Judge: Theresa M. Traber, Case: 23STCV19447, Date: 2024-01-31 Tentative Ruling
Case Number: 23STCV19447 Hearing Date: January 31, 2024 Dept: 47
Tentative Ruling
Judge Theresa M. Traber, Department 47
HEARING DATE: January 31, 2024 TRIAL
DATE: NOT SET
CASE: Bonnie Aarons v. Warner Bros.
Entertainment, Inc., et al.
CASE NO.: 23STCV19447 
MOTION
TO COMPEL ARBITRATION
MOVING PARTY: Defendants Warner Bros. Entertainment, Inc., New Line
Cinema LLC, and Scope Productions LLC
RESPONDING PARTY(S): Plaintiff Bonnie
Aarons
CASE
HISTORY:
·
08/15/23: Complaint filed.
STATEMENT
OF MATERIAL FACTS AND/OR PROCEEDINGS:
This is a breach of contract action filed on August 15, 2023. Plaintiff
is an actress starring in a series of horror films who alleges that Defendants
have not properly compensated her for the use of her likeness in merchandising
pursuant to the terms of her employment agreement.
Defendants move to compel this
matter to binding arbitration pursuant to the terms of an arbitration agreement
within the employment contract.
TENTATIVE RULING:
Defendants’ Motion to Compel
Arbitration is GRANTED. This action is hereby stayed pending resolution of the
arbitration.
The
Case Management Conference set for this date is vacated. The Court sets a Status Conference Re: Arbitration
scheduled for January 30, 2025 at 8:30 AM.
DISCUSSION:
Defendants move to compel this
matter to binding arbitration pursuant to the terms of an arbitration agreement
within the employment contract.
Defendants’ Evidentiary Objections to Declaration of
Bonnie Aarons
Defendant
raises several evidentiary objections to the Declaration of Bonnie Aarons in
opposition to the motion. The Court rules on these objections as follows:
Objection
to ¶ 7, lines 8-10: SUSTAINED as inadmissible hearsay.
Objection
to ¶ 8: OVERRULED as to Plaintiff’s knowledge of terms agreed to by
Defendant in the parties’ contract negotiation.
SUSTAINED as to statements by unidentified persons, as inadmissible
hearsay.
Objection
to ¶ 9: SUSTAINED as inadmissible hearsay because not attributed to
Defendant or one of its managing agents.
Objection
to ¶ 11, p.3:27-4:3: SUSTAINED as inadmissible hearsay because not
attributed to a specific person speaking on behalf of Defendant.
As the
remaining evidence to which Defendants object is not material to the Court’s
ruling, the Court declines to rule on those objections.
Defendants’ Evidentiary Objections to Declaration of
Douglas Stone
Defendants
also object to portions of the Declaration of Douglas Stone in support of the
opposition to the motion. The Court rules on these objections as follows:
Objection
to ¶ 3: OVERRULED: Does not lack foundation or personal knowledge.
Objection
to ¶ 5: OVERRULED: Does not lack foundation or personal knowledge.
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 persuasion to establish 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.)
Concerning the burden of production,
rather than persuasion, courts have articulated a three-step burden shifting
process:
First, the moving party bears the
burden of producing “prima facie evidence of a written agreement to arbitrate
the controversy.” [citation] The moving party “can meet its initial burden by
attaching to the [motion or] petition a copy of the arbitration agreement
purporting to bear the [opposing party’s] signature.” [citation] Alternatively,
the moving party can meet its burden by setting forth the agreement’s
provisions in the motion. [citations] For this step, “it is not necessary to
follow the normal procedures of document authentication.” [citation] If the
moving party meets its initial prima facie burden and the opposing party does
not dispute the existence of the arbitration agreement, then nothing more is
required for the moving party to meet its burden of persuasion.
If the moving party meets its initial
prima facie burden and the opposing party disputes the agreement, then in the
second step, the opposing party bears the burden of producing evidence to
challenge the authenticity of the agreement. [citation] The opposing party can
do this in several ways. For example, the opposing party may testify under oath
or declare under penalty of perjury that the party never saw or does not
remember seeing the agreement, or that the party never signed or does not
remember signing the agreement. [citations]
If the opposing party meets its burden
of producing evidence, then in the third step, the moving party must establish
with admissible evidence a valid arbitration agreement between the parties. The
burden of proving the agreement by a preponderance of the evidence remains with
the moving party. [citation].
(Gamboa v. Northeast Community Clinic (2021) 72
Cal.App.5th 158, 165-66.)
Here, Defendants seek to compel
arbitration based on a “Dispute Resolution” provision authorizing binding
arbitration of disputes under the contract executed by Plaintiff on March 25, 2017,
with Defendant Scope Productions, LLC. (Defendants’ Exh. A. p.1) Defendants
have provided a copy of the agreement which appears to bear Plaintiff’s
handwritten signature as well as the signature of Robyn Martin, Senior Vice
President for Scope Productions, LLC. (Defendants’ Exh. A p.19.) Plaintiff, in
opposition, does not dispute that her contract with Scope Productions contains
an arbitration agreement.
The Court therefore finds that
there is an agreement to arbitrate between Defendants and the Plaintiff.
Applicability of the FAA
Neither
Defendants nor Plaintiff contend that the agreement is governed by the Federal
Arbitration Act. The Court therefore finds that the contract is subject solely
to California law.
Scope of the Arbitration Agreement
“The scope of arbitration is a matter of
agreement between the parties.” (See, e.g., Ericksen, Arbuthnot, McCarthy,
Kearney & Walsh, Inc. v. 100 Oak Street (1983) 35 Cal.3d 312, 323.) “A
party can be compelled to arbitrate only those issues it has agreed to
arbitrate.” (Perez v. U-Haul Co. of California (2016) 3 Cal.App.5th 408,
419.)
Defendants contend that the arbitration
agreement delegates questions of the scope, validity, and enforceability of the
agreement to the arbitrator. As Plaintiff challenges the enforceability of both
the arbitration provision and the delegation clause itself as unconscionable,
the Court addresses the validity of the delegation clause separately, infra.
However, notwithstanding the delegation clause, the Court observes that the
Complaint expressly alleges a breach of Defendants’ obligations under the
agreement, and that Plaintiff does not contend that the arbitration provision is
inapplicable to this dispute. (Complaint ¶¶ 12-22.)
Delegation Provision
Defendants contend that the
arbitration agreement delegates questions of the scope, validity, and
enforceability of the agreement to the arbitrator. “The parties may, by clear
and unmistakable agreement, elect to have the arbitrator, rather than the
court, decide which grievances are arbitrable.” (Rodriguez v. American
Technologies, Inc. (2006) 135 Cal.App.4th 1110, 1123.) The Agreement states
that “the determination of the validity, enforceability, scope or applicability
of this agreement to arbitrate,” subject to certain exceptions not relevant
here, “shall be resolved” according to the arbitration procedures. (Defendants’
Exh. A. pp. 17-18.) Under the JAMS rules which the agreement states govern any
arbitration under the agreement, “[j]urisdictional and arbitrability disputes,
including disputes over the formation, existence, validity, interpretation or
scope of the agreement under which Arbitration is sought, and who are proper
Parties to the Arbitration, shall be submitted to and ruled on by the
Arbitrator. The Arbitrator has the authority to determine jurisdiction and
arbitrability issues as a preliminary matter.” (JAMS Rule 11(b).)
Plaintiff
does not dispute the existence of a delegation provision in the agreement but
contends that both the delegation provision and the arbitration agreement as a
whole are unenforceable because they are unconscionable. A delegation clause is
enforceable unless it is revocable under the same defenses as any contract,
such as fraud, duress, or unconscionability. (See, e.g., Tiri v. Lucky
Chances, Inc. (2014) 226 Cal.App.4th 231, 242.) However, “any claim of
unconscionability must be specific to the delegation clause.” (Id.
at 244 [emphasis in original].)
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
first argues that the delegation clause and the arbitration provision are both procedurally
unconscionable because they are part of a contract of adhesion. Contracts of
adhesion only demonstrate a minimum amount 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].) Thus,
even if proven, Plaintiff would have only succeeded in demonstrating a de
minimis level of unconscionability.
Plaintiff’s
contention that the arbitration provision and the delegation clause are
unconscionable is principally based on the conclusions of her counsel.
Plaintiff’s counsel contends that, in his experience, Defendants’ standard
practice is to present a standardized agreement containing standardized terms
including an arbitration provision that Defendants will not negotiate.
(Declaration of Douglas Stone ISO Opp. ¶ 3.) Attorney Stone states that when
Plaintiff was presented with the initial draft of the agreement, his firm provided
handwritten comments requesting, inter alia, removal of the mandatory
arbitration provision and waiver of Plaintiff’s right to a jury trial. (Id.
¶ 5, Exh 1.) Plaintiff contends that Defendants’ refusal is evidence that the
agreement is a contract of adhesion. Plaintiff also asserts that Defendants
threatened to replace her with a body double using digital replacement
technology if she did not sign the standard contract.
The Court is not persuaded. Defendants’
refusal of a demand to remove an arbitration provision wholesale is hardly
evidence of an unwillingness to negotiate regarding its terms. As Defendants
state in their reply, Plaintiff’s own evidence suggests that the terms of the
arbitration clause were not entirely fixed. Plaintiff’s counsel initially
proposed a total removal of the entire arbitration agreement. (Declaration of
Douglas Stone ISO Opp. Exh. 1.) When that proposal was rejected, clarifying the
arbitrator’s power to award attorney’s fees to include “reasonable outside”
attorney’s fees. (Stone Decl. Exh. 2.) This change was incorporated into the
final version of the agreement. (See Defendants’ Exh. A.) Although this
evidence is does not demonstrate a major revision of the essential terms of the
agreement, it does tend to contradict Attorney Stone’s conclusion that
Defendants were unwilling to negotiate about the terms of the arbitration
provision in general or the delegation clause in particular. (See Stone Decl. ¶
6.) There is no evidence that, for example, Plaintiff sought to limit the scope
of the delegation provision to exclude questions of enforceability, or scope,
nor that she sought to excise the delegation provision itself, independent of
the larger arbitration clause. Such a showing does not suffice to demonstrate
that either the arbitration provision or the delegation clause is procedurally
unconscionable.
The Court therefore finds that
Plaintiff has failed to establish procedural unconscionability.
2. Substantive Unconscionability
As Plaintiff has failed to
demonstrate any procedural unconscionability, the Court declines to address her
arguments concerning substantive unconscionability.
The Court therefore finds that neither
the arbitration agreement nor the delegation clause is unconscionable.
Conclusion
Defendants have demonstrated that
there is an enforceable arbitration agreement between the parties that applies
on its face to the claims at issue in this dispute. Plaintiff has failed to
demonstrate that any portion of the arbitration agreement is unconscionable.
Defendants are therefore entitled to an order compelling this matter to binding
arbitration.
CONCLUSION:
Accordingly,
Defendants’ Motion to Compel Arbitration is GRANTED. This action is hereby
stayed pending resolution of the arbitration.
The
Case Management Conference set for this date is vacated. The Court sets a Status Conference Re: Arbitration
scheduled for January 30, 2025, at 8:30 AM.
Moving
Parties to give notice.
IT IS SO ORDERED.
Dated: January 31,
2024 ___________________________________
Theresa
M. Traber
Judge
of the Superior Court
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