Court Opinion

ID: 9907682
Source: CourtListenerOpinion
Date Created: 2023-12-06 20:02:44.054595+00
Date Added: 2024-06-11T09:56:44.927803
License: Public Domain

Filed 12/6/23 Brown v. Cedars-Sinai Medical Center CA2/2
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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not been certified for publication or ordered published for purposes of rule 8.1115.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

                        SECOND APPELLATE DISTRICT

                                        DIVISION TWO

ERIK BROWN,                                                B324446

         Plaintiff and Respondent,                         (Los Angeles County
                                                           Super. Ct. No. BC689955)
         v.

CEDARS-SINAI MEDICAL
CENTER,

         Defendant and Appellant.

     APPEAL from an order of the Superior Court of Los
Angeles County, Lawrence P. Riff, Judge. Affirmed.
     Sheppard, Mullin, Richter & Hampton, Richard J.
Simmons, Daniel J. McQueen, Melissa M. Smith and Tyler J.
Johnson for Defendant and Appellant.
     Matern Law Group, Matthew J. Matern, Kiran Prasad,
Mikael H. Stahle and Irina A. Kirnosova for Plaintiff and
Respondent.
       Defendant and appellant Cedars-Sinai Medical Center
(Cedars-Sinai) appeals from a November 1, 2022 order denying
its petition to compel arbitration of individual claims asserted by
plaintiff and respondent Erik Brown on behalf of the California
Labor and Workforce Development Agency under the Labor Code
Private Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.)1
(PAGA).2 We affirm the trial court’s order.

                        BACKGROUND
      Brown was employed by Cedars-Sinai from November 2003
until June 2017. Before commencing his employment, Brown
executed a “Mutual Agreement to Arbitrate Claims” (arbitration
agreement) in which he agreed to submit to binding arbitration
any claim or controversy relating to his employment or
termination of employment if the claim demands $25,000 or
more.3 Brown had worked 17 pay periods at the time Cedars-
Sinai terminated his employment in June 2017.

1     All further statutory references are to the Labor Code.
2     The November 1, 2022 order also denied Cedars-Sinai’s
motion to dismiss nonindividual PAGA claims Brown asserted on
behalf of other aggrieved Cedars-Sinai employees. Cedars-Sinai
does not challenge that portion of the trial court’s order.
3      In the arbitration agreement, the parties agreed “to submit
all claims or controversies in any way relating to or associated
with your employment or the termination of employment
(‘Claims’), to the Conflict Resolution Procedure of the Medical
Center. If a Claim is not resolved by the Conflict Resolution
Procedure, and if the Claim demands $25,000.00 or more, you
and Cedars-Sinai agree that the Claim will be resolved
exclusively by binding arbitration.” The parties further agreed
that “[i]f any part of this Agreement is found to be void or

                                2
       Brown commenced this action against Cedars-Sinai in
January 2018, alleging a single cause of action under PAGA for
his individual Labor Code violation claims and nonindividual
claims on behalf of “other similarly aggrieved current and former
non-exempt employees.” He sought to recover unpaid wages and
civil penalties for “illegal rest period policies, failure to pay all
wages due to discharged and quitting employees, failure to
provide accurate itemized wage statements, failure to maintain
required records,” and for “interest, attorneys’ fees, costs, and
expenses.” On the civil case cover sheet accompanying his
complaint, Brown checked the box indicating the amount
demanded exceeds $25,000. The prayer for relief in Brown’s
complaint sought “civil penalties according to proof, including but
not limited to the amount of any unpaid wages of PLAINTIFF
and other aggrieved employees and all penalties authorized by
the Labor Code §§ 210, 226.3, 558, 1174.5, 1197.1, and 2699(a)
and (f),” in addition to interest, attorney fees, and costs.
       In June 2022, Cedars-Sinai moved to compel arbitration of
Brown’s individual PAGA claims and to dismiss the
nonindividual PAGA claims asserted on behalf of other aggrieved
employees. Cedars-Sinai based its motion on Viking River
Cruises, Inc. v. Moriana (2022) 596 U.S. __ [142 S.Ct. 1906], in
which the United States Supreme Court held that the Federal
Arbitration Act (9 U.S.C. § 1 et seq.) (FAA) preempted the
California state law rule that invalidated agreements to arbitrate
“‘individual PAGA claims for Labor Code violations that an
employee suffered,’” overruling Iskanian v. CLS Transportation

unenforceable, that part will be eliminated, and the rest of this
Agreement will remain in full force.”

                                  3
Los Angeles, LLC (2014) 59 Cal.4th 348. (Viking River, at
p. 1923, quoting Iskanian, at p. 383.)
       In its motion, Cedars-Sinai argued that Brown’s action
came within the arbitration agreement because the complaint
alleged employment-related claims, and the civil case cover sheet
filed with the complaint contained a judicial admission that
Brown’s claims demanded more than $25,000. Cedars-Sinai
further argued that Brown’s demand exceeded $25,000 even if
the trial court considered only Brown’s individual PAGA claims.
Cedars-Sinai reasoned as follows: Brown’s potential recovery in
civil penalties alone would exceed the $25,000 threshold in the
arbitration agreement if he sought to recover only the $100
default penalty available under PAGA for each of the 10 alleged
Labor Code violations during the initial pay period he worked (10
violations x 1 pay period x $100 = $1,000), and the $200 default
penalty for the 16 remaining pay periods he worked (10 violations
x 16 pay periods x $200 = $32,000), for a total potential recovery
of $33,000 ($1,000 + $32,000).4
       In opposing the motion to compel arbitration, Brown
argued that Cedars-Sinai failed to meet its burden of proving the

4      Under PAGA, the civil penalty for an initial violation is
$100 per employee per pay period, and the penalty for each
subsequent violation is $200 per employee per pay period.
Section 2699, subdivision (f)(2) provides: “For all provisions of
this code except those for which a civil penalty is specifically
provided, there is established a civil penalty for a violation of
these provisions, as follows: [¶] . . . [¶] . . . If, at the time of the
alleged violation, the person employs one or more employees, the
civil penalty is one hundred dollars ($100) for each aggrieved
employee per pay period for the initial violation and two hundred
dollars ($200) for each aggrieved employee per pay period for
each subsequent violation.”

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existence of an agreement to arbitrate his individual PAGA
claims. He maintained there was no evidence that his individual
PAGA claims demanded $25,000 or more; Cedars-Sinai’s
valuation of the individual PAGA claims was speculative; Cedars-
Sinai conceded that imposition of the default $100 statutory
penalty under section 2699, subdivision (f) alone would not bring
his claims within the $25,000 arbitration threshold; and without
imposing the additional $200 statutory penalty, the dispute did
not come within the scope of the arbitration agreement. Brown
further argued that because Cedars-Sinai had moved to compel
arbitration of only the individual PAGA claims, the value of the
nonindividual claims was not at issue and should not be
considered.
       On November 1, 2022, following a hearing at which the
parties argued, the trial court issued an order denying the motion
to compel arbitration. The court found that Cedars-Sinai failed
to meet its burden of showing that Brown’s individual PAGA
claims demand $25,000 or more as required by the arbitration
agreement. The trial court stated: “While the whole of the PAGA
claims exceed $25,000 as shown on the civil cover sheet, one
cannot discern that Brown’s ‘individual’ PAGA claims exceed that
sum. To the extent that Cedars-Sinai invites the court to parse
evidence at this point to determine the amount of such claim, the
court respectfully declines. [¶] As Brown notes, an employee
affected by at least one Labor Code violation may pursue
penalties on the state’s behalf for unrelated violations by the
same employer. [Citation.] The plaintiff’s ‘individual’ PAGA
claim might therefore demand only $100 in penalties, excusing
the Claim from arbitration under the Agreement, while as to
other aggrieved employees, the plaintiff seeks penalties that in
the aggregate total far more than the $25,000.”

                                5
      This appeal followed.

                            DISCUSSION
I.     Standard of review
       “Generally, the standard of review applicable to the denial
of a petition to compel arbitration is determined by the issues
presented on appeal [citation]. To the extent the denial relies on
a pertinent factual finding, we review that finding for the
existence of substantial evidence. [Citation.] In contrast, to the
extent the denial relies on a determination of law, we review the
trial court’s resolution of that determination de novo.” (Bautista
v. Fantasy Activewear, Inc. (2020) 52 Cal.App.5th 650, 655.)
Whether an arbitration agreement applies to a controversy is a
question of law to which we apply our independent judgment
when no conflicting extrinsic evidence in aid of interpretation was
introduced in the trial court. (Ahern v. Asset Management
Consultants, Inc. (2022) 74 Cal.App.5th 675, 687.)
       Finally, when an order denying a motion to compel
arbitration is based on the trial court’s finding that the petitioner
failed to carry its burden of proof, the reviewing court must
determine whether that finding was erroneous as a matter of law.
(Trinity v. Life Ins. Co. of North America (2022) 78 Cal.App.5th
1111, 1121 (Trinity).) “‘“Specifically, the question becomes
whether the appellant’s evidence was (1) ‘uncontradicted and
unimpeached’ and (2) ‘of such a character and weight as to leave
no room for a judicial determination that it was insufficient to
support a finding.’”’” (Ibid.)
II.    Applicable law
       The parties do not dispute that the FAA governs the
arbitration agreement. “The FAA embodies a clear federal policy
in favor of arbitration” (Simula, Inc. v. Autoliv, Inc. (9th

                                 6
Cir.1999) 175 F.3d 716, 719), and “any doubts concerning the
scope of arbitrable issues should be resolved in favor of
arbitration” (Moses H. Cone Memorial Hospital v. Mercury
Construction Corp. (1983) 460 U.S. 1, 24-25). When determining
the rights of parties to enforce an arbitration agreement governed
by the FAA, courts apply state contract law while giving due
regard to the federal policy favoring arbitration. (Volt
Information Sciences, Inc. v. Board of Trustees of Leland Stanford
Junior University (1989) 489 U.S. 468, 474.)
      Code of Civil Procedure section 1281.2 requires a trial court
to grant a petition to compel arbitration “if [the court] determines
that an agreement to arbitrate the controversy exists.” A party
seeking to compel arbitration bears the burden of proving by a
preponderance of the evidence the existence of a valid arbitration
agreement that covers the dispute at issue. (Trinity, supra, 78
Cal.App.5th at p. 1120; Nixon v. AmeriHome Mortgage Co., LLC
(2021) 67 Cal.App.5th 934, 946; Larian v. Larian (2004) 123
Cal.App.4th 751, 760.) “[T]he policy favoring arbitration ‘ “does
not override ordinary principles of contract interpretation.” . . .
“‘[T]he terms of the specific arbitration clause under
consideration must reasonably cover the dispute as to which
arbitration is requested.’”’” (Vaughn v. Tesla, Inc. (2023) 87
Cal.App.5th 208, 218-219.) “[A] court may order arbitration of a
particular dispute only where the court is satisfied that the
parties agreed to arbitrate that dispute.” (Granite Rock Co. v.
International Brotherhood of Teamsters (2010) 561 U.S. 287, 297.)
      Once the petitioning party has met its burden of proving
the existence of an agreement to arbitrate the dispute, the
burden shifts to the party opposing arbitration to prove by a
preponderance of the evidence any fact necessary to its defense,
such as fraud, waiver, or unconscionability. (Engalla v.

                                 7
Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972-976;
Rosenthal v. Great Western Fin. Securities Corp. (1996) 14
Cal.4th 394, 413.) Some California appellate courts have
imposed an additional burden “upon the party opposing
arbitration to demonstrate that an arbitration clause cannot be
interpreted to require arbitration of the dispute.” (Coast Plaza
Doctors Hospital v. Blue Cross of California (2000) 83
Cal.App.4th 677, 686-687 (Coast Plaza); accord, Howard v.
Goldbloom (2018) 30 Cal.App.5th 659, 663; Aanderud v. Superior
Court (2017) 13 Cal.App.5th 880, 890.)
III. No error in denial of petition to compel arbitration
       Citing the Coast Plaza line of cases, Cedars-Sinai contends
it met its burden of proving the existence of an agreement to
arbitrate the individual PAGA claims, thereby shifting to Brown
the burden of proving those claims fall outside the scope of the
arbitration agreement. We disagree. The arbitration agreement
itself sets a $25,000 minimum threshold for arbitrable claims.
Interpretation of that agreement is not at issue, and the contract
language imposing the $25,000 arbitration threshold is clear and
unambiguous in any event. Cedars-Sinai failed to prove by a
preponderance of the evidence that Brown’s demand for his
individual PAGA claims meets the $25,000 threshold. The
burden of proof accordingly did not shift to Brown.
       The civil case cover sheet Brown filed with his complaint is
not, as Cedars-Sinai contends, a judicial admission that Brown’s
individual PAGA claims demand more than $25,000. “Judicial
admissions may be made in a pleading, by stipulation during
trial, or by response to request for admission.” (Myers v.
Trendwest Resorts, Inc. (2009) 178 Cal.App.4th 735, 746.) Not
every document filed by a party is a pleading from which a
judicial admission may be extracted. (Ibid.) A civil case cover

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sheet, for example, is for the court’s use “for statistical purposes
and may affect the assignment of a complex case.” (Cal. Rules of
Court, rule 3.220(a).) A plaintiff’s claims are stated in his or her
pleadings, not on an administrative cover sheet.
       Even if the civil case cover sheet Brown filed with his
complaint could be deemed an admission that the individual
PAGA claims Brown asserts on his own behalf, together with the
nonindividual PAGA claims he asserts on behalf of other
employees, collectively demand more than $25,000, such an
admission would not establish that Brown’s individual PAGA
claims alone demand $25,000.
       Cedars-Sinai’s valuation of Brown’s individual PAGA
claims is insufficient to establish that those claims demand
$25,000 or more. Brown’s complaint seeks to recover “civil
penalties according to proof, including but not limited to the
amount of any unpaid wages” owed to him, but alleges no specific
or minimum amount of penalties sought. Cedars-Sinai’s
calculation of the minimum statutory penalties Brown may
recover for alleged violations during his initial pay period is
substantially below the $25,000 arbitration threshold. Under
Cedars-Sinai’s own analysis, the $25,000 threshold is exceeded
only if Brown can successfully prove not only the alleged
violations during his initial pay period, but subsequent violations
during the ensuing pay periods as well.5 Whether or not Brown

5     We disregard Cedars-Sinai’s argument that attorney fees
should be included in the valuation of Brown’s individual PAGA
claims when determining whether the demand for those claims
exceeds the $25,000 threshold, as Cedars-Sinai failed to raise this
argument in its opening appellate brief. (Shade Foods, Inc. v.
Innovative Products Sales & Marketing (2000) 78 Cal.App.4th
847, 894, fn. 10.)

                                 9
will succeed in doing so is uncertain. Cedars-Sinai’s valuation
analysis is not “‘“‘of such a character and weight as to leave no
room for a judicial determination that it was insufficient’”’” to
prove that the demand for Brown’s individual PAGA claims
exceeds $25,000. (Trinity, supra, 78 Cal.App.5th at p. 1121; see
Ibarra v. Manheim Investments, Inc. (9th Cir. 2015) 775 F.3d
1193, 1199 [when a damages assessment is based on
assumptions, “those assumptions cannot be pulled from thin air
but need some reasonable ground underlying them”].)
       Cedars-Sinai failed to meet its initial burden of proving, by
a preponderance of the evidence, the existence of an agreement to
arbitrate the parties’ particular dispute. The trial court did not
err by denying the petition to arbitrate.

                        DISPOSITION
      The order denying the petition to compel arbitration is
affirmed. Brown shall recover his costs on appeal.

                                     ________________________
                                     CHAVEZ, J.

We concur:

________________________
LUI, P. J.

________________________
ASHMANN-GERST, J.

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