Court Opinion

ID: 4434197
Source: CourtListenerOpinion
Date Created: 2019-08-28 20:02:14.663132+00
Date Added: 2024-06-11T14:27:52.631851
License: Public Domain

Filed 7/30/19; Modified and Certified for Publication 8/28/19 (order attached)

              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                  FOURTH APPELLATE DISTRICT

                                               DIVISION THREE

JASMINE LOPEZ,

    Plaintiff and Respondent,                                      G056249

        v.                                                         (Super. Ct. No. 30-2018-00965892)

BARTLETT CARE CENTER, LLC, et al.,                                 OPINION

    Defendants and Appellants.

                 Appeal from an order of the Superior Court of Orange County, Deborah C.
Servino, Judge. Affirmed.
                 Lewis Brisbois Bisgaard & Smith, Lann G. McIntyre and Mason T. Smith
for Defendants and Appellants.
                 Valentine Law Group, Kimberly A. Valentine, Jennifer L. Turner and
Joseph F. Fighera for Plaintiff and Respondent.
                                           *             *              *
              Defendant, a 24-hour skilled nursing facility, appeals from the order
denying its petition to compel arbitration of claims asserting negligent or willful
misconduct, elder abuse, and wrongful death filed against it by decedent’s daughter as
successor in interest and individually. The trial court found the successor claims were
not arbitrable because no arbitration agreement existed between decedent and defendant,
given defendant’s failure to prove daughter had authority to sign the agreement on
decedent’s behalf. The court further found the arbitration agreement was unenforceable
against daughter individually on grounds of unconscionability. We affirm.
                                              I
                                        BACKGROUND
                                    1
              Irene Lopez (Irene), a dependent adult within the meaning of Welfare and
Institutions Code section 15610.23, was admitted to defendant Bartlett Care Center,
doing business as French Park Care Center (the Facility), on October 5, 2016, with a
medical history of diabetes, dementia, end-stage renal disease, generalized muscle
weakness, and other debilitating conditions. At the end of October, a brief hospitalization
interrupted Irene’s stay at the Facility. She returned to the Facility (the return or second
admission) on November 4, 2016, and remained there until January 15, 2017.
              Sometime after Irene’s return to the Facility, her daughter Jasmine Lopez
(Jasmine) signed a two-page document entitled “RESIDENT-FACILITY
ARBITRATION AGREEMENT,” presented to her by a Facility employee, Mariana
Godinez. Jasmine signed on page two, in the signature block designated “Resident
Representative/Agent Signature.” Godinez signed in the signature block for “Facility
Representative[]”and dated her signature “11/14/16.” Jasmine did not date her signature.
Irene did not sign the agreement.

1
        We refer to Irene Lopez and her daughter Jasmine Lopez by their first names for
clarity, with no disrespect intended.

                                              2
                According to the operative complaint, on January 15, 2017, Irene was
transferred to an acute care hospital with complaints of generalized body pain. The
hospital diagnosed Irene with stage IV decubitus ulcers to her sarcrococcyx region and
right foot, wet gangrene of the right lower extremity, and sepsis. The complaint alleged:
“Decedent’s condition was such that she had to undergo debridement of her infected
sacral wound and also required ‘guillotine style amputation’ of her right [leg.]” The
complaint further alleged Irene suffered these severe injuries, pain, and disfigurement
because the defendants withheld “the most basic care and services,” and recklessly
disregarded her health and safety. Irene died on February 7, 2017, 23 days after leaving
the Facility.
                Jasmine, as Irene’s successor in interest, sued the Facility, two related
entities that managed the Facility, and various licensed and unlicensed individuals who
provided care and services to Irene at the Facility, stating claims for negligence and
willful misconduct, elder abuse, and violation of the Patient’s Bill of Rights under Health
& Safety Code, section 1430. Acting in her individual capacity, Jasmine also sued all
defendants for the wrongful death of her mother.
A. The Petition to Compel Arbitration
                The Facility filed a petition to compel arbitration of all claims stated against
itself and the two management companies. The petition asserted the arbitration
agreement Jasmine signed contractually bound her to arbitrate the claims she brought
both as Irene’s successor in interest and in her individual capacity.
                1. The Contents of the Arbitration Agreement
                Article Two of the arbitration agreement requires “the Resident” and the
Facility to arbitrate all disputes, specifically including “any action for injury or death
arising from negligence, intentional tort and/or statutory causes of action” under the
Welfare and Institutions Code (i.e., Elder Abuse claims). The agreement carves out two
exceptions from this arbitration mandate: “This Agreement shall be binding for any

                                                3
dispute, except for disputes pertaining to collections or evictions brought by the parties
hereto.” (Art. 4.)
              Although the arbitration agreement is entitled “RESIDENT-FACILITY
ARBITRATION AGREEMENT,” a particular provision in Article Four of the agreement
purports to bind “in their individual capacity” any persons “who execute this Agreement
below on the ‘Resident Representative/Agent Signature’ line,” thereby mandating
arbitration of the representative’s individual claims against the Facility and any claims
                                     2
brought in a representative capacity. (Art. 4, italics added.)
              2. Jasmine’s Authority to Sign the Agreement on Irene’s Behalf
              In support of its petition, the Facility attached employee Godinez’s
declaration, which purported to describe the circumstances in which the parties executed
the arbitration agreement. According to Godinez, both Jasmine and Irene were present
and Irene explicitly authorized her daughter to sign the agreement on Irene’s behalf.
              Godinez stated in her declaration: “During the admissions process, I went
over and explained the Admission Agreement and the Arbitration Agreement to both
[Jasmine] and [Irene] at the same time as they were together with me during the
admission process. During my meeting with [Jasmine] and [Irene], I recall [Irene]
verbally giving her daughter, [Jasmine], permission to act on her behalf in signing [the
Facility’s] Admission Agreement and the Arbitration Agreement attached hereto as

2
       Article Four reads in its entirety as follows: “This Agreement shall be binding for
any dispute, except for disputes pertaining to collections or evictions brought by the
parties hereto. This Agreement is binding on all parties, including the Resident's
representatives, executors, family members and heirs. The Resident's representatives,
agents, executors, family members, successors in interest and heirs who execute this
Agreement below on the ‘Resident Representative/Agent Signature’ line are doing so not
only in their representative capacity for the Resident, but also in their individual capacity
and thus agree that any claims brought individually by the Resident’s representatives,
agents, executors, family members, successors in interest and heirs are subject to binding
arbitration. This Agreement may be rescinded by written notice within thirty (30) days
of signature.” (Italics added.)

                                              4
Exhibit ‘A’. After I went over and explained [the Facility’s] Admissions Agreement and
the Arbitration Agreement to [Irene] and [Jasmine], [Jasmine] voluntarily signed the
Arbitration Agreement in my presence and in the presence of [Irene]. [Irene] did not
object to [Jasmine] signing the arbitration agreement on her behalf despite being aware
that [Jasmine] was signing the arbitration agreement on her behalf. Not only did [Irene]
not object, she verbally gave her daughter, [Jasmine], permission to sign the Arbitration
Agreement on her behalf.”
              Godinez went on to offer her opinion of Irene’s mental acuity “during the
admission process”: “Based on my interaction with [Irene] during the admission process
she appeared to be alert and able to understand what we were discussing and appeared
able to make her own decisions.”
              A starkly different picture of the circumstances in which the parties
executed the arbitration agreement emerges from the declaration Jasmine submitted in
opposition to the petition to compel arbitration. Where Godinez described a document
signing “[d]uring the admission process” with both Jasmine and Irene present, Jasmine
placed the signing in an office where Irene was not present and at a time later than and
separate from “the admission process.”
              Jasmine stated in her declaration: “In November 2016, following the start
of [Irene’s second admission] to the [Facility,] I was presented with a number of
documents [including the arbitration agreement] by an individual who I believed to be an
employee of the facility and was told I needed to sign them. . . . [¶] []At the time I was
presented with these documents, I was in a portion of the facility I believed to be the
Business Office. I was not in my mother’s room, and my mother was not present at the
time.”
              Jasmine flatly denied Godinez witnessed Irene verbally authorize Jasmine
to sign the arbitration agreement on Irene’s behalf: “My mother never provided me with
verbal authorization to sign any documents on her behalf at the time I was in the Business

                                             5
Office at [the Facility], nor did she provide me any such authorization at any time during
the course of her two admission[s] at [the Facility]. As such, Mariana Godinez could not
have heard my mother provide me with express authorization to execute any documents
on her behalf, as no such conversation ever took place in the presence of any person who
represented themselves as an employee or agent of [the Facility], nor did any such
discussion take place at any time in my presence.”
                Jasmine also disputed Godinez’s assertion she “explained” the arbitration
agreement to mother and daughter: “I have no recollection of anyone from [the Facility]
explaining to me the significance and effect of [a] purported arbitration agreement,
specifically that signing the ‘Resident-Facility Arbitration Agreement’ would then
require all claims pertaining to the care and treatment my mother received at [the
Facility] to be submitted to the arbitration process and would result in a waiver of her
right to jury trial. . . .”
B. The Order Denying the Petition to Compel Arbitration
                The trial court denied the petition to compel arbitration. The court ruled the
Facility failed to meet its burden of proving “the existence of a valid arbitration
agreement,” stating: “Given the conflict in the evidence, the court finds that Defendants
have not shown that Irene Lopez authorized Jasmine Lopez to execute the agreement on
her behalf.”
                Additionally, the court held the arbitration agreement was unenforceable as
to Jasmine in her individual capacity due to unconscionability. The minute order states:
“As to Jasmine Lopez’s individual claims, the court finds the agreement is both
procedurally and substantively unconscionable. Jasmine Lopez was not identified as a

                                               6
                                                                                     3]
party to the agreement. In fact, no one was identified as a party to the agreement.[
[Citation.] There was nothing to call out to Jasmine Lopez that she was signing an
agreement to arbitrate her own claims. Jasmine Lopez was not shown to be a party to the
agreement. Her signature block identifies her solely as resident representative/agent.
And, the agreement itself was inserted, without heading or highlighting, into a provision
otherwise directed to Irene Lopez’s claims. As between Jasmine Lopez and Defendants,
the agreement lacked mutuality.”
              This appeal followed.
                                              II
                                        DISCUSSION
              The Facility argues the trial court erred in denying its petition to compel
arbitration. The Facility contends it proved that Jasmine had both actual and ostensible
authority to execute the arbitration agreement on her mother’s behalf. The Facility
further contends the court erred in finding the arbitration agreement procedurally and
substantively unconscionable as to Jasmine in her individual capacity.
              There is no merit to any of these contentions. We are guided in that
assessment by the following law regarding standard of review: “‘“‘There is no uniform
standard of review for evaluating an order denying a [petition] to compel arbitration.
[Citation.] If the court’s order is based on a decision of fact, then we adopt a substantial
evidence standard. [Citations.] Alternatively, if the court’s denial rests solely on a
decision of law, then a de novo standard of review is employed. [Citations.]’”’
[Citation.]” (Avila v. Southern California Specialty Care, Inc. (2018) 20 Cal.App.5th
835, 839-840 (Avila).)

3
       On page one of the arbitration agreement Jasmine signed, two lines were left
conspicuously blank. At the top of the form, the typed words “Resident Name” appear,
followed by a colon, and then an empty line. Likewise, in Article Two, nothing is written
on the line for “Facility Name[.]”

                                              7
1. Substantial Evidence Supports the Trial Court Finding Jasmine Lacked Authority to
Waive Irene’s Trial Rights
              “Whether an agreement to arbitrate exists is a threshold issue of contract
formation and state contract law. [Citations.] The party seeking to compel arbitration
bears the burden of proving the existence of a valid arbitration agreement. [Citation.]”
(Avila, supra, 20 Cal.App.5th at pp. 843-844.)
              The Facility contends it proved an enforceable arbitration agreement
existed and the trial court erred in concluding otherwise. Citing the declaration of its
employee Godinez, the Facility asserts it “introduced credible evidence demonstrating
that [Jasmine] had the authority to sign the arbitration agreement on [Irene’s] behalf.”
The Facility points out that Godinez “testified that she observed [Irene] verbally give her
daughter authority to execute the agreement[,]” and this “express authority . . . creat[ed]
an actual agency relationship.” The Facility further argues that “even if actual agency is
not found, [Irene’s] conduct in allowing her daughter to sign the agreement on her behalf
caused [the Facility] to believe [Jasmine] had the authority to do so, thereby at least
creating ostensible agency.” Again, the only evidence of Irene’s purported “conduct . . .
creating ostensible agency” was Godinez’s description of the circumstances in which
Jasmine signed the arbitration agreement.
              The Facility’s argument ignores a fundamental rule of appellate practice: A
factual finding cannot be overturned on appeal simply because the record contains
“credible evidence” to the contrary. Our task begins and ends with a determination of
whether substantial evidence supports the trial court’s factual finding Irene did not
authorize Jasmine to sign the arbitration agreement on her behalf. “[T]he scope of our
review is well established. ‘We must accept the trial court’s resolution of disputed facts
and inferences, and its evaluations of credibility, if they are substantially supported.
[Citations.]’” (People v. Bradford (1997) 14 Cal. 4th 1005, 1033.) We conclude
Jasmine’s declaration submitted in opposition to the petition to compel arbitration

                                              8
constitutes substantial evidence supporting the trial court’s finding Jasmine had no
authority, either actual or ostensible, to waive Irene’s trial rights.
              “[A]n agency relationship may arise by oral consent or by implication from
the conduct of the parties. [Citation.] However, an agency cannot be created by the
conduct of the agent alone; rather, conduct by the principal is essential to create the
agency.” (Flores v. Evergreen at San Diego, LLC (2007) 148 Cal. App. 4th 581, 587-588
(Flores) [nonsignatory patient at skilled nursing facility was not bound by arbitration
agreement because her signatory husband was not her agent]; see also Pagarigan v. Libby
Care Center, Inc. (2002) 99 Cal. App. 4th 298, 301-302 [comatose mother not bound by
nursing home arbitration agreement signed by daughters because there was no evidence
mother authorized daughters to act as her agents].)
              In her declaration, Jasmine flatly disputed Godinez’s description of the
circumstances in which Jasmine signed the arbitration agreement. In particular, Jasmine
challenged Godinez’s contention Jasmine signed the agreement “during the admission
process” in the presence of both Irene and Godinez, and that, just prior to the signing,
Godinez heard Irene verbally authorize Jasmine to sign on Irene’s behalf. Jasmine stated
she did not sign the arbitration agreement or other admission documents “during the
admission process.” Instead, Jasmine said she signed the document at some later time in
the business office without Irene present.
              More to the point, Jasmine denied ever receiving her mother’s authorization
to sign “any documents on her behalf” and insisted Godinez could not have heard Irene
authorize Jasmine to sign the agreement. Jasmine stated: “My mother never provided
me with verbal authorization to sign any documents on her behalf at the time I was in the
Business Office at [the Facility], nor did she provide me any such authorization at any
time during the course of her two admission[s] at [the Facility]. . . . Mariana Godinez
could not have heard my mother provide me with express authorization to execute any
documents on her behalf, as no such conversation ever took place . . . .”

                                               9
              Jasmine’s statement Irene never authorized her to sign any agreement on
Irene’s behalf supports the trial court’s finding Jasmine lacked actual agency to waive
Irene’s trial rights. Jasmine’s statement she signed the agreement in the business office
without her mother present supports the court’s implied finding Jasmine also lacked
ostensible agency. It is difficult to see how Irene “allowed” her daughter to sign the
agreement if Irene was not in the room when Jasmine signed it. (Flores, supra,
148 Cal.App.4th at pp. 587-588 [“an agency cannot be created by the conduct of the
agent alone; rather, conduct by the principal is essential to create the agency”].)
              The relative strength of Jasmine’s declaration is bolstered by certain facets
of Godinez’s declaration that undermine confidence in its veracity. For example,
Godinez’s assertion the parties signed the agreement “during the admission process”
conflicts with the fact Godinez dated her signature on the arbitration agreement
“11/14/16” –– ten days after Irene’s return to the Facility. The trial court noted this
discrepancy at the hearing, pointing out the November 14 date next to Godinez’s
signature is “not the first day that [Irene] was there on the second hospitalization, right?”
              Defense counsel conceded the date of the arbitration agreement did not
match the date of Irene’s second admission, and stated it was “not uncommon” for an
arbitration agreement to be signed sometime after admission of “an elderly individual[.]”
Defense counsel explained that often “the resident is either not capable of executing” the
documents due to incapacity or “maybe they are tired.” Or, defense counsel stated, “the
arbitration agreement might be presented at a later date because they forgot to go over it
with the family, when they went over it during the initial admission process.”
              Also fueling skepticism of Godinez’s declaration was her assertion Irene
was “alert and able to understand what we were discussing and appeared able to make her
own decisions” –– a description seemingly at odds with Irene’s documented dementia
and serious medical conditions at admission.

                                             10
              In any event, the resolution of an evidentiary conflict is within the sole
province of the trier of fact. (Eisenberg et al., Cal Practice Guide: Civil Appeals and
Writs (The Rutter Group 2018) ¶ 8:4a, p. 8-2.) The trial court’s finding that
“[d]efendants have not shown that Irene [] authorized Jasmine [] to execute the
agreement on her behalf” simply reflects the court’s conclusion Jasmine’s account of the
signing was more believable than Godinez’s. We defer to that credibility determination.
(Santa Clara County Correctional Peace Officers’ Assn., Inc. v. County of Santa Clara
(2014) 224 Cal. App. 4th 1016, 1027 [the rule of appellate deference to trial court
credibility determinations is the same for written declarations as for oral testimony].)
              Because substantial evidence supports the trial court’s finding Jasmine had
no authority to execute the arbitration agreement on Irene’s behalf, the court properly
denied the petition to compel arbitration of the claims Jasmine brought as Irene’s
successor in interest.

2. The Trial Court Properly Found the Arbitration Agreement Unenforceable Against
Jasmine Due to Unconscionability
              The Facility argues the trial court erred in ruling the arbitration agreement
was unenforceable as to Jasmine’s individual wrongful death claim due to
unconscionability. The argument lacks merit.
              Procedural and substantive unconscionability “‘must both be present in
order for a court to exercise its discretion to refuse to enforce a contract or clause under
the doctrine of unconscionability.’ [Citation.] But they need not be present in the same
degree. . . . [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.” (Armendariz v. Foundation Health Psychcare Services,
Inc. (2000) 24 Cal. 4th 83, 114 (Armendariz).)

                                              11
              “Whether an agreement is unconscionable presents a question of law which
we review de novo. But ‘factual issues may bear on that determination. [Citations].
Thus, to the extent the trial court’s determination that the arbitration agreement was
unconscionable turned on the resolution of conflicts in the evidence or on factual
inferences to be drawn from the evidence, we consider the evidence in the light most
favorable to the trial court’s ruling and review the trial court’s factual determinations
under the substantial evidence standard.’ [Citation.]” (Williams v. Atria Las
Posas (2018) 24 Cal.App.5th 1048, 1055.)
              The Facility aptly explains the trial court found the arbitration agreement
procedurally unconscionable as to Jasmine individually because the agreement “did not
identify [Jasmine] as a party to the agreement and Article Four, which required [Jasmine]
to arbitrate all claims in her individual capacity, was inserted into the arbitration
agreement without headings or highlighting.” The Facility argues these facts did not
cause Jasmine to experience the sort of “unfair surprise” that constitutes procedural
unconscionability. More specifically, the Facility makes three arguments for why the
arbitration agreement is not procedurally unconscionable as to Jasmine. None is
persuasive.
              First, the Facility argues that because the arbitration agreement itself is only
two pages and has “bold font and red ink,” Jasmine “should have taken notice of the
contents of the agreement.” Second, the Facility asserts Jasmine cannot claim unfair
surprise at being individually bound by the arbitration agreement because “the contents of
the arbitration agreement were fully explained to [Irene] and her daughter[,]” as stated in
Godinez’s declaration. Third, Article Four “was only one of eight clauses in the
agreement” and Jasmine “initialed the bottom of the agreement, near Article Four. Thus,
any argument that [Jasmine] was not made aware of Article Four is unavailing.” In
essence, the Facility argues Jasmine cannot claim unfair surprise at the contents of the

                                              12
arbitration agreement because the agreement is short, has markings to signal its general
nature as a binding contract, and, in any event, Godinez explained the agreement to her.
              Of course, Godinez’s assertion she “explained” the agreement to Jasmine
carries no weight here, given the trial court believed Jasmine’s account of the
circumstances of her signing, rather than Godinez’s. More importantly, the brevity of the
arbitration agreement and the fact it contained bold face and red lettering does not
overcome the fact the agreement on its face is between a resident and the facility.
Nowhere does the agreement warn that a person who signs as a resident’s representative
or agent is agreeing to be bound in his or her individual capacity and representative
capacity. Article Four contains no heading or other warning that it includes a provision
waiving the individual trial rights of one who signs the agreement as a resident’s
representative or agent. Nor does the signature block warn of the purported dual capacity
in which the representative is signing. We conclude the trial court properly found the
arbitration agreement procedurally unconscionable as to Jasmine.
              As for substantive unconscionability, the trial court reasoned the arbitration
agreement lacked mutuality because it requires residents to arbitrate those claims they are
most likely to bring against the Facility (medical malpractice, personal injury, elder
abuse) while allowing the Facility to pursue in court the actions the Facility is most likely
to bring against residents (evictions and collections). The Facility argues the trial court
wrongly concluded the Article Four exception for “disputes pertaining to collections or
evictions” benefits only the Facility: “Both residents and [the Facility] might make
claims pertaining to evictions and collections” and the “carve-out” applies to such claims
regardless of who brings them. The argument is absurd; the provision is clearly “one-
sided,” benefitting only the Facility, and thus renders the agreement itself substantively
unconscionable . (Armendariz, supra, 24 Cal.4th at p. 114 [substantive unconscionability
focuses on overly harsh or one-sided results].)

                                             13
              Finally, the Facility argues the “single carve-out provision could be easily
severed.” Jasmine points out that severance “is an impossibility, as [the Facility] never
sought severance of said provision with the trial court, and cannot do so at this juncture.”
(See Samaniego v. Empire Today, LLC (2012) 205 Cal. App. 4th 1138, 1149 [defendants
forfeited claim that trial court abused its discretion by ruling entire arbitration agreement
unenforceable rather than severing unconscionable terms where defendants never raised
severance in trial court].)
              The trial court properly ruled the arbitration agreement was procedurally
and substantively unconscionable as to Jasmine and thus unenforceable against her in her
individual capacity.
                                             III
                                        DISPOSITION
              The order denying the petition to compel arbitration is affirmed.
Respondents are entitled to their costs on appeal.

                                                   ARONSON, J.

WE CONCUR:

O’LEARY, P. J.

GOETHALS, J.

                                             14
Filed 8/28/19

                              CERTIFIED FOR PUBLICATION

                IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                               FOURTH APPELLATE DISTRICT

                                        DIVISION THREE

JASMINE LOPEZ,

    Plaintiff and Respondent,                        G056249

        v.                                           (Super. Ct. No. 30-2018-00965892)

BARTLETT CARE CENTER, LLC, et                        ORDER MODIFYING OPINION
al.,                                                 AND CERTIFYING OPINION FOR
                                                     PUBLICATION; NO CHANGE IN
    Defendants and Appellants.                       JUDGMENT

                  It is ordered that the opinion filed in the above matter on July 30, 2019, is
hereby modified as follows:
                  1.     On page 13, the third sentence of the second full paragraph,
beginning with “The argument is,” delete the word “absurd” and replace it with
“frivolous” so the sentence reads:
                  “The argument is frivolous; the provision is clearly “one-sided,” benefitting
only the Facility, and thus renders the agreement itself substantively unconscionable.”
                  This modification does not change the judgment.
                  Respondents have requested that our opinion be certified for publication. It
appears that our opinion meets the standards set forth in California Rules of Court, rule
8.1105(c). The request is GRANTED. The opinion is ordered published in the Official
Reports.

                                              ARONSON, J.

WE CONCUR:

O’LEARY, P. J.

GOETHALS, J.

                                          2