Camille Winters v. FirstService Residential, et al.

TENTATIVE RULINGS 6-11-26 Department R17- Judge Gilbert G. Ochoa

This court follows California Rules of Court, rule 3.1308(a) (1) for tentative rulings. (See San Bernardino Superior Court Local Emergency Rule 8.) Tentative rulings for each law & motion will be posted on the internet (https://www.sb-court.org) by 3:00 p.m. on the court day immediately before the hearing.

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CAMILLE WINTERS

V.

FIRSTSERVICE RESIDENTIAL, et al.

Motion: Motion to Compel Arbitration and Stay or Dismiss the Proceedings

Movant: Defendant FirstService Residential California, LLC

Joinder: Defendant Lewis Management Corp.

Respondent: Plaintiff Camille Winters

DISCUSSION

I. Defendant’s Evidentiary Objections

Along with the reply, Defendant FirstService raises eight evidentiary objections against

statements made in Plaintiff’s Declaration.

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As a preliminary matter, Defendant does not provide a proposed order as required. Rules

of Court, rule 3.1354, subdivision (c), requires that a party submitting written objections to

evidence submit a proposed order, which includes places for the court to indicate whether it has

sustained or overruled each objection and a place for the judge’s signature. Where a party’s

evidentiary objections do not comply with Rule 3.1354, the court does not err in either overruling

the objections, or in refusing to rule on the objections. (Schmidt v. Citibank, N.A. (2018) 28

Cal.App.5th 1109, 1118 (“Schmidt”); Hodjat v. State Farm Mutual Automobile Ins. Co. (2012)

211 Cal.App.4th 1, 7-8 (“Hodjat”).)

Plaintiff’s Evidentiary Objections

Along with the opposition, Plaintiff raises eleven evidentiary objections against statements

made in Ms. Schwartz’ Declaration.

As a preliminary matter, Plaintiff does not provide a proposed order as required. Rules of

Court, rule 3.1354, subdivision (c).

Statement of the Law

California Law. Under the California Arbitration Act (“CAA”), “[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 contract.”

(Code Civ. Proc., § 1281.) Code of Civil Procedure sections 1280, et seq., provides a procedure

for the summary determination of whether a valid agreement to arbitrate exists, and such procedure

satisfies both state and federal law. (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14

Cal.4th 394, 413 (“Rosenthal”).)

Pursuant to 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

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shall order the parties to arbitrate if it determines an agreement to arbitrate exists, unless it

determines, in relevant part, that: (a) the right to compel arbitration has been waived by the

petitioner; or (b) grounds exist for rescission of the agreement.

The party may also seek a stay of pending litigation either by itself or in conjunction with

a petition to compel contract arbitration. A stay must be granted where a court has previously

ordered arbitration of the dispute or an application for such an order has been made but not ruled

upon. (Code Civ. Proc., § 1281.4.)

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.) Any

doubts about arbitration will be resolved against the party who is asserting a defense to arbitration,

whether the issue is construction of contract language, waiver, delay, or defense to arbitrability.

(In re Tobacco I (2004) 124 Cal.App.4th 1095, 1104.)

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, supra,

14 Cal.4th at p. 413.) The petitioner bears the burden of proving the existence of the arbitration

agreement by a preponderance of the evidence. If the party opposing the petition raises a defense

to enforcement, then he or she bears the burden of producing evidence and proving by

preponderance of the evidence any fact necessary to the defense. (Ibid.) The trial court’s role is to

resolve these factual issues. (Id. at p. 414.)

Federal Law. 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

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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 . . . .”].)

To compel arbitration under the FAA, a court must find an arbitration agreement exists

between the parties and the agreement covers their dispute. (AT&T Technologies, Inc. v.

Communications Workers of America (1986) 475 U.S. 643, 648-649 (“AT&T Technologies,

Inc.”).) The enforcement of an arbitration clause is a matter of ordinary state-law contract

principles. (AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333, 338 (“AT&T Mobility LLC”);

First Options of Chicago, Inc. v. Kaplan (1995) 514 U.S. 938, 944 (“First Options of Chicago,

Inc.”).) Arbitration agreements are on equal footing with other contracts and should be enforced

according to their terms. (AT&T Mobility LLC, supra, 563 U.S. 333, 338.) Under the FAA,

arbitration agreements can be declared unenforceable on grounds of law or equity for revocation

and permits invalidating the agreement on contract defenses, e.g., fraud, duress, or

unconscionability. (Id. at pp. 339-340.)

State rules of procedure, including those governing petitions to compel arbitration, apply

in state court proceedings except where such rules would defeat the purpose of the federal law.

(Rosenthal, supra, 14 Cal.4th at pp. 409-410.) Like California law, any doubt about the

arbitrability of a dispute under the FAA is resolved in favor of arbitration. (AT&T Technologies,

Inc., supra, 475 U.S. at p. 650.)

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If the court orders arbitration under an agreement, it shall on application of one of the

parties stay the action until such arbitration ends. (9 U.S.C. § 3.)

II.

Analysis

Defendant FirstService moves to compel arbitration pursuant to the FAA/CAA, and on the

grounds that Plaintiff agreed to and signed the Mutual Agreement to Mediate and Arbitrate Claims

(the “Arbitration Agreement”). Defendant Lewis joins FirstService in seeking arbitration.

Plaintiff opposes the motion on two main grounds. She contends there is no valid

agreement to arbitrate and that the agreement itself is unconscionable.

Defendant FirstService replies and disputes those positions.

Does the FAA apply? Yes.

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 (“Aviation Data, Inc.”).) Involving commerce refers to “affecting

commerce,” which is a term of art ordinarily signaling the broadest permissible exercise of

Congress’ commerce clause power. (Citizens Bank v. Alafabco, Inc. (2003) 439 U.S. 52, 56.) The

moving party bears the burden of demonstrating the FAA governs through declarations and other

evidence. (Shepard v. Edward Mackay Enterprises, Inc. (2007) 148 Cal.App.4th 1092, 1101.)

Alternatively, the agreement may simply provide for the FAA to govern. (Rodriguez v. American

Technologies, Inc. (2006) 136 Cal.App.4th 1110, 1122 (“Rodriguez”); Aviation Data, Inc., supra,

152 Cal.App.4th 1522, 1534-1535; Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46

Cal.App.5th 337, 346 (“Victrola 89, LLC”).)

Here, the purported Arbitration Agreement specially states: “[t]he Parties understand and

agree that [Defendant] is engaged in transactions involving interstate commerce. [¶] Except as

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provided in this Agreement, arbitration shall be governed by and proceed in accordance with and

be subject to the provisions of the Federal Arbitration Act; however, to the extent that the Federal

Arbitration Act is inapplicable or held not to require arbitration of a particular Claim or Claims,

the California Arbitration Act - Title 9 of Part III of the California Code of Civil Procedure

(commencing at Section 1280, et seq.), or any successor or replacement statute(s), shall apply.”

(Schwartz Decl., at ¶ 8, Exh. B at ¶ 3.) In addition, as Defendant’s Market President, Ms.

Mathieson declares that Defendant is a regional subsidiary/operating entity of FirstService

Residential, Inc., which is the largest residential property manager in North America, doing

business in approximately 25 states. (Mathieson Decl., at ¶ 3.) She also declares that: Defendant

uses interstate communication networks, including U.S. Mail, the internet, and cellular telephones,

to run its business operations; Defendant maintains business contacts with out of-state vendors and

uses interstate banks to conduct its business; and Defendant markets and advertises its services

throughout the United States via interstate media, including its website. (Ibid.)

Therefore, the Court FINDS that the FAA governs because the agreement provides for the

FAA to apply and Defendant’s business involves interstate commerce. (Rodriguez, supra, 136

Cal.App.4th 1110, 1122; Aviation Data, Inc., supra, 152 Cal.App.4th 1522, 1534-1535; Victrola

89, LLC, supra, 46 Cal.App.5th 337, 346.)

a. Does an arbitration agreement exist, and does it cover the dispute between the

parties? Although a close call, no. Defendant does meet its final burden.

To compel arbitration under the FAA, a court must find an agreement to arbitrate exists

between the parties and find the agreement covers their dispute. (AT&T Technologies, Inc., supra,

475 U.S. 643, 648-649; Brennan v. Opus Bank (9th Cir. 2015) 796 F.3d 1125, 1130; Cox v. Ocean

View Hotel Corp. (9th Cir. 2008) 533 F.3d 1114, 1119.) “When deciding whether the parties agreed

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to arbitrate a certain matter (including arbitrability), courts generally ... should apply ordinary

state-law principles that govern the formation of contracts.” (First Options of Chicago, Inc., supra,

514 U.S. 938, 944.)

A contract is formed when there are parties capable of contracting who consent to a lawful

objective and there is sufficient cause or consideration. (Civ. Code, § 1550.) A party moving to

compel arbitration can meet its “initial burden to show an agreement to arbitrate by attaching a

copy of the arbitration agreement purportedly bearing the opposing party’s signature.” (Espejo v.

Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1060 (“Espejo’),

emphasis in original.) For this initial burden, “‘it is not necessary to follow the normal procedures

of document authentication.’” (Id. at p. 1058, citing Condee v. Longwood Management Corp.

(2001) 88 Cal.App.4th 215, 218 (“Condee”).) “A plain reading of the statute indicates that as a

preliminary matter the court is only required to make a finding of the agreement’s existence, not

an evidentiary determination of its validity.” (Condee, supra, 88 Cal.App.4th 215, 219; Code Civ.

Proc., § 1281.2.) Only after the opposing party challenges the validity of the purported agreement

must the moving party “establish by a preponderance of the evidence that the signature was

authentic.” (Espejo, supra, 246 Cal.App.4th 1047, 1060.)

Here, Defendant FirstService meets the initial burden as it provides a copy of the

purportedly signed Arbitration Agreement. Ms. Schwartz, as Defendant’s Director of Human

Resources, declares that she has reviewed the records maintained in the ordinary course of business

and has provided the Arbitration Agreement, which Plaintiff appears to have electronically signed

on November 21, 2019. Ms. Schwartz advises that as part of the onboarding process with

Defendant, Plaintiff was provided with the New Hire Paperwork, including the Arbitration

Agreement, via her personal e-mail address. (See Schwartz Decl., at ¶¶ 2-10, Exhs. A-C.) Further,

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Ms. Schwartz states it is Defendant’s custom and practice to retain copies of signed documents,

including the New Hire Paperwork and Arbitration Agreement, in each employee’s personnel file.

(Id., at ¶ 15.) These statements are sufficient to shift the burden to Plaintiff because Defendant

shows the existence of the agreement.

“If the moving party meets its initial prima facie burden and the opposing party disputes

the agreement, then in the second step, the opposing party bears the burden of producing evidence

to challenge the authenticity of the agreement. [Citation.] The opposing party can do this in several

ways. For example, the opposing party may testify under oath or declare under penalty of perjury

that the party never saw or does not remember seeing the agreement, or that the party never signed

or does not remember signing the agreement. [Citations.]” (Gamboa v. Northeast Community

Clinic (2021) 72 Cal.App.5th 158, 165.) Additionally, the opposing party can declare that “she did

not recall the agreement and would not have signed it if she had been aware of it[.]” (Id., at p. 167.)

Here, Plaintiff in turn also meets her burden, as she sufficiently challenges the authenticity

of the Arbitration Agreement. Plaintiff declares that upon receiving and reviewing the documents,

she signed the documents that she understood and that pertained to her employment, but she did

not sign any agreement to arbitrate or mediate. (Plaintiff Winters Decl., at ¶ 4.) Plaintiff further

declares that she recalls not knowing what arbitration was or what the agreement entailed, and she

received no explanation from her employer. (Ibid.) She also recalls seeing the disclaimer that if

she signed the agreement, she would be representing that she had an opportunity to consult legal

counsel before signing the agreement, but because she needed to sign the documents in the

evening, she did not have an opportunity to consult legal counsel; thus, she chose not to sign the

agreement to arbitrate or mediate and sent back the remaining documents to her employer (Ibid.)

Plaintiff further declares that she did not consent to any agreement to arbitrate or mediate, and she

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has no recollection of ever placing her initials on the document presented by Defendant as Exhibit

B to the Declaration of Ms. Schwartz. (Id., at ¶ 5.) Plaintiff lastly declares that she never consented

to arbitrate or mediate any of her claims against her employer, nor has she ever agreed to waive

her right to trial by jury. (Id., at ¶ 6.) She then states during her employment that Defendant never

asked her to revisit the agreement to provide her signature or to place her initials on the agreement.

(Ibid.) These statements are sufficient to shift the burden back to Defendant because Plaintiff

denies signing the Arbitration Agreement.

In general, an electronic signature has the same legal effect as a handwritten signature.

(Civ. Code, § 1633.7; Espejo, supra, 246 Cal.App.4th 1047, 1061.) An electronic signature “means

an electronic sound, symbol, or process attached to or logically associated with an electronic record

and executed or adopted by a person with the intent to sign the electronic record. For purposes of

this title, a ‘digital signature’ as defined in subdivision (d) of Section 16.5 of the Government Code

is a type of electronic signature.” (Civ. Code, § 1633.2, subd. (h).) A digital signature “means an

electronic identifier, created by computer, intended by the party using it to have the same force

and effect as the use of a manual signature. For purposes of this section, a digital signature is a

type of ‘electronic signature’ as defined in subdivision (h) of Section 1633.2 of the Civil Code.”

(Gov. Code, § 16.5, subd. (d).)

Civil Code section 1633.9, subdivision (a), provides that “[a]n electronic record or

electronic signature is attributable to a person if it was the act of the person. The act of the person

may be shown in any manner, including a showing of the efficacy of any security procedure

applied to determine the person to which the electronic record or electronic signature was

attributable.” Civil Code section 1633.9, subdivision (b), further provides that “[t]he effect of an

electronic record or electronic signature attributed to a person under subdivision (a) is determined

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from the context and surrounding circumstances at the time of its creation, execution, or adoption,

including the parties’ agreement, if any, and otherwise as provided by law.”

Though not cited by either party, in Espejo, supra, 246 Cal.App.4th 1047, 1062, the Court

of Appeal found the underneath sufficient to establish that the electronic signature was the act of

the plaintiff:

Tellez detailed SCPMG’s security precautions regarding transmission and use of an applicant’s unique username and password, as well as the steps an applicant would have to take to place his or her name on the signature line of the employment agreement and the DRP. Based on this procedure, she concluded that the “name Jay Baniaga Espejo could have only been placed on the signature pages of the employment agreement and the DRP by someone using Dr. Espejo’s unique user name and password. ... [¶] Given this process for signing documents and protecting the privacy of the information with unique and private user names and passwords, the electronic signature was made by Dr.

Espejo” on the employment agreement and the DRP at the date, time, and IP address listed on the documents. These details satisfactorily meet the requirements articulated in Ruiz1 and establish that the electronic signature on the DRP was “the act of” Espejo (Civ. Code, § 1633.9, subd. (a)), and therefore provide the necessary factual details to properly authenticate the document. (Footnote omitted.)

Here, Defendant FirstService in the end does not show the electronic signature was

authentic by a “preponderance of the evidence.” (Bannister v. Marinidence Opco, LLC, 64

Cal.App.5th 541, 544 [“Where, as here, the respondent challenges the validity of the signature, ...

the petitioner must ‘establish by a preponderance of the evidence that the signature was

authentic.’”], Citing Espejo, supra, 246 Cal.App.4th 1047, 1060.) Defendant attempts to

authenticate the signature by showing that the audit report supports the New Hire Paperwork was

e-mailed to Plaintiff’s personal email address at 8:14:01 p.m. GMT on November 21, 2019, that

Plaintiff viewed the email at 8:20:31 p.m. GMT from IP address 75.142.217.165, and that the

document was electronically signed by Plaintiff at 9:17:32 p.m. GMT from the same IP address.

1 Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 838 (“Ruiz”), concluding the defendant did not present sufficient evidence to support a finding that the plaintiff electronically signed the 2011 agreement. Page | 10

(Schwartz Decl., at ¶¶ 10-11, Exh. C.) In addition, Defendant notes that Plaintiff admits she was

contacted by email, sent a link, reviewed the documents from home, and signed onboarding

documents that evening. (Plaintiff Winters Decl., at ¶¶ 3-4.) However, there is no evidence that

the typed named of “Camille Winters” was the act of Plaintiff. (See Schwartz Decl., Exh. B at p.

7.) Plaintiff denies that she signed the Arbitration Agreement. (Plaintiff Winters Decl., at ¶¶ 4-6.)

Unlike in Espejo, where the defendant within the supplemental declaration detailed “the steps an

applicant would have to take to place his or her name on the signature line of the employment

agreement and the [Dispute Resolution Procedure]” (Espejo, supra, 246 Cal.App.4th at pp. 1051,

1053-1054, 1062), Defendant here does not. Defendant through Ms. Schwartz’s Declaration

concludes that Plaintiff signed the Arbitration Agreement (See Schwartz Decl., at ¶¶ 7-8, Exhs. A-

B), but there is no explanation as to how only Plaintiff could have typed her name in the signature

area of the agreement. In other words, Defendant did not explain how, or upon what basis, it infers

that the typed name was the act of Plaintiff. (Civ. Code, § 1633.9, subd. (a).) Defendant similarly

does not explain how, or upon what basis, it infers that the initials were the act of Plaintiff. (Ibid;

See Schwartz Decl., Exh. B at p. 7.) For example, in Espejo, on the signature page the plaintiff

was “‘... prompted to either accept or decline ...’” and if accepted, “‘he was prompted to complete

his name as he would sign it. Whatever name he typed into this entry is what populated on the

signature line of the contract.’” (Espejo, supra, 246 Cal.App.4th 1047, 1054.)

Because Defendant had the burden to establish that the electronic signature on the

Arbitration Agreement was the act of Plaintiff and failed to do so, the Court DENIES the motion

to compel arbitration.

Ruling

After reviewing the filed papers, the Court rules as follows:

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(1) OVERRULE Defendant’s Evidentiary Objections Nos. 1-8.

(2) OVERRULE Plaintiff’s Evidentiary Objections Nos. 1-11.

(3) DENY Defendants’ Motion to Compel Arbitration and Stay or Dismiss the

Proceedings, as FirstService does not show by a preponderance of the evidence that a

valid, signed Arbitration Agreement exists.

Movant to give notice.

Dated-

____________________________ Judge

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