Judge: Gail Killefer, Case: 21STCV00208, Date: 2024-02-28 Tentative Ruling
Case Number: 21STCV00208 Hearing Date: February 28, 2024 Dept: 37
HEARING DATE: Tuesday, September 27, 2024
CASE NUMBER: 21STCV00208
CASE NAME: Virginia Pech-Torres v. Windsor Cheviot Hills, LLC, et al.
MOVING PARTY: Defendants Modern HR, Inc.,
Today’s HR, Inc., Kevin Jones, Nancy Rosas, and Jeff Huang
OPPOSING PARTY: Plaintiff Virginia Pech-Torres
TRIAL DATE: Not Set
PROOF OF SERVICE: OK
PROCEEDING: Motion to Compel
Arbitration and Stay Action
OPPOSITION: 13 February 2024
REPLY: 20
February 2024
TENTATIVE: Defendants’ motion to compel arbitration
and stay the action is granted as to the newly added Defendants -- Nancy Rosas,
Modern HR, Inc., and Today’s HR, Inc. -- and denied as to Defendants Kevin
Jones and Jeff Huang. The court advances the Post-Arbitration Status Conference
(“PASC”) set for February 28, 2024, to today, and continues the PASC to February
28, 2025, at 8:30 a.m. in Department 37.
Defendants to give notice.
Background
This
action arises out of the employment of Virginia Pech-Torres (“Plaintiff”) with
Defendants, CPE HR, Inc. (“CPE HR”) and Windsor Cheviot Hills, LLC (“Windsor”).
Plaintiff alleges that on August 30, 2018, she injured her wrist when she was
assisting a patient. Plaintiff allegedly informed both Defendant Kevin Jones
(“Jones”) and Director of Nursing Eva Cameron about her wrist disability but
was ignored. Additionally, the Complaint alleges that in early September 2019,
Plaintiff had to visit the emergency room due to pregnancy complications and
subsequently informed Defendants Nancy Doe (“Doe”) and Jeff Huang (“Huang”)
about these complications. Plaintiff requested light duty as a result of her
pregnancy complications, but Defendants Doe and Huang allegedly intentionally
refused to accommodate her.
Plaintiff’s
Complaint alleges twenty causes of action: (1) actual/perceived disability
harassment in employment in violation of the Fair Housing Employment Act
(“FEHA”), (2) actual/perceived disability discrimination in employment in
violation of FEHA against Windsor and CPE HR, (3) actual/perceived disability
retaliation in employment in violation of FEHA against Windsor and CPE HR, (4)
failure to engage in the good-faith interactive process in violation of FEHA,
(5) failure to provide reasonable accommodations in violation of the FEHA against
Windsor and CPE HR, (6) violation of the California Family Rights Act, (7)
violation of the California Pregnancy Disability Leave Law (“PDLL”), (8)
sex/gender harassment in employment in violation of the FEHA against Windsor,
CPE HR and Jones , (9) sex/gender discrimination in employment in violation of
the FEHA against Windsor and CPE HR, (10) sex/gender retaliation in employment
in violation of the FEHA against Windsor and CPE HR, (11) race/national origin
harassment in employment in violation of the FEHA against Windsor, Jones and
CPE HR, (12) race/national origin discrimination in employment against Windsor
and CPE HR, (13) race/national origin retaliation in employment in violation of
the FEHA against Windsor, CPE HR, (14) harassment, discrimination, retaliation
and/or expulsion for reporting patient abuse in employment in violation of the
FEHA against Windsor and CPE HR, (15) whistleblower retaliation against Windsor
and CPE HR, (16) failure to provide meal and rest periods against Windsor and
CPE HR, (17) failure to pay overtime wages against Windsor and CPE HR, (18)
violation of Business and Professions Code §§ 17200 et seq. against Windsor and
CPE HR, (19) intentional infliction of emotional distress, (20) injunctive
relief- physical disability discrimination in employment in violation of the
FEHA against Windsor and CPE HR.
On
September 2, 2021, the court granted Windsor and CPE HR’s Motion to Compel
Arbitration and Stay Proceedings.
On
August 7, 2023, Plaintiff filed a Motion to Lift the Stay and Proceed against
Defendants Jeff Huang and Kevin Jones (hereinafter “Individual Defendants”). Defendants
Windsor
and CPE HR (collectively “Entity Defendants”) filed opposing papers on August
16, 2023. Plaintiff filed a reply on August 22, 2023.
The
court continued the hearing after receiving Windsor Cheviot Hills, LLC’s notice
of stay of proceedings due to bankruptcy. On December 30, 2023, the court
stayed the action as to Defendants Windsor Cheviot Hills, LLC and CPE HR, Inc.,
but lifted the stay as to individual Defendants Jeff Huang and Keven Jones.
On December 22, 2023,
Defendants Modern HR, Inc., Today’s HR, Inc., Kevin Jones, Nancy Rosas, and
Jeff Huang (collectively “Defendants”) move for an order compelling Plaintiff
to arbitrate her claims against them. Plaintiff opposes the Motion. The matter
is now before the court.
I. Legal Standard
Parties may be compelled to arbitrate a dispute upon the
court finding that: (1) there was a valid agreement to arbitrate between the
parties; and (2) said agreement covers the controversy or controversies in the
parties’ dispute.¿(CCP § 1281.2; Omar v. Ralphs Grocery Co. (2004)¿118
Cal.App.4th 955, 961.)¿¿¿
¿¿¿¿
A party petitioning to compel arbitration has the burden of
establishing the existence of a valid agreement to arbitrate and the party
opposing the petition has the burden of proving, by a preponderance of the
evidence, any fact necessary to its defense. (Banner Entertainment, Inc. v.
Superior Court¿(1998) 62 Cal.App.4th 348, 356-57.)¿¿¿¿
¿¿¿
“If a court of competent jurisdiction, whether in this
State or not, 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.” (CCP § 1281.4.)
II. Evidentiary Objections
Plaintiff objects to the purported
new evidence cited in Defendant’s reply papers. The court notes that the
evidence refers to the court’s orders and evidence previously considered by the
court on September 2, 2021, when it ordered this action into arbitration.
Accordingly, Defendant did not present new evidence and Plaintiff had the
opportunity to discuss the prior arbitration agreement and the court’s previous
orders. Accordingly, the court overrules the objections.
II. Discussion
On September 2, 2021, the court found a
valid arbitration agreement exists between Plaintiff and Defendants. (Order of
09/02/21.) The court found that although
Plaintiff disputed she was provided a copy of the Arbitration Agreement policy
terms, she did not dispute that she signed the Arbitration Agreement. (Ibid.)
The court noted that the Alternative Dispute Resolution Policy (the “ADR
Policy”) applied to all disputes between Plaintiff and Windsor Cheviot Hills,
LLC and/or its outsourced Human Resources provider CPE HR, Inc. or any of their
respective employees or officers. (Ibid.) The court also rejected
Plaintiff’s claims that the Arbitration Agreement was unenforceable due to
Plaintiff’s request for injunctive relief and claims of unconscionability.
Arbitration against Windsor and CPE
commenced in October 2021 before the Hon. Michelle Rosenblatt through ADR
Services, Inc. On October 30, 2023, this court lifted the stay in this action
against Defendant Kevin Jones and Jeff Huang. Plaintiff then served two Doe
amendments, identifying Modern Inc. and Today’s HR, Inc. as Defendants. Now Defendants Modern HR, Inc., Today’s HR,
Inc., Kevin Jones, Nancy Rosas, and Jeff Huang (collectively “Defendants”) move
to compel Plaintiff to arbitrate her claims against them pursuant to the
Arbitration Agreement this court found valid on September 2, 2021.
Defendants assert that although they are not
explicitly named in the Arbitration Agreement, because they are being sued as
agents of Windsor
and CPE, the court can compel Plaintiff to arbitrate her claims against the
Defendants under the agency exception.
The agency exception is another exception
to the general rule that only a party to an arbitration agreement may
enforce it. (Thomas v. Westlake (2012) 204 Cal.App.4th 605,
613, 139.) The exception applies, and a defendant may enforce the arbitration
agreement “when a plaintiff alleges a defendant acted as an agent of a party to
an arbitration agreement....” (Id. at p. 614.) Here, the Complaint
alleges that Defendants Kevin Jones, Jeff Huang, and Nancy Rosas are agents of
Windsor and CPE HR. (Compl. ¶¶ 4, 5, 6.) Similarly, the Doe Defendants are also
alleged to be agents of Windsor and CPE HR. (Compl. ¶ 9.)
Accordingly, once the court lifted the
stay on October 30, 2023, the newly added Defendants were able to move to
compel arbitration under the September 2, 2021, arbitration agreement that this
court found to be valid. (See Order of 09/02/21.) Moreover, Plaintiff only
recently served the newly added Defendants Nancy Rosas, Modern HR Inc., and
Today’s HR, Inc. with a copy of the summons and Complaint. There is no support
for Plaintiff’s argument that Defendants have waived the right to compel
arbitration.
However, Plaintiff served Defendants
Jeffry Huang and Keven Jones with notice to appear at arbitration; they refused
to participate in the arbitration proceeding. (See 10/30/23 Order.) Plaintiff
was forced to seek leave of court to lift the stay to be able to proceed
against Defendants Huang and Jones. (Ibid.) Specifically this court
found:
Plaintiff has shown that because the
Arbitrator has no jurisdiction over Individual Defendants and because
Individual Defendants have waived any right to compel arbitration, lifting the
stay and allowing the action against Individual Defendants in court would not
interfere with the Arbitrator’s jurisdiction. Entity Defendants’ opposition
also fails to show that lifting the stay would interfere with the arbitrator’s
jurisdiction.
(Order of 10/30/23.)
¿“[Q]uestions of waiver are for the court rather than the
arbitrator[.]” (Wagner Const. Co. v. Pacific Mechanical Corp. (2007) 41
Cal.4th 19, 28; see also CCP § 1281.2(a).) “The question of waiver is generally
a question of fact, and the trial court's finding of waiver is binding on [appeal]
if it is supported by substantial evidence.” (Bower v. Inter-Con Security
Systems, Inc.¿(2014) 232 Cal.App.4th 1035, 1043.) “Even if the record
reflects that the trial court misunderstood or misapplied the law in reaching
its conclusion, it will be affirmed if supported by any legal theory.” (Kokubu
v. Sudo¿(2022) 76 Cal.App.5th 1074, 1082.)¿
In Davis v. Shiekh Shoes, LLC¿(2022) 84
Cal.App.5th 956, the appellate court found that the waiver test articulated by
the California Supreme Court in St. Agnes Medical Center v. PacifiCare of
California (2003) 31 Cal.4th 1187 (adopted from the Tenth Circuit opinion
in Peterson v. Shearson/American Express, Inc. (10th Cir. 1988) 849 F.2d
464) is the correct test to apply to the question of waiver “minus the
prejudice requirement.” (Davis, at p. 966.) As the Davis Court
found, the St. Agnes/Peterson waiver “test is substantially similar to
the test adopted by most federal circuit courts.” (Davis, at p. 965, see
also Zamora v. Lehman (2010) 186 Cal.App.4th 1, 21–22.)
The St. Agnes/Peterson factors to assess
claims of waiver are:¿¿
¿
(1) whether the party's actions are inconsistent with
the right to arbitrate;¿¿
(2) whether the litigation machinery has been substantially
invoked and the parties were well into preparation of a lawsuit before the
party notified the opposing party of an intent to arbitrate;¿¿
(3) whether a party either requested arbitration enforcement
close to the trial date or delayed for a long period before seeking a stay;¿¿
(4) whether a defendant seeking arbitration filed a
counterclaim without asking for a stay of the proceedings; and¿¿
(5) whether important intervening steps [e.g., taking
advantage of judicial discovery procedures not available in arbitration] had
taken place.¿
¿
(See Davis, supra, 84 Cal.App.5th at p. 964; St.
Agnes, supra, 31 Cal.4th at p.
1196; Peterson, supra, 849 F.2d at pp. 467-468.)¿
At the hearing to lift the stay and
proceed against individual Defendants Huang and Jones, Plaintiff represented
that counsel for the Entity Defendants refused to agree to join the
arbitration. (Order of 10/30/23.) Despite Plaintiff’s repeated requests to have
Huang and Jones participate in the arbitration proceedings, Huang and Jones
refused. (Order of 10/30/23.) When the arbitrator advised Plaintiff that she
had no power to compel Huang and Jones to arbitrate, Plaintiff moved to lift
the stay so that she could proceed against Huang and Jones. Factors one and two
under the St. Agnes/Peterson factors weigh in favor of the finding of
waiver due to Huang and Jones’ outright refusal to participate in arbitration
and forcing the court to lift the stay.
Jones and Huang now move to join the other newly added Defendants
to enforce arbitration of their claims only after the stay was lifted.
Accordingly, Defendants Huang and Jones unreasonably delayed in seeking to
compel arbitration, and by refusing to participate in arbitration, they forced
Plaintiff to lift the stay so that she could proceed against them. They then moved to compel arbitration despite
previously electing not to participate in arbitration and thus they delayed the
arbitration proceeding.
While Defendant Huang and Jones have not taken advantage of
judicial discovery procedures not available in arbitration, they have taken
advantage of the judicial system by stalling arbitration, forcing Plaintiff to
lift the stay of this action at law, and then demanding that this court order
their claims to arbitration despite previously delaying the arbitration
proceeding by refusing to participate in the proceeding. The U.S. Supreme Court has stated that the federal
policy favoring the enforcement of arbitration agreements is based on the
enforcement of contracts and not the preference for arbitration as an
alternative dispute resolution forum. (See Dean Witter Reynolds, Inc. v.
Byrd¿(1985) 470 U.S. 213, 219 [“The legislative history of the Act
establishes that the purpose behind its passage was to ensure judicial
enforcement of privately made agreements to arbitrate. We therefore reject the
suggestion that the overriding goal of the Arbitration Act was to promote the
expeditious resolution of claims.”].)
The court’s goal is to make arbitration agreements as enforceable
as any other contract, not more so. (See Morgan
v. Sundance, Inc. (2022) 212 L.Ed.2d 753 [142 S.Ct. 1708, 1713].) Here, Defendants
Huang and Jones now want the benefits of having their claims ordered to
arbitration while previously rejecting such benefits. Under the St. Agnes/Peterson
factors, Defendants Huang and Jones have waived their right to compel
arbitration of their claims.
While Defendants Huang and Jones have waived their right to compel
arbitration, the court finds that the newly added Defendants -- Nancy Rosas,
Modern Inc., and Today’s HR, Inc.-- have not waived their right to seek
arbitration. Under the agency exception,
the court grants their request to order Plaintiff to arbitrate her claims
against the newly added Defendants and stay the action as to the claims against
them.
To the extent that Plaintiff argues that
the Arbitration Agreement is invalid due to the Ending Forced Arbitration Act
(“EFAA”), Plaintiff must bring a motion for reconsideration of the September 2,
2021, Order compelling arbitration so the court can address the issue on the
merits and address whether the EFAA applies to Plaintiff’s claims.
Defendants’ motion to compel arbitration
and stay the action is granted as to the newly added Defendants -- Nancy Rosas,
Modern Inc., and Today’s HR, Inc. -- and denied as to Defendants Kevin Jones
and Jeff Huang.
Conclusion
Defendants’ motion to compel arbitration and stay the
action is granted as to the newly added
Defendants -- Nancy Rosas, Modern HR, Inc., and
Today’s HR, Inc. -- and denied as to
Defendants Kevin Jones and Jeff Huang. The court
advances the Post-Arbitration Status
Conference (“PASC”) set for February 28, 2024, to
today, and continues the PASC to February
28, 2025, at 8:30 a.m. in Department 37. Defendants to
give notice.