Judge: Jon R. Takasugi, Case: 22STCV13873, Date: 2023-04-14 Tentative Ruling

Case Number: 22STCV13873    Hearing Date: April 14, 2023    Dept: 17

                                    Superior Court of California

County of Los Angeles

DEPARTMENT 17

Plaintiff’s motion to compel Defendant to pay the arbitrator’s fees and costs or waive its right to arbitration is granted.

On 4/26/2022, Plaintiff Theresa Driskell, by and through her successor-in-interest, Teresa Smothermon (Plaintiff), and Teresa Smothermon (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; and (4) wrongful death. On September 7, 2022, Plaintiff’s causes of action for elder abuse/neglect, negligent/willful conduct, and breach of contract were compelled to arbitration and Smothermon’s cause of action for wrongful death was stayed pending arbitration.

Plaintiff moves for an order compelling Defendants to pay the arbitrator’s fees and costs or to waive its right to arbitration.

Legal Standard

“When a party who has engaged in arbitration in good faith is unable to afford to continue in such a forum, that party may seek relief from the superior court.” (Weiler v. Marcus & Millichap Real Estate Investment Services, Inc. (2018) 22 Cal.App.5th 970, 981.) If plaintiffs are unable to pay the costs of arbitration despite signing an agreement requiring them to pay their pro rata share of the arbitration costs, then defendant must either pay the entire cost of the arbitration or waive its right to arbitrate the dispute. (Roldan v. Callahan & Blaine (2013) 219 Cal.App.4th 87, 96.) “[T]he trial court should decide the issue of arbitrator fee payment.…” (Aronow v. Superior Court (2022) 76 Cal.App.5th 865, 884.) “[I]n forma pauperis status is not a prerequisite….” (Ibid.)

Objections

Defendants’ objections nos. 1-3 are overruled.

Discussion

Here, Plaintiff submits a declaration by Steve Driskell, who purports to be Plaintiff’s Durable Power of Attorney with knowledge of Plaintiff’s estate’s assets. (Opp., Exh. 4, ¶¶ 3-5.) Paragraph 5 provides:

At the time of my mom’s death, she had approximately $6,000 in cash assets. Once all debts and liabilities were satisfied after her passing, only about $1,000 in monetary assets remained. The remaining funds were distributed to her four children. My mother, THERESA DRISKELL did not have any other tangible or intangible assets of monetary value.

The arbitrator’s fees are $3,750 per half day and $7,500 per day with a $750 administrative fee. (Opp., Exh. 3.) Plaintiff argues in her motion that the arbitration will last seven days, however, the Court will not consider evidence submitted within a motion and not sworn to in a declaration. Defendant submits no evidence of the estimated arbitration costs. Based on the three causes of action, the Court finds that the arbitration will likely last more than one day. Thus, the fee will likely be over $10,000 in total with Plaintiff’s share exceeding $5,000. Additionally, Plaintiff alleges her estate has no assets to cover any costs of arbitration. Thus, Plaintiff requests that the Court order Defendants either pay her costs or waive its right to arbitration.

In opposition, Defendants argue that: (1) Roldan, supra, 219 Cal.App.4th 87 is limited to adhesion contracts and that the contract signed by Plaintiff was not an adhesion contract. (2) Roldan, supra, 219 Cal.App.4th 87 is limited to in forma pauperis plaintiffs seeking relief from arbitration fees; and (3) Plaintiff’s attorneys should bear the costs of arbitration because Plaintiff is being represented on a contingency fee basis.

Regarding the first argument, Defendants’ interpretation of Roldan is incorrect. Roldan, distinguishes itself from Gutierrez v. Autowest, Inc. (2003) 114 Cal.App.4th 77, 89. Roldan, supra, 219 Cal.App.4th 87, 95, cites Gutierrez “ ‘[W]here a consumer enters into an adhesive contract that mandates arbitration, it is unconscionable to condition that process on the consumer posting fees he or she cannot pay.’” “However, we need not go as far as either Gutierrez or Parada did in resolving this appeal. We need not, and do not, reach the issue of whether the arbitration agreements are actually unenforceable….” (Roldan, supra, 219 Cal.App.4th 87, 95.) Roldan addressed the authority of a court to apportion arbitration fees or order a party to waive its right to arbitration to prevent a party, who is unable to afford arbitration fees, from being deprived of a forum to pursue their claims. (Id. At 96.) Thus, Roldan does not address adhesion contracts as Defendants argue.

Regarding the second argument, Aronow, supra, 76 Cal.App.5th 865, 884, rules that in forma pauperis status is not required for a Court to order that one party should bear all arbitration fees.

Regarding the third argument, the Court finds no authority and Defendants cite none that allows the court to examine the privileged retainer agreement between Plaintiff and her counsel or that would require Plaintiff’s counsel to disclose its finances or ability to advance Plaintiff’s arbitration fees and costs. The cases addressing the issue of apportioning arbitration fees do not suggest that the court can order counsel for either party to pay arbitration fees on its client’s behalf. (See Aronow, supra, 76 Cal.App.5th 865; Weiler, supra, 22 Cal.App.5th 970; and Roldan, supra, 219 Cal.App.4th 87.)

Therefore, Defendants are ordered to pay the arbitrators fees and costs or waive their right to arbitration.

Elder Abuse

The Elder Abuse statutes are inapplicable because they do not address arbitration fee apportionment. Plaintiff submits additional arguments regarding Plaintiff’s status as a class protected by the Welfare and Institutions Code §§ 15657 through 15657.3 and the purpose of the statutes are “to encourage private enforcement of laws to protect a particularly vulnerable sector of the population from abuse and custodial neglect. (Sanders v. Lawson (2008) 154 Cal.App.4th 434, 439.) However, §§ 15657 through 15657.3 address attorneys’ fees, damages, and protective orders in elder abuse cases and not arbitration fee apportionment. Thus, the sections are inapplicable.

Judicial Arbitration and Mediation Services (JAMS) Rules

JAMS rules requiring a party enforcing a mandatory arbitration clause pay all costs is inapplicable because the arbitration agreement was not mandatory. Plaintiff argues that JAMS rules require that Defendants pay all arbitration costs pursuant to a mandatory pre-dispute arbitration clause. However, Defendants submits evidence that the arbitration agreement is not mandatory because the arbitration agreement provides as the first sentence “BOTH PARTIES UNDERSTAND THAT AGREEING TO Arbitration IS NOT A CONDITION OF YOUR ADMISSION TO THE COMMUNITY.” Plaintiff offers no evidence that the arbitration agreement was mandatory. Thus, the JAMS rules regarding mandatory arbitration clauses are inapplicable.

Based on the foregoing, Plaintiff’s motion to compel Defendant to pay the arbitrator’s fees and costs or waive its right to arbitration is granted.

It is so ordered.

Dated: April     , 2023

   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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