Power vs. Deerfield Apartments, LLC

Defendants Deerfield Apartments, LLC (Deerfield) and Irvine Management Company’s (IMC) motion to compel arbitration is GRANTED. (See 9 U.S.C. § 2 [Federal Arbitration Act (FAA)]; Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337, 345-346 (Victrola) [parties may incorporate the FAA]; Johnson v. Walmart Inc. (9th Cir. 2023) 57 F.4th 677, 681 [burden]; Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236 [burden].)

Plaintiff Jennifer Power is ORDERED to arbitrate her claims against defendants in accordance with the subject arbitration agreement. (Clem Decl. at Ex. 1 [lease at arbitration (arb.) addendum].)

This action is hereby STAYED pending completion of arbitration or further order of the court. (See 9 U.S.C. § 3.) Existence of arbitration agreement. Defendants have met their burden to demonstrate the existence of an agreement to arbitrate the controversy. (See Clem Decl. ¶ 2, Ex. 1 [lease at arb. addendum]; Arthur Andersen LLP v. Carlisle (2009) 129 S.Ct. 1896, 1902-1903 [under FAA, state contract law governs the validity, revocability, and enforceability of an arbitration agreement, including the question of whether an arbitration agreement may be enforced by a nonparty]; Banner Entertainment, Inc. v. Superior Court (1998) 62 Cal.App.4th 348, 357 [the FAA does not apply until the existence of an enforceable arbitration agreement is established under state law principles]; Garcia v. Stoneledge Furniture LLC (2024) 102 Cal.App.5th 41, 51-52 [three-step burden shifting process]; Ramirez v. Golden Queen Mining Co., LLC (2024) 102 Cal.App.5th 821, 830-832, 837 [if opposing party fails to meet her second-step burden, the burden shifting process stops there]; see also Clem at Ex. 1 [IMC was Deerfield “duly authorized agent,” see lease at p. 1, 6 & arb. addendum, pp. 1-2]; Compl. ¶¶ 6, 13-14, 16-17, & the second ¶ 7 [IMC sued for acts/omissions as Deerfield’s agent]; Dryer v. Los Angeles Rams (1985) 40 Cal.3d 406, 409-410 [agency exception]; Thomas v. Westlake (2012) 204 Cal.App.4th 605, 614-615 [same].)

Civ. Code, § 1953, subd. (a)(4). The court has considered plaintiff’s challenge based on Code of Civil Procedure section 1953, subdivision (a)(4) (section 1953(a)(4)) to the extent it applies specifically to the delegation clause, as the delegation clause, standing on its own, modifies plaintiff’s procedural rights in litigation. (See Clem Decl. at Ex. 1 [arb. addendum § 1].)

Plaintiff’s reliance on section 1953(a)(4), however, fails. The FAA applies here pursuant to the express terms of the arbitration agreement. (Clem Decl. at Ex. 1 [arb. addendum § 1, stating that the lease and arbitration addendum “shall be governed by ... the Federal Arbitration Act, 9 U.S.C. Sections l-16, notwithstanding any other choice of law provision”]; Victrola, supra, 6 Cal.App.5th at pp. 345-346 [where arbitration agreement states its enforcement is “governed by the [FAA],” both the procedural and substantive provisions of FAA apply]; Peleg v. Neiman Marcus Group, Inc. (2012) 204 Cal.App.4th 1425, 1445-1446 [same].)

“[T]he FAA preempts a state rule that discriminates against arbitration by discouraging or prohibiting the formation of an arbitration agreement.” (Chamber of Commerce of the United States of America v. Bonta (9th Cir. 2023) 62 F.4th 473, 483, 486 (Chamber of Commerce).) “[A] state rule discriminates against arbitration even if it does not expressly refer to arbitration, but instead targets its defining characteristics.” (Id., at p. 486.) This includes “a rule that prohibits an agreement ... that waives the right to a jury trial....” (Id. at p. 483.) Further, even if a state law is purportedly “generally applicable,” the FAA preempts the law if it “interferes with fundamental attributes of arbitration,” such as a categorical rule of unconscionability declaring a particular type of agreement against public policy. (AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333, 331-334 (Concepcion); Chamber of Commerce, at p. 483.)

This is what we have here. Section 1953(a)(4) prohibits and renders “void” an agreement modifying or waiving a tenant’s procedural rights in litigation, including the right to a jury trial. (Civ. Code, § 1953, subd. (a)(4); Jaramillo v. JH Real Estate Partners, Inc. (2003) 111 Cal.App.4th 394, 403-404 [section 1953(a)(4) establishes the general rule that a tenant cannot validly agree to binding arbitration in a residential lease agreement; “[i]nherent in an arbitration agreement is a waiver of any right to jury trial”].) It is therefore preempted by the FAA. (See Chamber of Commerce, supra, 62 F.4th at pp. 483, 486; Concepcion, supra, 563 U.S. at pp. 331-334.)

Delegation clause. The arbitration agreement includes a clear and unmistakable delegation clause. (See Clem Decl. at Ex. 1 [arb. addendum § 1, “The arbitrator shall have the exclusive authority to resolve any Claims, including any dispute relating to the interpretation, applicability, enforceability or formation of this agreement and any claim that all or any part of this agreement is unconscionable, void or voidable.”]; Aanderud v. Superior Court (2017) 13 Cal.App.5th 880, 892 [delegation clause prerequisites]; Malone v. Superior Court (2014) 226 Cal.App.4th 1551, 1559- 1560 [delegation clause that provided “ ‘[t]he arbitrator has exclusive authority to resolve any dispute relating to the interpretation, applicability, or enforceability of this binding arbitration agreement’ ” was clear and unmistakable]; Momot v. Mastro (9th Cir. 2011) 652 F.3d 982, 988 [language delegating authority to arbitrator to determine “ ‘the validity or application of any of the provisions of’ ” the arbitration clause was a clear and unmistakable agreement to arbitrate the question of arbitrability].)

Plaintiff has not raised any defenses specific to the delegation clause. (See Aanderud v. Superior Court, supra, 3 Cal.App.5th at p. 895 [burden]; Malone v. Superior Court, supra, 226 Cal.App.4th at pp. 1559-1560 [contentions that the entire agreement is unconscionable are not sufficient to challenge the delegation clause itself; “any claim of unconscionability must be specific to the delegation clause”]; accord, Nickson v. Shemran, Inc. (2023) 90 Cal.App.5th 121, 132; see also Opp., in passim.)

Therefore, the court must delegate the remaining issues for the arbitrator to decide, including plaintiff’s remaining challenges to enforcement based on the scope of the arbitration agreement or the “arbitrability” of her claims (see Opp. at pp. 5-6), unconscionability (id. at pp. 7-8), and waiver (id. at pp. 8-9).

CMC set 5/7/26 is ordered vacated.

ADR Review Hearing set 2/5/27 at 8:30 a.m. in Dept. C44.

Defendants shall give notice.

If parties/counsel wish to give argument, both hearings will be continued to July 9, 2026 at 1:30 p.m. in Dept. C44.