Judge: Mark A. Young, Case: 24SMCV03269, Date: 2025-01-03 Tentative Ruling
Case Number: 24SMCV03269 Hearing Date: January 3, 2025 Dept: M
CASE NAME: Woods v. Acadia Malibu Inc.,
et al.
CASE NO.: 24SMCV03269
MOTION: Petition/Motion to Compel
Arbitration
HEARING DATE: 1/3/2025
LEGAL STANDARD
Under California and federal
law, public policy favors arbitration as an efficient and less expensive means
of resolving private disputes. (Moncharsh v. Heily & Blase (1992)
3 Cal.4th 1, 8-9; AT&T Mobility LLC v. Concepcion (2011) 563 U.S.
333, 339.) Accordingly, whether an agreement is governed by the California
Arbitration Act (“CAA”) or the Federal Arbitration Act (“FAA”), courts resolve
doubts about an arbitration agreement’s scope in favor of arbitration. (Moncharsh,
supra, 3 Cal.4th at 9; Comedy Club, Inc. v. Improv West Assocs. (9th
Cir. 2009) 553 F.3d 1277, 1284; see also Engalla v. Permanente Med. Grp.,
Inc. (1997) 15 Cal.4th 951, 971-972 [“California law incorporates many of
the basic policy objectives contained in the Federal Arbitration Act, including
a presumption in favor of arbitrability [citation] and a requirement that an
arbitration agreement must be enforced on the basis of state law standards that
apply to contracts in general”].) “[U]nder both the FAA and California law,
‘arbitration agreements are valid, irrevocable, and enforceable, save upon such
grounds as exist at law or in equity for the revocation of any contract.’ ” (Higgins
v. Superior Crout (2006) 140 Cal.App.4th 1238, 1247.)
“Code of Civil Procedure
section 1281.2 requires a trial court to grant a petition to compel arbitration
if the court determines that an agreement to arbitrate the controversy exists.”
(Avery v. Integrated Healthcare Holdings, Inc. (2013) 218 Cal.App.4th
50, 59, quotations omitted.) Accordingly, “when presented with a petition to
compel arbitration, the court’s first task is to determine whether the parties
have in fact agreed to arbitrate the dispute.” (Ibid.) A
petition to compel arbitration is in essence a suit in equity to compel
specific performance of a contract. (Id. at 71.) As with any other
specific performance claim, “a party seeking to enforce an arbitration
agreement must show the agreement’s terms are sufficiently definite to enable
the court to know what it is to enforce.” (Ibid. [internal
citations omitted].) “Only the valid and binding agreement of the parties,
including all material terms well-defined and clearly expressed, may be ordered
specifically performed.” (Ibid.) An arbitration agreement “must
be so interpreted as to give effect to the mutual intention of the parties as
it existed at the time of contracting, so far as the same is ascertainable and
lawful.” (Civ. Code, § 1636.) The language of the contract governs its
interpretation if it is clear and explicit. (Civ. Code, § 1368.) If uncertainty
exists, “the language of a contract should be interpreted most strongly against
the party who caused the uncertainty to exist.” (Civ. Code, § 1654.)
The party seeking to compel
arbitration bears the burden of proving the existence of a valid arbitration
agreement by the preponderance of the evidence. (Engalla v. Permanente
Medical Group, Inc. (1997) 15 Cal.4th 951, 972.) It would then be
plaintiff’s burden, in opposing the motion, to prove by a preponderance of the
evidence any fact necessary to her opposition. (See Ibid.) “In these
summary proceedings, the trial court sits as a trier of fact, weighing all the
affidavits, declarations, and other documentary evidence, as well as oral
testimony received at the court’s discretion, to reach a final determination.”
(Ibid.)
ANALYSIS
Valid Arbitration Agreement
Defendants Acadia Malibua
(dba Oro House Recovery Centers) and Lynn Tumpa assert that Plaintiff Symere
Woods’s claims are required to be arbitrated because Plaintiff signed an
arbitration agreement covering these claims.
As with any contract, mutual
assent or consent is necessary for the formation of a valid arbitration
agreement. (Civ. Code, §§ 1550, 1565.) “Consent is not mutual, unless the
parties all agree upon the same thing in the same sense.” (Civ. Code, § 1580.)
The moving party bears the initial burden of showing the existence of an
agreement to arbitrate by a preponderance of the evidence. (Mitri v. Arnel
Mgmt. Co. (2007) 157 Cal.App.4th 1164, 1169 [“Because the existence of the
agreement is a statutory prerequisite to granting the petition, the petitioner
bears the burden of proving its existence by a preponderance of the
evidence.”].)
Plaintiff’s claims arise
from an agreement with Oro House to provide Plaintiff with confidential detoxification
and residential treatment services. (Compl., ¶¶ 2, 20-21.) During Plaintiff’s admission,
he participated in weekly group and individual therapy sessions with Oro
Recovery’s licensed treatment providers, including Tumpa. (¶ 3.) While Woods
was admitted to Oro Recovery for inpatient care, and during a confidential
treatment session with Tumpa, Tumpa secretly and illegally recorded a segment
of her session with Woods, revealing intimate, personal, and confidential
details of Woods’s life. (¶ 4.)
The operative agreement
included a “Financial and Admissions Agreement” executed by the parties, which
included a dispute resolution provision and arbitration agreement. (Hoffman
Decl., Ex. 1.) The Arbitration Agreement relevantly provides:
1. Dispute Resolution. In the event that any disagreement,
dispute or claim arises among the parties hereto with respect to the enforcement
or interpretation of this Agreement or any specific terms and provisions hereof
or with respect to whether an alleged breach or default hereof has or has not
occurred (collectively, a "Dispute"), such Dispute shall be settled
in accordance with the following procedures…
22.3. Arbitration. Any Dispute which cannot be resolved by
the parties within sixty (60) days following the end of the Meet and Confer
Period shall be resolved by final and binding arbitration (the "Arbitration").
The Arbitration shall be initiated and administered by and in accordance with
the then current Arbitration Rules of ADR Services. The Arbitration shall be
held in Los Angeles County, unless the parties mutually agree to have such
proceeding in some other locale; the exact time and location shall be decided
by the arbitrator(s) selected in accordance with the then current Arbitration Rules
of ADR Services. The arbitrator(s) shall apply California substantive law, or
federal substantive law where state law is preempted. The arbitrator(s)
selected shall have the power to enforce the rights, remedies, duties,
liabilities, and obligations of discovery by the imposition of the same terms,
conditions, and penalties as can be imposed in like circumstances in a civil
action by a court of competent jurisdiction of the State of California. The
arbitrator(s) shall have the power to grant all legal and equitable remedies provided
by California law and award compensatory damages provided by California law,
except that punitive damages shall not be awarded. The arbitrator(s) shall
prepare in writing and provide to the parties an award including factual
findings and the legal reasons on which the award is based. The arbitration
award may be enforced through an action thereon brought in the Superior Court
for the State of California in Los Angeles County. The prevailing party in any Arbitration
hereunder shall be awarded reasonable attorneys' fees, expert and nonexpert
witness costs and any other expenses incurred directly or indirectly with said
Arbitration, including without limitation the fees and expenses of the
arbitrator(s).
THIS ELECTION OF AN ALTERNATIVE DISPUTE PROCESS IS AN
AFFIRMATIVE WAIVER OF THE PARTIES' RIGHTS TO A JURY TRIAL UNDER CALIFORNIA LAW,
Cal. C. Civ. Pro. Sec 631. BY SIGNING BELOW, EACH PARTY IS EXPLICITLY WAIVING
JURY TRIAL AND AUTHORIZING ANY AND ALL PARTIES TO FILE THIS WAIVER WITH ANY
COURT AS THE WAIVER REQUIRED UNDER Cal. C. Civ. Proc. Sec. 631(f)(2):
(See Hoffman Decl., Ex. 1.)
There is no dispute that
Plaintiff voluntarily signed the Arbitration Agreement. There is no dispute
that Plaintiff’s claims arise from the Agreement. Thus, Plaintiff bears the
burden of showing a defense to the arbitration. Plaintiff asserts that
the arbitration agreement is unconscionable.
Unconscionability
The doctrine of unconscionability
refers to “an absence of meaningful choice on the part of one of the parties
together with contract terms which are unreasonably favorable to the other
party.” (Sonic-Calabasas A, Inc. v.
Moreno (2013) 57 Cal.4th 1109, 1133.) It consists of procedural and
substantive components, “the former focusing on oppression or surprise due to
unequal bargaining power, the latter on overly harsh or one-sided results.”
(Ibid.) Although both components of unconscionability must be present to
invalidate an arbitration agreement, they need not be present in the same
degree. (Armendariz v. Found Health Psychcare Servs., Inc. (2000) 24
Cal.4th 83, 114.) “Essentially a sliding scale is invoked which disregards the
regularity of the procedural process of the contract formation, that creates
the terms, in proportion to the greater harshness or unreasonableness of the
substantive terms themselves.
[Citations.] In other words, the more substantively unconscionable the
contract term, the less evidence of procedural unconscionability is required to
come to the conclusion that the term is unenforceable, and vice versa.” (Ibid.)
“The party resisting arbitration bears the burden of proving
unconscionability.” (Pinnacle Museum Tower Assn. v. Pinnacle Market Dev.
(US), LLC (2012) 55 Cal.4th 223, 247.)
Procedural Unconscionability
Plaintiff argues that the agreement was surprising and
oppressive, and therefore has a high degree of procedural unconscionability. Plaintiff
explains that Oro House requested that he electronically sign two additional
agreements more than a month into his treatment. (Wood Decl., ¶ 3.) Oro House
presented the agreements to Plaintiff on an electronic tablet. (Id.) Plaintiff
does not recall Defendants advising him of alternative review options. (Id.)
Plaintiff did not read or understand the agreements, but just signed them
immediately on the spot and in the presence of Oro House employees. (Id.)
Plaintiff states that he believed that signing the agreements was necessary to
continue his treatment and that “given the circumstances” he did not have sufficient
time to review the agreements or negotiate their terms, including the
Arbitration Agreement. (Id.) Defendants did not advise Woods to review the
additional agreements in detail or to consult with counsel. (Woods Decl. ¶ 4.)
With the
above evidence, Plaintiff fails to show significant surprise or oppression in
the presentation and signing of the arbitration agreement. There are some facts
which suggest a minor degree of procedural unconscionability. The Dispute
Resolution Provision appeared in only one of the three agreements signed, and
the other agreements indicated that disputes would be resolved in courts. (See
Shamilian Decl., Exs. 2-3.) Further, Plaintiff did not necessarily have the
ability to choose an alternative facility or program mid-treatment without
risking his criminal probation. That said, Plaintiff’s evidence does not support
the finding of a moderate or high degree of procedural unconscionability. Plaintiff
does not substantiate his position that he was in a vulnerable state due to
drug and alcohol addiction at the time he signed the Agreement a month into
treatment. Plaintiff does not explain why he believed that he did
not have time to review the agreements, or that signing the agreements was a
condition of his continued treatment. Plaintiff simply concludes that he
did not have time without further elaboration. Plaintiff also admits that he
did not attempt to read or negotiate the contract, but simply chose not to review
the documents and signed them. Additionally, Plaintiff does not show that the
terms were “hidden” in the prolix of a printed form. The provisions are between
the sixth and seventh pages of an eight-page document and are of the same
general font and size as the rest of the provisions of the agreement.
The presented evidence is distinguishable from
Plaintiff’s cited case of Wheeler v. St. Joseph Hosp., (1976) 63 Cal.
App. 3d 345, 361.) There, the Court of Appeal reversed the trial court’s order
compelling plaintiffs to arbitrate their claims, holding that the contract was
unconscionably adhesive under the circumstances. The court noted several
factors, including that a) the hospital's standard printed conditions of
admission form which contained an arbitration provision possessed all the
characteristics of a contract of adhesion, b) the patient was entering the
hospital, signed the form without reading it and that hospital personnel
did not call attention to the arbitration provision, or explain its
implications or the procedure for electing not to agree to arbitration; c) the form
contained ambiguities that rendered it subject to a reasonable interpretation
by a lay person that it referred only to arbitration of claims arising out of
hospital services, not malpractice committed by the patient's doctor. (Id.
at 357-369.) Unlike Wheeler, Plaintiff does not show that the
arbitration agreement was a condition of admission for immediate medical
treatment at a hospital. Instead, Plaintiff received the documents a month into
in-patient treatment.
Thus, the Court finds only a minor degree of
procedural unconscionability.
Substantive Unconscionability
An agreement is substantively
unconscionable if it imposes terms that are “overly harsh,” “unduly
oppressive,” “unreasonably favorable,” or “so one-sided as to ‘shock the conscience.’” (Sanchez v. Valencia Holding Co., LLC
(2015) 61 Cal.4th 899, 910-911.) “All of these formulations point to the
central idea that unconscionability doctrine is concerned not with ‘a simple
old-fashioned bad bargain’ [citation], but with terms that are ‘unreasonably
favorable to the more powerful party.’ [Citation.]” (Id. at 911.)
“These include ‘terms that impair the integrity of the bargaining process or
otherwise contravene the public interest or public policy; terms (usually of an
adhesion or boilerplate nature) that attempt to alter in an impermissible
manner fundamental duties otherwise imposed by the law, fine-print terms, or
provisions that seek to negate the reasonable expectations of the nondrafting
party, or unreasonably and unexpectedly harsh terms having to do with price or
other central aspects of the transaction.’”
(Ibid.)
Plaintiff argues that the arbitration agreement impermissibly waives
statutory rights, such as rights under “federal” law or statutory remedies such
as punitive damages. Plaintiff asserts that courts have consistently found such
waivers to be substantively unconscionable under California law. However,
California courts have found such waivers to be unconscionable because of
underlying policies of statutory schemes made for the public benefit such as
FEHA. (Armendariz, supra, 24 Cal.4th at 100 [waiver of
remedies invalid since “a law established for a public reason cannot be
contravened by a private agreement” and there was no question that the
statutory rights established by the FEHA are “for a public reason”].) Plaintiff
has cited no similar public policies underlying the claims in this case.
Plaintiff
also contends that the Dispute Resolution meet and confer terms and the fee and
cost shifting are impermissible. Plaintiff cites no binding authority in
support of these propositions. Plaintiff does not demonstrate that the meet and
confer terms (even if enforced) would constitute a “free peak” at Plaintiff’s
case, thereby obtaining an advantage if and when plaintiff were to later demand
arbitration.” (Nyulassy v. Lockheed Martin Corp., (2004) 120 Cal. App.
4th 1267, 1283.) Furthermore, Plaintiff submits no authority that the fee and
cost shifting provisions are objectionable. Plaintiff’s only California case is
distinguishable, since the fee and cost shifting provision there lacked any mutuality
as it only shifted fees against the employee. (Ajamian v. CantorCO2e, L.P.,
(2012) 203 Cal. App. 4th 771, 799-800.)
Therefore,
the Court finds no substantive unconscionability. In light of the minor degree
of procedural unconscionability, the agreement is not unconscionable.
Conclusion
Defendants meet their burden
to demonstrate the existence of an arbitration agreement between the parties
that covers Plaintiff’s claims. Plaintiff, in turn, fails to demonstrate that
the agreement is unconscionable. Defendants’ motion is therefore GRANTED and
the Court orders Plaintiff’s claims to arbitration, as discussed above. The
entire action is STAYED pending the completion of the arbitration. (CCP §
1281.4.) The Court sets a Status Conference
re Arbitration for September 18, 2025, at 8:30 a.m.