Judge: Robert B. Broadbelt, Case: 22STCV00532, Date: 2023-02-10 Tentative Ruling
Case Number: 22STCV00532 Hearing Date: February 10, 2023 Dept: 53
Superior Court of California
County of Los Angeles – Central District
Department
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22STCV00532 |
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Hearing
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February
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[Tentative]
Order RE: (1)
motion
to compel arbitration and stay proceedings (2)
demurrer
to complaint (3)
motion
to strike portions of complaint |
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MOVING PARTY: Defendant Citiguard, Inc.
RESPONDING PARTY: Plaintiff Tennia Taylor
(1)
Motion
to Compel Arbitration and Stay Proceedings
(2)
Demurrer
to Complaint
(3)
Motion
to Strike Portions of Complaint
The court
considered the moving, opposition, and reply papers filed in connection with the
motion to compel arbitration.
EVIDENTIARY OBJECTIONS
The court overrules defendant Citiguard, Inc.’s objection to plaintiff
Tennia Taylor’s opposition. The court
exercises its discretion to consider the opposition papers filed by plaintiff
Tennia Taylor on February 3, 2023.
MOTION TO COMPEL ARBITRATION FILED BY
CITIGUARD, INC.
Plaintiff Tennia Taylor
(“Plaintiff”) filed this employment action on January 6, 2022, against
defendants Memorial Hospital of Gardena and Citiguard, Inc.
Defendant Citiguard, Inc.
(“Defendant”) moves the court for an order (1) compelling Plaintiff to submit
all her claims against Defendant to binding
arbitration; (2) staying this action pending completion of arbitration; and (3)
awarding sanctions in favor of Defendant and against Plaintiff in the amount of
$1,320.
1. Existence of a Written Agreement to
Arbitrate
“On petition of a party to an
arbitration agreement alleging the existence of a written agreement to
arbitrate a controversy and that a party to the agreement refuses to arbitrate
that 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 the court finds that the right to compel arbitration
has been waived by the petitioner or that grounds exist for rescission of the
agreement. (Code Civ. Proc.,
§ 1281.2.)
“‘ “The party seeking to compel arbitration bears the burden of
proving the existence of an arbitration agreement, while the party opposing the
petition bears the burden of establishing a defense to the agreement’s
enforcement.” ’” (Beco v. Fast Auto
Loans (2022) 86 Cal.App.5th 292, 302.)
The burden of production as to this finding shifts in a three-step
process. (Gamboa v. Northeast Community Clinic (2021) 72
Cal.App.5th 158, 165.) First, the moving party bears the burden of producing
prima facie evidence of a written agreement to arbitrate, which can be met by
attaching a copy of the arbitration agreement purporting to bear the opponent’s
signature. (Ibid.) If the moving party meets this burden, the
opposing party bears, in the second step, the burden of producing evidence to
challenge its authenticity. (Ibid.) If the opposing party produces evidence
sufficient to meet this burden, the third and final step requires the moving
party to establish, with admissible evidence, a valid arbitration agreement
between the parties. (Ibid.)
The court finds that Defendant
has met its burden of producing prima facie evidence of a written agreement to
arbitrate by attaching a copy of the “Citiguard Inc. Arbitration Agreement”
(the “Arbitration Agreement”) purporting to bear Plaintiff’s signature. (Josephson Decl., Ex. “B” to Ex. B,
Arbitration Agreement, pp. 1, 5; Gamboa, supra, 72 Cal.App.5th at
p. 165.)
The Arbitration Agreement
provides that Plaintiff and Defendant agree to submit to arbitration “any
controversy or claim arising out of or relating to [the] employment
relationship with [Defendant] or the termination of that relationship, except
those claims specifically excluded from arbitration by federal and state law….” (Josephson Decl., Ex. “B” to Ex. B,
Arbitration Agreement, ¶ 1.)
Covered claims are defined to include claims for breach of contract,
tort claims, claims for emotional distress, discrimination, wrongful discharge,
and claims under the California Labor Code.
(Josephson Decl., Ex. “B” to Ex. B, Arbitration Agreement, ¶ 1, subd.
(a).)
The court finds that Plaintiff
has not met her burden of producing evidence to challenge the
authenticity of the Arbitration Agreement.
(Gamboa, supra, 72 Cal.App.5th at p. 165.) Plaintiff neither argues nor presents
evidence to argue that she did not sign, or does not remember signing, the
Arbitration Agreement.
The court therefore finds that
Defendant has met its burden of establishing the existence of a written
agreement to arbitrate as between Plaintiff and Defendant.
The court further finds that
Defendant has met its burden of establishing that the causes of action asserted
by Plaintiff are covered by the Arbitration Agreement. Plaintiff alleges five causes of action for
(1) constructive discharge in violation of public policy; (2) intentional
infliction of emotional distress; (3) retaliation in violation of the Labor
Code; (4) failure to pay all wages; and (5) failure to pay wages due upon
termination. As set forth above, the Arbitration
Agreement provides for arbitration of all claims “arising out of or relating to
[Plaintiff’s] employment relationship with [Defendant] or the termination of
that relationship,” including claims for wrongful discharge in violation of
public policy, emotional distress, and claims brought under the California
Labor Code. (Josephson Decl., Ex. “B” to
Ex. B, Arbitration Agreement, ¶ 1, subd. (a).) Plaintiff’s causes of action (1) relate to her
employment relationship with Defendant, including the termination of that
relationship, or (2) arise under the Labor Code. (Compl., ¶¶ 39, 46-47, 53-54, 63-65,
70.) The court therefore finds that
Plaintiff’s claims are subject to the Arbitration Agreement.
2. Waiver
Plaintiff contends that Defendant’s
delay in filing the pending motion to compel arbitration constitutes a waiver
of its right to arbitrate.
As set forth above, the court
shall order parties to an arbitration agreement to submit all claims to binding
arbitration unless the court finds that “[t]he right to compel arbitration has
been waived by the petitioner….” (Code
Civ. Proc., § 1281.2, subd. (a).)
“[N]o single test delineates
the nature of the conduct that will constitute a waiver of arbitration.” (St. Agnes Medical Center v. PacifiCare of
California (2003) 31 Cal.4th 1187, 1195.)
Courts may consider “(1) whether the party’s actions are inconsistent
with the right to arbitrate; (2) whether the litigation machinery has been
substantially invoked and the parties were well into preparation of a lawsuit
before the party notified the opposing party of an intent to arbitrate; (3)
whether a party either requested arbitration enforcement close to the trial
date or delayed for a long period before seeking a stay; (4) whether a defendant
seeking arbitration filed a counterclaim without asking for a stay of the
proceedings; (5) whether important intervening steps [e.g., taking advantage of
judicial discovery procedures not available in arbitration] had taken place;
and (6) whether the delay affected, misled, or prejudiced the opposing
party.” (Id. at p. 1196 [internal
quotation marks omitted].)
“California courts have found
a waiver of the right to demand arbitration in a variety of contexts, ranging
from situations in which the party seeking to compel arbitration has previously
taken steps inconsistent with an intent to invoke arbitration [citations] to
instances in which the petitioning party has unreasonably delayed in
undertaking the procedure.” (Fleming
Distribution Company v. Younan (2020) 49 Cal.App.5th 73, 80 [internal
quotation marks omitted].) “[W]aiver
will not be lightly inferred and the party asserting waiver ‘bears a heavy
burden of proof,’ with any doubts to be resolved in favor of arbitration.” (Ibid)
The court finds that Plaintiff
has not met her burden of establishing that Defendant waived its right to
demand arbitration.
The court acknowledges that
Defendant filed a demurrer and motion to strike on March 17, 2022,
approximately six months before it filed the pending motion to compel
arbitration. However, Defendant’s
counsel stated that the Arbitration Agreement was located “[d]uring the course
of Defendants’ initial document production….”
(Josephson Decl., ¶ 4.) While
counsel did not state the exact date on which the Arbitration Agreement was
located, it does not appear that Defendant knew of the existence of the
Arbitration Agreement at the time that Plaintiff filed the Complaint. Plaintiff has not presented any evidence to the
contrary. Moreover, Defendant has not
filed multiple motions with the court to challenge the pleadings or taking
advantage of procedures not available in arbitration. The court further finds that the timing of
Defendant’s motion, filed eight months after Plaintiff filed her Complaint,
does not reflect an inference of waiver.
Finally, the court notes that Plaintiff has not produced any evidence
establishing that she has been prejudiced, which is “critical in waiver
determinations.” (St. Agnes Medical
Center, supra, 31 Cal.4th at p. 1203; Hoover, supra,
206 Cal.App.4th at p. 1205 [“The presence or absence of prejudice from the
litigation is a determinative issue”].)
“[P]articipating in the
litigation of an arbitrable claim does not itself waive a party’s right to later
seek to arbitrate the matter,” but continued litigation of the dispute may
justify a finding of waiver. (Fleming
Distribution Company, supra, 49 Cal.App.5th at p. 80.) In viewing the litigation of this action as a
whole, the court finds that Plaintiff has not met her burden of establishing
that Defendant’s conduct is inconsistent with the right to arbitrate. (Hoover v. American Income Life Ins. Co. (2012)
206 Cal.App.4th 1193, 1204.)
3. Unconscionability
Plaintiff contends that the
Arbitration Agreement is unconscionable and therefore unenforceable.
“The burden of proving
unconscionability rests upon the party asserting it.” (OTO, L.L.C. v. Kho (2019) 8 Cal.5th
111, 126 (Kho).)
“‘[U]nconscionability has both a “procedural” and a “substantive”
element,’ the former focusing on ‘oppression’ or ‘surprise’ due to unequal
bargaining power, the latter on ‘overly harsh’ or ‘one-sided’ results.” (Armendariz v. Foundation Health
Psychare Services, Inc. (2000) 24 Cal.4th 83, 114 [citations
omitted].) “As a matter of general
contract law, California courts require both procedural and substantive
unconscionability to invalidate a contract.”
(Torrecillas v. Fitness International, LLC (2020) 52 Cal.App.5th
485, 492 (Torrecillas).)
California courts “apply a sliding scale, meaning if one of these
elements is present to only a lesser degree, then more evidence of the other
element is required to establish overall unconscionability. In other words, if there is little of one, there
must be a lot of the other.” (Ibid.)
a. Procedural Unconscionability
“Procedural unconscionability
pertains to the making of the agreement . . . .” (Ajamian v. CantorCO2e, L.P. (2012)
203 Cal.App.4th 771, 795.) Procedural
unconscionability “‘“focuses on two factors: ‘oppression’ and ‘surprise.’ [Citations.]
‘Oppression’ arises from an inequality of bargaining power which results
in no real negotiation and ‘an absence of meaningful choice.’ [Citations.] ‘Surprise’ involves the extent to which the
supposedly agreed-upon terms of the bargain are hidden in the prolix printed
form drafted by the party seeking to enforce the disputed terms.”’” (Zullo v. Superior Court (2011) 197 Cal.App.4th
477, 484 [citations omitted].)
i.
Oppression
“Oppression generally ‘takes
the form of a contract of adhesion, “‘which, imposed and drafted by the party
of superior bargaining strength, relegates to the subscribing party only the
opportunity to adhere to the contract or reject it.’”’” [Citation.]”
(Carmona v. Lincoln Millennium Car Wash, Inc. (2014) 226
Cal.App.4th 74, 84 (Carmona).)
“‘[A] predispute arbitration agreement is not invalid merely
because it is imposed as a condition of employment. [T]he mandatory nature of an agreement does
not, by itself, render the agreement unenforceable.’ [Citation.] But the adhesive nature of a contract is one
factor that the courts may consider in determining the degree of procedural
unconscionability.” (Id. at p.
84, fn. 4.)
As discussed above,
“[o]pression . . . occurs when there is a lack of negotiation and meaningful
choice.” (Torrecillas, supra, 52
Cal.App.5th at p. 493.)
“Adhesion contracts are form contracts a party with superior bargaining
power offers on a take-it-or-leave-it basis.”
(Ibid.) “Arbitration
contracts imposed as a condition of employment are typically adhesive . . .
.” (Kho, supra, 8 Cal.5th at p.
126.)
The court finds that Plaintiff
has met her burden of establishing that the Arbitration Agreement is a contract
of adhesion. As noted by Plaintiff, the
Arbitration Agreement includes language that states that Defendant has
“instituted a mandatory arbitration procedure for all employees.” (Josephson Decl., Ex. “B” to Ex. B, Arbitration
Agreement, p. 1.) Further, although not
mentioned by Plaintiff, the court notes that the Arbitration Agreement
expressly states that “[b]oth parties mutually agree that as a condition of
your employment at Citiguard, any controversy or claim arising out of or
relating to your employment relationship…or the termination of that
relationship…must be submitted for final and binding resolution by a private
and impartial arbitrator….” (Josephson
Decl., Ex. “B” to Ex. B, Arbitration Agreement, ¶ 1 [emphasis added].)
The court therefore finds that
Plaintiff has established a low level of procedural unconscionability based on
the adhesive nature of the Arbitration Agreement.
ii.
Surprise
As discussed above,
“[s]urprise is when a prolix printed form conceals the arbitration
provision.” (Torrecillas, supra, 52
Cal.App.5th at p. 493.)
Plaintiff does not argue that the Arbitration Agreement was concealed,
and has not presented any evidence or argument to establish surprise.
The court therefore finds that
Plaintiff has established that there is a low level of procedural
unconscionability based on the adhesive nature of the Arbitration
Agreement. (Ajamian, supra,
203 Cal.App.4th at p. 796 [“Where there
is no other indication of oppression or surprise, the degree of procedural
unconscionability of an adhesion agreement is low”].)
a. Substantive Unconscionability
“‘Substantive unconscionability pertains to the fairness of an
agreement’s actual terms and to assessments of whether they are overly harsh or
one-sided. [Citations.] A contract term is not substantively
unconscionable when it merely gives one side a greater benefit; rather, the
term must be “so one-sided as to ‘shock the conscience.’”’” (Carmona, supra, 226
Cal.App.4th at p. 85.) “‘“[T]he
paramount consideration in assessing [substantive] unconscionability is
mutuality.”’” (Ibid.)
Plaintiff contends that the
Arbitration Agreement is substantively unconscionable because it (1) limits
Plaintiff’s ability to conduct adequate discovery, and (2) places the burden of
proof on Plaintiff.
First, the court finds that
the Arbitration Agreement does not limit Plaintiff’s ability to conduct
adequate discovery. The Arbitration
Agreement expressly authorizes the arbitrator “to allow for appropriate
discovery and exchange of information before a hearing, including, but not
limited to, production of documents, information requests, depositions and
subpoenas.” (Josephson Decl., Ex. “B” to
Ex. B, Arbitration Agreement, ¶ 1, subd. (d).) This language does not limit Plaintiff’s
ability to conduct the discovery needed to vindicate her claims. Moreover, the court notes that, “when parties
agree to arbitrate statutory claims, they also implicitly agree, absent express
language to the contrary, to such procedures as are necessary to vindicate that
claim.” (Armendariz, supra,
24 Cal.4th at p. 106.)
Second, the court finds that
the Arbitration Agreement does not give Defendant an unfair advantage by
requiring Plaintiff to bear the burden of proof on her claims. (Josephson Decl., Ex. “B” to Ex. B,
Arbitration Agreement, ¶ 1, subd. (d)(ii).) Plaintiff has not identified or cited any
authority establishing that requiring Plaintiff to prove her claims at
arbitration is substantively unconscionable.
The court finds that Plaintiff
has not met her burden of establishing that the Arbitration Agreement is
substantively unconscionable. As set
forth above, “California courts require both procedural and substantive
unconscionability to invalidate a contract.”
(Torrecillas, supra, 52 Cal.App.5th at p. 492.) The court therefore finds that Plaintiff has
not met her burden of establishing that the Arbitration Agreement is
unconscionable and therefore unenforceable.
4. Conclusion
The court finds that (1)
Defendant met its burden of establishing the existence of a written, valid
agreement to arbitrate between Plaintiff and Defendant; (2) the Arbitration
Agreement encompasses the claims alleged by Plaintiff in her Complaint; and (3)
Plaintiff has not met her burden to show that (i) Defendant waived its right to
compel arbitration, or (ii) the Arbitration Agreement is unconscionable.
The court therefore grants
Defendant’s motion to compel arbitration.
The court further grants Defendant’s request to stay this action pending
completion of arbitration.
The court denies Defendant’s
request for an award of sanctions against Plaintiff because Defendant has not
cited any authority for the court to award sanctions against Plaintiff in
connection with this motion.
Finally, the court notes that
Defendant has submitted an arbitration agreement purportedly executed by and
between Defendant and Marquis Mejia Hill.
(Nomair Decl., Ex. A.) Although
the court found that this action and the action filed by Marquis Mejia Hill
(Case No. 22STCV00937) are related and ordered them assigned to this
department, the court did not order that these cases are consolidated. Thus, the court has not considered the
arbitration agreement relating to Marquis Mejia Hill in connection with this
motion.
JOINDER TO MOTION TO COMPEL ARBITRATION
FILED BY MEMORIAL HOSPITAL OF GARDENA
Defendant Memorial Hospital of
Gardena filed a “Notice of Joinder and Joinder in Motion to Compel Arbitration,
for Stay and for Sanctions Brought by Defendant Citiguard, Inc.” on September
6, 2022.
Defendant Memorial Hospital of
Gardena filed, on October 10, 2022, and October 24, 2022, notices to show that
it has filed a bankruptcy case. The
court finds that this action is automatically stayed as to defendant Memorial
Hospital of Gardena. (Shaoxing County
Huayue Import & Export v. Bhaumik (2011) 191 Cal.App.4th 1189, 1196; 11
U.S.C. § 362, subd. (a).)
The court therefore takes off
calendar the joinder to Defendant’s motion to compel arbitration, filed by
defendant Memorial Hospital of Gardena on September 6, 2022, without prejudice
to any motion seeking that relief if the automatic bankruptcy stay is lifted.
DEMURRER AND MOTION TO STRIKE FILED BY CITIGUARD,
INC.
Defendant filed a demurrer and motion to strike portions of
Plaintiff’s Complaint on March 15, 2022.
As set forth above, the court has granted Defendant’s motion to compel
arbitration. The court therefore takes
off calendar Defendant’s demurrer and motion to strike.
The court grants defendant Citiguard, Inc.’s motion to compel
arbitration.
The court orders (1) plaintiff Tennia Taylor and defendant Citiguard,
Inc. to arbitrate the claims alleged in plaintiff Tennia Taylor’s Complaint,
and (2) this action is stayed until arbitration is completed.
The court denies defendant Citiguard, Inc.’s request for sanctions.
The court orders that the
joinder to the motion to compel arbitration, filed by defendant Memorial
Hospital of Gardena on September 6, 2022, is taken off calendar, without
prejudice to any motion seeking that relief filed by defendant Memorial
Hospital of Gardena if the automatic bankruptcy stay is lifted.
The court orders that the demurrer and motion to strike filed by
defendant Citiguard, Inc., on March 15, 2022, are taken off calendar.
The court vacates the hearing on Plaintiff’s motion to compel further
discovery responses set for July 5, 2024.
The court sets an Order to Show Cause re completion of arbitration for
hearing on __________________, 2023, at 11:00 a.m., in Department 53.
The court sets a Status Conference re bankruptcy case for hearing on __________________,
2023, at 11:00 a.m., in Department 53.
The court orders defendant Citiguard, Inc. to give notice of this ruling.
IT IS SO ORDERED.
DATED:
_____________________________
Robert
B. Broadbelt III
Judge
of the Superior Court