Judge Lynne M. Hobbs, Case Number: 23STCV27253, Date: 2024-05-31 Tentative Ruling

Judge: Lynne M. Hobbs, Case: 23STCV27253, Date: 2024-05-31 Tentative Ruling

Case Number: 23STCV27253 Hearing Date: May 31, 2024 Dept: 61

DAVID GONZALEZ, AN INDIVIDUAL vs IGS SOLUTIONS, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, et al.

TENTATIVE

Defendants IGS Solutions, LLC, SGI Ducommon LLC, Stiiizy Development LLC, Shryne Group Inc., and Stiiizy Inc.’s Motion to Compel Arbitration is DENIED.

Plaintiff to provide notice.

DISCUSSION

I. OBJECTIONS

Plaintiff David Gonzalez (Plaintiff) objects to the declarations of Cindy Kaoud and Lena Song submitted by Defendants in support of their motion to compel arbitration. The objections to the Kaoud declaration are OVERRULED. Objections No. 4 and 5 to the Song declaration are SUSTAINED, as Song provides no foundation for her knowledge of the corporate structures and operations of entities other than IGS Solutions LLC. The remaining objections to her declaration are OVERRULED.

Defendants’ objections to the declaration of David Gonzalez are OVERRULED.

II. MOTION TO COMPEL ARBITRATION

On petition of a party to an arbitration agreement to arbitrate a controversy, a court must order the petitioner and respondent to arbitrate the controversy if it determines the arbitration agreement exists, unless (1) the petitioner has waived its right to arbitrate; (2) grounds exist for the revocation of the agreement; or (3) “[a] party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact.” (Code Civ. Proc., § 1281.2.)

“[T]he party moving to compel arbitration bears the burden of establishing the existence of a valid agreement to arbitrate, and the party opposing arbitration bears the burden of proving by a preponderance of the evidence any fact necessary to its defense. The role of the trial court is to sit as a trier of fact, weighing any affidavits, declarations, and other documentary evidence, together with oral testimony received at the court's discretion, to reach a determination on the issue of arbitrability.” (Hotels Nevada v. L.A. Pacific Center, Inc. (2006) 144 Cal.App.4th 754, 758.)

Defendants IGS Solutions, LLC, SGI Ducommon LLC, Stiiizy Development LLC, Shryne Group Inc., and Stiiizy Inc. (Defendants) move to compel the arbitration of Plaintiff David Gonzalez (Plaintiff) based on an agreement purportedly executed by him electronically on August 30, 2020. (Song Decl. Exh. A.)

Plaintiff presents a declaration denying that he signed any arbitration agreement, and contending that the agreement presented is not properly authenticated. (Opposition at pp. 7–10.) Plaintiff also argues that the agreement is unconscionably vague as to who is to bear the costs of arbitration and the parties’ discovery rights. (Opposition at pp. 12–14.) Plaintiff finally argues that Defendants waived their right to compel arbitration by filing answers with the court. (Opposition at p. 15.)

The case of Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, is instructive, as the court there described an employer declaration that did not adequately authenticate an employee’s electronic signature on an arbitration agreement:

[The manager] did not explain that an electronic signature in the name of [employee] could only have been placed on the 2011 agreement (i.e., on the employee acknowledgement form) by a person using [employee’s] “unique login ID and password”; that the date and time printed next to the electronic signature indicated the date and time the electronic signature was made; that all . . . employees were required to use their unique login ID and password when they logged into the HR system and signed electronic forms and agreements; and the electronic signature on the 2011 agreement was, therefore, apparently made by [employee] on September 21, 2011, at 11:47 a.m. Rather than offer this or any other explanation of how she inferred the electronic signature on the 2011 agreement was the act of [employee], [manager] only offered her unsupported assertion that [employee] was the person who electronically signed the 2011 agreement. In the face of [employee’s] failure to recall electronically signing the 2011 agreement, the fact the 2011 agreement had an electronic signature on it in the name of [employee], and a date and time stamp for the signature, was insufficient to support a finding that the electronic signature was, in fact, “the act of” [employee]. (Civ. Code, § 1633.9, subd. (a).) For the same reason, the evidence was insufficient to support a finding that the electronic signature was what Moss Bros. claimed it was: the electronic signature of Ruiz. (Evid. Code, § 1400, item (a).) This was not a difficult evidentiary burden to meet, but it was not met here.

(Id. at p. 844.)

In the case of Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, the court distinguished Ruiz and found that an employer had adequately authenticated an employee’s electronic signature:

[W]e find the supplemental Tellez declaration offered the critical factual connection that the declarations in Ruiz lacked. Tellez detailed SCPMG's security precautions regarding transmission and use of an applicant's unique username and password, as well as the steps an applicant would have to take to place his or her name on the signature line of the employment agreement and the DRP. Based on this procedure, she concluded that the “name Jay Baniaga Espejo could have only been placed on the signature pages of the employment agreement and the DRP by someone using Dr. Espejo's unique user name and password.... [¶] Given this process for signing documents and protecting the privacy of the information with unique and private user names and passwords, the electronic signature was made by Dr. Espejo” on the employment agreement and the DRP at the date, time, and IP address listed on the documents. These details satisfactorily meet the requirements articulated in Ruiz and establish that the electronic signature on the DRP was “the act of” Espejo (Civ. Code, § 1633.9, subd. (a)), and therefore provide the necessary factual details to properly authenticate the document.

(Espejo, supra, 246 Cal.App.4th at p. 1062.)

Defendants present the declaration of Lena Song, VP of Human Resources for Defendant IGS Solutions, LLC. (Song. Decl. ¶ 1.) Song states that IGS is the professional employer organization for other defendants, providing employee management services for these entities. (Song Decl. ¶¶ 4–5.) Song states that IGS maintains an online portal (called “EASE”) for employees to sign onboarding documents. (Song Decl. ¶¶ 10–11.) Song states that a link to the portal is sent to new employees’ personal email addresses, and that only the particular employee can access the portal to set up their profile. (Song Decl. ¶ 11.) The employee that follows the link sets up their profile name and password to access the profile, and IGS does not have access to the password. (Ibid.)

Although IGS can view the documents that the employee has completed on their profile, they are not able to add an employee’s signature to any documents. (Ibid.)

Song claims that Plaintiff executed an arbitration agreement in this manner on August 30, 2020. (Song Decl. ¶ 13.) Song states that other documents were similarly executed by Plaintiff on the same date, such as an acknowledgement of receipt of handbook, acknowledgement of policy regarding confidential information, confidentiality agreement, and instruction for answering criminal history inquiry. (Song Decl. ¶ 14.)

Plaintiff, however, specifically denies signing the arbitration agreement at issue, stating that he only became aware of the agreement through this litigation. (Gonzalez Decl. ¶¶ 5–7.) Plaintiff states that he knows he never signed any agreement because when he learned that some non-exempt employees had signed arbitration agreements, he asked his supervisor whether he had to sign one as well, and was informed that he did not have to because he was an exempt employee. (Gonzalez Decl. ¶ 8.) Plaintiff states that the only time he recalls using the EASE system on the date in question for benefits election, and submits the emails was EASE which addressed benefits. (Gonzalez Decl. ¶ 14, Exh. A.)

Plaintiff persuasively rebuts the existence of an agreement to arbitrate. His testimony is founded on a specific denial of signing an arbitration agreement, conversations with his supervisor regarding the same, and supporting email exhibits. The testimony of Lena Song, however, even if construed to satisfy the requirements of Ruiz and Espejo, is founded on general knowledge of Defendants’ policies, and what’s more, how these policies were applied during Plaintiff’s 2020 onboarding, all of which occurred prior to her own hiring with Defendants in July 2023. (Song Decl. ¶ 1.)

Moreover, the agreement itself does not adequately set forth an agreement to arbitrate claims with any particular party. The agreement identifies the parties as “Employee” (indicated to be Plaintiff in the signature block) and “Company,” identified on the agreement as — not any defendant party to this action — but “Cultivation.” (Song Decl. Exh. A.) Although Defendants argue in reply that there was no doubt that Defendant IGS was Plaintiff’s employer, there is no mention of IGS in the agreement. (Reply at p. 5.) As noted by the court in Flores v. Nature’s Best Distribution, LLC (2016) 7 Cal.App.5th 1:

We do not need to address whether the Agreement was properly authenticated because, even assuming the Agreement indeed bears plaintiff's signature, it fails to reflect plaintiff's agreement to submit her claims against defendants in the instant case to binding arbitration pursuant to its terms. First, although not specifically raised by the parties, we note the Agreement states it is between “employee and Company.” The body of the Agreement does not define either term. The signature block of the Agreement, however, has the name “Julie Flores” printed and signed under the word “Employee.” The signature block for the employer is not filled in, dated, or signed under the heading “Authorized Employer Signature.” Therefore, the Agreement does not identify with which entity or entities plaintiff had agreed to submit “all legal, equitable and administrative disputes” to the AAA for mediation and binding arbitration. In this case, defendants sought to enforce the arbitration provision of the Agreement against plaintiff. (Flores v. Nature's Best Distribution, LLC (2016) 7 Cal.App.5th 1, 9.) The agreement here similarly fails to identify to which entity or entities Plaintiff is now bound in arbitration.

Accordingly, the motion to compel arbitration is DENIED.