Related To Roas 17 Through 20 Plaintiffs Memorandum of Points And Authorities In Opposition To Houdinis Motion To Compel Arbitration

Opposition

Cal. Super. - 4th Dist.December 20, 2019

30-1 10 11 12 13 14 15 16 17 18 19 20 21 93 23 24 25 26 27 28 Electronically Filed by Superior Court of California, County of Orange, 07/27/2020 04:47:00 PM. 2019-01119910-CU-OE-CXC - ROA #24 - DAVID H. YAMASAKI, Clerk of the Court By e Clerk, Deputy Cle Armond M. Jackson, SBN 281547 Andrea M Fernandez-Jackson, SBN 295924 Jackson Law, APC 2 Venture Plaza, Ste. 240 Irvine, CA 92618 Phone (949) 281-6857 Fax (949) 777-6218 Attorney for Plaintiffs Raul Villagomez SUPERIOR COURT OF STATE OF CALIFORNIA FOR THE COUNTY OF ORANGE-CIVIL COMPLEX CASE NO: 30-2019-01119910-CU-OE-CXC RAUL VILLAGOMEZ, as an individual and ) [Unlimited Jurisdiction] on behalf of similarly situated employees Assigned for all purposes to the Honorable Randall J. Sherman, Dept. CX105 PLAINTIFF'S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANTS’ MOTION TO STRIKE AND COMPEL ARBITRATION Case filed: December 20, 2019 Trial date: TBD Plaintiffs, VS. HOUDINI, INC., a California corporation, and DOES 1-50, inclusive, Defendants. Hearing Date: August 7, 2020 Time: 10:00 a.m. Dept: CX105 (Filed concurrently with Declaration of Raul Villagomez; Declaration of Armond M. Jackson; and Request for Judicial Notice) N e N e N e N e N e N e N e N e N e N e N e N e N e N e N e N e N e N e N e N e N e N e PLAINTIFF'S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANTS’ MOTION TO COMPEL ARBITRATION -1 rk. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I. INTRODUCTION. Plaintiff Raul Villagomez (hereinafter “Mr. Villagomez” or Plaintiff”) has filed a complaint in this Court against his former employer, Houdini, Inc.’s (“Houdini” or “Defendant”) alleging, on both an individual and representative basis, unlawful business practices and various labor code violations. [See Declaration of Armond Jackson (“Jackson Decl.”) 3, Request for Judicial Notice, Ex. A Complaint.] Those violations include failure to pay minimum wages, failure to pay overtime violations, failure to provide meal breaks, failure to provide rest period, failure to pay owed wages upon termination and failure to provide accurate itemized wage statements. Id. Plaintiff files this Opposition to Defendant’s Motion to Compel Arbitration. Although defendant required Mr. Villagomez to sign an arbitration agreement, denial of this motion is appropriate because: (1) there is no basis to support an order striking the class action simply because the arbitration agreement failed to have a class action clause; and (2) the facts surrounding the execution of the arbitration agreement itself are identical to that of Oro, L.L.C. v. Kho (2019) 8 Cal.5th 111, in which the California Supreme Court deemed to be unenforceable on the grounds of unconscionability. II. STATEMENT OF FACTS. Mr. Villagomez grew up in Mexico and only knows how to effectively communicate in Spanish. [Declaration of Raul Villagomez (“Villagomez Decl.”) at § 2.) He became a resident of Orange County, California and was hired by Defendant 2015 through an employment agency to work for Defendant in its warehouse located in Fullerton, California. (Villagomez Decl. {{ 1, 3.) Thereafter, Plaintiff worked for Defendant seasonally every year, usually starting in June and lasting through December. (Villagomez Decl. {3.) He was responsible for removing cardboard boxes from the line and putting them in the cardboard box baler. In November 2018, three years after working for Defendant, Plaintiff was told to go to Defendant’s human resources office (“HR”) where he was directed to fill out and sign a stack of documents. (Villagomez Decl. | 5- 7.) Some of the documents were in English, which he did not understand, and some were in PLAINTIFF'S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANTS’ MOTION TO COMPEL ARBITRATION -2 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Spanish. The arbitration agreement was in English. Id. Plaintiff told the HR personnel that he required assistance in order to complete the documents. Id. An HR personnel very briefly helped him fill out the documents. Id. Mr. Villagomez did not know what the arbitration agreement was, specifically asking the HR Personnel who was helping him. The HR personnel just told Mr. Villagomez that his supervisor would explain it to him at a later time. Id. Mr. Villagomez filled out and signed the stack of documents and returned to work. (Villagomez Decl. {8.) Sometime thereafter, Mr. Villagomez went and asked his supervisor, David Figueroa, about the documents that he was given to sign, but Supervisor Figueroa told Mr. Villagomez to just sign them and there would not be any problems. (Villagomez Decl. 49.) Defendant did not explain what an “arbitration” agreement was, nor was Defendant “readily available to answer any questions regarding the documents reviewed and executed by the employees.” (Villagomez Decl. {10.) III. ARGUMENT A. There is No Legal Basis to Strike Plaintiff’s Class Claims. Defendant argues: “The Arbitration Agreements do not expressly provide for class arbitration, and thus, Plaintiff’s claims must proceed on an individual basis in arbitration and his class claims must be stricken.” [Defendant’s Memorandum of Points and Authorities in Support of Motion (“Defendant’s P&A’s”) at page 11, lines 16-18.] Defendant does not cite to any authority that supports that request, which is a violation of Rules of Court, Rule 3.113 (b). Moreover, Plaintiff did not locate any such authority supporting such request. Pursuant to California Rules of Court, Rule 3.113 (b), defendant’s memorandum “must contain a . . . concise statement of the law . . . in support of the position advanced.” As on appeal, legal arguments must be supported by authority, or the claims will be deemed forfeited. (Kaufman v. Goldman (2011) 195 Cal.App.4th 734, 743 [“Every argument presented by an appellant must be supported by both coherent argument and pertinent legal authority.”]; Wright v. City of Los Angeles (2001) 93 Cal. App.4th 683, 689 [asserted grounds for appeal that “merely complain of error without presenting a coherent legal argument are deemed abandoned and unworthy of discussion].) “Accordingly, every brief should contain a legal argument with PLAINTIFF'S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANTS’ MOTION TO COMPEL ARBITRATION -3 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 citation to authorities on the points made. If none is furnished on a particular point, the court may treat it as waived, and pass it without consideration.” Sprague v. Equifax, Inc. (1985) 166 Cal.App.3d 1012, 1050. Because there is no legal basis to grant Defendant’s request to strike class claims, that portion of its motion must be denied. B. The Arbitration Agreement Was a Product of Oppression and Surprise, Rendering It Unconscionable, and Therefore, Unenforceable. “California law, like federal law, favors enforcement of valid arbitration agreements” On the other hand, arbitration agreements may be rescinded on the same ground as other contracts. “In this respect, arbitration agreements are neither favored nor disfavored, but simply placed on an equal footing with other contracts.” Armendariz v. Foundation Health Psychcare Services, Inc., (2000) 24 Cal.4th 83, 126-127. “After Concepcion courts may continue to apply unconscionability doctrine to arbitration agreements” Sonic-Calabasas A, Inc. v. Moreno (2013) 57 Cal4th 1109, 1145. Here under simple contract principles, no contract was formed. Under California law, both procedural and substantive unconscionability must be shown for the defense to be established, but “they need not be present in the same degree. “Armendariz, supra, 24 Cal.4th at p. 114. Instead, they are evaluated on “‘a sliding scale.’” (Ibid.) “[T]he more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to” conclude that the term is unenforceable. (Ibid.) Conversely, the more deceptive or coercive the bargaining tactics employed, the less substantive unfairness is required. (A & M Produce Co. v. FMC Corp. (1982) 135 Cal.App.3d 473, 487. A contract’s substantive fairness “must be considered in light of any procedural unconscionability” in its making. (Sanchez v. Valencia Holding Co., LLC (2015) 61 Cal.4th 899, 912. “The ultimate issue in every case is whether the terms of the contract are sufficiently unfair, in view of all relevant circumstances, that a court should withhold enforcement.” OTO, L.L.C. v. Kho (2019) 8 Cal. 5th 111, 125-26, cert. denied sub nom. OTO, L.L.C. v. Ken Kho, No. 19-875, 2020 WL 3038293 (U.S. June 8, 2020) 1" PLAINTIFF'S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANTS’ MOTION TO COMPEL ARBITRATION -4 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I 1. The Arbitration Is Procedurally Unconscionable Because Mr. Villagomez Was Wholly Unaware of The Contract and Its Terms, But Defendant Induced Him to Sign Anyways. A procedural unconscionability analysis “begins with an inquiry into whether the contract is one of adhesion.” Armendariz, supra, 24 Cal.4th at p. 113. An adhesive contract is standardized, generally on a preprinted form, and offered by the party with superior bargaining power “on a take-it-or-leave-it basis.” Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1245; see Armendariz, at p. 113, 99. Arbitration contracts imposed as a condition of employment are typically adhesive (see Armendariz, at pp. 114-115; Serpa v. California Surety Investigations, Inc. (2013) 215 Cal. App.4th 695, 704. The agreement in this case is no different. The pertinent question, then, is “whether circumstances of the contract’s formation created such oppression or surprise that closer scrutiny of its overall fairness is required.” Baltazar, supra, at pp. 1245-1246. “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.” Grand Prospect Partners, L.P. v. Ross Dress for Less, Inc. (2015) 232 Cal.App.4th 1332, 1348. i. The Arbitration Agreement was Oppressive With respect to preemployment arbitration contracts, “the economic pressure exerted by employers on all but the most sought-after employees may be particularly acute, for the arbitration agreement stands between the employee and necessary employment, and few employees are in a position to refuse a job because of an arbitration requirement.” Armendariz, supra, 24 Cal.4th at p. 115, 99. This economic pressure can also be substantial when employees are required to accept an arbitration agreement in order to keep their job. Employees who have worked in a job for a substantial length of time have likely come to rely on the benefits of employment. For many, the sudden loss of a job may create major disruptions, including abrupt PLAINTIFF'S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANTS’ MOTION TO COMPEL ARBITRATION -5 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 income reduction and an unplanned reentry into the job market. In both the prehiring and posthiring settings, courts must be “particularly attuned” to the danger of oppression and overreaching. Armendariz, at p. 115. In Kho, an employee who did not speak fluent English signed an employer’s arbitration agreement. OTO, L.L.C. v. Kho, supra, 8 Cal. 5th 111, 126-29. The Supreme Court found the arbitration agreement to be a product of surprise and oppression, thus unenforceable. Ibid. The Court reasoned that the arbitration agreement was presented to the employee in his workspace, three years into his employment with the defendant, along with other employment-related documents. Ibid. Neither its contents nor its significance were explained to the employee. The Employer admitted that the employee was required to sign the agreement to keep the job he had held for three years. Ibid. Moreover, not only did the employer provide no explanation for its demand for his signature, it selected a entry level employee, to present the Agreement, creating the impression that no request for an explanation was expected. Finally, the employee was not given a copy of the agreement he had signed. Ibid. The same facts are presented here. Like the plaintiff in Kho, Mr. Villagomez, did not know how to effectively read English. (Villagomez Decl. at 2.) And just like in Kho, the arbitration was also given to Mr. Villagomez at his place of employment, also three years into his employment with Defendant, in the middle of his seasonal tenure, and also among other various employment documents. (Villagomez Decl. at 5.) However, worse than Kho, Mr. Villagomez specifically asked the Defendant’s HR personnel what the Arbitration agreement was, but was told to just sign it and was deferred to his supervisor, like in Kho, a low-level employee. (Villagomez Decl. at |] 5-9.) When he asked his supervisor about the contents of the documents he was required to sign, the Supervisor responded “just sign the documents and there would be no problems” for Mr. Villagomez. Id. The arbitration agreements, the contents nor its significance was never explained to Mr. Villagomez. Id. He was never given a copy nor was he given a significant opportunity to review the documents. Id. Therefore, “The circumstances here demonstrate significant oppression.” OTO, supra, 8 Cal. 5th at p. 127. PLAINTIFF'S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANTS’ MOTION TO COMPEL ARBITRATION -6 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I il. The Agreement Was Not Voluntarily Entered Into. “Arbitration is favored in this state as a voluntary means of resolving disputes, and this voluntariness has been its bedrock justification.” Armendariz, supra, 24 Cal.4th at p. 115. “Arbitration contracts are vigorously enforced out of respect for the parties’ mutual and voluntary agreement to resolve disputes by this alternative means. [citation] However, an inference of voluntary assent can be indulged only so far and must yield in the face of undisputed facts that undermine it. Where an employee is induced to sign an arbitration agreement through “sharp practices” and surprise [citation] the consent rationale carries less force.” OTO, supra, 8 Cal. 5th at p. 129. Here Mr. Villagomez had no understanding of the terms of the arbitration agreement. (Villagomez Decl. at 5-9.) He specifically asked defendant to explain what he was signing. Id. He was deferred to a entry level employee, his direct supervisor, and was told to just sign the documents and there would be no problems. Id. And as the Court found in Kho it is virtually impossible to conclude that Mr. Villagomez knew he was giving up his rights and voluntarily agreeing to arbitration instead. /d. 2. The Agreement Is Substantially Unconscionable Because It Lacks Mutuality. The California Supreme Court stated “We conclude. ..requiring this ‘modicum of bilaterality’ in an arbitration agreement. Given the disadvantages that may exist for plaintiffs arbitrating disputes, it is unfairly one-sided for an employer with superior bargaining power to impose arbitration on the employee as plaintiff but not to accept such limitations when it seeks to prosecute a claim against the employee, without at least some reasonable justification for such one-sidedness based on ‘business realities.””. . . If the arbitration system established by the employer is indeed fair, then the employer as well as the employee should be willing to submit claims to arbitration. Without reasonable justification for this lack of mutuality, arbitration appears less as a forum for neutral dispute resolution and more as a means of maximizing employer advantage. Arbitration was not intended for this purpose.” Armendariz, supra, 24 Cal. 4th at 115. PLAINTIFF'S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANTS’ MOTION TO COMPEL ARBITRATION -7 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Here the agreement lacks mutuality. The arbitration agreement has a clause that states “Houdini, Inc. and I agree to submit all such disputes exclusively to final and binding arbitration.” Houdini never executed this agreement; the agreement is not even Defendant’s letterhead to arguably state Houdini has executed this agreement. Plaintiff is the only party that was required to enter into this agreement and be bound by its terms. Plaintiff would be unable to enforce this agreement against Houdini. Therefore, there lacks the mutuality required by contract law to make this agreement enforceable. IV. CONCLUSION There is apparently no legal basis for Defendant’s request to strike the class action, or if there is Defendant waived that argument for failing to cite any authority in its motion. Moreover, the arbitration agreement itself unenforceable because it was a produce of oppression and surprise. Therefore, Mr. Villagomez respectfully request the court to deny this motion. Dated: July 27, 2020 Jackson Law, A Professional Law Corporation By:_/s/ Armond M. Jackson Armond M. Jackson Attorney for Plaintiff PLAINTIFF'S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANTS’ MOTION TO COMPEL ARBITRATION -38