Judge: Jon R. Takasugi, Case: 22STCV13873, Date: 2022-09-06 Tentative Ruling

Case Number: 22STCV13873    Hearing Date: September 6, 2022    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

Defendants’ motion to compel arbitration is GRANTED. This matter is ordered stayed pending the completion of arbitration proceedings.

            On 4/26/2022, Plaintiff Theresa Driskell, by and through her success-in-interest, Teresa Smothermon, and Terea Smothermon filed suit against SRG Pacific MGMT LLC dba the Grove at Cerritos, and the Grove at Cerritos (collectively, Defendants), alleging: (1) elder abuse/neglect; (2) negligent/willful conduct; (3) breach of contract; ad (4) wrongful death.

            Now, Defendants move to compel arbitration of Plaintiff’s Complaint. 

Legal Standard

Where the Court has determined that an agreement to arbitrate a controversy exists, the Court shall order the petitioner and the respondent to arbitrate the controversy …unless it determines that…  grounds exist for rescission of the agreement.” (Code Civ. Proc., § 1281.2.) Among the grounds which can support rescission are fraud, duress, and unconscionability. (Tiri v. Lucky Chances, Inc. (2014) 226 Cal.App.4th 231, 239.) The Court may also decline to compel arbitration wherein there is possibility of conflicting rulings on a common issue of law or fact. (Code Civ. Proc., § 1281.2 (c).)

Discussion

The party moving to compel arbitration “bears the burden of proving [the] existence [of an arbitration agreement] by a preponderance of the evidence.” (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413.) The moving party also bears the burden of demonstrating that the claims fall within the scope of the arbitration agreement. (Omar v. Ralphs Grocery Co. (2004) 118 Cal.App.4th 955, 961.)

A.    Existing Agreement

Here, Defendants submitted evidence that on 7/28/2019, Ms. Driskell executed an Admission Agreement with the Grove at Cerritos and initialed the Arbitration Agreement. (Ajello Decl., Exhs. A-B.)

In opposition, Plaintiffs do not dispute that the signature is authentic. Rather, Plaintiffs argue that Theresa Driskell is not bound by the agreement because she is not a signatory. However, there are a number of issues with this argument.

First, Plaintiffs’ seek to assert a claims for breach of contract based on the agreement entered into by Ms. Driskell and Defendants. Ms. Smothermon may not “step into the shoes” of Ms. Driskell to assert a breach of a contract claim for a contract she did not sign, then rely on the fact that she was a non-signatory to evade the arbitration agreement. (Mundi v. Union Sec. Life Ins. Co. (9^th Cir. 2990) 555 F.3d 1042, 1045. (“Equitable estoppel precludes a party from claiming the benefits of a contract while simultaneously attempting to avoid the burdens that contract imposes.”)

Second, under California law, a non-signatory to an arbitration agreement may be compelled to arbitrate under two circumstances: (i) if its claims are “dependent, on or inextricably intertwined” with the underlying contractual obligations of the agreement containing the arbitration clause; or (ii) if it receives a “direct benefit” from the contract containing the arbitration clause. (See In re Toyota Motor Corp. Unintended Acceleration Mktg. (C.D. Cal.2012) 838 F. Supp. 2d 967, 991.)

            Here, the gravamen of Plaintiffs’ Complaint is that Defendants failed to properly care for Ms. Driskell while providing 24-hour assisted living services. Defendants provided this care pursuant to the written agreement that contained the arbitration agreement. As such, all of Plaintiffs claims turn on the underlying written agreement between Defendants and Ms. Driskell, the obligations Defendants undertook pursuant to that agreement, and whether or not Defendants failed to comply with those obligations. (See e.g. Plaintiff’s Complaint ¶ 63 (“Defendants also had a contractual duty to maintain Ms. DRISKELL’S safety to prevent physical harm. Ms. DRISKELL’S contract for care to be provided by THE GROVE AT CERRITOS, included continuous care and supervision, as well as observation for changes in physical, mental, emotional, and social functioning. Defendants breached these contractual duties owed to Ms. DRISKELL based on the foregoing factual allegations. Defendant also had a contractual duty to provide: (1) continuous care and supervision; (2) observation for changes in physical, mental, emotional, and social functioning; (3) notification to resident’s family, physician, and other appropriate person/agency of resident’s needs, and; (4) assistance with personal ADL’s to include dressing, eating, toileting, bathing, grooming, and mobility tasks.”)

Because Plaintiffs’ claims are “dependent, on or inextricably intertwined” with the underlying contractual obligations of the agreement containing the arbitration clause, the Court finds that Plaintiffs can be compelled to arbitrate under the arbitration agreement provision under a theory of equitable estoppel. (Toyota, supra, 838 F.Supp.2d at p. 991.)

            Plaintiffs also argue that: (1) the Court should exercise its discretion and decline to enforce the arbitration agreement under CCP section 1281.2(c); and (2) the arbitration agreement is unenforceable because public policy prohibits arbitration agreements in residential lease or rental agreements.

            As to the first contention, as set forth above, the Court finds that equitable principles favor enforcing the arbitration against Plaintiffs. As such, the Court declines to exercise its discretion to decline to enforce the arbitration agreement.

            As to the second contention, Plaintiffs argue that Civil Code § 1953(a)(4) applies here which voids, as contrary to public policy, the waiver of procedural litigation rights in a dwelling lease or rental agreement. In support, they cite In Harris v. University Village Thousand Oaks, CCRC, LLC (2020), 49 Cal.App.5th 847. There, the Court held that “the agreements compelling arbitration arising from or related to the tenancy provisions of the continuing care contracts are void.” (Id. at 851.)

However, as noted by Defendants, this action here does not pertain to any “tenancy provisions” of Ms. Driskell’s residency agreement with the facility. In Harris, the allegations were that the facility misrepresented the type of security services provided, the amount of future increases in monthly fees, and whether monthly fees included the cost to charge their electric vehicles. (Id. at p. 852.) The Court of Appeals held that Civil Code §1953(a)(4) applied to render void the arbitration provision because "the allegations in the complaint [] include claimed violations of 'rights and obligations as a tenant’.” (Harris, supra, 49 Cal.App.5^th at p. 852.)

Here, by contrast, Plaintiffs’ allegations do not include violations of Ms. Driskell’s rights as a tenant. Instead, they pertain to personal injuries she allegedly sustained due to falls and skin breakdown which is alleged to be due to inadequate care provided to her by Defendants. As such, Plaintiffs’ claims do not include violations of Ms. Driskells’ rights and obligations as a tenant.

This conclusion is reinforced by the fact that if the Court were to adopt Plaintiffs’ characterization of the holding of Harris then all arbitration provisions contained in residential care agreement across the state would be invalid. There is no indication in Harris that its holding was intended to have this broad result.

In sum, the Court concludes that an arbitration agreement exists that can be enforced against Plaintiffs under a theory of equitable estoppel.

B.    Covered Claims

The arbitration agreement provides:

BOTH PARTIES UNDERSTAND THAT AGREEING TO ARBITRATION IS NOT A CONDITION OF YOUR ADMISSION TO THE COMMUNITY. By initialing the line at the end of this Section, however, you agree that any and all claims and disputes arising from or related to this Agreement or to your residency, care or services at the Community, whether made against us or any other individual or entity, shall be resolved by submission to neutral, binding arbitration in accordance with the Federal Arbitration Act; provided, however, that any claim or dispute involving unlawful detainer proceedings (eviction) or any claims that are brought in small claims court shall not be subject to arbitration unless all Parties involved agree to arbitrate such proceedings. If someone other than the resident signs this arbitration clause, he/she understands and agrees that he/she is agreeing to arbitrate on behalf of the resident and on behalf of him/herself as an individual. You give up your constitutional right to have any such dispute decided in a court of law before a jury, and instead accept the use of arbitration. You further waive your right to participate in a representative capacity, or to participate as a member of a class, in any litigation or arbitration proceeding with respect to any such dispute.

(Ajello Decl., Exh. A, emphasis added in part.)

      Accordingly, Plaintiffs’ claims which arise out the contract and the care and services provided to Ms.Driskell by Defendants fall within the scope of the arbitration agreement.

Given that Defendants have established by a preponderance of the evidence that an arbitration agreement exists, and that Plaintiffs’ claims are covered by that agreement, the burden shifts to the Plaintiffs to establish that the arbitration clause should not be enforced. (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236. (Pinnacle).)

II.               Plaintiff’s Burden 

The party opposing arbitration bears the burden of proving, by a preponderance of the evidence any defense, such as unconscionability or duress. (Pinnacle, supra, 55 Cal.4th at p. 236.)

            Here, Plaintiffs did not advance any grounds for unenforceability other than those arguments discussed above.  Accordingly, Plaintiffs have not met their burden.

Based on the foregoing, Defendants’ motion to compel arbitration is granted. This matter is ordered stayed pending the completion of arbitration proceedings.

It is so ordered.

Dated:  September    , 2022

   Hon. Jon R. Takasugi
   Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court at smcdept17@lacourt.org by 4 p.m. the day prior as directed by the instructions provided on the court website at www.lacourt.org.  If a party submits on the tentative, the party’s email must include the case number and must identify the party submitting on the tentative.  If all parties to a motion submit, the court will adopt this tentative as the final order.  If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar. 

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