Judge: Upinder S. Kalra, Case: 23STCV28864, Date: 2024-03-13 Tentative Ruling
Case Number: 23STCV28864 Hearing Date: March 13, 2024 Dept: 51
Tentative Ruling
Judge Upinder S.
Kalra, Department 51
HEARING DATE: March
13, 2024
CASE NAME: Anna
Wahdan v. Lancaster Hospital Corporation
CASE NO.: 23STCV28864
MOTION
TO COMPEL ARBITRATION
MOVING PARTY: Defendant
Lancaster Hospital Corporation d/b/a Southwest Palmdale Regional Medical Center
RESPONDING PARTY(S): Plaintiff Anna Wahdan
REQUESTED RELIEF:
1. An
Order compelling arbitration and an Order staying the matter pending
arbitration.
TENTATIVE RULING:
1. Motion
to Compel Arbitration is GRANTED;
2. The
court ORDERS this action STAYED pending arbitration.
STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:
On November 27, 2023, Plaintiff Anna Wahdan (Plaintiff)
filed a Complaint against Defendants Lancaster Hospital Corporation and
Universal Health Services, Inc. (Defendants) with seven causes of action for:
(1) Wrongful Termination in Violation of Public Policy, (2) Retaliation in
Violation of Govt. Code §12940(h), (3) Retaliation Cal. Labor Code §1102.5, (4)
Disparate Treatment Gender Discrimination in Violation of Govt. Code §12940(a),
(5) California Equal Pay Act – Cal Labor Code §1197.5, (6) Failure to Prevent
Retaliation and Discrimination in Violation of Govt. Code §12940(k), and (7)
Retaliation and Discrimination – California Family Rights Act in Violation of
Govt. Code §12945.2(k).
Plaintiff alleges that she worked for Defendants as a
Director of Diagnostic Imaging from approximately June 1, 2020 to September 12,
2023. She claims that she was wrongfully terminated under the guise of a
“reduction in force” because of her racial discrimination complaint, Defendants’
failure to address it, retaliation for bringing the discrimination complaint,
retaliation for taking protected medical leave, and because of gender
discrimination.
On January 16, 2024, Defendant Lancaster Hospital
Corporation (LHC) brought the instant motion to compel arbitration. On February
29, 2024, Plaintiff filed an opposition. On March 6, 2024, LHC filed a reply.
LEGAL STANDARD:
Under California
law, the trial court has authority to compel arbitration pursuant to CCP
§1281.2 where a written agreement for such arbitration exists and one of the
parties refuses to arbitrate.¿ Specifically, the statute provides that, “[o]n
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
arbitrate the controversy exists.”¿ The statute further sets forth four grounds
upon which the trial court may refuse to compel arbitration: (a) the right to
compel arbitration was waived, (b) recission of the agreement, (c) there is a
pending action or special proceeding with a third party, arising out of the
same transaction; and (d) petitioner is a state or federally chartered
depository institution.¿
“[T]he
petitioner bears the burden of proving the existence of a valid arbitration
agreement by the preponderance of the evidence . . . .”¿¿(Giuliano v. Inland Empire Personnel, Inc.¿(2007) 149 Cal.App.4th
1276, 1284¿(Guiliano).)¿“In
determining whether an arbitration agreement applies to a specific dispute, the
court may examine only the agreement itself and the complaint filed by the
party refusing arbitration [citation]. The court should attempt to give effect
to the parties' intentions, in light of the usual and ordinary meaning of the
contractual language and the¿circumstances under which the agreement was
made.”¿¿(Weeks v. Crow¿(1980) 113
Cal.App.3d 350, 353.)¿ “To determine whether a contractual arbitration clause
requires arbitration of a particular controversy, the controversy is first
identified and the issue is whether that controversy is within the scope of the
contractual arbitration clause.”¿¿(Titolo¿v.
Cano¿(2007) 157 Cal.App.4th 310, 316.)¿ “Doubts as to whether an
arbitration clause applies to a particular dispute are to be resolved in favor
of sending the parties to arbitration. The court should order them to arbitrate
unless it is clear that the arbitration clause cannot be interpreted to cover
the dispute.”¿¿(California Correctional
Peace Officers¿Ass'n¿v. State¿(2006) 142 Cal.App.4th 198, 205.)¿¿¿¿
¿
“[A] party
opposing the petition bears the burden of proving by a preponderance of the
evidence any fact necessary to its defense. [Citation.] In these summary
proceedings, the trial court sits as a trier of fact, weighing all the
affidavits, declarations, and other documentary evidence, as well as oral
testimony received at the court's discretion, to reach a final
determination.”¿¿(Giuliano, supra, at
p. 1284.)¿¿
ANALYSIS:
Defendant contends there is a valid written arbitration
agreement because Plaintiff signed the Alternative Resolution for Conflicts
Agreement (ARC) when she began her employment. Defendant also contends that the
ARC applies to co-defendant Universal Health Services, Inc. (Waters Decl. ¶¶
3-13.) Plaintiff argues the agreement is unenforceable due to fraud.
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).)¿¿¿¿¿
1. Agreement
Between Parties:
The moving party
can meet its initial burden of proving the existence of an arbitration
agreement by attaching a copy of the Agreement to this motion bearing the
signature of the opposing party. (See Bannister
v. Marinidence Opco, LLC (2021) 64 Cal.App.5th 541, 541-543 [“The party
seeking arbitration can meet its initial burden by attaching to the petition a
copy of the arbitration agreement purporting to bear the¿respondent's
signature.”].) Alternatively, the moving party can meet its initial burden by
setting forth the agreement’s provisions in the motion. (See Cal. Rules of
Court, rule 3.1330; see also Condee v.
Longwood Management Corp. (2001) 88 Cal.App.4th 215, 219.)
Here, Defendants met their initial burden because they
attached a copy of the ARC with Plaintiff’s physical signature. (Declaration of
Lilly Fernandez (Fernandez Decl.) ¶ 2, Exhibit A.)
“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.” (Gamboa
v. Northeast Community Clinic (2021) 72 Cal. App. 5th 158,165 (Gamboa).) The evidence must be
sufficient to create a factual dispute to shift the burden back to the
arbitration proponent who retains the ultimate burden of proving, by a preponderance
of the evidence, the authenticity of the signature. (Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747, 755 (Iyere).)
Plaintiff does not challenge her signature on the ARC.
Therefore, the Defendant has established that the
Arbitration Agreement exists.
2. The Agreement Covers the Dispute at Issue:
Applicability of ARC
to Subject Dispute
Defendant contends the ARC covers the subject dispute
because Plaintiff filed an employment action that is not otherwise excluded by
the ARC. Plaintiff did not directly oppose this argument.
Here, the ARC applies to the instant dispute. First, the ARC
states it covers “any past, present or future dispute arising out of or related
to Employee’s application for employment, employment and/or termination from
employment with PRMC or one of its affiliates, subsidiaries or parent companies
(“Company”) and survives after the employment relationship terminates.” [Fernandez
Decl., Exhibit A.] Plaintiff’s claim against Defendants concerns her employment
with them and is not otherwise carved out.
Therefore, the ARC applies to the subject dispute.
Defenses to
Arbitration
Plaintiff argues that the court should not compel
arbitration because Defendants fraudulently obtained her signature on the ARC. Upon
closer review of Plaintiff’s briefing, the court interprets this argument as
challenging the ARC as procedurally unconscionable.
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)).¿
Unconscionability
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 (Armendariz)).¿¿
a. Procedural
Unconscionability
Defendant contends there is no procedural unconscionability
because the ARC is clear on its face, it is a separate stand-alone agreement, included
an opt-out procedure, and was presented to Plaintiff for consideration along
with other new hire documents prior to beginning her employment. Plaintiff
argues there is substantial procedural unconscionability because she was not
permitted to read it, no one answered her questions, she was rushed to sign it,
and she was not given a copy of it. Defendant replies that Plaintiff
acknowledged receipt of the ARC on other signed onboarding documents and that
her declaration is self-serving.
Courts determine whether an agreement is procedurally
unconscionable 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 (Carmona).) Examples of contracts that
are procedurally unconscionable are contracts of adhesion, 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, supra, at p. 113). “The
circumstances relevant to establishing oppression include, but are not limited
to (1) the amount of time the party is given to consider the proposed contract;
(2) the amount and type of pressure exerted on the party to sign the proposed
contract; (3) the length of the proposed contract and the length and complexity
of the challenged provision; (4) the education and experience of the party; and
(5) whether the party’s review of the proposed contract was aided by an
attorney. (OTO, L.L.C. v. Kho (2019)
8 Cal.5th 111, 126-27 (OTO).)
Here, there is minimal procedural unconscionability. “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). Plaintiff’s arguments for procedural
unconscionability fail under OTO
because she claims she felt rushed to sign the onboarding documents because the
“person” with her signing the paperwork “did not want to be next to me” due to
the ongoing COVID-19 pandemic. (Wahdan Decl. ¶¶ 7, 8, 9.) Plaintiff claims she
did not know what she was signing. (Wahdan Decl. ¶¶ 9, 12.) However, Plaintiff
admits that she, too, was scared of COVID-19 and that “no one wanted to be
around each other.” (Wahdan Decl. ¶ 9.) It
appears to the court that both parties wished to execute these documents
quickly. Additionally, Plaintiff’s signature on the ARC appears on the same
page as the clearly-labeled opt-out provision. (Fernandez Decl., Exhibit A.) Moreover,
the ARC clearly states in bold that “Arbitration is not a mandatory
condition of Employee’s employment. . . .” (Fernandez Decl., Exhibit A.) The
court is not persuaded that Plaintiff did not at least see the opt-out clause,
in Paragraph 9 or Clause 11, Enforcement of This Agreement that were on the
same page, just above her signature line. (Ibid.)
Finally, the ARC is only four pages long and is written in plain English.
(Fernandez Decl., Exhibit A.) Plaintiff has not otherwise provided evidence of
surprise or oppression.
Thus, the
agreement is minimally procedurally
unconscionable.¿
b. Substantive Unconscionability
Plaintiff has not addressed whether the ARC is
substantively unconscionable. Defendant contends it is not.
“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, supra, at p. 85). There are five minimum substantive
requirements to an enforceable arbitration agreement: (1) neutral arbitrators,
(2) more than minimal discovery, (3) written award sufficient for judicial
review, (4) all types of relief otherwise available in court, and (5) no
unreasonable costs or fees as a condition of access. (Armendariz, supra, at
p.102.) When there is little procedural unconscionability, a party opposing
arbitration must show substantial substantive unconscionability. (Id. at 114.)
Here, ARC is not substantively unconscionable. First, it
meets the Armendariz factors by
providing: (1) an arbitrator “selected by mutual agreement” of the parties; (2)
Discovery allows for two witness depositions, any expert witness depositions,
requests for production and subpoenas, as well as additional discovery by
mutual agreement or pursuant request to the Arbitrator; (3) “a decision or
award in writing, stating the essential findings of fact and conclusions of law”;
(4) The Arbitrator “may award any party any remedy to which the party is
entitled to under the law” limited to what would be available in a court of law;
and (5) the employee is responsible for their attorney’s fees but Defendant
pays the Arbitrator’s fee and arbitration fees. (Fernandez Decl., Exhibit A.) The
ARC mutually applies to both parties. (Ibid.)
Accordingly, the ARC lacks substantive unconscionability.
CONCLUSION:
For
the foregoing reasons, the Court decides the pending motion as follows:
1.Motion to Compel Arbitration is
GRANTED;
2.The court ORDERS this action
STAYED pending arbitration.
Moving party is to give notice.
IT IS SO ORDERED.
Dated: March 13, 2024 __________________________________ Upinder
S. Kalra
Judge
of the Superior Court