Judge Richard Y. Lee, Case 30-2022-01256155 2022-10-27 Tentative Ruling

Judge: Richard Y. Lee, Case: 30-2022-01256155, Date: 2022-10-27 Tentative Ruling

Pursuant to the Notice, Petitioner/Defendant, Kathleen Maher (“Maher”) petitions the Court for the following:

1. an order, pursuant to California Code of Civil Procedure sections 1281.2, 1281.4, and 1281.7 and the Federal Arbitration Act, 9 U.S.C. § 4, compelling RESPONDENTS SPLICE AGENCY LLC, PAUL HAGOPIAN, JONATHAN PEISCHL, KEVIN STOKES, and JOSHUA MCCASLAND to arbitrate all claims and disputes, including each cause of action asserted in the Complaint filed in this action, in the arbitration pending before JAMS, captioned Maher v. Splice Agency LLC, et al., JAMS Case No. 5100000379 (“Maher Arbitration”);

2. an order, pursuant to California Code of Civil Procedure section 1281.4 and the Federal Arbitration Act, 9 USC § 3, dismissing this action or, alternatively, issuing a stay pending resolution of the Maher Arbitration;

3. an award of attorney’s fees and costs to Maher, California Code of Civil Procedure sections 1281.97, et seq., in the amount of $16,350.00; and

4. an order, pursuant to California Code of Civil Procedure sections 1281.97, et seq., for Respondents to pay all arbitration fees in the Maher Arbitration in accordance with the JAMS Employment Arbitration Rules.

Maher contends that an arbitration agreement exists based upon an arbitration agreement she signed in or about December 2018, as required by TriNet Group, Inc. (“TriNet”), a third-party human resources company, which require “mandatory arbitration” of any dispute “arising out of or relating to your employment with your company [Splice]” or any “employee, officer, or director” or “agent” of a TriNet customer [Splice]” (the “Arbitration Agreement”); that on May 20, 2022, Maher filed her arbitration with JAMS against Respondents Splice Agency Inc. (“Splice”) and Paul Hagopian; Jonathan Peischl; Joshua McCasland; and Kevin Stokes (collectively the “Respondents”), entitled Maher v. Splice Agency LLC, et al., JAMS Case No. 5100000379 (“Maher Arbitration”), in Alameda County, served the demand for arbitration on all Respondents, and followed up with opposing counsel on numerous occasions, but that Respondents ignored the arbitration proceedings in their entirety, and Maher paid the mandatory employer fees to ensure she could proceed with arbitration on August 12, 2022. Maher asserts that Arbitration Agreement designates JAMS Rules, and that Rule 11(b) of “JAMS Employment Arbitration Rules” give arbitrators the exclusive authority to determine issues of arbitrability such that any questions about arbitrability, including questions about whether the Arbitration Agreement is valid, encompasses certain claims, or applies to certain parties, must be resolved by the JAMS Arbitrator. The Court need not read any further to grant the Petition to Compel Arbitration. Maher argues that even if it were proper to invade the arbitrator’s exclusive jurisdiction, the Arbitration Agreement is valid and enforceable and applies to all of Respondents, i.e., Splice and the individual plaintiffs, and that the individual plaintiffs are not only an “employee, officer, or director,” but they are explicit “intended beneficiaries” regardless of whether they signed. Maher additionally argues that the individual plaintiffs are estopped to avoid arbitration because they assert claims “dependent upon, or inextricably intertwined with,” the underlying contractual obligations of the agreement containing the arbitration clause. Maher asserts that as the Arbitrator must decide all questions of arbitrability, dismissal of this action is proper, and that alternatively, dismissal is proper as all claims and parties are bound by the Arbitration Agreement, as Respondents willfully violated the Arbitration Agreement’s venue clause by filing the instant action in Orange County when the Arbitration Agreement requires that arbitration occur “within 75 miles” of Splice’s offices in Alameda County, as Respondents willfully filed claims on which they had no standing, and as the pending Maher Arbitration involves the same facts and legal issues Respondents have raised here. Maher provides that if the Court declines to dismiss the action, she alternatively requests a stay pending resolution of the Maher Arbitration, and that if the Court finds certain claims not arbitrable, she requests that the Court sever and stay those claims pending the Maher Arbitration. Finally, Maher requests an award attorney’s fees and costs to Maher accordingly in the amount of $16,350 pursuant to Code of Civil Procedure section 1281.99(a), and require Plaintiffs/Respondents to pay all arbitration fees in the Maher Arbitration in accordance with JAMS Employment Arbitration Rules & Procedures pursuant to CCP sections 1281.98 and 1281.97(b)(2).

Splice and the individual plaintiffs argue that Maher fails to prove the existence of an enforceable agreement to arbitrate between her and Plaintiffs or Splice, and that Plaintiffs never knew that it existed until after they filed this lawsuit. They argue that the Court has the exclusive authority to determine whether the DRP is enforceable and whether the claims are arbitrable as the DRP does not delegate threshold issues to an arbitrator, and is silent with respect to who, as between the arbitrator or a court, will decide the issues of enforceability and arbitrability. They also argue that Maher’s reliance on JAMS employment arbitration rules and procedures as delegating enforceability of the agreement to an arbitrator fails for two reasons: (1) Maher ignores the remainder of the DRP’s references to JAMS which also include other unnamed arbitration providers; and (2) it is not clear and unmistakable that the parties intended to delegate these issues to an arbitrator. They additionally argue even if the DRP binds Plaintiff and Splice and applies, Plaintiffs’ declaratory relief claim is outside the scope of the DRP and must be tried in this Court. Moreover, they argue that even if the DRP binds Plaintiffs and Splice and even if it applies, the DRP provides for an exception if there is another agreement “governing the resolution the covered disputes” and that in 2021, Maher and Splice entered into just such an agreement to resolve all of their disputes, namely, the “Transaction Bonus Agreement” (the “Release Agreement”) where Maher released all claims she had against Splice and Plaintiffs in exchange for a gross sum of $100,000. They assert that the Release Agreement plainly bars arbitration and precludes application of the DRP to Plaintiffs or Splice, and is broader than the DRP because it covers all disputes between Maher and Plaintiffs and Splice, including those related to Defendant’s employment with Splice. They further argue that Maher has waived the right to arbitrate because she has served a subpoena for the pre-hearing production of documents, as well as moved for dismissal of Plaintiffs’ claims on the purported ground that they lack standing to assert their alternative claims for fraud, conversion, and violation of the Penal Code. Finally, they assert that even if the Court grants the instant motion, it should deny the sanctions request as Splice and Plaintiffs had substantial justification to deny the arbitration demand given Defendant’s representation that she had signed the Release Agreement. Based on these arguments, Splice and the plaintiffs argue that the Court should deny the motion to compel arbitration, to dismiss or stay this action, and for sanctions and should instead stay Maher’s Arbitration until this action is resolved to avoid the potential for conflicting rulings on common issues of fact and law arising from the contradictory allegations in Plaintiffs’ first cause of action for declaratory relief in this action and Defendant’s demand for arbitration.

Existence of Arbitration Agreement

Code Civ. Proc. § 1281.2 provides, in pertinent part:

“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 rescission 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. . . .”

(Code Civ. Proc. § 1281.2.)

“Under ‘both federal and state law, the threshold question presented by a petition to compel arbitration is whether there is an agreement to arbitrate.’ [Citation].” (Cruise v. Kroger Co. (2015) 233 Cal.App.4th 390, 396.)

The party seeking to compel arbitration bears the burden of proving the existence of a valid arbitration agreement. (Avila v. Southern California Specialty Care, Inc. (2018) 20 Cal.App.5th 835, 846.)

Here, Maher submits a declaration stating, “I accepted the arbitration agreement provided by TriNet Group, Inc. (‘TriNet’), a third-party human resources company which provides payroll and benefits services. Attached hereto as Exhibit A is a true and correct copy of the TriNet Terms and Conditions Agreement.” (Declaration of Kathleen Maher (“Maher Decl.”), ¶ 4.)

Respondents separately filed objections wherein they object to the entirety of Paragraph 4 and Exhibit A on the ground that they lack authentication (Objection No. 2).

Maher additionally states, “I accepted the Employment Agreement [TriNet Terms and Conditions Agreement] on or about December 2018 through TriNet’s online platform. Attached hereto as Exhibit B is a true and correct copy of the Screenshot from my TriNet personnel file showing that I digitally accepted the Employment Agreement containing the Arbitration Agreement in December 2018.” (Maher Decl., ¶ 6.)

Respondents object to the entirety of Paragraph 6 and Exhibit B on the ground that they lack authentication (Objection No. 4.)

Further, Maher states: “Mandatory arbitration ‘covers any dispute … arising out of or relating to your employment with your company [Splice], as well as any dispute with an employee, officer, or director of TriNet or of a TriNet customer [Splice] (all of whom, in addition to TriNet customers, are intended to be beneficiaries of this DRP).’ ” Ex. A, Section 9(a). (Maher Decl., ¶ 8.)

Respondents object to the entirety of Paragraph 8 on the ground that it lacks authentication, the best evidence rule, and is an incomplete statement. (Objection No. 6.)

A writing must be authenticated by declarations or sufficient evidence to sustain a finding that the writing is what it purports to be, i.e., how it was obtained, how it had been identified, who had identified them, and its status as a true and correct copy of the “original.” (Evidence Code § 1400; Greenspan v. LADT, LLC (2010) 191 Cal.App.4th 486, 523; Landale-Cameron Court, Inc. v. Ahonen (2007) 155 Cal.App.4th 1401, 1409.) If the evidence would support a finding of authenticity, then the writing is admissible. (Jazayeri v. Mao (2009) 174 Cal.App.4th 301, 321.)

Here, although Maher provides that copies are “true and correct,” Maher does not provide evidence or facts establishing how Maher obtained the TriNet Terms and Conditions Agreement and accessed the TriNet personnel file, and how they were identified such that Maher does not provide sufficient evidence to sustain a finding that the documents are what they purport to be.

Additionally and significantly, Maher fails to provide evidence establishing her assertion that Splice is a TriNet customer.

Based on the foregoing, the Court DENIES the motion without prejudice to Maher re-filing the motion with a properly authenticated document setting forth the arbitration agreement.

Maher to give notice.