Rebecca Johnson vs Weltower Opoc Group LLC

Opposition Other

Cal. Super. - 4th Dist.March 9, 2018

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Steven M. Bronson, Esq. (SBN: 246751) THE BRONSON FIRM APC One America Plaza 600 West Broadway, Suite 930 San Diego, California 92101 p. (619) 374-4130 f. (619) 568-3365 sbronson@thebronsonfirm.com Natalie B. Holm, Esq. (SBN: 259457) HOLM LAW GROUP, PC 12636 High Bluff Drive, Suite 400 San Diego, California 92130 p. (858) 707-5858 f. (888) 483-3323 natalie@holmlawgroup.com Attorneys for Plaintiff ELECTRONICALLY FILED Superior Court of California, County of San Diego 07/26/2018 at 03:35:00 Pi Clerk of the Superior Court By Jessica Pascual, Deputy Clerk SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN DIEGO - HALL OF JUSTICE REBECCA JOHNSON, individually; Plaintiff, v. WELLTOWER OPCO GROUP, LLC dba SUNRISE ASSISTED LIVING AT BONITA, a Residential Care Facility for the Elderly; SUNRISE SENIOR LIVING MANAGEMENT, INC., a Virginia Corporation, ABC HOME HEALTH CARE, ) LLC dba BRIDGE HOME HEALTH, a Home ) Health Agency; DOES 1-10, inclusive, N r ? N e N m N r N t N t N a N m N a N e w ’ a m ’ ) ) Defendants. ) ) ) ) Case No.: 37-2018-00012090-CU-PO-CTL PLAINTIFF’S OPPOSITION TO DEFENDANTS SUNRISE SENIOR LIVING MANAGEMENT, INC. AND WELLTOWER OPCO GROUP, LLC’S PETITION TO COMPEL ARBITRATION; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF Date: October 26, 2018 Time: 8:30 a.m. Dept.: C-65 Judge: Hon. Joan M. Lewis Trial Date: Not set Complaint Filed: March 9, 2018 COME NOW, plaintiff, by and through her Attorneys of Record, hereby submit the following Memorandum of Points and Authorities in Opposition to Defendants Sunrise Senior Living Management, Inc. and Welltower Opco Group, LLC’s Petition to Compel Arbitration. 1 PLAINTIFF'S OPPOSITION TO DEFENDANTS’ PETITION TO COMPEL ARBITRATION; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 IL. IL. IV. VIL. VIL VIII. IX. TABLE OF CONTENTS Page No INTRODUCTION.......cowiis 3 ss nmsmmamass s 8 sammusmma s § 55 samsmsmas 15 6 § 5 Souaaes is § § 65 seumeamngs § § 145595 1 FACTUAL BACKGROUND. ....iuiintttititiitieeatieitienteeeseneeseeeieateataeaaeensnsenenssans 1 DEFENDANTS HAVE FAILED TO MEET THEIR BURDEN TO SHOW THAT A VALID AGREEMENT TO ARBITRATE EXISTS......cccoiiiiiiiiiiiiinen 2 A. OSTENSIBLE AUTHORITY IS DEMONSTRATED BY THE CONDUCT OF THE PRINCIPAL, NOT THE AGENT, AND DEFENDANTS HAVE NOT PROVIDED ANY EVIDENCE THAT PLAINTIFF EVER GRANTED HER DAUGHTER ACTUAL OR OSTENSIBLE AUTHORITY TO ENTER INTO AN ARBITRATION AGREEMENT ON PLAINTIFF'S BEHALF..............ccooeuoiil 3 B. UNILATERALL DESIGNATING PLAINTIFF'S DAUGHTER AS PLAINTIFF'S “RESPONSIBLE PARTY” DOES NOT CONFER UPON HER THE POWER TO BIND PLAINTIFF TO AN ARBITRATION AGREEMENT...........cccoeviiininnn. 4 C. PLAINTIFF IS NOT EQUITABLY ESTOPPED FROM REFUSING TO ARBITRATE vocomon ss +s smastemon s 4435 semnsainns s § s swwsvsmmsienss » § eowawsnammiin 4 CALIFORNIA LAW GOVERNS ENFORCEABILITY IF THE COURT FINDS THAT A VALID AGREEMENT TO ARBITRATE EXISTS........ccoiviiiiiiiniiinininn 5 WELLTOWER OPCO GROUP, LLC IS NOT ENTITLED TO ENFORCE THE ARBITRATION AGREEMENT UNDER A THEORY OF BOLI TABLE. ESTOPPEL cues s 5 ss ssssnsamsans 15: rosso #35 § se ansssnss s § 3 sUsssmess Fasusamme i = 7 REGARDLESS OF WHETHER THE COURT APPLIES THE FEDERAL ARBITRATION ACT OR THE CALIFORNIA ARBITRATION ACT, THE ARBITRATION CLAUSE SHOULD NOT BE ENFORCED, AS THE PRESENCE OF THIRD PARTIES CREATES A LIKELIHOOD OF CONFLICTING RULES.............. 9 THE ARBITRATION AGREEMENTS DO NOT COMPLY WITH REQUIREMENTS FOR AGREEMENTS TO ARBITRATE NON-WAIVABLE STATUTORY RIGHTS... cco, 11 PUBLIC POLICY WOULD NOT BE SERVED BY ENFORCING THE ARBITRATION AGREEMENT IN THIS CASE........ccoiiiiiiiiiiiiiiininiiiieiieeeaane 12 1610)\1 [6] BLU 3 (6) | HO 13 PLAINTIFF'S OPPOSITION TO DEFENDANTS’ PETITION TO COMPEL ARBITRATION; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES Page No. United States Supreme Court Cases Mastrobuono v. Shearson Lehman Hutton, Inc. (1995) 514 U.S. 52, 63-04. ...cnuninininineniie eee ee eet eter eee eee teers eee ae anna 6 Perry v. Thomas (1987) ABI 11S. 483, AUD... .. com ssmmmmnns § 55508 5a Emr 5 5 55 SATERLEE 12 453 HABATEIRALS & § 50 TBR EA 2 Prima Paint Corporation v. Flood & Conklin Manufacturing Co. (1967) 388 U.S. 395, 403-404. .....oeeniiieieitiiiiiiie ie e ra re enectteairteeeseseneii anes 4 Volt Information Sciences, Inc. v. Board of Trustees of Leland Standford Jr. University (1980) 489 U.S. 468... ..oeinieitiietie tetera e eee eet sees tenet renee taeeaaas 6 Federal Cases Biller v. Toyota Motor Corp. (9M Cir. 2012) 668 F.3d 655, 662663.....cuvurrrvnnrenrurenenarsssnsonsrsssasnassssssasssssnsnsssssasses 6 California Cases Armendariz v. Foundation Health Psychare Services, Inc. (2000) 24 Cal. 4™ 83, 102, 104, 107....ceeniiniiiiiiiiieiie ieee etre eee reece ase eenes 11, 12 Bolanos v. Khalatian (1991) 231 Cal. App.3d 1586, 1591-1592......nieiiiin iii 5 Boucher v. Alliance Title Company, Inc. (2005) 127 Cal APPAV-6D, FOB... « soommmnsis 12515 wbisnkatbiniass 5 5as50m60164 & 24 ARASH $3 § \5SBEEmS 5 County of Contra Costa v. Kaiser Foundation Health Plan, Inc. (1996) 47 Cal. APDP.AM 237, 245... etree eters ss sssese snes sees et ssssas ens s esses sesssesesesesesasesnes 3 Cronus Investments, Inc. v. Concierge Services (2005) 35 Cal. 4%, 376, 25 Cal.RPtr.3d 540........civniiniiiiiiiiieei eee eee een enn 9 Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal. 41 051,972. en iiiiiet tite eee eee e as ee eters ranean ranean ene snseen ans 3 ii PLAINTIFF'S OPPOSITION TO DEFENDANTS’ PETITION TO COMPEL ARBITRATION; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 California Cases, Cont’d Fitzhugh v. Granada Healthcare & Rehabilitation Center, LLC (2007) 150 Cal. App. 4M 469, 475,476. ..cncneeeeneeeiiieeie eee eevee aaa 9,11 Flores v. Evergreen at San Diego, LLC (2007) 148 Cal. ApP.4™ 581, 586. .....evueerneeuniiiieeiieeiie t r iia steer eee e seer sane esaeeannans 3 Harris v. Bingham McCutchen, LLP (2013) 214 Cal. App.4™ 1399, 1405-1407 .......eevniiiieei e e eee eee eee eee r eves 6 Madden v. Kaiser Foundation Hospitals (1976) T Cal. 3d699; THY. . : comemmsmons + « +» sosssammmns 135 5 5 ssmomsmmses s » FEeEEsEEmE + 5 5 SEESSSIERLT § § SHEE 3 Mastic v. TD Ameritrade, Inc. (2012) 209 Cal. App.4™ 1258, 1263. ...ivuiiniiieiieeie eee eee e e eee ee eee e sane 5 Metaclad Corporation v. Ventana Environmental Organization Partnership (2003) 109 Cal. App. 4% 1705, 1713-1715. eu e eee eee eee eve abe ens 8 Metters v. Ralphs Grocery Company (2008) 161 Cal. APDP.4M 696, TOL... .uinieniieiiieiie iii e e e eere ees ee seer ane eae a ranenns 2 Moncharsh v. Heily & Blase (1992) 3 Cal 4 1, 0. uuiitiii iia e eee eee e eae aaa ea aaaas 3 Mount Diablo Medical Center v. Health Net of California, Inc. (2002) 101 Cal. ADD. AT 711, 725. niece eee eee eee eee eee erases 6 Simmons v. Ghaderi (2008) 44 Cal. 4 570, 584... enireeeeeiieeie eee eee ee teeter eee e aera aerate ss aaerens 5 Solari v. Snow CEB) [0] Cal. FBT. is cosmmmmumnns ss sams 155 55 ainsmmmusinas s $5 5 bmn 65 § § 58 SHEESRAGA § 5 § 5 STRATES 55 8 Thomas v. Westlake (2012) 204 Cal. APDP.4™M 605... ..evneeiieiee eerie ieee reer er ee ererneenernrraenaseenesaenerneananns 9 Wagner Construction Company v. Pacific Mechanical Corporation (2007) Cal. RPtr. 3d 434... iinet ieee erat eee e eee e aes eneeaaanenenenennaansnenns 12 iii PLAINTIFF'S OPPOSITION TO DEFENDANTS’ PETITION TO COMPEL ARBITRATION; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Statutes Civil Coda § 2300... couemenon evo vo vommamainss s§ 5 § 308mm o Saud 5 5 40 AASEGETE 5 1 § 8 5H MUSRAES § 83 ATEBAIATS § 3 CIVIL COE § 2315... ieee eee eee eerste e ar eer sae e atest en ease eae se nessa neanenen 3 Code of Civil Procedure §1281.........oueniniininiiiiiiiiiiiie ieee etcetera eens aas 11 Code of Civil Procedure § 1281.1......... ccasmsmsiiass somes 1055 5 soammamnans s «5 ves uassmsos s 5 § 55 55858iid a +5 9,10 Code of Civil Procedure § 1290... ....c.cuiiniuiuiiiiiiiiiiieiiiii recente ere ease es 11 Secondary Sources California Elder Law Litigation: An Advocate’s Guide (C.E.B. 2006) §6.34.............cccoiininininnn. 11 Cole v. Burns International Security Services (D.C. Cir. 1997) 105 F.3d 1465.........cccccevvinininnen. 11 iv PLAINTIFF’S OPPOSITION TO DEFENDANTS’ PETITION TO COMPEL ARBITRATION; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LL INTRODUCTION The subject matter of this litigation stems from acts of elder neglect committed against plaintiff Rebecca Johnson (“plaintiff”) by defendants Welltower Opco Group, LLC (“Welltower™), Sunrise Senior Living Management, Inc., (“Sunrise”) and ABC Home Health Care dba Bridge Home Health (“Bridge Home Health™). Defendants Welltower and Sunrise now seek to compel plaintiff to proceed with her claims against the by way of arbitration. Defendants’ fail to meet their burden to demonstrate that a valid arbitration agreement exists. Defendants’ reliance upon ostensible agency and equitable estoppel arguments fail because Defendants have not provided factual support which meets all elements of either theory. Furthermore, the subject arbitration clause fails to comply with requirements set forth under applicable California statutes and case law for non-waivable statutory rights. Additionally, Welltower and Bridge Home Health are third parties to the purported arbitration agreement, claims against which stem from the same transaction or series of transactions as those made against Sunrise, and there exists not just a possibility, but a likelihood, of conflicting rulings on common issues of law or fact if part of the case were to be ordered to arbitration and the remainder proceeded to trial. Finally, the public policy behind the legislative and judicial preference for enforcing arbitration agreements would not be served in this case, as compelling arbitration would offer neither a speedier nor affordable resolution to this litigation, but would result in a multiplicity of discovery and trials regarding the same facts and legal issues. Defendants’ reliance on these public policy arguments are misguided and misleading. Accordingly, plaintiff respectfully requests that this Court deny defendants’ Petition to Compel Arbitration. IL FACTUAL BACKGROUND Plaintiff began residing at Sunrise on or about January 12, 2017 following a December 2016 fall that resulted in a left hip socket fracture and a hematoma to her left lower extremity. Plaintiff was admitted to Sunrise for the purposes of receiving assistance with her Activities of Daily Living during her recovery, and was to receive home health services provided by Bridge Home Health throughout her stay. 1 PLAINTIFF’S OPPOSITION TO DEFENDANTS’ PETITION TO COMPEL ARBITRATION; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 10 11 12 13 14 15 16 17 18 138 20 21 22 23 24 25 26 27 28 On or prior to January 19, 2017, plaintiff developed an open wound over the bruise on her left lower extremity. This change in condition was noted by Sunrise within her facility record on January 19, 2017, and all of the named defendants, their officers, directors, and managing agents were aware of the open wound on plaintiff's left lower extremity. Nonetheless, none of the defendants reported the wound to plaintiff’s primary care physician or family, and did not observe, document the condition of, or provide any care for the open wound on plaintiff’s left lower extremity between January 20, 2017 and January 24, 2017. On or about January 24, 2017, plaintiff presented to her orthopedic surgeon’s office for a routine follow-up appointment, and, upon removal of the bloody dressing covering her left lower extremity, her doctor assessed her as having an ulceration over the anterolateral leg with exposed hematoma. She was transferred to the emergency room due to the size of her wound where surgeons irrigated and debrided it, applied wound vacuum dressing, and later performed a skin graft to close the wound. Plaintiff Rebecca Johnson filed this lawsuit on March 9, 2018, alleging causes of action for Elder Abuse and Negligence against all defendants, and an additional cause of action for Breach of Contract against Sunrise. Defendants Sunrise and Welltower are now requesting that the Court compel arbitration based upon an arbitration clause contained within the facility’s Residency Agreement. Neither Welltower nor Bridge Home Health were named parties or signatories to the Residency Agreement. IIL. DEFENDANTS HAVE FAILED TO MEET THEIR BURDEN TO SHOW THAT A VALID AGREEMENT TO ARBITRATE EXISTS State law applicable to contracts generally governs whether a valid agreement to arbitrate exists. Perry v. Thomas (1987) 482 U.S. 483, 492; Meters v. Ralphs Grocery Co. (2008) 161 Cal. App.4™ 696, 701. Accordingly, it must be determined whether a valid arbitration agreement exists under California Law before the Court can go on to determine whether federal or state law governs the enforceability of that agreement. A written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any 2 PLAINTIFF’S OPPOSITION TO DEFENDANTS’ PETITION TO COMPEL ARBITRATION; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 contract. Moncharsh v. Heily & Blase (1992) 3 Cal.4% 1, 9. However, the right to compel arbitration depends upon the existence of a valid agreement to arbitrate between the parties. County of Contra Costa v. Kaiser Foundation Health Plan, Inc. (1996) 47 Cal. App.4'" 237, 245. The party seeking to compel arbitration bears the burden of proving the existence of a valid arbitration agreement. Flores v. Evergreen at San Diego, LLC (2007) 148 Cal.App.4™ 581, 586 (citing Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4" 951, 972). “Even the strong public policy in favor of arbitration does not extend to those who are not parties to an arbitration agreement or who have not authorized anyone to act for them in executing such an agreement.” County of Contra Costa, supra, 47 Cal. App.4™ at 245. Agents cannot bind parties to arbitrate without actual or implied authority to do so. Madden v. Kaiser Found. Hosps. (1976) 7 Cal.3d 699, 709. A. OSTENSIBLE AUTHORITY IS DEMONSTRATED BY THE CONDUCT OF THE PRINCIPAL, NOT THE AGENT, AND DEFENDANTS HAVE NOT PROVIDED ANY EVIDENCE THAT PLAINTIFF EVER GRANTED HER DAUGHTER ACTUAL OR OSTENSIBLE AUTHORITY TO ENTER INTO AN ARBITRATION AGREEMENT ON PLAINTIFF’S BEHALF Defendants have not offered any evidence that plaintiff’s daughter possessed actual authority to enter into an arbitration agreement on plaintiff’s behalf. They instead rely upon plaintiff’s daughter’s purported ostensible authority in arguing that a valid arbitration agreement exists. Ostensible authority cannot be created merely by a purported agent’s representation. “An agency] is ostensible when the principal intentionally, or by want of ordinary care, causes a third person to believe another to be his agent who is not really employed by him.” Civ. Code § 2300 [emphasis added]. “An agent has such authority as the principal, actually or ostensibly, confers upon him.” Civ. Code § 2315 [emphasis added]. Throughout their moving papers, defendants argue that ostensible authority was conferred on Denise Steen to enter into the subject arbitration clause because she signed the admissions papers as plaintiff's “Responsible Party”. As explained more thoroughly below, not only is the title “Responsible Party” one that was bestowed upon Denise Steen by defendants, not plaintiff, but defendants have provided no evidence that plaintiff (i.e. the principal) gave the impression that her daughter was 3 PLAINTIFF’S OPPOSITION TO DEFENDANTS’ PETITION TO COMPEL ARBITRATION; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 10 11 12 13 14 15 le 17 18 19 20 21 22 23 24 25 26 27 28 authorized to act as her agent, or, if Denise Steen was plaintiff's agent, that the authority bestowed upon her encompassed entering into binding contractual agreements or waiving her Constitutional right to trial by jury. In fact, plaintiff was not even present at the signing of the Residency Agreement, and did not witness Denise Steen sign those documents. (Declaration of Denise Steen {6 filed concurrently herewith.) Defendants have failed to meet their burden to demonstrate that Denise Steen had ostensible authority to sign the subject arbitration clause on her mother’s behalf. B. UNILATERALLY DESIGNATING PLAINTIFF'S DAUGHTER AS PLAINTIFF’S “RESPONSIBLE PARTY” DOES NOT CONFER UPON HER THE POWER TO BIND PLAINTIFF TO AN ARBITRATION AGREEMENT Within its moving papers, defendant argues that Denise Steen represented herself to be plaintiff's agent because she signed the admissions documents on plaintiff’s behalf, as her Responsible Party. However, the title “Responsible Party” was one conferred upon Denise Steen by defendants, not by plaintiff. Defendants had Denise Steen sign a “Responsible Party Contract” wherein she essentially agreed to be the guarantor of her mother’s financial obligations to Sunrise of Bonita and participate in plaintiffs care while she was a resident of the facility. (Residency Agreement, Exhibit 6, page 26; Attached as Exhibit “A” to the Declaration of Denise Steen.) This contract, while potentially enforceable against Denise Steen individually if plaintiff had defaulted on her monthly payments to defendants, does not by itself infuse Denise Steen with the right to make decisions or enter into arbitration agreements on her mother’s behalf, as it was not signed or even witnessed by plaintiff Rebecca Johnson. (Declaration of Denise Steen 6 filed concurrently herewith.) It therefore cannot be used as evidence that Rebecca Johnson - the principal - granted Denise Steen actual or ostensible authority to enter into an arbitration agreement on her behalf. C. PLAINTIFF IS NOT EQUITABLY ESTOPPED FROM REFUSING TO ARBITRATE Courts do not look to the contract as a whole to determine arbitrability. Challenges to the validity of the underlying contract are not considered. The only question is whether the parties knowingly agreed to arbitrate disputes under the contract. Prima Paint Corp. v. Flood & Conklin Mfg. Co. (1967) 388 U.S. 395, 403-404. Accordingly, the validity of the entire Residency Agreement containing the subject arbitration clause is of no consequence to the Court’s decision on defendants’ 4 PLAINTIFF'S OPPOSITION TO DEFENDANTS’ PETITION TO COMPEL ARBITRATION; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Petition to Compel Arbitration. Furthermore, defendant has not identified a single case in support of their argument that plaintiff is estopped from refusing to arbitrate because the arbitration clause is part of a larger contract. In fact, the caselaw applying the concept of equitable estoppel, only applies the doctrine either to compel a signatory plaintiff to arbitrate with a nonsignatory defendant (e.g. Boucher v. Alliance Title Company, Inc. (2005) 127 Cal. App.4™ 262, 268), or to compel arbitration by the nonsignatory family members of a signatory patient (e.g. Bolanos v. Khalatian (1991) 231 Cal. App.3d 1586, 1591-1592). None of the cases cited by defendant - or found by plaintiff in her research - hold an injured patient to an arbitration agreement signed on her behalf by a family member on an equitable theory that the family member was the patient’s agent. A valid claim for equitable estoppel requires: (a) a representation or concealment of material facts; (b) made with knowledge, actual or virtual, of the facts; (c) to a party ignorant, actually and permissibly, of the truth; (d) with the intention, actual or virtual, that the ignorant party act on it; and (e) that party was induced to act on it. Simmons v. Ghaderi (2008) 44 Cal.4™ 570, 584. There can be no estoppel if one of these elements is missing. /d Defendants have not demonstrated that a single of these requirements has been met. Here, plaintiff, the principal, would have had to make a representation or concealment of material facts to defendants. Not only did defendants fail to offer any evidence of such a representation or concealment by plaintiff, but they could not offer evidence that plaintiff made a representation or concealment to defendants, as she was not even present when the admissions documents were signed. (Declaration of Denise Steen 96 filed concurrently herewith.) Thus, the threshold requirement for equitable estoppel cannot be met. Iv. CALIFORNIA LAW GOVERNS ENFORCEABILITY IF THE COURT FINDS THAT A VALID] AGREEMENT TO ARBITRATE EXISTS If the parties to an arbitration agreement agree that California law governs the contract, the California Arbitration Act applies, and the Federal Arbitration Act does not. Mastick v. TD Ameritrade, 5 PLAINTIFF’S OPPOSITION TO DEFENDANTS’ PETITION TO COMPEL ARBITRATION; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Inc. (2012) 209 Cal. App.4™ 1258, 1263; See also, Volt Information Sciences, Inc. v. Board of Trustees of Leland Standford Jr. University (1980) 489 U.S. 468 [FAA does not preempt CAA where the parties agree to another choice of law]. Choice-of-law clauses are interpreted to incorporate the chosen state laws governing the enforcement of arbitration agreements. Mount Diablo Medical Center v. Health Net of California, Inc. (2002) 101 Cal.App.4™ 711, 725. The choice-of-law provision covers the rights and duties of the parties, while the arbitration clause covers arbitration proceedings; neither sentence intrudes upon the other. Mastrobuono v. Shearson Lehman Hutton, Inc. (1995) 514 U.S. 52, 63-64; Biller v. Toyota Motor Corp. (9™ Cir. 2012) 668 F.3d 655, 662-663; Harris v. Bingham McCutchen, LLP, (2013) 214 Cal. App.4™ 1399, 1405-1407 [Choice of Massachusetts law in employment contract was enforced. Arbitration Provision unenforceable under substantive Massachusetts law, and Petition to Compel Arbitration properly denied]. The arbitration clause cited to by defendant Sunrise in support of this Petition is Article VII to a larger contract entitled “Residency Agreement”. Article V of the Residency Agreement contains a choice-of-law provision. This paragraph, entitled “Governing Law”, states: This Residency Agreement, its construction, performance, the obligations and duties of the parties, and any claims or disputes arising from it will be governed by and construed in accordance with the laws of the state in which the Community is located. (See, Residency Agreement, Article V, Paragraph S; Attached as Exhibit “A” to the Declaration of Denise Steen.) Article VII of the Residency Agreement contains the Arbitration Clause, which provides that the arbitration process will be governed by the Federal Arbitration Act. (See, Residency Agreement, Article VII; Attached as Exhibit “A” to the Declaration of Denise Steen filed concurrently herewith.) Sunrise of Bonita, the facility in which Rebecca Johnson was a resident, is located in California. (Declaration of Denise Steen 4 filed concurrently herewith.) The choice-of-law provision contained within the Residency Agreement clearly dictates that California law be applied in interpreting the agreement, including the terms and enforceability thereof. Therefore, the Court’s decision on defendant’s Petition to Compel Arbitration must be governed by the California Arbitration Act, and any reference made by defendant to the law under the Federal Arbitration Act must be disregarded. Of note, within its moving papers, defendant purports to cite to portions of the arbitration clause in support of its suggestion that: 6 PLAINTIFF'S OPPOSITION TO DEFENDANTS’ PETITION TO COMPEL ARBITRATION; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 10 11 12 13 14 1.5 16 17 18 19 20 21 22 23 24 25 26 27 28 California substantive law is implicated as to the arbitration itself (i.e. the merits of claims submitted to arbitration), but the FAA governs with respect to the enforceability of the agreement. (See Section 3 [The dispute will be governed by the laws of the state in which the Community is located] and Section 5 [The Arbitration Agreement shall be governed by and interpreted under the Federal Arbitration Act, 9 U.S.C. Sections 1-16]). (See, Petition to Compel Arbitration 9:3-21.) The sections and language, stated above and cited by defendant, do not exist within the Residency Agreement or arbitration clause contained therein. Furthermore, defendant has not cited to any law that would support its notion that federal law would be presumed to govern the enforceability of the arbitration agreement while state law would govern the arbitration proceedings themselves. Finally, defendant’s assertion, unsupported by law or fact, that federal law governs the enforceability of the arbitration clause and California law governs the arbitration proceedings thereafter is directly contravened by the language of the contract itself. As cited above, pursuant to Article V, Paragraph S of the Residency Agreement, California law governs construction, performance, obligations and duties, and claims or disputes arising from the contract of which the Arbitration Clause is part. Then, in reading Article VII entitled “Arbitration”, it appears as though defendant intended the actual arbitration proceedings themselves to be governed by the Federal Arbitration Act. (See, Residency Agreement, Article VII, Paragraphs A, C; Attached as Exhibit “A” to the Declaration of Denise Steen.) The language of the eontract directly refutes defendant’s argument. Regardless of defendant’s arguments, however, the law is clear. Where a contract containing an arbitration clause includes a choice-of-law provision, that agreed-upon body of law governs the enforceability of the arbitration agreement. Therefore, California law, or the California Arbitration Act, must govern the Court’s ruling on defendant’s Petition to Compel Arbitration. V. WELLTOWER OPCO GROUP, LLC IS NOT ENTITLED TO ENFORCE THE ARBITRATION AGREEMENT UNDER A THEORY OF EQUITABLE ESTOPPEL The parties to the Residency Agreement are defined therein as HCRI AL U.S. Bonita Subtenant, L.L.C. (“owner”) acting through its manager, Sunrise Senior Living Management, Inc. (“Sunrise”) d/b/a Sunrise of Bonita (the “Community”) and Rebecca Johnson (“Resident”). (See, Residency Agreement 7 PLAINTIFF'S OPPOSITION TO DEFENDANTS’ PETITION TO COMPEL ARBITRATION; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 cover page; Attached as Exhibit “A” to Declaration of Denise Steen.) The contract was signed by a representative of the Community. Petitioning defendant Welltower is not a named party or signatory to this agreement. Welltower does not appear anywhere within the approximately 40 page agreement. Accordingly, defendant argues that Welltower is entitled to enforce the arbitration clause contained within the Residency Agreement based upon a theory of equitable estoppel. In determining whether defendant Welltower is entitled to enforce the subject arbitration clause, despite not being a party or signatory to that contract, based upon a theory of equitable estoppel, defendants must demonstrate (1) that the claims against defendants arise out of or relate to the Residency Agreement and (2) the nature of the relationship between Welltower Opco Group, LLC and signatory defendant Sunrise Senior Living Management, Inc. Metalclad Corp. v. Ventana Environmental Organiz. Partnership (2003) 109 Cal. App.4t 1705, 1713-1715. In this case, the claims against defendants for violations of the Elder and Dependent Adult Civil Protection Act arise out of statutory duties defendants owed to plaintiff Rebecca Johnson. Similarly, plaintiff’s negligence cause of action arises from common law tort obligations defendants had to plaintiff. Even without the Residency Agreement, plaintiff would, and does, have a basis upon which to hold the petitioning defendants liable for their misconduct. Accordingly, the claims against moving defendants do not arise out of or relate to the Residency Agreement. Furthermore, and more importantly, defendants have failed to provide any evidence regarding the nature of the relationship between nonsignatory Welltower and signatory Sunrise. Defendants merely cite to plaintiff’s Complaint as evidence of this relationship, which in and of itself is not evidence. Solari v. Snow (1894) 101 Cal. 387. Accordingly, defendants have not met their burden to demonstrate the nature of the relationship between Welltower and signatory defendant Sunrise. Defendants have not demonstrated that the doctrine of equitable estoppel should apply such that defendant Welltower, a nonparty and nonsignatory to the Residency Agreement, is entitled to enforce the arbitration clause contained therein. Accordingly, Welltower must be treated as a third party for the purposes of Court’s ruling on this petition. 1H 1 8 PLAINTIFF'S OPPOSITION TO DEFENDANTS’ PETITION TO COMPEL ARBITRATION; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 VL REGARDLESS OF WHETHER THE COURT APPLIES THE FEDERAL ARBITRATION ACT OR THE CALIFORNIA ARBITRATION ACT, THE ARBITRATION CLAUSE SHOULD NOT BE ENFORCED, AS THE PRESENCE OF THIRD PARTIES CREATES A LIKELIHOOD OF CONFLICTING RULINGS While there is a strong public policy in favor of arbitration, there is an “equally compelling argument that the Legislature has also authorized trial courts to refuse enforcement of an arbitration agreement when there is a possibility of conflicting rulings.” Fitzhugh v. Granada Healthcare & Rehabilitation Center, LLC (2007) 150 Cal. App.4™ 469, 475. Code of Civil Procedure section 1281.2 states that a court shall order the parties to arbitrate a controversy if it determines that an agreement to arbitrate the controversy exists, unless: [...] (c) 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. The term “third party”, means a party to the action that is not bound by or entitled to enforce the arbitration agreement. Thomas v. Westlake (2012) 204 Cal. App.4™ 605. Even if the Court were to determine that the Federal Arbitration Act governs the enforceability of the subject arbitration clause, Code of Civil Procedure section 1281.2 still applies. Cronus Investments, Inc. v. Concierge Services (2005) 25 Cal.Rptr.3d 540 [holding that an arbitration clause calling for the application of the Federal Arbitration Act (FAA) did not preclude the application Code of Civil Procedure section 1281.2 since section 1281.2 did not conflict with the applicable provisions of the FAA and did not undermine or frustrate the FAA’s substantive policy favoring arbitration]. Defendants’ analysis of Section 1281.2 misses the mark entirely. While defendants focus on the fact that the non-signatory defendant, ABC Home Health Care LLC dba Bridge Home Health (“Bridge Home Health”), is a healthcare provider whereas the petitioning defendants are not, that categorization has absolutely nothing to do with the common issues to be decided at trial - i.e. liability, causation and damages. Defendant Bridge Home Health's status as a healthcare provider limits damages recoverable 9 PLAINTIFF'S OPPOSITION TO DEFENDANTS’ PETITION TO COMPEL ARBITRATION; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 10 11 12 13 14 15 le 17 18 19 20 21 22 23 24 25 26 27 28 under plaintiff’s negligence cause of action, but it does not change the overall analysis required for a jury to find liability, causation and damages against Bridge Home Health or to apportion liability between multiple defendants. As such, defendants’ entire analysis of Section 1281.2 is fatally flawed. Here, plaintiff has alleged causes of action for violation of the Elder and Dependent Adult Civil Protection Act and negligence against all defendants. Even if the parties were to assume for the sake of argument that defendants had met their burden in demonstrating Welltower was entitled to enforce the arbitration agreement on an equitable estoppel theory - which they did not - defendant Bridge Home Health was not a party or signatory to the subject Residency Agreement and is not affiliated with Sunrise of Bonita in any way such that they could arguably enforce the arbitration agreement upon a theory of equitable estoppel. Bridge Home Health is therefore inarguably a “third party” as that term is used in Section 1281.2. Plaintiff has filed this lawsuit against defendants based upon the development and worsening of an open wound to her left lower extremity while she was a resident of Sunrise of Bonita. Bridge Home Health was charged with providing plaintiff with home health services while she was a resident of Sunrise of Bonita. The initial skin tear was first noted on January 19, 2017, was not reported to plaintiff’s physician, and no care was provided by any defendants to treat the wound for five days (a complete absence of care), allowing it to worsen, and ultimately requiring a wound vac and skin graft. These are the facts alleged against all defendants equally. Based upon the foregoing, there will be countless issues that will arise throughout this litigation that would pose the possibility of conflicting rulings on a common issue of law or fact. Furthermore, at trial or arbitration of this matter, the trier of fact will be charged with deciding which defendants, if any, had a duty to plaintiff and breached that duty causing her wound to develop and/or worsen, and the amount of damages resulting therefrom. It will also be incumbent upon the trier of fact to apportion fault for plaintiff’s harm between the parties. There is no way that any two triers of fact will decide these issues the same way. The cases against the defendants named in this lawsuit are so entwined as to make it nearly impossible to proceed against one without the others, and will absolutely result in conflicting rulings on issues of law or fact, particularly as to apportionment of liability and the amount of damages. 10 PLAINTIFF'S OPPOSITION TO DEFENDANTS’ PETITION TO COMPEL ARBITRATION; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 VIL THE ARBITRATION AGREEMENTS DO NOT COMPLY WITH REQUIREMENTS FOR AGREEMENTS TO ARBITRATE NON-WAIVABLE STATUTORY RIGHTS Defendants argue that the arbitration clause should be enforceable because the statutory requirements provided in California Code of Civil Procedure section 1281 et seq., and 1290 et seq., have been followed. However, defendants fail to acknowledge the unique nature of an Elder Abuse case, and the specific requirements that adhere to arbitration agreements of non-waivable statutory rights, such as those provided by the Elder Abuse Act. See Fitzhugh v. Granada Healthcare and Rehabilitation Center, LLC (2007) 150 Cal.App.4th 469, 476 (holding that under no circumstances may a resident waive his right to sue under the Elder Abuse Act). The California Supreme Court has enunciated the five minimum requirements for mandatory arbitration agreements of non-waivable statutory rights: (1) An express provision for a neutral arbitrator; (2) provisions for more than minimal discovery; (3) a requirement or provision for a written award; (4) a provision for all types of relief that would otherwise be available in court; and (5) a provision stating that plaintiff will not be responsible for paying any expense that she would not be required to bear if she were free to bring the action in court. Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83,102. These requirements were originally formulated by the District of Columbia Circuit Court of Appeals in Cole v. Burns International Security Services (D.C. Cir. 1997) 105 F.3d 1465, in the context of mandatory arbitration of employment claims under Title VII. The rights and remedies created by California’s Elder Abuse Act are similar to those created by FEHA and Title VII. See, California Elder Law Litigation: An Advocates Guide (C.E.B. 2006), §6.34. In this case, the subject arbitration agreement fails to include the minimum requirements for mandatory arbitration agreements. First, the Arbitration Agreements do not provide for more than minimal discovery. As discussed in Armendariz, supra, 24 Cal.4" at 104, defendant is in possession of much of the information and knowledge of and access to witnesses relevant to plaintiff’s claims. As such, the denial of adequate discovery in an arbitration proceeding would lead to the de facto frustration of plaintiff's statutory rights. Id. Accordingly, the arbitration clause in question must provide for more than minimal discovery, which they do not. 11 PLAINTIFF’S OPPOSITION TO DEFENDANTS’ PETITION TO COMPEL ARBITRATION; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Defendant’s arbitration clause further fails to include a provision ensuring that plaintiff will not be responsible for paying any expense that she would not be required to bear if she were free to bring the action in court. In fact, rather than containing a provision forbidding any payment for arbitration fees, costs, or expenses, the arbitration clause drafted by defendant contains an express provision stating that “each party shall bear its own costs and fees in connection with the arbitration”. Parties appearing in court may be required to assume the cost of filing fees and other administrative expenses, so any reasonable costs of this sort that accompany arbitration are not problematic. Armendariz, supra, 24 Cal.4™ at 107. However, adding to that thousands of dollars in arbitrator’s fees and administrative costs particularly incurred due to the forum would effectively deter plaintiffs from bringing their claims. Jd. Furthermore, the typical consumer is completely unaware of how expensive arbitration can be when he/she signs an arbitration agreement. So, unless that arbitration agreement expressly states that arbitration can potentially increase the cost of litigation by tens of thousands of dollars, it cannot be said that a consumer knowingly agreed to assume these additional costs and fees. The failure to include these mandatory provisions invalidates the arbitration clause, making it unenforceable. VIII PUBLIC POLICY WOULD NOT BE SERVED BY ENFORCING THE ARBITRATION AGREEMENT IN THIS CASE Statutes governing petitions to compel arbitration reflect a strong public policy in favor of arbitration as a speedy and relatively inexpensive means of dispute resolution. Wagner Const. Co. v. Pacific Mechanical Corp. (2007) 58 Cal.Rptr.3d 434. In this case, however, these policy considerations would not be served by compelling Rebecca Johnson to arbitrate her claims against Sunrise. This is because plaintiff would still have to litigate the same issues against the one or two remaining defendants. Accordingly, compelling plaintiff to arbitrate her claims against Sunrise and leaving one or two remaining defendants to continue on to trial will actually make the entire case longer and more costly, as the parties will incur the cost of both arbitration and the entire civil proceedings. Given these circumstances, policy considerations do not support the enforcement of this arbitration agreement. " 12 PLAINTIFF'S OPPOSITION TO DEFENDANTS’ PETITION TO COMPEL ARBITRATION; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF [l DocuSign Envelope ID: DD584A5B-AFEE-4907-AD6A-C188B5E4858C 10 1] 12 13 14 15 16 1d 18 19 20 21 22 24 25 26 27 28 IX. 5 CONCLUSION For the reasons set forth herein, defendants have failed to demonstrate that a valid agreement to arbitrate exists. Even if one did exist, the Court should decline to compel arbitration based upon the likelihood of conflicting rulings, defendant’s failure to meet minimum requirements for arbitration agreements in cases such as this one, and because public policy would not be served by enforcement of this arbitration clause. Accordingly, plaintiff respectfully requests that defendants’ Petition be denied. Dated: . 7/26/2018 HOLM LAW GROUP, PC : By: Natalie Holm Natalie B. Holm, Esq., Attorney for Plaintiff 13 PLAINTIFF'S OPPOSITION TO DEFENDANTS’ PETITION TO COMPEL ARBITRATION; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF