Judge: Frank M. Tavelman, Case: 22BBCV01092, Date: 2023-04-28 Tentative Ruling

Case Number: 22BBCV01092    Hearing Date: April 28, 2023    Dept: A

LOS ANGELES SUPERIOR COURT

NORTH CENTRAL DISTRICT - BURBANK

DEPARTMENT A

MOTIONS TO COMPEL ARBITRATION & STAY MATTER

ALLEGATIONS: 

On November 29, 2022, Jonathan Alberto Funez Arroyo (“Plaintiff”) filed suit against Dhar Mann Studios, Inc. (“Defendant”) for claims arising out of his employment with Defendant. The Complaint contains seven causes of action: (1) failure to provide meal break, (2) failure to provide rest break, (3) failure to pay all wages due, (4) retaliation, (5) failure to prevent and remedy discrimination, harassment, and retaliation, (6) violation of business professions code §17200 et seq., and (7) wrongful termination.

HISTORY: 

On March 10, 2023, Defendant filed its motion to compel arbitration and motion to stay proceedings. On April 17, 2023, Plaintiff filed his Opposition. On April 21, 2023, Defendant filed their Reply.    

RELIEF REQUESTED: 

Defendant moves for an order compelling Plaintiff to submit the entire Complaint to binding arbitration. 

Defendant moves to stay the proceedings pending the Court’s final ruling on the motion to compel arbitration and pending the results of the binding arbitration between the parties. 

ANALYSIS: 

Compel Arbitration 

I.          LEGAL STANDARD 

Code of Civil procedure § 1281.2 states: “[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.”

A party seeking to compel arbitration has the initial burden to prove, by a preponderance of the evidence, the existence of a valid and enforceable arbitration agreement. (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972.) If the moving party has met its initial burden, then the burden shifts to respondents to prove the falsity or unenforceability of the arbitration agreement. (Ibid.) 

II.         MERITS 

Defendant’s Burden to Show Enforceable Arbitration Agreement 

The arbitration agreement submitted by Defendant is presented in the body of a six-page employment agreement. (Ruvalcaba Decl., Exh. A.) The arbitration clause is identified by the heading “Article 4 Mediation and Arbitration”. (Id.) Article 4.03 is entitled “Arbitration of Disputes” and reads as follows:

“Company and Employee agree that any dispute or claim in law or equity arising between them out of this Agreement, which is not settled through mediation, shall be decided by neutral, binding arbitration through the American Arbitration Association's (“AAA'') National Rules for the Resolution of Employment Disputes, as the exclusive remedy for such controversy, claim or dispute.”

The Court finds that Defendant’s evidence of the arbitration clause is sufficient to prove its burden of an enforceable arbitration agreement between the parties. As such the burden shifts to Plaintiff to show unenforceability.  

Plaintiff’s Burden to Show Unenforceability

Plaintiff argues he did not assent to the arbitration agreement. Plaintiff argues the agreement to arbitrate stands separate from the employment agreement and thus his assent to the employment agreement is not assent to arbitration. In support of this argument, Plaintiff cites to Meyer v. Uber Techs., Inc., 868 F.3d 66, 73(2d Cir. 2017), which the Court notes is a federal case with no direct precedential effect in this state court proceeding. Regardless, Plaintiff cites Meyer for the general notion that assent exists only where an agreement to arbitrate is conspicuous and unambiguous. Plaintiff does not explain how this arbitration agreement is not conspicuous. Plaintiff also offers no argument as to the agreement’s ambiguity. Plaintiff merely avers that the agreement was not easily discernable in the employment contract, such is insufficient to avoid arbitration.

Plaintiff also cites to Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337. Plaintiff argues Victrola held that a signature directly next to an arbitration clause is required to prove consent. This is not the case. Victorola dealt with whether the party’s signature next to a general arbitration clause intended to incorporate the FAA provision of the clause which contained a separate signature line. (Victrola supra, 46 Cal.App.5th 337, at 350.) The Victrola court did not discuss whether a signature next to a clause within a larger agreement constitutes assent. In fact, in Martinez v. Baron HR, Inc. (2020) 51 Cal. App. 5th 962, the Court of Appeal concluded a contract’s arbitration provision valid where no signature was made next to an arbitration clause, despite a space being designated for it. (Martinez supra, 51 Cal. App. 5th 962, 965.)

The Court finds the arbitration agreement sufficiently shows assent of both parties to arbitrate.  

Where “the language of the signed agreement is not ambiguous…[i]t is an objective expression of the parties' mutual assent to arbitrate,” and Plaintiff cannot “create ambiguity with his previously undisclosed assertions he did not want to arbitrate or waive his jury trial right when he signed the agreement.” (Martinez supra, 51 Cal. App. 5th 962, 969-970.) “The law is well-settled that unexpressed subjective intentions are irrelevant to the issue of mutuality.” (Id. at 970.) Further, “one who accepts or signs an instrument, which on its face is a contract, is deemed to assent to all its terms, and cannot escape liability on the ground that he has not read it.” (Randas v. YMCA of Metro. Los Angeles (1993) 17 Cal. App. 4th 158, 163.)

Here, the arbitration clause is differentiated from other sections of the agreement by a clear heading which indicates it is an agreement to arbitrate. (Ruvalcaba Decl., Exh. A.) The agreement states in clear terms the parties agree to arbitrate “any dispute or claim in law or equity arising between them out of this Agreement.” (Id.) The clause also contains a section in all capitalized letters stating:

“BY AGREEING TO THIS BINDING ARBITRATION PROVISION, BOTH EMPLOYEE AND THE COMPANY GIVE UP ALL RIGHTS TO TRIAL BY JURY.”

The language of the arbitration clause is clear and unambiguous. Plaintiff’s contention that he was not aware of the agreement is insufficient to invalidate his assent.

Plaintiff also argues the agreement is unenforceable because its terms and conditions are boilerplate, and the drafters have no reason to believe the adhering party would have assented to the terms if they knew of their presence. Plaintiff cites to no binding authority for this contention. The only citation Plaintiff provides is to Cal. Civ. Prac. Workers' Compensation § 7:14. Besides not being binding law, the Court finds Plaintiff has misrepresented this source. Cal. Civ. Prac. Workers' Compensation § 7:14 discusses the use of boilerplate language in worker’s compensation settlement agreements, a matter which bears no relevance on the instant motion.

Plaintiff also generally argues that Defendant had no reason to believe Plaintiff would have agreed to waive his constitutional right to trial if he was aware of the arbitration agreement. People read and agree to arbitration agreements daily, the Court finds no merit in Plaintiff’s argument.

III.       CONCLUSION 

The Court finds that Defendant has satisfied its initial burden of proving the existence of an enforceable arbitration agreement, and Plaintiff has not shown unenforceability. As such, the Court GRANTS the motion to compel arbitration.

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Stay 

I.          LEGAL STANDARD 

Once arbitration has been compelled, in whole or in part, a stay of proceedings is mandatory if the issues in the arbitration and the pending action overlap. (C.C.P. § 1281.4 (if a court “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.”)) 

“The purpose of the statutory stay [under section 1281.4] is to protect the jurisdiction of the arbitrator by preserving the status quo until arbitration is resolved. In the absence of a stay, the continuation of the proceedings in the trial court disrupts the arbitration proceedings and can render them ineffective.” (Federal Ins. Co. v. Superior Court (1998) 60 Cal.App.4th 1370, 1374-1375 (citations omitted).) 

II.         MERITS 

As the Court grants the motion to compel arbitration in its entirety, the Court also grants the motion to stay the proceedings pending arbitration. 

III.       CONCLUSION 

The Court grants the stay pending arbitration. 

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RULING: 

In the event the parties submit on this tentative ruling, or a party requests a signed order or the court in its discretion elects to sign a formal order, the following form will be either electronically signed or signed in hard copy and entered into the court’s records. 

ORDER 

Dhar Mann Studios, Inc.’s Motion to Compel Arbitration and Motion for Stay came on regularly for hearing on April 28, 2023 with appearances/submissions as noted in the minute order for said hearing, and the court, being fully advised in the premises, did then and there rule as follows: 

THE MOTION TO COMPEL ARBITRATION IS GRANTED. 

THE MOTION FOR STAY IS GRANTED. 

THE COURT ADVANCES AND VACATES ALL REMAINING DATES.   COURT SETS AN OSC RE BINDING ARBITRATION FOR OCTOBER 24, 2023 AT 9:00 AM.

DEFENDANT TO GIVE NOTICE.

IT IS SO ORDERED. 

DATE:  April 28, 2023                             _______________________________ 

                                                                        F.M. TAVELMAN, Judge 

Superior Court of California 

County of Los Angeles