Judge: Gail Killefer, Case: 23STCV07167, Date: 2023-12-08 Tentative Ruling

Case Number: 23STCV07167    Hearing Date: December 22, 2023    Dept: 37

HEARING DATE:                 Friday, December 8 & 22, 2023

CASE NUMBER:                   23STCV07167

CASE NAME:                        Jose Diaz Bustamante v. Super Center Concepts, Inc.

MOVING PARTY:                 Defendant Super Center Concepts, Inc.

OPPOSING PARTY:             Plaintiff Jose Diaz Bustamante

RELIEF REQUESTED:         Motion to Compel Arbitration

TENTATIVE:                         Defendant’s Motion to Compel Arbitration is denied.

Background

On April 3, 2023, Jose Diaz Bustamante (“Plaintiff”) filed a Complaint against Super Center Concepts, Inc. dba Superior Grocers (“Defendant”), and Does 1 to 20.

The Complaint alleges six causes of action: (1) Disability Discrimination in Violation of Gov. Code §§ 12940 et seq; (2) Retaliation in Violation of Gov. Code §§ 12940 et seq; (3) Failure to Prevent Discrimination and Retaliation in Violation of Gov. Code § 12940(k); (4) Failure to Provide Reasonable Accommodation in Violation of Gov. Code §§ 12940 et seq.; (5) Failure to Engage in a Good Faith Interactive Process in Violation of Gov. Code §§ 12940 et seq; and (6) Wrongful Termination in Violation of Public Policy.

On November 15, 2023, Defendant filed a Motion to Compel Arbitration. Plaintiff filed opposing papers on November 27, 2023. Defendant filed a reply on December 1, 2023.  At the hearing on December 8, 2023, Defendant’s counsel requested a continuance to file a supplemental brief, which the court allowed, with a response by Plaintiff.  This matter came before the court again on December 22, 2023.

motion to compel arbitration

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.) 

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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 submits evidentiary objections to the following:

Objection No. 1: The entirety of Exhibit B of Declaration of Ricardo Flores

Plaintiff’s objection is sustained. Although Mr. Flores competently testifies to Defendant having an arbitration policy, Mr. Flores fails to testify Exhibit B is the same arbitration policy that Plaintiff was allegedly given in December 2019.

Objection No. 2: The entirety of Exhibit C of Declaration of Ricardo Flores

Objection No. 2 is overruled.  A complete and unredacted copy of Exhibit C is provided in Exhibit G to the Declaration of Enrique Montes.

Objection No. 3: Declaration of Ricardo Flores, ¶ 4.

Objection No. 4 is sustained as Mr. Flores was not present at the Accounting Booth.  The signing of the acknowledgment of the arbitration policy appears to be a one-time event such that Mr. Flores cannot testify to the custom and practice at the Accounting Booth at that time.

Objection No. 4: Declaration of Ricardo Flores, ¶ 5.

Objection No. 4 is overruled as to the sentence “On that same day, Frida Marlene Amaya Ortiz was assigned to work in the Accounting Booth as the Accounting Booth Clerk.” The rest of the objection is sustained as Mr. Flores cannot testify as to what actions Ms. Ortiz took as he fails to state he was physically present at the Accounting Booth during the time at issue and personally observed Ms. Ortiz’s actions and that of Plaintiff.

Objection No. 5: Declaration of Ricardo Flores, ¶ 3.

Objection No. 5 is overruled.

Objection No. 6: Declaration of Ricardo Flores, ¶ 6 & ¶ 2.

Objection No. 6 is overruled.

III.      Discussion

“The petitioner bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence, and a party opposing the petition bears the burden of proving by a preponderance of the evidence any fact necessary to its defense. In these summary proceedings, the trial court sits as a trier of fact, weighing all the affidavits, declarations, and other documentary evidence, as well as oral testimony received at the court’s discretion, to reach a final determination. No jury trial is available for a petition to compel arbitration.” (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972 [Citations Omitted].)

Defendant moves to compel arbitration of this action on the basis that on December 22, 2019, Plaintiff signed an acknowledgment that (1) he received a copy of Defendant’s Mutual Arbitration Policy (the “Agreement”) and (2) agreed to be bound by its terms. Defendant’s evidence that Plaintiff agreed to arbitration is not a signed agreement but an alleged signature of acknowledgment on a register entitled “Payroll Check Pick-Up Register”. (Montes Decl. Ex. G; Flores Decl. Ex. C.) Neither party disputes the assertion that Plaintiff read and understood English. (Flores Decl. ¶ 3, Ex. A.)

Underneath the title “Payroll Check Pick-Up Register” in bold font, about 8 to 10 point font size, the following is stated:

SPECIAL NOTE:                            As a condition of employment all disputes must be arbitrated pursuant to the Arbitration Policy. Your continued employment after receiving a copy of the Policy and signing below means you agreed to the terms and conditions. A signature is not [illegible as the sentence is cut off].

(Montes Decl. Ex. G; Flores Decl. Ex. C.)

The register goes on to list the name of the employee, their ID, signature, and pick-up date. (Montes Decl. Ex. G; Flores Decl. Ex. C.) The “SPECIAL NOTE”, including the cut-off portion, is found on the top of each page in the register, including the page Plaintiff signed.

Enrique Montes, who is Defendant’s Vice President of Human Resources, asserts that on December 22, 2019, when the Plaintiff went to pick up his paycheck, he was provided with a copy of the Agreement and signed the acknowledgment. (Montes Decl. ¶ 3, Ex. G.)

Ricardo Flores was the former store manager of Defendant’s Palmdale location in December 2019, the same store in which Plaintiff was working in 2019. (Fores Decl. ¶ 2.) Mr. Flores states that at the Accounting Booth, employees picked up their paychecks and filled out their paperwork and other personal documents. (Id. ¶ 4.) Mr. Flores asserts that in December 2019, it was the custom and practice to give employees a copy of Defendant’s Arbitration policy when the employees picked up their paychecks at the Accounting Booth and to give employees a copy of the Agreement in either English or Spanish. (Ibid., Ex. B.) Mr. Flores asserts that the Accounting Booth Clerk would explain to employees what the Agreement was, ask employees to review it, and instruct employees to let them or someone at Human Resources know if they had questions or concerns about the Agreement. (Ibid.) According to Mr. Flores, the Accounting Booth Clerk would then ask employees to sign a sheet entitled “Payroll Check Pick-up Register” acknowledging that the employee understood the arbitration policy and that the employee’s continued employment after receiving a copy of the Agreement constituted their agreement to the terms and conditions of the Agreement. (Ibid.) The Accounting Booth Clerk at the time was Frida Marlene Amaya Ortiz who initialed the acknowledgment next to Plaintiff’s signature. (Id. at p. 5.)

Neither Mr. Montes nor Mr. Flores assert that they were present at the Accounting Booth when Plaintiff allegedly received a copy of the Agreement and signed the “Payroll Check Pick-Up Register” acknowledging the Policy. The declaration of the Accounting Booth Clerk, Frida Marlene Amaya Ortiz, is not provided to show that copies of the Agreement were printed out to give to all employees, that all employees who signed the register did in fact receive a copy of the Agreement, that the Agreement was explained to them, and that signing the register constituted not only an acknowledgment of receiving a copy the Agreement but also agreement to be bound by its terms.

Plaintiff’s declaration asserts that Defendants never asked Plaintiff to sign an arbitration agreement and that he never saw the arbitration policy while employed by Defendant. (Diaz Bustamante Decl. ¶ 5.) Defendant does not dispute this but asserts that Plaintiff’s signature on the “Payroll Check Pick-up Register” is sufficient to bind Plaintiff to the Agreement. Plaintiff states that he was told he needed to sign the “Payroll Check Pick-Up Register” document to receive his paycheck and that he signed a document entitled “Payroll Check Pick-Up Register” every week when he picked up his paycheck. (Diaz Bustamante Decl. ¶ 7.)

Plaintiff states that the Accounting Booth was where both also were customers would line up to pay their bills, and that the waiting line consisted of both employees and customers. (Diaz Bustamante Decl. ¶ 8.)

For this reason, this was always a fast process. We did not want to keep customers waiting or hold up other employees from receiving their checks. We would simply get in line and when it was our time to pick up the check, we would quickly sign a log which I was told was to indicate that I had received my check. In the payroll lines, there was never opportunity to discuss any issues. There was also not enough time to read documents before signing.

(Ibid.)

Plaintiff does not dispute that his signature appears on the register but states that the date is not in his handwriting and that he did not see anyone initial the document after he signed the register. (Diaz Bustamante Decl. ¶ 9.) Plaintiff states that the “Payroll Check Pick-Up Register” that he signed looks different from the form he signed to obtain his check and that “it is possible that I overlooked the small print in the haste of the payroll line and thought it was simply the same Payroll Check Pick-Up Register document I had seen and signed dozens of times. I never remember seeing the three sentences mentioning arbitration at the top when I picked up my checks.” (Id. ¶ 9.) Furthermore, Plaintiff asserts that he does not remember anyone by the name of Frida Marlene Amaya Oritz and that “[t]he person who usually worked the accounting booth was the Accounting Booth Manager.” (Id. ¶ 10.)

In the Supplemental Briefing, Defendant provided the Declaration of Frida Marlene Amaya Ortiz.  Ms. Ortiz states that part of her duties in the Accounting Booth was to hand out paychecks and other documents at the Lancaster and Palmdale Stores from 2013 to July 2021. (Oritz Decl. ¶ 2.) “When employees picked up their paychecks, they signed a Payroll Check Pick-Up Register (“Acknowledgment”). After an employee signed the Acknowledgment, I would add the date and sign my initials.” (Ortiz Decl. ¶ 2.)

Ms. Ortiz does not state, however, that she recalls explaining the arbitration agreement or the acknowledgment note to each employee while she worked at the Accounting Booth in December 2019.  Moreover, Ms. Ortiz bases her belief that she gave Mr. Ortiz a copy of the Arbitration Agreement, not on her recollection of events, but on the fact that the register shows the Plaintiff’s signature and her initials next to the signature. (Ortiz Decl. ¶ 7.) Plaintiff’s signature on the register is not sufficient to show mutual assent unless the Plaintiff knew that he was signing an acknowledgment of the Defendant’s arbitration policy. Ms. Ortiz’s declaration fails to show that she imparted such knowledge to Plaintiff.

As Plaintiff points out in his Response to Defendant’s Further Briefing, Ms. Ortiz does not declare that the Acknowledgment in the Payroll Check Pickup Form was brought to the attention of employees; that copies of the Agreement were provided to all employees, including Plaintiff; that the Arbitration Agreement was explained to employees; or that she explained to employees, and they understood, that their signature was an acknowledgment of having received a copy of the Agreement.  (Pl. Supp. Resp., 2.) 

“[A] person with capacity of reading and understanding an instrument signs it, he may not, in the absence of fraud, imposition or excusable neglect, avoid its terms on the ground he failed to read it before signing it.” (Bauer v. Jackson (1971) 15 Cal.App.3d 358, 370.) “Although it is true that when a person with the ability to read and understand an instrument signs it, he is bound by the provisions of such instrument, in the absence of fraud or imposition, it is likewise true that a party to a contract will not be bound by it unless he assents to it and, if he did not in reality assent, such want of assent may be shown in order to avoid the effect of his signature.” (Wetzstein v. Thomasson¿(1939) 34 Cal.App.2d 554, 559.) Fraud in the “execution” or “inception” of a contact “goes to the inception or execution of the agreement, so that the promisor is deceived as to the nature of his act, and actually does not know what he is signing, or does not intend to enter into a contract at all, mutual assent is lacking, and the contract is¿void.” (Rosenthal v. Great Western Fin. Securities Corp.¿(1996) 14 Cal.4th 394, 415 [italics original].)

Plaintiff presents sufficient evidence to show that there was no valid agreement to arbitrate because there was no mutual assent. Instead of having an acknowledgment form that was separate from the Payroll Register, Defendant included the acknowledgment of the agreement to arbitrate in a register entitled “Payroll Check Pick-Up Register,” making it indistinguishable from other payroll registers employees signed weekly.  A reasonable employee could believe that by signing the register they were not acknowledging that they were informed and received a copy of the Agreement and agreed to its terms. Instead, a reasonable employee could believe that they were signing the register either as a condition of receiving their paycheck or as an acknowledgment that they did receive their paycheck. A signature obtained under such conditions would void any agreement due to fraud in the execution. (See Najarro v. Superior Court (2021) 70 Cal.App.5th 871, 877.)

Furthermore, the “SPECIAL NOTE” on the register was cut-off, so the acknowledgment was not fully legible to employees who did see and read the notice. The Declaration of Ms. Ortiz is not sufficient to show mutual assent. “The policy is to make ‘arbitration agreements as enforceable as other contracts, but not more so.’ [Citation.]” (Morgan v. Sundance, Inc. (2022) 212 L.Ed.2d 753 [142 S.Ct. 1708, 1713].)

As Defendant has failed to show that a valid agreement to arbitrate exists between the parties, the Motion is denied. 

Conclusion

Defendant’s Motion to Compel Arbitration is denied.

Defendant to give notice.