Judge: Peter Wilson, Case: 2020-01164707, Date: 2022-09-01 Tentative Ruling
Defendant Aluminum Precision Products, Inc. (Defendant) seeks an order compelling Plaintiffs John Maldonado, Jr., Gregory Maratas, Bernardo Sandoval and Hoang Nguyen to arbitrate their individual claims and dismiss their representative PAGA claims.
Plaintiffs’ Objections (ROA 519) to the ROA 465, Block Declaration are OVERRULED as to Nos. 1-3, 7, 8 and 9, and SUSTAINED as to Nos. 4, 5 and 6.
Defendant’s Objections (ROA 525 to the Maldonado and Maratas Declarations are OVERRULED. The objection to the entirety of the Nguyen Declaration (Obj. No. 3) is SUSTAINED, rendering Objection No. 4 MOOT.
The Court DENIES the Plaintiff’s Request for Judicial Notice (ROA 515) since the documents are not relevant to the Court’s ruling on this Motion.
Since the filing of this Motion, Hoang Nguyen has been dismissed from this case. ROA 473. As such, the Motion is MOOT as to Nguyen.
For the reasons set forth below, the Motion is DENIED as to Plaintiffs Maldonado, Maratas and Sandoval (collectively, Plaintiffs).
Defendant argues Plaintiffs entered into two separate arbitration agreements that it refers to as the First Arbitration Agreement and Second Arbitration Agreement. ROA 465, P&A, p. 8; ROA 523, Reply, pp. 3-4.
The Second Arbitration Agreement applies solely to Nguyen. ROA 465, Block Decl., ¶¶5, 6; ROA 468, P&A, pp. 8-10. Since Nguyen has been dismissed, and the Second Arbitration Agreement is not relevant to Plaintiffs, the Court limits the discussion to the “First Arbitration Agreement".
Relevant Authority. As the party seeking arbitration, Defendant bears the burden of proving the existence of a valid arbitration agreement by a preponderance of the evidence and the party opposing arbitration bears the burden of proving any defense. (Mendoza v. Trans Valley Transport (2022) 75 Cal.App.5th 748, 764; Mitri v. Arnel Management 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” (italics in original)]; Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 402 [before granting a petition to compel arbitration, a court must determine the factual issue of “the existence or validity of the arbitration agreement”]; 9 U.S.C. §2 [before referring dispute to arbitrator, court determines whether valid arbitration agreement exists].)
There are three steps to the burden of production. The moving party can meet its initial burden by “attaching to the [motion or] petition a copy of the arbitration agreement purporting to bear the [opposing party’s] signature” or by setting forth the agreement’s provisions in the motion.” (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165, citing Bannister v. Marinidence Opco, LLC (2021) 64 Cal.App.5th 541, and Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 219; see also Cal. R. Ct., 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.”].) At this initial step, it is not necessary to follow the normal procedures of document authentication. (Gamboa v. Northeast Community Clinic, supra, 72 Cal.App.5th at 165.)
If the moving party meets its initial burden and if the opposing party disputes the agreement, then in the second step, the opposing party bears the burden of producing evidence to challenge the authenticity of the agreement. (Gamboa v. Northeast Community Clinic, supra, 72 Cal.App.5th at 165.) The opposing party may meet his burden by testifying under oath or declaring under penalty of perjury “that the party never saw or does not remember seeing the agreement, or that the party never signed or does not remember signing the agreement.” (Id.)
If the opposing party meets his burden, then in the third step, the moving party “must establish with admissible evidence a valid arbitration agreement between the parties. The burden of proving the agreement by a preponderance of the evidence remains with the moving party.” (Id. at 165-166.)
Defendant Has Not Met Its Initial Burden.
Defendant refers to Exhibit A attached to the ROA 465, Block Declaration as the First Arbitration Agreement. ROA 468, P&A, p. 8, lines 11-16 and fn. 1; ROA 465, Block Decl., ¶3. However, on its face, that document is entitled “Summary Explanation of Dispute Resolution Plan” (Summary Explanation) and indicates there is a separate document referred to as the Dispute Resolution Plan. The Summary Explanation states:
The foregoing information and the questions and answers which follow provide a summary explanation of the Plan. Complete details of the Dispute Resolution Plan are contained in the Plan itself, which can be obtained by any employee upon request from the Personnel Manager or the Company's Corporate Counsel. We encourage all employees to review the detailed Dispute Resolution Plan document in addition to this Summary. If there are any contradictions or discrepancies between this Summary Explanation and the Plan, the provisions of the Plan will govern. (Emphasis added.)
ROA 465, Ex. A, pp. 1, 6. Thus, the plain language in the Summary Explanation contradicts Defendant’s argument that the Summary Explanation is the arbitration agreement. (See Mitri v. Arnel Management Co., supra, 157 Cal.App.4th at 1170-1171 [handbook states disputes would be settled by binding arbitration, described parameters of such arbitration and that employees are required to sign an arbitration agreement undermining defendant’s argument the handbook itself was intended to constitute an arbitration agreement between defendant and its employees].)
This conclusion is consistent with the representation in the Block Declaration that the arbitration agreement is a document entitled “Dispute Resolution Plan” (ROA 465, Block Decl., ¶3, p. 2, lines 17-19 [Defendant’s employees “executed an arbitration agreement entitled ‘Dispute Resolution Plan’…”]) and the admission that Exhibit A is only a “copy of the summary of the dispute resolution plan or ‘arbitration agreement’.” ROA 523, Reply, p. 3 fn. 1.
Additionally, the language used in the Summary Explanation indicates it is meant to be informational and not contractual. The Summary Explanation refers to the Dispute Resolution Plan as a “new approach” or an “external means” to resolve workplace disputes, not as an agreement or a contract. There is no language in the Summary Explanation that states the employee agrees to the terms set forth in the Summary Explanation. Rather, the Summary Explanation states it is providing “information” regarding the new Dispute Resolution Plan to the employees. ROA 465, Ex. A, p. 6. There is no language within the Summary Explanation itself that indicates Plaintiffs agreed to be bound by or agrees to the terms in the Summary Explanation. As such, it does not appear that the Summary Explanation is intended to be the arbitration agreement and binding on the parties. (See Esparza v. Sand & Sea, Inc. (2016) 2 Cal.App.5th 781, 784 [no express agreement to arbitrate where handbook stated it was informational, not intended to be a contract and that employer could change policies at any time with or without notice]; Mendoza v. Trans Valley Transport, supra, 75 Cal.App.5th at 784-785 [no agreement to arbitrate where handbook states its was not intended as a contract of employment, handbook was designed for quick reference, and policies could be modified or amended at any time].)
The one-page document entitled “Dispute Resolution Plan Acknowledgment of Receipt and Agreement to be Bound” (Acknowledgment) appears to confirm the Summary Explanation is not the arbitration agreement, separate from the arbitration agreement, and not binding. The Acknowledgment states the employee received a copy of the Summary Explanation and the “Dispute Resolution Plan description has been made available”. ROA 465, Exs. C, E, and F. The Acknowledgment also states the employee has been given a “reasonable opportunity to review the Plan and the Summary Explanation”. ROA 465, Exs. C, E and F, emphasis added. Because the Acknowledgment repeatedly refers to both the Summary Explanation and Dispute Resolution Plan and does not contain language that Plaintiffs agree to be bound by or to the terms in the Summary Explanation while it does state the employee will be bound by the Dispute Resolution Plan (ROA 465, Exs. C, E and F), the Acknowledgment also supports the conclusion that they are separate and distinct documents, and the Dispute Resolution Plan is the actual arbitration agreement.
Based on the above and contrary to the representations in the Block Declaration and Defendant’s arguments, the Court concludes that the Summary Explanation is not the arbitration agreement, i.e. Dispute Resolution Plan. Accordingly, Defendant has not satisfied its initial burden since it has neither attached a copy of the arbitration agreement that Plaintiffs purportedly agreed to, nor set forth the provisions of the arbitration agreement verbatim in the Motion. (Cal. R. Ct., rule 3.1330.)
Further, Defendant has not presented any authority nor has the Court found any, that Defendant has met its prima facie burden by providing a separate acknowledgment of the arbitration agreement when the arbitration agreement itself has not been provided. ROA 523, Reply, pp. 3-4. In each of the cases cited by Defendant to show it met its prima facie burden, the moving party attached the actual arbitration agreement at issue. (See Condee v. Longwood Mgmt. Corp., supra, 88 Cal.App.4th at 218-219 [arbitration agreement was included as an exhibit with defendants’ petitions and not properly authenticated but at initial stage “it is not necessary to follow normal procedures of document authentication”]; Espejo v. S. Cal. Permanente Med. Grp. (2016) 246 Cal.App.4th 1047, 1052-1053, 1058-1060 [defendant’s prima facie burden satisfied by attaching the arbitration agreement bearing the plaintiff’s electronic signature].) Even Defendant explains its prima facie burden “can be easily met by a declaration from a company representative attaching the agreement and attesting that the company’s records reflect that the employee agreed to the arbitration agreement” (Reply, at p. 3); yet, Defendant failed to meet this requirement.
There Is Insufficient Evidence of an Arbitration Agreement with Plaintiffs.
Plaintiffs specifically challenged the existence of a valid arbitration agreement in their Opposition, arguing that Exhibit A is only a summary of the dispute resolution program, that the dispute resolution program was optional and not mandatory, and that despite requests from their counsel Defendant never produced a signed arbitration agreement and belatedly sought arbitration. ROA 517, Farde Decl., ¶¶3-5, 7, 9. Plaintiffs Maldonado and Maratas submitted declarations that they had not been provided any arbitration agreements with Defendant describing the AAA plan or do not know what AAA is. ROA 517, Maldonado Decl., ¶2; Maratas Decl., ¶2.
Consistent with Plaintiffs Maldonado and Maratas’ representations they did not receive the Dispute Resolution Plan, neither the Summary Explanation nor the Acknowledgment state that Plaintiffs received an actual copy of the Dispute Resolution Plan. The Acknowledgment states the employee received a copy of the Summary Explanation and the “Dispute Resolution Plan description has been made available”. ROA 465, Ex. A. The Acknowledgment states the employee has been given a “reasonable opportunity to review the Plan and the Summary Explanation”. ROA 465, Exs. C, E and F.
In reply, Defendant "doubles down" on its contention that the Summary Explanation is indeed the Arbitration Agreement. See, for example, Reply 3:10-11, defining the summary of the dispute resolution plan as the “Arbitration Agreement", and at 4:5-6: "Attached to Ms. Block's Declaration is the arbitration agreement that Plaintiffs acknowledged receiving." Attached to Ms. Block's Declaration is the Summary Explanation, not an arbitration agreement.
The Court recognizes the Acknowledgment states that “arbitration under the Dispute Resolution Plan will be [the employee’s] sole and exclusive remedy for any legal claims or disputes [the employee] may have against the Company regarding my employment or the termination of my employment” and that by signing the Acknowledgment, the employee is “agreeing to be bound by the Dispute Resolution Plan” (ROA 465, Exs. C, E, and F), but these statements are simply illusory in the context presented here. Plaintiffs have requested, but have not been provided with, a copy of the purported Dispute Resolution Plan, and despite a clear legal requirement cited by Defendant itself, this Court has likewise not been provided with a copy of the purported Dispute Resolution Plan, nor had its relevant contents stated verbatim. There is thus no arbitration agreement before the Court which has been agreed to by Plaintiffs. Without an arbitration agreement to review, it is entirely speculative whether the Armendariz factors are satisfied by the purported agreement.
Defendant is ordered to give notice.