Judge: Robert B. Broadbelt, Case: 23STCV13920, Date: 2024-02-14 Tentative Ruling

Case Number: 23STCV13920    Hearing Date: February 14, 2024    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTY:                Defendant Z&S Management Corporation, d/b/a 360 Behavioral Health – Management Services

RESPONDING PARTY:       Plaintiff Heather Miller

(1)   Motion to Compel Arbitration

(2)   Motion to Stay Proceedings

The court considered the moving, opposition, and reply papers filed in connection with each motion.

BACKGROUND

Plaintiff Heather Miller (“Plaintiff”) filed this action on June 15, 2023 against defendant Z&S Management Corporation, d/b/a 360 Behavioral Health (“Defendant”), alleging 12 causes of action for (1) pregnancy discrimination; (2) sex discrimination; (3) failure to provide reasonable accommodation; (4) failure to provide lactation breaks; (5) retaliation; (6) failure to prevent discrimination; (7) wrongful termination in violation of public policy; (8) failure to provide meal periods; (9) failure to provide rest periods; (10) failure to pay all wages due upon termination; (11) intentional infliction of emotional distress; and (12) unfair business practices.

Now pending before the court are two motions filed by Defendant: (1) Defendant’s motion to compel arbitration, and (2) Defendant’s motion to stay proceedings.

MOTION TO COMPEL ARBITRATION

Defendant moves the court for an order compelling Plaintiff to submit the claims alleged in her Complaint to binding arbitration, or, in the alternative, to order the parties to address the issues presented in this motion before Hon. Linda L. Miller (Ret.), the arbitrator appointed to the arbitration proceedings previously initiated by Plaintiff (JAMS Case No. 1210038032).

1.     Existence of Written Agreement to Arbitrate

A written provision in any contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.¿ (9 U.S.C. § 2.)  The Federal Arbitration Act requires courts to direct parties to proceed to arbitration on issues covered by an arbitration agreement upon a finding that the making of the arbitration agreement is not in issue.¿ (9 U.S.C. § 4; Chiron Corp. v. Ortho Diagnostic Sys. (9th Cir. 2000) 207 F.3d 1126, 1130.)¿ “The court’s role under the [Federal Arbitration Act] is therefore limited to determining (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue.”¿ (Chiron Corp., supra, 207 F.3d at p. 1130.)¿ The Federal Arbitration Act reflects “both a ‘liberal federal policy favoring arbitration,’ [citation], and the ‘fundamental principle that arbitration is a matter of contract,’ [citation].”¿ (AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333, 339.)¿¿ 

“‘ “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 final step requires the moving party to establish, with admissible evidence, a valid arbitration agreement between the parties.¿ (Ibid.)¿¿¿ 

First, the court finds that Defendant has met its burden of producing prima facie evidence of an agreement to arbitrate.

In support of its motion, Defendant has submitted the “Arbitration Agreement” entered into by and between Plaintiff, on the one hand, and Defendant, on the other hand.  (Rea Decl., Ex. B to Ex. B, Arbitration Agreement.)  The Arbitration Agreement states, in relevant part, that the parties “agree that any dispute or controversy covered by this Agreement or arising out of, relating to, or concerning any interpretation, construction, performance, validity, enforceability, or breach of this Agreement, except as provided in Section 2 of this Agreement, shall be resolved by binding arbitration . . . .”  (Rea Decl., Ex. B to Ex. B, Arbitration Agreement, p. 1.)  The Arbitration Agreement further states that it “applies to the resolution of all disputes arising out of or relating to the employment relationship including, but not limited to, claims arising under statue, regulation, contract or common law.”  (Ibid.)  The Arbitration Agreement purports to bear Plaintiff’s signature, dated October 30, 2018.  (Id. at p. 2.)

Thus, the court finds that Defendant has produced prima facie evidence of an arbitration agreement entered into by and between Plaintiff and Defendant.

Second, the court finds that Plaintiff has not met her burden to challenge the authenticity of the Arbitration Agreement. 

Plaintiff does not dispute the authenticity of the Arbitration Agreement in her opposition papers.  Moreover, the parties do not dispute that Plaintiff initiated arbitration proceedings against Defendant pursuant to the Arbitration Agreement on May 5, 2021.  (Rea Decl., ¶ 3; Kaufman Decl., ¶ 2.)

Thus, the court finds that there exists a valid agreement to arbitrate between Defendant and Plaintiff.  

The court further finds that the Arbitration Agreement encompasses the claims alleged in Plaintiff’s Complaint, because (1) the Arbitration Agreement extends to all disputes arising out of or relating to the parties’ employment relationship, and (2) Plaintiff’s causes of action—which allege claims under the Fair Employment and Housing Act, the Labor Code, and for wrongful termination, intentional infliction of emotional distress, and unfair competition—all arise from her employment with Defendant.  (Compl., ¶¶ 53-57, 60, 68, 79-81, 91, 98, 106, 113, 121, 128-129, 136, 140-142, 147.)

2.     Code of Civil Procedure Section 1281.98

As set forth above, the court has concluded that there is a valid arbitration agreement and has noted that the parties do not dispute that Plaintiff initiated arbitration proceedings against Defendant pursuant thereto.  The parties dispute whether (1) Plaintiff can rely on Code of Civil Procedure section 1281.98 to withdraw from arbitration, and (2) Defendant has materially breached the Arbitration Agreement.

The court finds that (1) the parties agreed to incorporate the Federal Arbitration Act and its procedural provisions, and (2) Plaintiff therefore has not met her burden to show that she may proceed in court pursuant to Code of Civil Procedure section 1281.98.

i.                 Incorporation of the Procedural Provisions of the Federal Arbitration Act

“Section 2 of the [Federal Arbitration Act] is a substantive rule that applies in both federal and state courts.”  (Judge v. Nijjar Realty, Inc. (2014) 232 Cal.App.4th 619, 630.)  In contrast, “‘[t]he [Federal Arbitration Act’s] procedural provisions (9 U.S.C. §§ 3, 4, 10, 11) do not apply unless the contract contains a choice-of-law clause expressly incorporating them.’  [Citation.]  ‘[T]he question is not whether the parties adopted the [California Arbitration Act’s] procedural provisions: The state’s procedural statutes ([Code Civ. Proc.,] §§ 1281.2, 1290.2) apply by default because Congress intended the comparable [Federal Arbitration Act] sections (9 U.S.C. §§ 3, 4, 10, 11) to apply in federal court.’”  (Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337, 345 [emphasis in original] [internal citation omitted]; Cronus Investments, Inc. v. Concierge Services (2005) 35 Cal.4th 376, 394 [“Our opinion does not preclude parties to an arbitration agreement to expressly designate that any arbitration proceeding should move forward under the [Federal Arbitration Act’s] procedural provisions rather than under state procedural law”] [emphasis in original].)

Here, the Arbitration Agreement states that “[a]rbitration under this Agreement . . . is governed by the Federal Arbitration Act (9 U.S.C. §§ 1 et seq.).”  (Rea Decl., Ex. B to Ex. B, Arbitration Agreement, p. 1.)  The court finds that this language shows that the parties “adopted the [Federal Arbitration Act]—all of it—to govern their arbitration[,]” including its procedural provisions.  (Rodriguez v. American Technologies, Inc. (2006) 136 Cal.App.4th 1110, 1122; Cronus, supra, 35 Cal.4th at p. 383 [courts “examine the language of the contract to determine whether the parties intended to apply the [Federal Arbitration Act] to the exclusion of California procedural law”].)

The court notes that, when agreements to arbitrate are “completely silent” and include “no terms mentioning or alluding to the Federal Arbitration Act, California law, or any other state law or rules of procedure[,]” the procedural provisions of the CAA will apply in California courts.  (Los Angeles Unified School Dist. v. Safety National Casualty Corp. (2017) 13 Cal.App.5th 471, 479.)  However, Plaintiff has not pointed to any provision in the Arbitration Agreement that (1) limits or conditions the application of the Federal Arbitration Act to any part of arbitration, or (2) incorporates California law, and the court has found none.  Instead, the only provision in the Arbitration Agreement regarding choice of law is the provision stating that arbitration is governed under the Federal Arbitration Act.  (Rea Decl., Ex. B to Ex. B, Arbitration Agreement, p. 1.) 

Thus, the court finds that the language of the Arbitration Agreement requiring arbitration to be “governed by the Federal Arbitration Act” is “broad and unconditional” and incorporates the procedural provisions of the Federal Arbitration Act in place of California procedural law.  (Rea Decl., Ex. B to Ex. B, Arbitration Agreement, p. 1; Rodriguez, supra, 136 Cal.App.4th at pp. 1121-1122 [finding that the arbitration agreement, which provided that the parties agreed to arbitrate claims “[p]ursuant to the Federal Arbitration Act[,]” incorporated the procedural provisions of the Federal Arbitration Act].)

ii.               Default Under Code of Civil Procedure section 1281.98

In her opposition, Plaintiff contends that, because Defendant failed to timely pay arbitration fees in violation of Code of Civil Procedure section 1281.98, Defendant is in material breach of the Arbitration Agreement, is in default, and has waived its right to compel Plaintiff to proceed with arbitration.  (Opp., p. 1:2-7; Code Civ. Proc., § 1281.98, subd. (a)(1).)  Thus, Plaintiff requests that the court deny Defendant’s motion.

As set forth above, the court has concluded that the procedural provisions of the Federal Arbitration Act apply here.  Thus, the California Arbitration Act, including Code of Civil Procedure section 1281.98, do not apply to the parties.  (Gallo v. Wood Ranch USA, Inc. (2022) 81 Cal.App.5th 621, 633, n. 4 [in 2019, the California Legislature amended the California Arbitration Act to add, inter alia, section 1281.98].)

The court therefore finds that Plaintiff has not met her burden to show that Defendant has waived its right to compel Plaintiff to arbitration.[1]

3.     Conclusion

For the reasons set forth above, the court finds that (1) Defendant has met its burden to show the existence of a valid, written agreement to arbitrate this controversy; (2) Plaintiff has not met her burden to challenge the authenticity of the agreement; and (3) Plaintiff has not met her burden to establish a defense to the enforcement of the agreement.

The court therefore grants Defendant’s motion.  (Chiron Corp., supra, 207 F.3d at p. 1130.)

MOTION TO STAY PROCEEDINGS

Defendant moves the court for an order staying proceedings in this action (1) pending resolution of its motion to compel arbitration, and (2) pending completion of binding arbitration before Hon. Linda L. Miller (Ret.).

First, because the court has ruled on Defendant’s motion to compel arbitration, the request to stay the action pending resolution of Defendant’s motion to compel arbitration is moot.

Second, the court grants Defendant’s request to stay this action pending completion of arbitration.  (Opp., p. 7:10-11 [“Plaintiff does not object to the matter being stayed pending completion of Arbitration with JAMS” and only objects to the extent that Defendant has used this motion to evade discovery]; 9 U.S.C. § 3.)

ORDER

The court grants defendant Z&S Management Corp., d/b/a 360 Behavioral Health – Management Services’ (1) motion to compel arbitration, and (2) motion to stay proceedings.

The court orders (1) defendant Z&S Management Corp., d/b/a 360 Behavioral Health – Management Services and plaintiff Heather Miller to arbitrate all of the claims alleged in plaintiff Heather Miller’s Complaint, and (2) this action is stayed until arbitration is completed.

The court orders that all future hearing dates presently scheduled in this action are vacated.   

The court sets an Order to Show Cause re: completion of arbitration for hearing on October 15, 2024, at 8:30 a.m., in Department 53.

The court orders defendant Z&S Management Corp., d/b/a 360 Behavioral Health – Management Services to give notice of this ruling.

IT IS SO ORDERED.

DATED:  February 14, 2024

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court