Judge: Stuart M. Rice, Case: 24STCV03095, Date: 2024-10-08 Tentative Ruling
Case Number: 24STCV03095 Hearing Date: October 8, 2024 Dept: 1
Moving Party: Defendant Fitness
International, LLC
Responding Party: Plaintiff Martha Cisneros
Ruling: Motion
to compel arbitration denied.
This is a wage-and-hour proposed class
action. Plaintiff Martha Cisneros
(Plaintiff) alleges that she and others were employed by defendant Fitness
International, LLC (Defendant), during which employment they suffered various
violations of labor law. Defendant moves
to compel Plaintiff to submit her claims to arbitration pursuant to an
arbitration agreement she purportedly signed.
Legal Standards
Code of Civil Procedure section 1281.2
states, in relevant part:¿
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….¿
“California law reflects a strong public
policy in favor of arbitration as a relatively quick and inexpensive method for
resolving disputes. To further that policy, section 1281.2 requires a trial
court to enforce a written arbitration agreement unless one of three limited
exceptions applies. Those statutory exceptions arise where (1) a party waives
the right to arbitration; (2) grounds exist for revoking the arbitration
agreement; and (3) pending litigation with a third party creates the
possibility of conflicting rulings on common factual or legal issues.” (Acquire
II, Ltd. v. Colton Real Estate Group¿(2013) 213 Cal.App.4th 959, 967,
citations omitted.)¿
“There is no public policy favoring
arbitration of disputes which the parties have not agreed to arbitrate.” (Engineers
& Architects Assn. v. Community Development Dept.¿(1994) 30 Cal.App.4th
644, 653.) Nevertheless, the strong public policy promoting private arbitration
of civil disputes gives rise to a presumption in favor of arbitrability and
compels the Court to construe liberally the terms of the arbitration agreement.
(Vianna v. Doctors’ Management Co.¿(1994) 27 Cal.App.4th 1186, 1189).¿
¿¿
“The petitioner bears the burden of
proving the existence of a valid arbitration agreement by the preponderance of
the evidence, and a party opposing the petition bears the burden of proving by
a preponderance of the evidence any fact necessary to its defense. In these
summary proceedings, the trial court sits as a trier of fact, weighing all the
affidavits, declarations, and other documentary evidence, as well as oral
testimony received at the court's discretion, to reach a final determination.”
(Giuliano v. Inland Empire Personnel, Inc.¿(2007) 149 Cal.App.4th 1276,
1284.)¿¿ The movant may bear this initial burden “by attaching a copy of
the arbitration agreement purportedly bearing the opposing party's signature.” (Iyere
v. Wise Auto Group (2023) 87 Cal.App.5th 747, 755 (Iyere);
Espejo v. Southern California Permanente Medical Group (2016) 246
Cal.App.4th 1047, 1060.) “At
this step, a movant need not ‘follow the normal procedures of document
authentication’ and need only ‘allege the existence of an agreement and support
the allegation as provided in [Rules of Court, Rule 3.1330].’” (Iyere, supra, 87 Cal.App.5th
at 755; Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th
215, 219 (Condee).)
“The party opposing arbitration has the
burden of demonstrating that an arbitration clause cannot be interpreted to
require arbitration of the dispute. Nonetheless, this policy does not override
ordinary principles of contract interpretation. The contractual terms
themselves must be carefully examined before the parties to the contract can be
ordered to arbitration: Although [t]he law favors contracts for arbitration of
disputes between parties, there is no policy compelling persons to accept
arbitration of controversies which they have not agreed to arbitrate.” (Rice
v. Downs¿(2016) 247 Cal.App.4th 1213, 1223, citations and quotations
omitted.)¿¿¿
“A party seeking
to enforce an arbitration agreement has the burden of showing FAA
preemption.” (Lane v. Francis Capital
Management, LLC (2014) 224 Cal.App.4th 676, 687; see also Nixon v.
AmeriHome Mortgage Company, LLC (2021) 67 Cal.App.5th 934, 946
[“The party seeking to enforce the arbitration agreement also bears the burden
of establishing the FAA applies and preempts otherwise governing provisions of
state law or the parties’ agreement.”].)
Discussion
The Agreement at issue here is appended
to Plaintiff’s employment application.
(See Stokesberry Decl., Ex. 1.)
Plaintiff does not dispute that the Agreement, if valid, would encompass
all her claims in this action. She only
disputes the authenticity of her electronic signature and contends that the
Agreement is unconscionable.
1.
Electronic Signature
Even where the signature is electronic, a
movant “[meets] its initial burden to show an agreement to arbitrate by
attaching a copy of the Contract to its petition, which purportedly bears [the
plaintiff’s] electronic initials and signature.” (Fabian v. Renovate America, Inc. (2019)
42 Cal.App.5th 1062, 1067 (Fabian).) Where the plaintiff does not recall signing
the contract, the movant then has “‘the burden of proving by a preponderance of
the evidence that the electronic signature was authentic.’” (Ibid.)
Code Civ. Proc. § 1633.9(a) provides: “An
electronic record or electronic signature is attributable to a person if it was
the act of the person. The act of the person may be shown in any manner,
including a showing of the efficacy of any security procedure applied to
determine the person to which the electronic record or electronic signature was
attributable.”
Ruiz v. Moss Bros. Auto Group, Inc. (2014)
232 Cal.App.4th 836 (Ruiz) is instructive. There, a defendant moved to compel
arbitration based on an electronically signed agreement of which the plaintiff
had no recollection. (Id. at 844.)
When the plaintiff said so in opposition to the motion, the defendant’s
witness provided further information:
After Ruiz averred he did not recall electronically signing
the 2011 agreement, Main explained in her reply declaration that the 2011
agreement was part of an employee acknowledgment form that “is” presented to
all Moss Bros. employees as part of a series of changes to the company's
employee handbook, and each employee is required to log into the company's HR
system, using his or her “unique login ID and password,” to review and sign the
employee acknowledgment form. Again, however, Main did not explain how, or upon
what basis, she inferred that the electronic signature on the 2011 agreement
was “the act of” Ruiz. (Civ. Code, § 1633.9, subd. (a).) This left a critical
gap in the evidence supporting the petition.
Indeed, Main did not explain that an electronic signature in
the name of “Ernesto Zamora Ruiz” could only have been placed on the 2011
agreement (i.e., on the employee acknowledgement form) by a person using Ruiz's
“unique login ID and password”; that the date and time printed next to the
electronic signature indicated the date and time the electronic signature was
made; that all Moss Bros. employees were required to use their unique login ID
and password when they logged into the HR system and signed electronic forms
and agreements; and the electronic signature on the 2011 agreement was,
therefore, apparently made by Ruiz on September 21, 2011, at 11:47 a.m. Rather
than offer this or any other explanation of how she inferred the electronic
signature on the 2011 agreement was the act of Ruiz, Main only offered her
unsupported assertion that Ruiz was the person who electronically signed the
2011 agreement. In the face of Ruiz's failure to recall electronically
signing the 2011 agreement, the fact the 2011 agreement had an electronic
signature on it in the name of Ruiz, and a date and time stamp for the
signature, was insufficient to support a finding that the electronic signature
was, in fact, “the act of” Ruiz. (Civ. Code, § 1633.9, subd. (a).) For the
same reason, the evidence was insufficient to support a finding that the
electronic signature was what Moss Bros. claimed it was: the electronic
signature of Ruiz. (Evid. Code, § 1400, item (a).) This was not a difficult
evidentiary burden to meet, but it was not met here.
(Ibid.)
Plaintiff declares that she does not
recall electronically signing any arbitration agreement, and the Agreement here
purports to be electronically signed. Although
she frames this as supporting “surprise” for the purposes of procedural
unconscionability, she cites Ruiz, and Defendant responds to it with the
gravity it deserves. Under Ruiz, Defendant
must show that the electronic signature was “the act of” Plaintiff. (Ruiz, supra, 232 Cal.App.4th
at 844.)
Defendant presents the declaration of
Mindy Stokesberry, Defendant’s Vice President of Human Resources. (Stokesberry Decl., ¶ 3.) Ms. Stokesberry declares that the Agreement was
found in Plaintiff’s personnel file. (Ibid.) She also declares that the Agreement is a
standard part of the application process for all 706 of Defendant’s fitness
clubs in the United States, and that it is required for the applicant to be
hired. (Id. at ¶¶ 6, 8.)
Defendant essentially puts forward that
Defendant did not permit anyone to apply without signing an arbitration
agreement, and that the Agreement bearing the electronic signature was found in
Plaintiff’s personnel file. This showing
does not meet the requirements of Fabian and Ruiz. There is nothing to infer that only
Plaintiff could have applied her electronic signature to the document. Ms. Stokesberry’s declaration makes only
vague reference to some electronic “system” which does not permit the application
to be submitted without a signed arbitration agreement but gives no details of
what that system is or how she knows Plaintiff used it to apply. The document bears no indicia of it having
been generated from or stored in an electronic system and has no document or control
number and no watermark. For her part,
Plaintiff does not say she signed any documents electronically.
Evidence that Defendant generally
requires applicants to sign an arbitration agreement does not meet the statutory
requirement to show that the signature which appears on this Agreement was “the
act of” Plaintiff. (Code Civ. Proc. §
1633.9(a).) There is simply no
discussion of the process whereby Plaintiff would have signed the
Agreement. If the much more robust
evidence in Ruiz was nonetheless insufficient, then the evidence here
must fail.
Defendant contends that under Iyere, Plaintiff’s
lack of recollection of her signature fails to create a dispute as to whether
the electronic signature is valid.
However, Iyere’s reasoning is expressly directed toward physical
signatures, and distinguishes Ruiz and other electronic signature
cases on that basis. (See Iyere,
supra, 87 Cal.App.5th at 756.)
Ruiz supplies the rule of decision here.
Because Defendant has not met its burden
to establish Plaintiff’s signature on the Agreement, it is unnecessary to
consider whether the Agreement is both procedurally and substantively
unconscionable and the motion must be denied.
Conclusion
For the foregoing reasons, the motion to
compel arbitration is denied. Plaintiff
to give notice.