Judge: Teresa A. Beaudet, Case: 24STCV12512, Date: 2025-04-03 Tentative Ruling

Case Number: 24STCV12512    Hearing Date: April 3, 2025    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

            Background

On or about May 19, 2022, Plaintiff Penny J. Clayburg was rear-ended by Erick De Leon while driving southbound on Veteran Avenue. De Leon was allegedly reacting to a firetruck exiting a Los Angeles Fire Department (LAFD) station during rush hour. According to Plaintiff, the firetruck was not responding to an emergency but was conducting a practice drill and did not activate its lights or sirens until it was already in the intersection. (Complaint ¶¶ 12-15.) As a result of the collision, Plaintiff sustained serious injuries that left her permanently disabled, incurred substantial medical expenses, and suffered ongoing diminished mental capabilities, significantly impairing her ability to work, perform daily tasks, and live a healthy life. (Complaint ¶ 16.)

On or about May 20, 2022, Plaintiff retained Defendants Hillstone Law, PC, Edwin Essakhar, and Yvette Essakhar, Esq. to represent her in connection with the personal injury and property damage claims arising from the incident. (Complaint ¶ 17.) Defendants quickly settled with De Leon’s insurer, exhausting his $15,000/$30,000 policy limits (Complaint ¶ 18), and pursued an underinsured motorist claim through Plaintiff’s own insurer, USAA. (Complaint ¶ 19.) However, the total recovery was inadequate given the severity of Plaintiff’s injuries and losses. (Complaint ¶ 20.) Plaintiff alleges that Defendants took no action to investigate or pursue claims against LAFD, despite their clear involvement in the incident. (Complaint ¶ 21.) By July 2023, Plaintiff received a final closing statement from Defendants reflecting a net payment of only $29,191.59 and no further contact from Defendants. (Complaint ¶ 22.)

In February 2024, Plaintiff attempted to retain new counsel to pursue a claim against LAFD, only to learn that no governmental tort claim had been timely filed, rendering her claims time-barred. (Complaint ¶ 23.) Plaintiff alleges that Defendants never informed her of the need to file a government claim within a prescribed time limit, even though she had inquired about the possibility of LAFD liability. (Complaint ¶ 24.) Instead, Plaintiff was reassured that she need not worry and that everything was being handled. (Complaint ¶ 25.). As a result of Defendants’ failure to file the necessary claim or take any action to preserve her rights, Plaintiff contends she was deprived of any viable legal recourse to seek full compensation for her lifelong injuries and impairments. (Complaint ¶ 26.)

            Discussion

On September 30, 2024, Defendants filed a Motion to Compel Arbitration. Plaintiff opposed the motion on February 3, 2025. According to Plaintiff, in preparation for her opposition, she attempted to obtain a supporting declaration from one of her medical providers. Although Plaintiff timely filed an Opposition to the Motion to Compel Arbitration, she did so without the support of a medical provider's declaration due to delays outside her control. Plaintiff states that due to scheduling conflicts and other factors outside her control, she was unable to obtain the declaration before the filing deadline. (Clayburg Decl. ¶¶ 2-3.) It was not until February 24, 2025, that Plaintiff obtained the Declaration of Krystal Boothe, LCSW. (Clayburg Decl. ¶ 6.) Plaintiff states the declaration contains relevant medical information/diagnoses about her cognitive functioning at the time she entered into the agreement. Plaintiff seeks leave to file this supplemental declaration, arguing that it is essential to fully inform the Court of her mental state and inability to provide informed consent to arbitration.

Plaintiff maintains that there is no bad faith or intentional delay, as she made multiple efforts to obtain the declaration before the original filing deadline. The delay was caused solely by scheduling conflicts with her medical provider. The hearing on Defendants’ Motion to Compel Arbitration, originally scheduled for February 18, 2025, has been continued by the Court to May 1, 2025. Plaintiff contends that granting her request will not prejudice Defendants and is necessary to ensure a fair determination of the arbitration issue.

In opposition, Defendants argue that Plaintiff’s legal malpractice and breach of fiduciary duty claims must be submitted to binding arbitration pursuant to the parties’ written engagement agreement. Defendants filed a Motion to Compel Arbitration and contend that Plaintiff’s opposition (based on her alleged lack of mental capacity to contract) is both untimely and unsupported by relevant or admissible evidence. Defendants assert that Plaintiff raised the incapacity claim for the first time in her opposition without any medical evidence, and only attempted to cure this defect nearly a week after the original February 18, 2025 hearing date.

Defendants argue that Plaintiff’s effort to supplement her opposition is procedurally improper and an example of “sandbagging.” They contend the proposed declaration is both untimely and substantively deficient. Specifically, the declaration is from a social worker, not a medical provider, and does not offer any opinion or evidence as to Plaintiff’s capacity to contract at the relevant time. (Boothe Decl. ¶ 3.) The declaration references Plaintiff’s mental health diagnoses—such as PTSD, Severe Anxiety, and Major Depressive Disorder—but fails to establish that these conditions rendered her legally incapacitated when she entered into the engagement agreement.

Citing California Probate Code § 810, Defendants emphasize that the law presumes individuals have the capacity to contract and that diagnoses alone are insufficient to rebut this presumption. Instead, legal incapacity must be based on evidence of specific mental deficits affecting the ability to perform a legal act (§ 810(a)-(c)). They argue the Boothe declaration offers no such evidence and, therefore, Plaintiff has failed to meet her burden to show incapacity.

Defendants further argue that granting Plaintiff leave to file the declaration would be futile, as the arbitration provision is severable from the remainder of the contract. Any challenge to the validity of the engagement agreement as a whole must be decided by the arbitrator, not the court. Both federal and California law recognize that arbitration clauses are severable from the contracts in which they appear. This means that even if a party challenges the validity of the entire contract, that dispute must still be decided by an arbitrator—not the court—so long as the arbitration clause itself is not specifically challenged. Defendants cite cases affirming this principle:  Prima Paint v. Flood & Conklin (1967) 388 U.S. 395, Ericksen v. 100 Oak St. (1983) 25 Cal. 3d 312, Buckeye Check Cashing, Inc. v. Cardegna (2006) 546 U.S. 440, and Nitro-Lift Techs., LLC v. Howard (2012) 133 S. Ct. 500. Because Plaintiff’s argument attacks the entire contract rather than the arbitration clause specifically, Defendants assert that the court is obligated to enforce the arbitration clause and leave the question of Plaintiff’s capacity for the arbitrator.

In reply, Plaintiff contends that Defendants’ claims of untimeliness and futility are unfounded. She reiterates that she lacked the capacity to enter into the engagement agreement, including its arbitration clause, due to severe cognitive limitations. Although she filed a timely opposition to the Motion to Compel Arbitration, Plaintiff explains she was unable to submit supporting medical evidence by the deadline through no fault of her own. She made multiple attempts to obtain a declaration from a medical provider, ultimately receiving it as soon as reasonably practicable. The present motion was then promptly filed and set for hearing at the earliest available date. (Clayburg Decl. ¶¶ 3-5.)

Plaintiff argues that the declaration from her Licensed Clinical Social Worker, Krystal Boothe, sufficiently rebuts the presumption of contractual capacity. The Boothe declaration identifies Plaintiff’s recurrent episodes of PTSD, Severe Anxiety Disorder, and Major Depressive Disorder, which caused substantial cognitive impairments affecting her ability to engage in daily activities, focus, and regulate emotions. Plaintiff asserts that these specific mental deficits satisfy the standard under California Probate Code § 810 for finding a lack of legal capacity—not merely based on diagnosis, but on demonstrable impairment of mental functioning. Moreover, Plaintiff argues that social workers are qualified to assess and opine on cognitive and psychological functioning, and Boothe did just that.

Contrary to Defendants’ arguments, Plaintiff contends that the arbitration clause is not severable from the engagement agreement. She distinguishes Prima Paint v. Flood & Conklin (1967) 388 U.S. 395, arguing that the severability doctrine does not apply where the arbitration provision is so integrated with the broader agreement that separating it would undermine the purpose of the contract. Because Plaintiff lacked capacity to understand and consent to the agreement as a whole—including the arbitration clause—severing the clause is inappropriate. Additionally, since the issue of Plaintiff’s capacity is directed at the entire agreement and not solely the arbitration clause, she argues that it is a question properly before the court, not an arbitrator.

The Court finds that Plaintiff has demonstrated good cause for seeking to supplement the record. It appears that the delay in obtaining the declaration was not due to bad faith or negligence but rather the result of circumstances outside Plaintiff’s control, specifically delays from her medical provider. Plaintiff filed her Opposition to the Motion to Compel Arbitration in a timely manner and appears to have acted diligently to obtain and submit the supporting declaration as soon as it became available. Further, the Court notes that Plaintiff promptly sought to advance the hearing date on the present motion to allow full consideration prior to the hearing on the Motion to Compel Arbitration, thereby avoiding prejudice to Defendants.

The Court further finds that the declaration of Krystal Boothe, LCSW, is relevant and probative. While Defendants argue that Ms. Boothe is not a “medical provider,” Defendants have not established that her role as a Licensed Clinical Social Worker disqualifies her to assess and report on cognitive and psychological impairments. Her declaration, which describes Plaintiff’s diagnoses of PTSD, Severe Anxiety Disorder, and Major Depressive Disorder, as well as associated cognitive impairments that affect Plaintiff’s daily functioning, attention, and emotional regulation, appears to provide evidence of potential deficits in Plaintiff’s mental functioning. These observations are relevant to the inquiry under California Probate Code § 810, which requires that legal incapacity be determined based on mental deficits, not merely diagnoses. It appears that the Boothe declaration sufficiently raises a factual question regarding Plaintiff’s capacity to contract at the time she entered into the engagement agreement, including the arbitration clause.

Additionally, the Court rejects Defendants’ argument that the arbitration clause is automatically severable from the engagement agreement. While federal and state precedent generally support the severability of arbitration provisions such as Prima Paint, Buckeye, and Ericksen, Plaintiff's contention that her cognitive limitations impaired her ability to understand or assent to any part of the contract (including the arbitration clause) is not a challenge to the contract as a whole in the abstract, but rather a threshold question of capacity. Where a party raises a genuine issue as to whether they had legal capacity to enter into any agreement, the Court must first determine that issue before compelling arbitration. (See Algo-Heyres v. Oxnard Manor LP (2023) 88 Cal.App.5th 1064, 1067.)

Conclusion

The Court grants Plaintiff’s motion for leave to file a supplemental declaration of Plaintiff’s medical provider in support of Plaintiff’s opposition to Defendants’ motion to compel arbitration.

Plaintiff is ordered to provide notice of this ruling.

DATED:  April 3, 2025                                 

________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court