Court Opinion

ID: 9896306
Source: CourtListenerOpinion
Date Created: 2023-11-09 21:05:28.452122+00
Date Added: 2024-06-11T09:14:41.348669
License: Public Domain

Filed 11/9/23 Cruz v. Oliphant Financial CA1/3

                  NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or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

                                      FIRST APPELLATE DISTRICT

                                                DIVISION THREE

 CHERRIE SILVA CRUZ,
      Cross-complainant and
 Appellant,                                                              A166874

 v.                                                                      (San Mateo County
 OLIPHANT FINANCIAL, LLC et al.,                                         Super. Ct. No. 21-CIV-03306)
      Cross-defendants and
 Respondents.

         Cherrie Silva Cruz took out a consumer loan and signed a “Borrower
Agreement” containing an arbitration provision. Oliphant Financial, LLC
(Oliphant) filed suit to collect Cruz’s unpaid debt, alleging it purchased the
debt. Cruz filed a class action cross-complaint against Oliphant and
Oliphant’s attorney (Rachel Haney) and her law firm (Gurstel Law Firm,
P.C.) (collectively, cross-defendants), alleging cross-defendants violated state
and federal debt collection laws. The trial court granted cross-defendants’
petition to compel individual arbitration and to stay proceedings pursuant to
the arbitration provision in the Borrower Agreement.

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      On appeal, Cruz argues, in essence, that cross-defendants failed to
prove the right to compel arbitration was transferred to them by the original
creditor to the Borrower Agreement. Cross-defendants have filed a motion to
dismiss the appeal on the ground that the appeal is taken from a
nonappealable order. We agree the order granting the petition to compel
arbitration is a non-appealable order and so we dismiss the appeal.
                 FACTUAL AND PROCEDURAL BACKGROUND
      Oliphant’s complaint against Cruz alleges that Cruz obtained a loan
from WebBank that she failed to repay, that Cruz’s account was assigned or
transferred to Oliphant, and that Oliphant seeks to collect the debt.
Attached to the complaint are documents detailing Cruz’s account, a copy of a
borrower agreement, and a bill of sale indicating LendingClub Corporation
(Lending Club) and Oliphant executed an Account Purchase Master
Agreement, whereby LendingClub sold to Oliphant various accounts,
including Cruz’s account.
      Cruz filed a cross-complaint asserting a class action against Oliphant
and the attorney and law firm representing Oliphant. The allegations
tentatively define the class as persons in California against whom cross-
defendants filed a collection complaint attempting to collect a debt originally
owed to WebBank and sold to Oliphant during a specific time period. Cruz
also alleges as follows. Cruz incurred a financial obligation in the form of a
consumer credit account issued by WebBank. The alleged debt (which she
denies owing) is evidenced by a promissory note created and maintained by
LendingClub. The debt and electronic promissory note were transferred by
WebBank to LendingClub in March 2016, and thereafter the debt and
promissory note were transferred to IBI Consumer Credit, LP (IBI), with
LendingClub acting as IBI’s agent. The alleged debt was then sold to cross-

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defendants for collection purposes, though control of the electronic
promissory note was not transferred to cross-defendants.
      Based on these alleged facts, Cruz’s cross-complaint includes a cause of
action under the California Fair Debt Buying Practices Act against Oliphant
alone, claiming Oliphant’s complaint falsely states its compliance with Civil
Code section 1788.52 and does not attach a copy of the contract or other
document described in Civil Code section 1788.52, subdivision (b). The cross-
complaint also includes causes of action under the federal Fair Debt
Collection Practices Act and California’s Rosenthal Fair Debt Collection
Practices Act against all cross-defendants, claiming they made false
representations in trying to collect the debt and were attempting to collect a
debt barred by federal and state statutes of limitations.
      Cross-defendants filed a motion to compel arbitration of Cruz’s
individual claims and to stay the action on the ground that Cruz’s Borrower
Agreement with WebBank contains the following arbitration provision: “Any
dispute with us, Lending Club or any subsequent holder of the Loan
Agreement and Promissory Note will be resolved by binding arbitration,
subject to your right to opt out . . . .” The arbitration provision specifically
provides that either party to the Borrower Agreement or any subsequent
holder may require arbitration of claims. A “claim” includes any dispute
between Cruz and WebBank and/or “any subsequent holder (or persons
claiming through or connected with us and/or the subsequent holders) . . .
relating to or arising out of this Agreement.” “Claims are subject to
arbitration regardless of whether they arise from contract; tort (intentional or
otherwise); a constitution, statute, common law, or principles of equity; or
otherwise. Claims include matters arising as initial claims, counterclaims,
cross-claims, third-party claims, or otherwise. The scope of this Arbitration

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Provision is to be given the broadest possible interpretation that is
enforceable.” The provision also provides for delegation of arbitrability issues
to the arbitrator by defining a “claim” as including “any past, present, or
future claim, dispute, or controversy . . . relating to or arising out of this
Agreement, any Loan Agreement and Promissory Note(s), the Site, and/or the
activities or relationships that involve, lead to, or result from any of the
foregoing, including . . . the validity or enforceability of this Arbitration
Provision, any part thereof, or the entire Agreement.” (Italics added.)
      Section 20(f) of the arbitration provision further indicates that no
arbitration shall proceed on a class representative or collective basis, and
that challenges to the validity of this particular section “shall be determined
exclusively by a court and not by the administrator or any arbitrator.” The
arbitration provision also includes a means for opting out of the arbitration
provision.
      Cross-defendants filed several declarations and exhibits in support of
their motion to compel arbitration, which supported the conclusion that Cruz
and WebBank executed the Borrower Agreement containing the arbitration
clause, that Oliphant was assigned and acquired all rights to Cruz’s account
after it purchased a portfolio of accounts, that Oliphant presently owns
Cruz’s account, and that the account originated with WebBank.
      Over Cruz’s opposition, the trial court granted cross-defendants’ motion
to compel arbitration and stay the action. The court explained the material
issue in the case was whether Cruz agreed to the Borrower Agreement
containing the arbitration provision, and the evidence indicated she did.
      Cruz filed this appeal.

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                                  DISCUSSION
      Generally, an order granting a motion to compel arbitration is not an
appealable order. (Code Civ. Proc., § 1294; Cal. Law Revision Com. com.,
Deering’s Ann. Code Civ. Proc., (2014 ed.) foll. § 1294, p. 805; Reyes v. Macy’s,
Inc. (2011) 202 Cal.App.4th 1119, 1122.) Review of such an order ordinarily
must await appeal from a final judgment. (Nguyen v. Applied Medical
Resources Corp. (2016) 4 Cal.App.5th 232, 242.)
      Cruz acknowledges this general rule but argues the order is
immediately appealable under the “death knell” doctrine. The death knell
doctrine requires an order that “(1) amounts to a de facto final judgment for
absent plaintiffs, under circumstances where (2) the persistence of viable but
perhaps de minimis individual plaintiff claims creates a risk no formal final
judgment will ever be entered.” (In re Baycol Cases I & II (2011) 51 Cal.4th
751, 759.) In Cruz’s view, the death knell doctrine applies because the
arbitration provision confers no authority upon the arbitrator to consider
class claims, so the order is a de facto final judgment for the absent plaintiffs.
Cruz also contends the trial court erred in ruling that the issue whether
cross-defendants were actually assigned the right to compel arbitration was a
matter for the arbitrator to decide.
      But the trial court did not dismiss the class claims, and it properly
declined to decide Cruz’s challenge to the “assignment chain” because the
Borrower Agreement explicitly left the determination of “gateway” issues to
the arbitrator. (Aanderud v. Superior Court (2017) 13 Cal.App.5th 880, 891
[“ ‘parties can agree to arbitrate “gateway” questions of “arbitrability,” such
as whether the parties have agreed to arbitrate or whether their agreement
covers a particular controversy’ ”].) Cruz does not challenge the court’s
finding that she signed the Borrower Agreement which contains the

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arbitration provision, nor does she contest the validity of the delegation
clause in the arbitration provision. Cruz may in the future litigate her class
claims in the superior court action if the arbitrator comes to agree with her
that the arbitration clause may not be enforced here in light of the
“assignment chain” issues. In other words, no death knell has yet sounded
for these claims.
        Although Cruz has requested oral argument, we have no jurisdiction
and must dismiss this appeal due to the lack of an appealable order. The
effect of this dismissal of the appeal is to leave the challenged order in place.
(Code Civ. Proc., § 913; Estate of Sapp (2019) 36 Cal.App.5th 86, 100.)
                                  DISPOSITION
        The appeal is dismissed. Cross-defendants are entitled to costs on
appeal. (Cal. Rules of Court, rule 8.278.)

                                      _________________________
                                      Fujisaki, J.

WE CONCUR:

_________________________
Tucher, P.J.

_________________________
Petrou, J.

Cruz v. Oliphant (A168874)

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