Judge: Jon R. Takasugi, Case: 24STCV25230, Date: 2025-04-08 Tentative Ruling

Case Number: 24STCV25230    Hearing Date: April 8, 2025    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

 Defendant’s motion to compel arbitration is GRANTED. This action is stayed pending the completion of arbitration.

            On 9/30/2024, Plaintiff Brian Cosio Borillo (Plaintiff) filed suit against AG Arcadia LLC dba Huntington Drive Health Rehabilitation (Defendant), alleging: (1) disability discrimination; (2) failure to accommodate; (3) failure to engage in the interactive process; (4) violation of California Family Rights Act (CFRA); (5) harassment, hostile work environment; (6) retaliation; (7) retaliation; (8) failure to prevent; (9) wrongful termination; and (10) Labor Code section 1102.5. 

            On 2/21/2025, Defendant moved to compel arbitration of Plaintiff’s Complaint, and stay proceedings pending the completion of arbitration.

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

Defendant submitted evidence that on 3/8/2022, Defendant hired Plaintiff as a  business office manager. Defendant submitted evidence that as part of the employment, Plaintiff executed an Acknowledgement of Policies, Rules, and Agreement for At-Will Employment and Arbitration (the Acknowledgement). (Villaluz Decl. ¶5, Exh 1.)

The Acknowledgement contains the following language:

Agreement for Binding Arbitration:

I KNOWINGLY AND VOLUNTARILY AGREE TO SUBMIT AND SETTLE ANY DISPUTE, CONTROVERSY OR CLAIM ARISING OUT OF OR RELATING TO MY EMPLOYMENT RELATIONSHIP WITH COMMUNITY CARE CENTER TO ARBITRATION AS DESCRIBED IN THE “ARBITRATION AGREEMENT” SECTION OF THIS HANDBOOK. I AGREE THAT THE ARBITRATION OF SUCH ISSUES, INCLUDING THE DETERMINATION OF ANY AMOUNT OF DAMAGES SUFFERED, SHALL BE FINAL AND BINDING UPON ME AND ALL PARTIES TO THE MAXIMUM EXTENT PERMITTED BY LAW. I REALIZE BY AGREEING TO ARBITRATION, I WILL HAVE WAIVED MY RIGHT TO TRIAL BY JURY. THIS POLICY CANNOT CHANGE EXCEPT BY WRITTEN AGREEMENT BETWEEN MYSELF AND HUNTINGTON DRIVE HEALTH AND REHABILITATION CENTER. THIS POLICY DOES NOT PERTAIN TO CLAIMS PROCESSED THROUGH THE NLRB.

      (Exh. 1.)

The arbitration provision set forth in the Employee Handbook at pages 10-11 contains the following additional language:

This binding arbitration shall be conducted by a retired judge or other such person as agreed to, jointly selected by the parties, and the procedure governed by the Federal Arbitration Act. Both parties shall have all rights of discovery and remedies as he or she would in a state court civil action. The arbitration of all issues, including the determination of any amount of damages suffered, shall be final and binding upon the employee and employer to the maximum extent permitted by law. Judgment upon the award rendered by the arbitrator may be entered by any court having jurisdiction. The parties shall each initially bear their own costs and attorney’s fees. The employer shall pay for the arbitrator’s fees and any out-of-pocket costs required for the administration of the arbitration (such as room rental charges). The arbitrator shall issue a written decision explaining the reasons for the decision. The arbitrator shall follow the applicable law in determining whether to award attorneys’ fees and costs to the prevailing party. The arbitrator shall follow California law in respects of his/her award.

            (Exh. 2.)

            In opposition, Plaintiff argues that: (1) Defendant cannot meet its burden to prove the existence of a valid agreement to arbitrate; (2) Plaintiff did not sign either the 2020 or 2024 proposed arbitration agreement; (3) Defendant's presentation of a new arbitration agreement in 2024 constitutes waiver of any earlier agreement; (4) the purported agreement is both procedurally and substantively unconscionable; and (5) Defendant's retaliatory termination of Plaintiff for refusing to sign the 2024 agreement renders enforcement contrary to public policy. Furthermore, Defendant's outrageous request for sanctions highlights its questionable litigation tactics in this matter.

            After review, the Court disagrees for several reasons.

            First, Plaintiff contends that he never signed the Acknowledgement. However, Plaintiff does not submit any evidence that the signature is forged, and Defendant submitted evidence that the form was located in Plaintiff’s personnel file and maintained at the work facility. (Villaluz Decl. ¶ 5.)

            Instead, Plaintiff argues that “[n]otably, the expanded version of the arbitration agreement buried in the Employee Handbook that Defendant relies upon remains unsigned. (Exhibit 2 to Villaluz Decl.) Moreover, Defendant's own conduct in 2024—specifically, presenting Plaintiff with a new agreement and explicitly telling him no agreement was in place— directly contradicts its current position.” (Opp., 2: 15-19.)

However, the fact that the expanded version was not individually signed is insufficient because “… it is generally unreasonable… to neglect to read a written contract before signing it.” (Sanchez v. Valencia Holing Co. LLC (2015) 61 Cal.4th 899.) The fact that Plaintiff was clearly put on notice of the presence of an arbitration provision—as indicated by his signature and acknowledgement—only makes his failure to read the expanded version in the agreement that must more unreasonable.

            Furthermore, this makes the facts here materially different from those in Sparks v. Vista Del Mar Child and Family Services (2012) 207 Cal.App.4th 151, which Plaintiff cites in support. There, a California employer attempted to enforce an arbitration clause located within the employee handbook against an employee claiming damages as a result of his termination. Ultimately, the Court of Appeal held that the employee was not bound by his employer’s arbitration clause located within the employee handbook because it “was included within a lengthy employee handbook; the arbitration clause was not called to the attention of plaintiff, and he did not specifically acknowledge or agree to arbitration; the handbook stated that it was not intended to create a contract; the handbook provided that it could be amended unilaterally by defendant and thus rendered any agreement illusory; the specific rules referred to in the arbitration clause were not provided to plaintiff; and the arbitration clause is unconscionable.” (Id. at 1514.)

Here, by contrast, the preponderance of evidence suggests the signature on the 2022 Acknowledgement form is Plaintiff’s. As such, Plaintiff did have notice of the arbitration clause, and did sign a document acknowledging the presence of the clause. Moreover, as set forth below, the arbitration agreement is not unconscionable. 

Finally, while Plaintiff did refuse to sign a 2024 arbitration agreement, Plaintiff’s signature on the 2022 Acknowledgement is controlling. Given that arbitration agreement covers any dispute arising out the employment relationship, Plaintiff’s claims here fall within the scope of the agreement.

Given that Defendant has established by a preponderance of the evidence that an arbitration agreement exists, and that Plaintiff’s claims are covered by that agreement, the burden shifts to the Plaintiff 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.)

Plaintiff argues that the agreement is procedurally unconscionable because it was “buried in a lengthy Employee Handbook” and because it fails to specify which arbitration rules apply.

As for the first contention, the Court already rejected this above as unpersuasive. As for the second contention, the Agreement provides that “[t]he arbitration proceeding is instituted by either party making a written demand for arbitration to either ADR Services in Century City or Orange County or JAMS (Judicial Arbitration and Mediation Services) in either Los Angeles or Orange County, or by sending a certified letter, return receipt requested, to the other party demanding arbitration.” (Villaluz Decl., Exh. 2.)

As such, the agreement does identify the relevant arbitration venues, and the applicable rules are available over the internet. Courts have held that a failure to attach arbitration rules is insufficient, by itself, to sustain a finding of procedural unconscionability. (Peng v. First Republic Bank (2013) 219 Cal.App.4th 1462, 1469

As for substantive unconscionability, Plaintiff argues that the agreement is one of adhesion and that the venue provision is fatally vague.

As for the first contention, the adhesive quality of a contract speaks to procedural unconscionability, not substantive unconscionability. Second, where pre-employment adhesion contracts are involved, a degree of procedural unconscionability is always present. This is because, “the arbitration agreement stands between the employee and necessary employment, and few employees are in a position to refuse a job because of an arbitration agreement.” (Little v. Auto Stiegler, Inc. (2003) 29 Cal.4th 1064, 1071 (Little).)  However, where “there is no other indication of oppression or surprise, the degree of procedural unconscionability of an adhesion agreement is low, and the agreement will be enforceable unless the degree of substantive unconscionability is high.” ((Ajamian v. CantorCO2e (2012) 203 Cal.App.4th 771, 796 (Ajamian).)

As to the second contention, Plaintiff argues that the venue provision requiring arbitration in "Orange County or the nearest county seat with over 250,000 population" is impermissibly ambiguous under Civil Code section 164. However, the only argument set forth in support this is that “[s]uch ambiguity in fundamental terms renders an arbitration agreement substantively unconscionable. (Flores v. Nature's Best Distribution, LLC (2016) 7 Cal.App.5th 1, 10-11.)” (Opp., 9: 21-23.) Such an argument is conclusory, and “[w]hen [a party] fails to raise a point or asserts it but fails to support it with reasoned argument and citation to authority, we treat the point as waived.” (Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784-785.)

While Plaintiff presented evidence of procedural unconscionability, Plaintiff has not presented any evidence of substantive unconscionability. As a result, the Court finds that the arbitration agreement is enforceable. (Ajamian, supra, Cal.App.4th at p. 796.)

            Based on the foregoing, Defendant’s motion to compel arbitration is granted. This action is stayed pending the completion of arbitration.

It is so ordered.

Dated:  April    , 2025

   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.  For more information, please contact the court clerk at (213) 633-0517.