Judge Kerry Bensinger, Case Number: 23STCV30260, Date: 2024-10-02 Tentative Ruling

CASE: Marquise D. Lewis, et al. v. The Petersen Automotive Museum Foundation, et al.

DEFENDANT PETERSEN MUSEUM FOUNDATION MOTION TO COMPEL ARBITRATION AND STAY OF PROCEEDINGS

On December 11, 2023, Plaintiff Marquise D. Lewis (Lewis or Plaintiff) filed a Complaint against Defendant Petersen Automotive Museum Foundation (Petersen) for (1) Unlawful Discrimination in Violation of Government Code Section § 12900 et seq.; (2) Unlawful Termination in Violation of Public Policy; and (3) Failure to Prevent Harassment and Discrimination, arising from his employment as a security guard at the Petersen Automotive Museum. Lewis also brings causes of action for (4) Civil Battery, (5) Negligence, (6) Premises Liability, and (7) Breach of Contract against Defendants Bistagne Brothers Body Shop, Inc.; Bistagne Brothers Properties, LLC; Bistagne Brothers, LLC; Robert E. Bistagne; and Charles A. Bistagne (collectively, the Bistagne Defendants).[1]

Lewis was employed by Petersen to serve as a security guard at the Petersen Automotive Museum (Petersen Museum). Lewis signed an employment agreement. The agreement contained an arbitration agreement.

Lewis’s allegations fall into two general categories. First, Lewis, who identifies racially as Black, alleges Petersen engaged in discriminatory and unequal treatment by (among other things) consistently assigning him and other Black security guards at the two most dangerous posts at the Petersen Museum. This culminated with Lewis being shot while on duty on December 11, 2021 (December 11 shooting).

The second category relates to the December 11 shooting. Lewis was working the graveyard shift at the Petersen Museum parking lot for three private parties. Bistagne Defendants hosted one of the parties. Thomas P. Otis (Otis), an employee of the Bistagne Defendants, attended the party with his partner. They parked in the garage. Later that night, Otis and his partner decided to leave the party and attempted to leave the garage. Both were inebriated. Otis became belligerent when Lewis would not allow them to leave the garage without paying for parking. The incident escalated into a physical confrontation between Lewis and Otis and Otis shooting Lewis with a handgun. Plaintiff alleges Bistagne Defendants had a duty to provide adequate security to protect all individuals at the Petersen Museum the night of the party and a duty to inform the bartenders or caterers who were serving alcohol at the party of Otis’s drunken and violent tendencies.

On July 29, 2024, Petersen filed this Motion to Compel Arbitration and Stay Proceedings.

On September 5, 2024, Bistagne Defendants filed a joinder to Petersen’s motion.

On September 18, 2024, Lewis filed an opposition to Petersen’s motion and concurrently filed an opposition to Bistagne Defendants’ joinder. Lewis filed an amended opposition on September 19, 2024.[2]

Petersen asserts twenty-eight (28) objections to the Declaration of Marquise D. Lewis and thirty-fourth (34) objections to the Declaration of Carter M. Zinn.

Objections 14, 15: SUSTAINED: lack of foundation, personal knowledge and speculation.

Objection 16 is SUSTAINED: hearsay, except where offered for effect on the listener and state of mind.

Objection 20 is SUSTAINED (with respect to the identification of the signature): lack of foundation and speculation

Hence, the key inquiry is whether Lewis’s use of the phrase, “to my knowledge” in his certification of his declaration introduced an impermissible level of uncertainty. (Katelaris, 92 Cal.App.4th at p. 1216; Pelayo, 174 Cal.App.4th at p. 494.) Lewis declared he had personal knowledge of the facts he asserted and signed the document under penalty of perjury, declaring that the facts set forth were true and correct. As in Pelayo, the declaration asserted facts that were within the scope of Lewis’s personal knowledge. (Pelayo, supra, at p. 494.) Given this unqualified statement, the inclusion of the phrase “to his knowledge” does not render Lewis’s declaration impermissibly uncertain.

The court declines to rule on the objections because the court did not rely on Zinn’s Declaration in ruling on the motion.

Petersen moves to compel arbitration and stay the proceedings in this matter pursuant to an arbitration agreement. Bistagne Defendants argue they may also compel arbitration of Lewis’s claims despite being non-signatories to the arbitration agreement based on equitable estoppel and third-party beneficiary theories.

In opposition, Lewis argues the agreement to arbitrate is unenforceable because his “signature” was obtained by fraud, and alternatively, he never consented to arbitrate his claims. As to Bistagne Defendants, Lewis disputes their standing to compel arbitration.

Accordingly, there are two issues to be decided: (1) whether there exists a valid agreement to arbitrate, and (2) if there is a valid arbitration agreement, whether Bistagne Defendants may compel arbitration as non-signatories to the agreement.

Code of Civil Procedure section 1281.2 requires the trial court to order arbitration of a controversy “[o]n petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate that controversy ... if it determines that an agreement to arbitrate the controversy exists.” On a motion to compel arbitration, the threshold question is whether there is an agreement to arbitrate the dispute. (Trinity v. Life Ins. Co. of North America (2022) 78 Cal.App.5th 1111, 1120 (Trinity).) The party seeking to compel arbitration bears the burden of proving by a preponderance of the evidence an agreement to arbitrate a dispute exists. (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236; Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413 (Rosenthal).) To meet this burden, the moving party must first produce “prima facie evidence of a written agreement to arbitrate the controversy.” (Rosenthal, 14 Cal.4th at p. 413; accord, Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165 (Gamboa).) “ ‘If the moving party meets its initial prima facie burden and the opposing party disputes the agreement, then ... the opposing party bears the burden of producing evidence to challenge the authenticity of the agreement.” (Gamboa, 72 Cal.App.5th at p. 165.) “If the opposing party produces such evidence, then ‘the moving party must establish with admissible evidence a valid arbitration agreement between the parties.’ ” (Trinity, 78 Cal.App.5th at p. 1120.) “Despite the shifting burden of production, ‘[t]he burden of proving the agreement by a preponderance of the evidence remains with the moving party.’ ” (Ibid.)

The trial court acts as the trier of fact, weighing all the affidavits, declarations, and other documentary evidence. (Code Civ. Proc., § 1281.2; Provencio v. WMA Securities, Inc. (2005) 125 Cal.App.4th 1028, 1031.)

Here, Petersen makes a prima facie case for the existence of a valid arbitration agreement. (See Bannister v. Marinidence Opco, LLC (2021) 64 Cal.App.5th 541, 543 (Bannister) [“The party seeking arbitration can meet its initial burden by attaching to the [motion or] petition a copy of the arbitration agreement purporting to bear the [opposing party's] signature.”].) Petersen attaches a document entitled “Arbitration Agreement” (hereafter, the Agreement) to the declaration its Human Resources Manager, Karen Locke (Locke). (See Locke Decl., Ex. A.) Locke states that the Agreement was presented to Lewis as part of his initial on-boarding process with Petersen. (Locke Decl., ¶¶ 8-9.) The Agreement purportedly bears Lewis’s handwritten name and is dated January 2, 2016. (Locke Decl., Ex. A.)

Lewis argues his signature was obtained by fraud in the execution. Mutual consent is an essential contract element. (Civ. Code, § 1550; Donovan v. RRL Corp. (2001) 26 Cal. 4th 261, 270.) For a contract to be enforceable, the consent of the parties to a contract must be free, mutual, and communicated by each to the other. (Civ. Code, § 1565; Sellers v. JustAnswer LLC (2021) 73 Cal.App.5th 444, 460 [“If there is no evidence of establishing a manifestation of assent to the “same thing” by both parties, then there is no mutual consent to contract and no contract formation.”].) Consent is not mutual unless the parties all agree upon the same thing in the same sense. (Civ. Code, § 1580.) An apparent consent is not real or free when obtained through fraud. (Civ. Code, § 1567(3).) “In the case of fraud in the inception or execution of the contract, the fraud goes to the inception or execution of the agreement, so that the promisor is deceived as to the nature of his act, and actually does not know what he is signing, or does not intend to enter into a contract at all, mutual assent is lacking, and [the contract] is void.” (Rosenthal, supra, 14 Cal.4th at p. 416, emphasis in original.)

Here, Lewis states that he reviewed onboarding documents in the office of his then-new boss, head of Petersen security, Ken Van Meter (Van Meter), on his first day of work. (Lewis Decl., ¶ 4.) Van Meter was present. (Id.) Lewis further states that, upon reading the Agreement, he told Van Meter about his concerns with giving up his right to a jury trial. (Lewis Decl., ¶¶ 14-15.) Lewis did not want to sign the Agreement and asked Van Meter what could be done in the situation. (Id., ¶ 15.) In response, Van Meter said something to the effect, “Don’t worry Marquise, I understand. Other people have said the same thing. You do not need to sign the agreement if you don’t want to. All you need to do is just spell out your name on the signature line, and all that will indicate is that you received the document, but not that you are signing it. Since you are just printing out your name, everyone will know you are not signing it.” (Id.) Lewis states he was uncomfortable with the situation but decided to print his name, as suggested by Van Meter, rather than risk being branded a troublemaker. (Id., ¶ 16.) Lewis reiterates he did not intend to bind himself legally to the terms of the Agreement. (Id., ¶ 17.)

Petersen does not submit evidence to refute Lewis’s account of the circumstances surrounding the signing of the Agreement. Instead, Petersen argues Lewis’s assertion of fraud is unsupported by evidence and is akin to the assertions in Rosenthal, supra, 14 Cal.4th 396. In Rosenthal, the defendant, a securities corporation, moved to compel arbitration on the grounds that the plaintiffs had executed a client agreement containing an arbitration clause. (Rosenthal, 14 Cal.4th at pp. 402-403.) In opposition, the plaintiffs argued the arbitration agreement was unenforceable because “ ‘there was fraud in the inception of the contract’ “ and submitted declarations containing evidence that the defendant's representatives did not tell them the client agreement contained an arbitration clause and assured them that the client agreement was a mere formality needed to open an account. (Id. at p. 403.) In reply, the defendant's representatives offered declarations wherein they denied making the allegedly fraudulent statements. (Id. at p. 404.) Without holding an evidentiary hearing, the trial court denied the defendant's petition to compel arbitration, concluding that the plaintiffs “ ‘presented sufficient evidentiary support for their allegations of fraud in the inception of the arbitration agreement.’ ” (Ibid.) The California Supreme Court granted review to resolve a different question. The High Court ultimately concluded that the majority of the plaintiffs' declarations “did not present legally sufficient evidence that they reasonably relied on fraudulent representations as to the essential character of the client agreements they signed[.]” (Rosenthal, 14 Cal.4th at p. 402.) This was so because the statements “to the effect the client agreements were merely a formality, or did not need to be read, were insufficient, even in light of the parties’ relationship, to warrant a finding of fraud in the inception of the agreements.” (Rosenthal, supra, 14 Cal.4th at pp. 426-427.)

Rosenthal is distinguishable. Unlike Rosenthal, Lewis submits evidence to show he printed his name to merely acknowledge receipt of the Agreement pursuant to Van Meter’s instruction; Lewis states unequivocally he never intended to be legally bound to the Agreement. Petersen does not offer any evidence to the contrary. The court finds the Agreement is not enforceable.

Accordingly, Peterson’s motion to compel is DENIED. Having so concluded there is no valid agreement to arbitrate, Bistagne Defendants’ motion is likewise DENIED. The court need not and does not address Lewis’s remaining arguments.

Defendants are ordered to serve and file their Answers to the Complaint within 15 days of the court’s order.

Kerry Bensinger

Judge of the Superior Court

[1] Jo’Nez Cain, Lewis’s wife, also brings a cause of action for loss of consortium.

[2] Petersen points out the opposition was served on September 19, 2024, and is therefore untimely. The court exercises its discretion to consider Lewis’s opposition. (Cal. Rules of Court, rule 3.1300(d).)