Judge Linda S. Marks, Case 2023-01300264 2023-07-24 Tentative Ruling

Judge: Linda S. Marks, Case: 2023-01300264, Date: 2023-07-24 Tentative Ruling

1. Motion to Compel Arbitration filed by Anaheim Healthcare Center, LLC on 3/13/23
2. Case Management Conference

As a threshold matter, Plaintiffs, Dolores Tafoya (the “Decedent”) by and through her Successor-In-Interest, Arnold Tafoya, and Arnold Tafoya, individually (“Tafoya”) (together “Plaintiffs”) do not dispute, and therefore, implicitly concede, that there exists a valid Arbitration Agreement with the Decedent; that the Decedent voluntarily signed an Arbitration Agreement; and that the survivor claims for Elder Abuse, Negligence, and Violation of Residents’ Rights are claims that fall within the scope of the Arbitration Clause.

Anaheim Healthcare Center (AHC) also submits the Arbitration Agreement by way of the Declaration of Yoseeline Andalon, who has been the Admissions Coordinator at AHC since approximately October 2020, and has been employed by AHC since 2015. (Ex. B to the Declaration of Julieta Echeverria, Declaration of Yoseeline Andalon, ¶ 2; ROA 11.) Said declaration also provides that Andalon was the Admissions Coordinator at the time of the Decedent’s admission to AHC; that Andalon provided the Arbitration Agreement to the Decedent; that Andalon witnessed the Decedent sign the Arbitration Agreement on August 27, 2021; and that Andalon signed the Arbitration Agreement as the Facility Representative on behalf of AHC on that same date. (Id., ¶¶ 6-9.) Attached as Exhibit “A” a true and correct copy of the signed Arbitration Agreement. (Id., ¶¶ 10-11.) The Arbitration Agreement states, in pertinent part:

As set forth herein, both parties [AHC and the Decedent] agree to arbitrate disputes as described in clauses 5.1 (medical malpractice) and 5.2 (all other disputes or claims).

1.1 It is understood that any dispute as to medical malpractice, that is as to whether any medical services rendered under this contract were unnecessary or unauthorized or were improperly, negligently or incompetently rendered or not rendered, will be determined by submission to arbitration and not by a lawsuit or resort to court process . . . .

1.2 It is also understood that any and all other disputes, controversies, demands or claims that relate or arise out of the provision of services or health care or any failure to provide services or health care by Facility, the admission agreement and/or this Agreement, the validity, interpretation, construction, performance and enforcement thereof, including, without limitation, claims that allege: breach of contract; unpaid nursing home charges; fraud; deceptive trade practices; misrepresentation; negligence; gross negligence; Health and Safety Code section 1430 claims; violations of the Elder Abuse and Dependent Adult Civil Protection Act, the Unfair Competition Act, the Consumer Legal Remedies Act; and/or any right granted to Resident by law or by the admission agreement will be determined by submission to arbitration and not by a lawsuit or resort to court process except as California law provides for judicial review of arbitration proceedings. (Ex. A to Declaration of Julieta Echeverria, Arbitration Agreement, Article I – Recitals, §§ 1.1, 1.2.)

Before the first signature line of the Arbitration Agreement, it also states, “The parties to the Arbitration Agreement hereby acknowledge and agree that, upon execution, any and all disputes or claims as to medical malpractice (that is, whether any medical services rendered during the Resident’s admission were unnecessary or unauthorized or were improperly, negligently or incompetently rendered or not rendered) will be determined by submission to neutral arbitration, and not by a lawsuit or court process, except as California law provides for judicial review of arbitration proceedings. Such arbitration will be governed by this Arbitration Agreement.” (Ex. A to Declaration of Julieta Echeverria, Arbitration Agreement, Article V – Execution, § 5.1.) Under Section 5.1 and immediately above the Decedent’s signature is language which states, “[Printed in Red:] NOTICE: BY SIGNING THIS CONTRACT YOU ARE AGREEING TO HAVE ANY ISSUE OF MEDICAL MALPRACTICE DECIDED BY NEUTRLA ARBITRATION AND YOU ARE GIVING UP YOUR RIGHT TO A JURY OR COURT TRIAL. SEE ARTICLE I OF THIS CONTRACT.” (Id. at p. 3.)

The Arbitration Agreement also states, “Consistent with the Federal Arbitration Act, this arbitration agreement binds the parties hereto, including the heirs, representative, executors, administrators, successors, and assigns of such parties whose claims may arise out of or relate to any services (medical or otherwise) or goods provided by the Facility or the admission agreement.” (Ex. A to Declaration of Julieta Echeverria, Arbitration Agreement, Article II – Parties, § 2.2.)

Thus, AHC has shown the existence of an Arbitration Agreement between it and the Decedent.

AHC submits sufficient evidence showing that the Federal Arbitration Act (FAA) applies. The Andalon Declaration provides that “AHC is a skilled nursing facility,” and that “AHC participates in and receives funding from Medicare and Medi-Cal programs.” (Ex. B to the Declaration of Julieta Echeverria, Declaration of Yoseeline Andalon, ¶ 3, ROA 11.) “Payments of Medicare or Medicaid funds are transactions involving commerce.” (Willis v. Prime Healthcare Services, Inc. (2014) 231 Cal.App.4th 615, 626.)

AHC does not argue that Tafoya signed an Arbitration Agreement but contends that he is bound by the Arbitration and that Tafoya’s individual wrongful death claim against AHC is also covered by the Arbitration Agreement as it binds the Decedent’s heirs, representatives, executors, administrators, successors, and assign’s interest to arbitration for individual actions related to the Decedent’s care and treatment. AHC argues that California case law provides that a patient can bind their heirs in a wrongful death action by signing arbitration agreements that include the arbitration of wrongful death claims, citing to Ruiz v. Podolsky (2010) 50 Cal.4th 838.

Tafoya argues that he is not a signatory to the Arbitration Agreement, and therefore, cannot be compelled to arbitrate his wrongful death claim. Tofaya also argues that Ruiz does not apply in this case because the Arbitration Agreement was not entered into pursuant to CCP section 1295; that the holding in Ruiz only applies to arbitration agreements entered into pursuant to section 1295 in wrongful death actions against licensed healthcare providers for causes of action pursuant to CCP 1295; and that a non-section 1295 wrongful death claim is not arbitrable because the wrongful death plaintiff is considered a third party to the agreement as defined by Section 1281.2, citing to Daniels v. Sunrise Senior Living, Inc. (2013) 212 Cal.App.4th 674.

A court’s role in considering a petition to compel arbitration under the FAA is limited to “determining (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue. If the response is affirmative on both counts, then the Act requires the court to enforce the arbitration agreement in accordance with its terms.” (Chiron Corp. v. Ortho Diagnostic Sys. Inc. (9th Cir. 2000) 207 F.3d 1126, 1130.) If these requirements are met, “the court must compel arbitration.” (Boardman v. Pacific Seafood Group (9th Cir. 2016) 822 F.3d 1011, 1017.) The FAA places arbitration agreements on the same footing as other contracts, and requires courts to enforce them according to their terms. (Rent-A-Center, West, Inc. v. Jackson (2010) 561 U.S. 63, 67.)

“Under ‘both federal and state law, the threshold question presented by a petition to compel arbitration is whether there is an agreement to arbitrate.’ [Citation].” (Cruise v. Kroger Co. (2015) 233 Cal.App.4th 390, 396, emphasis in original (“Cruise”).) The court is to determine whether a valid arbitration agreement exists, and if so, whether the agreement encompasses the dispute at issue. (Omar v. Ralphs Grocery Co. (2004) 118 Cal.App.4th 955, 960-961, citing Howsam v. Dean Witter Reynolds, Inc. (2002) 537 U.S. 79, 84; Lifescan, Inc. v. Premier Diabetic Servs., Inc. (9th Cir. 2004) 363 F.3d 1010, 1012.)

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. [Citations.]” (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236; Circuit City Stores, Inc. v. Najd (9th Cir. 2002) 294 F.3d 1104, 1108 (“Circuit City”).) General principles of contract law apply to determine whether the parties have entered into a binding agreement. (Ibid.) Generally, an arbitration agreement must be in writing, and a party’s acceptance of an agreement to arbitrate may be express or implied in fact. (Ibid.) “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.” (Ibid.) Generally applicable contract defenses, such as lack of consideration and mutual assent, may invalidate an arbitration agreement. (Circuit City, supra, 294 F.3d at p. 1108.)

Both federal and California courts resolve doubts on questions of arbitrability in favor of arbitration. (Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp. (1983) 460 U.S. 1, 24-25 [“as a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay or like defense to arbitrability”]; Coast Plaza Doctors Hosp. v. Blue Cross (2000) 83 Cal. App. 4th 677, 686 [“[a]ny doubts regarding the arbitrability of a dispute are resolved in favor of arbitration”].

The FAA preempts any contrary state law and is binding on state courts as well as federal courts. (Rosenthal v. Great Wester Fin. Securities Corp. (1996) 14 Cal.4th 394, 405.)

“If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the application for the stay is not in default in proceeding with such arbitration.” (9 U.S.C. § 3.)

“[W]hile it is true that the language of an arbitration agreement determines the scope of the arbitrator’s powers granted by the signatories, the agreement cannot bind nonsignatories, absent a judicial determination that the nonsignatory falls within the limited class of third-parties who can be compelled to arbitrate. [Citation.]” (Benaroya v. Willis (2018) 23 Cal.App.5th 462, 468.)

AHC relies heavily on Ruiz v. Podolsky (2010) 50 Cal.4th 838 (“Ruiz”). As noted by Plaintiffs, in Ruiz, the California Supreme Court held only that “all wrongful death claimants are bound by arbitration agreements entered into pursuant to section 1295,” when the language of the agreement manifests an intent to bind these claimants,” and stated that such holding “carries out the intent of the Legislature that enacted section 1295 and related statutes.” (Ruiz, supra, 50 Cal.4th at p. 841.) Ruiz involved a patient that signed an arbitration agreement with an orthopedic surgeon, which specifically provided for the arbitration of wrongful death and loss of consortium claims. (Id. at pp. 841-842.) The patient died and his wife and four adult children sued the orthopedic surgeon and other health care providers for medical malpractice and wrongful death alleging that defendants failed to adequately identify and treat the patient’s hip fracture, resulting in complications and eventually his death. (Id. at p. 842.) The trial court and Court of Appeal concluded that the wife was bound by the arbitration agreement, but that the adult children were not as they had not consented to arbitration. (Id. at pp. 841-842.) The California Supreme Court reversed and remanded to grant the physician’s petition to compel arbitration of all wrongful death claims, finding that Section 1295 was designed to permit patients who sign arbitration agreements to bind their heirs in wrongful death actions. (Id. at pp. 849-850, 854.) Code of Civil Procedure section 1295 concerns what must be contained in “[a]ny contract for medical services which contains a provision for arbitration of any dispute as to professional negligence of a health care provider.” (Code Civ. Proc. § 1295(a).)

Plaintiffs primarily cite to Daniels v. Sunrise Senior Living, Inc. (2013) 212 Cal.App.4th 674 (“Daniels”) for the proposition that a wrongful death plaintiff is considered a third party to the agreement as defined by Section 1281.2.

The Court of Appeal in Daniels held that Ruiz has no bearing on third party wrongful death claims outside the context of section 1295. (Daniels v. Sunrise Senior Living, Inc. (2013) 212 Cal.App.4th 674, 677.) The Court of Appeal also found that there was no error of law or abuse of discretion in the trial court’s order denying a petition to compel arbitration of claims for elder abuse in violation of the Elder Abuse and Dependent Care Adult Civil Protection Act, negligence, breach of contract, and willful misconduct (the survivor claims) brought by a daughter as successor-of-interest of her late mother, or the daughter’s individual cause of action for wrongful death of her mother based on allegations that her mother was elderly, suffered from dementia and psychosis, and died as a result of receiving inadequate care by defendant, a residential care facility for the elderly. (Id., at pp. 676-678.) The Court of Appeal found that the daughter’s wrongful death claim was personal to her and lied independent of the survivor claims; that the daughter did not sign the residency agreement in her personal capacity but only as her mother’s agent or attorney in fact; and that the daughter was a third party to the residency agreement and not bound by tis arbitration clause. (Id. at pp. 680-681.) The Court of Appeal noted that the trial court principally relied on Fitzhugh v. Granada Healthcare & Rehabilitation Center LLC (2007) 150 Cal.App.4th 469 (“Fitzhugh”), and stated that it agreed that Fitzhugh “is on point and persuasive,” where the Court found that although the arbitration agreements were expressly binding on the decedent’s heirs, the court concluded that the decedent’s surviving spouse and adult children were not obligated to arbitrate their wrongful death claims because there was no evidence that the spouse signed the agreements in her personal capacity and the adult children did not sign either agreement. (Id. at p. 681.) The Daniels court explained that “[i]n context, the provision making the arbitration clause binding on heirs mean[t] only that the duty to arbitrate the survivors claims is binding on [the mother] and other persons who would assert the survivor claims on [the mother’s] behalf,” and that “[t]he agreement [did] not indicate an intent to bind third parties who claims independent of the survivor claims, such as wrongful death claimants.” (Ibid.)

Defendants argued that the wrongful death claim should be deemed subject to the arbitration clause based on Ruiz, and another case. (Ibid.) The Court of Appeal in Daniels found Ruiz distinguishable as it involved professional negligence and wrongful death claims where the arbitration agreement was governed by section 1295, stating, “Ruiz is based squarely on section 1295, which governs agreements to arbitrate professional negligence or medical malpractice claims in medical services contracts with health care providers.” (Id. at p. 682.) The Court of Appeal also distinguished the arbitration clause before on the basis that it was not manifestly intended to bind third party wrongful death claimants as it did not mention or allude to wrongful death or other third party claims, as well as disagreed that Ruiz should be extended to arbitration agreements not governed by section 1295, or that are entered into with a person other than a health care provider for claims other than medical malpractice.” (Id. at p. 683.) The Court of Appeal additionally noted that “Section 1295 includes safeguards designed to ensure that the patient will make an informed decision in agreeing to arbitration,” and that the arbitration clause before it did not meet either requirement set forth in Section 1295 requiring that an arbitration provision in a contract for medical services appear in the first article of the contract, and be stated in the language prescribed in the statute, as well as provide a notice, in 10-point boldface red type, be set forth immediately above the signature line warning the patient that by signing the agreement the patient is giving up the right to a jury trial on any issue of medical malpractice, and was not governed by Section 1295. (Id. at p. 684.)

The Court of Appeal in Daniels, cited to a portion of Herbert v. Superior Court (1985) 169 Cal.App.3d 718 which states, “Under section 1295, arbitration of wrongful death or other professional negligence claims may not be compelled if the requirements of that section are not met.” (Daniels, supra, 212 Cal.App.4th at p. 685.) The Court of Appeal found that the “critical distinction” between Ruiz and Herbert and the case before it was that the latter two cases involved arbitration agreements governed by and entered into pursuant to CCP section 1295. (Id. at pp. 685-686.)

Neither case is on all fours with the present case. The facts of the instant case are similar to the facts in Daniels. Like in Daniels, the Complaint alleges claims for elder abuse, negligence, and violation of residents rights; Tafoya is bringing the action and these claims as successor-in-interest of his mother; Tafoya also alleges a claim in his individual capacity for wrongful death; and Tafoya did not sign the Arbitration Agreement and is a third party to said agreement, which is undisputed.

However, this is where the similarities end. Under Daniels, the question is whether the Arbitration Agreement in the present case is governed by and entered into pursuant to CCP section 1295. The arbitration clause in Daniels did not meet the requirements of Section 1295, and thus, was not governed by it.

In contrast, the arbitration clause at issue here is found in a separate Arbitration Agreement which meets the requirements of CCP section 1295, and appears to be governed by and entered into pursuant to Section 1295. Sections 1.1, 5.1, and 2.2 of the Arbitration Agreement set forth above, appears to meet the requirements of CCP section 1295 including that the arbitration provision appear in the first article of the contract, that it contain the language prescribed in the statute, and provides the requisite notice immediately above the signature line. Thus, the Arbitration Agreement appears to have been entered into pursuant to Section 1295 and Section 2.2 manifests and intent to bind Tafoya, as successor-in-interest to the Decedent, such that it appears that Ruiz applies, and Tafoya and his wrongful death claim are bound by the Arbitration Agreement at issue.

Additionally, Tafoya’s wrongful death claim is based on the negligence of AHC, a health care provider, i.e., medical malpractice. (See Complaint, ¶¶ 3, 10, 15, 16, 57-59.)

Based on the foregoing, the Court GRANTS the motion and stays the action pending completion of arbitration.

Plaintiffs cite to no legal authority to supporting their assertion that the Court must order AHC to pay costs of arbitration, and the Court disregards this argument. When legal argument with citation to authority is not furnished on a particular point, the court may treat the point as forfeited and move on without consideration. (Okasaki v. City of Elk Grove (2012) 203 Cal.App.4th 1043, 1045, fn. 1.)

Tentative Ruling: The Motion to Compel Arbitration filed by Defendant, Anaheim Healthcare Center, LLC, is GRANTED. The Court sets an ADR Review hearing for [Date and Time to be set at the time of hearing on this motion].

AHC to give notice.