Kaur v. The Permanente Medical Group, Inc., et al

The Complaint alleges causes for (1) negligence; (2) negligent hiring, supervision, or retention of employees; (3) intentional infliction of emotional distress; (4) negligent infliction of emotional distress; and (5) invasion of privacy – survivor’s right to control death images. Statement of the Law California law favors the enforcement of valid arbitration agreements. (Ericksen, Arbuthnot, McCarthy, Kearney & Walsh, Inc. v. 100 Oak Street (1983) 35 Cal.3d 312, 320; In re Tobacco I (2004) 124 Cal.App.4th 1095, 1103.)

Any doubts to arbitration will be resolved against the party asserting a defense to arbitration, whether the issue is construction of contract language, waiver, delay or any like defense to arbitrability. (Erickson, supra, 35 Cal.3d at p. 320.) Under Code of Civil Procedure section 1281.2, a party to an arbitration agreement may move to compel arbitration if another party to the agreement refuses to arbitrate, and the court shall order the parties to arbitrate if it determines an agreement to arbitrate exists, unless it determines (a) the right to compel has been waived by the petitioner; (b) grounds exist for revocation of the agreement; or (c) a party to the agreement is also a party to a pending court action or special proceeding, arising out of the same transaction or related transaction, and there is a possibility of conflicting rulings on common issues of law or fact. (Code Civ.

Proc., § 1281.4.) The Court must determine when a petition to compel arbitration is filed and accompanied by prima facie evidence of a written arbitration agreement whether the agreement exists, if any defense to its enforcement is raised, and whether the agreement is enforceable. (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th394, 413.) The moving party bears the burden of proving the existence of the arbitration agreement by preponderance of the evidence. (Ibid.) If the party opposing the petition raises a defense to enforcement, then he bears the burden of producing evidence and proving by preponderance of the evidence any fact necessary to the defense. (Ibid.)

The Federal Arbitration Act (FAA), at 9 U.S.C. §1, et seq., also authorizes enforcement of arbitration clauses unless grounds exist in law or equity for the revocation of any contract. (9 U.S.C. § 2). The enforcement language of the FAA is almost identical to Code of Civil Procedure section 1281. In situations governed by the FAA, conflicting state law is preempted in either state or federal courts. (Volt Info. Sciences, Inc. v. Board of Trustees of Leland Stanford Junior University (1989) 489 U.S. 468, 477 [“The FAA contains no express pre-emptive provision, nor does it reflect a congressional intent to occupy the entire field of arbitration . . . .

But even

when Congress has not completely displaced state regulation in an area, state law may nonetheless be pre-empted to the extent that it actually conflicts with federal law . . . .”].)

Analysis

FAA Application: Defendant Kaiser meets its burden to show the arbitration agreement affects interstate commerce. The moving defendant bears the burden of demonstrating FAA coverage by declarations and other evidence. (Shepard v. Edward Mackay Ent., Inc. (2007) 148 Cal.App.4th 1092, 1101.) The FAA applies to arbitration clauses involving interstate commerce. (9 U.S.C. § 2; Aviation Data, Inc. v. American Express Travel Related Services Company, Inc. (2007) 152 Cal.App.4th 1522, 1534.) Here, Kaiser presents evidence that its hospitals and medical offices use large quantities of equipment and supplies purchased and shipped from outside of California; that its facilities are constructed with materials and services obtained from out of state sources; and that Kaiser is required to pay for, or provide, certain medical services to its plan members from providers outside of California. (Everett Decl., ¶¶3-4.)

Plaintiff offers no argument in opposition. Thus, the Court concludes the FAA applies. The Arbitration Provision: In California, general principles of contract law determine whether the parties have entered a binding agreement to arbitrate and the party seeking arbitration bears the burden of proving the existence of an arbitration agreement. (Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 842.) Providing an executed copy of the arbitration agreement satisfies a defendant’s initial burden. (Espejo v.

Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1058-1060.) Here, Kaiser presents evidence that decedent entered into a Combined Membership Agreement, Evidence of Coverage, and Disclosure form (EOC) for the years 2023 and 2024. (Fertel Decl., Exhs. A, A-1.) That EOC contains an arbitration provision, which states: Any dispute shall be submitted to binding arbitration if all of the following requirements are met: • The claim arises from or is related to any alleged violation of any duty incident to or arising out of or relating to this EOC or a Member Party’s relationship to Kaiser Foundation Health Plan, Inc. (“Health Plan”), including any claim for medical or hospital malpractice (a claim that medical services or items were unnecessary or unauthorized or were improperly, negligently, or incompetently rendered), for premises liability, or relating to the coverage for, or delivery of, services or items, irrespective of the legal theories upon which the claim is asserted • The claim is asserted by one or more Member Parties against one or more Kaiser Permanente Parties or by one or more Kaiser Permanente Parties against one or more Member Parties 5

• Governing law does not prevent the use of binding arbitration to resolve the claim (Fertel Decl., Exh. A [EOC pp. 77-78.], A-1 [EOC, p. 77].) “Member Parties” includes a member, a member’s heir, relative, or personal representative; and any person claiming a duty to them arises from a member’s relationship to one or more Kaiser Permanente Parties. Kaiser “Permanente Parties” includes The Permanente Medical Group physician, Kaiser Foundation Hospitals, and Kaiser Foundation Health Plan, Inc. (Fertel Decl., Exh.

A [EOC, p. 78], A-1 [EOC, p. 77].) Further, as part of Kaiser’s online enrollment process, on July 6, 2023, and again on November 21, 2024, decedent provided his electronic signature on the Covered California Online Enrollment System acknowledging that: I understand that every participating health plan has its own rules for resolving disputes or claims, including, but not limited to, any claim asserted by me, my enrolled dependents, heirs, or authorized representatives against a health plan, any contracted health care providers, administrators, or other associated parties, about the membership in the health plan, the coverage for, or the delivery of, services or items, medical or hospital malpractice (a claim that medical services were unnecessary or unauthorized or were improperly, negligently, or incompetently rendered), or premises liability.

I understand that, if I select a health plan that requires binding arbitration to resolve disputes, I accept, and agree to, the use of binding arbitration to resolve disputes or claims (except for Small Claims Court cases and claims that cannot be subject to binding arbitration under governing law) and give up my right to a jury trial and cannot have the dispute decided in court, except as applicable law provides for judicial review of arbitration proceedings. I understand that the full arbitration provision for each participating health plan, if they have one, is in the health plan's coverage document, which is available online at CoveredCA.com for my review, or I can call Covered California for more information. (Taylor Decl., Exhs.

C, D.) Kaiser provides copies of the Covered California E-Signature Reports showing Decedent agreed to his electronic signature. (Taylor Decl., Exhs. E, F.) Plaintiff argues Kaiser does not adequately authenticate Decedent’s signature on the arbitration agreement because Exhibits E and F provide no signatures, and Kaiser cannot show that only the Decedent could have signed the agreements. However, contrary to Plaintiff’s argument, Kaiser has sufficiently shown that the decedent electronically signed the arbitration agreement: Although Kaiser bears the burden, it may authenticate an electronic signature “in any manner,” including presenting evidence of the agreement at issue and the circumstances of its execution. (Ruiz, supra, 232 Cal.App.4th at pp. 844-845.) “[T]he burden of authenticating an electronic signature is not great.” (Ibid.) 6

As to coverage, Plaintiff argues that her claims do not arise out of the arbitration agreement. Relying on Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337, 356, a case not related to medical arbitration, Plaintiff argues that because the agreement uses the phrase “arising out of,” the scope of the agreement must be narrowly construed. Plaintiff argues that when narrowly considered, the purpose of the arbitration agreement was only to set forth the parties’ obligations as related to decedent’s “medical care and treatment.”

Plaintiff argues that her claims are not related to the medical care but are, rather, “entirely premised on Defendants’ conduct after [decedent] had already been pronounced deceased.” The Court disagrees. Here, the arbitration agreement requires that any dispute must be submitted to arbitration if the “claim arises from or is related to any alleged violation of any duty incident to or arising out of or relating to this EOC or a Member Party’s relationship to Kaiser Foundation Health Plan, Inc.” and includes any claim relating to “delivery of, services or items, irrespective of the legal theories upon which the claim is asserted.” (Fertel Decl., Exh.

A, p. 77.) Plaintiff’s claims are related to decedent’s receiving and Kaiser’s delivery of services under the EOC. Unconscionability: Unconscionability has requires a procedural and a substantive element, “the former focusing on oppression or surprise due to unequal bargaining power, the latter on overly harsh or one-sided results.” (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114 [citation and quotation marks omitted].) Both elements must be present before a contract provision will be rendered unenforceable on grounds of unconscionability. (Ibid.)

However, they need not be present to the same degree. Rather, courts invoke a “sliding scale” to determine unconscionability: “[T]he more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.” (Ibid.) Here, Plaintiff has presented no evidence of procedural unconscionability. In light of Plaintiff failing to show any procedural unconscionability exists, the Court need not consider Plaintiff’s argument related to substantive unconscionability.

However, as Kaiser points out on reply, Plaintiff’s substantive unconscionability argument consists only of a series of four listed items, without any citation to provisions or legal analysis offered in support. Thus, the Court declines to find unconscionability.

*** *** ***

7