Filed 6/25/15 Tong v. Orange Coast Mem. Med. Center CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

JONATHAN TONG et al., Plaintiffs and Respondents,

v.

ORANGE COAST MEMORIAL MEDICAL CENTER, Defendant and Appellant. G050038
(Super. Ct . No. 30-2012-00542508)

O P I N I O N

Appeal from an order of the Superior Court of Orange County, Elizabeth K. Eagleson, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.) Affirmed. Foley & Lardner, Tami S. Smason a nd Sonia Salinas fo r Defendant and Appellant. Younesi & Yoss, John D. Younesi and Jan A. Yoss for Plaintiffs and Respondents.
* * *2 Plaintiffs and respondents Jonathan Tong, Wynnson Tom, Thomas Nguyen, and James Chang (collectively, Plaintiffs) sued defendant and appellant Orange Coast Memorial Medical Center (Orange Coast) as third party beneficiaries under a contract Orange Coast entered into with another party. Orange Coast moved to compel Plaintiffs
to arbitrate their breach of co ntract claim, arguing Plaintiffs are bound by the arbitration provision in Orange Coast’s contract with th e other party “to the extent that Plaintiffs claim to be third party beneficiaries to this contract.” Orange Coast, however, denied Plaintiffs were third party beneficiaries under the contract or that it had any contractual relationship with Plaintiffs . Based on our decision in Brodke v. Alphatec Spine, Inc. (2008) 160 Cal.App.4th 1569 ( Brodke ), the trial court denied the motion because Orange Coast failed to affirmatively allege an ar bitration agreement existed between it and
Plaintiffs.

In Brodke , this court concluded Code of Civil Procedure section 1281.2’s plain language requires a party moving to comp el arbitration to affirmatively allege an agreement to arbitrate ex ists between the parties. 1 We explained a defendant moving to compel arbitration cannot meet this burden by simply arguing the plaintiff either admitted an arbitration agreement existed or cannot deny its existence because the plaintiff’s
claims are based on a contract that included an arbitration provision. Arbitration is a matter of contract and a motion to compel arbitr ation essentially is an action in equity to specifically enforce an arbitra tion agreement. Accordingly, a party cannot specifically enforce an arbitration ag reement and simultaneously deny it has any contractual relationship with the party it seeks to compel into arbitration. We also reject Orange Coast’s contenti on Plaintiffs agreed to arbitration by signing a separate contract with another part y that incorporates the contract containing the arbitration provision on which Orange Coast relied in making its motion.

1 All statutory references are to the Code of Civil Procedure.3 Incorporating a provision from another contract requires a clear and unequivocal reference to that contractual provision. The contract Plaintiffs signed, however, ambiguously states it incorporates “pertin ent portions” of Orange Coast’s contract without referring to arbitration or specifying which portions it inco rporated. That is
insufficient. We therefore affirm the tria l court’s decision to deny arbitration.

I

F ACTS AND P ROCEDURAL H ISTORY Orange Coast is a general acute care hospital located in Fountain Valley, California. In 2000, Magdi Sidhom, M.D., a nd Orange Coast entered into the “Exclusive Professional Services Agreement” (Exclusive Services Agreement), making Sidhom the exclusive provider of anesthesiology services at the hospital. The Exclusive Services Agreement authorized Sidhom to hire other an esthesiologists to work at Orange Coast, but required those anesthesiologists to c ontract with Sidhom. Under the Exclusive Services Agreement, Sidhom controlled all scheduling, billing, an d other administrative matters concerning anesthesiology services at Orange Coast. Th e Exclusive Services Agreement also included an arbitration pr ovision stating, “Any C ontroversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by a single arbitrator in arbitration at Los Angele s, California, administered by the American
Arbitration Association under its Commercial Arbitration Rules, and judgment on any award rendered by the arbitrator may be en tered in any court having jurisdiction
thereof. . . .”
Plaintiffs each entered into a se parate “Anesthesiology Services Agreement” (Anesthesiology Agreement) with Sidhom to become a st aff member eligible to provide anesthesiology services at Orange Coast. Under the Anesthesiology Agreement, each Plaintiff agreed to provide services as an independent contractor and accept payment from Sidhom based on a “pooled income methodology.” The4 Anesthesiology Ag reement repeatedly referred to the Exclusive Services Agreement and incorporated by reference th e “pertinent portions” that we re purportedly attached as Exhibit “A,” but no portions of the Exclus ive Services Agreement are attached to the copies of the Anesthesiology Agreement included in the reco rd and nothing purports to identify which portions of the Exclusive Servic es Agreement were to be attached. The Anesthesiology Agreemen t did not include an arbitration provision. In 2011, Plaintiffs and others notic ed irregularities in the compensation they received from Sidhom. When Plain tiffs confronted Si dhom, he allegedly acknowledged he had been taki ng more than he was entitled from the pool of funds he received for Plaintiffs’ services. In respon se, Plaintiffs negotia ted with Sidhom and Orange Coast for repayment of the funds, a nd for a new compensation structure. When these negotiations were unsuccessful, Sidhom and Orange Coast either terminated Plaintiffs’ rights to provide an esthesiology services at Ora nge Coast or forced them to relinquish those rights. In February 2012, Plaintiffs filed this action against Sidhom, Orange Coast, Orange Coast’s chief executive officer, and ot hers alleging a conspiracy to steal money from Plaintiffs and the other anesthesiologi sts who worked at Orange Coast. After several rounds of demurrers and summary ad judication motions, the trial court granted Plaintiffs leave to file a fifth amended compla int to add a breach of contract claim against Orange Coast. In that claim, Plaintiffs a lleged they were third party beneficiaries under the Exclusive Services Agreement and Orange Coast was a “third party obligor” under the Anesthesiology Agr eement. According to Plaintiffs , Orange Coast breached both agreements by terminating their rights to wo rk at Orange Coast without cause and in retaliation for Plaintiffs complaining about Sidhom ’s thefts. Plaintiffs seek to recover the compensation they would have received if they continued to work at Orange Coast and5 their attorney fees based on the attorney fee clauses in th e Exclusive Services Agreement
and the Anesthesio logy Agreement. 2 Orange Coast moved to compel Plainti ffs to arbitrate their new breach of
contract cause of action ba sed on the Exclusive Services Agreement’s arbitration provision. In making the motion, Orange Coast denied Plaintiffs were third party beneficiaries under the Exclusive Services Ag reement and that it was a third party obligor under the Anesthesiology Agreem ent. Nonetheless, Orange Coast argued Plaintiffs must
arbitrate their breach of contract claim beca use they based their claim on the Exclusive Services Agreement, and therefore equitabl e estoppel prevented them from refusing to arbitrate under that agreement’s arbitration provision.
The trial court denied the motion on tw o grounds. First, because Orange
Coast denied it had a contractual relationship with Plaintiffs a nd that Plaintiffs were third party beneficiaries under the Exclusive Serv ices Agreement, Orange Coast failed to allege an arbitration agreement existed betwee n Plaintiffs and Orange Coast. Second, the court found ordering Plaintiffs to arbitrate their breach of contract claim may lead to conflicting rulings on legal or factual issues common to th e claims against the other
defendants. 3 (See § 1281.2, subd. (c).) Or ange Coast timely appealed.

2 Plaintiffs remaining causes of acti on against Orange Coast and the other defendants are not at issue on this appeal.

3 We do not address whether the tria l court properly denied the motion to compel arbitration on this s econd ground because our conclusi on Orange Coast failed to affirmatively allege an arbitr ation agreement between it and Pl aintiffs renders this issue moot.6 II

D ISCUSSION

A. Basic Legal Principles on Compelling Arbitration California has a strong public policy fa voring arbitration as a speedy and relatively inexpensive means of dispute resolu tion. Arbitration, ho wever, is a matter of contract. ( Avery v. Integrated He althcare Holdings, Inc. (2013) 218 Ca l.App.4th 50, 59 ( Avery ).) “The ‘“‘“‘. . . policy favoring arbitr ation cannot displace the necessity for a voluntary agreement to arbitrate.’” [Citation.] “A lthough ‘[t]he law favors contracts for arbitration of disputes betwee n parties’ [citation], ‘“there is no policy compelling persons to accept arbitration of controve rsies which they have not agreed to arbitrate. . . .”’ [Citations.]”’ [Citation.] ‘Absent a clear agr eement to submit disputes to arbitration, courts will not infer that the right to a jury trial has been waived.’”’” ( Ibid ., original italics.) Section 1281.2 therefore requires a tria l court to grant a motion to compel arbitration “if [the court] determines that an agreement to arbitrate the controversy exists.” (§ 1281.2.) The pa rty seeking to compel arbitr ation has the initial burden to allege and prove the existence of a valid, writte n arbitration agreement that applies to the dispute. Once that burden is satisfied, th e party opposing arbitration must prove by a preponderance of the evidence any defense to the arbitration agreem ent’s enforcement. ( Ibid .; Avery , supra , 218 Cal.App.4th at p. 59; Brodke , supra , 160 Cal.App.4th at p. 1574.)
“‘There is no uniform standard of re view for evaluating an order denying a motion to compel arbitration. [Citation.] If the court’s order is based on a decision of fact, then we adopt a substan tial evidence standard. [Citations .] Alternatively, if the court’s denial rests solely on a decision of la w, then a de novo standard of review is employed. [Citations.]’ [Citation]” ( Avery , supra , 218 Cal.App.4th at p. 60.) Here,7 there are no disputed factual issues, and th erefore we review the trial court’s ruling de novo. ( Metalclad Corp. v. Ventana Enviro nmental Organizational Partnership (2003) 109 Cal.App.4th 1705, 1715-1716 ( Metalclad ).)

B. Orange Coast Failed to Affirmatively A llege an Arbitration Agreement Existed With Plaintiffs Orange Coast contends the trial cour t erred by concluding Orange Coast failed to meet its burden to allege the existen ce of an arbitration agreement. According to Orange Coast, it satisfied its burden by allegi ng Plaintiffs based thei r breach of contract claim on the Exclusive Services Agreement a nd that agreement included an arbitration provision. We disagree because Orange Coast misconstrues its burden as the party moving to compel arbitration.

In Brodke , this court examined section 12 81.2’s requirement that a party allege and prove the existence of a valid arbitration agreement before it may compel arbitration. There, four plaintiffs sued a medical device manufacturer to recover royalties under a product development agreement, and the manufacturer moved to compel arbitration based on an arbitration provis ion in the agreement. In doing so, the manufacturer expressly “‘contest[ed] the exis tence or validity’” of any written agreement with the plaintiffs, but nonetheless argued th e plaintiffs must arbitrate their claims because the plaintiffs based their claims on an agreement that in cluded an arbitration provision. ( Brodke , supra , 160 Cal.App.4th at pp. 1572-1 573, italics omitted.) The trial
court denied the motion because the manufactu rer failed to “‘“allege the existence of a written agreement to arbitrate a controve rsy”’” as required by section 1281.2. 4 ( Brodke , at p. 1573.)

4 Section 1281.2 pr ovides, “On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such controvers y, the court shall order the petitioner and the respondent to arbitrate the controversy if it de termines that an agr eement to arbitrate the8 The Brodke court affirmed, concluding a party could not simultaneously seek to enforce a contract’s arbitration pr ovision and deny that cont ract’s existence. ( Brodke , supra , 160 Cal.App.4th at pp. 1571, 1575.) As we explained, section 1281.2’s plain language requires a party moving to comp el arbitration to affirmatively “‘allege[] the existence of a written agreem ent to arbitrate’” because a motion to compel arbitration
is “‘is in essence a su it in equity to comp el specific performance of a contract.’” ( Brodke , at pp. 1571, 1574.) The motion therefore serv es the function of a complaint for specific performance, and the moving party fails to state a cause of acti on unless it alleges the existence of an agreem ent to arbitrate. ( Id . at p. 1575.) By contesting “‘the existence or validity’” of any written agreement with the pl aintiffs, the manufacturer “failed to satisfy the most basic statutory prerequisite to gr anting the [motion to compel arbitration]—to allege the existence of a writte n agreement to arbitrate.” ( Id . at p. 1574.) In reaching this conclusion, we reje cted the manufacturer’s contention it was not required to allege the existence of a written arbitration agreement because the allegations of the plaintiffs’ complaint admitt ed the agreement existed. We explained the allegations in one party’s pleading cannot sa tisfy the burden of another party to allege every element of its claim. Moreover, alth ough the “plaintiffs’ admissions [in their complaint] are an appropriate means by which the existenc e of an agreement may be proved , there is simply no reason to prove an ything until the moving party alleges the existence of that which is to be proved.” ( Brodke , supra , 160 Cal.App.4th at p. 1575.) Indeed, regardless of the basis for a plainti ff’s claims, a motion to compel arbitration must be denied if the moving party fails to affirmatively allege an arbitration agreement exists between the plaintiff and the defendant. ( Id . at p. 1571.)

controversy exists, unless it determines [a defense to enforcemen t exists].” (Italics added.)9 Here, Orange Coast failed to satisfy th is “most basic statutory prerequisite to granting [a motion to co mpel arbitration].” ( Brodke , supra , 160 Cal.App.4th at p. 1574.) Orange Coast alleged that the Exclusive Services Ag reement between it and Sidhom included an arbitration provision. Bu t Orange Coast also alleged Plaintiffs are not parties to the Exclusive Services Agreement and are not third party beneficiaries entitled to any benefits under th at agreement. Thus, Orange Coast alleged an arbitration agreement existed, but not between it and Plaintiffs. Like the manufacturer in Brodke , Orange Coast sought to satisfy its burden by pointing to the a llegations Plaintiffs made in their breach of contract claim and alleging “to the extent that Plainti ffs claim to be third party beneficiaries to [the Exclusive Services Agreement], they must be similarly bound by the contract’s arbitration provision.” Reliance on Plaintiffs’ allegations, however, fails to satisfy Orange Coast’s burden to affirmatively allege it had an arbitration agreement with Plaintiffs. Simply put, by denying the existence of any contractual relationship with Plaintiffs, Orange Coast cannot satisfy its burden. Orange Coast emphasizes the moving party in Brodke claimed the agreement that included the arbitration provi sion was invalid, but here Orange Coast does not contest the validity of the Exclusive Servic es Agreement and its arbitration provision. This argument misconstrues Brodke and the burden section 1281.2 imposes on the moving party to allege the existence of an ag reement to arbitrate. To meet its burden, Orange Coast must allege the exis tence of an arbitration agreement between the parties subject to the arbitration provision. As explained above, arbitration is a matter of contract ( Avery , supra , 218 Cal.App.4th at p. 59), and th erefore a party cannot be sent to
arbitration unless there is an arbitration agreement between that party and the party seeking to compel arbitration. Although Orange Coast alle ged an arbitration agreement existed, it also alleged Plaintiffs are not par ties to that agreement and are not third party
beneficiaries under it.10 Contrary to Orange Coast’s c ontention, our interpretation of Brodke does not require a party to “concede that an arbitrab le claim is meritorious in order to succeed in a motion to compel arbitration.” A defe ndant seeking to compel arbitration remains free to deny liability by arguing it did not breach the contract, it did not cause the plaintiff’s damages, the plaintiff did not su ffer any damages, and any other applicable defense. The only contention the defend ant cannot make is that no contractual relationship exists between the parties becau se that contention prevents the defendant from satisfying its burden under section 1281.2 to affirmatively allege an arbitration agreement existed between the de fendant and the plaintiff. Molecular Analytical Systems v. Ciphergen Biosystems, Inc. (2010) 186 Cal.App.4th 696 ( Molecular Analytical ), illustrates this distin ction. There, the plaintiff sued two defendants based on a lic ensing agreement it ente red into with one defendant, who then assigned the agreement to the second defendant. Both defendants moved to compel arbitration based on an arb itration provision in th e licensing agreement. ( Id . at pp. 701-702.) Citing Brodke , the plaintiff opposed the motion by arguing the
defendants failed to meet their burden to alle ge and prove the existence of an arbitration agreement because the defendants denied all of the plaintiff’s claims. ( Molecular Analytical , at p. 709.) The Molecular Analytical court rejected this argument, explaining the defendants in its case did not dispute the existence of the licensing agreement in moving to compel arbitration. ( Id . at p. 710.) Because the Molecular Analytical defendants simply denied they were liable to the plainti ff, the court concl uded the facts in its case were “entirely dissimilar” to those in Brodke . ( Molecular Analytical , at p. 710.) Moreover, Brodke points out that requiring a party moving to compel arbitration to affirmatively allege the exis tence of an agreement to arbitrate does not require that party to surrender any defense it may have to the underlying action. ( Brodke , supra , 160 Cal.App.4th at p. 15 76.) Indeed, section 1281.2’s pleading requirement does not prevent a party from challenging the existenc e of a contractual relationship; it merely11 requires the party to do so in court becau se denying the existence of a contractual relationship is inconsistent with arbitration’s contractual nature.

C. Equitable Estoppel Did Not Relieve Orange Coast of Its Burden to Affirmatively Allege the Existence of an Arbitration Agreement Orange Coast contends the trial cour t erroneously denied the motion to compel arbitration because Plaintiffs based th eir breach of contract claim on a contract containing an arbitration pr ovision—the Exclusive Servi ces Agreement—and therefore Plaintiffs were equitably esto pped from refusi ng to arbitrate that claim. We disagree. Although the equitable estoppel doctrine genera lly may be applied to enforce arbitration agreements against nonsignatories, it does not excuse Orange Coast from its statutory burden to affirmatively allege an arbitrati on agreement existed between it and Plaintiffs. When it applies, the equita ble estoppel doctrine pr ovides an exception to the general rule that “‘one must be a party to an arbitration agreemen t to be bound by it or invoke it.’” ( Molecular Analytical , supra , 186 Cal.App.4th at p. 706.) Under this doctrine, “a nonsignatory ‘is estopped from avoi ding arbitration if it knowingly seeks the
benefits of the contract contai ning the arbitration clause.’” ( Crowley Maritime Corp. v. Boston Old Colony Ins. Co. (2008) 158 Cal.App.4th 1061 , 1070.) “‘The fundamental point . . . is that [a party is] not entitled to make use of the [c ontract containing an arbitration clause] as long as it worked to her advantage, then attempt to avoid its application in defining the forum in which her dispute . . . shou ld be resolved.’ [Citation.] The doctrine thus prevents a party from playi ng fast and loose with its commitment to arbitrate, honoring it when a dvantageous and circumventing it to gain undue advantage.” ( Metalclad Corp. , supra , 109 Cal.App.4th at p. 1714.) Orange Coast cites several cases ack nowledging equitable estoppel may allow a nonsignatory defendant to enforce an arbitration agreemen t against a signatory plaintiff, and a signatory defendant to en force an arbitration agreement against a nonsignatory plaintiff. (See, e.g., JSM Tuscany, LLC v. Superior Court (2011)12 193 Cal.App.4th 1222, 1236-1241 [acknowle dging potential application of equitable estoppel, but remanding because appellate reco rd lacked sufficient evidence to show equitable estoppel applied]; Molecular Analytical , supra , 186 Cal.App.4th at pp. 714-717 [allowing nonsignatories to en force arbitration agreement based on equitable estoppel]; Goldman v. KPMG, LLP (2009) 173 Cal.App.4th 209, 2 20-221, 229-234 [acknowledging equitable estoppel may be relied upon to enforce arbitration agreement against nonsignatory, but declining to do so on facts of case]; Rowe v. Exline (2007) 153 Cal.App.4th 1276, 1286-1290 [allowing nonsignatories to enforce arbitration agreement based on equitable estoppel].) None of these cases, however, addresse d section 1281.2’s requirement that the party moving to compel arbitration must affirmatively allege the existence of an arbitration agreement that applies to the par ties. More importantly, none of these cases involved a moving party who sought to co mpel arbitration despite denying the party allegedly subject to arbitrati on had any contractual relationshi p with the moving party. In contrast, Brodke addressed both section 1281.2’s pleading requirement and equitable estoppel. As explained above, the Brodke defendant moved to compel arbitration while simultaneously denying it ha d any contractual relationship with the plaintiffs. ( Brodke , supra , 160 Cal.App.4th at pp. 1572-1573.) The defendant argued it did not have to allege the existence of an arbitration agreement between the parties because the plaintiffs based all their claims on a contract that included an arbitration clause, and therefore the plaintiffs were e quitably estopped from avoiding arbitration.
The trial court denied the motion and this court affirmed because section 1281.2’s requirement to affirmatively allege the existe nce of an arbitration agreement between the parties is a pleading burden th e moving party must satisfy to put the moti on to compel
arbitration at issue. Without an affirmative allegation that an arbitration agreement exists between the parties, the court never reac hes the question whether the opposing party either has admitted the agreement’s existenc e or is equitably es topped from denying its13 existence. As the Brodke court explained, nothing in the cases relying on equitable estoppel to enforce an arbitr ation agreement allows “a party petitioning to enforce an arbitration clause [to] simultaneously deny the existence of the very contract sought to be enforced,” or “excuse [s] the statutory requirement th at a party seeking to compel arbitration must affirmatively allege the ex istence of a written arbitration agreement.” ( Brodke , at p. 1575.)
We follow Brodke and conclude Orange Coas t may not rely on equitable estoppel to excuse its failure to affirmatively allege the ex istence of an agreement to arbitrate between it and Plaintiffs. By defi nition, equitable estoppel is an equitable doctrine with fairness as its linchpin. Oran ge Coast fails to explain how equity or fairness requires the trial court to enforce the arbitration provis ion in the Exclusive Services Agreement against Plaintiffs when Orange Coast alleges Plaintiffs are neither parties to that agreement nor third party be neficiaries with any rights under it. (See City of Hope v. Bryan Cave, L.L.P. (2002) 102 Cal.App.4th 1 356, 1370 [declining to apply equitable estoppel to allow nonsignatory to enforce arbitrati on agreement because moving party failed to explai n how fairness required enforcement of the agreement].)

D. Plaintiffs Did Not Agree to Arbitration by Entering Into the Anesthesiology Agreement Regardless whether it may directly enforce the Exclusive Services Agreement’s arbitration clause against Plain tiffs, Orange Coast contends the trial court erred in denying the motion to compel arbitra tion because Plaintiffs concede they signed the Anesthesiology Agr eement, and that agreement repeated ly refers to and incorporates by reference the Exclusive Services Agreement and its arbitration clause. According to Orange Coast, Plaintiffs therefore agreed to arbitrate their claims by signing the Anesthesiology Agreement. We disagree. “[A]n agreement need not expressly provide for arbitration, but may do so in a secondary document which is inco rporated by reference . . . .” ( Chan v. Drexel14 Burnham Lambert, Inc. (1986) 178 Cal. App.3d 632, 639 ( Chan ).) “‘“But each case must turn on its facts. [Citation.] For the terms of another docume nt to be incorporated into the document executed by the parties the refere nce must be clear and unequivocal, the
reference must be called to th e attention of the other party and he must consent thereto, and the terms of the incorporated document must be known or easily available to the contracting parties.”’” ( Id . at p. 641, italics omitted; see Troyk v. Farmers Group, Inc. (2009) 171 Cal.App. 4th 1305, 1331; Baker v. Osborne Development Corp. (2008) 159 Cal.App.4th 884, 895.)

In Chan , the defendant was a securities br okerage firm that employed the plaintiff as a stockbroker. During her em ployment, the plaintiff signed a uniform application to register with the National Association of Secu rities Dealers, the American Stock Exchange, and the New Yo rk Stock Exchange (NYSE). The application stated the plaintiff “‘agree[d] to abide by the Statute(s), Constitution(s ), Rule(s) and By-Laws . . . of the agency juri sdiction or organization with or to wh ich [she submitted th e application].’” ( Chan , supra , 178 Cal.App.3d at p. 636.) Th e NYSE’s rules required registered stockbrokers to arbitrate any controversy ar ising out of their em ployment with a NYSE member. ( Ibid .) When the plaintiff la ter sued for wrongful te rmination, the defendant moved to compel arbitration based on the NYSE ’s arbitration rule. The trial court denied the motion, rejecting the defendant’s argum ent the application the plaintiff signed incorporated the NYSE’s arbitration rule. ( Id . at pp. 636-637.) The Court of Appeal affirmed, explaini ng “‘the right to select a judicial forum, vis-à-vis arbitration, is a “‘substantia l right,’” not lightly to be deemed waived.’” ( Chan , supra , 178 Cal.App.3d at p. 643.) The Chan court found the vague reference to “‘the Statute(s), Constitution(s), Rule(s) and By-Laws’” of any orga nization to which the application was submitted did not incorporate the NYSE’s arbitration rule into the application because the reference “failed to clearly and unequivocally refer to the15 incorporated document [that included the ar bitration provision]” and nowhere mentioned arbitration. ( Id . at p. 643.) Here, the Anesthesiology Agreement does not bind Plaintiffs to the Exclusive Services Agreem ent’s arbitration clause because the Anesthesiology Agreement fails to clearly a nd unequivocally incorporate either the entire Exclusive Services Agreement or its ar bitration clause. The Anesth esiology Agreement refers to the Exclusive Services Agreement six times , repeatedly acknowledging that Sidhom
entered into the Exclusive Se rvices Agreement to provide anesthesiology services at Orange Coast, that Plaintiffs “desire[]” to become members of the anesthesiology department at Orange Coast under the Exclusiv e Services Agreement, and that Plaintiffs must comply with the term s and conditions of the Excl usive Services Agreement. 5 The Anesthesiology Agre ement, however, includes only one reference that purports to incorporate the Exclusive Servic es Agreement, but that refe rence does not incorporate the entire Exclusive Services Agre ement. Instead, the refere nce incorporates only the “pertinent portions” attached to the Anesthesiology Agreem ent. Unfortunately for

5 The following are the six references to the Exclusive Services Agreement in the Anesthesiology Agreem ent: (1) “WHEREAS, [Sidhom ] has entered into an Anesthesia Agreement with [O range Coast], a true and correct copy of pertinent portions of which is attached hereto and incorp orated by reference as Exhibit ‘A’”; (2) “WHEREAS, [Plaintiffs] desi re[] to be . . . staff me mber[s] of the Anesthesia Department of [Orange Coast], under [Sidho m’s] agreement with [Orange Coast]”; (3) “Such services include, but are not limited to, all of the services and activities which [Sidhom] is required to perform under th e terms of the Anesthesia Agreements, Exhibit ‘A’ hereto”; (4) “[Plaintiffs] agree[ ] to act at all times in the manner which conforms to and is consistent with the spir it, terms and conditions of this Agreement and the Anesthesia Agreement betw een [Sidhom] and [Orange Co ast], Exhibit ‘A’ hereto”; (5) “This Agreement may be immediately termin ated by either [Sidhom] or by [Plaintiffs] for cause, which includes, without limitation, [Plaintiffs’] breach of [their] duties under Exhibit ‘A’”; and (6) “[Plainti ffs], at all times, sh all fully comply wi th the requirements imposed upon anesthesiologists by [Sidhom’ s] Anesthesia Agreement with [Orange Coast], Exhibit ‘A’ hereto, as amended an d/or supplemented from time to time in the future.”16 Orange Coast, the copy of the Anesthesiology Agreement includ ed in the reco rd does not attach any portions of the Exclusive Serv ices Agreement and Orange Coast does not identify which portions were purportedly attach ed. The other referenc es to the Exclusive Services Agreement are not sufficient to in corporate the arbitration provision because they only generally refer to the standards for performing under the Exclusive Services Agreement without referring to arbitration or any other form of dispute resolution. Accordingly, although the An esthesiology Agreement could have incorporated the Exclusive Services Agreement’ s arbitration clause, it failed to adequately do so and
Plaintiffs therefor e are not bound by it. 6

III

D ISPOSITION

The order is affirmed. Plaintiffs sh all recover their costs on appeal.

ARONSON, J.

WE CONCUR:

BEDSWORTH, ACTING P. J.

THOMPSON, J.

6 Because the Anesthesio logy Agreement does not adeq uately incorporate the Exclusive Services Agreement’ s arbitration clause, we need not decide whether that clause, if adequately incorporated, would requi re Plaintiffs to arbitrate claims against Sidhom only or both Sidh om and Orange Coast.