Judge: Theresa M. Traber, Case: 22STCV05737, Date: 2022-08-01 Tentative Ruling

Case Number: 22STCV05737    Hearing Date: August 1, 2022    Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE:     August 1, 2022                       TRIAL DATE: NOT SET

CASE:                         Taylor Stein v. Lisa Helfend Meyer et al.

CASE NO.:                 22STCV05737           

MOTION TO COMPEL ARBITRATION AND STAY PROCEEDINGS

MOVING PARTY:               Defendants Lisa Helfend Meyer; Meyer, Olson, Lowy & Meyers, LLP; Samantha F. Spector; Spector Law, APLC

RESPONDING PARTY(S): Plaintiff Taylor Stein

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

            This is an action for legal malpractice in connection with a post-judgment parentage action. 

Defendants move to compel arbitration and stay the action pending arbitration.

TENTATIVE RULING:

Defendants’ motion to compel arbitration is GRANTED, along with the request to stay the case pending arbitration.

DISCUSSION:

            Defendants move to compel arbitration and stay the action pending arbitration.

Existence of Arbitration Agreement

Under California law, arbitration agreements are valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. (Blake v. Ecker (2001) 93 Cal.App.4th 728, 741 (overruled on other grounds by Le Francois v. Goel (2005) 35 Cal.4th 1094).) A party petitioning to compel arbitration has the burden of establishing the existence of a valid agreement to arbitrate, and the party opposing the petition has the burden of proving, by a preponderance of the evidence, any fact necessary to its defense. (Banner Entertainment, Inc. v. Superior Court (1998) 62 Cal.App.4th 348, 356-57.)

Defendants seek to compel arbitration based on an arbitration clause in the Engagement Agreement between the parties as to Defendants’ legal representation of Plaintiff.

Paragraph 14 of the Engagement Agreement states:

14. All disputes between us regarding any aspect of our attorney-client relationship will be resolved by binding arbitration pursuant to Sections 1280 et seq. of the Code of Civil Procedure and not by litigation in Court. This provision applies to all disputes whether they are about financial matters (fees and costs) or about the quality of our services (malpractice). By this provision, we are both giving up our right to have any such dispute decided by a judge or a jury. We also enclose a separate letter regarding the arbitration clause.

(Declaration of Lisa Helfend Meyer ISO Mot. Exh. A.)

            Plaintiff signed the agreement as the client, under a statement, in bold, stating the following:

I HAVE CAREFULLY REVIEWED AND UNDERSTAND ALL OF THE FOREGOING TERMS AND PROVISIONS AND I HEREBY AGREE TO RETAIN YOUR FIRM IN ACCORDANCE WITH THE TERMS SET FORTH IN YOUR LETTER DATED MARCH 27, 2020.

(Id.)

            This evidence shows that Plaintiff agreed to submit claims for legal malpractice to binding arbitration. Thus, the burden shifts to Plaintiff to show that a valid arbitration agreement does not exist. As Plaintiff does not dispute the existence of an arbitration agreement, the Court finds that there is a binding arbitration agreement.

Applicability of the FAA

            Neither party contends that the arbitration agreement is governed by the Federal Arbitration Act.

Unconscionability

            Plaintiff’s principal argument in opposition is that the agreement is unenforceable because it is unconscionable.

1.      Procedural Unconscionability

“‘To briefly recapitulate the principles of unconscionability, the doctrine has “‘both a “procedural” and a “substantive” element,’ the former focusing on ‘“oppression”’ or ‘“surprise”’ due to unequal bargaining ¿power, the latter on ‘“overly harsh”’ … or ‘“one-sided”’ results.” [Citation.] The procedural element of an unconscionable contract generally takes the form of a contract of adhesion, “‘which, imposed and drafted by the party of superior bargaining strength, relegates to the subscribing party only the opportunity to adhere to the contract or reject it.’” … [¶] Substantively unconscionable terms may take various forms, but may generally be described as unfairly one-sided.’ [Citation.]” (Citation omitted.) 
 
“Under this approach, both the procedural and substantive elements must be met before a contract or term will be deemed unconscionable. Both, however, need not be present to the same degree. A sliding scale is applied so that ‘the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.’ (Citations omitted.) 
 

(Walnut Producers of California v. Diamond Foods, Inc. (2010) 187 Cal.App.4th 634, 645 (bold emphasis added).) 

Plaintiff argues that the agreement is procedurally unconscionable because it is a contract of adhesion. This presents a minimal degree of procedural unconscionability: 

“The procedural element of the unconscionability analysis concerns the manner in which the contract was negotiated and the circumstances of the parties at that time. [Citation.] The element focuses on oppression or surprise. [Citation.] ‘Oppression arises from an inequality of bargaining power that results in no real negotiation and an absence of meaningful choice.’ [Citation.] Surprise is defined as ‘“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.”’ [Citation.]” (Citation omitted.) 
 
Plaintiffs claim the Agreement is procedurally unconscionable because it is an adhesion contract. An adhesion contract is “a standardized contract … imposed upon the subscribing party without an opportunity to negotiate the terms.” (Citation omitted.) “The term signifies a standardized contract, which, imposed and drafted by the party of superior bargaining strength, relegates to the subscribing party only the opportunity to adhere to the contract or reject it. [Citation.]” (Citation omitted.) 
 
The California Supreme Court has consistently stated that “‘[t]he procedural element of an unconscionable contract generally takes the form of a contract of adhesion … .’ ” (Citations omitted.) 
 
“Whether the challenged provision is within a contract of adhesion pertains to the oppression aspect of procedural unconscionability. A contract of adhesion is “imposed and drafted by the party of superior bargaining strength” and “relegates to the subscribing party only the opportunity to adhere to the contract or reject it.” (Citations omitted.) “[A]bsent unusual circumstances, use of a contract of adhesion establishes a minimal degree of procedural unconscionability notwithstanding the availability of market alternatives.” (Citation omitted.) 

(Walnut Producers of California, supra, 187 Cal.App.4th at 645-46 (bold emphasis added).) Ordinarily, attorney-client retainer agreements are not considered contracts of adhesion. (Powers v. Dickson, Carlson & Campillo (1997) 54 Cal.App.4th 1102, 1110.)

            Plaintiff contends that the agreement was an adhesion contract because the letter accompanying the agreement, which offered additional explanation of certain key provisions of the engagement agreement, including the arbitration clause, required Plaintiff to check either that she had discussed the agreement with independent counsel and was advised to her satisfaction, or that she was advised to seek independent counsel and decided not to do so. (Meyer Decl. Exh. B. p. 2.) Plaintiff contends that this requirement in the explanation letter somehow renders the agreement so oppressive as to be unconscionable. As Defendants state in their reply brief, Plaintiff identifies no provision of the agreement itself that Plaintiff contends is procedurally unconscionable. Further, although Plaintiff states in argument that Defendants were in a superior bargaining position because of a pressing need and desire to hire legal counsel, Plaintiff cites no evidence showing that Defendants, in fact, held superior bargaining position over Plaintiff due to her financial means, the time available, the availability of other counsel, or any other factor that might have affected the relative bargaining strength of the parties.

Based on the evidence presented, the Court cannot conclude that the agreement was procedurally unconscionable.

2.      Substantive Unconscionability

As Plaintiff has not shown any procedural unconscionability, the Court need not address whether there is any substantive unconscionability in the agreement. Nevertheless, the Court will address this prong of the unconscionability test on its merits.

“A provision is substantively unconscionable if it ‘involves contract terms that are so one-sided as to “shock the conscience,” or that impose harsh or oppressive terms.’ [Citation.] The phrases ‘harsh,’ ‘oppressive,’ and ‘shock the conscience’ are not synonymous with ‘unreasonable.’ Basing an unconscionability determination on the reasonableness of a contract provision would inject an inappropriate level of judicial subjectivity into the analysis. ¿‘With a concept as nebulous as “unconscionability” it is important that courts not be thrust in the paternalistic role of intervening to change contractual terms that the parties have agreed to merely because the court believes the terms are unreasonable. The terms must shock the conscience.’ [Citations.]”  

(Walnut Producers of California. supra, 187 Cal.App.4th at 647-48.)

            Plaintiff contends that the agreement is substantively unconscionable for the same reasons that the agreement is procedurally unconscionable. Even if the agreement were procedurally unconscionable, and it is not, arguments of procedural unconscionability do not address the question of substantive unconscionability. Plaintiff points to no terms in the agreement that are so one-sided as to shock the conscience, or that impose harsh or oppressive terms. Plaintiff has failed to establish any substantive unconscionability in the arbitration agreement. Therefore, the arbitration clause is not unenforceable on the basis of unconscionability.

CONCLUSION:

            Accordingly, the motion to compel arbitration is GRANTED, along with the request to stay the case pending arbitration.

            Moving Parties to give notice.

IT IS SO ORDERED.

Dated: August 1, 2022                                    ___________________________________

                                                                                    Theresa M. Traber

                                                                                    Judge of the Superior Court

            Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept47@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.