ALMANZA VS WESTERN GOLF PROPERTIES LLC

Existence of Arbitration Agreement: In moving papers, Defendants provide evidence supporting the existence of valid arbitration agreements with each Plaintiff. They provide an authenticated copy of the Agreement as well as each Plaintiffs’ signature pages. (Motion, Ex. A.)

Defendants also submit the declaration of WGP’s Payroll and HR Specialist, Audrey LaBruna, who comprehensively explains the step-by-step process of completing onboarding documentation, confirming that Plaintiffs assented to the terms of the arbitration agreement. (See Declaration of Audrey LaBruna (“LaBruna Decl.”), ¶¶ 6-31.)

Accordingly, Defendant met its burden of proving the existence of an arbitration agreement between itself and Plaintiffs. (See Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 164-165.)

In opposing this motion, Plaintiff submit the declaration of two of the five Plaintiffs who claim that they do not recall ever seeing the arbitration agreement, and that the IP addresses (tracked by WBP in its ordinary course of business) simply do not belong to them. (See opposing declarations of Findencio o Almanza “Almanza Decl.” and Declaration of Eliseo Simental “Simental Decl.”)

However, as noted by Defendant, not recalling their assent to an agreement is entirely different than denying it occurred. Here, the onboarding documents, including the subject Agreement and Handbook, are located in Paylocity, an application that all Plaintiffs used throughout their employment with WGP. (See LaBruna Decl. at ¶¶ 11-12.)

Plaintiffs had the ability to access these documents through the Paylocity dashboard anytime they logged into their personalized account. (Id.)

Accordingly, the assent of remaining Plaintiffs, Eduardo Cruz, Arturo Escobar, and Luis Hernandez are not at issue; and Plaintiff Almanza and Plaintiff Simental’s opposition to their assent is unfounded.

The FAA is Applicable: The Federal Arbitration Act (9 U.S.C. §§1 et seq.) generally governs arbitration in written contracts involving interstate commerce and authorizes enforcement of arbitration clauses unless grounds exist in law or equity for the revocation of any contract, similar to the California Arbitration Act. (9 U.S.C. §2; Basura v. U.S. Home Corp. (2002) 98 Cal.App.4th 1205, 1213.)

In situations governed by the FAA, conflicting state law is preempted. (Southland v. Keating (1984) 465 U.S. 1, 12; Volt Info. Sciences, Inc. v. Board of Trustees of Leland Stanford Junior University (1989) 489 U.S. 468, 477.) The FAA embodies a strong federal policy favoring arbitration. (Southland, supra, 465 U.S. at 12.)

Plaintiffs give the FAA a narrow reading, contending that since Plaintiff’s employment as landscapers did not involve interstate or foreign commerce, the FAA does not preempt Plaintiffs’ claims. However, as noted by Defendant, courts have consistently held that the FAA applies broadly and recognizes that the nature of the employer’s activities and related interstate aspects of the employee relationship are sufficient for FAA coverage.

For example, in Giuliano v. Inland Empire Personnel, Inc., the Plaintiff argued that his declaration created a “disputed issue of fact regarding the interstate nature of his employment.” (Giuliano v. Inland Empire Pers., Inc. (2007) 149 Cal. App. 4th 1276, 1287.) However, the court disagreed, stating the declaration “showed only that most of his time was spent physically working in California which, on record, is insufficient to create a reasonable inference that his work had no connection to interstate commerce.” (Id.)

Here, Plaintiffs’ argument and declarations merely assert that most work time was spent in California, locally; however, per Giuliano, that does not automatically negate FAA coverage so long as Defendant’s business is undisputedly interstate and tied to the employment contract.

In Wools v. Superior Court (2005) 127 Cal. App. 4th 197 and Carbajal v. CWPSC, Inc. (2016) 245 Cal. App. 4th 227, both cited by Plaintiff, the party contending that the FAA applied did not present any evidence of the party’s business that would show a connection to interstate commerce. In Carbajal, for instance, the court noted that the moving party “presented nothing about the nature of its business or [the employee’s] work that showed any connection with interstate commerce. (Id. 239.) In Woolls, the moving party “did not make any evidentiary showing in furtherance of his assertion [the] transaction involve[d] interstate commerce”. (Woolls at 213.)

On the other hand, in the present matter, Defendants presented undisputed evidence that WGP operates accross multiple states, utilizes the interstate communication networks to conduct business, and— perhaps most relevant to Plaintiffs—regularly purchases agronomy tools, which Plaintiffs admit they use in their typical job duties. (See LaBruna Decl. at ¶ 4; Opposition at p. 7- 8.)

Unconscionability: As noted earlier, both federal and California law embody a strong public policy favoring arbitration. (See AT&T Mobility LCC v. Concepcion (2011) 563 U.S. 333, 339 (The FAA “reflect[s] both a liberal federal policy favoring arbitration...); CCP § 1281.2.)

In a motion to compel arbitration, the party opposing arbitration bears the burden of proving by a preponderance of the evidence any defense, such as unconscionability. (Serafin v. Balco Props. Ltd., LLC (2015) 235 Cal. App. 4th 165, 172-73.)

Both procedural and substantive unconscionability must be present for an agreement to be deemed unconscionable, and these elements are evaluated on a “sliding scale.” (Id. at 178.)

Procedural: In the Opposition, Plaintiffs contend that the Agreement is procedurally unconscionable because (1) the arbitration agreement is a contract of adhesion, (2) the agreement uses fine print and sophisticated legal terms, (3) WGP failed to provide a copy of governing rules to plaintiffs, and (4) agreement’s title did not give notice of the arbitration agreement.

Plaintiffs claim that the agreement is one of adhesion because the consent to arbitrate disputes was a condition of his continued employment with Defendant. However, it is well- settled that the adhesive nature of a contract alone is insufficient to establish sufficient procedural unconscionability. (See Giuliano v. Inland Empire Pers., Inc. (2007) 149 Cal.App.4th 1276, 1292 – “Arbitration clauses in employment contracts have been upheld despite claims that the clauses were unconscionable because they were presented as part of an adhesion contract on a take-it-or-leave-it basis.”.=

Here, Plaintiffs’ sole allegation regarding the adhesive nature of the Arbitration Agreement is that it was presented to Plaintiffs on a “take it or leave it” basis. (See Opposition, at p. 12.) As established above, this fact alone is not sufficient to render the agreement unenforceable. Plaintiffs do not identify any other factors which support an argument of procedural unconscionability, such as circumstances sufficient to show fraud or duress.

Plaintiffs also contend that the failure to attach the FAA or the CAA rules to the arbitration agreement “contributes to oppression because the employee is forced to go to another source to find out the full import of what he or she is about to sign and must go to that effort prior to signing.”

Plaintiffs specifically cite that “Numerous cases have held that the failure to provide a copy of the arbitration rules to which the employee would be bound, supported a finding of procedural unconscionability.” (Opposition, at p. 14 (citing Carbajal, 245 Cal. App. 4th at 244 (citing cases); Zullo v. Superior Court (2011) 197 Cal.App.4th 477, 485–486.)

Plaintiffs’ arguments relate to the FAA statute, not the arbitration service’s rules, which are the subject of Plaintiffs’ cited case law. Moreover, the cited case predated more recent authority from the California Supreme Court in Baltazar v. Forever 21, Inc. (2016) 62 Cal. 4th 1237.)

In Baltazar, the Plaintiff made a similar argument to the Plaintiffs here, that because the employer did not provide her with a copy of the AAA’s rules for arbitration, it was unconscionable. (Id. at 1246.) Indeed, the Court clarified and expanded upon the point raised by Plaintiffs, that “numerous cases have held that the failure to provide a copy of the arbitration rules to which the employee would be bound supported a finding of procedural unconscionability. But in [those cases] ... the plaintiff’s unconscionability claim depended in some manner on the arbitration rules in question. [Citations.]

These cases thus stand for the proposition that courts will more closely scrutinize the substantive unconscionability terms that were ‘artfully hidden’ by the simple expedient of incorporating them by reference or rather than including them in or attaching them to the arbitration agreement.” (Id. (emphasis added).)

Accordingly, the court held that because the Plaintiff was not challenging specific enforcement of the AAA rules, it did not affect unconscionability. (Id.)

Plaintiffs cite Carmona v. Lincoln Millennium Car Wash, Inc. (2014) 226 Cal. App. 4th 74, which is distinguishable. In Carmona, the court found the agreement to be procedurally unconscionable because it was admittedly presented solely in a language which the plaintiffs could not read, a lack of mutuality existed as to how the arbitration procedure applied to the employer’s confidentiality claims, the agreement allowed for a presumption of harm in favor of the employer, and the rules were not provided. (Id. at 90.)

It was the litany of both substantive and procedural factors present in Carmona which rendered the court’s finding that the arbitration agreement was “permeated by unconscionability” and unenforceable. (Ibid.)

Here, Plaintiffs do not allege that they could not understand the language of the agreement. (Almanza Decl., ¶9.; Simental Decl., ¶8.) Both Plaintiffs Fidencio Almanza and Plaintiff Eliseo Simental concede that they can read and write in English. (Almanza Decl. at ¶ 9; Simental Decl. at ¶ 8.)

Plaintiffs also omit the part of Carmona which states that failure to provide a copy of the rules is just one factor to consider in unconscionability and “what elevates this case to a high degree of unconscionability” was not failure to provide the rules, but failure of the employer to translate one of the most important terms written explicitly within the agreement itself. (Carmona (2014) 226 Cal.App.4th 74, at 85.)

Plaintiffs also cite Carbajal v. CWPSC, Inc. (2016) 245 Cal. App. 4th 227, another case where the court issued its ruling regarding unconscionability based on a multitude of factors and did not find that failure to provide the rules alone was a sufficient basis for unconscionability. Further, in Carbajal, the court again found that there was a compilation of factors, which are not at issue here, impacting the finding that the agreement was unenforceable. (Id.)

The Court of Appeals identified the factors supporting its decision as the lack of mutuality in the agreement by requiring that the employee but not the employer arbitrate all claims, as the agreement required the employee to use arbitration as the sole means of resolving claims but allowed for the employer to seek injunctive relief in court. (Id. at 249.) The agreement also granted the employer a unilateral right of appeal. (Id. at 253.) Finally, and also distinguishable from the instant case, is that the employer failed to present any evidence that the FAA applied, as there was no indication of the employer’s involvement in interstate commerce. (Id. at 234.)

Plaintiffs also allege that the text was “too small” or contained an extensive amount of legal jargon. (See Opposition, p. 13-14.) However, arbitration agreements are inherently legal documents and contain necessary legal language, which alone cannot be a basis to invalidate an arbitration agreement. (See Mission Viejo Emergency Medical Associates v. Beta Healthcare Group (2011) 197 Cal. App. 4th 1146, 1154-55 (explaining Plaintiff’s claim for lack of knowledge ignores contract law, and the agreement remains enforceable).

Plaintiffs contend that they either do not recall signing the arbitration agreement or that the IP addresses do not belong to them. In support, they offer only self-serving, unsupported declarations. Both Plaintiff Fidencio Almanza and Plaintiff Eliseo Simental contend that the signatures shown are “not how [they] write or sign [their name].” (Almanza Decl. at ¶ 6; Simental Decl. at ¶ 7.)

This claim entirely misunderstands that the electronic signatures are adopted, not handwritten. As depicted in each of the signed Arbitration Agreements, the signatures are all identical, in the same font, because they are created with a computer-generated font through the Paylocity application. (See generally, Exh. A.)

As noted by Defendant, Plaintiff Fidencio Almanza additionally insists that he completed his paperwork in person by hand. This directly contradicts WGP records which show both an email and IP address were used to access documents. (See LaBruna Decl. ¶ 13-15.)

Plaintiff Fidencio Almanza speculates, without any substantiating evidence or foundation, that the IP address is registered to a T-Mobile cell phone and therefore could not be his because he uses AT&T. (Almanza Decl. ¶ 7-8.)

California courts have routinely held that “one who accepts or signs an instrument, which on its face is a contract, is deemed to assent to all its terms, and cannot escape liability on the ground he has not read it.” (Castillo v. CleanNet USA, Inc. (2018) 358 F.Supp.3d 912, 932. (internal quotations omitted.))

If a plaintiff “had reasonable opportunity to know of the character or essential terms of the proposed contract” and “fails to learn the nature of the document he or she signs, such negligence precludes a finding that the contract is void for fraud in the execution.” (Rosenthal v. Great W. Fin. Sec. Corp. (1996) 14 Cal.4th 394, 423.) (internal quotations omitted).)

In fact, failure to read or understand the arbitration clause is generally no defense to its enforcement. (Madden v. Kaiser Found. Hosps. (1976) 17 Cal.3d 699, 710.) Courts have found arbitration agreements to be valid even in cases where an employee did not read the agreement. “An arbitration clause . . . may be binding on a party even if the party never actually read the clause.” (Pinnacle Museum Tower Ass’n., supra, 55 Cal. 4th at 236; 24 Hour Fitness v. Sup. Ct. (1998) 66 Cal. App. 4th 1199, 1215 (enforcing arbitration agreement where plaintiff alleged it was contained in a handbook she never read).

Finally, Plaintiffs assert that Defendants did not provide any tracking or geolocation data for Plaintiffs’ signatures, or that Defendants did not email or text the arbitration agreement. Yet they provide no authority for requiring this as a means of validating the arbitration agreement.

Substantive: Plaintiffs’ contend that (1) defendants are denying plaintiffs their statutory right to a jury trial on their labor code claims and (2) defendants are denying plaintiffs their right to a jury trial on their claim for injunctive relief.

As to (1) above, this turns solely on whether the FAA governs. As noted by Defendant, Plaintiffs essentially argue that the Arbitration Agreement is substantively unconscionable because it denies the right to Labor Code 229 by applying the FAA. However, it is well-settled law that if the FAA applies, this overrules the rights afforded to Plaintiffs under Labor Code 229. (Perry v. Thomas (1987) 482 U.S. 483, 491-92.; Garrido v. Air Liquide Industrial U.S. LP (2015) 241 Cal. App. 4th 833 (reaffirming the holding in Perry v. Thomas).) Since the FAA applies (see discussion above), this argument is moot.

As to (2) above, there is no right to a jury trial in actions under California’s Unfair Competition Law as they are inherently equitable, rather than legal, in nature. (Nationwide Biweekly Administration, Inc. v. Superior Court (2020) 9 Cal.5th 279, 322.)

Inconsistent rulings: Arbitration can proceed without conflicting rulings if the court stays the nonsignatory plaintiff’s claims, i.e., plaintiff Patricia Almanza, pending the outcome of arbitration. (CC § 1281.2 (d).)

Again, there is a strong public policy under both California and Federal law favoring arbitration as the preferred method of resolution. (See AT&T Mobility LCC v. Concepcion (2011) 563 U.S.. 333, 339; CCP. § 1281.2.) Even plaintiffs concede through CCP § 1281.2(c) that a court’s ability to deny or allow arbitration is discretionary and not mandatory. (See Opposition, at p. 16-17.)

The arbitration agreement applies to any claims that “may arise out of or be related in any way to [the employee’s] employment” and the agreements’ broad “owners/directors/officers/managers/employees/agents” language specifically demonstrates the agreement contemplated and encompassed the type of situation argued by Plaintiffs regarding the elder abuse claim falling outside the scope.

Also, the Complaint alleges these very same causes of action against all defendants. The Complaint fails to single out Mr. Cote or Mr. Gomez. To the extent that any defendant is identified individually, it is solely Western Golf Properties. All claims against Mr. Cote and Mr. Gomez are pled on a collective basis, i.e., “against all Defendants.”

Severance: If the Court finds any language in the Arbitration Agreement to be unconscionable, the clause can be easily severed, and thus not a fatal flaw to the enforcement of the Arbitration Agreement as a whole. There is a “strong legislative and judicial preference to sever the offending term and enforce the balance of the agreement.” (Dotson v. Amgen, Inc. (2010) 181 Cal.App.4th 975, 986.)

“[T]he dispositive question is whether the central purpose of the contract is so tainted with illegality that there is no lawful object of the contract to enforce.” (Poublon v. C.H. Robinson Co. (9th Cir. 2017) 846 F.3d 1251, 1272- 1274, citing Marathon Entertainment, Inc. v. Blasi (2008) 42 Cal. 4th 974, 996.) Here, the Arbitration Agreement explicitly includes a severability clause. (See Motion Exhibit A, ¶ 6.)

Motion to Compel Arbitration GRANTED. The action is stayed in its entirety, including those claims by Plaintiff Patricia Almanza who is not included in the arbitration. Status hearing re arbitration is scheduled for 10.20.26. Case Management Conference continued to that date.

4. CASE # CASE NAME HEARING NAME HEARING RE: DEMURRER ON 2ND AMENDED COMPLAINT FOR BREACH LITTLE VS ROCKET TITLE CVPS2508295 OF CONTRACT/WARRANTY (OVER INSURANCE $35,000) OF AUDREY LITTLE BY OAKTREE FUNDING CORPORATION Tentative Ruling: A general demurrer lies where the pleading does not state facts sufficient to constitute a cause of action. (CCP § 430.10(e).)

In evaluating a demurrer, the court gives the pleading a reasonable interpretation by reading it as a whole and all of its parts in their context. (Moore v. Regents of University of California (1990) 51 Cal.3d 120, 125.)

The court assumes the truth of all material facts which have been properly pleaded, of facts which may be inferred from those expressly alleged, and of any material facts of which judicial notice has been requested and may be taken. (Crowley v. Katleman (1994) 8 Cal.4th 666, 672.)

However, a demurrer does not admit contentions, deductions or conclusions of fact or law. (Daar v. Yellow Cab Company (1967) 67 Cal.2d 695, 713.)

If the complaint fails to state a cause of action, the court must grant the plaintiff leave to amend if there is a reasonable possibility that the defect can be cured by amendment. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)