Notice Ruling

Cal. Super. - 6th Dist.May 11, 2020

Freeman Mathis & Gary, LLP Attorneys at Law kw KOOONON 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ZOCV366495 Santa Clara - Civil Y. Cf FREEMAN MATHIS & GARY, LLP Electronically Filed DANIEL C. WALSH (SBN 266386) by Superior Court of CA, _@_g_DW315h fm 1aW-00m County of Santa Clara, ISIS D. MIRANDA (SBN 313855) on 7/30/2021 3.49 PM IMirandangmglaw.com - . I 550 South Hope Street, 22nd Floor Rev'ewed By' Y" Chavez Los Angeles, California 90071-2627 Case #ZOCV356495 (213) 615-7000; FAX (213) 615-7100 Envelope: 6965345 Attorneys for Petitioner GEICO GENERAL INSURANCE COMPANY SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA - DOWNTOWN COURTHOUSE GEICO GENERAL INSURANCE CASE NO.: 20CV366495 COMPANY, [Assigned to Hon. Maureen A. Folan, Dept. 6] Petitioner, NOTICE OF RULING ON GEICO’S MOTION TO COMPEL ARBITRATION vs. Date: July 29, 2021 ANNA M. PRENARES, Time: 9:00 am. Dept: 2 Respondent. Complaint Filed: May 11, 2020 Trial Date: None Yet PLEASE TAKE NOTICE that the Motion to Compel Arbitration filed by Petitioner GEICO GENERAL INSURANCE COMPANY (“GEICO”) came on regularly for hearing on July 29, 2021 at 9:00 am. in Department 2 of the above-entitled court. Daniel C. Walsh, Esq. appeared for GEICO. N0 appearance was made on behalf 0f Respondent ANNA M. PRENARES. Pursuant to Local Civil Rules of Court, Rule 8.E., the Court’s tentative ruling granting GEICO’s motion automatically became the order of the Court. Attached hereto as Exhibit “A” is a true and correct copy of the Court’s tentative ruling. Dated: July 30, 2021 FREEMAN MATHIS G RY, LLP ((75426 mNIEL C. WALSH ISIS D. MIRANDA Attorneys for Petitioner GEICO GENERAL INSURANCE COMPANY 1 NOTICE OF RULING ON GEICO’S MOTION TO COMPEL ARBITRATION 15399915.1 11222-89142 aVSZ EXHIBIT A HI I Calendar line 9 Case name: Anna Prenares v. GEICO General Insurance Company Case N0.: 20CV366495 On April 20, 2021, defendant GEICO General Insurance Company (“GEICO”) filed motion t0 compel arbitration. On July 14, 2021, plaintiffAnna Prenares (“plaintiff”) filed opposition, and 0n July 22, 2021, GEICO filed reply. Background The action pertains t0 an automobile accident in which a vehicle driven by an underinsured motorist struck a vehicle driven by plaintiff causing physical injuries to plaintiff. Plaintiff made claim t0 her insurer, GEICO, under the underinsured motorist provision 0f her policy 0f insurance with GEICO. The claim was not resolved, and plaintiff filed a motion for arbitration. GEICO asserted that the policy 0f insurance required that the arbitration be conducted pursuant t0 Consumer Arbitration Rules promulgated by American Arbitration Association rules 0f arbitration (“AAA rules”). Plaintiff asserted surprise that arbitration was t0 be conducted under AAA rules, and declined t0 further pursue arbitration. GEICO then filed the instant motion. Summary 0f contentions GEICO asserts that the subj ect auto insurance policy contains a provision mandating arbitration 0f claims pursuant t0 AAA rules. Plaintiff, a party t0 the agreement, refuses t0 arbitrate her claim which is covered by the policy. GEICO asserts that the policy references the AAA rules and the rules include a provision for delegation 0f selection 0f a single, neutral arbitrator. Under these circumstances, GEICO asserts that the court is required t0 order the parties t0 arbitration pursuant t0 the provisions 0f the policy and cited California statutory law. In opposition, plaintiff asserts that after she filed petition for arbitration 0f her claims, she was surprised that GEICO contended that the policy requires that arbitration be conducted under AAA rules. Plaintiff asserts that she was unfamiliar with the AAA rules, was not provided with a copy at any time prior t0 filing the Superior Court action, that reference t0 arbitration under AAA rules was not prominently displayed in the policy and she was not directed t0 take notice 0f the provision. As a result, she was not properly apprised that arbitration 0f her claims was pursuant t0 AAA rules. Plaintiff further asserts that application 0fAAA rules t0 the instant arbitration would be unconscionable, and that arbitration agreements are subject t0 all defenses in law and equity that apply t0 contracts in general, including existence 0f a valid and enforceable agreement. In that regard, plaintiff asserts that the AAA rules are unenforceable in that AAA rules as a whole is a contract 0f adhesion which she had n0 meaningful ability t0 negotiate, that AAA rules unreasonably favor GEICO, are unduly harsh, oppressive and one-sided as t0 shock the consolous. Plaintiff asserts that she is a consumer, and while she chose GEICO as her auto insurer, she is not 0n equal bargaining footing and was made t0 accept all terms 0f the policy. Because the AAA rules constitute an unconscionable term 0f adhesion, plaintiff urges the court t0 find the AAA rules unconscionable and unenforceable, and sever the rules from the policy and from the arbitration proceeding. Plaintiff further asserts that surprise is evidence 0f procedural unconscionability even where a party had an opportunity t0 read the document before signing it. Plaintiff argues that the policy is presented 0n a take-it-or-leave-it basis with n0 opportunity t0 negotiate pre-printed terms, that plaintiffwas not provided with a copy 0f the AAA rules prior t0 signing the policy, and the lack 0fprominent reference t0 AAA rules supports a finding of surprise. Plaintiff argues that this constitutes oppression sufficient for procedural unconscionability. Plaintiff also asserts that AAA rules are substantively unconscionable because they require her t0 pay fees above and beyond filing fees in a Superior Court action, provide n0 procedure for discovery, and d0 not require testimony under oath. Proceeding under these rules effectively denies plaintiff the constitutional right t0 a fair trial. In its motion and reply, GEICO asserts that in this matter, jurisdiction t0 determine issues 0f enforceability 0f the arbitration provisions is vested with the arbitrator, not the court. This is because the policy contains a severable and enforceable provision delegating enforceability issues t0 the arbitrator. If a “delegation provision” is specifically challenged, the clause is severed and enforceability 0f the clause is determined by the court. If the clause is determined enforceable, jurisdiction t0 determine the enforceability 0f the agreement then vests in the arbitration proceeding. GEICO asserts that the policy’s reference t0 AAA rules, which contains the delegation clause, is clear and unmistakable evidence 0f the parties’ intention for the arbitrator t0 decide issues 0f arbitration, including enforceability 0f the arbitration provisions. In contrast, if the arbitration agreement is challenged as a whole, it is not a specific challenge t0 the delegation clause, and the delegation clause is severed, and its validity is presumed and enforced. Jurisdiction t0 determine the issues 0f the claim and existence, validity and enforcement 0f the arbitration agreement then vests with the arbitrator, not the court. GEICO asserts that plaintiffs challenge is a general challenge, and notwithstanding that jurisdiction t0 determine enforceability is vested in the arbitration proceeding, GEICO asserts here that the delegation clause is enforceable, and the AAA rules are not unconscionable, procedurally 0r substantively. Judicial notice The unopposed request for judicial notice 0f the AAA rules is GRANTED. Evidence Code section 452(h). The document is also referenced by both parties in their papers. Analysis The AAA rules referenced in the policy include Rule- 14 which is a “delegation clause”. The delegation clause provides that determination 0f issues regarding the existence, scope 0r validity 0f the arbitration agreement is vested in the arbitrator. This would include the issues 0f unconscionability asserted by plaintiff. Plaintiffs claim of unconscionability is in substance a general challenge t0 the whole 0fAAA rules 0f arbitration. While the general challenge necessarily includes the delegation clause, it is not a specific challenge t0 the clause. Consequently, the delegation clause is severed out and enforced, and the arbitrator and not the court determines the enforceability 0f the arbitration agreement. Malone v. Superior Court (2014) 226 Cal.App.4th 155 1. Further, plaintiff does not challenge the validity 0f the delegation clause, and that pursuant t0 the evidence and authorities submitted by GEICO, the court finds that the clause is valid and enforceable. Plaintiff also asserts that a provision 0f the policy itself that mandates arbitration pursuant t0 AAA rules is unconscionable and unenforceable. This is within the jurisdiction 0f the court t0 determine. Plaintiff asserts that the provision in the policy is oppressive, and therefore, unenforceable because plaintiffwas not apprised 0f the requirement t0 arbitrate pursuant t0 AAA rules. It is asserted that reference t0 the AAA in the policy is not prominently displayed and plaintiffwas not provided with a copy 0f the AAA rules. Plaintiff also asserts that the policy was presented t0 her 0n a take-it-or-leave-it basis with n0 opportunity t0 negotiate. The contents section 0f the subject policy include a bold face font heading “SECTION IV UNINSURED MOTORISTS AND UNDERINSURED MOTORISTS COVERAGE”. This section lists a subsection “Disputes Between Us and Insured”. The subsection refers the policy holder t0 page 13 0f the policyl . The text 0f the subsection in the policy states unambiguously that disputes are settled in arbitration “according t0 American Arbitration Association rules.” The court finds that the provision 0f the policy requiring arbitration pursuant t0 AAA rules is clear and conspicuous. Plaintiffs filing 0f her petition for arbitration evidences her reading 0f the subsection and awareness, understanding and intention that the parties are bound t0 the arbitration provision in the policy. T0 the extent plaintiff did not carefully read the provision in the policy does not bar a finding 0f validity 0f the provision where, as here, the provision is understandable, clear and conspicuous. See Mission Viejo Emer.Med.Ass ’n. v. Beta Healthcare Group (201 1) 197 Cal.App.4th 1146. Although the AAA rules were not furnished t0 plaintiff, the fact that the policy refers t0 the rules and they are accessible 0n the internet substantially defeats the asserted ground 0f surprise. See Lane v. Francis Capital Mgmt., LLC (2014) 224 Cal.App.4th 676, 689. Disposition Plaintiffs challenge of the arbitration agreement, specifically the AAA rules, is a general challenge, and not specific t0 the delegation clause in the AAA rules. The delegation clause in the AAA rules referenced in the policy is therefore severed from the arbitration agreement and enforced. The motion t0 compel arbitration is GRANTED 0n that basis. lThe section actually appears 0n page 12. Further, assuming for argument's sake that the challenge was specific to the delegation clause, the court finds that the delegation clause is valid and enforceable. Additionally, the provision in the policy requiring arbitration of plaintiffs claims in this action pursuant AAA rules is valid and enforceable, and the petition to compel arbitration is GRANTED on that alternative basis. Arbitration shall include determination of all issues of the existence, scope or validity of the arbitration agreement, including issues that the AAA rules are procedurally and/or substantially unconscionable. - oo0oo - t’ i tif ’ Freeman Mathis & Gary, LLP Attorneys at Law 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE STATE OF CALIFORNIA, COUNTY OF LOS ANGELES I am employed in the County 0f Los Angeles, State 0f California. I am over the age of 18 and not a party to the within action; my business address is 550 S. Hope Street, 22nd Floor, Los Angeles, California 9007 1 -2627. On July 30, 2021, I served the foregoing document(s) described as: NOTICE OF RULING ON GEICO’S MOTION TO COMPEL ARBITRATION 0n interested parties in this action by placing a true and correct copy thereof enclosed in a sealed envelope addressed as follows: SEE ATTACHED SERVICE LIST (BY MAIL) I deposited such envelope(s) in the mail at Los Angeles, California. The envelope was mailed with postage thereon fully prepaid. I am “readily familiar” with the firm’s practice of collection and processing correspondence for mailing. Under that practice it would be deposited with U.S. postal service 0n that same day With postage thereon fully prepaid at Los Angeles, California in the ordinary course of business. I am aware that 0n motion 0f the party served, service is presumed invalid if postal cancellation date 0r postage meter date is more than one day after date of deposit for mailing in affidavit. E (STATE) I declare under penalty of perjury under the laws of the State 0f California that the above is true and correct. Executed on July 30, 2021, at Los Angeles, California. Sophia Lovos-Castaneda Type or Print Name Signature PROOF OF SERVICE 15399915.1 11222-89142 Freeman Mathis & Gary, LLP Attorneys at Law 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SERVICE LIST Re: Geico General Insurance Company v. AnnaM Prenares Santa Clara Sup.Crt. Case N0. 20CV366495 John Kevin Crowley, Esq. Attorneyfor Respondent, 125 S. Market Street, Suite 1200 ANNAM PRENARES San Jose, CA 951 13 Telephone: (408) 288-8100 Facsimile: (408) 288-9409 PROOF OF SERVICE 15399915.1 11222-89142