Judge: Glenda Sanders, Case: 30-2022-01272718, Date: 2023-01-05 Tentative Ruling
Defendant Reef, Inc. dba Homewatch Caregivers of Yorba Linda (Reef) seeks to compel Plaintiff to arbitrate her individual claims, to dismiss the class claims against Reef and to stay all other claims, including the PAGA claims, pending completion of the individual arbitration.
Plaintiff objects (ROA 44) to portions of the ROA 20, Castanon Declaration. Objection Nos. 1, 2, 3, and 4 are SUSTAINED.
The Court DENIES Reef’s Request for Judicial Notice since it is not relevant the Court’s ruling. ROA 53.
Relevant Law. “The threshold question presented by every petition to compel arbitration is whether an agreement to arbitrate exists. The party seeking to compel arbitration bears the burden of proving by a preponderance of the evidence an agreement to arbitrate a dispute exists.” (Trinity v. Life Ins. Co. of N. Am. (2022) 78 Cal. App. 5th 1111, 1120, citations omitted; Code Civ. Proc. § 1281.2.)
While the burden of persuasion is always on the moving party, the burden of production may shift in a three-step process. First, the moving party must present “prima facie evidence of a written agreement to arbitrate the controversy”, which is satisfied by attaching a copy of the arbitration agreement purporting to bear the opposing party's signature. (Gamboa v. Ne. Cmty. Clinic (2021) 72 Cal. App. 5th 158, 164–67 (Gamboa).)
If the moving party meets its initial prima facie burden, and the opposing party disputes the agreement, then the burden shifts to the opposing party to challenge the authenticity of the agreement. The opposing party may satisfy this burden by testifying that the party never saw or does not remember seeing the agreement, or that the party never signed or does not remember signing the agreement. (Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1054 (Espejo) [did not recall seeing or signing document]; Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 846 (Ruiz) [did not recall signing agreement].)
Finally, in the third step, the moving party must present admissible evidence of a valid arbitration agreement between the parties by a preponderance of the evidence. (Gamboa, supra, 72 Cal. App. 5th at 164–67.)
Here, Reef meets its initial prima facie burden by presenting a four-page document dated July 14, 2021 entitled “Mutual Arbitration Agreement” (Arbitration Agreement) bearing Plaintiff’s purported electronic signature. ROA 20, Ex. A, Arbitration Agreement. Except where provided, the Arbitration Agreement covers “any and all disputes, past, present or future, that may arise between Employee (sometimes “you” or “your”) and COMPANY, including without limitation any dispute arising out of related to Employee’s application, employment and/or separation of employment with COMPANY.” ROA 20, Ex. A, ¶2.
The burden then shifted to Plaintiff to challenge the authenticity of the Arbitration Agreement. Although this argument is not made in her Opposition, like the plaintiffs in Ruiz, Espejo and Gamboa, Plaintiff states she “cannot recall ever signing any document referring to arbitration” in her declaration. ROA 46, Plaintiff’s Decl., ¶9. And, as indicated above, Plaintiff’s objections to the Castanon Declaration, including the objections based on improper authentication, have been sustained.
Thus, Plaintiff has satisfied her burden of proof and the burden shifted to Reef to properly authenticate Plaintiff’s electronic signature. (Espejo, supra, 246 Cal.App.4th at 1060.) Reef has not submitted any supplemental declarations or evidence with its Reply in response to Plaintiff’s Declaration and relies solely on the ROA 20, Castanon Declaration to authenticate Plaintiff’s digital signature.
Civil Code § 163319(a) provides:
An electronic record or electronic signature is attributable to a person if it was the act of the person. The act of the person may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable.
In Espejo, the court analyzed Ruiz to determine when a digital signature has been properly authenticated:
As discussed above, in Ruiz the court considered two declarations submitted by defendant's business manager, Mary Main, purporting to authenticate Ruiz's electronic signature on an arbitration agreement. (Ruiz, supra, 232 Cal.App.4th at pp. 840-841, 181 Cal.Rptr.3d 781.) As detailed by the Ruiz court, in the first declaration, Main “summarily asserted ... that Ruiz was the person who electronically signed the 2011 agreement ..., but she did not explain how she arrived at that conclusion.” (Id. at p. 843, 181 Cal.Rptr.3d 781.) In other words, Main “never explained how Ruiz's printed electronic signature, or the date and time printed next to the signature, came to be placed on the 2011 agreement. More specifically, Main did not explain how she ascertained that the electronic signature on the 2011 agreement was ‘the act of’ Ruiz” as required by Civil Code section 1633.9. (Id. at pp. 843-844, 181 Cal.Rptr.3d 781.) The court then explained why Main's second declaration, offered to rebut Ruiz's assertion that he did not recall signing the agreement, did not provide the necessary authentication: “... Main explained in her reply declaration that the 2011 agreement was part of an employee acknowledgment form that ‘is’ presented to all Moss Bros. Employees ..., and each employee is required to log into the company's HR system, using his or her ‘unique login ID and password,’ to review and sign the employee acknowledgment form. Again, however, Main did not explain how, or upon what basis, she inferred that the electronic signature on the 2011 agreement was ‘the act of’ Ruiz. (Civ.Code, § 1633.9, subd. (a).) This left a critical gap in the evidence supporting the petition.
“Indeed, Main did not explain that an electronic signature in the name of ‘Ernesto Zamora Ruiz’ could only have been placed on the 2011 agreement ... by a person using Ruiz's ‘unique login ID and password’; that the date and time printed next to the electronic signature indicated the date and time the electronic signature was made; that all Moss Bros. employees were required to use their unique login ID and password when they logged into the HR system and signed electronic forms and agreements; and the electronic signature on the 2011 agreement was, therefore, apparently made by Ruiz on September 21, 2011, at 11:47 a.m. Rather than offer this or any other explanation of how she inferred the electronic signature on the 2011 agreement was the act of Ruiz, Main only offered her unsupported assertion that Ruiz was the person who electronically signed the 2011 agreement. In the face of Ruiz's failure to recall electronically signing the 2011 agreement, the fact the 2011 agreement had an electronic signature on it in the name of Ruiz, and a date and time stamp for the signature, was insufficient to support a finding that the electronic signature was, in fact, ‘the act of’ Ruiz.” (Ruiz, supra, 232 Cal.App.4th at p. 844, 181 Cal.Rptr.3d 781.)
(Espejo, supra, 246 Cal. App. 4th at 1061–62.)
In contrast to the defendant in Ruiz, the defendant in Espejo offered “the critical factual connection that the declarations in Ruiz lacked”, i.e. explanation of the “security precautions regarding transmission and use of an applicant’s unique username and password, as well as the steps an applicant would have to take to place his or her name on the signature line of the employment agreement and the DRP”. (Espejo, supra, 246 Cal.App.4th at 1062.) Specifically, the defendant in Espejo explained that the arbitration agreement was included in the packet of documents that were provided to the plaintiff as part of his offer of employment; that plaintiff was sent an email with a hyperlink to the Applicant Home Page and employment contract, which included the arbitration agreement; that the Applicant Home Page requires the use of a private and unique username and password to which only plaintiff had access; that the username and password were “directly and orally” given to plaintiff and then when plaintiff logged in for the first time, he had to change his password before he could do anything else on the Applicant Home Page; that plaintiff had to log in and use his unique user name and password to access the hyperlinks to each document; that plaintiff was prompted to electronically sign the arbitration agreement by typing in his name, which would then populate the signature line on the contract; and that then plaintiff’s name, date, time and IP address where the agreement was electronically signed would be inputted into the contract. (Espejo, supra, 246 Cal.App.4th at 1054-1054.)
Here, the Castanon Declaration fails to demonstrate she has the required personal knowledge regarding Reef’s policies and practices for onboarding new hires at the time of Plaintiff’s hire. Castanon explains she has only been in her position for 1 year. ROA 20, Castanon Decl., ¶2. There is no indication that Castanon worked for Reef prior to her current position as Director of Operations. See generally, ROA 20, Castanon Decl. This means that the Arbitration Agreement pre-dates Castanon’s employment and Plaintiff’s onboarding. ROA 20, Ex. A; ROA 36, FAC, ¶20. Therefore, there are no facts to support Castanon’s conclusory statement that “[a]t the time of Plaintiff’s employment”, Reef used Viventium or the implication that Castanon was aware of any of Reef’s policies and practices at the time of Plaintiff’s hiring and onboarding.
Additionally, Castanon states she is “responsible for maintaining and being knowledgeable about the documents presented to current and newly hired employees as part of their onboarding training”, but Castanon does not state if or how she was aware of these procedures at the time of Plaintiff’s onboarding, whether Reef utilized the same Viventium system and onboarding procedures at the time of Plaintiff’s onboarding, or whether it was Reef’s policy and practice to present the Arbitration Agreement as part of the onboarding documents at the time of Plaintiff’s onboarding.
Like the Main declarations in Ruiz, the Castanon Declaration fails to explain how, or on what basis, she obtained the knowledge and inferred that the electronic signature on the Arbitration Agreement was the act of Plaintiff. In light of the gaps in the Castanon Declaration, the Court finds the facts in this case are similar to Ruiz and that Reef has not satisfied its burden to properly authenticate the electronic signature and show it was an act by Plaintiff.
Accordingly, the Motion to Compel Arbitration is DENIED.
The Court has received and considered the parties’ joint case management statement filed December 29, 2022 and sets a further status conference on April 21, 2023 at 9 AM. The parties are ordered to file a joint status report not later than April 14, 2023.
Reef is ordered to give notice.