Judge: Ronald F. Frazier, Case: 37-2022-00050024-CU-WT-CTL, Date: 2023-10-13 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - October 12, 2023

10/13/2023  08:30:00 AM  C-65 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Ronald F. Frazier

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Civil - Unlimited  Wrongful Termination Motion Hearing (Civil) 37-2022-00050024-CU-WT-CTL MCDONALD VS SUNSTONE HOTEL INVESTORS INC [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion to Compel Discovery, 03/07/2023

Defendant HLT Conrad Domestic Employer LLC's Motion to Compel Arbitration and Stay Action Pending Arbitration is GRANTED. (ROA 12.) Defendant seeks to compel Plaintiff to arbitrate all of her claims pursuant to a written Mutual Agreement to Arbitrate Claims ('Agreement') Plaintiff signed electronically on June 20, 2022 as part of the onboarding process when Plaintiff was hired to work at Hilton San Diego Bayfront.

Defendant first asserts the court should decline to consider Plaintiff's opposition papers because they were filed and served late. Plaintiff's opposition was due October 2, 2023. (Code Civ. Proc. § 1005(b).) Plaintiff did not file or serve the opposition until October 4, 2023, two days late. The court has discretion to refuse to consider late-filed papers. (Cal. R. Court, rule 3.1300(d).) However, Defendant was able to timely file a reply. Accordingly, the court concludes there is no prejudice to Defendant and has exercised its discretion to consider Plaintiff's untimely opposition on this occasion. However, Plaintiff's counsel is admonished to follow court rules in any future briefing.

Defendant asserts the Federal Arbitration Act ('FAA') applies to the arbitration provisions at issue. The FAA applies to 'contracts evidencing a transaction involving commerce.' (9 U.S.C. § 2.) Here, the Agreement states it is governed by the FAA, and Plaintiff does not dispute this. Accordingly, the court concludes the FAA applies here.

Plaintiff first asserts the Agreement is illusory and unenforceable because Defendant retains the right to amend or terminate the Agreement at any time in its sole discretion without consideration for any amendments. 'A contract is unenforceable as illusory when one of the parties has the unfettered or arbitrary right to modify or terminate the agreement or assumes no obligations hereunder.' (Harris v. TAP Worldwide, LLC (2016) 248 Cal.App.4th 373, 385.) 'Also, a contract is illusory where one party provides no legal consideration.' (Ibid.) Here, the Agreement states Hilton reserves the right to 'revise, amend, modify or discontinue this Agreement at any time in its sole discretion with thirty (30) calendar days' written notice.' (Mendez Decl.

at Exh. I, ¶ 4.) Thus, although modification does not require the employee's express consent, the employee would receive written notice before the modification became effective. An employee's decision to continue employment upon receipt of such notice would imply consent, and the Agreement advises of this: 'Employees' continuation of employment after receiving such amendments shall be deemed acceptance of the amended terms.' (Ibid.) Likewise, an employee's continued employment with its employer after modification is adequate consideration.

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2942426  15 CASE NUMBER: CASE TITLE:  MCDONALD VS SUNSTONE HOTEL INVESTORS INC [IMAGED]  37-2022-00050024-CU-WT-CTL Plaintiff next asserts the Agreement is unenforceable because it is unconscionable. To invoke this defense to the Agreement, Plaintiff must demonstrate both procedural and substantive unconscionability. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114.) These two elements 'need not be present in the same degree'; rather, 'a sliding scale is invoked....' (Ibid.) '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.' (Ibid.) 'Procedural unconscionability focuses on the elements of oppression and surprise.' (Roman v. Superior Court (2009) 172 Cal.App.4th 1462, 1469.) As evidence of procedural unconscionability, Plaintiff asserts the Agreement was a contract of adhesion presented on a take-it-or-leave-it basis. The Agreement expressly states in bold and larger typeface than the rest of the text: 'This Agreement is a condition of employment.' (Mendez Decl. at Exh. I, ¶ 1.) The court concludes there is some evidence of procedural unconscionability.

'Substantive unconscionability focuses on the actual terms of the agreement and evaluates whether they create overly harsh or one-sided results [citations], that is, whether contractual provisions reallocate risks in an objectively unreasonable or unexpected manner.' (Roman at pp. 1469-70.) Among other arguments, Plaintiff claims she 'potentially waived' her rights under a list of statutes, but provides no analysis of how she believes she has waived any statutory rights. Per the Agreement, the arbitrator is empowered to 'award any relief authorized by law in connection with the claims or disputes asserted.' (Mendez Decl. at Exh. I, ¶ 8.) The court concludes Plaintiff has not presented sufficient evidence of substantive unconscionability.

Plaintiff and Defendant are ordered to arbitration and this case is STAYED until completion of arbitration.

The court sets a status conference regarding the status of the arbitration for April 19, 2024 at 10:15 a.m.

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