Judge: Michael E. Whitaker, Case: 24SMCV00991, Date: 2025-03-03 Tentative Ruling

Case Number: 24SMCV00991    Hearing Date: March 3, 2025    Dept: 207

TENTATIVE RULING

MOTION

On March 4, 2024, Plaintiff Kyra Smith (“Plaintiff”) brought suit against Defendant Mar Vista Country Villa Healthcare & Wellness Centre LP (erroneously sued and served as Country Villa Mar Vista Healthcare Centre LP) (“Defendant”) alleging two causes of action for (1) dependent adult abuse based on neglect, and (2) medical negligence.

Defendant now petitions to compel arbitration and stay this action pending the arbitration proceedings.

Plaintiff opposes the petition and Defendant replies.

ANALYSIS

1.     MOTION TO COMPEL ARBITRATION – LEGAL STANDARDS

            “[T]he advantages of arbitration include a presumptively less costly, more expeditious manner of resolving disputes.  It follows a party to a valid arbitration agreement has a contractual right to have its dispute with another party to the contract resolved quickly and inexpensively.”  (Henry v. Alcove Investment, Inc. (1991) 233 Cal.App.3d 94, 99–100 [cleaned up].)  Thus, “on petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate that 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.”  (Code Civ. Proc., § 1281.2; see also

EFund Capital Partners v. Pless (2007) 150 Cal.App.4th 1311, 1320 [the language in section 1281.2 compelling arbitration is mandatory].) 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.  (Code Civ. Proc., § 1281.2, subds. (a)-(c).)   

            “On a petition to compel arbitration, the trial court must first determine whether an agreement to arbitrate the controversy exists.  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.  The party seeking arbitration can meet its initial burden by attaching to the petition a copy of the arbitration agreement purporting to bear the respondent's signature.”  (Bannister v. Marinidence Opco, LLC (2021) 64 Cal.App.5th 541, 543-544 [cleaned up].)  The party seeking to compel arbitration must also “plead and prove a prior demand for arbitration and a refusal to arbitrate under the agreement.”  (Mansouri v. Superior Court (2010) 181 Cal.App.4th 633, 640-641.) 

            And while the moving party on a motion to compel arbitration “bears the burden of proving the existence of a valid arbitration agreement by a preponderance of the evidence, [a] party opposing the petition bears the burden of proving by a preponderance of the evidence any fact necessary to its defense.  The trial court sits as the trier of fact, weighing all the affidavits, declarations, and other documentary evidence, and any oral testimony the court may receive at its discretion, to reach a final determination.”  (Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 842 [cleaned up]; see also Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236 [“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”].) 

2.     ENFORCEABLE ARBITRATION AGREEMENT

Here, Defendant has provided the Declaration of Gil Goldstein, attached to which as Exhibits A and B are the Standard Admission Agreement and Arbitration Agreement Plaintiff signed upon admission to Defendant’s nursing facility.  The Arbitration Agreement provides:

ARTICLE I

RECITALS

As set forth herein, both parties agree to arbitrate disputes as described in clauses 5.1 (medical malpractice) and 5.3 (all other disputes or claims).

1.1 It is understood that any dispute as to medical malpractice, that is as to whether any medical services rendered under this contract were unnecessary or unauthorized or were improperly, negligently or incompetently rendered or not rendered, will be determined by submission to arbitration and not by a lawsuit or resort to court process. Both parties to this contract, by entering into it, are giving up their constitutional right to have any such dispute decided in a court of law before a jury, and instead are accepting the use of arbitration. The type of award requested (e.g., treble damages, punitive damages or attorneys’ fees) shall not affect whether a dispute is subject to arbitration by this Agreement.

1.2 It is also understood that any and all other disputes, controversies, demands or claims that relate or arise out of the provision of services or health care or any failure to provide services or health care by Facility, the admission agreement and/or this Agreement, the validity, interpretation, construction, performance and enforcement thereof, including, without limitation, claims that allege: breach of contract; unpaid nursing home charges; fraud;deceptive trade practices; misrepresentation; negligence; gross negligence; Health and Safety Code section 1430 claims; violations of the Elder Abuse and Dependent Adult Civil Protection Act, the Unfair Competition Act, the Consumer Legal Remedies Act; and/or any right granted to Resident by law or by the admission agreement will be determined by submission to arbitration and not by a lawsuit or resort to court process except as California law provides for judicial review of arbitration proceedings. Both parties to this contract, by entering into it, are giving up their constitutional right to have any such dispute decided in a court of law before a jury, and instead are accepting the use of arbitration. The type of award requested (e.g., treble damages, punitive damages or attorneys’ fees) shall not affect whether a dispute is subject to arbitration by this Agreement. Notwithstanding anything in this paragraph, any appeals made by Resident concerning his/her transfer or discharge, as provided under state and federal law and any dispute not justiciable in a court of law will not be governed by this Agreement.

1.3 Resident (or Resident’s Legal Representative and/or Agent on behalf of Resident) and Facility agree that they will arbitrate each dispute, controversy, demand or claim described in sections 1.1 or 1.2 (each, a “Dispute”) on an individual basis, and will not seek representative, consolidated, or class treatment of any Dispute in any arbitration. If it is determined that either Resident or Facility cannot waive the right to seek representative, consolidated, or class treatment of any claim, the parties agree that such representative, consolidated, or class action Dispute shall be subject to this Agreement.

1.4 All claims based in whole or in part on the same incident, transaction, or related course of care or services provided by Facility to Resident shall be arbitrated in one proceeding. A claim shall be waived and forever barred if it arose prior to the date upon which notice of arbitration is received by Facility or received by Resident, and is not presented in the arbitration proceeding.

1.5 All claims must be brought within the statute of limitations established in applicable state or federal law pertaining to such claims.

1.6 The arbitrator, and not any federal, state, or local court or agency, shall have the exclusive authority to resolve any Dispute relating to the interpretation, applicability, enforceability, or formation of this Agreement, including, but not limited to, any claim that all or any part of this Agreement is void or voidable.

1.7 Agreement to arbitration is not a precondition for admission to the Facility or to continue to receive care at the Facility. In other words, Resident has the right not to sign the agreement and still be admitted to, or continue receiving care at, the Facility.

1.8 As this Agreement relates to the Resident’s admission in the Facility, and the Facility, among other things, participates in the Medicare and/or Medi-Cal programs and/or procures supplies from out-of-state vendors, the parties acknowledge and agree that the Resident’s admission and these other events evidence transactions affecting or involving interstate commerce governed by the Federal Arbitration Act. This agreement shall be construed and enforced in accordance with and governed by the Federal Arbitration Act and the procedures set forth in the Federal Arbitration Act shall govern any petition to compel arbitration.

1.9 This agreement to arbitrate shall not limit the right of the Resident or anyone else to communicate with federal, state, or local officials, including but not limited to, federal and state surveyors, other federal or state health department employees, and representatives of the Office of the State Long-Term Care Ombudsman.

ARTICLE II

PARTIES

2.1 The term “Resident” in this Agreement refers to Kyra R Smith

The term “Facility” in this Agreement refers to Country Villa Mar Vista Nursing Center

2.2 Consistent with the Federal Arbitration Act, this Agreement binds the parties hereto, including the heirs, representatives, executors, administrators, successors, and assigns of such parties whose claims may arise out of or relate to any services (medical or otherwise) or good provided by the Facility or the admission agreement.

ARTICLE III

ARBITRATION OF DISPUTES

3.1 The parties hereby acknowledge that arbitration is preferable to a judicial forum and that Federal and State law favor the enforcement of valid agreement(s) to arbitrate. Arbitration under this agreement shall be provided by JAMS or Judicate West, conducted by a single neutral arbitrator agreed upon by the parties, or selected pursuant to the arbitral procedures of the selected forum. Further, the arbitrator shall be an attorney or retired judge selected pursuant to Section 5 of the Federal Arbitration Act, 9 U.S.C. § 5. The arbitration shall be conducted in a place that is convenient to both the Resident and the Facility. As such, the parties agree that their preferred location is within the County where Facility is located. In reaching a decision the arbitrator shall prepare findings of fact and conclusions of law. Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction.

3.2 For arbitrations initiated by the Resident, the Resident shall pay for one-half of all fees and expenses of arbitration, including hearing(s). For arbitrations initiated by the Facility, the Resident shall not pay any portion of the filing fees, but shall pay for one-half of all fees and expenses of arbitration. The initiator of the arbitration is the earliest party: to file a case in the Superior Court requiring the other party to file a Petition to Compel Arbitration, or to demand arbitration. Except as required by law and except with respect to any costs and fees that may be awarded by the arbitrator, each party shall bear its own attorneys’ fees and costs for the arbitration.

3.4 Consistent with the expedited nature of arbitration, plaintiffs may collectively propound a total of thirty-five (35) interrogatories (without subparts), thirty-five (35) requests for production of documents, and take four (4) depositions. Defendants may collectively propound a total of thirty-five (35) interrogatories (without subparts), thirty-five (35) requests for production of documents, and take four (4) depositions. 3.5 Depending on the complexity of the case, limited additional discovery to facilitate the parties’ development of the case and preparation for arbitration may be appropriate. Any dispute regarding discovery, or the relevance or scope thereof, shall be determined by the arbitrator based on the following: (1) whether denial of the requested discovery would deprive the requesting party of what is reasonably necessary to allow that party a fair opportunity to prepare and present its case; (2) whether the information sought may be obtained with less expense or burden; and (3) whether the requested discovery is consistent with the desire and intent of the parties to resolve the dispute in an expeditious and cost-effective manner.

ARTICLE IV

RESCISSION

4.1 This arbitration agreement may be rescinded by written notice from either party, including the Resident’s Legal Representative and/or Agent, if any, and as appropriate, to the other party within thirty (30) days of signature. This agreement shall continue to govern any Disputes arising before the rescission and any such rescission shall only apply to any Disputes arising after the rescission.

ARTICLE IV

EXECUTION

 5.1 The parties to the Arbitration Agreement hereby acknowledge and agree that, upon execution, any and all disputes or claims as to medical malpractice (that is, whether any medical services rendered during the Resident’s admission were unnecessary or unauthorized or were improperly, negligently or incompetently rendered or not rendered) will be determined by submission to neutral arbitration, and not by a lawsuit or court process, except as California law provides for judicial review of arbitration proceedings. Such arbitration will be governed by this Arbitration Agreement.

5.2 By signing this arbitration agreement below, the parties agree to be bound by the provisions of this Arbitration Agreement. Further the Resident (or Resident’s Legal Representative and/or Agent on behalf of Resident) acknowledges that: (A) the agreement has been explained to the Resident (or Resident’s Legal Representative and/or Agent on behalf of Resident) by a representative of the Facility in a form and manner that the Resident understands, including in a language that the Resident (or Resident’s Legal Representative and/or Agent on behalf of Resident) understands; and (B) the Resident (or Resident’s Legal Representative or Agent on behalf of Resident) understands this agreement.

NOTICE: BY SIGNING THIS CONTRACT YOU ARE AGREEING TO HAVE ANY ISSUE OF MEDICAL MALPRACTICE DECIDED BY NEUTRAL ARBITRATION AND YOU ARE GIVING UP YOUR RIGHT TO A JURY OR COURT TRIAL. SEE ARTICLE I OF THIS CONTRACT.

[…]

5.3 The parties further acknowledge and agree that any and all disputes, controversies, demands or claims that relate or arise out of the provision of services or health care or any failure to provide services or health care by Facility, the admission agreement and/or this Agreement, the validity, interpretation, construction, performance and enforcement thereof, including, without limitation, claims that allege: medical malpractice; breach of contract; unpaid nursing home charges; fraud; deceptive trade practices; misrepresentation; negligence; gross negligence; Health and Safety Code section 1430 claims; violations of the Elder Abuse and Dependent Adult Civil Protection Act, the Unfair Competition Act, the Consumer Legal Remedies Act; and/or any right granted to Resident by law or by the admission agreement, which seeks an award of treble damages, punitive damages or attorneys’ fees, will be determined by submission to neutral arbitration, and not by a lawsuit or court process, except as California law provides for judicial review of arbitration proceedings. Such arbitration will be governed by this Arbitration Agreement.

5.4 By signing this arbitration agreement below, the parties agree to be bound by the provisions of this Arbitration Agreement. Further the Resident (or Resident’s Legal Representative and/or Agent on behalf of Resident) acknowledges that: (A) The agreement has been explained to the Resident (or Resident’s Legal Representative and/or Agent on behalf of Resident) by a representative of the Facility in a form and manner that the Resident understands, including in a language that the Resident understands; and (B) The Resident (or Resident’s Legal Representative or Agent on behalf of Resident) understands this agreement.

(Ex. B.)

            As such, it appears that the parties entered into a valid, binding agreement to arbitrate and the claims at issue in this case are encompassed by the arbitration agreement. 

On February 19, 2025, Plaintiff filed an opposition, the timeliness of which Defendant objects to.  Pursuant to Code of Civil Procedure section 1290.6, a response to a petition to compel arbitration “shall be served and filed within 10 days after service of the petition [….]”  Similarly, Code of Civil Procedure section 1005, subdivision (b) provides that oppositions to motions shall be filed and served at least nine court days prior to the hearing. 

Here, Defendant electronically served the petition on January 3, 2025, making Plaintiff’s opposition due by January 15 (10 days plus 2 days for electronic service (Code Civ. Proc., § 1010.6, subd. (a)(3)(B).)  Yet, Plaintiff did not file the opposition until February 19, 2025.  Even under Section 1005, the opposition would have been due February 18. 

Notwithstanding, Defendant filed a reply on February 24.  As such, the Court exercises its discretion and considers both the opposition and reply.  (Cal. Rules of Court, rule 3.1300(d).) 

In opposition, Plaintiff argues the arbitration agreement is not valid and enforceable because (1) it is not legibly signed or dated by Plaintiff nor dated by the “Facility Representative”; (2) Defendant waived the right to compel arbitration; and (3) Plaintiff cannot afford to pay one half of the arbitration fees, as required by the agreement.

Taking Plaintiff’s first argument, although Plaintiff argues that the electronic signature on the arbitration agreement is illegible, Plaintiff has not provided any evidence that the signatures are not, in fact, Plaintiff’s, or that Plaintiff did not sign the arbitration agreement or otherwise agree to arbitrate.

Thus, the Court finds that the parties entered into a valid, binding agreement to arbitrate the instant dispute.

a.      WAIVER

            “Waiver of the right to arbitrate does not require a voluntary relinquishment of a known right.  For example, a party may waive the right by an untimely demand even without any intent to forgo the procedure.  In this circumstance, waiver is similar to a forfeiture arising from the nonperformance of a required act.”  (Hoover v. American Income Life Ins. Co. (2012) 206 Cal.App.4th 1193, 1203 (hereafter Hoover) [cleaned up].)  “Although participation in litigation of an arbitrable claim does not itself waive a party's right later to seek arbitration, at some point, litigation of the issues in dispute justifies a finding of waiver.”  (Id. at p. 1204.)  On the issue of what constitutes a “reasonable time” to demand arbitration, the Hoover court noted:

There is no fixed stage in a lawsuit beyond which further litigation waives the right to arbitrate. Rather, the court views the litigation as a whole in determining whether the parties' conduct is inconsistent with a desire to arbitrate.  A defendant's removal of a case filed in state court to federal court does not by itself constitute an implicit waiver of the right to compel arbitration.  But, a defendant's removal of a case to federal court, coupled with participation in several months of litigation, waives the right to arbitrate because electing to proceed in federal court on an arbitrable dispute is presumptive waiver of the right to arbitrate.

(Ibid. [cleaned up].)  On the issue of prejudice, the Hoover court stated:

The presence or absence of prejudice from the litigation is a determinative issue.  Because of the strong policy favoring arbitration, prejudice typically is found only where the petitioning party has unreasonably delayed seeking arbitration or substantially impaired an opponent's ability to use the benefits and efficiencies of arbitration.  Prejudice sufficient for waiver will be found where instead of seeking to compel arbitration, a party proceeds with extensive discovery that is unavailable in arbitration proceedings.

(Id. at p. 1205 [cleaned up].)  Similarly, in finding there was no waiver to arbitrate, the California Supreme Court noted, in part:

Although we have found no California or United States Supreme Court decisions on point, other courts that have addressed this issue hold that a petitioning party does not waive its arbitration rights merely by seeking to change judicial venue of an action prior to requesting arbitration. In so holding, those courts reason that a party is not required to litigate the issue of arbitration in an improper or inconvenient venue, and that a party's position on venue does not necessarily reflect a position on arbitrability. We agree with that reasoning, and find it consistent with California and federal case law holding that a waiver determination requires the consideration of all circumstances, including the absence or presence of prejudice.

(St. Agnes Medical Center v. PacifiCare of Cal. (2003) 31 Cal.4th 1187, 1205 (hereafter, St. Agnes) [cleaned up].) 

            In Hoover, the appellate court held that the defendant waived its right to arbitration by “actively litigating this action for more than a year and causing prejudice to Hoover.”  (Hoover, supra, 206 Cal.App.4th at p. 1203.)  In particular, the Hoover court determined that the defendant waived its right because it “[d]id not introduce the question of arbitration for almost a full year and [the defendant] conducted litigation in a style inconsistent with the right to arbitrate.  The two failed efforts to remove the case to federal court and [the defendant’s] recalcitrant responses to discovery suggest its policy has been one of delay rather than seeking a more prompt and expeditious resolution through arbitration.  During that time, [the defendant] availed itself of discovery mechanisms like depositions not available in arbitration.  [The defendant] also solicited putative class members, in an effort to reduce the size of the class. Hoover was certainly strongly affected and prejudiced by [the defendant’s] delay, causing significant legal expenses.”

(Id. at p. 1205 [cleaned up]; but see St. Agnes, supra, 31 Cal.4th at p. 1201 [“a waiver generally does not occur where the arbitrable issues have not been litigated to judgment].) 

            Here, Plaintiff contends that Defendant waived the right to compel arbitration by substantially participating in this litigation.  Specifically, Defendant did not originally respond to the complaint, resulting in a request for entry of default and statement of damages being served on June 11, 2024.  The parties stipulated to set aside the default on June 24, Defendant filed a Case Management Conference Statement on June 27, 2024, and filed an Answer to the Complaint and a Notice of Posting Jury Fees on July 3.

On October 3, Defendant first demanded arbitration, and Defendant filed the instant motion on January 3, 2025.  In the meantime, Plaintiff had served a Request for Production of Documents on Defendant, for which Defendant obtained several extensions, before ultimately serving objections only on January 10, 2025.

The Court finds under the circumstances that Defendant did not unreasonably delay compelling arbitration, nor substantially participate in the litigation to substantiate a finding of waiver.  Rather, Defendant’s actions in this litigation of stipulating to set aside the default, filing a case management conference statement, an answer, and a notice of posting jury fees, are all consistent with preserving Defendant’s rights, but not vigorously litigating in this forum.  Regarding the posting of jury fees, the Court notes that Defendant was ordered to do so on or before July 16, 2024.  (See Minute Order, July 2, 2024.)

Therefore, the Court finds that Defendant did not waive its right to arbitrate by its participation in this litigation.

3.     PAYMENT OF ARBITRATION FEES

Plaintiff argues that if the Court should grant Defendant’s motion to compel arbitration, it should require the Defendant to pay Plaintiff’s share of the arbitration fees or allow Plaintiff to proceed in court.

In support, Plaintiff cites to Roldan v. Callahan & Blaine (2013) 219 Cal.App.4th 87 (hereafter Roldan) and Hang v. RG Legacy (2023) 88 Cal.App.5th 1243 (hereafter Hang).

In Roldan, the appellate court held that plaintiffs, who were granted permission to proceed in forma pauperis in the trial court, were also excused from the obligation to pay their share of arbitration fees, thereby giving defendant the choice of whether to pay plaintiff’s share of the arbitration costs or waive its right to arbitrate the claim.

Similarly, in Hang, the appellate court upheld the trial court’s order granting the petition to compel arbitration on the condition that the facility either paid all arbitration fees and costs or forego arbitration and resume litigation in the trial court, based on evidence the Plaintiff submitted that he was indigent at the time of his death.

Here, the Court notes that Plaintiff has not requested or obtained any fee waivers in this case.  But “in forma pauperis status is not a prerequisite” to obtaining relief from arbitration fees. (Hang, supra, 88 Cal.App.5th at p. 1257.)   In support of the request, Plaintiff has submitted an attorney declaration, which indicates:

12. Furthermore, the Plaintiff in this matter does not have the financial resources to pay the fees of an arbitrator. Plaintiff’s counsel has known Plaintiff for years, has represented her in prior litigation that involves her health care and is aware of her financial condition. She is disabled, having an amputation of her leg, and retired. She has limited financial support and cannot afford to pay the costs of an arbitrator. She presently resides in Kalamazoo, Michigan. In this case, the arbitration agreement is a substantial impediment to Plaintiff being able to assert her rights.

Defendant argues that this is insufficient to demonstrate Plaintiff’s financial situation because Plaintiff has not provided her own declaration of her financial status.  The Court disagrees. 

In Hang, the plaintiff submitted evidence that his only source of income was $826 monthly in Social Security, his trust account containing $7,000 was used to pay his funeral and burial expenses, and he had no other assets or property at the time of his death.  (Hang, supra, 88 Cal.App.5th at p. 1255.)  The defendant had argued that this was insufficient to demonstrate that Plaintiff could not afford the arbitration expenses, because the declaration was silent as to property, stocks, bonds, or other assets that were moved or otherwise distributed prior to his death.  (Id. at p. 1256.)  The court of appeal rejected the argument, noting that the moving party can ask for leave to conduct limited discovery as to the opponent’s financial circumstances, but the defendant had failed to do so.  (Ibid.)

Similarly, here, Plaintiff has presented evidence of her financial condition by way of the declaration of her attorney (and agent) with personal knowledge of her financial condition.  Moreover, as in Hang, Defendant here did not request leave to conduct additional discovery regarding Plaintiff’s financial condition.

Therefore, the Court severs the provision requiring Plaintiff to pay half of the arbitration fees. 

CONCLUSION

            Having found that a valid, enforceable agreement to arbitrate the instant dispute exists and Defendant did not, by its conduct in this litigation so far, waive the right to compel arbitration, the Court conditionally grants Defendant’s motion to compel arbitration.  However, because Plaintiff presented evidence of her inability to afford the arbitration fees, the Court severs that provision from the rest of the arbitration agreement. 

            As such, the Court conditionally grants Defendant’s motion to compel arbitration on the condition that Defendant pays Plaintiff’s portion of the arbitration fees.  Otherwise, the Court may deem that Defendant has waived its right to compel arbitration. 

            As such, the Court continues the hearing on the Petition to March 24, 2025 at 8:30 A.M. in Department 207 to permit Defendant time to consider the Court’s ruling, and pronounce how it wishes to proceed.

            Defendant shall provide notice of the Court’s orders and file the notice with a proof of service forthwith.

DATED:  March 3, 2025                                                        ___________________________

                                                                                          Michael E. Whitaker

                                                                                          Judge of the Superior Court