Judge: Upinder S. Kalra, Case: 24STCV13518, Date: 2024-12-03 Tentative Ruling
Case Number: 24STCV13518 Hearing Date: December 3, 2024 Dept: 51
Tentative Ruling
Judge Upinder S.
Kalra, Department 51
HEARING DATE: December
3, 2024
CASE NAME: Osbaldo
Ramirez v. Nissin Foods (USA) Company, Inc.
CASE NO.: 24STCV13518
MOTION
TO COMPEL ARBITRATION
MOVING PARTY: Defendant
Nissin Foods (USA) Company, Inc.
RESPONDING PARTY(S): Plaintiff Osbaldo Ramirez
REQUESTED RELIEF:
1. An
Order compelling Plaintiff’s Complaint to arbitration and staying the matter
pending arbitration.
TENTATIVE RULING:
1. Motion
to Compel Arbitration is GRANTED;
2. The
case is STAYED pending arbitration.
STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:
On May 30, 2024, Plaintiff Osbaldo Ramirez (Plaintiff) filed
a Complaint against Defendant Nissin Foods (USA) Company, Inc. (Defendant) with
two causes of action for: (1) Retaliation for Reporting Illegal Violation (Cal.
Lab. Code § 1102.5); and (2) Wrongful Termination in Violation of Public
Policy.
According to the Complaint, Plaintiff worked for Defendant
since October 2022 in HR. Plaintiff prepared severance agreements and an
internal I-9 audit where he identified numerous problematic and unlawful
employment practices. Plaintiff alleges that Defendant wrongfully terminated
his employment because he investigated and reported the various violations.
On July 31, 2024, Defendant filed the instant motion to
compel arbitration. On November 18, 2024, Plaintiff timely filed an opposition.
On November 22, 2024, Defendant timely filed a reply.
LEGAL STANDARD:
Request for Judicial
Notice
The court GRANTS Defendant’s request for judicial notice.
(Evid. Code § 452(h); See Kalnoki v.
First American Trustee Servicing Solutions, LLC (2017) 8 Cal.App.5th
23,37.) However, the court only takes judicial notice of the foregoing
documents only as to “the existence, content and authenticity of public records
and other specified documents”; it does not take judicial notice of the truth
of the factual matters asserted in those documents. (Dominguez v. Bonta (2022) 87 Cal. App. 5th 389, 400.)¿¿
Compel Arbitration
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.)¿
Here, while the Agreement at issue says the FAA
applies, Defendant provides argument under both the FAA and California law
concerning enforceability of the Agreement. As such, the court will apply
California law.
ANALYSIS:
Defendant contends there is a valid written arbitration
agreement because Plaintiff signed an Employment Agreement when he was promoted
to Senior Director of Human Resources which contains an arbitration clause (the
Agreement). (Declaration of Sandra McGinty Decl. ¶ 6, Exhibit D.) Plaintiff
argues the court should not enforce the Agreement because it is procedurally
and substantively 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).)¿¿¿
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, Defendant met their initial burden because they
attached a copy of the Agreement with Plaintiff’s physical signature. (McGinty
Decl. ¶ 6, Exhibit D.)
“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 his signature on the Agreement.
Therefore,
Defendant has established that an arbitration agreement exists.
Applicability of Agreement
to Subject Dispute¿
Defendant contends the Agreement covers the subject dispute
because Plaintiff filed an employment action that is not otherwise excluded by
the Agreement. Plaintiff did not oppose this argument.
Here, the Agreement applies to the instant dispute. Notably,
the Agreement covers “any dispute, claim or controversy concerning Employee’s
employment or separation therefrom, or any dispute, claim or controversy
arising out of or relating to any interpretation, construction, performance or
breach of this Agreement . . . .” (McGinty Decl., Exhibit D, pg. 5, item 6.) Plaintiff’s
Complaint concerns his termination.
Therefore, the Agreement applies to the subject dispute.
Defenses to
Arbitration
Plaintiff argues that the court should not compel
arbitration because the Offer Arbitration Agreement is procedurally and
substantively unconscionable and the Agreement does not supersede it. Defendant
replies that the Agreement does supersede the Offer Agreement and that the
Agreement is not procedurally or 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)).¿¿
As
a threshold matter, the court finds that the Agreement superseded the Offer
Agreement. In fact, it so states: “This Agreement constitutes the full and
complete expression of the rights and obligations of the Parties with respect
to the subject matter of this Agreement and superseded all other agreement,
written or oral, made by the Parties with respect to the subject matter herein.
All prior written or oral agreements pertaining to the employment of Employee
are hereby mutually terminated.” (McGinty Decl., Exhibit D, pg. 6, item 8.1.)
Thus, the court will analyze whether that Agreement is unconscionable and
disregards Plaintiff’s arguments concerning the Offer Agreement.
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)).¿¿¿
¿
Defendant contends there is no procedural unconscionability
because Plaintiff collaborated with Defendant to create the Agreement.
Plaintiff argues it is procedurally unconscionable because the arbitration
clause is buried in dense legalease and is a contract of adhesion.
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). It does appear that Plaintiff needed to sign
this Agreement to continue his employment with Defendant. However, Plaintiff’s
arguments that he did not know there was an arbitration clause in the Agreement
and did not understand what it was are not well taken. Plaintiff was VP Head of
Human Resources and worked with corporate counsel to create this Agreement.
(Complaint ¶¶ 18, 21, 23.)
¿
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, Agreement is not substantively unconscionable. First,
it meets the Armendariz factors by
providing: (1) a neutral arbitrator; (2) “discovery sufficient to adequately
arbitrate the Parties’ claims”; (3) a decision in writing; (4) the arbitrator
may grant injunctions or other relief; and (5) the Defendant will pay costs
specific to the arbitration process.[1] (McGinty Decl., Exhibit D, pg. 5, item 6.) The Agreement
mutually applies to both parties. (Ibid.)
Plaintiff’s
argument that the Agreement fails to carve out unwaivable rights renders the
entire Agreement unenforceable is unpersuasive. Plaintiff’s reliance on Hasty v. American Automobile Assn. etc. (2023)
98 Cal.App.5th 1041 (Hasty), is
misplaced. In Hasty, the explicit language of the arbitration agreement, absolutely
required the employee to bring claims in and individual capacity and barred
private attorney general actions. (Id.
at p. 1063.) Here, by contrast, the clause at issue states: “To the extent allowed by law, the
Parties to this Agreement intend to arbitrate any disputes between them on an
individual basis only.” (McGinty Decl., Exhibit D, pg. 5, item 6 9 (emphasis added).)
The court agrees with Defendant that this is not an express waiver of
unwaivable rights. To be clear, the language in Hasty did not include this limiting language. As such, read in context,
this provision was not a complete ban as the one in Hasty was. Lastly, the court remains unconvinced that he severability
clause is one sided.
¿
Therefore, the Agreement lacks substantive
unconscionability.¿
Accordingly, the court GRANTS Defendant’s motion to
compel arbitration.
CONCLUSION:
For
the foregoing reasons, the Court decides the pending motion as follows:
1. Motion
to Compel Arbitration is GRANTED;
2. The
case is STAYED pending arbitration.
Moving party is to give notice.
IT IS SO ORDERED.
Dated: December 3, 2024 __________________________________ Upinder
S. Kalra
Judge
of the Superior Court