Judge: Linda S. Marks, Case: 2021-01209277, Date: 2023-07-24 Tentative Ruling
Motion to Compel Arbitration filed by Capistrano Beach Care Center, LLC and Cambridge Healthcare Services LLC on 8/23/21
Background:
11/1/2021 this Court denied Defendants’ Motion to Compel Arbitration
11/15/2021 Notice of Appeal was filed. 2/2/2023 the Court of Appeal issued its opinion wherein it ruled:
“We partially affirm the order. The trial court’s decision that Capistrano failed to carry its burden is reversible only if its evidence was ‘uncontradicted and unimpeached.’ Ferrari’s evidence contradicted Capistrano’s in nearly every aspect, and the trial court’s ruling was based on this evidence. We therefore affirm the order denying Capistrano’s petition to compel the arbitration of Koelzer’s claims against it.
“The trial court did not, however, rule on the issue of whether Ferrari’s own claim, for wrongful death, was arbitrable. We return the matter to the trial court to rule on this issue.”
On page five of the Opinion, the Court of Appeal noted:
“The arbitration agreement includes a provision precluding a resident’s family members from suing in their individual capacity, and the signature line states that Ferrari signed as an individual. The trial court did not reach the issue of whether Ferrari’s own claim for wrongful death was arbitrable. We return the matter to the trial court to make this determination.”
5/23/2023 Temporary Judge Kathleen Scherger ruled: “This matter having been returned from the Court of Appeal for the trial court to make a determination as to the arbitrability of the individual plaintiff's claim, the court now resets Defendants' Motion to Compel Arbitration for hearing on 07/24/2023 at 10:00 AM in Department CX102. Further briefing is to be filed and served per code.”
7/11/2023 Plaintiff filed her Supplemental Brief.
Attached to the Declaration of Healy, as Ex. A are three different arbitration agreements:
4) Resident-Facility Arbitration Agreement
5) ARBITRATION OF MEDICAL MALPRACTICE DISPUTES
6) ARBITRATION OF DISPUTE OTHER THAN MEDICAL MALPRACTICE
RESIDENT-FACILITY ARBITRATION AGREEMENT
Article 4. This Agreement shall be binding for any dispute, except for disputes pertaining to collections or evictions. This Agreement is binding on all parties, including the Resident's representatives, executors, family members, and heirs who bring any claims individually or in a representative capacity. The Resident's representatives, agents, executors, family members, successors in interest and heirs who execute this Agreement below on the signature line are doing so not only in their representative capacity for the Resident, but also in their individual capacity and thus agree that any claims brought individually by any such representatives, agents, executors, family members, representatives, successors in interest and heirs are subject to binding arbitration. This Agreement may be rescinded by written notice within thirty (30) days of signature.
Article 6. …The parties agree that California Code of Civil Procedure §1281.2(c) is excluded from this Agreement as the parties mutually desire to have any and all disputes submitted to binding arbitration.
Article 7. This Agreement relates to the Resident's admission to the Facility, and the Facility, among other things, participates in the Medicare and/or Medi-Cal programs and/or procures supplies from out of state vendors. The parties, therefore, agree that the underlying admission to the Facility involves interstate commerce. The parties, therefore, agree that the underlying admission to the Facility involves interstate commerce. Accordingly, this Agreement is to be governed by the Federal Arbitration Act and the procedural rules set forth in the Federal Arbitration Act (9 U.S.C. Sections 1-16) shall govern any petition to compel arbitration and the selection of an arbitrator, should the parties be unable to mutually agree upon a single neutral arbitrator.
The Resident and/or the person executing this Agreement certifies that he/she has read this Agreement and has been given a copy of this Agreement, and affirmatively represents that he/she is duly authorized, by virtue of the Resident's consent, instruction and/or durable power of attorney, to execute this Agreement and accept its terms on behalf of the Resident and acknowledges that the Facility is relying on the aforementioned certification.
The document is signed by Deborah Ferrari on 7/5/2020. Underneath the signature line is typed “Signature on behalf of the Resident and as an Individual.”
The FAA, CAA, or Both:
Both the Federal Arbitration Act (FAA) and the California Arbitration Act (CAA) require the existence of a valid Arbitration Agreement, before arbitration can be compelled. (See 9 U.S.C. §2 and C.C.P. §1281.2).
The FAA “applies where there is ‘a contract evidencing a transaction involving commerce.’” (Allied-Bruce Terminix Companies, Inc. v. Dobson (1995) 513 U.S. 265, 277 [quoting 9 USC § 2]. Under the FAA, the moving party on a motion to compel arbitration must demonstrate the existence of an arbitration agreement between the parties that covers the controversy or claims at issue. (Lifescan, Inc. v. Premier Diabetic Servs., Inc. (9th Cir. 2004) 365 F.3d 1010, 1012; Howsam v. Dean Witter Reynolds, Inc. (2002) 537 U.S. 79, 83-85.) In determining the validity or “the rights of parties to enforce an arbitration agreement within the FAA’s scope, courts apply state contract law while giving due regard to the federal policy favoring arbitration.” (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236.) “The party seeking arbitration bears the burden of proving the existence of an arbitration agreement, and the party opposing arbitration bears the burden of proving any defense, such as unconscionability.” (Id.)
In this instance, the agreement apparently invokes the FAA. See Article 7 above. However, Defendant does not submit a declaration establishing its business is involved in interstate commerce.
Plus, the Arbitration Agreement also states in Article 1, “any dispute…will be determined by submission to arbitration as provided by California law, and not by a lawsuit or resort to court process except as California law provides for judicial review of arbitration proceedings.” Article 6 also refers to CA law, stating, “Resident and Facility agree that California substantive law, including California Code of Civil Procedure §667.7 and Civil Code §§3333.1-3333.2 applies to any and all claims arising out of the care, treatment and services provided to the Resident by the Facility.”
Plaintiff does not argue one way or another as to which applies (FAA, CAA, or both). Defendant only argues in the REPLY that the FAA is applicable and thus it would be improper for the Court to exercise discretion under CCP 1281.2(c) to deny the motion.
It appears from the agreement, that FAA applies to procedural law, and CAA law applies to substantive law.
Existence of Arbitration Agreement between Defendant and Plaintiff Ferrari:
Attached to the Declaration of Attorney JEFFREY S. HEALEY are the arbitration agreement(s).
RESIDENT-FACILITY ARBITRATION AGREEMENT is signed by Deborah Ferrari in two places and initialed once. Under her signature is typed, “Signature on behalf of the Resident and as an Individual”.
As indicated above in Article 4, “family members, successors in interest and heirs who execute this Agreement below on the signature line are doing so not only in their representative capacity for the Resident, but also in their individual capacity and thus agree that any claims brought individually by any such representatives, agents, executors, family members, representatives, successors in interest and heirs are subject to binding arbitration.”
Therefore, the agreement seemingly applies to individual claims brought by Deborah Ferrari.
However, she declares, “I signed the admission paperwork on my husband’s behalf, but at no time did I sign the agreement in my individual capacity. When I executed my husband’s paperwork, it was my intent that the papers I signed applied only to my husband. I was never told that I was personally giving up my constitutional right to a jury trial for my husband’s wrongful death in connection with his care and treatment at Capistrano Beach Care Center.” [Decl. of Ferrari¶10.]
Defendant argues pursuant Ruiz v. Podolsky (2010) 50 Cal.4th 838, the wrongful death claim is subject to arbitration. Here, while the arbitration provision does set forth the language as required by CCP§1295(a), it does not appear Ruiz applies because this wrongful death cause of action is based on elder abuse due to neglect (See Complaint¶¶48, 65), and not professional negligence. Ruiz did not involve elder abuse, but rather professional negligence. Furthermore, Plaintiff cites to Avila v. Southern California Specialty Care, Inc. (2018) 20 Cal.App.5th 835, 845 where the Court of Appeal held that Ruiz was inapplicable to a wrongful death cause of action based on elder abuse (as opposed to professional negligence). As such, Defendant’s reliance on Ruiz is misplaced.
Plaintiff essentially argues that she is not a party to the agreement and cannot be compelled to arbitrate her wrongful death claim citing to Avila v. Southern California Specialty Care, Inc. (2018) 20 Cal.App.5th 835; Daniels v. Sunrise Senior Living, Inc. (2013) 212 Cal.App.4th 674; Lopez v. Bartlett Care Ctr., LLC (2019) 39 Cal. App. 5th 311, 321; and Goldman v. Sunbridge Healthcare, LLC (2013) 220 Cal.App.4th 1160, 1174.
In Avila v. Southern California Specialty Care, Inc. (2018) 20 Cal.App.5th 835, the Court held, “There is simply no evidence that when Alex signed the agreement as his father's agent, he had any intent to waive his right to a jury trial for any personal claims.” Avila v. Southern California Specialty Care, Inc. (2018) 20 Cal.App.5th 835, 845. In that case, the son signed as “son” because the patient was unable to sign, and under a statement regarding his certification that he was authorized to act as Antonio's agent. That case is distinguishable because there was clearly no Article 4 as is here, which provides, the person signing does so in their individual capacity.
In Avila, the resident's daughter in her personal capacity was not bound by the arbitration provision in the residency agreement for a residential care facility for the elderly (RCFE), and thus the agreement did not apply to resident's wrongful death claim, even though the provision purported to bind resident's heirs and to encompass all claims “arising from or related to” the care and services resident received, where the arbitration provision was directed solely to “your” claims, the agreement did not include the advisements required for a waiver of third party claims under Medical Injury Compensation Reform Act (MICRA), and daughter signed the agreement only as resident's agent or attorney in fact, and not in her personal capacity.
Again, this case appears distinguishable because of Article 4, and the signature line which sets forth that Deborah was signing in her individual capacity.
In Lopez v. Bartlett Care Ctr., LLC (2019) 39 Cal. App. 5th 311, 321 case, a skilled nursing care facility resident's daughter brought action against two entities that managed facility and various individuals, asserting claims for negligence and willful misconduct, elder abuse, and violation of the Patient's Bill of Rights in her capacity as patient's successor in interest, and asserting a wrongful death claim in her individual capacity. The trial court denied the petition, and the Court of appeal affirmed, holding that 1. resident's daughter lacked authority to execute arbitration agreement on resident's behalf; 2. arbitration agreement was procedurally unconscionable as to daughter in her individual capacity; and 3. arbitration agreement was substantively unconscionable as to daughter in her individual capacity.
Notably, here, Plaintiff made no “unconscionability” arguments until the supplemental brief was filed; and even then only argues, “Just like in Lopez, the subject agreement lacks a heading or other conspicuous warning that Ferrari was signing in both a representative and individual capacity. The mere fact that the signature block indicates that Ferrari was signing in both capacities is legally inadequate.” [See Supp brief, page 4:28-5:3.]
However, although Article 4 does not include a heading, if properly read, it would apprise an individual that he/she was giving up individual claims. And, unlike Lopez, the signature block indicates Ferrari was signing in both capacities, and not just as “resident representative/agent signature,” (as in Lopez). Therefore, it appears because Plaintiff did not argue unconscionability (and certainly has not addressed substantive unconscionability), and the case is somewhat distinguishable, it does not serve as a basis to deny.
In Goldman v. Sunbridge Healthcare, LLC (2013) 220 Cal.App.4th 1160, 1174case, the deceased resident's wife brought action against the operators of two skilled nursing facilities for neglect, negligent infliction of emotional distress, and wrongful death. The trial court denied motion to compel arb, and the Court of Appeal affirmed holding:
1 Veterans Administration (VA) advance directive did not grant resident's wife authority to sign arbitration agreement on resident's behalf;
2 marriage did not grant resident's wife authority to sign arbitration agreement on resident's behalf;
3 wife's agreement to arbitrate in “her representative and individual capacity” was invalid; and
4 wife's agreement as resident's “responsible party” that wife's own claims would be subject to arbitration was invalid.
The Court of Appeal stated: Although Judy signed as Edward's legal representative, the fact of her signing did not cast her in that status. (Flores, supra, 148 Cal.App.4th at pp. 585, 589, 55 Cal.Rptr.3d 823.) There was no such person as Edward's legal representative at the time Judy signed the Carmichael Care arbitration agreement. Thus, the signature in that capacity was a mistake. “The doctrine of mistake customarily involves such errors as the nature of the transaction, the identity of the parties, the identity of the things to which the contract relates, or the occurrence of collateral happenings.” (Odorizzi v. Bloomfield School Dist. (1966) 246 Cal.App.2d 123, 130, 54 Cal.Rptr. 533, Because there was no such person as Edward's legal representative **24 there was also no legal representative to sign in his or her individual capacity.
At most, the arbitration agreement is ambiguous as to whether it intended Judy to sign in her individual capacity independent of her description as “Resident's Legal Representative.” However, as the California Supreme Court noted in another case involving the interpretation of an arbitration agreement, “ambiguities in standard form contracts are to be construed against the drafter.” (Victoria v. Superior Court (1985) 40 Cal.3d 734, 739, 222 Cal.Rptr. 1, 710 P.2d 833.) Carmichael Care produced a form with a blank space expressly reserved for identifying parties to be bound by the agreement. However, Carmichael Care left this space blank. Moreover, Carmichael Care could have chosen to have Judy sign separately and expressly in her own right. It did not do so. Accordingly, we conclude Judy is not bound in her individual capacity because her signature as legal representative was ineffective. Carmichael Care's medical practice arbitration agreement is identical and yields the same conclusion. [Goldman v. Sunbridge Healthcare, LLC (2013) 220 Cal.App.4th 1160, 1176–1177.]
Here, this Court already concluded that there was insufficient evidence before the Court (due to inconsistencies between the agreement and the Declaration of Magallon) that decedent permitted his wife to sign on his behalf. Indeed, as in Goldman, it appears the fact that Deborah signed was a mistake as her husband, “…still had full capacity to act and make decisions on his own behalf at the time.” [Decl. of Ferrari¶4]. Thus, he could have signed the documents himself. Pursuant to Goldman, because there was no one signing on decedent’s behalf, there was also no legal representative to sign in his or her individual capacity. Additionally, the agreement can be construed against the drafter as ambiguous because Deborah declares, “I signed the admission paperwork on my husband’s behalf, but at no time did I sign the agreement in my individual capacity. When I executed my husband’s paperwork, it was my intent that the papers I signed applied only to my husband. I was never told that I was personally giving up my constitutional right to a jury trial for my husband’s wrongful death in connection with his care and treatment at Capistrano Beach Care Center.” [ Decl. of Ferrari¶10.] Furthermore, Defendants could have had Deborah sign separately and expressly in her own right. It did not do so.
All in all, it appears inequitable to deprive the third-party wrongful death Plaintiff of her constitutional right to a jury trial when she did not knowingly elect to submit her claims to Binding Arbitration; the “representative” capacity in which she signed is made explicitly apparent by the face of the agreement; the totality of the agreement, in that it was exclusively related to Koelzer’s admission to a nursing home; and the context in which Ferrari signed the agreement, i.e., during the admissions process for her husband’s treatment at a nursing home….even when considering Article 4 and the signature block.
Tentative Ruling: The motion to compel arbitration of Plaintiff’s claim for wrongful death is DENIED,