Judge Richard S. Whitney, Case 37-2022-00007812-CU-BC-CTL 2023-12-01 Tentative Ruling

Judge: Richard S. Whitney, Case: 37-2022-00007812-CU-BC-CTL, Date: 2023-12-01 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - November 30, 2023

12/01/2023 10:30:00 AM C-68 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Richard S. Whitney

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Civil - Unlimited Breach of Contract/Warranty Motion Hearing (Civil) 37-2022-00007812-CU-BC-CTL KAWESKI MD FACS VS MOLINA HEALTHCARE OF CALIFORNIA [IMAGED] CAUSAL DOCUMENT/DATE FILED:

TENTATIVE RULING: DEFENDANT MOLINA HEALTHCARE OF CALIFORNIA'S MOTION TO COMPEL ARBITRATION is GRANTED.

Defendant MOLINA HEALTHCARE OF CALIFORNIA ('Defendant') seeks to compel Plaintiff Susan Kaweski MD FACS ('Plaintiff') to arbitrate Plaintiff's claims and to stay this matter pending arbitration.

CCP section 1281.2 provides 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 such 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, unless it determines that: (a) The right to compel arbitration has been waived by the petitioner; or (b) Grounds exist for the revocation of the agreement. (c) A party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact....

(CCP §1281.2.) The moving party must prove by a preponderance of the evidence the existence of the arbitration agreement and that the dispute is covered by the agreement. (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413.) The burden then shifts to the resisting party to prove by a preponderance of the evidence a ground for denial, e.g., unconscionability or waiver. (Id.) Defendant has met its burden to show the existence of the arbitration agreement as Plaintiff attaches the signed agreement to the complaint. The existence of the arbitration agreement is a judicial admission.

Plaintiff also does not dispute that this action falls within the scope of the arbitration provision. The arbitration agreement broadly provides that controversies between the parties must be submitted to arbitration. The burden has shifted to Plaintiff to demonstrate, by a preponderance of the evidence, a ground for denial.

Plaintiff asserts the arbitration agreement is unconscionability. A showing of unconscionability requires two elements: (1) a procedural element; and (2) a substantive element. (Kinney v. United Healthcare Svc, Inc. (1999) 70 Cal.App.4 1322, 1329.) 'Although both elements must be present before a contract or contract provision is rendered unenforceable on grounds of unconscionability, they are reviewed in tandem such that 'the greater the degree of substantive unconscionability, the less the degree of procedural unconscionability that is required to annul the contract or clause.'' (Id. [Citation omitted].) Calendar No.: Event ID: TENTATIVE RULINGS

3000397 57 CASE NUMBER: CASE TITLE: KAWESKI MD FACS VS MOLINA HEALTHCARE OF CALIFORNIA 37-2022-00007812-CU-BC-CTL The prevailing view is that [procedural and substantive unconscionability] must both be present in order for a court to exercise its discretion to refuse to enforce a contract or clause under the doctrine of unconscionability.' (Stirlen v. Supercuts, Inc., supra, 51 Cal.App.4th at p. 1533 (Stirlen).) But they need not be present in the same degree. 'Essentially a sliding scale is invoked which disregards the regularity of the procedural process of the contract formation, that creates the terms, in proportion to the greater harshness or unreasonableness of the substantive terms themselves.' (15 Williston on Contracts (3d ed.

1972) § 1763A, pp. 226-227; see also A & M Produce Co., supra, 135 Cal.App.3d at p. 487.) In other words, the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.

(Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114.) Procedural unconscionability focuses on two factors: oppression and surprise. (Crippen v. Central Valley RV Outlet, Inc. (2004) 124 Cal.App.4th 1159, 1165.) Oppression arises from an inequality of bargaining power which results in no real negotiation and an absence of meaningful choice and surprise involves the extent to which the terms of the bargain are hidden in a verbose printed form drafted by a party in a superior bargaining position. (Id.) Substantive unconscionability varies in form, but may generally be described as unfairly one-sided terms. (Little v. Auto Stiegler, Inc. (2003) 29 Cal.4th 1064, 1071.) Substantive unconscionability 'traditionally involves contract terms that are so one-sided as to 'shock the conscience,' or that impose harsh or oppressive terms.' (24 Hour Fitness, Inc. v. Superior Court (1998) 66 Cal.App.4th 1199, 1213.) 'The general principles of unconscionability are well established. A contract is unconscionable if one of the parties lacked a meaningful choice in deciding whether to agree and the contract contains terms that are unreasonably favorable to the other party.' (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 125.) Where there is no other indication of oppression or surprise, the degree of procedural unconscionability of an adhesion agreement is low. (Serpa v. California Surety Investigations, Inc. (2013) 215 Cal.App.4th 695, 704.) The Court finds that, at best, the declaration of Plaintiff supports a low degree of procedural unconscionability. Plaintiff merely establishes she did not draft the agreement, she was not 'invited' to revise the draft agreement, and Plaintiff was not advised regarding the waiver of a right to trial. Plaintiff does not establish that the agreement was offered on a take-it-or-leave-it basis such that Plaintiff could not realistically negotiate any modification in the terms of the agreement. Further, the agreement need not explicitly state the rights to a jury trial are waived. (Madden v. Kaiser Foundation Hospitals (1976) 17 Cal.3d 699, 714–715.) As far as substantive unconscionability, Plaintiff points to the fact the agreement provides the parties 'agree to divide and share equally the cost of arbitration.' This does not render the agreement unconscionable as this is not an employment contract. The provision cannot be held unconscionable absent a showing that the 'fees and costs in fact would be unaffordable or would have a substantial deterrent effect in [Plaintiff's] case.' (Sanchez v. Valencia Holding Co., LLC (2015) 61 Cal.4th 899, 920.) Plaintiff has made no such showing. Plaintiff has failed to meet her burden to demonstrate unconscionability to justify this Court declining to enforce the arbitration agreement.

Plaintiff also asserts that Defendant's breaches of the agreement preclude Defendant's right to enforce the arbitration agreement since Plaintiff cancelled the agreement. 'Arbitration provisions, which themselves have not been repudiated, are meant to survive breaches of contract, in many contexts, even total breach....' (Drake Bakeries, Inc. v. Local 50, Am. Bakery and Confectionery Workers Intern., AFL-CIO (1962) 370 U.S. 254, 262.) Plaintiff asserts she cancelled the agreement in September of 2021. However, Plaintiff is judicially estopped from denying the enforceability of the arbitration agreement as she relies upon the enforceability of the agreement in her complaint. Plaintiff cannot, on the one hand, claim the arbitration provision is not enforceable because the agreement is not enforceable, but also claim, on the other hand, the agreement is enforceable without the arbitration Calendar No.: Event ID: TENTATIVE RULINGS

3000397 57 CASE NUMBER: CASE TITLE: KAWESKI MD FACS VS MOLINA HEALTHCARE OF CALIFORNIA 37-2022-00007812-CU-BC-CTL provision simultaneously being enforceable as well.

Plaintiff cites to CCP section 1281, which provides that '[a] written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract.' (Code Civ. Proc., § 1281.) Plaintiff does not seek revocation of the agreement in the complaint. Plaintiff also cites Civil Code section 1688, which provides '[a] contract is extinguished by its rescission.' (Civ. Code, § 1688.) Again, Plaintiff does not seek rescission. Rather, Plaintiff seeks enforcement of the agreement. Moreover, 'contractual arbitration clauses generally must be enforced where one of the parties seeks rescission of the entire contract on the basis that it allegedly was induced by fraud, mistake, or duress, or where an alleged breach of a warranty or other promise justifies the aggrieved party in putting an end to the contract.' (St. Agnes Medical Center v. PacifiCare of California (2003) 31 Cal.4th 1187, 1198.) Finally, Plaintiff has not presented evidence of fraud to support revocation.

In sum, Plaintiff has failed to demonstrate by a preponderance of the evidence that a ground to deny enforcement of the arbitration agreement exists. The motion is granted. The case is hereby stayed pursuant to CCP section 1281.4. A status conference is hereby set for April 7, 2024, at 10:00 am.

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