions. Plaintiffs argue that where contract language is uncertain, it should be interpreted most strongly against the party who caused the uncertainty to exist. Defendants argue in reply that the agreement specifically provides that patients signing the agreement do not waive their rights under the Patient’s Bill of Rights and with respect to transfer or discharge.

Plaintiffs are not asking the court to interpret the language of the contract, instead they are asking the Court to interpret the intent behind the language. The Court does not find the language of the contract to be uncertain, instead, it clearly outlines which claims are subject to arbitration and which are not. Both sets of parties are bound to arbitrate claims above $50,000 and both sets of parties are free to pursue judicial remedy of claims below that amount or falling outside the scope of the agreement. As such, the Court finds no lack of mutuality in the agreement.

CCP § 1281.2(c)

Plaintiffs argue that the CCP § 1281.2(c) prohibits certain claims from being arbitrable by virtue of presenting the possibility of conflicting outcomes with those claims adjudicated by a court. As the Court has found that all causes of action here are arbitrable, the Court need not consider the CCP § 1281.2(c) argument.

III.       CONCLUSION 

The Court grants the instant motions. 

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Stay 

I.          LEGAL STANDARD 

Once arbitration has been compelled, in whole or in part, a stay of proceedings is mandatory if the issues in the arbitration and the pending action overlap. (C.C.P. § 1281.4 (if a court “has ordered arbitration of a controversy which is an issue involved in an action or proceeding pending before a court of this State, the court in which such action or proceeding is pending shall, upon motion of a party to such action or proceeding, stay the action or proceeding until an arbitration is had in accordance with the order to arbitrate or until such earlier time as the court specifies.”)) 

“The purpose of the statutory stay [under section 1281.4] is to protect the jurisdiction of the arbitrator by preserving the status quo until arbitration is resolved. In the absence of a stay, the continuation of the proceedings in the trial court disrupts the arbitration proceedings and can render them ineffective.” (Federal Ins. Co. v. Superior Court (1998) 60 Cal.App.4th 1370, 1374-1375 (citations omitted).) 

II.        MERITS 

As the Court grants the motion to compel arbitration in its entirety, the Court also grants the motion to stay the proceedings pending arbitration. 

III.       CONCLUSION 

The Court grants the instant motion. 

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RECOMMENDED RULING: 

In the event the parties submit on this tentative ruling, or a party requests a signed order or the court in its discretion elects to sign a formal order, the following form will be either electronically signed or signed in hard copy and entered into the court’s records. 

ORDER 

Defendants RG Legacy I LLC dba Golden Rose Care Center & Two Palms Skilled Care LLC dba Two Palms Care Center’s Motions to Compel Arbitration and Motions for Stay came on regularly for hearing on February 3, 2023 with appearances/submissions as noted in the minute order for said hearing, and the court, being fully advised in the premises, did then and there rule as follows: 

THE MOTIONS TO COMPEL ARBITRATION ARE GRANTED. 

THE MOTIONS FOR STAY ARE GRANTED. 

IT IS SO ORDERED. 

DATE:  February 3, 2023                               _______________________________ 

                                                                        F.M. TAVELMAN, Judge 

Superior Court of California 

County of Los Angeles