Judge Teresa A. Beaudet, Case Number: 23STCV14035, Date: 2024-04-29 Tentative Ruling

Plaintiffs Juhee Bang by and through her Successor-in-Interest, Lora Tram, and Lora Tram (jointly, “Plaintiffs”) filed this action on June 16, 2023 against Defendant 1100 South Alvarado Street, LLC dba Olympia Convalescent Hospital (“Defendant”).

Plaintiffs filed the operative First Amended Complaint (“FAC”) on June 20, 2023, alleging causes of action for (1) elder abuse and neglect, (2) negligence, (3) violation of patient’s rights, and (4) wrongful death.

Defendant seeks an order compelling Plaintiffs to arbitrate the controversy alleged in the Complaint in binding arbitration and to stay the action. Juhee Bang by and through her Successor-in-Interest, Lora Tram (“Plaintiff”) opposes.

In a motion to compel arbitration, the moving party must prove by a preponderance of evidence the existence of the arbitration agreement and that the dispute is covered by the agreement. The burden then shifts to the resisting party to prove by a preponderance of evidence a ground for denial (e.g., fraud, unconscionability, etc.). ((Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413-414.)

Generally, on a petition to compel arbitration, the court must grant the petition unless it finds either (1) no written agreement to arbitrate exists; (2) the right to compel arbitration has been waived; (3) grounds exist for revocation of the agreement; or (4) litigation is pending that may render the arbitration unnecessary or create conflicting rulings on common issues. ((Code Civ. Proc., § 1281.2); (see Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 218-219.)

“California has a strong public policy in favor of arbitration and any doubts regarding the arbitrability of a dispute are resolved in favor of arbitration.” ((Coast Plaza Doctors Hospital v. Blue Cross of California (2000) 83 Cal.App.4th 677, 686.) “This strong policy has resulted in the general rule that arbitration should be upheld unless it can be said with assurance that an arbitration clause is not susceptible to an interpretation covering the asserted dispute.” ((Ibid. [internal quotations omitted].) This is in accord with the liberal federal policy favoring arbitration agreements under the Federal Arbitration Act (“FAA”), which governs all agreements to arbitrate in contracts “involving interstate commerce.” (9 U.S.C. section 2, et seq.; (Higgins v. Superior Court (2006) 140 Cal.App.4th 1238, 1247.)

In support of the petition, Defendant submits the Declaration of Estel Mi, an employee of 1100 South Alvarado LLC dba Olympia Convalescent Hospital (aka Olympia Convalescent Hospital). (Mi Decl., ¶ 1.) In her declaration, Ms. Mi states that “[a]ttached hereto as Exhibit A is a true and correct copy of the ‘Resident-Facility Arbitration Agreement’ for Olympia Convalescent Hospital, which was signed by Lora Lee Tram, the daughter and legal representative of former resident, JUHEE BANG on her behalf on 3/18/22, which was at or around the time of Ms. Bang’s admission to Olympia Convalescent Hospital.” (Mi Decl., ¶ 3.) Ms. Mi states that “Lora Lee Tram signed the arbitration agreement on her mother’s behalf after Ms. Bang asked me to have her daughter sign the admission documents and the arbitration agreement for her.” (Mi Decl., ¶ 4.) Ms. Mi further states that “[a]t no time did Lora Lee Tram or JUHEE BANG ever rescind the arbitration agreement.” (Mi Decl., ¶ 7.)

Defendant argues that the “History and Physical prepared by the physician notes that Ms. Bang ‘has the capacity to understand and make decisions.’…Thus, she had the capacity to appoint her daughter to act on her behalf.” (Pet. at p. 6:10-13.) Defendant’s counsel’s declaration in support of the petition states, inter alia, “[a]ttached hereto as Exhibits [sic] ‘B’, is a true and correct copy of the History and Physical pertaining to Juhee Bang which my office obtained from my client who maintains said document in its ordinary course and scope of business.” (Eng Decl., ¶ 2.) Exhibit “B” to Mr. Eng’s declaration contains a checked box next to “has the capacity to understand and make decisions.” (Eng Decl., ¶ 2, Ex. B.)

Defendant notes that the subject “Resident – Facility Arbitration Agreement” attached as Exhibit A to Ms. Mi’s Declaration provides, inter alia, as follows:

“Article 1. It is understood that any dispute as to medical malpractice, that is as to whether any medical services rendered under this contract were unnecessary or unauthorized or were improperly, negligently or incompetently rendered, will be determined by submission to arbitration as provided by California law, and not by a lawsuit or resort to court process except as California law provides for judicial review of arbitration proceedings. Both parties to this contract, by entering into it, are giving up their constitutional right to have any such dispute decided in a court of law before a jury, and instead are accepting the use of arbitration.

Article 2. It is further understood that any dispute between ________________,[1] its owners, investors, operators, officers, directors, administrators, staff, employees, agents, and any management and administrative services company and all related entities and individuals, their staff, personnel, employees, owners, officers, directors, members, and agents that provide services to the Facility that relates to the provision of care, treatment and services the Facility provides to the Resident, (collectively referred to herein as ‘Facility’), including any action for injury or death arising from negligence, intentional tort and/or statutory causes of action (including all California Welfare and Institutions Code sections and Health and Safety Code section 1430), will be determined by submission to binding arbitration and not by lawsuit or resort to court process except as California law provides for judicial review of arbitration proceedings. The parties to this agreement are giving up their Constitutional right to have all disputes decided in a court of law before a jury, and instead are accepting the use of binding arbitration. By signing this agreement, the parties waive their right to commence and/or be a party to any class or collective action in any court against the other party relating in any manner whatsoever to the Resident’s residency at the Facility. Further, the parties waive their right to commence or be a party to any group, class, or collective action claim in arbitration or any other forum.

Article 4. This Agreement shall be binding for any dispute, except for disputes pertaining to collections or evictions. This Agreement is binding on all parties, including the Resident’s representatives, executors, family members, and heirs who bring any claims individually or in a representative capacity. The Resident’s representatives, agents, executors, family members, successors in interest and heirs who execute this Agreement below on the signature line are doing so not only in their representative capacity for the Resident, but also in their individual capacity and thus agree that any claims brought individually by any such representatives, agents, executors, family members, representatives, successors in interest and heirs are subject to binding arbitration. This Agreement may be rescinded by written notice within thirty (30) days of signature…” (Mi Decl., ¶ 3, Ex. A.)

Defendant argues in the petition that “[c]learly, this dispute applies to the arbitration agreement attached hereto. On its face, the parties have agreed to resolve any dispute, including negligence and elder abuse/neglect, by way of arbitration.” (Pet. at p. 8:12-14.)

In the opposition, Plaintiff asserts that Defendant failed to meet its burden of showing that a valid arbitration agreement exists.

Plaintiff argues that “Defendant failed to show that Ms. Bang gave authority to Ms. Tram to sign the alleged arbitration agreement.” (Opp’n at p. 3:26-27.) Plaintiff cites to Pagarigan v. Libby Care Center, Inc. (2002) 99 Cal.App.4th 298, 299, where “Libby Care Center, Inc., and Longwood Management Corporation are defendants in an action for personal injuries brought by plaintiffs Teri, Mary and John Pagarigan as successors in interest to their deceased mother, Johnnie Pagarigan, and for wrongful death brought in their own right.” The defendants “appeal[ed] from a trial court order denying their petition to compel arbitration of plaintiffs’ claims,” and the Court of Appeal affirmed. (Ibid.)

The Pagarigan Court found, inter alia, “Defendants bore the burden of establishing a valid agreement to arbitrate…Defendants admit Johnnie Pagarigan did not sign either arbitration agreement. They further admit Ms. Pagarigan was mentally incompetent at the time she was admitted to Magnolia Gardens and at the time her daughters signed the arbitration agreements approximately a week later. There was no evidence Ms. Pagarigan had signed a durable power of attorney. It necessarily follows Ms. Pagarigan lacked the capacity to authorize either daughter to enter into the arbitration agreements on her behalf. Consequently no valid arbitration contract exists.” ((Id. at p. 301.) The Court of Appeal in Pagarigan further noted that “defendants argue the signatures of Teri and Mary Pagarigan on the arbitration agreements ‘prove they represented themselves as having the power to bind Johnnie Pagarigan to these arbitration documents.’ This may be true but it is totally irrelevant. A person cannot become the agent of another merely by representing herself as such. To be an agent she must actually be so employed by the principal…or ‘the principal intentionally, or by want of ordinary care, [has caused] a third person to believe another to be his agent who is not really employed by him.’…Defendants produced no evidence Ms. Pagarigan had ever employed either of her daughters as her agent in any capacity.” ((Id. at pp. 301-302 [internal emphasis omitted].)

Plaintiff asserts that here, “Defendant failed to present any evidence that Ms. Tram had the authority to sign the arbitration on behalf of Ms. Bang.” (Opp’n at p. 4:16-17.) Plaintiff submits the Declaration of Lora Tram, who states that she is the biological daughter of Juhee Bang. (Tram Decl., ¶ 2.) Ms. Tram states that “[t]here was no power of attorney or any other written authorization by Ms. Bang that authorized me to sign the Arbitration Agreement. I did not have the authority to sign the Arbitration Agreement on behalf of Ms. Bang.” (Tram Decl., ¶ 3.) Ms. Tram further states that “Ms. Bang did not verbally authorize me to sign the Arbitration Agreement. Ms. Bang never even mentioned the Arbitration Agreement. Ms. Bang and I never discussed anything related to an arbitration agreement or giving up her right to trial. She never asked me to sign the Arbitration Agreement or agree to any kind of arbitration.” (Tram Decl., ¶ 4.)

In addition, Ms. Tram states that “I never signed the Arbitration Agreement in the presence of anyone at the Facility. I never signed the Arbitration Agreement at all. I was not even present at the Facility on March 18, 2022 due to medical/personal reasons.” (Tram Decl., ¶ 6.) The subject Resident – Facility Arbitration Agreement contains the dates “3/18/2022” next to signatures on the agreement. (Mi Decl., ¶ 3, Ex. A.)

As set forth above, Ms. Mi states in her declaration in support of the petition that “Lora Lee Tram signed the arbitration agreement on her mother’s behalf after Ms. Bang asked me to have her daughter sign the admission documents and the arbitration agreement for her.” (Mi Decl., ¶ 4.) Ms. Mi asserts that “[t]he attached arbitration agreement was signed by Lora Lee Tram, the daughter…of former resident, JUHEE BANG, in my presence after she had an opportunity to completely review the arbitration agreement and ask any questions that she may have had.” (Mi Decl., ¶ 5.) Defendant argues in the petition that “decedent herself gave verbal authority to permit Ms. Tram to execute the subject Arbitration Agreement on her behalf. Said conduct by decedent not only created a direct agency, but is also sufficient to create ostensible agency.” (Pet. at p. 6:14-16.)

Defendant cites to Flores v. Evergreen at San Diego, LLC (2007) 148 Cal.App.4th 581, 587-588, where the Court of Appeal noted that “[e]ven when there is no written agency authorization, an agency relationship may arise by oral consent or by implication from the conduct of the parties. However, an agency cannot be created by the conduct of the agent alone; rather, conduct by the principal is essential to create the agency. Agency can be established either by agreement between the agent and the principal, that is, a true agency…or it can be founded on ostensible authority, that is, some intentional conduct or neglect on the part of the alleged principal creating a belief in the minds of third persons that an agency exists, and a reasonable reliance thereon by such third persons. The principal must in some manner indicate that the agent is to act for him, and the agent must act or agree to act on his behalf and subject to his control…Thus, the formation of an agency relationship is a bilateral matter. Words or conduct by both principal and agent are necessary to create the relationship…” (Internal quotations and citations omitted, emphasis in original.)[2]

In the opposition, Plaintiff asserts that “Defendant’s argument regarding ostensible authority is meritless.” (Opp’n at p. 5:3.) Plaintiff asserts that “Defendant avers that Ms. Bang somehow asked Defendant to have Ms. Tram sign the arbitration agreement on Ms. Bang’s behalf. However, Defendant fails to even address how this could be so given Ms. Bang’s lack of English comprehension.” (Opp’n at p. 5:19-21.) In her supporting declaration, Ms. Tram states that “Ms. Bang spoke and read Korean. Accordingly, Ms. Bang would rely on me given her lack of English comprehension. Moreover, due to her lack of ability to read, speak, or understand English, Ms. Bang would not have been able to understand what the Arbitration Agreement meant or what arbitration even meant in English. Based on my observation, when spoken to in English, it was obvious that Ms. Bang could not converse or comprehend what was being said. Further, Ms. Bang would not be able to say in English to have me sign an arbitration agreement on her behalf.” (Tram Decl., ¶ 5.)

Plaintiff also asserts that “Defendant’s argument regarding ostensible authority falls flat given that Ms. Tram never signed the Arbitration Agreement at all, much less in front of anyone at the Facility.” (Opp’n at p. 6:2-3.) As set forth above, Ms. Tram states that “I never signed the Arbitration Agreement in the presence of anyone at the Facility. I never signed the Arbitration Agreement at all. I was not even present at the Facility on March 18, 2022 due to medical/personal reasons.” (Tram Decl., ¶ 6.)

In the reply, Defendant counters that “Plaintiff contends that Ms. Bang could not have understood what she was doing because she does not speak English. Said argument falsely presumes that Ms. Mi, who discussed the agreement with Ms. Bang, does not speak Korean.” (Reply at p. 3:10-12.) Defendant submits a Supplemental Declaration of Estel Mi in connection with the reply. In her supplemental declaration, Ms. Mi states that “I am Korean myself and speak fluently in Korean. I was able to speak with JUHEE BANG in Korean and explain the admission process and the documents needed for her admission. She spoke with me in Korean and I did not observe any issues with her comprehending our conversation regarding the admission process…” (Suppl. Mi Decl., ¶ 3.)

Ms. Mi further states in her supplemental declaration that “[o]n the date of JUHEE BANG’s admission, she initially arrived with her son-in-law. When I presented admission documents, including the arbitration agreement, to both Ms. Bang and her son-in-law, he said to have his wife, Ms. Bang’s daughter sign the documents. I called Ms. Tram and she asked to have her mother sign the documents. I then went back to JUHEE BANG with the documents, however, she expressly told me to have her daughter, Lora Lee Tram, sign all of her admission documents including the arbitration agreement.” (Suppl. Mi Decl., ¶ 2.)

Defendant contends that “the verbal consent provided by the decedent (principal) after discussing same in Korean with Ms. Mi meets the requirements set forth above to find the existence of an agency relationship for the purposes of finding the subject Agreement to be valid and enforceable.” (Reply at p. 5:5-8.)

The Court notes that as Ms. Mi’s Supplemental Declaration was submitted for the first time in connection with Defendant’s reply, Plaintiff has not had the opportunity to respond to it. Thus, the Court is inclined to continue the hearing on the instant petition in order to provide Plaintiff the opportunity to respond to Ms. Mi’s Supplemental Declaration.

Based on the foregoing, the Court continues the hearing on Defendant’s petition to compel arbitration to ________________, 2024¿at 10:00 a.m. in Dept. 50.¿

By ________________, 2024, Plaintiff may file and serve a supplemental opposition to address the Supplemental Declaration of Estel Mi, with a courtesy copy delivered to Dept. 50.

[1]The Court notes that the subject Resident – Facility Arbitration Agreement contains a blank space in Article 2 of the agreement. (Mi Decl., ¶ 3, Ex. A.)

[2]In Flores, “Evergreen at San Diego, LLC (Evergreen), appeal[ed] from an order denying its petition to compel arbitration of the civil action filed by Luis and Josephina Flores against Evergreen. Luis signed an arbitration agreement when admitting his wife, Josephina, into Evergreen’s skilled nursing facility.” (Id. at pp. 584-585.) The Court of Appeal concluded “Luis did not have authority to bind his wife to the arbitration agreement,” and affirmed the order. (Id. at p. 585.) The Court of Appeal found that “[e]ven though Evergreen presented evidence showing that Luis acted as if he were Josephina’s agent, the establishment of the agency also requires conduct on the part of Josephina conferring that status. It was Evergreen’s burden to show the validity of the arbitration agreement based on Josephina’s express or implied consent to have her husband act as her agent. As in Pagarigan, the record is devoid of any such evidence.” (Id. at p. 589.)

Superior Court of California

County of Los Angeles

Department 50