Judge: Teresa A. Beaudet, Case: 23STCV30054, Date: 2024-06-24 Tentative Ruling

Case Number: 23STCV30054    Hearing Date: June 24, 2024    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

Plaintiff Andrea Thornton (“Plaintiff”) filed this action on December 8, 2023 against Defendant Sajahtera, Inc. dba The Beverly Hills Hotel. The Complaint alleges causes of action for (1) harassment – hostile work environment, (2) race discrimination, (3) retaliation, (4) failure to prevent discrimination, harassment, and retaliation, (5) constructive discharge, and (6) violation of Business and Professions Code section 17200, et seq.  

Sajahtera, Inc. (“Defendant”) now moves for an order compelling arbitration of the instant action. Plaintiff opposes.

Evidentiary Objections

The Court rules on Plaintiff’s evidentiary objections as follows:

Objection No. 1: overruled

Objection No 2: overruled

Objection No. 3: overruled

Objection No. 4: overruled

Objection No. 5: overruled

Legal Standard

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. Securities Corp. (1996) 14 Cal.4th 394, 413-414.) 

Generally, on a petition to compel arbitration, the court must grant the petition unless it finds either (1) no written agreement to arbitrate exists; (2) the right to compel arbitration has been waived; (3) grounds exist for revocation of the agreement; or (4) litigation is pending that may render the arbitration unnecessary or create conflicting rulings on common issues. ((Code Civ. Proc., § 1281.2); (see Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 218-219.)

“California has a strong public policy in favor of arbitration and any doubts regarding the arbitrability of a dispute are resolved in favor of arbitration.” ((Coast Plaza Doctors Hospital v. Blue Cross of California (2000) 83 Cal.App.4th 677, 686.) “This strong policy has resulted in the general rule that arbitration should be upheld unless it can be said with assurance that an arbitration clause is not susceptible to an interpretation covering the asserted dispute.” ((Ibid. [internal quotations omitted].) This is in accord with the liberal federal policy favoring arbitration agreements under the Federal Arbitration Act (“FAA”), which governs all agreements to arbitrate in contracts “involving interstate commerce.” (9 U.S.C. section 2, et seq.; (Higgins v. Superior Court (2006) 140 Cal.App.4th 1238, 1247.)

            Discussion

A.    Existence of Arbitration Agreement

In support of the motion, Defendant submits the Declaration of Claudia Campos, who is employed as the “Area Director of People & Culture at Sajahtera, Inc., dba The Beverly Hills Hotel.” (Campos Decl., ¶ 1.) In her declaration, Ms. Campos states that “Ms. Thornton worked in the Culinary Department with the Hotel from July 19, 2022 until her voluntary resignation on August 18, 2023.” (Campos Decl., ¶ 4.)

Ms. Campos states that “[i]n August 9, 2022, pursuant to the Hotel’s business practices at all times relevant hereto, Ms. Thornton was provided with her own personal employment contract with The Hotel called ‘The Pledge,’ which she signed acknowledging receipt of and agreeing to comply with on August 9, 2022.” (Campos Decl., ¶ 5.) Ms. Campos states that “[t]he Pledge contains an alternative resolution agreement known as the Dispute Resolution Process (“DRP”).” (Campos Decl., ¶ 6.)

As an initial matter, the “Dispute Resolution Agreement” attached as Exhibit “D” to Ms. Campos’s declaration appears to be missing a page. (Campos Decl., ¶ 6, Ex. D.) This “Dispute Resolution Agreement” provides, inter alia, that “[t]he Beverly Hills Hotel offers a procedure to assure that problems and complaints are resolved in a transparent and consistent manner - this is called the Dispute Resolution Process (DRP). By agreement between me, and The Beverly Hills Hotel, any one of the five steps of the DRP may be waived, and they may be taken out of order…” (Ibid.) The Dispute Resolution Agreement (Defendant’s Exhibit “D”) then lists Step 1 through Step 4, but as noted by Plaintiff, no “Step 5” is listed. (Ibid.)  In addition, it appears that certain language below “Step 4” was cut-off. (Ibid.)

In the opposition, Plaintiff asserts that she “did not agree to arbitrate disputes because Defendant did not provide Plaintiff the substantive terms relating to arbitration process, i.e. ‘Step 5: Arbitration,’ and there is no mutual assent.” (Opp’n at p. 7:12-13.) In addition, in her declaration in support of the opposition, Plaintiff states that “I do not recall that the Hotel gave me the full version of the Dispute Resolution Agreement to review and sign. In connection with this matter, I have reviewed the Dispute Resolution Agreement the Hotel wants to enforce against me. Other than in connection with reviewing this document for purposes of this matter, I do not remember seeing the full version of this document before. To the best of my recollection, I was not provided the full version of this document to review and sign, and I do not remember signing a full version of this document. I recall only the first and last pages which were given to me as mandatory forms to sign.” (Thornton Decl., ¶ 2.)

In connection with the reply, Defendant submits the Declaration of Elyana Santos, the “Director of People & Culture at Sajahtera, Inc. dba The Beverly Hills Hotel.” (Santos Decl., ¶ 1.) In her declaration, Ms. Santos states that “The Pledge, at all relevant times hereto, contained an arbitration agreement titled the Dispute Resolution Agreement. The Dispute Resolution Agreement sets forth the Dispute Resolution Process and Ms. Thornton’s obligations to arbitrate all employment-related claims (‘DRP’). Ms. Thornton signed the DRP. (A true, correct, and complete copy of Ms. Thornton’s signed DRP executed on August 9, 2022 is lodged with the Court and identified as Exhibit G.).” (Santos Decl., ¶ 6.)

Exhibit “G” to Defendant’s “Supplemental Notice of Lodgment of Exhibits” is a “Dispute Resolution Agreement” that appears to contain an additional page that was not included in the “Dispute Resolution Agreement” provided with the motion. (See Santos Decl., ¶ 6, Ex. G; Campos Decl., ¶ 6, Ex. D.) The additional page in the “Dispute Resolution Agreement” filed with the reply contains a “Step 5: Arbitration.” (Santos Decl., ¶ 6, Ex. G.) However, this document was filed for the first time in connection with the reply, such that Plaintiff has not had the opportunity to respond to it. The Court notes that “¿¿[t]he general rule of motion practice…is that new evidence is not permitted with reply papers.¿¿” (Jay v. Mahaffey¿(2013) 218 Cal.App.4th 1522, 1537¿.)

Even if the “Dispute Resolution Agreement” attached to Ms. Santos’s reply declaration had been filed with the motion, Plaintiff argues that she opted out of the agreement. Plaintiff asserts that “[e]ven if Defendant had met its burden of proving the existence of an agreement to arbitrate, which Defendant has not, Plaintiff exercised the option to opt-out of the DRA…The purported DRA allows an option to opt-out of the arbitration process, with no stated opt-out procedures or deadline to opt-out.” (Opp’n at p. 7:22-25.)

The “Dispute Resolution Agreement” submitted with the motion provides, inter alia, that “If I agree to abide by the DRP and not to optout of the Arbitration process described in Step 5, I will receive Separation Pay if I am separated because of a permanent layoff, reduction in force, or reasons that are no fault of my own…” (Campos Decl., ¶ 6, Ex. D, emphasis added.) The Dispute Resolution Agreement also provides, “Can I still choose to go to court? No. If I do not opt-out of the arbitration provisions of the DRP, I waive my right to have my case submitted to a court of law and decided by a judge or jury.” (Campos Decl., ¶ 6, Ex. D, emphasis added.)

In his declaration in support of the motion, Defendant’s counsel states, inter alia, that “[o]n December 4, 2024 [sic], Counsel for Plaintiff informed The Hotel that Plaintiff disagrees with The Hotel’s perspective on the parameters for opting-out of DRP and further stated that they were opting-out of arbitration as of December 4, 2024 [sic].” (Maretz Decl., ¶ 5.) Plaintiff points to Defendant’s “Exhibit E,” which consists of emails between the parties’ counsel. (Maretz Decl., ¶ 6, Ex. E.) “Exhibit E” includes a December 4, 2023 email from Plaintiff’s counsel to Defendant’s counsel stating, inter alia, that “the purported agreement contains an option to opt-out of the arbitration process, with no deadline to opt-out. Ms. Thornton exercises her option to opt-out.” (Maretz Decl., ¶ 6, Ex. E.)

In the reply, Defendant asserts that “Plaintiff did not and may not opt out of the arbitration agreement.” (Reply at p. 5:8.) More specifically, Defendant asserts that “Plaintiff had the opportunity to opt out of the DRP, and forego mandatory arbitration, within 30 days of receiving The Pledge or any updated version of The Pledge, by returning the Opt-Out form to the People & Culture Office…Plaintiff did not do so.” (Reply at p. 5:18-21.) In support of this assertion, Defendant appears to point to “Exhibit B” to Ms. Campos’s declaration. Ms. Campos states that “[a] true and correct copy of the Pledge adopted by Ms. Thornton is lodged as Exhibit B. Ms. Thornton’s signed acceptance of the Pledge is lodged as Exhibit C.” (Campos Decl., ¶ 5.)

            Defendant cites to page 96 of “The Pledge,” which is a document titled “Arbitration Opt-Out.” (Campos Decl., ¶ 5, Ex. B, p. 96.) The “Arbitration Opt-Out” document provides, inter alia, that “The Beverly Hills Hotel offers its employees the option of agreeing to the Hotel’s Dispute Resolution Process (‘DRP’). I have read that agreement.” (Ibid.)

The “Arbitration Opt-Out” document further provides that “I know that unless I choose to opt out of the arbitration provisions of that DRP procedure as set forth below, I will automatically be covered by it and required to submit to binding arbitration any disputes specifically described in the DRP. I have had the opportunity to ask questions about the DRP. I understand that I have the right to opt-out of the DRP. To optout I must provide written notice to the People & Culture office (either by email to: HR.BHH@dorchestercollection.com or otherwise delivered Beverly Hills Hotel, People & Culture Office 9641 Sunset Blvd., Beverly Hills, CA 90210) specifically indicating that I do not wish to be bound by the DRP. I understand that such notice must be provided within thirty (30) calendar days of my receipt of the DRP or within thirty (30) calendar days of the date I am notified of any written amendment to my DRP agreement. If I would like additional time to consider opting out, I know I can contact the People & Culture offices to request more time.” (Campos Decl., ¶ 5, Ex. B, p. 96.)

However, as noted by Plaintiff, the above-referenced “Arbitration Opt-Out” document is unsigned. (Campos Decl., ¶ 5, Ex. B, p. 96.) The document contains, inter alia, a line for “Print name of team member,” and “Team member’s signature,” but no name or signature is included. (Campos Decl., ¶ 5, Ex. B, p. 96.) Plaintiff states in her supporting declaration that “I do not recall being provided any information regarding arbitration opt-out procedures or arbitration opt-out deadlines. I do not recall signing any forms acknowledging arbitration opt-out procedures or arbitration opt-out deadlines.” (Campos Decl., ¶ 5.)

In the reply, Defendant notes that the “Arbitration Opt-Out” document provides that “I understand that I may not opt out of the arbitration provisions of DRP while I have any legal claim pending which arose prior to my execution of this form and which has been or could have been submitted to arbitration under DRP at the time the claim arose.” (Campos Decl., ¶ 5, Ex. B, p. 96.) But as discussed above, the subject “Arbitration Opt-Out” form provided by Defendant is not executed by Plaintiff. (See Campos Decl., ¶ 5, Ex. B, p. 96.) The Court does not find that Defendant has demonstrated that Plaintiff improperly opted-out of the Dispute Resolution Agreement. (Campos Decl., ¶ 6, Ex. D.)

In light of all of the foregoing, the Court does not find that Defendant has met its burden of demonstrating the existence of an agreement to arbitrate, and that the instant dispute is covered by the agreement.

Conclusion

Based on the foregoing, Defendant’s motion to compel arbitration is denied.

Plaintiff is ordered to provide notice of this Order.¿ 

DATED:  June 24, 2024                                

________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court