Judge: Lee W. Tsao, Case: 21NWCV00450, Date: 2023-03-28 Tentative Ruling

Case Number: 21NWCV00450    Hearing Date: March 28, 2023    Dept: C

MEDINA v. 5648 EAST GOTHAM STREET, LLC

CASE NO.:  21NWCV00450

HEARING:  3/28/23 @ 10:30 AM

#3

TENTATIVE RULING

Defendant 5648 East Gotham Street, LLC’s motion to compel arbitration is GRANTED as to the individual claims.  The representative claims are STAYED.

Moving party to give NOTICE.

Defendant 5648 East Gotham Street, LLC dba Briarcrest Nursing Center (“Briarcrest”) moves to compel arbitration pursuant to CCP § 1281.2.

A written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract.  (CCP § 1281.) The court must grant the petition to compel arbitration unless it finds either: no written agreement to arbitrate exists; the right to compel arbitration has been waived; grounds exist for revocation of the agreement; or litigation is pending that may render the arbitration unnecessary or create conflicting rulings on common issues.  (CCP § 1281.2.)

Plaintiff’s Complaint asserts a cause of action for PAGA violations.

The Court finds that Defendant has met the burden of proving the existence of a valid arbitration agreement between the parties. Plaintiff “knowingly and voluntarily agree[d] to submit and settle any dispute, controversy or claim arising out of or relating to my employment relationship with Briarcrest Nursing Center to arbitration as described in the “arbitration agreement” section of this handbook.” (Pellicer Decl., Ex. A-B.)

Based on the recent United States Supreme Court opinion in Viking River Cruises, Inc. v. Moriana, 142 S.Ct. 1906 (2022), Plaintiff’s individual claims are subject to binding arbitration.

In opposition, Plaintiff initially contends that she did not see nor accept Defendant’s arbitration agreement because “it does not appear to be my signature.”  (Medina Decl., ¶¶ 3-5, 10.)  The arbitration proponent has a minimal burden on a Petition to Compel Arbitration and need only attach an arbitration agreement signed by the plaintiff.  (See Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1057, 1060.)  In response, if a plaintiff challenges the authenticity of the signature, plaintiff must present sufficient evidence to create a factual dispute as to whether the signature is her own.  If the plaintiff is simply “unable to recall” or “does not remember” signing the agreement, this is insufficient as a matter of law to create a legitimate factual dispute so as to shift the burden back to defendant to prove the signature’s authenticity.  (See Iyere v. Wise Auto Group (2023) 87 Cal.App.5^th 747, 756 – “That evidence does not create a factual dispute as to whether plaintiffs signed the agreement. The declarations explicitly acknowledge that plaintiffs signed a “stack of documents” and do not deny that the stack included the agreement.”)  Here, Plaintiff acknowledged that she was asked to complete documents, but “do[es] not recall” signing it.  (Medina Decl., ¶¶ 5, 9.)  Plaintiff provides no corroborating detail about why Plaintiff believes the signature is not hers.  Pursuant to Iyere, this evidence is insufficient to create a factual dispute as to whether Plaintiff signed the document.  Moreover, Defendant has submitted sufficient responsive evidence demonstrating by a preponderance of the evidence that Plaintiff’s signature is authentic.  (Pellicer Suppl. Decl., ¶ 4 – multiple documents signed by Plaintiff carrying the same signature.)

Alternatively, Plaintiff argues that the Agreement is unconscionable.

Once petitioners allege that an arbitration agreement exists, the burden shifts to respondents to prove the falsity of the purported agreement. (Condee v. Longwood Mgt. Corp. (2001) 88 Cal.App.4th 215, 219.)  An adhesion contract in of itself is insufficient to render the arbitration clause unenforceable. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 113.) Instead, the opposing party must demonstrate that the agreement is unconscionable. (Id.) To find an agreement to be unconscionable, there must be a finding of both procedural unconscionability and substantive unconscionability. (Id. at 114.)

Procedural unconscionability concerns the manner in which the contract was negotiated and the parties' circumstances at that time, and focuses on the factors of oppression or surprise.  (Sanchez v. Western Pizza Enterprises, Inc. (2009) 172 Cal.App.4th 154, 173.)  “Procedural unconscionability focuses on the manner in which the disputed clause is presented to the party in the weaker bargaining position. When the weaker party is presented the clause and told to ‘take it or leave it’ without the opportunity for meaningful negotiation, oppression, and therefore procedural unconscionability, are present.”  (Szetela v. Discover Bank (2002) 97 Cal.App.4th 1094, 1100.)  “Substantive unconscionability addresses the fairness of the term in dispute. Substantive unconscionability ‘traditionally involves contract terms that are so one-sided as to ‘shock the conscience,’ or that impose harsh or oppressive terms.’”  (Szetela, supra, 97 Cal.App.4th at 1110.)

Plaintiff contends that the arbitration agreement is procedurally unconscionable because it was presented as a “take it or leave it” agreement.  However, Plaintiff offers no evidence that Plaintiff lacked the ability to negotiate the contract.  Aside from generally alleging that she was not permitted to negotiate the documents (Medina Decl., ¶ 7), Plaintiff offers no facts or details regarding the circumstance surrounding the signing of the arbitration agreement. Plaintiff does not explain what questions she initiated, and what the employer’s response was.  Plaintiff does not assert that she did not want to arbitrate her disputes, and does not assert that she vocalized any such objection.  Like Plaintiff’s allegation that she did not sign the arbitration agreement, her allegation that she was not permitted to negotiate the document, lacks credibility.  Medina’s declaration is deliberately vague and lacking in any factual support.  Here, the arbitration provision is in all-capital letters, and appears directly above Plaintiff’s signature.  (Pellicer Decl., Ex. A.)  The provision is not hidden within any other text.  Accordingly, the court finds that Plaintiff failed to establish any procedural unconscionability.  To find an agreement to be unconscionable, there must be a finding of both procedural unconscionability and substantive unconscionability.  (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114.)  Since Plaintiff failed to establish the first prong of the test, the court need not address substantive unconscionability.

Notwithstanding such, the court finds that there are no contract terms that are so one-sided that it shocks the conscience or imposes harsh or oppressive terms.  Here, the arbitration provision is mutual.  It clearly states that any disputes between the employee and employer must be resolved through arbitration, which can be enforced by either side. Further, it clearly states that “Both parties shall have all rights of discovery and remedies as he or she would have in a state court civil action,” and “The arbitrator shall follow the applicable law in determining whether to award attorneys’ fees and costs to the prevailing party.”  (Pellicer Decl., Ex. B.)  Plaintiff also argues that the agreement somehow violates

Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4^th 83, 107, because there must be a written decision and judicial review.  However, the Arbitration Agreement states the arbitrator “shall issue a written decision explaining the reasons for the decision”.  (Pellicer Decl., Ex. B.)  There is nothing substantively unconscionable about the agreement.

Accordingly, the court does not find that the contract is unconscionable.

Finally, Plaintiff argues that Defendant waived arbitration by not filing the motion earlier.  Whether a party to an arbitration agreement has waived the right to arbitrate is a question of fact, and a trial court's determination on that matter will not be disturbed on appeal if supported by substantial evidence… Since arbitration is a strongly favored means of resolving disputes, courts must closely scrutinize any claims of waiver. A party claiming that the right to arbitrate has been waived has a heavy burden of proof… In determining if there has been a waiver of an arbitration agreement, a court can consider (1) whether the party's actions are inconsistent with the right to arbitrate; (2) whether the litigation machinery has been substantially invoked and the parties were well into preparation of a lawsuit before the party notified the opposing party of an intent to arbitrate; (3) whether a party either requested arbitration enforcement close to the trial date or delayed for a long period before seeking a stay; (4) whether a defendant seeking arbitration filed a counterclaim without asking for a stay of the proceedings; (5) whether important intervening steps, e.g., taking advantage of judicial discovery procedures not available in arbitration, had taken place; and (6) whether the delay affected, misled, or prejudiced the opposing party. (Sobremonte v. Superior Court (1998) 61 Cal. App. 4th 980, 991.)

The court finds that the litigation machinery has not been substantially invoked.  Defendant did not have the benefit of the Viking River decision to make the request earlier.  (See Iskanian v. CLS Transp. Los Angeles, LLC (2014) 59 Cal.4th 348, 374-378 - recognizing futility as a ground for delaying petition to compel arbitration.)  Defendant has not litigated this matter in any way or conducted discovery, and only responded to written discovery after Plaintiff refused to extend the deadline for doing so.  The court finds that Defendant has not waived arbitration.

Because PAGA standing may be a state law issue, and the California Supreme Court is poised to hear this issue in Adolph v. Uber Technologies, Inc., No. S274671 (rev. granted July 20, 2022), this court will sever the representative claims from the individual claims, and stay the representative claims pending the arbitration of the individual claims and/or further instruction from the California Supreme Court.

Accordingly, the Motion is GRANTED as to the individual claims.  The representative claims are STAYED.