Judge Lynne M. Hobbs, Case Number: 24STCV16434, Date: 2025-01-27 Tentative Ruling

Judge: Lynne M. Hobbs, Case: 24STCV16434, Date: 2025-01-27 Tentative Ruling

Case Number: 24STCV16434 Hearing Date: January 27, 2025 Dept: 61

NICOLE PRENDEZ vs NATURAL NINE, INC, et al.

Tentative

Defendants Natural Nine, Inc., 893 Tora, Inc., and Alan Kiyoshi Minato’s Motions to Compel Arbitration are GRANTED.

Defendants to provide notice.

Analysis:

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 893 Tora, LLC, Natural Nine, Inc., and Alan Kiyoshi Minato (Defendants) move to compel arbitration of Plaintiff Nicole Prendez’s (Plaintiff) claims asserted against them, based on an arbitration agreement purportedly executed by Plaintiff on January 24, 2022. (Beebe Decl. Exh. 1.) That agreement, entitled “Release of Liability, Assumption of Risk, and Indemnity Agreement,” is by its terms between Defendant 893 Tora, LLC dba Sam’s Hofbrau, and Plaintiff, and includes a provision waiving Plaintiff’s right to sue 893 Tora for negligence. (Id. at ¶ 1.) The agreement states that it is not creating a relationship of employment. (Id. at p. 1.) It includes an arbitration provision stating as follows:

This agreement shall be governed by and interpreted in accordance with the laws of the state in which Sam's is located (''Forum State") without regard to the conflict of law rules of the Forum State. I agree and acknowledge that any claim or dispute arising from or related to this agreement or the relationship of the parties in any respect thereto shall first be submitted to mediation, and that engaging in such mediation is a condition precedent to bringing any claim against Sam's arising from or related to this agreement. Such mediation may be initiated by either party by providing a written demand for mediation to the other party and shall be conducted within the Forum state in accordance with the then current Commercial Mediation Procedures of the American Arbitration Association ("AAA"). If settlement is not reached within sixty (60) days after delivery of a written demand for mediation, such claim or dispute shall I be submitted to and be settled by final and binding arbitration in the Forum State in accordance with the then current Commercial Arbitration Rules of the American Arbitration Association. If arbitration is not available, or in the event of litigation to enforce arbitration or settlement between the parties to this agreement, I agree that sole jurisdiction and venue shall be in the state and federal courts located in the Forum State, and I waive any defense of jurisdiction and/or venue that may now or hereafter exist.

(Beede Decl. Exh. 1, ¶ 8.)

Plaintiff presents a declaration in which she testifies that she never signed any arbitration agreement, and that upon beginning to work for Defendants she signed only a photography release form and provided only basic biographical information. (Prendez Decl. ¶ 4.)

Defendants argue that the agreement contains a delegation clause requiring all issues, including the existence of an agreement to arbitrate, to be decided by the arbitrator. (Reply at pp. 2–3.) But the agreement on its face contains no delegation clause. This is fatal to the argument, since any such clause, to be enforceable, must be “clear and unmistakable.” (Rodriguez v. American Technologies, Inc. (2006) 136 Cal.App.4th 1110, 1123.) Defendants argue that the agreement incorporates the rules of the American Arbitration Association (AAA), which themselves include a delegation clause. (Reply at p. 3.) But the agreement does not incorporate the AAA rules; it merely states that the arbitration shall be conducted in accordance therewith. And even if such an incorporation were included, it would be insufficient to divest this court of authority to decide arbitrability issues, since the inclusion of such a consequential provision through a document not presented with the agreement would not be “clear and unmistakable.” (See Ajamian v. CantorCO2e, L.P. (2012) 203 Cal.App.4th 771, 790 [“There are many reasons for stating that the arbitration will proceed by particular rules, and doing so does not indicate that the parties' motivation was to announce who would decide threshold issues of enforceability.”].)

Proceeding to the existence of the agreement, Plaintiff’s denial of signing the agreement is not persuasive. Although Plaintiff denies that the signature or initials on the agreement are not hers, there is no obvious difference between the writing on the agreement and those other writing samples that Plaintiff presents. (Prendez Decl. Exh. A.) This much is confirmed in the declaration of handwriting expert Beth Chrisman, submitted by Defendants in reply, who opines that the signature and initials on the agreement are the from the same hand that produced Plaintiff’s other materials. (Chrisman Decl. ¶ 17.) The substance of the agreement — defining Plaintiff as a “customer” rather than employee — is consonant with Plaintiff’s allegations that her employment was misclassified. And the documents produced by Reda Beebe include not just the release identified by Plaintiff, but also a scanned copy of Plaintiff’s driver’s license, consistent with Beebe’s testimony. (Beebe Decl. ¶ 4, Exh. 1.)

Although Plaintiff argues that Defendants Natural Nine, Inc. and Alan Kiyoshi Minato are not parties to the arbitration agreement, Plaintiff supplies a basis for them to enforce the arbitration agreement by seeking liability against them as joint employers with the signatory party. Plaintiff alleges all causes of action in the Complaint against all Defendants collectively, and asserts that each defendant was not only the agent of the other, but that each was part of an “integrated enterprise,” acting as the “joint employer of Plaintiff.” (Complaint ¶¶ 9–12.) It would be inequitable to allow Plaintiff to assert broad collective liability against all defendants, supported only by a joint enterprise theory, and then rely upon their legal separateness to escape the arbitration agreement. (. Pexco, LLC (2017) 11 Cal.App.5th 782, 788 [“Garcia agreed to arbitrate his wage and hour claims against his employer, and Garcia alleges Pexco and Real Time were his joint employers. Because the arbitration agreement controls Garcia’s employment, he is equitably estopped from refusing to arbitrate his claims with Pexco.”].)

Plaintiff’s arguments as to the unconscionability of the arbitration agreement also fail, because Plaintiff has identified no substantively unconscionable provisions of the agreement. “Unconscionability requires a showing of both procedural unconscionability and substantive unconscionability.” (Ajamian v. CantorCO2e, L.P. (2012) 203 Cal.App.4th 771, 795.) Arbitration contracts presented to employees on a take-it-or-leave-it basis are at least minimally procedurally unconscionable. (See Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 113.) Taking Plaintiff’s testimony regarding the circumstances of her employment relation with Defendants as true for the purposes of this motion, the agreement is at least minimally unconscionable in a procedural sense under this authority.

But Plaintiff cites no aspect in which the agreement’s substance is unconscionable. She argues that it lacks the protections required by the Armendariz decision, such as a neutral arbitrator, a written decision, and adequate discovery. (Opposition at pp. 6–7.) Yet Armendariz announces a rule that such requirements will be implied into agreements that require them when they are not excluded: “We further infer that when parties agree to arbitrate statutory claims, they also implicitly agree, absent express language to the contrary, to such procedures as are necessary to vindicate that claim.” (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 106.) Plaintiff’s argument that the agreement is “entirely silent” on these matters thus furnishes no basis to invalidate the agreement. (Opposition at p. 8.)

Plaintiff also argues that the agreement is unconscionable in its scope, yet this too is unpersuasive. The case that Plaintiff relies upon addressed an arbitration provision drafted by a university employer, applicable to “all claims whether or not arising out of Employee’s University Employment.” (Cook v. University of Southern California (2024) 102 Cal.App.5th 312, 321.) This is unlike the present arbitration provision, which applies to “any claim or dispute arising from or related to this agreement, or the relationship of the parties in any respect thereto.” (Beebe Decl. Exh. 1, ¶ 8.) The arbitration agreement is not unlimited in scope, but expressly limited to claims arising out of the relationship defined by the agreement. The agreement is therefore not unconscionable.

The motion to compel arbitration is therefore GRANTED.*

Defendants’ objections to those portions of Plaintiff’s declaration wherein she describes the nature of her relationship with Defendants need not be ruled upon, as the evidence is not material to the resolution of this motion.