Judge: Gail Killefer, Case: 23STCV25978, Date: 2024-05-13 Tentative Ruling
Case Number: 23STCV25978 Hearing Date: May 13, 2024 Dept: 37
HEARING DATE: Monday, May 13, 2024
CASE NUMBER: 23STCV25978
CASE NAME: Claudia Karina Diaz v. The Belvedere Hotel Partnership, et al.
MOVING PARTY: Defendant The Belvedere Hotel
Partnership dba Peninsula Beverly Hills
OPPOSING PARTY: Plaintiff Claudia Karina Diaz
TRIAL DATE: Not Set.
PROOF OF SERVICE: OK
PROCEEDING: Motion to Compel
Arbitration
OPPOSITION: 18 April 2024
REPLY: 6
May 2024
TENTATIVE: Defendants’ Motion to Compel Arbitration is
Denied. Defendants shall file a
Responsive Pleading within 10 days. The
Court sets an OSC Re: Filing of Responsive Pleading for June 5, 2024, at 8:30
a.m. Moving Party to give notice.
Background
On October 24, 2023, Plaintiff Claudia Karina Diaz (“Plaintiff”),
filed a Complaint against the Belvedere Hotel Partnership dba The Peninsula
Beverly Hills (“Belvedere Hotel”); Peninsula Beverly Hills Hotel Management,
Inc.; 707 PBH, LLC; Belvedere America, LLC; Peninsula Beverly Hills Holdings,
LLC; Peninsula Beverly Hills, Inc; Sergio Lopez (“Sergio”) (collectively
“Defendants”); and Does 1 to 20.
The Complaint
alleges eleven causes of action:
1)
Discrimination in Violation
of Gov. Code § 12940 et seq;
2)
Harassment in Gov. Code §
12940 et seq;
3)
Retaliation in Violation of
Gov. Code § 12940 et seq;
4)
Failure to Prevent
Discrimination, Harassment, and Retaliation Gov. Code § 12940(k);
5)
For Declaratory Judgment;
6)
Assault;
7)
Gender Violence (Civ. Code
§ 52.4);
8)
Violation of the Ralph
Civil Rights Act (Civ. Code § 51.7);
9)
Violation of the Tom Bane
Civil Rights Act (Civ. Code § 52.1);
10)
Negligent Supervision and
Retention;
11)
Wrongful Termination in
Violation of Public Policy;
12)
Failure to Permit
Inspection of Personnel and Payroll Records (Lab. Code § 1198.5);
13)
Failure to Provide Rest
Periods (Lab. Code §§ 226.7);
14)
Failure to Provide Itemized
Wage and Hour Statements (Lab. Code § 226, et seq.)
15)
Waiting Time Penalties
(Lab. Code §§ 201-203); and
16)
Unfair Competition (Bus.
& Prof. Code § 17200, et seq.)
Defendant Belvedere
Hotel now moves to compel arbitration and stay the action. Defendant Sergio Lopez
has filed a joiner to the Motion. Plaintiff opposes the Motion. The matter is
now before the court.
I. Legal Standard
“California law reflects a strong public policy in favor of
arbitration as a relatively quick and inexpensive method for resolving
disputes.¿ To further that policy, Code of Civil Procedure, section 1281.2
requires a trial court to enforce a written arbitration agreement unless one of
three limited exceptions applies.¿ Those statutory exceptions arise where (1) a
party waives the right to arbitration; (2) grounds exist for revoking the
arbitration agreement; and (3) pending litigation with a third party creates
the possibility of conflicting rulings on common factual or legal
issues.”¿ (CCP, § 1281.2; Acquire II, Ltd. v. Colton Real Estate Group
(2013) 213 Cal.App.4th 959, 967.)¿ Similarly, public policy under federal law
favors arbitration and the fundamental principle that arbitration is a matter
of contract and that courts must place arbitration agreements on an equal
footing with other contracts and enforce them according to their terms.¿ (AT&T
Mobility LLC v. Concepcion (2011) 563 U.S. 333, 339.)¿
In deciding a motion or petition to compel arbitration,
trial courts must first decide whether an enforceable arbitration agreement
exists between the parties and then determine whether the claims are covered
within the scope of the agreement.¿ (Omar v. Ralphs Grocery Co. (2004)
118 Cal.App.4th 955, 961.)¿ The opposing party has the burden to establish any
defense to enforcement.¿ (Gatton v. T-Mobile USA, Inc. (2007) 152
Cal.App.4th 571, 579 [“The petitioner ... bears the burden of proving the
existence of a valid arbitration agreement and the opposing party, plaintiffs
here, bears the burden of proving any fact necessary to its defense.”].)¿
II. Discussion
Defendants
assert that on the first day Plaintiff began working as a cook, she signed a
Mutual Agreement to Arbitrate (the “Agreement”) along with other onboarding
documents. (Kupka Decl. ¶ 3, Ex. 1.) Plaintiff does not dispute that she signed
the Agreement but asserts the Agreement is unenforceable due to
unconscionability because she cannot read, write, or speak English well and she
did not fully understand what the Agreement represented when she signed it.
(Diaz Decl. ¶¶ 3, 5, 6.)
The court
does not reach the merits of Plaintiff’s unconscionability claims because the
court finds that Plaintiff’s claims cannot be
compelled to arbitration due to the Ending Forced Arbitration of Sexual Assault and Sexual
Harassment (the “Act” or “EFAA”). (9 U.S.C. §§ 401, 402(a).) The Act became
effective on March 3, 2022, and voided any predispute arbitration agreements
involving sexual harassment allegations. (9 U.S.C. § 402(a).)
The Act “shall apply with respect to any dispute or claim
that arises or accrues on or after the date of enactment of this Act.” (Pub.L.
No 117-90, March 3, 2022, 136 Stat 26.) Although this provision, which limits
the applicability of the Act, is included in the Act, it is not codified as a
subsection but rather as a statutory note.
Nonetheless, it is nevertheless part of the Act. When interpreting a
statute, “we must read it in the context of the entire Act, rather than in the
context of the ‘arrangement’ selected by the codifier.” (U.S. v. Welden
(1964) 377 U.S. 95, 98, fn. 4; see also Conyers v. Merit Systems Protection
Bd. (Fed. Cir. 2004) 388 F.3d 1380, 1382, fn. 2; Midland Power Co-op. v.
Federal Energy Regulatory Com'n (D.C. Cir. 2014) 774 F.3d 1, 3 [In cases
where the United States Code and the Statutes at Large conflict, the Statutes
at Large version controls].)
Here, Plaintiff’s Complaint alleges a claim for sexual
harassment beginning on or about September 1, 2021, and ending when Plaintiff
was terminated on or about November 3, 2021. (Compl. ¶ 24, 26.)
The court need not
decide if Plaintiff’s claims arose on or before the Act became effective if the
dispute arose on or after March 3, 2022. “[T]terms ‘dispute’
and ‘claim’ have distinct meanings as used by Congress . . . [i]n general, a
claim arises for the first time when the plaintiff suffers an injury.” (Kader v. Southern California Medical Center, Inc.
(2024) 99 Cal.App.5th 214, 223 (Kader).) “A dispute arises when one
party asserts a right, claim, or demand, and the other side expresses
disagreement or takes an adversarial posture. [Citation.] In other words, ‘[a]
dispute cannot arise until both sides have expressed their disagreement, either
through words or actions.’ [Citation.] Until there is a conflict or
disagreement, there is nothing to resolve in litigation.” (Id. at pp.
22-223.) “[A] claim may arise or accrue before a dispute arises, and additional
claims may arise after a dispute arises.” (Id. at pp. 224-225.)
The
relevant inquiry here is when Plaintiff’s dispute arose and if it was on or
after the date the act. “We conclude the date that a dispute has arisen for
purposes of the Act is a fact-specific inquiry in each case, but a dispute does
not arise solely from the alleged sexual conduct.” (Kader, supra,
99 Cal.App.5th at p. 222.) In Kader, the court determined that “[u]der
the plain meaning of section 402, subdivision (a), the Act applies to the
instant case, which was filed after the effective date of the Act.” (Id.
at p. 224.)
Here, the Complaint was filed on October
24, 2023, after the Act became effective. Therefore, the Act applies. Moreover,
the Act specifies that it applies to any ““case filed under Federal, Tribal, or State law and relates
to the sexual assault dispute or the sexual harassment dispute.” (9
U.S.C. §402(a).) Accordingly, the Act applies to bar an entire “case” from
arbitration, entire not just claims for
sexual harassment.
On reply, Defendants for the first time
assert that the Act does not apply because Plaintiff’s claims for sexual
harassment lack substance. (Reply at p. 5:18-20.) A motion to compel
arbitration is not the proper motion to challenge the substance of Plaintiff’s
pleadings. Therefore, the court finds that the Defendants have failed to show
that a valid legal Agreement to arbitrate exists and denies the Defendants’
Motion to compel arbitration.
Conclusion
Defendants’ Motion to Compel Arbitration
is denied. Defendants shall file a Responsive Pleading within 10 days. The Court sets
an OSC Re: Filing of
Responsive Pleading for June 5,
2024, at 8:30 a.m. Moving Party to give notice.