Judge Richard S. Whitney, Case Number: 37-2023-00029045-CU-OE-CTL, Date: 2024-04-12 Tentative Ruling

Judge: Richard S. Whitney, Case: 37-2023-00029045-CU-OE-CTL, Date: 2024-04-12 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - April 11, 2024

04/12/2024 10:30:00 AM C-68 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Richard S. Whitney

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Civil - Unlimited Other employment Motion Hearing (Civil) 37-2023-00029045-CU-OE-CTL ESCALANTE VS PINNACLE PROPERTY MANAGEMENT SERVICES LLC [E-FILE] CAUSAL DOCUMENT/DATE FILED:

TENTATIVE RULING: DEFENDANTS' MOTION TO COMPEL ARBITRATION AND TO STAY ALL NON-ARBITRAL CLAIMS is GRANTED.

Defendants PINNACLE PROPERTY MANAGEMENT SERVICES, LLC and CUSHMAN & WAKEFIELD U.S., INC. ('Defendants') seek to compel Plaintiff YESENIA ESCALANTE's individual PAGA claims and to stay the remaining representative PAGA claims. Plaintiff opposes the motion and objects to the declaration of Erinn Cassidy, the former Vice President, Human Resources - Americas Services for Pinnacle. Plaintiff's objections are overruled.

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 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. (Id.) Plaintiff asserts Defendants have failed to prove the existence of an arbitration agreement because Defendants present an arbitration agreement that does not specify it is between Plaintiff and Defendants but rather 'the Company,' which is defined as 'American Management Services.' Erinn Cassidy declares that in Plaintiff's personnel file is a signed and dated arbitration agreement. (Decl. Cassidy, � 5 and Exhibit 1.) While Plaintiff is correct that the 'Issue Resolution Rules' define the 'Company' as American Management Services, the remainder of the agreement repeats numerous times that the application for employment is with 'Pinnacle Property Management Services, LLC,' that the 'Issue Resolution Agreement' (arbitration agreement) pertains to 'Pinnacle Property Management Services, LLC,' and that notice of withdrawal of consent is to be sent to 'Pinnacle Property Management Services, LLC.' (Decl. Cassidy, � 5 and Exhibit 1.) Perhaps most importantly, Plaintiff does not deny signing the Calendar No.: Event ID: TENTATIVE RULINGS

3039624 46 CASE NUMBER: CASE TITLE: ESCALANTE VS PINNACLE PROPERTY MANAGEMENT 37-2023-00029045-CU-OE-CTL agreement, dating it, and placing her social security number on the agreement directly above where it states 'Pinnacle Property Management Services, LLC agrees to follow this Issue Resolution Agreement and the Issue Resolution Rules in connection with the Employee whose signature appears above.' (Decl. Cassidy, � 5 and Exhibit 1.) 'It is a basic rule of contract law that '[i]t is essential to the validity of a contract, not only that the parties should exist, but that it should be possible to identify them.' (Civ. Code, � 1558.)' (Westlye v. Look Sports, Inc. (1993) 17 Cal.App.4th 1715, 1728.) Plaintiff does not deny that Pinnacle can clearly be identified that Plaintiff signed the agreement, and that the signing was part of the application process for employment with Pinnacle. Plaintiff's argument in this regard fails.

Plaintiff also asserts Defendants have not properly authenticated the agreement. '[A] petitioner is not required to authenticate an opposing party's signature on an arbitration agreement as a preliminary matter in moving for arbitration or in the event the authenticity of the signature is not challenged.' (Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 846.) Defendants have the burden to prove authenticity, by a preponderance of the evidence, if Plaintiff declares that Plaintiff cannot recall signing it and that Plaintiff 'would not have signed it had it been presented to' Plaintiff. (Id.) Plaintiff does not provide any declaration to deny signing the arbitration agreement, to state that Plaintiff does not recall signing the arbitration agreement, nor that Plaintiff 'would not have signed it had it been presented to' Plaintiff. (Id.) Therefore, Defendants are not required to authenticate the agreement. In any event, Erinn Cassidy has authenticated the agreement.

Plaintiff asserts this matter may not be arbitrated as it is exclusively a representative action. Under Viking River Cruises, Inc. v. Moriana (2022) 142 S.Ct. 1906 certain PAGA disputes may be compelled to arbitration notwithstanding Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348.

Iskanian, which is now overruled in part, states 'where...an employment agreement compels the waiver of representative claims under the PAGA, it is contrary to public policy and unenforceable as a matter of state law.' (Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 384.) 'After Iskanian, several appellate courts [] held that an individual PAGA plaintiff may not be required to arbitrate his or her PAGA claim.' (Contreras v. Superior Court of Los Angeles County (2021) 61 Cal.App.5th 461, 472.) The Supreme Court in Viking River determined PAGA claims are arbitrable on an individual basis. (Viking River, supra, 142 S.Ct. at 1913 ['Under this Courts holding, Iskanian's prohibition on wholesale waivers of PAGA claims is not preempted by the FAA. But Iskanian's rule that PAGA actions cannot be divided into individual and non-individual claims is preempted, so Viking was entitled to compel arbitration of Moriana's individual claim.']) Viking River overruled Iskanian's rule that effectively precluded claim splitting a PAGA claim. Since Viking River became the law, parties could split a PAGA claim. Viking River now allows a court to find the 'representative' portion of the PAGA claim may not be compelled to arbitration while the 'individual' portion of the PAGA claim may be compelled to arbitration. The same may be done in this case.

Plaintiff's individual PAGA claims are arbitrable and the remaining representative PAGA action may be stayed pending the arbitration of Plaintiff's individual PAGA claims. (Adolph v. Uber Technologies, Inc.

(2023) 14 Cal.5th 1104.) Finally, Plaintiff asserts the arbitration agreement is unconscionable.

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 Calendar No.: Event ID: TENTATIVE RULINGS

3039624 46 CASE NUMBER: CASE TITLE: ESCALANTE VS PINNACLE PROPERTY MANAGEMENT 37-2023-00029045-CU-OE-CTL 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.) The procedural unconscionability element focuses on 'oppression' or 'surprise' due to unequal bargaining power. The substantive unconscionability element focuses on 'overly harsh' or 'one-sided' results. (Id.) '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.) 'Arbitration contracts imposed as a condition of employment are typically adhesive.' (Kho, supra, 8 Cal.5th at 126.) 'Where there is no other indication of oppression or surprise, the degree of procedural unconscionability of an adhesion agreement is low, and the agreement will be enforceable unless the degree of substantive unconscionability is high.' (Ajamian v. CantorCO2e, L.P. (2012) 203 Cal.App.4th 771, 796.) 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.) While the agreement states that it is a condition of employment, it also provides that the signer may opt out within three days. (Decl. Cassidy, � 5 and Exhibit 1.) However, the agreement also indicates that if the signer opts out, they also withdraw their application for employment. Thus, the agreement is one of adhesion. However, Plaintiff does not demonstrate any oppression or surprise. Therefore, the degree of procedural unconscionability is low.

As to substantive unconscionability, Plaintiff asserts the contractual limitations period of one year is unconscionable, as well as the limitations on discovery. The agreement provides 'I understand that I must file a claim for arbitration within one (1) year of the day on which I learned or, through reasonable diligence, should have learned that my legal rights were violated.' (Decl. Cassidy, � 5 and Exhibit 1.) 'A PAGA action is subject to a one-year statute of limitations.' (Esparza v. Safeway, Inc. (2019) 36 Cal.App.5th 42, 59.) The Court fails to see how the limitations period, which is one year under the law and the agreement, 'would effectively whittle away the relevant period of this PAGA action.' 'Generally, a statute of limitations begins to run when a cause of action accrues, meaning when the cause of action is complete with all of its elements.' (Id.) Even if it were unconscionable, it could be severed pursuant to the severability clause. (Decl. Cassidy, � 5 and Exhibit 1.) Discovery is limited to three depositions and 20 interrogatories and document requests. (Decl. Cassidy, � 5 and Exhibit 1.) However, the agreement also provides '[u]pon the request of any Party and a showing of substantial need, the Arbitrator may permit additional discovery, but only if the Arbitrator finds that such additional discovery is not overly burdensome, and will not unduly delay conclusion of the arbitration.' (Id. [Emphasis in original].) The Court finds Plaintiffs have not demonstrated the discovery limitations are unconscionable. (See Sanchez v. Carmax Auto Superstores California, LLC (2014) 224 Cal.App.4th 398, 404-406 [substantially similar limitation of three depositions and 20 interrogatories was not unconscionable.) In short, Plaintiff has not met Plaintiff's burden to demonstrate unconscionability.

The motion is granted. The Court elects to stay the remainder of this matter not compelled to arbitration pursuant to CCP section 1281.4. A status conference is hereby set for October 25, 2024, at 10:00 am.

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