Judge: Margaret L. Oldendorf, Case: 23AHCV01447, Date: 2023-12-15 Tentative Ruling

Case Number: 23AHCV01447    Hearing Date: March 12, 2024    Dept: P

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES

NORTHEAST DISTRICT

          I.        INTRODUCTION

 This litigation stems from a stay at a skilled nursing facility (SNF). Plaintiff Ruth Montury (Ruth), 93 years old, was admitted to Defendant Gem Transitional Care Center (Gem) on February 11, 2022. Defendant Saint Cabrini Healthcare Services LLC is the management company of the Gem facility. Ruth alleges she experienced a dramatic decline in condition over the course of her stay at Gem. Specifically, it is alleged that she fell during her stay at Gem, fracturing her hip. She alleges that she left the facility with a fractured hip and incontinence, which left her reliant on pain medication and requiring   significant assistance with activities of daily living. Her complaint alleges three causes of action: (1) elder abuse and neglect under WIC Section 15600, (2) violation of residents’ bill of rights under HSC Section 1430(b) and (3) negligence.

Defendants Gem and Saint Cabrini (collectively Defendants) filed a motion to compel arbitration on August 14, 2023. The Court granted the motion to compel arbitration on December 15, 2023.

Before the Court is Plaintiffs’ motion for reconsideration filed on January 30, 2024. Plaintiffs argue that: (1) in light of the recent Haydon decision, the arbitration agreement at issue in this case is substantively and procedurally unconscionable; and (2) Defendants have not been diligent in selecting a mediator. Defendants filed an opposition on February 28, 2024. Plaintiffs filed a reply on March 5, 2024.

After consideration of the papers, the Court DENIES the motion for reconsideration.

II.       LEGAL STANDARD 

Code of Civil Procedure Section 1008 provides, in pertinent part: 

“(a) When an application for an order has been made to a judge, or to a court, and refused in whole or in part, or granted, or granted conditionally, or on terms, any party affected by the order may, within 10 days after service upon the party of written notice of entry of the order and based upon new or different facts, circumstances, or law, make an application to the same judge or court that made the order, to reconsider the matter and modify, amend, or revoke the prior order. The party making the application shall state by affidavit what application was made before, when and to what judge, what order or decisions were made, and what new or different facts, circumstances, or law are claimed to be shown. 

(b) A party who originally made an application for an order which was refused in whole or in part, or granted conditionally or on terms, may make a subsequent application for the same order upon new or different facts, circumstances, or law, in which case it shall be shown by affidavit what application was made before, when and to what judge, what order or decisions were made, and what new or different facts circumstances, or law are claimed to be shown. For a failure to comply with this subdivision, any order made on a subsequent application may be revoked or set aside on an ex parte motion. 

… 

(e) This section specifies the court’s jurisdiction with regard to applications for reconsideration of its orders and renewals of previous motions, and applies to all applications to reconsider any order of a judge or court, or for the renewal of a previous motion, whether the order deciding the previous matter or motion is interim or final. No application to reconsider any order or for the renewal of a previous motion may be considered by any judge or court unless made according to this section.” (CCP § 1008(a), (b), (e).) 

A motion for reconsideration under § 1008 requires that the moving party present new or different facts that were not previously considered by the Court.  (New York Times Co. v. Superior Court (2005) 135 Cal.App.4th 206, 212-13.)  However, the burden under CCP Section 1008 “is comparable to that of a party seeking a new trial on the ground of newly discovered evidence: the information must be such that the moving party could not, with reasonable diligence, have discovered or produced it at the trial.”  (Ibid.; Even Zohar Construction & Remodeling, Inc. v. Bellaire Townhouses, LLC (2015) 61 Cal.4th 830, 833 [finding that § 1008 imposes the special requirement of having to not only show new or different facts, circumstances, or law, but also to “show diligence with a satisfactory explanation for not presenting the new or different information earlier…”].)  Reconsideration cannot be granted based on claims that the court misinterpreted the law in its initial ruling because this is not a "new" or "different" matter.  (Gilberd v. AC Transit (1995) 32 Cal.App.4th 1494, 1500.) 

III.     ANALYSIS

A. Timeliness of the Motion for Reconsideration

In their opposition, Defendants urge that the instant motion for reconsideration is not timely. Per CCP Section 1008, a motion for reconsideration must be brought within 10 days of notice of the ruling the party wishes to be reconsidered. (CCP § 1008(a).)

Here, the notice of ruling of the 12/15/23 Order compelling arbitration was e-served that same day, giving 10 days from that date in which to file this motion. This motion was filed over a month later, on January 30, 2024.

In reply, Plaintiffs urge that the motion was timely, as it was “Defendants’ dilatory acts of unilaterally rejecting Plaintiff’s arbitrator proposals and only suggesting arbitrators who set arbitration at their initial case management conference” that gave rise to this motion. (Reply p. 3: 9-11.) This is not a valid excuse for filing a motion for reconsideration.

Notwithstanding the untimeliness of the motion, the Court shall proceed to consider the substantive merits of the arguments advanced by the parties.

B. Discussion of the Haydon v. Elegance at Dublin case

Plaintiffs urge that the December 15 order granting the motion to compel arbitration should be reconsidered. In support, Plaintiffs cite Haydon v. Elegance at Dublin (2023) 97 Cal.App.5th 1280, a new decision on substantive and procedural unconscionability in arbitration agreements that was issued 4 days after this Court’s December 15 ruling. The standard for procedural unconscionability, per Haydon, is “whether circumstances of the contract's formation created such oppression or surprise that closer scrutiny of its overall fairness is required.” (Id. at 1287, internal citations omitted.) Oppression in this context is “where a contract involves lack of negotiation and meaningful choice . . . and surprise involves the extent to which . . . the allegedly unconscionable provision is hidden within a prolix printed form.” (Id., internal citations omitted.) Haydon also involved a child with an unwell parent and an arbitration agreement with a nursing facility. (Id. at 1284-1285.) However, unlike the instant case, the arbitration agreement was signed by the parent, who had aphasia and cognitive decline, not the child. Relying on the declaration of the daughter, the Court of Appeals concluded that there was a high level of procedural unconscionability as “[the] mother was under enormous pressure to sign the agreement and arbitration provision because her condition was declining, she had limited financial resources, and the facility was offering a discount contingent on her signing up quickly.” (Id. at 1288.) The Haydon court also found surprise as the arbitration provision was “a long, dense agreement interspersed with several confusing signature blocks,” the provision was buried within the packet the mother was asked to sign, was not contained in a separate document, and did not alert Haydon to the JAMS rules. (Id.)

Further, the Haydon court concluded that the arbitration agreement was procedurally unconscionable despite the presence of an opt-out provision, and language that an agreement to arbitrate was not a pre-requisite to admission at the facility. (Id. at 1288-1289.)

Plaintiff argues that similar circumstances are present here. In support, they provide the declaration of their attorney, Christopher W. Peterson. (Peterson Decl.) He attaches Plaintiff’s opposition to the motion to compel in support of this argument. (Peterson Decl. ¶ 3, referencing Exh. B.) Similarly to the plaintiff in Haydon, Frank Montury was allegedly presented with the arbitration agreement, along with other papers, when his mother was admitted to Defendant Gem. (Montury Decl. ¶ 4.) Plaintiffs urge that “Frank Montury, Jr. was in a vulnerable position at the time of his mother’s admission since his mother needed to find a facility to provide for her needs.” In contrast, the plaintiff in Haydon was vulnerable in that it was the elderly mother who signed the agreement herself, after the facility was told by the daughter that the mother was cognitively impaired.

Further, Plaintiffs urge that “Additionally, Frank Montury, Jr. likely felt pressure since Defendants requested he sign the Agreement while also requesting he sign numerous other admissions documents.” (Motion p. 6: 14-16.) This alleged pressure is significantly different from “enormous pressure” the elderly, impaired plaintiff in Haydon faced. Simply being presented with the separate arbitration agreement while his mother was being admitted to Defendants’ facility is not enough for this Court to conclude that there is procedural unconscionability, and thus to reconsider its December 15 ruling. (See Opposition p. 9: 24- p. 10: 22.)

Secondly, Plaintiffs urge that the agreement was substantively unconscionable as there was surprise, by the Haydon standard. However, the document in question here is two pages, which is relatively short. It contains two signature blocks, below two notices in all capital letters. There is one place for initials on the prior page. Additionally, the individual signing filled out the form correctly, unlike the plaintiff in Haydon. The arbitration agreement is a separate document, clearly labelled, and included a notice that the arbitration was subject to the Federal Arbitration Act. Under the Haydon standard, the elements of surprise are not clearly met here. Accordingly, the Court declines to reconsider its December 15, 2023 ruling compelling arbitration based on surprise. (See Opposition p. 10: 6-22.)

Relying on the high level of procedural unconscionability, the Haydon court required only a small amount of substantive unconscionability and found three provisions of the arbitration agreement substantively unconscionable: (1) a confidentiality provision, (2) limitations on discovery, and (3) a provision providing that Plaintiff bear her own costs. (Haydon, supra, at 1290-1292.) Notably, in ruling that the cost provision was unconscionable, the court noted that “JAMS charges up to $10,000.00 per day for a single-arbitrator arbitration and this would be unaffordable for Haydon, who is on Social Security and has no retirement funds.” (Id. at 1291).

Here, Plaintiff urges that there are limitations on discovery. The Court does not find this argument convincing. The arbitration agreement at issue does not have a provision limiting discovery. Likewise, the FAA rule that parties have to agree to discovery, and parties’ inability so far to agree to an arbitrator, does not demonstrate that discovery is limited in any manner. (See Motion p.8: 1-8.)

Secondly, Plaintiffs urge that the provision requiring both parties to bear half of the arbitration costs is substantively unconscionable. Here, Defendants have provided the names of some arbitrators who work for JAMS, the company referenced in Haydon as charging $10,000 per arbitration. (See Haydon, supra, at 1291.) Specifically, Plaintiffs urge “[t]his is an excessive amount which is highly unaffordable for an elderly plaintiff, who is still incurring skilled nursing care costs.” (Motion p. 8: 18-19.) However, as noted above, the conclusion that the cost provision was substantively unconscionable is based on that plaintiff's specific financial straits (e.g., social security and no retirement funds). (Haydon, at 1291.) Here, even assuming arguendo that Ruth is still incurring skilled nursing care costs, there is insufficient evidence to demonstrate she cannot afford half of the JAMS fee, if selected, as there is no other evidence or assertion as to her financial condition. (See Opposition p. 11: 23-25.) Additionally, Defendants point out in the opposition that JAMS arbitrators were not the only ones proposed by Defendants -- they also offered names of arbitrators who work with Judicate West. (Opposition p. 10:26- p. 11: 4.)

Accordingly, the Court declines to reconsider its December 15, 2023 ruling compelling arbitration.

C. Diligence in Selecting an Arbitrator

Lastly, Plaintiff urges that the Defendants have not been diligent in selecting an arbitrator and, on that basis, the Court should reconsider its December 15, 2023 ruling. Plaintiffs attach emails between their counsel and Defense counsel, indicating that an arbitrator has not yet been selected. (Motion Exhs. G-K.) There is no case law or statutory law cited supporting this proposition, just the general purpose of arbitration and Plaintiffs’ off-calendar motion for trial preference. It is unclear to the Court as to why meeting the standard for a different motion, trial preference, demands that arbitration occur within 4-6 months. To the extent the Court considers the argument that Ms. Montury is elderly and has several serious health conditions, the Court urges parties to meet and confer in an effort to resolve this issue.

To the extent that the Court considers this motion to be a petition for the court to select an arbitrator under CCP Section 1281.6, the Court declines to do so on two grounds: (1) the parties have only had a little over two months to select an arbitrator, so it is premature to say conclusively that they cannot do so without court intervention; and (2) a CCP 1281.6 motion requires a list of no less than five (5) potential arbitrators supplied jointly by both parties, where here Plaintiffs propose only three names on their own.

IV.     CONCLUSION AND ORDER

          The Plaintiff’s motion for reconsideration is denied.

Defendants are ordered to give notice.

Dated:                                                              _______________________________

                                                                              MARGARET L. OLDENDORF

                                                                       JUDGE OF THE SUPERIOR COURT