Judge: Stephen I. Goorvitch, Case: 23STCV06987, Date: 2023-08-17 Tentative Ruling

Case Number: 23STCV06987    Hearing Date: March 26, 2024    Dept: 39

Cynthia Batac v. Windsor Healthcare Management, Inc.

Case No. 23STCV06987

Motion to Enforce Stay or to Compel Arbitration

Motion to Strike

INTRODUCTION

            Plaintiff Cynthia Batac (“Plaintiff”) filed this employment case against Defendants Windsor Healthcare Management, Inc. (“Windsor Healthcare”); Windsor Terrace Healthcare; LLC (“Windsor Terrace”); SNF Management Company LLC (“SNF”); CPE HR Inc. (“CPE”); Modern HR, Inc. (“Modern HR”); and Amanda Moore (“Moore”).  All of the defendants except CPE and Modern HR filed a motion to compel arbitration on May 31, 2023, and CPE and Modern HR filed a notice of joinder on June 1, 2023.  Plaintiff opposed the motion, which the Court granted on August 17, 2023, and the Court stayed the case.  Notwithstanding the stay, Plaintiff’s counsel named six more defendants to this case on September 18, 2023.  Then, Plaintiff’s counsel filed an ex parte application to return the case to the active docket, which the Court denied on October 9, 2023.  Afterwards, Plaintiff’s counsel added a seventh new defendant.  Then, Plaintiff’s counsel issued deposition notices (even though the case was stayed).  Now, Defendant files a motion to enforce the stay or, in the alternative, to compel arbitration of the new defendants.  Defendant also moves to strike the new defendants. 

PROCEDURAL HISTORY

            Plaintiff filed this employment case on March 30, 2023.  Defendants filed a motion to compel arbitration, which the Court granted on August 17, 2023.  The Court’s order stated as follows: “The case is ordered stayed pending binding arbitration as to the entire matter.”  (See Court’s Minute Order, dated August 17, 2023.)  Notwithstanding the stay, on September 18, 2023, Plaintiff’s counsel filed six Doe amendments naming defendants in place of Doe 1 through Doe 6.  (See Amendments to Complaint (Fictitious/Incorrect Name), dated September 18, 2023.) 

            On October 6, 2023, Plaintiff’s counsel filed an ex parte application to withdraw this case from arbitration and restore the case to the active docket under Code of Civil Procedure section 1281.97, arguing that the arbitration fees were not paid in a timely manner.  The Court denied the ex parte application for two reasons.  First, the Court found that an ex parte application was improper because there was no irreparable harm, immediate danger, or any other statutory basis for granting relief ex parte, as required by California Rules of Court, rule 3.1202.  (See Court’s Minute Order, dated October 9, 2023.)  Second, and more important, the Court found that the arbitration fees had, in fact, been paid:

“Second, in fact, the required fees were paid in a timely manner. Plaintiff’s counsel represents that the fees were due on or before September 30, 2023. (See Plaintiff’s Ex Parte Application, pp. 3:10, 4:3.) Defendants’ counsel provides an email from the arbitration service stating “This will confirm that the filing fee was paid/received on September 15, 2023, by the Castro Law Group on behalf of all Respondents. The filing fees are not based on the number of Respondents; therefore, the filing requirements have been met and the AAA are proceeding forward with this matter.” (Declaration of Kerri Lutfey, Exh. #6.) There is no basis to find that this email is false.”

(See id., pp. 1-2.) 

            Notwithstanding the Court’s order staying this case and the Court’s order finding that the case properly belonged in arbitration, Plaintiff’s counsel named a seventh defendant in place of Doe 7 on October 9, 2023.  (See Notice of Amendment to Complaint, filed on October 9, 2023.)  Then, on October 24, 2023, Plaintiff’s counsel sought to take depositions of six of the new defendants and two other individuals in the instant case.  (See Declaration of Kerri R. Lutfey, ¶ 6.) 

            On October 20, 2023, Defendants’ counsel filed a motion to enforce the stay or, in the alternative, to compel arbitration of the new defendants.  Defendants also seek monetary sanctions in the about of $6,810 against Plaintiff Cynthia Batac and her counsel, Suzanne E. Rand-Lewis, for discovery abuses under Code of Civil Procedure section 2023.030.  Then, on October 24, 2023, Plaintiff filed a motion to withdraw the case from arbitration and to return the case to the active docket under Code of Civil Procedure section 1281.97, arguing that the arbitration fees were not paid in a timely manner.  The Court denied that motion.  (See Court’s Minute Order, dated February 21, 2024.)     

DISCUSSION

            The Court is concerned that Plaintiff’s counsel disobeyed a court order staying this case by naming additional defendants and, more troubling, propounding discovery.  The Court’s order was clear on its face: “The case is ordered stayed pending binding arbitration as to the entire matter.”  (See Court’s Minute Order, dated August 17, 2023.)  There is no justification for Plaintiff’s counsel’s conduct.  If Plaintiff’s counsel believed that the order should no longer apply (e.g., based upon the arguments raised in her motion or opposition to Defendants’ motion), she should have raised those issues first with the Court.  By propounding discovery in a case that has been stayed, Plaintiff’s counsel has violated a court order.

            The Court grants Defendants’ motion and orders the following new defendants to proceed by way of arbitration: (1) Antelope Holdings I LLC, (2) Newgen Administrative Services LLC, (3) 9560 Pico LLC, (4) Pico AR LLC, and (5) Windsor Terrace Holding Company LLC.  The Court incorporates by reference its order of August 17, 2023.  Specifically:

“In her complaint, Plaintiff alleges that Defendants are co-employers and agents of each other concerning employment matters, like those raised in this action.  (Complaint, ¶¶ 1, 17, 19.)  This is sufficient to invoke the arbitration agreement in this case.  (See, e.g., Dryer v. Los Angeles Rams (1985) 40 Cal.3d 406, 418.)”

(See Court’s Minute Order, dated August 17, 2023.)  The Court grants Defendants’ motion to strike and dismisses the following defendants: (1) Abrohom (“Abe”) Tress, and (2) Aaron Rubin.  The dismissals are without prejudice but the Court orders that Plaintiff may not name any new defendants or propound any discovery in this case without an order of the Court because this case is stayed pending arbitration. 

            Defendants request monetary sanctions in the amount of $6,810 under Code of Civil Procedure section 2023.030.  The Court finds that Plaintiff’s counsel violated this Court’s order by propounding discovery, which constitutes an abuse of the discovery process.  The Court finds that there is no good cause for Plaintiff’s conduct in this case.  The Court finds that the amount of the requested sanctions is fair and reasonable under the circumstances to compensate Defendants from having to litigate this issue.  The Court finds that equitable considerations favor Defendants in this issue.  Nevertheless, the Court must deny the request for sanctions because the Civil Discovery Act’s sections defining conduct subject to discovery sanctions do not independently authorize trial courts to impose monetary sanctions for misuse of discovery; they authorize sanctions only to the extent authorized by another provision of the act.  (See City of Los Angeles v. PricewaterhouseCoopers, LLC (2022) 84 Cal.App.5th 466, 504.)  The Court will reconsider this order if Defendants’ counsel files a motion for reconsideration within ten (10) days of any contrary opinion by the California Supreme Court.  (See City of Los Angeles v. PricewaterhouseCoopers (2023) 522 P.3d 1073.) 

CONCLUSION AND ORDER

            Based upon the foregoing, the Court orders as follows:

            1.         The Court grants Defendants’ motion to enforce the stay.  This case shall remain stayed for all purposes absent an order from the Court.  Plaintiff’s counsel may not add any defendants or propound any discovery without an express order of the Court.

            2.         The Court grants Defendants’ motion to compel arbitration of the new entity defendants: (1) Antelope Holdings I LLC, (2) Newgen Administrative Services LLC, (3) 9560 Pico LLC, (4) Pico AR LLC, and (5) Windsor Terrace Holding Company LLC.

            3.         The Court grants Defendants’ motion to strike and dismisses Abrohom (“Abe”) Tress and Aaron Rubin.  The dismissals are without prejudice but the Court orders that Plaintiff may not name any new defendants or propound any discovery in this case without an order of the Court because this case is stayed pending arbitration. 

            4.         The Court denies Defendants’ request for monetary sanctions.  The Court will reconsider this order if Defendants’ counsel files a motion for reconsideration within ten (10) days of any contrary opinion by the California Supreme Court.  (See City of Los Angeles v. PricewaterhouseCoopers (2023) 522 P.3d 1073.)

            5.         Defendants’ counsel shall provide notice and file proof of such with the Court.