Judge: Joseph Lipner, Case: 24STCV02448, Date: 2024-10-15 Tentative Ruling

Case Number: 24STCV02448    Hearing Date: October 15, 2024    Dept: 72

SUPERIOR COURT OF CALIFORNIA

COUNTY OF LOS ANGELES

DEPARTMENT 72

TENTATIVE RULING

Defendants Cedars-Sinai Medical Center (Cedars-Sinai) and Julie Strumwasser (“Strumwasser”) (collectively, “Moving Defendants”) move for an order compelling Plaintiff Pamela Richardson-Elex (“Plaintiff”) to arbitrate her claims in this action.

The Court GRANTS the motion to compel arbitration and STAYS this action pending the outcome of arbitration.

Background

This is an employment case between Plaintiff and Defendants Cedars-Sinai, Cedars Sinai Health Ventures (“Health Ventures”), Cedars Sinai Health Systems (“Health Systems”), and Strumwasser (collectively, “Defendants”).  Plaintiff alleges that Strumwasser was her supervisor at Health Ventures.  (Complaint ¶ 2(c).)

Plaintiff was employed with Cedars-Sinai beginning in March 2009 and ending on September 15, 2023. (Hickey Decl. ¶ 7.) Plaintiff alleges that she was subjected to discrimination, harassment, retaliation, and wrongful termination in connection with her employment.

Plaintiff filed this action against Defendants on January 30, 2024, raising claims for (1) employment discrimination (race) – hostile environment; (2) employment discrimination (race) – disparate treatment; (3) employment discrimination (disability); (4) employment discrimination (retaliation); (5) employment discrimination (unlawful harassment); and (6) whistleblower retaliation.

On September 3, 2024, Moving Defendants moved to compel arbitration. Plaintiff filed an opposition and Moving Defendants filed a reply.

Request for Judicial Notice

The Court grants Moving Defendants’ request for judicial notice and takes notice of the submitted materials as public records.

Legal Standard

Under both the Federal Arbitration Act (“FAA”) and California law, arbitration agreements are valid, irrevocable, and enforceable, except on such grounds that exist at law or equity for voiding a contract. (Winter v. Window Fashions Professions, Inc. (2008) 166 Cal.App.4th 943, 947.)

The party moving to compel arbitration must establish the existence of a written arbitration agreement between the parties. (Code of Civ. Proc., § 1281.2.) In ruling on a motion to compel arbitration, the court must first determine whether the parties actually agreed to arbitrate the dispute, and general principles of California contract law help guide the court in making this determination. (Mendez v. Mid-Wilshire Health Care Center (2013) 220 Cal.App.4th 534, 541.)

“A petition to compel arbitration or to stay proceedings pursuant to Code of Civil Procedure sections 1281.2 and 1281.4 must state, in addition to other required allegations, the provisions of the written agreement and the paragraph that provides for arbitration. The provisions must be stated verbatim or a copy must be physically or electronically attached to the petition and incorporated by reference” (Cal. Rules of Court, rule 3.1330.) “With respect to the moving party's burden to provide evidence of the existence of an agreement to arbitrate, it is generally sufficient for that party to present a copy of the contract to the court. Once such a document is presented to the court, the burden shifts to the party opposing the motion to compel, who may present any challenges to the enforcement of the agreement and evidence in support of those challenges.” (Baker v. Italian Maple Holdings, LLC (2017) 13 Cal.App.5th 1152, 1160 [internal citations omitted].)

Discussion

The Arbitration Agreements

While employed with Cedars-Sinai, Plaintiff executed three arbitration agreements with Cedars-Sinai. The first agreement was executed on March 24, 2009 (the “2009 Agreement”). (Hickey Decl. ¶ 4, Ex. A.) The second agreement was executed on May 13, 2011 (the “2011 Agreement”). (Hickey Decl. ¶ 4, Ex. B.) The third agreement was executed on November 8, 2019 (the “2019 Agreement”). (Hickey Decl. ¶ 5, Ex. C.) Plaintiff does not contest that she executed the agreements.

Moving Defendants make this motion pursuant to the 2019 Agreement. The 2019 Agreement provides that it supersedes all prior agreements between Cedars-Sinai and Plaintiff. (Hickey Decl., Ex. C at p. 4.)

Unconscionability

“ ‘The prevailing view is that [procedural and substantive unconscionability] must both be present in order for a court to exercise its discretion to refuse to enforce a contract or clause under the doctrine of unconscionability.’ [Citation] But they need not be present in the same degree. ‘Essentially a sliding scale is invoked which disregards the regularity of the procedural process of the contract formation, that creates the terms, in proportion to the greater harshness or unreasonableness of the substantive terms themselves.’ [Citation] In other words, the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.” (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114 (Armendariz).)

“ ‘Procedural unconscionability’ concerns the manner in which the contract was negotiated and the circumstances of the parties at that time. It focuses on factors of oppression and surprise. The oppression component arises from an inequality of bargaining power of the parties to the contract and an absence of real negotiation or a meaningful choice on the part of the weaker party. The component of surprise arises when the challenged terms are ‘hidden in a prolix printed form drafted by the party seeking to enforce them.’” (Nyulassy v. Lockheed Martin Corp. (2004) 120 Cal.App.4th 1267, 1281.)

Substantive unconscionability focuses on the actual terms of the agreement and evaluates whether they create overly harsh or one-sided results as to shock the conscience. (Suh v. Superior Court (2010) 181 Cal.App.4th 1504, 1515.) The paramount consideration in assessing substantive unconscionability is mutuality. (Carmona v. Lincoln Millennium Car Wash, Inc. (2014) 226 Cal.App.4th 74, 85.)

The California Supreme Court has held that a mandatory pre-dispute arbitration agreement requiring arbitration of unwaivable statutory rights must provide for the following: (1) a neutral arbitrator; (2) adequate discovery; (3) availability of all types of relief that are otherwise available in court; (4) a written decision that will permit a limited form of judicial review; and (5) a provision that the employer must pay for the arbitrator’s fees and all costs unique to arbitration. (Armendariz, supra, 24 Cal.4th at p. 102.)

            Plaintiff argues that the 2009 Agreement is unconscionable because it does not sufficiently set forth discovery procedures. There are two problems with this argument. First, that is not the correct agreement. Moving Defendants move to compel arbitration pursuant to the 2019 Agreement, which superseded the 2009 Agreement. Second, the 2019 Agreement accounts for discovery, providing that “[t]he parties shall be entitled to engage in discovery as authorized by the JAMS Rules.” (Hickey Decl., Ex. C at p. 2.)

            Finally, even if Plaintiff were able to show substantive unconscionability, Plaintiff makes no argument concerning procedural unconscionability, which is also a requirement in order for the Court to deny enforcement of an arbitration agreement.

            The Court therefore finds that Plaintiff has not shown that the 2019 Agreement, the operative arbitration agreement, is unconscionable.

Third-Party Beneficiaries

Plaintiff argues that the Court cannot impose arbitration as to the Defendants other than Cedars-Sinai.

For a third party to be able to enforce a contract, three factors must be established: (1) the third party would in fact benefit from the contract; (2) a motivating purpose of the contracting parties was to provide a benefit to the third party; and (3) permitting the third party to enforce the contract against a contracting party is consistent with the objectives of the contract and reasonable expectations of the third parties. (Goonewardene v. ADP, LLC¿(2019) 6 Cal.5th 817, 830.)

Whether the third party is an intended beneficiary or merely an incidental beneficiary involves construction of the intention of the parties, gathered from reading the contract as a whole in light of the circumstances under which it was entered. (Cione v. Foresters Equity Services, Inc. (1997) 58 Cal.App.4th 625, 636.) It is not necessary that the beneficiary be named or identified as an individual. (Ronay Family Limited Partnership v. Tweed (2013) 216 Cal.App.4th 830, 838.)

Where the language of a contract is clear and explicit, and does not involve an absurdity, the plain meaning governs. (West Pueblo Partners, LLC v. Stone Brewing Co., LLC (2023) 90 Cal.App.5th 1179, 1185, citing Civ. Code, § 1638.)

The first element is satisfied because the third parties would benefit from enforcing the 2019 Agreement as to Plaintiff’s claims against them.

The second element is satisfied because the 2019 Agreement covers “all claims or controversies in any way relating to or associated with [Plaintiff’s] employment or termination of [Plaintiff’s] employment,” except as provided in the 2019 Agreement’s limited exceptions – exceptions which no party contends apply here. (Hickey Decl., Ex. C at p. 1.) Thus, the 2019 Agreement contemplated arbitration of claims relating to Plaintiff’s employment and termination, and not merely claims between the two contracting parties.

The third element is satisfied because permitting the third parties to compel arbitration is consistent with the stated objective of the 2019 Agreement to cover all claims relating to Plaintiff’s employment and termination.

Thus, the non-contracting Defendants can compel arbitration under the 2019 Agreement.

The Court therefore grants the motion to compel arbitration and stays this action pending the outcome of arbitration.