Judge: Maurice A. Leiter, Case: 23STCV12926, Date: 2024-01-02 Tentative Ruling

Case Number: 23STCV12926    Hearing Date: January 2, 2024    Dept: 54

Hearing Date: January 2, 2024

Department 54, Judge Maurice A. Leiter

Motion to Compel Arbitration

Moving Party: Defendant GJohnny, LLC, joined by Defendants Adams Hummus Bar JV LLC, Romaine Hummus Bar JV, LLC, Daniel Elmaleh and Gabriela A. Castro

Responding Party: Plaintiff Misael Luna Jeronimo

T/R:     DEFENDANT GJOHNNY’S MOTION TO COMPEL ARBITRATION IS GRANTED.

MOTION TO JOIN BY DEFENDANTS ADAMS HUMMUS BAR JV LLC, ROMAINE HUMMUS BAR JV, LLC, AND DANIEL ELMALEH IS GRANTED.

DEFENDANT CASTRO’S MOTION IS DENIED.

DEFENDANT GJOHNNY TO NOTICE.

If the parties wish to submit on the tentative, please email the courtroom at SMCdept54@lacourt.org with notice to opposing counsel (or self-represented party) before 8:00 am on the day of the hearing.

The Court considers the moving papers and oppositions.

BACKGROUND

On June 7, 2023, Plaintiff filed a complaint against Defendants, asserting 14 causes of action for FEHA and Labor Code violations.

ANALYSIS

“On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate a controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists….”  (CCP § 1281.2.)  The right to compel arbitration exists unless the court finds that the right has been waived by a party’s conduct, other grounds exist for revocation of the agreement, or where a pending court action arising out of the same transaction creates the possibility of conflicting rulings on a common issue of law or fact.   (CCP § 1281.2(a)-(c).)  “The party seeking arbitration bears the burden of proving the existence of an arbitration agreement, and the party opposing arbitration bears the burden of proving any defense, such as unconscionability.”  (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236.)

A.         Existence of Arbitration Agreement

Defendant GJohnny moves to compel arbitration based on the Dispute Resolution Agreement executed by Plaintiff on February 5, 2021. (Decl. Elmaleh, Exh. A.) The agreement provides, “I and GJohnny, LLC dba Johnny’s West Adams (“the Company”) agree to utilize binding individual arbitration to resolve all disputes that might arise out of or be related in any way to my employment by the Company.” (Id.) The agreement states that it is governed by the FAA.

Defendant has met its burden to establish the existence of an agreement to arbitrate. The burden shifts to Plaintiff to establish any defenses to enforcement.

B. Enforceability of Agreement

1. Unconscionability

Plaintiff asserts that the arbitration agreement is procedurally unconscionable because it is an adhesion contract. Plaintiff asserts Defendant required Plaintiff to sign the agreement as a condition of transfer to another restaurant and only after Plaintiff had complained about Labor Code violations.

Regarding procedural unconscionability, the California Supreme Court has held:

“[T]here are degrees of procedural unconscionability. At one end of the spectrum are contracts that have been freely negotiated by roughly equal parties, in which there is no procedural unconscionability . . . . Contracts of adhesion that involve surprise or other sharp practices lie on the other end of the spectrum. [Citation.] Ordinary contracts of adhesion, although they are indispensable facts of modern life that are generally enforced (see Graham v. Scissor–Tail, Inc. (1981) 28 Cal.3d 807, 817–818, 171 Cal.Rptr. 604, 623 P.2d 165), contain a degree of procedural unconscionability even without any notable surprises, and ‘bear within them the clear danger of oppression and overreaching.’ (Id. at p. 818 [171 Cal.Rptr. 604, 623 P.2d 165].)” (Gentry v. Superior Court (2007) 42 Cal.4th 443, 469, 64 Cal.Rptr.3d 773, 165 P.3d 556.)

(Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1244.)

Generally, in the employer-employee context, there is unequal bargaining power. (See Amendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 115 [“in the case of preemployment arbitration contracts, the economic pressure exerted by employers on all but the most sought-after employees may be particularly acute, for the arbitration agreement stands between the employee and necessary employment, and few employees are in a position to refuse a job because of an arbitration requirement.”]

The Court finds that a moderate degree of procedural unconscionability exists here as there is unequal bargaining power and the agreement was a condition of Plaintiff’s ability to transfer to another location. Plaintiff also represents that he was required to sign the agreement only after complaining about Defendant’s labor practices.

This moderate degree of procedural unconscionability does not render the arbitration agreement unconscionable; to find the agreement unenforceable, the must be some degree of substantive unconscionability. (See Dotson v. Amgen, Inc. (2010) 181 Cal.App.4th 975, 981.) Plaintiff asserts that the agreement is substantively unconscionable because of the level of procedural unconscionability. Plaintiff does not point to any provision in the agreement that is unfairly one-sided. This is insufficient to establish substantive unconscionability.

Defendant GJohnny’s motion is GRANTED.

C. Defendants Adams Hummus Bar JV LLC, Romaine Hummus Bar JV, LLC, Daniel Elmaleh and Gabriela A. Castro’s Joinder to Motion to Compel Arbitration

Joinder Defendants, who are non-signatories, move to compel arbitration under the Dispute Resolution Agreement on the ground that the agreement includes claims against GJohnny’s “parent, subsidiary, affiliated or client entities as well as against as owners, directors, officers, managers, employees, agents ….” Joinder Defendants also seek arbitration under the doctrine of equitable estoppel, which provides, “a nonsignatory defendant may invoke an arbitration clause to compel a signatory plaintiff to arbitrate its claims when the causes of action against the nonsignatory are ‘intimately founded in and intertwined’ with the underlying contract obligations.” (Boucher v. Alliance Title Co., Inc. (2005) 127 Cal.App.4th 262, 271.)

The entity Defendants represent that they are affiliated entities and Elmaleh is the owner of all entity Defendants, including GJohnny. Plaintiff alleges the entities and individuals are alter egos and agents of each other. Adams Hummus Bar JV LLC, Romaine Hummus Bar JV, LLC, and Daniel Elmaleh may compel arbitration.

Defendant Castro has defaulted in this action and cannot move to compel arbitration.