Judge: Lee W. Tsao, Case: 21NWCV00755, Date: 2023-03-28 Tentative Ruling

Case Number: 21NWCV00755    Hearing Date: March 28, 2023    Dept: C

NAYLOR v. 5648 EAST GOTHAM STREET, LLC

CASE NO.:  21NWCV00755

HEARING:  3/28/23 @ 10:30 AM

 

#4

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. B-C.)

 

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 no one told him about the documents that he was signing.  (Naylor Decl., ¶¶ 4, 8.)  Plaintiff relies on Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158 and Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836.  However, the court finds both cases are distinguishable.  Ruiz involved an electronic signature, and the reasoning in Gamboa was rejected in Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747, 756.

 

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.5th 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 explicitly acknowledged that he signed documents, and does not deny that the documents included the arbitration provision.  (Naylor Decl., ¶ 5.)  Pursuant to Iyere, the fact that Plaintiff was unable to recall or does not remember is insufficient to create a factual dispute as to whether Plaintiff signed the document.

 

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 no one told Plaintiff about the documents he was signing (Naylor Decl., ¶ 4-6), Plaintiff offers no facts or details regarding the circumstance surrounding the signing of the arbitration agreement.  Plaintiff does not dispute that the “onboarding process” takes 2-3 days, and that Plaintiff had possession of the handbook and arbitration agreement during this time.  (Pellicer Decl., ¶ 6.)  “It is hornbook law that failing to read an agreement before signing it does not prevent the formation of a contract.” (Upton v. Tribilcock (1875) 91 U.S. 45, 50; quoted by Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747, 759 - “it will not do for a [person] to enter into a contract and when called upon to respond to its obligations, to say that [they] did not read it when [they] signed it, or did not know what it contained”. “That settled rule cannot be evaded by adding, ‘... and if I had read the contract, I wouldn’t have signed it.’” (Ibid.; see also Pinnacle Museum Tower Assn v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236 - “An arbitration clause within a contract may be binding on a party even if the party never actually read the clause”.)  Plaintiff does not explain what questions he initiated, and what the employer’s response was.  Plaintiff does not assert that he did not want to arbitrate his disputes, and does not assert that he vocalized any such objection to the employer.  Like Plaintiff’s allegation that he did not recall being told about the arbitration agreement, his allegation that he was not permitted to negotiate the document, lacks credibility. Here, the arbitration provision is in all-capital letters, and appears directly above Plaintiff’s signature.  (Pellicer Decl., Ex. B.)  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 it is unconscionable to require Plaintiff to relinquish her statutory PAGA rights.  However, this proposition is without merit.  The arbitration provision does not mention PAGA or require Plaintiff to relinquish any statutory rights.  Plaintiff has failed to identify any such provision in the agreement. (Further, Plaintiff is not relinquishing any state law rights because such claims may be severed.  See below.)  The court finds there is nothing substantively unconscionable about the agreement.

 

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

 

Finally, Plaintiff argues that PAGA is a substantive state right and therefore, the court should not enforce the U.S. Supreme Court decision in in Viking River. 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.