Judge: Upinder S. Kalra, Case: 22STCV09179, Date: 2022-08-10 Tentative Ruling
Case Number: 22STCV09179 Hearing Date: August 10, 2022 Dept: 51
Tentative Ruling
Judge Upinder S.
Kalra, Department 51
HEARING DATE: August
10, 2022
CASE NAME: Larry
Chavez v. ABM Industry Groups LLC, et al.
CASE NO.: 22STCV09179
DEFENDANT’S
MOTION TO COMPEL ARBITRATION
MOVING PARTY: Defendant ABM Industry Groups, LLC
RESPONDING PARTY(S): Plaintiff Larry Chavez
REQUESTED RELIEF:
1. An
order compelling the Plaintiff into arbitration
2. An
order staying the proceedings
TENTATIVE RULING:
1. Motion
to Compel Arbitration is GRANTED.
2. Request
for Stay of the Proceedings is GRANTED.
STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:
On March 15, 2022, Plaintiff Larry Chavez (“Plaintiff”)
filed a complaint against Defendant ABM Industry Groups, LLC, Bridgette Goins,
and Does 1 through 20 (“Defendants”). The complaint alleged multiple causes of
action for discrimination, harassment, retaliation under California Fair
Employment and Housing Act.
LEGAL STANDARD
Both the CAA and the FAA
“are driven by a strong public policy of enforcing arbitration agreements.” (Weiler v. Marcus & Millichap Real Estate
Investment Services, Inc. (2018) 22 Cal.App.5th 970, 979.)
Code of
Civil Procedure section 1281.2 provides, 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…
(Code Civ. Proc. § 1281.2.)
Section 2 of
the FAA provides: “A written provision in ... a contract ... to settle by
arbitration a controversy thereafter arising out of such contract ... shall be
valid, irrevocable, and enforceable, save upon such grounds as exist at law or
in equity for the revocation of any contract.”
(9 U.S.C. § 2.”)
“Thus, a court generally must compel arbitration in
accordance with the agreement when requested by one of the parties. (Code Civ.
Proc., § 1281.2; 9 U.S.C. § 2.)” (Ibid.)
Service:
Proof of Service attached to Defendant’s Motion indicates
that Plaintiff’s attorney was served via email. Plaintiff has failed to attach
a proof of service to any of the motions. As a note, Defendant failed to argue
that service was improper.
Plaintiff’s Evidentiary Objections:
Declaration of Jayne
Frixione
1. Declaration
in Entirety
2. Paragraph
7
Objection based on lacks foundation, lacks personal
knowledge
Objections 1-2: OVERRULED
Exhibits A-H of
Request for Judicial Notice:
Objection based on relevancy.
Objection SUSTAINED.
Request for Judicial Notice:
The Court may take judicial notice of the
existence of the records, but not the truth of matters asserted in such
records. (Sosinsky v. Grant (1992) 6
Cal.App.4th 1548, 1565). As a result, although the court may take judicial
notice that the documents exists, the Court may not take judicial notice of the
truth of the facts in the documents.
Additionally,
Evidence Code only allows the Court to take judicial notice of certain types of
documents. The court may take judicial notice of “official acts of the
legislative, executive, and judicial departments of the United States and of
any state of the United States,” “[r]ecords of (1) any court of this state or
(2) any court of record of the United States or of any state of the United
States,” and “[f]acts and propositions that are not reasonably subject to
dispute and are capable of immediate and accurate determination by resort to
sources of reasonably indisputable accuracy.” (Evid. Code § 452, subds. (c),
(d), and (h).) The Evidence Code does not allow the Court to take judicial
notice of discovery responses or parts of cases, such as depositions.
Defendant requests the court take judicial notice of eight
documents, including items such as Minute Orders from the U.S. District Court
of Central District of California, Declarations in support of Motion to Compel
Arbitration. All the documents involved the same arbitration agreement at issue
in this action.
Request for Judicial Notice is DENIED. While the Court may
properly take judicial notice of the existence of the records but not the truth,
it is clear that Defendant is seeking
that the Court take judicial notice of the documents for their truth, otherwise
the documents have no relevance
ANALYSIS:
Defendant moves to compel the Plaintiff to arbitration.
1.
Existence
of Arbitration Agreement:
In determining the enforceability of an
arbitration agreement, the court considers “two ‘gateway issues’ of
arbitrability: (1) whether there was an agreement to arbitrate between the
parties, and (2) whether the agreement covered the dispute at issue.” (Omar v. Ralphs Grocery Co. (2004) 118
Cal.App.4th 955, 961 (Omar).)
A. Agreement
Between Parties:
“Arbitration is a product of contract. Parties are not
required to arbitrate their disagreements unless they have agreed to do
so. [Citation.] A contract to arbitrate will not be inferred absent
a ‘clear agreement.’ [Citation.] When determining whether a valid
contract to arbitrate exists, we apply ordinary state law principles that
govern contract formation. [Citation.] In California, a ‘clear
agreement’ to arbitrate may be either express or implied in fact.
[Citation.]” (Davis v. Nordstrom,
Inc. (9th Cir. 2014) 755 F.3d 1089, 1092-1093 (Davis).)
In support of its motion, Defendant
submits a copy of the Agreement attached to the Declaration of Jayne Frixione,
the Senior Human Resources Manager for ABM Industry Groups, LLC. The Mutual
Arbitration Agreement contains the following provision:
Final and
binding arbitration before a single, neutral arbitrator shall be the exclusive
remedy for any "Covered Claim" (as that term is hereinafter defined).
A "Covered Claim" is any claim (except a claim that by law is
non-arbitrable) that arises between me and the Company, its past, present, and
future: parent(s) subsidiaries, affiliates, and/or their respective past,
present, and future: officers, directors and/or employees, including but not
limited to claims arising and/or relating in any way to my hiring, my
employment with, and/or the severance of my employment with, the Company.
Plaintiff contends that mutual assent was not present.
First, Plaintiff argues that the Declaration of Jayne Frixione relies on
hearsay and contains statements that are not based on personal knowledge.
Additionally, Plaintiff indicates that the signature on the agreement is not
his. In his declaration, Plaintiff Chavez states that he told his supervisor he
did not wish to sign the document, printed only his name and withheld his
signature. He further states that “it appears someone tried to recreate my
signature as it appears on my driver’s license.” (Dec. Chavez ¶ 4-5). Additionally,
Plaintiff provides a copy of his driver’s license.
The Defendant’s initial burden to
compel arbitration was satisfied. Under Rule of Court Rule 3.1330, a copy of
the agreement must be attached and incorporated by reference. Here, Defendant
has done so. Once Plaintiff challenged the validity of the signature, “defendants
were then required to establish by a preponderance of the evidence that the
signature was authentic.” (Espejo v.
Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047,
1060). In Espejo, the supplemental
declaration of the systems consultant provided the necessary information to
establish the authenticity of the document, specifically how the unique
username and password were only accessible to that specific individual. (Id. at
1062). Espejo dealt with an
electronic signature, which requires a different type of authentication.
Here, the handwritten signature was
authenticated. Defendant provided a supplemental declaration of Jayne Frixione.
The Declaration provides that as Senior Human Resources Manager, she has access
to personnel files. After reviewing the personnel files, there are other
documents that the Plaintiff signed and acknowledged while on-boarding. These
documents are included as Exhibits B-K. The Court has considered Plaintiff’s
assertion that the signature is not his. Moreover, the Court has considered the
Declaration of Jayne Frixione which asserts that since Plaintiff’s driver’s
license was not included in the personnel file, it could not have been used to
recreate his signature as Plaintiff argues.The Court has compared the signatures
in exhibits B-K that Plaintiff has not challenged. The Court is convinced, by a
preponderance of evidence, that the signature on the Arbitration Agreement is sufficiently
similar to Plaintiff’s signature on other documents signed while on-boarding to
demonstrate that Plaintiff signed the Arbitration agreement. Thus, notwithstanding
Plaintiff’s claim denying signing the Arbitration Agreement, the Court finds
that Defendant has met its burden by a preponderance of the evidence
establishing mutual assent to the Arbitration Agreement.
B. Claims
Fall Within Scope of Arbitration Clause
Defendant contends that the claims
raised in the Plaintiff’s complaint fall within the scope of the arbitration
agreement. Plaintiff’s complaint is based on claims of discrimination,
harassment, and retaliation and later termination during his employment with
Defendant. Additionally, “if, as the complaint alleges, the individual
defendants, though not signatories, were acting as agents for the Rams, then
they are entitled to the benefit of the arbitration provisions.” (Dryer v. Los Angeles Rams (1985) 40 Cal.3d
406, 418).
Plaintiff argues that Defendant
did not establish that agreement falls under the FAA. This argument fails.
Paragraph C of the Agreement states that this agreement is governed by the FAA.
“The federal statute rests on the authority of Congress to enact substantive
rules under the commerce clause, requiring courts to enforce arbitration
agreements in contracts involving interstate commerce.” (Cronus Investments, Inc. v. Concierge Services (2005) 35 Cal.4th
376, 383). The agreement here states “both the Company and I agree that we are
engaged in interstate commerce as part of the Company’s business and my
employment with the Company.” As the Declaration of Jayne Frixione states,
Defendant is a “nation-wide provider of facility services with operations and
customers throughout California and in multiple other states.” (Dec. Frixione ¶
2). The language of the Agreement encompasses the types of claims raised in the
Complaint.
Additionally, Defendant argues
that the agreement also covers individually named Defendant Brigitte Goins. The
express language in the arbitration agreement states that this agreement covers
any claim with the Company, its subsidiaries, officers, directors, and/or
employees “arising and/or relating in any way to my hiring, my employment with,
and/or the severance of my employment with, the Company.” (Dec. Frixione, Ex.
A). Here, the Complaint states that the conduct was undertaken or ratified by
Defendant Brigette Goins. (Complaint ¶ 33). As such, Defendant Goins is
entitled to arbitration
2.
Defenses
to Arbitration
Once it is determined that a valid
arbitration agreement exists, the burden shifts to the opposing party to “prove
by a preponderance of the evidence any defense to the petition.” (Lacayo v. Catalina Restaurant Group Inc.
(2019) 38 Cal.App.5th 244, 257, review denied (Nov. 13, 2019)). In Armendariz, the
California Supreme Court stated that when determining whether an arbitration
agreement was unconscionable, there is both a procedural and a substantive element.
(Armendariz v. Foundation Health
Psychcare Service, Inc. (2000) 24 Cal.4th 82, 114).
a. Procedurally
Courts determine whether an agreement is
unconscionable procedurally by looking at surprise and oppression. Oppression
is an “inequality of bargaining power, when one party has no real power to
negotiate or a meaningful choice. Surprise occurs when the allegedly
unconscionable provision is hidden.” (Carmona
v. Lincoln Millennium Car Wash, Inc. (2014) 226 Cal.App.4th 74, 84). Examples of contracts that are procedural unconscionable
are contracts of adhesions, which is 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.” (Armendariz v. Foundation Health
Psychcare Services, Inc. (2000) 24 Cal.4th 83, 113). Plaintiff
contends this agreement is unconscionable because Defendant tried to force
Plaintiff to sign the agreement without reading the agreement as a condition of
employment; this was a take-it-or-leave-it agreement, without any negotiation
or discussion. Plaintiff also was not given an explanation of what arbitration
is nor provided a copy of the agreement.
Here, while this may have been a contract of adhesion,
as most employment contracts are, this alone does not mean the whole agreement
is procedurally unconscionable. “When arbitration is a condition of employment,
there is inherently economic pressure on the employee to accept arbitration.
This alone is a fairly low level of procedural unconscionability.” (Cisneros Alvarez v. Altamed Health Services Corporation (2021) 60 Cal.App.5th 572,
591). The agreement was not a surprise; the document is stand alone, with
Mutual Arbitration Agreement is bold letters at the top. This agreement also
explains the procedure, including the waiver of a right to jury trial. Thus,
the agreement is minimally procedurally unconscionable.
Yet ‘a finding of procedural unconscionability does
not mean that a contract will not be enforced, but rather that courts will
scrutinize the substantive terms of the contract to ensure they are not
manifestly unfair or one-sided.’” (Sanchez
v. Valencia Holding Co., LLC (2015) 61 Cal.4th 899, 915).
b. Substantively
“Substantive
unconscionability pertains to the fairness of an agreement's actual terms and
to assessments of whether they are overly harsh or one-sided.” (Carmona v. Lincoln Millennium Car Wash, Inc.
(2014) 226 Cal.App.4th 74, 85).
Plaintiff contends that the agreement is substantively
unconscionable because (1) it waives statutory rights under FEHA and (2) does
not have any mechanisms for review, such as “judicial review, to ensure the
arbitrator correctly applied the law or correct principles of evidence.” (Opp.
13: 18-19). However, these arguments are unavailing. “With respect to FEHA
claims, our Supreme Court has outlined certain minimum requirements which must
be met to ensure the preservation of statutory rights in an arbitral forum: (1)
the agreement must provide for neutral arbitrators, (2) the agreement may not
limit remedies provided under the statute, (3) there must be sufficient
discovery to adequately arbitrate the employee's statutory claim, (4) there
must be a written arbitration decision and judicial review sufficient to ensure
the arbitrator complied with the statutory requirements, and (5) the employer
must pay all costs unique to arbitration.” (Ramos
v. Superior Court (2018) 28 Cal.App.5th 1042, 1059, as modified (Nov. 28,
2018)). Here, the Agreement satisfies these requirements: (1) there is a
neutral arbitrator (Agmt. ¶ B), (2) the agreement does not limit remedies or
relief available (Agmt. ¶ B), (3) the agreement does not limit discovery, (4)
the agreement indicates that the decisions shall be written, issued within 30
days, state the reasons for the decision, and be based on governing law and
evidence, (Agmt. ¶ 1), and (5) Defendant has agreed to pay costs (Agmt. ¶ B).
As for Plaintiff’s argument about challenging the award, nothing
in the Agreement expressly prohibits the party from doing so. The rules of both
the California Arbitration Act and the FAA contain procedures, which cannot be
waived when entering into the agreement. Because the Agreement meets the
requirements under Armendariz as it
relates to FEHA statutory rights and allows for judicial review, the agreement
is not substantively unconscionable.
Plaintiff alternatively requests
that the AAA provision be struck from the arbitration, as the discovery rights
are limited. This request is denied, for the reasons indicated above. The Court
also is aware of the numerous appellate court decisions rejecting similar arguments.
Even if the adhesive nature of the
contract is sufficient to establish some procedurally unconscionability, the
lack of substantive unconscionability is dispositive. Employing the sliding
scale that this court must utilize, the minimal amount of procedural
unconscionability coupled with the lack of substantive unconscionability, is
not sufficient to render the arbitration agreement invalid. In other words, the
arbitration agreement is valid and enforceable.
Stay of the Proceedings:
CCP § 1281.4 provides the following:
If a court of competent
jurisdiction, whether in this State or not, has ordered arbitration of a
controversy which is an issue involved in an action or proceeding pending
before a court of this State, the court in which such action or proceeding is
pending shall, upon motion of a party to such action or proceeding, stay the
action or proceeding until an arbitration is had in accordance with the order
to arbitrate or until such earlier time as the court specifies.
Here, the Defendant has requested a stay of the proceeding.
The arbitration agreement is valid, and the Plaintiff is compelled to undergo
arbitration. Therefore, a stay of the proceedings is required.
Conclusion:
For
the foregoing reasons, the Court decides the pending motion as follows:
Motion to Compel Arbitration is
GRANTED.
Request for a Stay on the
Proceedings is GRANTED.
Action is stayed and an OSC Re status of arbitration and/or
dismissal is set for March 1, 2023, at 8:30 a.m. in Dept. 51.
Moving party is to give notice.
IT IS SO ORDERED.
Dated: August
11, 2022 __________________________________ Upinder
S. Kalra
Judge
of the Superior Court