Judge: Malcolm Mackey, Case: 23STCV05747, Date: 2023-08-31 Tentative Ruling
Case Number: 23STCV05747 Hearing Date: August 31, 2023 Dept: 55
VALDIVIA
v. DCC STAFFING SERVICES INC., 23STCV05747
Hearing: 8/31/23,
Dept. 55.
#7: MOTION TO COMPEL ARBITRATION AND STAY
PROCEEDINGS.
Notice: Okay
Opposition
MP:
Defendant DCC STAFFING SERVICES INC.
Joinder of defendants ANCESTRAL HOME HEALTH CARE
PROVIDERS INC., EVELYN BORROMEO-CRUZ AND ANA LINGAO.
RP:
Plaintiff
Summary
On 3/15/23, Plaintiff ALONDRA VALDIVIA filed a
Complaint alleging that Plaintiff was employed by Defendants, a Receptionist,
then “staffing coordinator,” until their constructive, wrongful termination of
employment on or about March 15, 2021, based upon work-related disability and
sexual orientation.
The causes of action are:
1. BREACH OF EXPRESS
WRITTEN CONTRACT;
2. BREACH OF IMPLIED
CONTRACT;
3. BREACH OF THE COVENANT
OF GOOD FAITH AND FAIR DEALING;
4. WRONGFUL TERMINATION
IN VIOLATION OF PUBLIC POLICY;
5. DISCRIMINATION;
6. RETALIATION;
7. HARASSMENT;
8. VIOLATION OF CAL.
LABOR CODE §1102.5;
9. VIOLATION OF CAL.
LABOR CODE §1198.5;
10. FRAUD;
11. INTENTIONAL
INFLICTION OF EMOTIONAL DISTRESS;
12. VIOLATION OF BUSINESS
& PROFESSIONS CODE §17200;
13. NEGLIGENCE;
14. ASSAULT;
15. VIOLATION OF CIVIL
CODE §§51, ET SEQ., 52.1;
16. VIOLATION OF COVID
LAWS;
17. VIOLATION OF SAFETY
LAWS.
MP
Positions
Moving party requests an order compelling arbitration
of the Complaint, and staying this action, on grounds including the following:
·
Plaintiff’s employment-related claims are
subject to a written agreement to arbitrate disputes, entered into by the
parties on July 11, 2019.
·
The only named parties in this lawsuit are
all alleged to be the joint employer of Plaintiff, and thus parties to the
arbitration agreement. (Complaint at. ¶ 2.)
·
Plaintiff can show no basis for holding
that the arbitration agreement is unenforceable.
·
AB 51 is preempted by the FAA (See generally Chamber of Commerce of the
United States v. Bonta (9th Cir. 2023) 62 F.4th 473.)
RP
Positions
Opposing party advocates denying, for reasons
including the following:
• Defendants waived,
forfeited and are estopped from compelling arbitration in this case. Defendants
have acted inconsistently with the right to compel arbitration, falsely
claiming that one Defendant should not be a party as it did not employ
Plaintiff, purposefully delayed the hearing on their motion, have engaged in
extensive law and motion practice before the Court, served extensive discovery,
and demanded Plaintiff pay fees in violation of Armendariz v. Foundation Health
Psychcare Services, Inc. (2000) 24 Cal.4th 83. See, Declaration of Suzanne E.
Rand-Lewis.
• Defendants have not met
their burden of proving that a valid, enforceable arbitration agreement was
formed. Civil Code §§1550, 1565, 1640. Defendants’ evidence is inadmissible.
Plaintiff never agreed to arbitration or signed an arbitration agreement.
Plaintiff’s evidence preponderates. See, Declaration of Plaintiff; Plaintiff’s
Objections to Evidence.
• Defendants AHHC, Cruz
and Lingao’s “Joinder” is defective and must be denied.
• Assuming arguendo that
an agreement exists, Defendants AHHC, Cruz and Lingao are not parties to the
alleged arbitration agreement, and there is a distinct possibility of
conflicting rulings . Code of Civil Procedure §1281.2(c).
• Assuming arguendo an
agreement was formed, the agreement is unenforceable as it is both procedurally
and substantively unconscionable.
(Opp., p. 2.)
Tentative
Ruling
The motion is granted.
Plaintiff and moving and joining 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.
Opposing party’s evidentiary objections are overruled. Trial judges have broad discretion in ruling
on evidentiary objections, and even when evidence improperly was excluded, it
is not reversible error unless probably a more favorable result would have been
reached. Tudor Ranches v. State Comp. Ins. Fund (1998) 65 Cal. App. 4th
1422, 1431-1432.
Assent
The Court finds that moving party’s declaration is
competent in showing that the declarant personally signed the arbitration
agreement for the employer and the Plaintiff signed, both using ink on paper (e.g., motion, p. 12).
The signature on Plaintiff’s opposing declaration
looks like this:
The signature on the agreement referenced at page 4 of
the motion, looks very similar, like this:
Parties seeking to compel arbitration meet their
initial burden simply by reciting the terms of the governing provision, or by
attaching a copy of the provisions, unless there is a dispute over authenticity
that is beyond merely contesting the preliminary showing. Sprunk v. Prisma LLC (2017) 14
Cal.App.5th 785, 793; Ruiz v. Moss
Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 846 (“In the face of … failure to recall signing
… had the burden of proving by a preponderance of the evidence that the electronic
signature was authentic….”); Espejo v. So. Cal. Permanente Med. Group (2016) 246 Cal.App.4th 1047, 1060
(“defendants … met their initial burden by attaching to their petition a copy
of the purported arbitration agreement bearing … electronic signature. Once …
challenged …, defendants were then required to establish by a preponderance of
the evidence that the signature was authentic.”)
An agreement’s signature
can be shown by having a judge compare a genuine signature to that on an
agreement. Gamboa v. Ne. Cmty.
Clinic (2021) 72 Cal. App. 5th 158, 170
Unconscionability
The Court finds against
procedural unconscionability, it instead finding that Plaintiff signed the
arbitration agreement.
Also, the Court finds
against substantive unconscionability, because the AAA rules applicable to
employment were incorporated by reference, and readily available to Plaintiff
including online.
Cases that have held that
the failure to provide a copy of the arbitration rules support finding
procedural unconscionability have involved an unconscionability claim that
somehow depended upon the incorporated arbitration rules. Baltazar v. Forever 21, Inc. (2016) 62
Cal.4th 1237, 1246. 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. AAA provisions for the employer to pay
arbitration expenses are not substantively unconscionable. To avoid being determined unconscionable, an
arbitration agreement must provide for relief from any unaffordable arbitration
expenses. Gutierrez v. Autowest, Inc.
(2003) 114 Cal.App.4th 77, 92.
“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.
Standing to Compel
The Court finds that all
defendants have standing to enforce the arbitration agreement.
The Complaint admits that
the entity defendants were Plaintiff’s joint employer (Complaint, ¶ 2 (“were Plaintiff’s joint employer,…”). Further, it admits that each Defendant was
the agent of codefendants (¶ 19 (“each
of the Defendants were the agents, servants, and employees of the co-defendants….”)). Additionally, the arbitration agreement expressly
covers disputes against agents and employees
(opp., ex. A (“ARBITRATION AGREEMENT”), ¶ B(1) (“any dispute against any present or former
officer, director, employee, agent, attorney, or insurer of the Employer, shall
be submitted to binding arbitration….”).
In addition, the arbitration agreement is part of the employment
agreement that the Complaint is based upon
(e.g., motion, ex. A, ¶ A (“Employer
and Employee desire to commence an employment at-will relationship, whereas
Employee will be employed by Employer for an unspecified term and on am at-will
basis, with either party having the right to terminate the employment
relationship at any time for any reason, with or without cause or notice.”); and Complaint, ¶ 22 (“Plaintiff and Defendant EMPLOYER entered
into a verbal and written employment contract pursuant to which Plaintiff
agreed to work for Defendant EMPLOYER.”)).
Generally, just signatories
to arbitration agreements have standing to enforce them, with exceptions as
to nonsignatory persons “who are agents
or alter egos of a signatory party or intended third party beneficiaries of an
arbitration agreement.” Bouton v.
USAA Casualty Ins. Co. (2008) 167 Cal.App.4th 412, 424. Accord
Smith v. Microskills San Diego L.P. (2007) 153 Cal. App. 4th 892,
896. “[A] plaintiff's allegations of an
agency relationship among defendants is sufficient to allow the alleged agents
to invoke the benefit of an arbitration agreement executed by their principal
even though the agents are not parties to the agreement.” Thomas v. Westlake (2012) 204
Cal.App.4th 605, 614-15. Intended
third-party beneficiaries may enforce arbitration provisions. Macaulay v. Norlander (1992) 12
Cal.App.4th 1, 7–8; Michaelis v.
Schori (1993) 20 Cal.App.4th 133, 139 (agreement expressly included
arbitration of claims as to signatory’s employees). Applying equitable estoppel to compel
arbitration, without an applicable arbitration agreement, a nonsignatory may
compel arbitration when the claims against the nonsignatory are founded in, and
inextricably bound up with, the agreement’s obligations, as determined by
examining the facts of the complaint. Felisilda
v. FCA US LLC (3rd Dist. 2020) 53 Cal.App.5th 486, 496-97
Conflicting Rulings
The Court finds no danger
of conflicting rulings, because all defendants are being compelled into
arbitration.
Code of Civil Procedure
Section 1281.2(c), regarding denying arbitration requests on the ground of
there being a pending action between a party to the arbitration agreement and a
third party, does not apply where all of the parties involved in the lawsuit
are bound by the arbitration agreement at least as to some claims. RN Solution v. Healthcare (2008) 165
Cal.App.4th 1511, 1521.
Waiver/Estoppel
The Court finds that defendants did not waive arbitration
and are not estopped, including because participation in litigation does not
necessarily constitute a waiver.
A trial court's determination of waiver of arbitration
is upheld on appeal where supported by substantial evidence. Sobremonte v. Sup. Ct. (1998) 61 Cal.
App. 4th 980, 991.
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. “Because merely participating in
litigation … does not result in a waiver, courts will not find prejudice where
the party opposing arbitration shows only that it incurred court costs and
legal expenses.… Rather, courts assess prejudice with the recognition that
California’s arbitration statutes reflect ‘a strong public policy in favor of
arbitration as a speedy and relatively inexpensive means of dispute
resolution’.… Prejudice typically is
found only where the petitioning party’s conduct has substantially undermined
this important public policy or substantially impaired the other side’s ability
to take advantage of the benefits and efficiencies of arbitration.” Saint Agnes Medical Center v. PacifiCare
of Cal. (2003) 31 Cal.4th 1187,
1203-04.
"State law, like the FAA, reflects a strong
policy favoring arbitration agreements and requires close judicial scrutiny of
waiver claims.... Although a court may deny a petition to compel arbitration on
the ground of waiver..., waivers are not to be lightly inferred and the party
seeking to establish a waiver bears a heavy burden of proof. " Saint Agnes Medical Center v. PacifiCare
of Cal. (2003) 31 Cal.4th 1187,
1195-96 (under both federal and state law, there is no single test of waiver,
and courts can consider acts inconsistent with arbitration).
Under the California and federal arbitration acts, at
a minimum, the failure to plead arbitration as an affirmative defense is an act
inconsistent with the right to arbitrate and indicates a waiver, as one factor
to consider. Guess?, Inc. v. Sup. Ct. (2000) 79 Cal.App.4th 553, 558. See
also Wolschlager v. Fidelity Nat.
Title Ins. Co. (2003) 111 Cal.App.4th 784, 793 ("Although defendant failed to raise
arbitration as an affirmative defense …, waiver does not provide a basis for
denying the petition to compel arbitration.").
Jury
Trial
“Predispute
arbitration agreements are specifically authorized by statute. (Code Civ.
Proc., § 1281 [‘A written agreement to submit to arbitration an existing
controversy or a controversy thereafter arising is valid, enforceable and
irrevocable, save upon such grounds as exist for the revocation of any
contract.’)…. Contracting parties can voluntarily agree to waive their
constitutional right to have their dispute resolved in a judicial forum by a
jury.” Murrey v. Sup.Ct. (2023)
87 Cal. App. 5th 1223, 1236. Parties’
following statutes providing for arbitration or references results in a waiver
of a jury trial, without the need for predispute agreements to expressly so
state. Woodside Homes of California,
Inc. v. Sup.Ct. (2006) 142 Cal. App. 4th 99, 103, 104.
Stay
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.