Judge Stephen P. Pfahler, Case Number: 23STCV24714, Date: 2024-01-30 Tentative Ruling

Judge: Stephen P. Pfahler, Case: 23STCV24714, Date: 2024-01-30 Tentative Ruling

Case Number: 23STCV24714 Hearing Date: January 30, 2024 Dept: 68

Dept. 68

Date: 1-30-24

Case #23STCV24714

Trial Date: Not Set

ARBITRATION & STAY

MOVING PARTY: Defendants, Casa Bonita Convalescent Hospital, LLC, et al.

RESPONDING PARTY: Plaintiff, Elizabeth Graham

RELIEF REQUESTED

Motion to Compel Arbitration

SUMMARY OF ACTION

Plaintiff Elizabeth Graham was an employee with defendants Casa Bonita Convalescent Hospital, LLC and Casa Bonita Convalescent Hospital, Inc. from August 2022 through June 2023. Plaintiff suffers from osteo arthritis and is/was a cancer patient. Plaintiff maintains certain activities in caring for the residents of the facility were improperly requested and not takin into account Plaintiff’s medical history.

On October 10, 2023, Plaintiff filed an 11 cause of action complaint for Harassment in Violation of Violation Of The Fair Employment And Housing Act – Hostile Work Environment; Disability Discrimination; Failure to Engage in the Interactive Process; Failure to Provide a Reasonable Accommodation, Failure to Prevent Harassment, Discrimination or Retaliation (FEHA); Retaliation – Complaining (Labor Code 1102.5, subdivision (b)); Wrongful Constructive Discharge in Violation of Public Policy; Retaliation (FEHA); Failure to Authorize and Permit Rest Periods; Waiting Time Penalties; and, Paystub Violations. Defendants answered on November 16, 2023.

RULING: Granted.

Evidentiary Objections: Overruled.

The court concludes the executed arbitration agreement exists, and does not rely on any other conclusions in the points and authorities regarding the conduct of Plaintiff, which may differ from the actual statements of Escontrias declaration.

Defendants Casa Bonita Convalescent Hospital, LLC and Casa Bonita Convalescent Hospital, Inc. move to compel arbitration on the complaint of plaintiff Elizabeth Graham, and a stay of the case. Defendants move to compel arbitration based on the arbitration provision in the “Arbitration Agreement.” Defendants maintain all claims are subject to arbitration under the terms of the agreement. Plaintiff in opposition challenge enforcement of the agreement on grounds within the language of the agreement, as well as legal bars. Defendants in reply maintains the existence of the executed arbitration agreement and enforceability. Defendant denies the unconscionability arguments as well, and otherwise maintains the ability to sever any offending sections.

“A written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract.” (Code Civ. Proc., § 1281.) “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 revocation of the agreement.” (Code Civ. Proc., § 1281.2.)

The agreement itself requires arbitration for any claims arising from employment and subject to state, federal or local law, including contract and tort claims. While the FAA governs the rules for conducting arbitration, barring citation to a case precluding California law, motions to compel arbitration are still governed by California law. (Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, 1119; Viking River Cruises, Inc. v. Moriana (2022) 142 S.Ct. 1906; Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior University (1989) 489 U.S. 468, 477–479; Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337, 346.)

The law creates a general presumption in favor of arbitration. In a motion to compel arbitration, the moving party must prove by a preponderance of evidence the existence of the arbitration agreement and that the dispute is covered by the agreement. “‘Under “both federal and state law, the threshold question presented by a petition to compel arbitration is whether there is an agreement to arbitrate.”’” (Long v. Provide Commerce, Inc. (2016) 245 Cal.App.4th 855, 861.) “Private arbitration is a matter of agreement between the parties and is governed by contract law. (Platt Pacific, Inc. v. Andelson (1993) 6 Cal.4th 307, 313.) In a motion to compel arbitration, the moving party must prove by a preponderance of evidence the existence of the arbitration agreement and that the dispute is covered by the agreement. The burden then shifts to the resisting party to prove by a preponderance of evidence a ground for denial (e.g., fraud, unconscionability, etc.). (Rosenthal v. Great Western Fin'l Securities Corp. (1996) 14 Cal.4th 394, 413-414; Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 164–165; Hotels Nevada v. L.A. Pacific Ctr., Inc. (2006) 144 Cal.App.4th 754, 758.) Any challenges to the formation of the arbitration agreement should be considered before any order sending the parties to arbitration. The trier of fact weighs all evidence, including affidavits, declarations, documents, and, if applicable, oral testimony to determine whether the action goes to arbitration. (Hotels Nevada v. L.A. Pacific Ctr., Inc., supra, 144 Cal.App.4th at p. 758.)

The court interprets the arbitration clause like any other contract, including determination of the intent of the parties and ambiguities. (Gravillis v. Coldwell Banker Residential Brokerage Co. (2006) 143 Cal.App.4th 761, 772.) “‘A contract must be so interpreted as to give effect to the mutual intention of the parties as it existed at the time of contracting, so far as the same is ascertainable and lawful.’ (Civ. Code, § 1636.) ‘The language of a contract is to govern its interpretation, if the language is clear and explicit, and does not involve an absurdity.’ (Civ. Code, § 1638.) ‘When a contract is reduced to writing, the intention of the parties is to be ascertained from the writing alone, if possible; subject, however, to the other provisions of this Title.” (Civ. Code, § 1639.) “The whole of a contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the other.’ (Civ. Code, § 1641.) ‘A contract must receive such an interpretation as will make it lawful, operative, definite, reasonable, and capable of being carried into effect, if it can be done without violating the intention of the parties.’ (Civ. Code, § 1643.) ‘The words of a contract are to be understood in their ordinary and popular sense, rather than according to their strict legal meaning; unless used by the parties in a technical sense, or unless a special meaning is given to them by usage, in which case the latter must be followed.’ (Civ. Code, § 1644.) ‘However broad may be the terms of a contract, it extends only to those things concerning which it appears that the parties intended to contract.’ (Civ. Code, § 1648.) ‘Repugnancy in a contract must be reconciled, if possible, by such an interpretation as will give some effect to the repugnant clauses, subordinate to the general intent and purpose of the whole contract.’ (Civ. Code, § 1652.) ‘Stipulations which are necessary to make a contract reasonable, or conformable to usage, are implied, in respect to matters concerning which the contract manifests no contrary intention.’ (Civ. Code, § 1655.)” (Siligo v. Castellucci (1994) 21 Cal.App.4th 873, 880–881.)

“A contract term should not be construed to render some of its provisions meaningless or irrelevant.” (Estate of Petersen (1994) 28 Cal.App.4th 1742, 1754 (footnote 4).) “A well-settled maxim states the general rule that ambiguities in a form contract are resolved against the drafter. (Citations.) But that is a general rule; it does not operate to the exclusion of all other rules of contract interpretation. It is used when none of the canons of construction succeed in dispelling the uncertainty.” (Oceanside 84, Ltd. v. Fidelity Federal Bank (1997) 56 Cal.App.4th 1441, 1448.)

The court finds an agreement was executed by Graham with an entity identified as Casa Bonita. [Declaration of Richard Escontrias, Ex. A.] Defendant represents the entity was Casa Bonita Convalescent, Inc., which later changed to Casa Bonita Convalescent, LLC. The court finds no dispute over the existence of entities or change in entity status. The change in corporate form includes the retention of all assets and liabilities, including the subject agreement. (See Corp. Code, § 1153, et seq.)

The court also finds the terms encapsulate all claims raised in the complaint. Thus, the court finds a valid arbitration agreement between Graham and Casa Bonita Convalescent Hospital, Inc.

The burden now shifts to Plaintiff to challenge enforcement. The court considers the myriad arguments under unconscionability presented in opposition.

Unconscionability claims have both a “‘procedural’” and “‘substantive’” element. (Stirlen v. Supercuts, Inc. (1997) 51 Cal.App.4th 1519, 1531.) “‘Procedural unconscionability’” concerns the manner in which the contract was negotiated and the circumstances of the parties at that time. (Kinney v. United HealthCare Services, Inc. (1999) 70 Cal.App.4th 1322, 1329.) “‘The procedural element focuses on two factors: “oppression” and “surprise.” “Oppression” arises from an inequality of bargaining power which results in no real negotiation and an absence of meaningful choice. “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.’” (Stirlen v. Supercuts, Inc., supra, 51 Cal.App.4th at p. 1532.) “Substantive unconscionability” involves contracts leading to “‘“overly harsh”’” or “‘“one-sided”’” results.’” … “[U]nconscionability turns … on an absence of ‘justification “for it…” [and therefore] must be evaluated as of the time the contract was made.’” (Stirlen v. Supercuts, Inc. (1997) 51 Cal.App.4th 1519, 1532.)

In the employment context, a mandatory arbitration agreement is enforceable, if it “(1) provides for neutral arbitrators, (2) provides for more than minimal discovery, (3) requires a written award, (4) provides for all of the types of relief that would otherwise be available in court, and (5) does not require employees to pay either unreasonable costs or any arbitrators’ fees or expenses as a condition of access to the arbitration forum.” (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 102.) Required execution of an arbitration agreement as a condition of employment may constitute an unconscionable provision, where the contract lacks mutuality and/or imposes a disadvantage on the employee. (Armendariz v. Foundation Health Psychcare Services, Inc., supra, 24 Cal.4th at pp. 114-118; Little v. Auto Stiegler, Inc. (2003) 29 Cal.4th 1064, 1071-1072.)

Plaintiff relies on a description of the contract as one of adhesion, with a disadvantage imposed on Plaintiff due to the inability to review the terms with an attorney before signing the agreement. [Declaration of Elizabeth Graham.] The court finds an insufficient basis of procedural unconscionability based on the argued circumstances. (Gentry v. Superior Court (2007) 42 Cal.4th 443, 470-472 overruled in AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333, 341 [131 S.Ct. 1740, 1747, 179 L.Ed.2d 742].)

The court also finds the terms comply with all substantive unconscionable standards, including limitations on discovery and arbitrator neutrality. Nothing in the complaint otherwise indicates a PAGA claim, seeking any form of public injunction, multiple cases pending under the “Bellwether Procedures” section, or confidentiality clause challenges. The court also finds any potential statute of limitations argument not part of any enforcement issue.

The action is therefore ordered to arbitration in compliance with the terms of the agreement. The parties may stipulate to an arbitrator with JAMS, but in case they are unable to agree upon an arbitrator, the parties are directed to contact JAMS for internal direction on the selection process. If the parties reach an impasse on an arbitrator and JAMS rules otherwise preclude selection, the parties may submit a list of one to two arbitrators from each side, where the court will select the arbitrator. The parties have 30 days from the date of this order to begin the selection process.

“If a court of competent jurisdiction, whether in this State or not, has ordered arbitration of a controversy which is an issue involved in an action or proceeding pending before a court of this State, the court in which such action or proceeding is pending shall, upon motion of a party to such action or proceeding, stay the action or proceeding until an arbitration is had in accordance with the order to arbitrate or until such earlier time as the court specifies.” (Code Civ. Proc., § 1281.4.) The court orders the action stayed.

The court will set an OSC re: Status of Arbitration and Stay at the time of the hearing.

Case Management Conference set for 2-15-24 off-calendar.

Moving parties to give notice to all parties.