Judge: Peter Wilson, Case: 2022-01292641, Date: 2023-08-03 Tentative Ruling
Defendants Mayflower Gardens Health Facilities, Inc. and Retirement Housing Foundation (collectively, Defendants) seek an order compelling Plaintiff Bobbie Diane Taylor (Plaintiff) to arbitrate her individual PAGA claims, strike her non-individual PAGA claims and stay this matter.
For the reasons which follow, the Motion is GRANTED in part. Plaintiff is ordered to arbitrate her individual PAGA claims, and this action, including the non-individual PAGA claims, is stayed pending completion of arbitration.
Objections. All of Plaintiff’s objections (ROA 40) to the ROA 18, Ibarra Declaration are OVERRULED.
All of Defendants’ objections (ROA 47) to the ROA 42, Taylor Declaration are OVERRULED.
There is a Valid Arbitration Agreement Between the Parties. The Court recognizes the parties have already been ordered to arbitrate Plaintiff’s individual claims and her class action claims have been dismissed without prejudice in the related matter, Taylor v. Mayflower Gardens Health Facilities, Inc., OCSC Case No. 2022-01296092 (Class Action). See ROA 52, 6/2/2023 Minute Order in the Class Action.
For the same reasons as set forth in the June 2, 2023 Minute Order in the Class Action and as set forth in greater detail below, this Court finds a valid arbitration agreement exists between the parties to arbitrate the individual claims asserted by Plaintiff and that no grounds exist to bar enforcement of the agreement. (Code Civ. Proc. § 1281.2.)
Defendants have the initial burden of demonstrating the existence of an arbitration agreement between the parties. (Rosenthal v. Great Wester Fin. Securities Corp. (1996) 14 Cal. 394, 413; Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972.) Defendants present evidence that in connection with Plaintiff’s hiring on November 10, 2021, Plaintiff signed the one-page document entitled “Arbitration Agreement” (Arbitration Agreement) that covers the issues in this lawsuit. ROA 18, Ibarra Decl., ¶¶3-5 and Ex. A.
Although Plaintiff notes that Defendants did not sign the Arbitration Agreement (ROA 42, Taylor Decl., ¶10), there is no dispute that Defendants employed Plaintiff and was entitled to enforce the Arbitration Agreement. ROA 42, Taylor Decl., ¶2; ROA 2, Complaint, ¶¶9-19 [alleging Defendants are joint employers and have joint liability]. Moreover, nonsignatories may enforce an Arbitration Agreement where the claims are intimately founded in and intertwined with the underlying contract claims and inseparable from the arbitrable claims. (Garcia v. Pexco, LLC (2017) 11 Cal.App.5th 782, 785-86; Boucher v. Alliance Title Co., Inc. (2005) 127 Cal.App.4th 262, 271.)
Thus, Defendants have satisfied their initial burden.
Plaintiff disputes the circumstances of her signing the Arbitration Agreement and does not recall seeing or signing the Arbitration Agreement. ROA 42, Taylor Decl., ¶¶7-9. However, significantly, Plaintiff does not dispute that she signed the Arbitration Agreement, or that the Arbitration Agreement applies to all of her claims. ROA 42, Taylor Decl., ¶¶7-9.
Plaintiff’s argument that her alleged failure to understand what she was signing and that such failure precluded a binding agreement is unpersuasive. “The general rule is that, when a person with the capacity of reading and understanding an instrument signs it, he is, in the absence of fraud and imposition, bound by its contents, and is estopped from saying that its provisions are contrary to his intentions or understanding.” (Palmquist v. Mercer (1954) 43 Cal. 2d 92, 98.) Plaintiff does not present any evidence that she lacked capacity to read or understand the arbitration agreement. Moreover, “[i]f the individual does not deny that the handwritten personal signature is his or her own, that person’s failure to remember signing is of little or no significance”. (Iyere v. Wise Auto Group (2023) 87 Cal. App. 5th 747, 757.) “[T]he fact that that person does not recall signing the agreement neither creates a factual dispute as to the signature's authenticity nor affords an independent basis to find that a contract was not formed.” (Id. at 758.)
The FAA Applies. Section 2 of the FAA (9 U.S.C. § 2) applies to any “written provision in . . . a contract evidencing a transaction involving commerce.” Defendants have the burden of proving the FAA applies. (Woolls v. Sup.Ct. (Turner) (2005) 127 Cal.App.4th 197, 214.)
Here, Defendants argue they are involved in interstate commerce because they regularly purchase goods and supplies from vendors outside of California and permit payment for its patients through the Medicare program. ROA 18, Ibarra Decl., ¶2. This is sufficient to establish application of the FAA. (See Willis v. Prime Healthcare Services, Inc. (2014) 231 Cal.App.4th 615, 625–26 [FAA applies where defendant purchased equipment interstate and received Medicare payments; “[p]ayments of Medicare or Medicaid funds are transactions involving commerce.”]; (Pickering v. Urbantus, LLC (S.D. Iowa 2011) 827 F. Supp. 2d 1010, 1014. [nursing homes that purchase equipment from out-of-state vendors are subject to the FAA].)
Plaintiff argues that these connections are insufficient because there is no showing that Plaintiff’s employment activities involved interstate commerce. (ROA 55, Opp., p. 7.) Not so. Defendants present evidence that Plaintiff was employed as a Certified Nursing Assistant who provided patient care to Defendants’ patients. ROA 18, Ibarra Decl., ¶6. See also, ROA 42, Taylor Decl., ¶¶2, 5, 7, 11. Given Plaintiff’s duties, it is likely Plaintiff provided care to patients who paid through Medicare or used the equipment or supplies from out-of-state.
But even if that is not the case, application of the FAA is not defeated because the individual transaction, taken alone, did not have a substantial effect on interstate commerce: it is enough that in the aggregate the economic activity in question would represent a general practice subject to federal control. (Citizens Bank, supra, 539 U.S. at 56–57.) As Defendants’ evidence shows, Defendants facilitate the provision of services to Medicare patients through federal funding, and Plaintiff’s employment was part of that enterprise. As such, the FAA applies.
The Arbitration Agreement Is Not Unconscionable. Plaintiff has failed to meet her burden of proving the facts of any defense to enforceability. (Chin v. Advanced Fresh Concepts Franchise Corp. (2011) 194 Cal. App. 4th 704, 708.) The defense of unconscionability requires that the arbitration agreement be both procedurally and substantively unconscionable. (De La Torre v. CashCall, Inc. (2018) 5 Cal. 5th 966, 982; Baltazar v. Forever 21, Inc. (2016) 62 Cal. 4th 1237, 1243; Baxter v. Genworth North America Corp. (2017) 16 Cal. App. 5th 713, 723.)
The Arbitration Agreement is not rendered unenforceable just because it was required as a condition of employment. (Baltazar v. Forever 21, Inc., supra, 62 Cal. 4th at 1245, 1251; Sanchez v. Carmax Auto Superstores California, LLC (2014) 224 Cal. App. 4th 398, 402-03.) But other circumstances indicate there may be some procedural unconscionability. It is undisputed that the one-page Arbitration Agreement was presented to Plaintiff within a “packet” of onboarding documents to sign. ROA 18, Ibarra Decl., ¶5; ROA 42, Taylor Decl., ¶4. There is conflicting evidence regarding the amount of time Plaintiff had to review the Arbitration Agreement and whether she was pressured into signing the Arbitration Agreement. ROA 18, Ibarra Decl., ¶¶4-5; ROA 42, Taylor Decl., ¶¶7-9. Thus, there may be some degree of procedural unconscionability.
However, Plaintiff has shown no substantive unconscionability. The Arbitration Agreement provides basic fairness to plaintiff and is therefore enforceable. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal. 4th 83, 90-91, 120.) Plaintiff argues that the arbitration agreement is substantively unconscionable because it only discusses claims that Plaintiff would have against the employer and not the employer’s claims against Plaintiff. No so. The Arbitration Agreement encompasses “any and all disputes arising out of or relating to Employee’s employment with the Company, or the termination of that employment,… Such disputes shall include, but are not limited to, any claim of harassment or discrimination in violation of any federal or state law, or any other aspect of Employee’s compensation, employment, or termination of employment (except for claims for workers’ compensation or unemployment benefits, which may be pursued before the appropriate state agency), as may arise between the Employee and the Company or its parents, subsidiaries, affiliates, or agents (including Employee’s supervisors, managers, and co-employees.)” ROA 18, Ex. A. Thus, the contractual language includes claims brought by the Defendants against Plaintiff arising from her employment.
Plaintiff also complains that the Arbitration Agreement does not provide for all relief that is allowable in court, but there is nothing in the contractual language that limits the relief Plaintiff may seek.
Further, Plaintiff argues that the Arbitration Agreement failed to attach the AAA rules. But Plaintiff has not identified how the absence of the AAA rules affected any of her substantive rights. (Balthazar v. Forever 21, Inc., supra 62 Cal.4th at 1236 [plaintiff’s challenge to enforcement of agreement had nothing to do with AAA rules; challenge concerned matters clearly delineated in agreement signed, thus, the failure to attach the AAA did not affect court’s consideration of substantive unconscionability claims].)
As such, plaintiff has not shown substantive unconscionability such as to render the Arbitration Agreement unenforceable.
Only Plaintiff’s Individual PAGA Claims May Be Arbitrated and the Non-Individual Claims Are Stayed. Pursuant to Viking River Cruises, Inc. v. Moriana (2022) 142 S. Ct. 1906, the anti-waiver rule for PAGA claims in Iskanian v. CLS Transportation Los Angeles (2014) LLC, 59 Cal. 4th 348 is preempted only “insofar as it precludes division of PAGA actions into individual and non-individual claims through an agreement to arbitrate.” (Viking River Cruises, Inc., supra, 142 S. Ct. at 1924.) As such, Plaintiff’s individual PAGA claims, i.e. those premised on Labor Code violations actually sustained by Plaintiff, are ordered to arbitration.
In Adolph v. Uber Techs., Inc., (Cal. July 17, 2023 No. S274671), 2023 WL 4553702, at *8, the California Supreme Court, the final arbiter of state law, explained
where a plaintiff has filed a PAGA action comprised of individual and non-individual claims, an order compelling arbitration of individual claims does not strip the plaintiff of standing to litigate non-individual claims in court. This “is the interpretation of PAGA that best effectuates the statute's purpose, which is ‘to ensure effective code enforcement.’ ” (Galarsa, supra, 88 Cal.App.5th at p. 654, 305 Cal.Rptr.3d 15, quoting Kim, supra, 9 Cal.5th at p. 87, 259 Cal.Rptr.3d 769, 459 P.3d 1123.)
Thus, this action is stayed pending completion of arbitration.
An arbitration review conference is set for December 8, 2023 at 9:00 a.m., and the parties are Ordered to file a joint status report not later than December 4, 2023.
Defendants are ordered to give notice.