Judge: Malcolm Mackey, Case: 22STCV10965, Date: 2023-04-18 Tentative Ruling

Case Number: 22STCV10965    Hearing Date: April 18, 2023    Dept: 55

 

CATALANO v. BHR TRS BEVERLY HILLS LLC                                22STCV10965

Hearing Date:  4/18/23,  Dept. 55.

#10:   MOTION TO COMPEL ARBITRATION AND STAY PROCEEDINGS.

 

Notice:  Okay

Opposition

 

MP:  Defendants BEVERLY HILLS HOTEL MANAGEMENT LLC; REMINGTON LODGING & HOSPITALITY, LLC; CAROL ROUDILLON; and MIGUEL MORALES.

RP:  Plaintiff.

 

 

Summary

 

On 4/1/22, Plaintiff CRISTINA CATALANO filed a Complaint alleging that, as a result of the employer defendants’ inappropriately touching, adverse employment actions, discrimination, harassment and retaliation, based on gender, Plaintiff was forced to resign.

The causes of action are:

1. DISCRIMINATION IN VIOLATION OF FEHA

2. FAILURE TO PREVENT DISCRIMINATION (FEHA)

3. HARASSMENT IN VIOLATION OF FEHA

4. FAILURE TO PREVENT HARASSMENT IN VIOLATION OF FEHA

5. RETALIATION IN VIOLATION OF FEHA

6. FAILURE TO PREVENT RETALIATION (FEHA)

7. RETALIATION IN VIOLATION OF LABOR CODE 1102.5.

 

 

MP Positions

 

Moving parties request an order compelling arbitration and staying this action, on grounds including the following:

·         There is a valid written arbitration agreement between Plaintiff and Remington Lodging & Hospitality, LLC.

·         Plaintiff affirmed the Arbitration Agreement by computer, on July 9, 2022, and the Agreement was stored in Plaintiff’s signed documents record.

·         The Arbitration Agreement provides that the parties “agree all legal disputes and claims between them shall be determined exclusively by final and binding arbitration.” (Ex. 3, ¶ 9(d)).

·         The FAA applies to this case because both BHHM and Remington are engaged in transactions involving interstate commerce.

·         The Arbitration Agreement is not unconscionable.

·         To the extent Plaintiff contends she had no opportunity to review the agreement, courts routinely enforce agreements signed by a party, regardless of whether or not they read it.

·         Substantive unconscionability is not present.  All Armendariz factors are satisfied.  The Arbitration Agreement allows for adequate discovery. Under the Arbitration Agreement, the parties agree to be bound by the JAMS Employment Arbitration Rules, which allows for discovery under JAMS Rule 17. Furthermore, the Arbitration Agreement does not limit discovery.

·         While BHHM, Morales, and Roudillon are not signatories to the Arbitration Agreement, they may nonetheless enforce the provisions thereof as third-party beneficiaries.

·         Any illegal provisions are severable.

·         Defendant has not waived its right to arbitrate and has timely sought to enforce its rights under the Arbitration Agreement by filing the motion.

 

 

RP Positions

 

Opposing party advocates denying, for reasons including the following:

 

·         While Plaintiff does not recall the amount of time she had to consider the Arbitration,  defendants are unable to show that Plaintiff actually had time to review these documents.  Plaintiff was purportedly required to review and “acknowledge” 19 documents on July 9, 2021. (Declaration of Angeline Miller at Defendants’ Exhibit 4.)

·         There are procedural and substantive unconscionability.

·         The Agreement failed to attach the JAMS rules.

·         The Agreement gives the arbitrator discretion to address formation issues, in violation of the California Constitution and applicable law.

·         Employees, like Plaintiff, are left with no option other than to sign the arbitration agreement to secure employment.

·         The arbitration agreement is 4 pages in length, single-spaced, and riddled with legal jargon that an average lay person could not understand.

·         Employment cases such as this require multiple depositions. Defendant’s arbitration agreement provides for the JAMS rules, which only require one percipient witness deposition.

·         Where a court is unable to cure unconscionability through severance or restriction and is not permitted to cure it through reformation and augmentation, it must void the entire agreement.  Mills v. Facility Sols. Grp., Inc., 84 Cal. App. 5th 1035, 1043.

·         Defendants caused a waiver of arbitration by setting their motion for a hearing date in April of 2023 when there were earlier hearing dates available.

 

 

Tentative Ruling

 

The motion is granted.

Plaintiff and defendants shall arbitrate the controversies between them, including the entire Complaint, in accordance with their agreement to arbitrate. 

This entire case is stayed until such arbitration has been completed.

Plaintiff has not evidenced both procedural and substantive unconscionability. 

Parties opposing arbitration have the burden to prove any fact necessary to a defense to arbitration enforcement.  Gatton v. T-Mobile USA, Inc.  (2007) 152 Cal.App.4th 571, 579. 

For an arbitration agreement to be unenforceable as unconscionable, both procedural and substantive unconscionability must be present.  Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114.  Claims brought under the Fair Employment and Housing Act (FEHA) are subject to arbitration, if there are provisions for arbitrator neutrality, discovery, written decisions, and expense limits.  O'Hare v. Municipal Resource Consultants (2003) 107 Cal. App. 4th 267, 273;  Fittante v. Palm Springs Motors, Inc.(2003) 105 Cal. App. 4th 708, 716; Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 96-121; Craig v. Brown & Root, Inc. (2000) 84 Cal.App.4th 416, 422-23;  Blake v. Ecker (2001) 93 Cal.App.4th 728, 433, overruled on other grounds by  Le Francois v. Goel (2005) 35 Cal.4th 1094.

"[A] compulsory predispute arbitration agreement is not rendered unenforceable just because it is required as a condition of employment or offered on a 'take it or leave it' basis."  Lagatree v. Luce, Forward, Hamilton & Scripps (1999) 74 Cal. App. 4th 1105, 1127.  Accord  Giuliano v. Inland Empire Personnel, Inc.  (2007) 149 Cal.App.4th 1276, 1292.  Surprise caused by provisions buried in a long contract, language not fully explained, or misleading captions, indicates procedural unconscionability.  Thompson v. Toll Dublin, LLC (2008) 165 Cal.App.4th 1360, 1373. 

Plaintiff has not evidenced insufficient opportunity to read the arbitration provisions, but instead asserts in the memorandum an inability to recall.  Inability to remember means there must be other proof to show insufficient opportunity.  Lack of recollection is not determinative of inability to prove an issue, if other evidence is sufficiently supportive.  Cf.  Kaney v. Custance (2022) 74 Cal.App.5th 201, 217.  Failure to read a contract with reasonable diligence is not a ground to avoid arbitration.  Brookwood v.  Bank of America (1996) 45 Cal.App.4th 1667, 1673.

The Court finds that JAMS rules were readily available to Plaintiff via the Internet, including based upon moving parties’ evidence of various computer tasks Plaintiff had performed in applying for employment.  “Whether a document purportedly incorporated by reference was ‘readily available’ is a question of fact.”  Baker v. Osborne Development Corp. (2008) 159 Cal.App.4th 884, 895.  Accord  Shaw v. Regents of Univ. of Cal. (1997) 58 Cal.App.4th 44, 54 (whether incorporation of terms is enforced depends on the particular facts).  “Numerous cases have held that the failure to provide a copy of the arbitration rules to which the employee would be bound, supported a finding of procedural unconscionability.”  Trivedi v. Curexo Technology Corp. (2010) 189 Cal.App.4th 387, 393, disapproved on other grounds by  Baltazar v. Forever 21, Inc. (2016) 62 Cal. 4th 1237, 1248. 

JAMS rules provide for sufficient discovery.  "‘[A]dequate’ discovery does not mean unfettered discovery....'"  Fitz v. NCR Corp. (2004)118 Cal.App.4th 702, 715.  An AAA provision allowing arbitrators to control the extent of discovery did not constitute substantive unconscionability.  See Roman v. Sup. Ct.  (2009) 172 Cal.App.4th 1462, 1476.

There is no absolute right to bring litigation.  Parties validly may agree that arbitrators have jurisdiction to decide whether arbitration provisions are enforceable, but such language must so provide “‘clearly and unmistakably.’”  Parada v. Sup. Ct. (2009) 176 Cal.App.4th 1554, 1566.  “Under the Federal Arbitration Act…, the enforceability of an arbitration agreement is ordinarily to be determined by the court…. The parties may agree in the arbitration provision, however, that the enforceability issue will be delegated to the arbitrator…. To establish this exception, it must be shown by ‘clear and unmistakable’ evidence that the parties intended to delegate the issue to the arbitrator.”  Ajamian v. CantorCO2e, L.P. (2012) 203 Cal.App.4th 771, 781.

The Court finds insufficient delay and litigation to constitute an arbitration waiver as to this case filed 4/1/22.

Participating in litigation does not by itself waive a party's right to later seek to arbitrate the matter, but the request must be in a reasonable time, and at some point continued litigation justifies a waiver finding, as a fact question, considering the party's actions as a whole in determining whether the conduct was inconsistent with intent to arbitrate.  Desert Regional Medical Center, Inc. v. Miller (2022) 87 Cal.App.5th 295, 316, 321.

Finally, where a court has ordered arbitration, it shall stay the pending action, until an arbitration is had in accordance with the order to arbitrate, or another earlier time, and the stay may be with respect to an issue that is severable.  CCP §1281.4;  Cruz v. PacifiCare Health Systems, Inc. (2003) 30 Cal. 4th 303, 320;  Twentieth Century Fox Film Corp. v. Sup. Ct. (2000) 79 Cal.App.4th 188, 192;  Heritage Provider Network, Inc. v. Sup. Ct.  (2008) 158 Cal.App.4th 1146, 1152, 1154 n. 12.