YONG PAK, ET AL. VS GT MADISON REALTY LLC, ET AL.

Tentative Rulings

Case Number: *******4640 Hearing Date: October 20, 2021 Dept: 61

Defendants GT Madison Realty, LLC, and Oak Park Manor, LP’s Motion to Compel Arbitration is DENIED.

I. MOTION TO COMPEL ARBITRATION

On petition of a party to an arbitration agreement to arbitrate a controversy, a court must order the petitioner and respondent to arbitrate the controversy if it determines the arbitration agreement exists, unless (1) the petitioner has waived its right to arbitrate; (2) grounds exist for the revocation of the agreement; or (3) “[a] party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact.” (Code Civ. Proc., ; 1281.2.)

“[T]he party moving to compel arbitration bears the burden of establishing the existence of a valid agreement to arbitrate, and the party opposing arbitration bears the burden of proving by a preponderance of the evidence any fact necessary to its defense. The role of the trial court is to sit as a trier of fact, weighing any affidavits, declarations, and other documentary evidence, together with oral testimony received at the court's discretion, to reach a determination on the issue of arbitrability.” (Hotels Nevada v. L.A. Pacific Center, Inc. (2006) 144 Cal.App.4th 754, 758.)

Defendants present an arbitration agreement executed by Plaintiff on behalf of Decedent within the facility admissions agreement on August 11, 2020. (Motion Exh. 1.) The agreement applies to “any controversy or claim arising out of or relating to this contract, or the breach thereof.” (Motion Exh. 1 at p. 16.) The agreement is authenticated by Jennifer Liefveld, who was the interim administrator for Defendant Oak Park Manor, LP, and who delivered the agreement to Plaintiff and executed it. (Liefyeld Decl. ¶¶ 4–5.)

Plaintiff objects to the agreement on a number of bases. First, Plaintiff notes that the space for the signature of the facility’s representative is not present on the agreement, and the admission agreement is missing one of its opening pages, which may define its parties. (Opposition at pp. 6–9.) Plaintiff further argues that the scope of the agreement, which applies to claims arising out of the contract, does not encompass the present elder abuse and wrongful death action. (Opposition at pp. 9–10.) Plaintiff also notes that she signed the agreement only as a representative of Decedent, and cannot be compelled to arbitrate her own claims, meaning that the request for arbitration must be denied for risk of inconsistent rulings under Code of Civil Procedure ; 1281.2. (Opposition at pp. 11–12.) Plaintiff finally argues that the agreement is unconscionable and unlawful under Health & Safety Code ; 1569.269. (Opposition at pp. 12–17.)

Plaintiffs’ arguments are persuasive. First, enforcing the arbitration agreement executed between Oak Manor and Decedent carries an unacceptable risk of conflicting rulings on common issues of law and fact with those claims not subject to the agreement under Code of Civil Procedure ; 1281.2, subd. (c). That statute provides, “A party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact.” (Code Civ. Proc. ; 1281.2, subd. (c).)

Here, there exist claims as to third parties to the arbitration agreement, namely all Plaintiffs’ claims against GT Madison Realty, LLC, and Plaintiff’s claims against both Defendants. This is because GT Madison is not named as a party to the arbitration agreement, and Liefveld, whose testimony authenticates the agreement, testifies only that she is employed by Defendant Oak Park Manor, LP and executed the agreement on that Defendant’s behalf. (Liefveld Decl. ¶¶ 1–5.) Defendants in reply attempt to argue that GT is actually a party to the agreement because a previously omitted page of the agreement defines “facility” to include “the operator of the facility,” and because GT is alleged and licensed to operate Defendant Oak Park Manor. (Reply at pp. 4–5.) But the inclusion of this potential reference to GT in the agreement does not mean that GT is actually a party to the contract, particularly as Liefveld does not allege that the agreement was presented or executed on behalf of GT.

Even if the contract could be construed to include GT as a party, it would only extend to Decedent’s claims, not to Plaintiff’s, thus creating the risk of conflicting rulings that Code of Civil Procedure ; 1281.2 is designed to prevent. The case of Daniels v. Sunrise Senior Living, Inc. (2013) 212 Cal.App.4^th 674, is directly on point. There, the court of appeal upheld a trial court decision denying a motion to compel arbitration under Code of Civil Procedure ; 1281.2, subd. (c), based on the arbitrability of a survivor cause of action but not a successor’s wrongful death action. (Id. at pp. 686-687.) When the defendant argued that the existence of non-arbitrable claims did not obviate the arbitrability of other claims, the court rejected this argument, reasoning that the plaintiff’s claims were not merely non-arbitrable, but that plaintiff was a third party to the agreement under section 1281.2. (Id. at p. 687.) That case specifically distinguished the very authority that Defendants rely upon here to justify enforcing the arbitration agreement. (Ibid.; Reply at p. 6.) Accordingly, this court may decline to enforce the arbitration agreement under Code of Civil Procedure ; 1281.2.[1]

Furthermore, Plaintiff persuasively argues that the arbitration agreement at issue is illegal under Health & Safety Code ; 1569.269. (Opposition at pp. 15–16. That statute enumerates rights held by residents of residential care facilities, such as those run by Defendants (Complaint ¶ 3), and contains the following subsection:

No provision of a contract of admission, including all documents that a resident or his or her representative is required to sign as part of the contract for, or as a condition of, admission to a residential care facility for the elderly, shall require that a resident waive benefits or rights to which he or she is entitled under this chapter or provided by federal or other state law or regulation.

(Health & Safety Code ; 1569.269, subd. (c).)

Plaintiff cites decisions in which similar statutes were held to prohibit the application of arbitration agreements. (See Harris v. University Village Thousand Oaks, CCRC, LLC (2020) 49 Cal.App.5^th 847, 852–853 [holding that arbitration agreement in residential lease agreement violated Civil Code ; 1953, which prohibits waiver of procedural litigation rights in such leases].) Since the right to jury trial in civil actions is a right to which Decedent was entitled under federal and state law, it was unlawful to require a waiver of this right as a condition to Decedent’s admission into the facility. Defendants in reply argue only that arbitration agreements are generally lawful, and make no reference to this particular statute. (Reply at pp. 7–8.)

Accordingly, the motion to compel arbitration is DENIED.