Judge Frank M. Tavelman, Case 22BBCV00702 2023-03-01 Tentative Ruling

RULING
REQUESTING ADDITIONAL BRIEFING

March 1,
2023

Los Angeles Superior Court
Case # 22BBCV00702

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. Plaintiff’s also named ICC Convalescent Corp. (“ICC”) as defendants
in the suit. While no arbitration agreement exists as between ICC and
Plaintiffs, ICC’s existence as a party is relevant for purposes of this motion.

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.

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.

Defendants
motion came on for hearing before the court on February 3, 2023. Plaintiff’s
counsel raised concern that facts mentioned by the Court in its tentative
ruling tracked to defendant Imperial Care Center (“Imperial”), with whom
Plaintiff has no arbitration agreement. The Court acknowledges that its factual
references were unclear and issues this final ruling to clarify the basis for
the Court’s ruling. Plaintiffs’ counsel also raised concerns regarding CCP §
1281.2(c), arguing that allowing Imperial claims to go to trial while
submitting those of Golden Rose and Two Palms would produce inconsistent rulings.
The Court will address the arguments of the parties in this respect as well.

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.

C.C.P. §
1281.2 states: “[o]n petition of a party to an arbitration agreement alleging
the existence of a written agreement to arbitrate a controversy and that a
party thereto refuses to arbitrate such controversy, the court shall order the
petitioner and the respondent to arbitrate the controversy if it determines
that an agreement arbitrate the controversy exists.”

A party
seeking to compel arbitration has the initial burden to prove, 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.) If the moving party has met its initial burden, then the
burden shifts to respondents to prove the falsity or unenforceability of the
arbitration agreement. (Ibid.)

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.

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’
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.” (C.C.P. §1295(a).) 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.

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 be nonsensical for a plaintiff to avoid arbitration by simply alleging
claims based upon professional negligence but 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.)

“’As used
in the Act, neglect refers not to the substandard performance of medical
services but, rather, to the “failure of those responsible for attending to the
basic needs and comforts of elderly or dependent adults, regardless of their
professional standing, to carry out their custodial obligations.’” (Covenant
Care, Inc. v. Superior Court (2004) 32 Cal.4th 771 quoting Delaney
v. Baker (1999) 20 Cal.4th 23.)

The
Court’s tentative ruling incorporated a number of factual allegations against
Imperial rather than those against Golden Rose and Two Palms. The Court seeks
to address the correct factual allegations and analyze them under Avila to determine if
they primarily sound in negligence or elder abuse.

·
Rose
Garden failed to initially start antibiotics due to lack of IV line on April
19, 2022

·
Rose
Garden failed to document, care plan to treat, conduct a root cause analysis,
or notify a physician of Decedent’s black eye and head wound on April 28, 2022

·
Rose
Garden failed to document, care plan to treat, conduct a root cause analysis,
or notify a physician of a rash Decedent had developed post treatment for lice on
May 27, 2022

·
Rose
Garden failed to document, care plan to treat, conduct a root cause analysis,
or notify a physician of Decedent’s facial wound on June 3, 2022

· On June 6, 2022, Shrey Kanjiya, M.D.
saw MARIA BAIRES and documented that she would be on antibiotics for life due
to her surgical wound infection

·
On June
8, 2022 Rose Garden conducted nuerochecks on Decedent but did not document,
care plan for, determine the root cause of any falls.

·
Rose
Garden conducted CPR on June 15, 2022 despite Decedent’s do not resuscitate
status, resulting in several rib fractures

·
Rose
Garden failed to document, did not care plan to treat, and did not notify the
physician of the Decedent’s vomiting or diarrhea on June 16, 2022

·
Rose
Garden also failed to get Decedent out of bed or address Decedent’s lack of
appetite and broken dentures

·
Two Palms
failed to assess Decedent’s risk of developing pressure ulcers, properly create,
and implement a care plan to prevent and treat pressure ulcers and properly
turn and reposition Decedent, instead allowing pressure to be applied to her
bony prominences such as her sacrum area for many hours at a time. As a result
of this neglect, Decedent developed a right buttock pressure ulcer and her
sacral pressure ulcer worsened.

·
While at
Two Palms Decedent’s dentures and wheelchair were damaged and not fixed which
prevented her from eating and moving about.

·
Two Palms failed
to properly treat, monitor, and assess Decedent’s surgical wounds. On April 11,
2022, Decedent left Two Palms to go to see her orthopedic surgeon. From there,
she was sent to Sherman Oaks Hospital emergency department and admitted to
their telemetry unit for surgical site infection. On April 12, 2022, Sherman
Oaks personnel noted that she had an unstageable pressure ulcer with two open areas.

The Court
finds that the allegations with respect to Golden Rose primarily sound in
professional negligence as opposed to elder abuse. Except for the failure to
create care plans, all other statements allege as the substandard performance
of medical services provided. Plaintiff alleges that Golden Rose “initially
failed” to start antibiotics, indicating that they thereafter did provide them.
Plaintiff alleges that Golden Rose treated Decedent for lice but failed to
treat a rash which presumably resulted thereafter. Plaintiff alleges that
Golden Rose treated Decedent according with a fall but failed to document such
a fall. All these allegations indicate that Decedent was receiving medical
services, even if they were being performed well under standard. As such, the
Court finds the allegations to sound primarily in professional negligence.

The Court
similarly finds that the allegations with respect to Two Palms primarily sound
in professional negligence as opposed to elder abuse. Plaintiff alleges that
Two Palms failed to assess Decedent’s risk for pressure ulcers, but this speaks
more to Two Palms negligent provision of medical services rather than its
refusal to provide them. The same can be said about Plaintiff’s allegation
regarding failure to properly treat Decedent’s surgical wounds properly.

There is
one claim common to Imperial, Golden Rose, and Two Palms. Plaintiff alleges
that all facilities were understaffed. It is true that under Fenimore v. Regents of University of California (2016) 245 Cal. App. 4th 1339 allegations of
deliberate understaffing can be used to support elder abuse claims; however, the
Fenimore court indicated that there must be a pattern of understaffing
and it must be sufficiently egregious. (Cochrum v. Costa Victoria
Healthcare, LLC (2018) 25 Cal.App.5th 1034.) Particularly persuasive
for the Fenimore court was the allegation of statutory violation. Plaintiff here alleges that Imperial’s staffing
fell below the minimum levels required by Health and Safety Code § 1276.5.
Plaintiff does not allege such violations with respect to Golden Rose and Two
Palms. Instead, Plaintiff points to the Center for Medicare and Medicaid
Services (“CMS”) Five-Star Rating System for staffing, in which Golden Rose and
Two Palms both received three-star ratings. According to CMS, roughly 70
percent of nursing facilities in each state have a two-star, three-star, or four-star
rating. (See CMS “Design for Care Compare Nursing Home Five-Star
Quality Rating System: Technical Users’ Guide (2023), p. 5.) The Court
does not find that Plaintiff states facts amounting to a sufficiently egregious
pattern of understaffing by Golden Rose and Two Palms as to remove it from the
applicability of the arbitration agreement to the other plaintiffs.

The Court
thus finds that Plaintiffs do not satisfy their 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
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.

Plaintiffs
argue that the agreement is procedurally unconscionable for failing to adequately
warn that the legal representative signing 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 on 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.

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 by 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 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

Plaintiffs
allege that the contract lacks mutuality from 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 distinguishable from 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.

To ensure
that arbitration agreements are enforced according to their terms, the FAA
preempts all state laws that apply of their own force to limit those agreements
against the parties' will or to withdraw the power to enforce them. (See, e.g.,
Perry v. Thomas (1987) 482 U.S. 483, 490–491 [FAA preempted California
statute that rendered private agreements to arbitrate wage collection claims
unenforceable by requiring judicial forum for resolution of those claims]. (Cronus
Investments, Inc. v. Concierge Services (2005) 35 Cal.4th 376, 385.)

“The FAA
itself contains no provision designed to deal with the special practical
problems that arise in multiparty contractual disputes when some or all of the
contracts at issue include agreements to arbitrate. California has taken
the lead in fashioning a legislative response to this problem, by giving courts
authority to consolidate or stay arbitration proceedings in these situations in
order to minimize the potential for contradictory judgments. See Calif. Civ.
Proc. Code Ann. § 1281.2(c).” (Volt Information Sciences, Inc. v. Board
of Trustees of Leland Stanford Junior University (1989) 489 U.S. 468, 476
at fn. 5.) Because “[t]here is no federal policy favoring arbitration
under a certain set of procedural rules”, the Court of Appeal's construction of
the arguably ambiguous generic choice-of-law clause—as incorporating both the
state substantive law and state pro-arbitration rules (rather than the FAA)—did
not violate the Moses H. Cone principle. (Id. at
p. 476.)

Plaintiffs
argue that the CCP § 1281.2(c) prohibits arbitration of certain claims when there
is a possibility of conflicting outcomes with those claims adjudicated by a
court. “Section 1281.2(c) grants a trial court discretion to refuse to enforce
written arbitration agreements when (1) a party to the agreement also is a
party to pending litigation with a third party who did not agree to
arbitration; (2) the pending third-party litigation arises out of the same
transaction or series of related transactions as the claims subject to
arbitration; and (3) the possibility of conflicting rulings on common factual
or legal issues exists. A trial court has no discretion to deny arbitration
under section 1281.2(c) unless all three of these conditions are satisfied.” (Acquire
II, Ltd. v. Colton Real Estate Group (2013) 213 Cal.App.4th 959, 964.)

In both
their opposition and the hearing Plaintiff raised concern that allowing claims
against Imperial to go to trial while submitting those against Golden Rose and
Two Palms to arbitration. In response Defendant’s counsel argued that the arbitration
agreement’s language provides for governance by the Federal Arbitration Act. Defendant argues that it is this act that
controls and not CCP §1281.2.

“Accordingly, this Agreement is to be governed by the
Federal Arbitration Act and the procedural rules set forth in the Federal
Arbitration Act (9 U.S.C. Sections 1- 16) shall govern any petition to compel
arbitration and the selection of an arbitrator.” (Golden Rose Motion, Exh. A., Art. 7.)

“The
parties agree that California Code or Civil Procedure § l281.2(c) is excluded
from this Agreement as the parties mutually desire to have any and all disputes
submitted to binding arbitration.” (Golden Rose Motion, Exh. A., Art. 6.) It is clear from this language that the
parties agreed to preclude § 1281.2(c) from their agreement and have the FAA
control.

“The
Federal Arbitration Act ("FAA"), not state law, will control and
applies to the arbitration of disagreements between the parties and the parties
agree to incorporate such laws into this Agreement. This Agreement will
otherwise be governed by the State law where the Facility is located. This
shall include local court rules governing discovery, and state law governing
state medical liability act(s), if applicable. If it is determined that the FAA
does not apply to arbitration under this Agreement, the parties agree to
resolve any disagreement through arbitration under control of state law” (Two
Palms Motion, Exh A. p.6.)

The Court
finds that whether parties intended to contract around §1281.2(c) is dependent
upon the language of the agreement. “Under United States Supreme Court
jurisprudence, we examine the language of the contract to determine whether the
parties intended to apply the FAA to the exclusion of California procedural law
and, if any ambiguity exists, to determine whether section
1281.2(c) conflicts with or frustrates the objectives of the FAA.” (Cronus
Investments, Inc. v. Concierge Services (2005) 35 Cal.4th 376, 383.) “Our
opinion does not preclude parties to an arbitration agreement to expressly designate
that any arbitration proceeding should move forward under the FAA's procedural
provisions rather than under state procedural law.” (Id. at 394.)

The Court read Cronus to mean that parties
are free to contract around § 1281.2(c) but that the contract must explicitly
say so. The Court finds that the Golden Rose arbitration agreement does
explicitly contract around § 1281.2(c) The Golden Rose agreement specifically
says the parties don’t intend to be bound by 1281.2(c).

Conversely, the Two Palms agreement says the FAA
controls, but then introduces language that state law will govern in certain
areas. This is important as the court in Cronus found that the FAA does
not preempt 1281.2(c) because the California law does not defeat the rights
granted by Congress and because the FAA has so equivalent provision. Specifically
of concern is the lack of reference to whether the FAA or California law
applies to the procedural rules.

It is unclear to the Court
as to whether the language of the Two Palms agreement intends to contract
around § 1281.2(c). Several cases speak about this issue but none of their
arbitration agreements have language which mirrors that in Two Palms.

In Rodriguez v. American
Technologies, Inc. (2006) 136 Cal.App.4th 1110, the court held that a
contract which specified claims would be arbitrated by the FAA but did not explicitly
reference procedure, intended for FAA procedure to control regardless because
the contract made absolutely no mention of California law.

In Los Angeles Unified
School Dist. v. Safety National Casualty Corp. (2017) 13 Cal.App.5th
471, the court denied motion to compel and granted stay under 1281.2(c) where
an agreement made no explicit mention of the procedural rules.

In Mave Enterprises,
Inc. v. Travelers Indemnity Co. (2013) 219 Cal.App.4th 1408, the court
found that the FAA’s procedural provisions do not apply to California State
Court unless the contract contains a choice of law clause expressly
incorporating them.

Here the Two Palms
agreement falls somewhere between all of these cases because it states that the
FAA controls but then ambiguously introduces factors of California law
controlling with specific procedural matters such as discovery.

If the Court
does finds that CCP 1281.2 (c) applies, then it has several options. The last
paragraph of CCP 1281.2 provides that:

“If the
court determines that a party to the arbitration is also a party to litigation
in a pending court action or special proceeding with a third party as set forth
under subdivision (c), the court (1) may refuse to enforce the arbitration
agreement and may order intervention or joinder of all parties in a single
action or special proceeding; (2) may order intervention or joinder as to all
or only certain issues; (3) may order arbitration among the parties who have
agreed to arbitration and stay the pending court action or special proceeding
pending the outcome of the arbitration proceeding; or (4) may stay arbitration
pending the outcome of the court action or special proceeding.”

The Court
is predisposed to grant the motion to compel arbitration but cannot make a
final determination due to the outstanding § 1281(c) concerns. The Court
requests additional briefing from the parties on whether the Two Palms
agreement is subject to § 1281.2(c). The Court also requests additional
briefing as to the impact proceeding with the ICC lawsuit has relative to the
arbitration of Golden Rose and Two Palms. The Court is particularly
concerned with a potential basis for inconsistent rulings and whether that can be
resolved with a stay of the trial or the arbitration while the other issue is
resolved.

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).)

As the
Court cannot make a determination on the motion to compel without further
briefing, it declines to rule on the motion to stay at this time.

In the
event 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.

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 to the matter under submission and issues this revised ruling requesting
additional briefing.

PARTIES ARE ORDERED TO PROVIDE ADDITIONAL SIMULTANEOUS
BRIEFING NO LATER THAN MARCH 16, 2023.

MP:	RG Legacy I LLC dba Golden Rose Care Center & Two Palms Skilled Care LLC dba Two Palms Care Center (Defendants)
RP:	Maria Baires, by and through her successor-in-interest, Gloribel Baires, Gloribel Baires, individually; Mirna Vanegas, individually; and Samuel Baires, individually (Plaintiffs)