Judge: Michael Shultz, Case: 24STCV29757, Date: 2025-05-13 Tentative Ruling

Case Number: 24STCV29757    Hearing Date: May 13, 2025    Dept: 40

24STCV29757 Diana Wymar v. Congress Medical Surgery Center, LLC, et al.

[TENTATIVE] ORDER GRANTING MOTION BY DEFENDANTS, CONGRESS MEDICAL SURGERY CENTER, LLC AND RISSER SURGERY CENTER, LLC, TO COMPEL ARBITRATION (RES. NO. -7205)

[TENTATIVE] ORDER GRANTING MOTION BY DEFENDANT, CEDARS-SINAI MEDICAL CENTER TO COMPEL ARBITRATION (RES. NO. -5877)

                                                                                         I.         BACKGROUND

      Plaintiff alleges she was hired as a registered nurse by Defendant, Congress Medical Surgery Center, LLC (“Congress”). Congress and Defendant, Risser Surgery Center, LLC (“Risser”) allegedly combined in early 2024 to form one comprehensive orthopedics practice as part of Defendant, Cedars Sinai Medical Center (Cedars). As a result of the merger/acquisition, “Defendants operated as a single enterprise, joint employer, and/or successor in interest.” (Complaint, 7:1-2.) Plaintiff alleges that Defendant, TriNet Group, Inc. (“TriNet”) administers payroll and health benefits and advises clients on employment law compliance and other issues.

      Plaintiff alleges she was subjected to disability discrimination during her employment and subsequently discharged in retaliation for engaging in protected activities. Plaintiff alleges claims in violation of the Fair Employment and Housing Act and Labor Code, and asserts tort claims for wrongful termination in violation of public policy and intentional infliction of emotional distress.

                                                                                          II.        ARGUMENTS

A.     Congress and Risser’s motion filed January 7, 2025, and Cedars’ motion filed January 22, 2025

      Congress and Risser, collectively (“Defendants”) move to compel arbitration. Plaintiff signed a Dispute Resolution Protocol (DRP) on March 12, 2024, requiring her to arbitrate the disputes raised in this action. The agreement was part of an overarching “TriNetTerms and Conditions Agreement” which is binding and enforceable under the Federal Arbitration Act, or alternatively, the California Arbitration Act. The scope of the agreement includes disputes arising out of Plaintiff’s relationship with TriNet, including a TriNet Co-employer, and a TriNet client who are intended beneficiaries of the agreement.

      Cedars’ motion does not differ substantially from the co-Defendants’ motion regarding validity and enforcement of the agreement. Cedars also argues that while it is not a signatory to the arbitration agreement and did not employ Plaintiff, Plaintiff is equitably estopped from avoiding arbitration because her claims are closely intertwined with the claims that are arbitrable. Cedars adds that the arbitration agreement is neither procedurally, nor substantively unconscionable. Cedars requests that the court dismiss Plaintiff’s claims.

B.     Opposition filed April 30, 2025.

      Plaintiff argues she did not sign an arbitration agreement with Congress or Risser, neither of whom established that Plaintiff consented to TriNet’s arbitration agreement. Defendants used undue influence to obtain Plaintiff’s consent which renders the agreement voidable. Congress and Risser are not third-party beneficiaries of the TriNet agreement since Defendants have not established a relationship between them and Congress.

      In opposition to Cedars’ motion, Plaintiff argues that Cedars’ only evidence is the Thompson declaration submitted by Congress and Risser, submitted through Cedars’ counsel’s declaration. Plaintiff incorporates her arguments in opposition to the Congress and Risser motion.

      Plaintiff adds that there is a split of authority as to whether Plaintiff is equitably estopped from avoiding arbitration. Plaintiff’s theories of liability do not rely on a joint employment relationship with TriNet, the only signatory to the agreement.

C.     Reply filed May 6, 2025

      Defendants established that it is more likely than not that Plaintiff electronically signed the agreement. Plaintiff does not take issue with the substance of the Agreement or that the Agreement is not procedurally or substantively unconscionable. Plaintiff’s ignorance of the contents of the document does not negate her consent. Defendants are entitled as third-party beneficiaries to enforce the agreement.          

      Cedars argues that the authority on which Plaintiff relies has recently been disapproved and is distinguishable from Gonzalez v. Nowhere Beverly Hills LLC (2024) 107 Cal.App.5th 111, cited by Cedars. The sole basis for Plaintiff’s claims against Cedars is its status as a joint employer.

                                                                                  III.       LEGAL STANDARDS

      The court can order the parties to arbitrate a case on petition of a party to an arbitration agreement. (Code Civ. Proc., § 1281.2.) The petitioner’s burden is to show that a valid arbitration agreement exists under state law. (Metters v. Ralphs Grocery Co. (2008) 161 Cal.App.4th 696, 701.) The court shall order arbitration unless the court finds that the right to compel arbitration has been waived, grounds exist for rescission of the agreement, or there is another pending action with a third party arising out of the same transactions presenting the possibility of conflicting rulings on a common issue of law or fact. (Code Civ. Proc., § 1281.2 subd (a) – (c).)

      Defendants need only show the existence of an agreement not its validity. (Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1058 ["as a preliminary matter the [trial] court is only required to make a finding of the agreement's existence, not an evidentiary determination of its validity.”].)  The moving party need only attach a copy of the agreement to the petition and incorporate it by reference. (Id. at 1058; Cal. Rules of Court, rule 3.1330 [“The provisions must be stated verbatim or a copy must be physically or electronically attached to the petition and incorporated by reference."].)

      Even if an agreement at issue states it is governed by the FAA, courts apply state law to determine who is bound by an arbitration agreement and who may enforce it. (Thomas v. Westlake (2012) 204 Cal.App.4th 605, 614, fn. 7); Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 410 ["Because the California procedure for deciding motions to compel [arbitration] serves to further, rather than defeat, full and uniform effectuation of the federal law's objectives, the California law, rather than section 4 of the USAA, is to be followed in California courts."].) 

      Under Section 2 of the FAA, written arbitration agreements are valid, irrevocable, and enforceable “save upon such grounds as exist at law or in equity for the revocation of a contract.” (Arthur Andersen LLP v. Carlisle (2009) 556 U.S. 624, 629–630; 9 U.S.C.A. § 2.) Section 3 of the FAA requires the Court to stay the action if it involves issues referable to arbitration. (9 U.S.C.A. § 3.) If a party challenges the validity of an agreement to arbitrate, as Plaintiff argues here, the issue is properly determined by the court in the first instance and not the arbitrator, unless there is “clear and unmistakable evidence” that the parties so agreed. (Jackpot Harvesting, Inc. v. Applied Underwriters, Inc. (2019) 33 Cal.App.5th 719, 731; Beco v. Fast Auto Loans, Inc. (2022) 86 Cal.App.5th 292, 302.)

IV.  DISCUSSION

      A.   Defendants have established that Plaintiff signed an agreement to arbitrate.

      Defendants’ burden in moving to compel arbitration is to show the existence of an agreement, not its validity.  (Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1058 ["as a preliminary matter the [trial] court is only required to make a finding of the agreement's existence, not an evidentiary determination of its validity.”].) To meet its burden, the moving party need only attach a copy of the agreement to the petition and incorporate it by reference. (Id. at 1058; Cal. Rules of Court, rule 3.1330 [“The provisions must be stated verbatim or a copy must be physically or electronically attached to the petition and incorporated by reference.”].)

      Defendants established the existence of the arbitration agreement. (Chad Thompson decl., Ex. A, p. 11.)

      B.   Defendants have shown that Plaintiff electronically signed the TriNet agreement during the onboarding process.

      Plaintiff denies signing the arbitration agreement. (Wymar decl., ¶12.) She avers that she was on medical leave starting January 2024 through the time of her termination in April 2024, and did not have access to her work email during this period. (Id. at ¶ 11.) Plaintiff did not receive a “Welcome” email from TriNet containing a purported unique, temporary, and secure login identification and default password. (Id.)

      The moving party is required to authenticate electronic signatures where the opposing parties deny signing the agreement. (See Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 844.) The moving party can attribute the signature to Plaintiff by showing the "efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable.” (Civ. Code, § 1633.9, (a).) The effect of an electronic signature attributed to a person "is determined from the context and surrounding circumstances at the time of its creation, execution, or adoption, including the parties' agreement, if any, and otherwise as provided by law." (Civ. Code, § 1633.9, (b).)

      A party can establish that the electronic signature was the act of an employee “by presenting evidence that a unique login and password known only to that person was required to affix the electronic signature, along with evidence detailing the procedures the person had to follow to electronically sign the document and the accompanying security precautions.” (Bannister v. Marinidence Opco, LLC (2021) 64 Cal.App.5th 541, 545.) This may include evidence of any security procedures required to access the agreements electronically or evidence to establish that the signers did access the on-line portal, or when and at what time. (Ruiz, supra at  844 [where the court of appeal found a “critical gap in the evidence” to infer that the electronic signature was in fact the employee’s without evidence to show that only the employee could have affixed the electronic signature.].)

      Defendants submit the declaration of Chad Thompon, TriNet’s director of Global Security, attests to the onboarding process. (Thompson decl., ¶¶ 2, 7-9.) Thompson attests that the agreement was presented to Plaintiff via her TriNet ID and password on or about March 12, 2024. (Id. ¶ 10.) Thompson provides a screenshot of Plaintiff’s online platform account, showing she accepted the TCA and DRP on March 12, 2024, and that the email was sent to Plaintiff’s Gmail account. (Id. at ¶¶ 14-17, Ex. B-C.)

      The evidence is supported by Nathalie Hernandez, a project manager for Cedars, who attests she engaged in an email conversation with Plaintiff wherein Plaintiff narrated her registration with the TriNet system, which aligns with the procedures described by Thompson. (Hernandez Reply Decl., ¶¶ 2-3.) Significantly, Plaintiff responded to Hernandez’s email on March 12, 2024, stating:

(Hernandez Reply Decl., Ex. A.) The evidence demonstrates that Plaintiff had difficulty accessing the TriNet system and asked Hernandez for assistance. (Id. Ex. A, pdf p. 7 [“Hi Nathalie, I just want to say thank you again. I’m not quite sure what’s going on with my email. I wasn’t able to see this email until this morning. That is why I sent you another email. I apologize. Is there any way that you can help me receive the eleven-digit code for access to the Trinet system? When I spoke to Trinet yesterday, they said reach out to your employer. Diana Sent from my iPhone.”].)

      All of Plaintiff’s objections to the Thompson declaration are overruled. Thompson demonstrates adequate foundation for the online procedure, that Plaintiff established an account during the TriNet onboarding process and agreed to the arbitration provisions. (Id.)

      Plaintiff objects on grounds the Hernandez declaration is “new evidence” that could have been provided earlier, and new evidence cannot be submitted with a reply. Plaintiff also objects on hearsay grounds.

      None of the objections have merit. The evidence submitted with the reply brief rebuts Plaintiff’s contention denying that she accessed the TriNet platform as established by Defendants. Rebuttal evidence is “generally defined as evidence addressed to the evidence produced by the opposite party and does not include mere cumulative evidence of the plaintiff's case in chief." (Edgar v. Workmen's Compensation Appeals Bd. (1966) 246 Cal.App.2d 660, 665.) Defendant is not asserting a new theory. Plaintiff’s reliance on Maleti v. Wickers (2022) 82 Cal.App.5th 181 is misplaced as the moving party in that case asserted a new theory regarding standing for the first time in the reply brief.

      Plaintiff argues she would not have been in a state of mind to review documentation and consider whether to waive her legal rights to a jury trial, as she was concerned at the time because Defendants stripped Plaintiff of health insurance without any warning while she was out on medical leave. Plaintiff contends she suffered from depression and anxiety at the time. (Diana Wymar decl., ¶¶ 2, 8.)

      This contention is undermined by the emails Plaintiff sent to Hernandez requesting help with the TriNet onboarding platform. The evidence does not demonstrate that Plaintiff was not in an appropriate state of mind to review documentation. (Wymar decl., ¶ 12.) An employee “can be bound by an arbitration agreement regardless of whether she read it or was aware of it.” (Dougherty v. Roseville Heritage Partners (2020) 47 Cal.App.5th 93, 103–104.)

C. The scope of the arbitration clause broadly includes the claims alleged by Plaintiff and applies to other entities who are intended beneficiaries.

      Section 8 of that agreement requires arbitration “… for any dispute arising out of or relating to your co-employment with TriNet and/or arising out of or relating to your employment with your company, and for any dispute with an employee, officer, or director of TriNet or of a TriNet client.” (Id. Ex. A p. 5, section 8.)

      The scope of the agreement includes disputes with other entities not limited to TriNet, who are expressly deemed intended beneficiaries:

“… any dispute arising out of or relating to your co-employment with TriNet, including your TriNet co-employer, and/or arising out of or relating to your employment with your company, as well as any dispute with an employee, officer, or director of TriNet or of a TriNet client (all of whom, in addition to TriNet clients, are intended to be beneficiaries of this DRP) (“covered dispute”), including, but not limited to, all claims whether arising in tort or contract and whether arising under statute or common law including, but not limited to, any claim of breach of contract, discrimination or harassment of any kind.” (Id. section 8 subd. (a).)

      Under California law, the general rule is that “only a party to an arbitration agreement is bound by or may enforce the agreement. (Code Civ. Proc., § 1281.2); … ." (Thomas v. Westlake (2012) 204 Cal.App.4th 605, 613.) An exception to that rule is where a contract is made expressly for the benefit of a third person. (Civ. Code, § 1559). Persons who are “only incidentally or remotely benefited by it" are excluded. (Lake Almanor Associates L.P. v. Huffman-Broadway Group, Inc. (2009) 178 Cal.App.4th 1194, 1199).

      Plaintiff alleges that she was employed by Congress, who joined Risser, both of whom joined Cedars and are alleged to be joint employers. (Complaint, ¶ 17.) Mr. Thompson attests that Risser is a client of TriNet. (Thompson decl., ¶ 6.) Plaintiff’s relationship with TriNet began because Plaintiff’s “work-site employer,” or “your company” is a TriNet customer. (Thompson decl., Ex. A, p. 2, first paragraph).)

D.     Cedars has established that Plaintiff is equitably estopped from arguing that the arbitration clause does not apply to Cedars, a non-signatory.

      First, Plaintiff’s over-limit opposition has not caused any prejudice to Cedars, who was able to timely file a reply brief which the court has considered. An oversized memorandum must be filed and considered in the same manner as a late-filed paper. (Cal. Rules of Court, Rule 3.1113 subd. (g).)  The court has considered Plaintiff’s oversized opposition in favor of the strong policy favoring disposition of the case on the merits. (Kapitanski v. Von’s (1983) 146 Cal.App.3d 29, 32). [“Judges are well aware of the unnecessary burdens placed on courts and counsel when strict compliance with local procedural rules results in the expenditure of unnecessary time and money for the preparation of later section 473 motions.”].)  Plaintiff is admonished to adhere to the requirements for page limitations or request leave of court to file an over-sized brief. (Cal. Rules of Court, Rule 3.1113 subd. (e).)

      As to Cedars’ second argument, ordinarily, only parties to an arbitration agreement can invoke it, unless the doctrine of equitable estoppel applies. The doctrine provides that a non-signatory can enforce an arbitration clause if the claims Plaintiff asserts against the nonsignatory are “dependent upon, or founded in and inextricably intertwined with, the underlying contractual obligations of the agreement containing the arbitration clause.” (Gonzalez v. Nowhere Beverly Hills LLC (2024) 107 Cal.App.5th 111, 118.)

      Plaintiff’s claims are based on her employment relationship with all defendants, whom Plaintiff alleges are her joint employers. Plaintiff argues that a non-signatory such as Cedars cannot enforce the arbitration agreement citing Jarboe v. Hanlees Auto Group (2020) 53 Cal.App.5th 539 and Soltero v. Precise Distribution, Inc. (2024) 102 Cal.App.5th 887.  The Second District Court of Appeal disapproved of both cases in Gonzalez v. Nowhere Beverly Hills LLC (2024) 107 Cal.App.5th 111, on which Cedars relies.

      The “linchpin” of equitable estoppel is fairness: "It is unfair for a signatory to an employment agreement to avoid arbitration by suing nonsignatories for claims that are based on the same facts and are inherently inseparable from arbitrable claims deriving from the agreement." (Gonzalez v. Nowhere Beverly Hills LLC (2024) 107 Cal.App.5th 111, 129.) Here, as in Gonzalez Plaintiff alleges that all three Defendants “operated as a single joint enterprise,” and were joint employers. (Complaint, 7:1-2.)  The Gonzalez court observed that "defendants’ alleged status as joint employers is important because a joint employer shares the direct employer's legal obligations and thus claims against a joint employer are intertwined with the direct employer's obligations." (Gonzalez at 125.)

      Plaintiff observes that there is a split of authority as whether she is equitably estopped from avoiding arbitration with Cedars. (Opp. 4:12.) Where appellate decisions are in conflict, the trial court "can and must make a choice between the conflicting decisions." (Auto Equity Sales, Inc. v. Superior Court of Santa Clara County (1962) 57 Cal.2d 450, 456.) The court finds Gonzalez to be persuasive.

      While Cedars’ motion also asserted that the arbitration agreement is not procedurally or substantively unconscionable, Plaintiff does not address the argument, and therefore, it is not at issue.

E.     The court is required to stay the action.

      Section 3 of the FAA requires the court to stay the action if it involves issues referable to arbitration. (9 U.S.C.A. § 3.) Under state law, if the court orders an action to arbitration, the court “shall” stay the proceeding until the completion of arbitration. (Code Civ. Proc., § 1281.4.)

VI.  CONCLUSION

      Based on the foregoing, the motion to compel arbitration by Congress and Risser is GRANTED.  The motion to compel arbitration by Cedars is GRANTED.  The action is stayed until completion of arbitration.