Judge: Stephen P. Pfahler, Case: 24STCV11195, Date: 2024-12-10 Tentative Ruling

Case Number: 24STCV11195    Hearing Date: December 10, 2024    Dept: 68

Dept. 68

Date: 12-10-24 c/f 12-5-25 c/f 11-26-24 and a/f 3-11-25

Case #24STCV11195

Trial Date: Not Set

ARBITRATION

MOVING PARTY: Defendants, Marriott International, Inc., et al.

RESPONDING PARTY: Plaintiff, Maria Rodriguez

RELIEF REQUESTED

Motion to Compel Arbitration

SUMMARY OF ACTION

Plaintiff Maria Rodriguez was employed with Defendants Marriott, W Hollywood Hotel, and Starwood Hotels from September 5, 2011 to October 21, 2021. Plaintiff alleges wrongful termination following a hand injury thereby interfering with work as a housekeeper. Plaintiff alleges her age of 60 years old at the time of termination also constituted a basis for the termination decision.

On May 3, 2024, Plaintiff filed a complaint for 1. Discrimination In Violation Of Gov’t Code §§12940 Et Seq.; 2. Retaliation In Violation Of Gov’t Code §§12940 Et Seq.; 3. Failure To Prevent Discrimination And Retaliation In Violation Of Gov’t Code §12940(K); 4. Failure To Provide Reasonable Accommodations In Violation Of Gov’t Code §§12940 Et Seq.; 5. Failure To Engage In A Good Faith Interactive Process In Violation Of Gov’t Code §§12940 Et Seq.; 6. For Declaratory Judgment; 7. Wrongful Termination In Violation Of Public Policy; 8. Failure To Pay Wages (Cal. Labor Code §§ 201, 1194); 9. Failure To Provide Rest Periods (Cal. Labor Code §226.7); 10. Failure To Provide Itemized Wage And Hour Statements (Cal. Labor Code §§226, Et Seq.); 11. Waiting Time Penalties (Cal. Labor Code §§201-203); and 12. Unfair Competition (Bus. & Prof. Code §17200 Et Seq.)

On August 16, 2024, Plaintiff dismissed W Hollywood Hotel and Residences.

RULING: Denied

Defendant Marriott International, Inc.  moves to compel arbitration on the complaint filed by Plaintiff Maria Rodriguez. Defendants Marriott International, Inc., Sheraton Operating LLC and Starwood Hotels & Resorts Worldwide, LLC filed a second motion to compel arbitration, which is concurrently set for the same hearing date. Plaintiff filed a single joint opposition to both motions. Defendants submit a combined reply. The court therefore consolidates the motions into a single order.

Defendants maintain all claims are subject to arbitration under the terms of the agreement, the agreement in no way presents unconscionable terms, and all parties are subject to the agreement as subsidiaries of Starwood. Plaintiff in opposition challenges enforcement of the agreement on grounds of the lack of an ability to enforce the agreement with the non-signatory parties to the agreement. The reply reiterates the existence of the agreement, and third party beneficiary and equitable estoppel basis for compelling as to the non-signatory parties.

The court first considers the Federal Arbitration Act (FAA). “The FAA shall govern the interpretation and enforcement of this Agreement. If the FAA is held not to apply to this Agreement for any reason, and the state or district in which Employee is employed recognizes the enforceability of this Agreement and the arbitration award, then this Agreement and the arbitration award or decision are enforceable under the laws of the state or district in which Employee is employed.”

Defendants represent engaging in interstate commerce and therefore contend FAA rules govern pursuant to the terms of the agreement. [Declaration of Mariela Palomares-Cortez.] Plaintiff offers no challenge. Barring a conflict supporting a preemption of a specific provision under FAA, the court adheres to the California standard for compelling arbitration in that FAA and California adhere to the same standards for review of arbitration agreements. The court finds no conflict with the FAA under the terms of the agreement. (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; see Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, 1119; Viking River Cruises, Inc. v. Moriana (2022) 142 S.Ct. 1906.)

“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 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.)

Defendants present an undisputed copy of the arbitration agreement which includes signature on September 2, 2011. [Palomares-Cortez Decl, Ex. 1.] Plaintiff also offers no challenge that the subject matter of the instant action as covered within the scope of the arbitration clause, though neither party addresses the wage and hour causes of action and potential exemptions under FAA versus California Arbitration Act enforcement.

“Actions to enforce the provisions of this article for the collection of due and unpaid wages claimed by an individual may be maintained without regard to the existence of any private agreement to arbitrate.” (Lab. Code, § 229; Ware v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1972) 24 Cal.App.3d 35, 45; see see Kirby v. Immoos Fire Protection, Inc. (2012) 53 Cal.4th 1244, 1256-1257.) State law exclusions are preempted where Federal Arbitration Act (FAA) preemption occurs. (Carbajal v. CWPSC, Inc. (2016) 245 Cal.App.4th 227, 238; Hoover v. American Income Life Ins. Co. (2012) 206 Cal.App.4th 1193, 1207-1208; see Lane v. Francis Capital Management LLC (2014) 224 Cal.App.4th 676, 68-688.) Given the finding of FAA applicability, all potential exempt claims are therefore preempted.

The court therefore finds the claims subject to arbitration as to all contracting parties. Plaintiff raises no defense on the issue of unconscionability. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 102; Stirlen v. Supercuts, Inc. (1997) 51 Cal.App.4th 1519, 1531; Kinney v. United HealthCare Services, Inc. (1999) 70 Cal.App.4th 1322, 1329.)

On the disputed issue regarding the parties to the agreement, Defendants rely on the plain language of the agreement identifying all defendants, or alternatively enforcement via estoppel or third party beneficiary. Plaintiff challenges any third party beneficiary relationship, and offers no apparent challenge to the estoppel claim. The court addresses both given the burden on moving party to establish estoppel. (Hernandez v. Meridian Management Services, LLC (2023) 87 Cal.App.5th 1214, 1219.)

The doctrine of equitable estoppel allows for a non-signatory party to compel arbitration “‘when the causes of action against the nonsignatory are “intimately founded in and intertwined” with the underlying contract obligations.’” (JSM Tuscany, LLC v. Superior Court (2011) 193 Cal.App.4th 1222, 1237; Goldman v. KPMG, LLP (2009) 173 Cal.App.4th 209, 217-218; Crowley Maritime Corp. v. Boston Old Colony Ins. Co. (2008) 158 Cal.App.4th 1061, 1070 [Under equitable estoppel, a party cannot avoid participation in arbitration, where the party received “a direct benefit under the contract containing an arbitration clause…”]; Boucher v. Alliance Title Co, Inc. (2005) 127 Cal.App.4th 262, 271.)

“Every California case finding nonsignatories to be bound to arbitrate is based on facts that demonstrate, in one way or another, the signatory's implicit authority to act on behalf of the nonsignatory.” (Jensen v. U-Haul Co. of California (2017) 18 Cal.App.5th 295, 304; Harris v. Superior Court (1986) 188 Cal.App.3d 475, 478–479; Rowe v. Exline (2007) 153 Cal.App.4th 1276, 1290.) “A nonsignatory can be compelled to arbitrate when a preexisting relationship existed between the nonsignatory and one of the parties to the arbitration agreement, making it equitable to compel the nonsignatory to arbitrate as well.” (JSM Tuscany, LLC v. Superior Court (2011) 193 Cal.App.4th 1222, 1240.) “Examples of the preexisting relationship include agency, spousal relationship, parent-child relationship and the relationship of a general partner to a limited partnership. (Citations.) In the absence of such a relationship, or third party beneficiary status, courts will generally not compel a nonsignatory to arbitrate.” (Crowley Maritime Corp. v. Boston Old Colony Ins. Co. (2008) 158 Cal.App.4th 1061, 1070; see Hernandez v. Meridian Management Services, LLC, supra, 87 Cal.App.5th at pp. 1218-1222.)

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 relied upon section of the arbitration agreement states in part: “In consideration of Starwood Hotels & Resorts Worldwide, Inc. ("Starwood") having extended an offer of employment to me and/or having hired me, I agree that all disputes and claims that I may have, now or in the future, with or against Starwood, any of Starwood's affiliated or subsidiary companies and/or any of Starwood's partners or joint venturers, and/or any officer, employee or agent of Starwood, any affiliated or subsidiary company, or partner or joint venturer (collectively, ‘claims’), shall be submitted to the American Arbitration Association to be resolved and determined ...” [Palomares-Cortez Decl, Ex. 1.]

Reliance on the existence of the language identifying “partners or joint venturers, and/or any officer, employee or agent of Starwood, any affiliated or subsidiary company, or partner or joint venturer” in no way establishes the other defendants as parties to the contract simply based on the contractual terms. Written terms identifying potential, but otherwise unidentified parties, insufficiently establishes formation and assent among all moving parties.

In support of the estoppel and third party beneficiary relationship, Defendants present a single unchallenged declaration which states in relevant part: “Sheraton and Starwood are affiliates of Marriott. Sheraton is the employer of employees working at the W Hollywood Hotel. Prior to 2023, Sheraton was known as Sheraton Operating Corporation. Sheraton is an affiliate of Starwood, formerly known as Starwood Hotels & Resorts Worldwide, Inc. Starwood Hotels & Resorts Worldwide, Inc. converted to Starwood in September 2016. To the best of my knowledge, Starwood Hotels & Resorts WW Inc. and W Hollywood Hotel and Residences are non-existent entities; no entities with those names are subsidiaries or affiliates of Marriott.” [Declaration of Andrew Wright, ¶ 3.] Notwithstanding the denial of any “W Hollywood Hotel” entity, the agreement itself states “W HOLLYWOOD” at the top of the page, though, as cited above, the agreement lists Starwood as the apparent employing party.

Regardless, Defendant offers no definition or expressed legal implications of the affiliate relationship between the entitles. A court considering the meaning of the term essentially found an affiliate addresses a part of an organization associated with a larger organization, which can include a branch or subsidiary. (Iqbal v. Ziadeh (2017) 10 Cal.App.5th 1, 9-11.) In considering the relationship in context of the contractual language, the court finds no meaningful evidence regarding participation of the “affiliated” co-defendants, such as a parent subsidiary or principal agent. (See Hernandez v. Meridian Management Services, LLC, supra, 87 Cal.App.5th at p. 1220; Waste Management, Inc. v. Superior Court (2004) 119 Cal.App.4th 105, 110; Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 548.)

Plaintiff challenges the language of the agreement as not conveying any intended third beneficiary relationship between the entities. Plaintiff cites to a three part test for determination of a third party relationship in the employment arbitration context: The court must “examine the express provisions of the contract at issue, as well as the relevant circumstances of the contract's formation, to determine not only (1) whether the third party would benefit from the contract, but also (2) whether a motivating purpose of the contracting parties was to provide a benefit to the third party, and (3) whether permitting a third party to bring its own breach of contract action against a contracting party would be consistent with the objectives of the contract and the reasonable expectations of the contracting parties. The proponent must satisfy all three elements for the third party action to proceed.” (Hernandez v. Meridian Management Services, LLC, supra, 87 Cal.App.5th at p. 1222.) The court lacks any evidence regarding a beneficiary determination as to the handling of administrative decisions leading to the termination of Plaintiff.

The court therefore finds no contractual basis for arbitration as to Marriott International, Inc., and Sheraton Operating LLC.  Again, the motion lacks sufficient evidence of establishment of a relationship binding the parties.

While Starwood makes a valid case for arbitration, the court, as a matter of policy, avoids potential piecemeal adjudication of cases, and maintains all parties either participate in arbitration or remain with the court. “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: … (c) A party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact...” (Code Civ. Proc., § 1281.2.)

The right of a trial court to refuse arbitration on the possibility of conflicting rulings remains an upheld statutory rule. (Whaley v. Sony Computer Entertainment America, Inc. (2004) 121 Cal.App.4th 479, 485-486; Henry v. Alcove Investment, Inc. (1991) 233 Cal.App.3d 94, 101-102.) The motion is therefore denied on this basis as well, due to the inability to determine the basis for compelling all parties to arbitration.

The motion is therefore denied in its entirety. This order is appealable. (Code Civ. Proc., § 1294, subd. (a).)

The court will concurrently conduct the case management conference.

Defendants to provide notice.