Court Opinion

ID: 9363827
Source: CourtListenerOpinion
Date Created: 2023-01-17 19:03:36.805147+00
Date Added: 2024-06-11T17:15:28.112438
License: Public Domain

Filed 1/17/23 C.D. v. BNI Treatment Centers CA2/5
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for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 FIVE

 C.D., a Minor, etc.,                                             B313195

          Plaintiff and Respondent,                               (Los Angeles County
                                                                  Super. Ct.
          v.                                                      No. 20SMCV00941)

 BNI TREATMENT CENTERS, LLC,

          Defendant and Appellant.

     APPEAL from an order of the Superior Court of Los
Angeles County, H. Jay Ford III, Judge. Affirmed.
     Qureshi Law and Omar G. Qureshi for Plaintiff and
Respondent.
     Hester Law Group, Cecille L. Hester, and Barbara M.
Reardon, for Defendant and Appellant.
       Plaintiff C.D. (plaintiff) was a minor when he entered a
residential facility operated by defendant BNI Treatment
Centers, LLC (defendant) for treatment relating to autism
spectrum disorder. Plaintiff later sued defendant, and defendant
sought to compel arbitration pursuant to an agreement that
plaintiff’s father, Joshua Deighton (Father), signed as plaintiff’s
legal representative or agent. In this appeal from the trial court’s
denial of defendant’s motion to compel arbitration, we are asked
to decide whether plaintiff validly repudiated the arbitration
agreement pursuant to a provision of the family code that states
“a contract of a minor may be disaffirmed by the minor before
majority or within a reasonable time afterwards,” except as
otherwise provided by statute. (Fam. Code,1 § 6710.)

                           I. BACKGROUND
       Plaintiff’s initial complaint against defendant alleges that
in 2019, while a minor, he required care in a residential facility
with “staff who were specially trained and had expertise in
stabilizing children with Autism.” The complaint generally
alleges defendant falsely represented it was equipped to provide
such care and subjected him to abuse that caused his condition to
worsen. The specific causes of action alleged in the initial
complaint included claims for breach of contract and breach of
the implied covenant of good faith and fair dealing.
       Defendant moved to compel arbitration pursuant to an
arbitration agreement Father signed (the Agreement). For
purposes of this appeal, there is no dispute as to the scope of the

1
     Undesignated statutory references that follow are to the
Family Code.

                                 2
Agreement. The central issue is whether plaintiff was a principal
to the Agreement or a third-party beneficiary thereof, which, as
we shall discuss, turns on the Agreement’s first sentence:
“This . . . Agreement is executed between BNI Treatment
Centers . . . and [Father] (‘Minor’ or ‘Minor’s Legal
Representative’ and/or ‘Agent’) in conjunction with the Minor’s
admission to BNI and relating to the provision of
therapy/counseling services and other professional services by
BNI to Minor.”
       After defendant moved to compel arbitration, plaintiff filed
a first amended complaint that (among other differences from the
original pleading) expressly disaffirmed his contract for
treatment with defendant and omitted the cause of action for
breach of contract.2 The disaffirmation was made pursuant to the
aforementioned provision of the Family Code, section 6710.
       Defendant amended its motion to compel arbitration to
account for the filing of the first amended complaint. Defendant
argued the complaint should still be compelled to arbitration for
the same reasons set forth in its original motion.
       In his opposition to defendant’s motion, plaintiff argued he
was entitled to disaffirm the Agreement and included a
declaration so disaffirming it (in case a declaration was seen as

2
      The operative first amended complaint asserts causes of
action for violation of the CLRA; violation of the FAL; violation of
the UCL; constructive fraud; intentional misrepresentation;
unjust enrichment; negligent supervision, hiring, retention, and
training; violation of the Bane Act (Civ. Code, § 52.1); violation of
the Ralph Act (Civ. Code, § 51.7); violation of the Unruh Act (Civ.
Code, § 51 et seq.); intentional infliction of emotional distress;
and negligence.

                                  3
necessary). Plaintiff also argued there were no pertinent
statutory exceptions that would prevent him from disaffirming
the Agreement, including Code of Civil Procedure section 1295
(Section 1295), which bars disaffirming certain agreements with
licensed health care providers (as therein defined).3
        In reply, defendant contended a minor may only disaffirm a
contract that the child personally signed—i.e., not one signed by
a parent on the child’s behalf.
        The trial court held a hearing on defendant’s motion to
compel arbitration in March 2021. The court advised the parties
of its tentative conclusion that plaintiff was entitled to disaffirm
the Agreement because Father “signed the [A]greement as
[plaintiff’s] agent or legal representative” and plaintiff “was
therefore the principal in the [A]greement, not merely a third-
party beneficiary.” The court also expressed surprise that
defendant’s reply brief did not discuss whether defendant
qualifies as a licensed health care provider under Section 1295.
When defendant’s attorney asserted the Section 1295 exception to
disaffirmance did apply, the trial court continued the hearing to
permit supplemental briefing on the applicability of Section 1295
and the issue of whether plaintiff was a principal or third-party
beneficiary of the Agreement.

3
       Subdivision (d) of the statute provides: “Where the contract
is one for medical services to a minor, it shall not be subject to
disaffirmance if signed by the minor’s parent or legal guardian.”
Subdivision (g) of the statute defines “health care provider”
(which is used interchangeably in the statute with references to
“medical services”—a point we will return to later in greater
detail) to mean “any clinic, health dispensary, or health facility
licensed pursuant to” a division of the Health and Safety Code.

                                 4
      After receiving supplemental briefing—in which defendant
focused on the nature of the treatment provided and again did
not discuss whether defendant qualifies as a health care provider
as defined in Section 1295—the trial court denied the motion to
compel arbitration. The court found defendant “still fail[ed] to
establish [plaintiff] was not the principal of the arbitration
agreement” and “fail[ed] to demonstrate that it is a health care
provider” for purposes of Section 1295.

                           II. DISCUSSION
       To reiterate, section 6710 states that “[e]xcept as otherwise
provided by statute, a contract of a minor may be disaffirmed by
the minor before majority or within a reasonable time
afterwards . . . .” The Agreement’s first sentence establishes the
trial court correctly found the Agreement is “a contract of a
minor” (i.e., that plaintiff was the principal not a third party
beneficiary): Father signed in his capacity as plaintiff’s
representative or agent, not in his own right. The trial court also
correctly concluded the Section 1295, subdivision (d) exemption
for licensed health care providers from the general right of
disaffirmation did not apply, largely because defendant made no
attempt to establish it is a health care provider for purposes of
that statute.

      A.    Legal Framework
            1.    Burdens of proof and standard of review
      Although both federal and state law strongly favor
arbitration and establish a presumption in favor of arbitrability,
generally applicable contract defenses may be applied without
contravening the Federal Arbitration Act (9 U.S.C. § 1 et seq.) or

                                 5
the California Arbitration Act (Code Civ. Proc., § 1280 et seq.).
(OTO, LLC v. Kho (2019) 8 Cal.5th 111, 125 (OTO).) The trial
court determines whether an agreement to arbitrate exists and, if
any defense to its enforcement is raised, whether the agreement
is enforceable. (Rogers v. Roseville SH, LLC (2022) 75
Cal.App.5th 1065, 1072, citing Rosenthal v. Great Western Fin.
Securities Corp. (1996) 14 Cal.4th 394, 413.)4 Where a party
opposing a petition to compel arbitration establishes an otherwise
applicable contract defense, the party seeking to compel
arbitration has the burden to prove any exception to that defense
applies. (Swain v. LaserAway Medical Group, Inc. (2020) 57
Cal.App.5th 59, 76.) Our review on appeal is de novo. (OTO,
supra, at 126.)

            2.    Section 6710
      Disaffirmance of a contract pursuant to section 6710 is a
defense to a motion to compel arbitration. (Coughenour v. Del
Taco, LLC. (2020) 57 Cal.App.5th 740, 747-748, 751
(Coughenour).)

4
       Defendant contends, for the first time on appeal, that a
delegation clause in the Agreement deprived the trial court of
jurisdiction to determine whether plaintiff disaffirmed the
Agreement. Defendant forfeited this issue by not raising it in the
trial court. (Mendoza v. Trans Valley Transport (2022) 75
Cal.App.5th 748, 770 [delegation issue forfeited where moving
party raised it for the first time “in a cursory manner” in reply
papers in trial court].) Defendant also waived its right to
arbitrate questions of arbitrability by “fully litigat[ing] the very
issue that [it] now argue[s] was delegated to the arbitrator . . . .”
(Id. at 771.)

                                  6
       As we have already seen, a minor’s right to disaffirm a
contract is also subject to statutory exceptions. (§ 6711 [“A minor
cannot disaffirm an obligation, otherwise valid, entered into by
the minor under the express authority or direction of a statute”].)
The exceptions are varied and include, for example, certain
contracts for necessaries (§ 6712) and certain entertainment and
athletic contracts (§§ 6750-6751). The Family Code also exempts
contracts for specific categories of medical treatment from
disaffirmance (§ 6921), ranging from those relating to the
prevention or treatment of pregnancy (§ 6925) to certain
contracts for mental health treatment or counseling (§ 6924).
Defendant does not invoke any of the Family Code exceptions,
relying instead solely on Section 1295.

       B.    Plaintiff Disaffirmed the Contract
       No specific act or language is required to disaffirm an
agreement pursuant to section 6710, and the filing of a lawsuit is
sufficient to do so. (Coughenour, supra, 57 Cal.App.5th at 748.)
Here, plaintiff disaffirmed the Agreement by filing the first
amended complaint and he left no doubt as to his intentions by
submitting his own declaration to the same effect. These facts
are undisputed.
       Defendant nonetheless suggests plaintiff is “bound by the
claims made in the original [c]omplaint,” including the allegation
that he “entered into a contract for treatment with [defendant].”
Defendant’s only authority for this proposition is a case
discussing the sham pleading doctrine. (Larson v. UHS of
Rancho Springs, Inc. (2014) 230 Cal.App.4th 336, 343-346.) This
doctrine, which “preclude[s] [plaintiffs] from amending
complaints to omit harmful allegations, without explanation,

                                 7
from previous complaints to avoid attacks raised in demurrers or
motions for summary judgment” (Deveny v. Entropin, Inc. (2006)
139 Cal.App.4th 408, 425), has no application here. The first
amended complaint does not omit the allegation that plaintiff
entered into a contract with defendant—it adds the assertion
that he disaffirmed it. The omission of plaintiff’s causes of action
premised on the existence of an enforceable contract is a
straightforward consequence of his disaffirmance of the contract.

      C.      Plaintiff Was Entitled to Disaffirm the Agreement as
              a Principal
       Defendant contends, and plaintiff agrees, that if Father
signed the Agreement as a principal himself, plaintiff would be a
third-party beneficiary bound to arbitrate his claims against
defendant. (See, e.g., Doyle v. Giuliucci (1965) 62 Cal.2d 606, 609
[predecessor to section 6710 did “not apply to contracts between
adults and [was] therefore not controlling on the question of a
parent’s power to bind his child to arbitrate by entering into a
contract of which the child is a third party beneficiary”] (Doyle).)
The Doyle Court emphasized that because “minors can usually
disaffirm their own contracts to pay for medical services
[citations], it is unlikely that medical groups would contract
directly with them. They can be assured the benefits of group
medical service only if parents can contract on their behalf.
Unless such contracts unreasonably restrict minors’ rights, they
should be sustained.” (Ibid.)
       The Agreement in this case, however, was not a “contract[ ]
between adults.” (Doyle, supra, 62 Cal.2d at 609.) By the express
terms of the Agreement, Father signed as plaintiff’s
representative or agent. Defendant does not grapple with this

                                 8
dispositive language. Instead, defendant emphasizes a sentence
in Father’s declaration that states “[Father] entered a
contract . . . on [plaintiff’s] behalf.”5 Defendant is apparently of
the view that Father’s statement dispenses with any need to
consult the Agreement itself because Father “is a lawyer” and it
is “reasonable to assume precision of language by him.”
Defendant’s analytical approach (privileging the diction of a
declaration over the terms of the Agreement) runs contrary to
fundamental tenets of contract law. (Montrose Chemical Corp. v.
Superior Court (2020) 9 Cal.5th 215, 230 [clear and explicit
contractual language reflects the parties’ mutual intentions].)
       Defendant’s alternative contention that the Agreement is
not “a contract of a minor” because plaintiff did not personally
sign it also lacks merit. There is no plausible construction of “a
contract of a minor” that does not include all contracts of which a
minor is a principal. In Berg v. Taylor (2007) 148 Cal.App.4th
809, the Court of Appeal held that a minor plaintiff was entitled
to disaffirm a contract “signed [only] by a parent” because the
minor “was not a third party beneficiary of the agreement signed

5
       Contrary to defendant’s argument, even Father’s phrasing
does not cast plaintiff as a third-party beneficiary of the contract.
It is commonplace to say that an agent acts on behalf of a
principal. (See, e.g., Dones v. Life Ins. Co. of North America
(2020) 55 Cal.App.5th 665, 689 [“‘[A]n agent is ordinarily not
liable on the contract when he acts on behalf of a disclosed
principal’”], emphasis added; 7 Witkin, Cal. Procedure (6th ed.
2022) Trial, § 102 [“an agent, in executing [a arbitration]
agreement on behalf of the principal, may retain his or her own
right to a jury trial even though the agreement waives the
principal’s right”], emphasis added.)

                                  9
by his mother, but a principal.” (Id. at 818-819.) In other words,
there is no general parental-signature exception to section 6710.6

      D.     Defendant Failed to Establish Any Exception to
             Plaintiff’s Right to Disaffirm the Agreement
       Defendant contends plaintiff was precluded from
disaffirming the Agreement under Section 1295. Section 1295,
subdivision (a) provides, in pertinent part, that “[a]ny contract for
medical services which contains a provision for arbitration of any
dispute as to professional negligence of a health care provider”
shall include a specific warning regarding the effect of the
arbitration provision. Subdivision (d) provides that “[w]here the
contract is one for medical services to a minor, it shall not be
subject to disaffirmance if signed by the minor’s parent or legal
guardian.” Defendant points to its staff’s medical credentials and
the nature of the treatment offered and contends subdivision (d)
applies because the contract was “one for medical services to a
minor.” But subdivision (d)’s use of the definite article (“[w]here
the contract is one for medical services”) indicates that
subdivision must be understood in light of subdivision (a) such

6
       Defendant’s reliance on Doyle for the proposition that
disaffirmance in these circumstances will make it impossible for
children like plaintiff to obtain the treatment they need ignores
the straightforward solution offered in Doyle. Defendant need
only have secured an agreement by Father, in his own right, for
the benefit of plaintiff. (See, e.g., Aaris v. Las Virgenes Unified
School Dist. (1998) 64 Cal.App.4th 1112, 1120 [holding that a
minor plaintiff was bound by a release signed by her mother, in
which the mother agreed as, “I, the undersigned,” to release
claims against the defendant school district].)

                                 10
that it applies only to contracts for medical services involving a
health care provider.7 This is significant because subdivision (g)
defines “health care provider” to mean persons and entities
licensed under specific statutes.8 (§ 1295, subd. (g)(1).)
Defendant made no attempt to establish it satisfies this
definition at trial, and it concedes the point on appeal.

7
       Construing Section 1295, subdivision (d) to apply to
contracts for medical services involving health care providers as
defined in subdivision (g) is consistent with the basic principle
that “‘“statutory language must . . . be construed in the context of
the statute as a whole and the overall statutory scheme . . . .”’
[Citation.]” (People v. Arroyo (2016) 62 Cal.4th 589, 593.)
Several subdivisions of Section 1295 impliedly incorporate
subdivision (a)’s specification of a “contract for medical services
which contains a provision for arbitration of any dispute as to
professional negligence of a health care provider.” Subdivision
(b) requires a warning to appear “[i]mmediately before the
signature line provided for the individual contracting for the
medical services” (emphasis added); subdivisions (c) and (e) refer
to “such a contract”; and, as we have already mentioned,
subdivision (d) refers to “the contract.”
8
       “‘Health care provider’ means any person licensed or
certified pursuant to Division 2 (commencing with Section 500) of
the Business and Professions Code, or licensed pursuant to the
Osteopathic Initiative Act, or the Chiropractic Initiative Act, or
licensed pursuant to Chapter 2.5 (commencing with Section 1440)
of Division 2 of the Health and Safety Code; and any clinic,
health dispensary, or health facility, licensed pursuant to
Division 2 (commencing with Section 1200) of the Health and
Safety Code. ‘Health care provider’ includes the legal
representatives of a health care provider[.]” (§ 1295, subd. (g)(1).)

                                 11
       Without seriously disputing this construction of Section
1295, subdivision (d), defendant suggests the Legislature did not
intend to limit its application based on “[t]echnical licensing
issues.” But Section 1295 is hardly unique among statutes
limiting a minor’s right to disaffirm contracts in raising
“technical licensing issues.” Section 6924, for instance, which
precludes disaffirmance of certain contracts for mental health
treatment or counseling, applies to contracts for treatment from,
among others, a “professional person” defined to include persons
licensed under various statutes. (§ 6924, subd. (a)(2).) Section
6710’s default rule that a minor may disaffirm a contract is
subject only to “express” statutory exceptions. (§ 6711.)

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

   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

                           BAKER, J.

We concur:

     RUBIN, P. J.

     MOOR, J.

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