Judge: Upinder S. Kalra, Case: 23STCV30265, Date: 2024-05-16 Tentative Ruling

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Case Number: 23STCV30265    Hearing Date: May 16, 2024    Dept: 51

Tentative Ruling

Judge Upinder S. Kalra, Department 51

HEARING DATE:   May 16, 2024                                     

CASE NAME:           Margarita Soto v. BVCV Operating Company LLC, et al.

CASE NO.:                23STCV30265

MOTION TO COMPEL ARBITRATION

MOVING PARTY:  Defendant BVCV Operating Company LLC dba Monte Vista Healthcare Center

RESPONDING PARTY(S): Plaintiff Margarita Soto

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 December 12, 2023, Plaintiff Margarita Soto (Plaintiff) filed a Complaint against Defendant BVCV Operating Company, LLC (Defendant) with seven causes of action for: (1) Disability Discrimination in Violation of FEHA, (2) Failure to Provide Reasonable Accommodations in Violation of FEHA, (3) Failure to Engage in Good Faith Interactive Process in Violation of FEHA, (4) Retaliation in Violation of FEHA, (5) Failure to Prevent Discrimination and Retaliation in Violation of FEHA, and (6) Wrongful Termination in Violation of Public Policy.

Plaintiff alleges that she began working for Defendant as in June 2023 as a LVN Night Nurse. (Compl. ¶ 17.) On August 29, 2023, Plaintiff experienced a work injury wherein she fell on a chair, resulting in extreme pain to her neck and back. (Id. at ¶ 18.) Because of her injuries, she was required to wear a back brace for support, and her doctor advised against certain physical activities. (Id. at ¶¶ 19-20.) Her doctor recommended a leave of absence for one week and modified duties upon returning to work. (Id. at ¶ 21.) Plaintiff provided her doctor’s note to Defendant’s Director of Nursing, who refused to consider any work modifications. (Id. at ¶ 21.) After returning from her previously scheduled leave unrelated to her injury that was scheduled between September 11 and September 27, Plaintiff learned from the Director of Nursing that she had been terminated effective October 3, 2023. (Id. at ¶¶ 22-24.)

On February 6, 2024, Defendant brought the instant motion to compel arbitration. On May 3, 2024, Plaintiff filed an opposition. On May 8, 2024, Defendant 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.)¿¿ 

EVIDENTIARY OBJECTIONS

Plaintiff objects to various portions of the Declaration of Lisa Radogna. These objections are overruled in their entirety.

ANALYSIS:

Defendant contends there is a valid written arbitration agreement because Plaintiff signed the Acknowledgement of Policies, Rules and Agreement for At-Will Employment and Arbitration (Acknowledgment) when she began her employment. Plaintiff argues the agreement is unenforceable because it is unconscionable.

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 Acknowledgement with Plaintiff’s physical signature. (Declaration of Lisa Radogna (Radogna Decl.) ¶ 4, Exhibit A.)  The Acknowledgment sets forth the relevant terms of the arbitration agreement and incorporates by reference the arbitration provision found within the Employee Handbook. (Id. at ¶ 6, Exhibit B at pp. 10-11.) Collectively, these documents comprise of the arbitration agreement between the parties.

“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 Acknowledgment.

Therefore, the Defendant has established that the Arbitration Agreement exists.   

2.      The Agreement Covers the Dispute at Issue: 

Applicability of the Arbitration Agreement to Subject Dispute 

Defendant contends the arbitration agreement covers the subject dispute because Plaintiff filed an employment action that is not otherwise excluded by the agreement.  (Motion at pg. 5.) Plaintiff did not directly oppose this argument.

Here, the arbitration agreement applies to the instant dispute. First, the Acknowledgment states it covers “any dispute, controversy or claim arising out of or relating to [Plaintiff’s] employment relationship with [Defendant]. . . .” (Radogna Decl. ¶ 4, Exhibit A.) Second, the arbitration provision within the Employee Handbook states: “if any disputes between employer and employee cannot be resolved, then [Defendant] will require that such disputes be resolved in binding arbitration.” (Radogna Decl. ¶ 6, Exhibit B at pg. 10.)  There is no dispute that Plaintiff’s claim concerns her employment with Defendant and is not otherwise carved out.  

Therefore, the arbitration agreement applies to the subject dispute. 

Defenses to Arbitration 

Plaintiff argues that the court should not compel arbitration because the arbitration agreement is procedurally and substantively 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)).¿¿ “The party resisting arbitration bears the burden of proving unconscionability.”   (Pinnacle Museum Tower Assn. v. Pinnacle Market Dev. (US), LLC (2012) 55 Cal.4th 223, 247.)

a.       Procedural Unconscionability 

“Procedural unconscionability pertains to the making of the agreement; it focuses on the oppression that arises from unequal bargaining power and the surprise to the weaker party that results from hidden terms or the lack of informed choice.”  (Ajamian v. CantorCO2e, L.P. (2012) 203 Cal.App.4th 771, 795.) 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).) Arbitration clauses are often found in adhesion contracts (standardized contracts drafted by a party of superior bargaining power and presented to the weaker party on a take-it-or-leave-it basis).  (See, e.g., Armendariz, supra, 24 Cal.4th at 113-114.)

Plaintiff argues the agreement is procedurally unconscionable for the following reasons. First, she contends that it is a contract of adhesion because she was not provided an opportunity to negotiate the terms of the arbitration agreement and believed that she had to sign the agreement to be hired. (Opposition at pg. 3.) Second, she argues that the actual arbitration provisions were scattered throughout the Employee Handbook, which contributed to surprise. (Ibid.) Third, Plaintiff asserts that the arbitration provision within the Employee Handbook is misleading because it misconstrues the benefits of arbitration and the employer’s obligations. (Id. at pg. 4.) In this regard, Plaintiff reasons the language found within the arbitration provision is misleading because it suggests that arbitration will be a cost-saving benefit for the employee, but the reality is that the employer is the true beneficiary of these cost-savings. (Ibid.) Fourth, Plaintiff asserts that the arbitration agreement fails to identify or incorporate the relevant arbitration rules. (Id. at pg. 5, relying on Trivedi v. Curexo Technology Corp. (2010) 189 Cal.App.4th 387, 393.)

These arguments are insufficient to show that there is a large degree of procedural unconscionability. The mere fact an adhesion contract is involved does not per se render the arbitration provision unenforceable because such contracts are “an inevitable fact of life for all citizens—businessman and consumer alike.” (Graham v. Scissor-Tail, Inc.¿(1981) 28 Cal.3d 807, 817.) In terms of any indication of oppression, Plaintiff merely relies on her own declaration, and it is noted that it lacks sufficient detail to show that Plaintiff was actually pressured by one of Defendant’s representatives or prohibited from asking questions. (See Declaration of Margarita Soto at ¶ 2.)

With regard to Plaintiff’s claim of surprise, this is also unpersuasive because, upon review of the arbitration agreement, the terms are legible and not purposefully hidden. (See OTO, L.L.C. v. KHO (2019) 8 Cal.5th 111, 128.) Moreover, as to the contention that the arbitration agreement is misleading, Plaintiff has failed to cite to any legal authority to support this as a basis of procedural unconscionability. The cost saving remarks found within the arbitration agreement are not instances of oppression or surprise because they do not take advantage of a weaker party.  Lastly, the failure to include the arbitration rules is not dispositive. While the lack of arbitration rules can be considered oppressive (see Samaniego v. Empire Today LLC (2012) 205 Cal.App.4th 1138, 1146), Defenant has not artfully hidden the reference to such rules. (Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1246.) As stated in the arbitration agreement, either ADR or JAMS would be utilized for their arbitration services. With this information, Plaintiff would have been able to find the relevant rules.

Therefore, the agreement is minimally procedurally unconscionable.¿ 

b.      Substantive Unconscionability 

“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, Plaintiff contends that the arbitration agreement is substantively unconscionable for the following reasons. First, Plaintiff again references the misleading statements regarding the cost-savings associated with arbitration. (Opposition at pp. 5-6.) Second, Plaintiff argues that the arbitration agreement is one-sided because it limits her ability to pursue a representative PAGA action or class action. (Id. at pp. 6-7.) Third, Plaintiff contends that the arbitration provision improperly limits her administrative remedies because requires damage claims arising from rights afforded by statute to be compelled into arbitration. (Id. at pg. 7.) Lastly, Plaintiff argues that the severance provision within the arbitration agreement is one-sided. (Id. at pg. 8.)  

In consideration of these arguments, the Court finds that the arbitration agreement is not substantively unconscionable. First, the cost-saving remarks are not indicative that the agreement is one-sided. Second, Plaintiff’s reference to limits imposed on representative actions by the arbitration agreement is a red herring argument because Plaintiff does not assert any such claims. Moreover, the FAA preempts the rule prohibiting representative actions in arbitration agreements. (Viking River Cruises, Inc. v. Moriana (2022) 142 S. Ct. 1906, 1922.)

Third, Plaintiff’s assertion that the arbitration agreement limits her ability to recovery through administrative remedies is illogical and misinterprets the arbitration agreement. As stated in the arbitration agreement, employees are permitted to submit administrative claims, but if they seek to pursue such claims of damages based upon statutory rights, they must be resolved through arbitration. (Rodogna Decl. ¶ 6, Exhibit B at pg. 10.) This has no bearing on Plaintiff’s ability to exhaust her administrative remedies.  Similarly, it is illogical to conclude that the severance provision is one-sided because it is a well-established concept within contract drafting.

Thus, the arbitration agreement lacks substantive unconscionability.  Accordingly, Plaintiff has failed to meet her burden of establishing that the arbitration agreement is unconscionable.

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:             May 16, 2024              __________________________________                                                                                                                Upinder S. Kalra

                                                                                    Judge of the Superior Court