Court Opinion

ID: 4538076
Source: CourtListenerOpinion
Date Created: 2020-06-01 19:02:01.703725+00
Date Added: 2024-06-11T12:42:50.653451
License: Public Domain

Filed 6/1/20
                 CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                  SECOND APPELLATE DISTRICT

                            DIVISION SIX

ADRIAN HARRIS et al.,                   2d Civil No. B293290
                                      (Super. Ct. No. 56-2015-
     Plaintiffs and Appellants,       00472965-CU-NP-VTA)
                                         (Ventura County)
v.

UNIVERSITY VILLAGE
THOUSAND OAKS, CCRC,
LLC, et al.,

  Defendants and
Respondents.

             Public policy prohibits arbitration agreements in
residential lease or rental agreements. (Civ. Code, § 1953, subd.
(a)(4).) The question presented here is whether this prohibition
applies to tenancy provisions in a continuing care retirement
community. We hold that it does.
             Five residents of University Village Thousand Oaks
appeal from a judgment confirming a binding arbitration award
against them. (Code Civ. Proc., §§ 904.1, subd. (a)(1), 1294, subd.
(d).) Adrian Harris, Sonya Harris, David Clark, Jennifer
Andrews Clark and Robert James (collectively, appellants) were
residents of University Village Thousand Oaks. 1 Respondents
are: University Village Thousand Oaks, CCRC, LLC; Life Care
Services, LLC; Continuing Life, LLC; Ryan Exline, executive
director of University Village Thousand Oaks; and Warren
Spieker, chair and managing partner of Continuing Life
(collectively, UVTO). Michael South, University Village
Thousand Oaks’s former director of security, was named in the
complaint but he was not included in the arbitration proceedings
and is not a party to this appeal.
             Appellants claim the trial court erred when it ordered
their dispute to arbitration because the arbitration agreements
between the parties are void as contrary to public policy, and
because arbitration without an essential party created the
possibility of “conflicting rulings on a common issue of law or
fact.” (Code Civ. Proc., § 1281.2, subds. (c) & (d).) Appellants
claim the arbitrator: (1) exceeded his authority by failing to
enforce statutory protections for elders, (2) failed to consider or
resolve necessary issues, and (3) refused to hear material
evidence. Appellants also claim UVTO falsified, destroyed and
withheld evidence. We conclude the agreements compelling
arbitration arising from or related to the tenancy provisions of
the continuing care contracts are void. We reverse and remand
for trial.
            FACTUAL AND PROCEDURAL HISTORY
             UVTO is a continuing care retirement community.
Its contracts are governed by the statutory provisions for

      1 James was not a party to the civil complaint but joined in
the arbitration. James died after the arbitration award but his
personal representative authorized the appeal on his behalf.
(Welf. & Inst. Code, § 15657.3.)

                                2
continuing care contracts. (Health & Saf. Code, § 1770 et seq.)
The continuing care contracts here state that the residents’ fees
“shall be deemed payment for your residence, care and services.”
The contracts include “a right to live in” a specified “[living] unit,”
with “initial and continued residence” in the unit. Residents pay
a monthly fee based on the type of residential living unit. One
meal per day is included. If residents request to move to another
unit, they must “pay the Monthly Fee applicable to the new unit.”
If residents require care that cannot be provided in their units,
they are transferred to an assisted living unit, with the monthly
fee adjusted for two additional meals per day. In the contracts,
appellants agreed to binding arbitration for “any and all claims
and disputes arising from or related to the Agreement or to your
residency, care or services at University Village.”
             Appellants sued UVTO, alleging it made false
representations regarding facility security, the amount of future
increases in monthly fees, and whether monthly fees included the
cost to charge electric vehicles. The complaint alleged causes of
action for conversion, negligence per se, negligence, intentional
and negligent infliction of emotional distress, fraudulent and
negligent misrepresentation, false advertising, unfair
competition, elder abuse and declaratory relief.
             The trial court ordered arbitration of appellants’
claims, over their objection. The court found inapplicable the
statutory prohibition of arbitration clauses in dwelling lease or
rental agreements (Civ. Code, § 1953, subd. (a)(4)) because the
agreements are “not standard residential lease agreements.”
             After arbitration, the arbitrator issued an award for
UVTO on all causes of action. The trial court confirmed the
award, and denied appellants’ motion to vacate the award.

                                  3
                            DISCUSSION
                         Statutory preclusion
             Whether an arbitration agreement is precluded by
statute is an issue of law we review de novo. (Cooper v. Lavely &
Singer Professional Corp. (2014) 230 Cal. App. 4th 1, 12.)
             Civil Code section 1953, subdivision (a)(4), voids as
contrary to public policy the waiver of procedural litigation rights
in a dwelling lease or rental agreement. “Inherent in an
arbitration agreement is a waiver of any right to a jury trial.”
(Jaramillo v. JH Real Estate Partners, Inc. (2003) 111
Cal. App. 4th 394, 404 (Jaramillo).) Accordingly, Civil Code
section 1953, subdivision (a)(4), “establishes the general rule that
a tenant of residential premises cannot validly agree, in a
residential lease agreement, to binding arbitration to resolve
disputes regarding [their] rights and obligations as a tenant.”
(Jaramillo, at p. 404, original italics.)
             When the Legislature declares conduct to be contrary
to public policy, the rights provided are unwaivable. (Civ. Code, §
3513; Armendariz v. Foundation Health Psychcare Services, Inc.
(2000) 24 Cal. 4th 83, 101 [waiver of California Fair Employment
and Housing Act remedies contrary to public policy]; Bickel v.
Sunrise Assisted Living (2012) 206 Cal. App. 4th 1, 8-10 [statutory
attorney’s fees and costs for elder abuse unwaivable].) Rights
established for a public purpose cannot be waived through an
arbitration agreement before a dispute arises. (Armendariz, at p.
101; Bickel, at p. 8.)
             In determining whether Civil Code section 1953
applies to continuing care contracts, we first examine the plain
language of the statute, “giving the words their usual, ordinary
meaning.” (People v. Canty (2004) 32 Cal. 4th 1266, 1276.) “The

                                 4
language is construed in the context of the statute as a whole and
the overall statutory scheme, and we give ‘significance to every
word, phrase, sentence, and part of an act in pursuance of the
legislative purpose. [Citation.]’ [Citations.]” (Ibid.) We may
look to legislative history to confirm a plain-meaning
construction. (Hughes v. Pair (2009) 46 Cal. 4th 1035, 1046.)
                            Plain meaning
             Civil Code section 1953, subdivision (a), states, “Any
provision of a lease or rental agreement of a dwelling by which
the lessee agrees to modify or waive any of the following rights
shall be void as contrary to public policy: [¶] . . . [¶] (4) [Their]
procedural rights in litigation in any action involving [their]
rights and obligations as a tenant.”
             The chapter that includes Civil Code section 1953
applies to “all persons who hire dwelling units located within this
state including tenants, lessees, boarders, lodgers, and others,
however denominated.” (Civ. Code, § 1940, subd. (a).) “‘Dwelling
unit’ means a structure or the part of a structure that is used as a
home, residence, or sleeping place by one person who maintains a
household or by two or more persons who maintain a common
household.” (Civ. Code, § 1940, subd. (c).)
             The plain language of Civil Code sections 1940 and
1953 applies to the continuing care contracts here because the
fees paid by appellants include payment for the right to live in a
residence. Appellants are thus “persons who hire dwelling units.”
(Civ. Code, § 1940, subd. (a).) Thus, the protections for
“boarders” and “lodgers” (Civ. Code, § 1940, subd. (a)) apply to
the “board, or lodging” portions of continuing care contracts
(Health & Saf. Code, § 1771, subd. (m)(1)). Because the
allegations in the complaint here include claimed violations of

                                 5
“rights and obligations as a tenant” (Civ. Code, § 1953, subd.
(a)(4)), the arbitration agreements are void.
                             Statutory schemes
              Continuing care contracts are different in some
respects from typical residential rental agreements. But the
differences do not preclude protection of the residents here,
pursuant to Civil Code section 1953.
              Continuing care retirement communities typically
provide care to elderly residents for the duration of their lives in
return for an entrance fee, periodic charges, or both. (Health &
Saf. Code, § 1771, subds. (c)(8), (9) & (e)(1), (3).) Although
appellants paid UVTO an entrance fee, the UVTO contracts did
not provide the residents with any equity interest in the
property. (Health & Saf. Code, §§ 1771, subd. (e)(5), 1788, subd.
(a)(25); see Health & Saf. Code, §§ 1788.2, 1775, subd. (b).) The
periodic charges paid by appellants included a “‘[m]onthly care
fee,’” defined by statute as “the fee . . . for current
accommodations and services, including care, board, or lodging.”
(Health & Saf. Code, § 1771, subd. (m)(1).)
              Appellants lived in independent living units and not
the adjacent assisted living units. Their contracts included
services such as transportation to medical appointments and
shopping areas, assistance in gaining access to supportive
services, and healthcare services, “for as long as you reside in
your Unit.” (See Health & Saf. Code, § 1788, subd. (a)(8), (9).)
But these services do not negate the portion of their payments to
“hire dwelling units” (Civ. Code, § 1940) or for “accommodations
. . . including . . . board, or lodging” (Health & Saf. Code, § 1771,
subd. (m)(1)).

                                  6
              The statutes regarding continuing care contracts
prevail over conflicting statutes regarding the sale or hire of real
property. (Health & Saf. Code, § 1775, subd. (a).) But there is no
conflict with the protections of Civil Code section 1953. While
continuing care contract statutes contain a list of residents’ rights
(Health & Saf. Code, § 1771.7), nothing states that this list is
exclusive. To the contrary, subdivision (a) of section 1771.7 of the
Health and Safety Code provides, “No resident of a continuing
care retirement community shall be deprived of any civil or legal
right, benefit, or privilege guaranteed by law, by the California
Constitution, or by the United States Constitution, solely by
reason of status as a resident of a community.” Similarly, Health
and Safety Code sections 1787 and 1788 list requirements for
continuing care contracts, but do not provide that these
requirements exclude the benefits afforded by other statutes.
              UVTO’s reliance on Lewis Operating Corp. v.
Superior Court (2011) 200 Cal. App. 4th 940 is misplaced. There,
the court considered a different protection in Civil Code section
1953, subdivision (a)(5), which prohibits waiver of the landlord’s
duty of care. The court held that “Civil Code section 1953 is
designed to protect a tenant’s basic, essential need for shelter”
and did not prohibit a waiver of claims regarding recreational use
of a fitness facility on the premises that “was in no way critical”
to the need for shelter. (Lewis Operating Corp., at p. 948.) In
contrast, the arbitration agreements here were applied to claims
dealing with the housing portion of the contracts, i.e., increases
in monthly fees, whether the charges for utilities included
electricity to charge vehicles, and failure to provide promised
building and grounds security.

                                 7
             UVTO cites two cases involving arbitration clauses in
“Residential Care Facilities for the Elderly,” of which continuing
care retirement communities are a subset. (Health & Saf. Code,
§§ 1569, 1771.5.) Neither case concludes that predispute
arbitration agreements are permitted. In Condee v. Longwood
Management Corp. (2001) 88 Cal. App. 4th 215, 219, the court held
that the party seeking arbitration did not have the initial burden
to authenticate the arbitration agreement, and remanded “to
permit the court to consider the other objections raised to the
enforcement of the agreement.” In Garrison v. Superior Court
(2005) 132 Cal. App. 4th 253, 256, the court held that the patient’s
daughter had authority to enter arbitration agreements on her
behalf, and remanded to reconsider the petition to compel
arbitration. Neither case involves the issue presented here.
“Cases are not authority for propositions not considered therein.”
(State Farm Fire & Casualty Co. v. Pietak (2001) 90 Cal. App. 4th
600, 614.)
             We conclude the statutory scheme for continuing care
residential communities does not conflict with the arbitration
provisions of Civil Code section 1953.
                         Legislative intent
             Our review of the legislative history confirms our
plain-meaning construction of Civil Code section 1953.
             Civil Code section 1953 was enacted because it
“‘would help prevent the unknowing signing away of valuable
rights by a tenant who may not fully understand a lease or rental
agreement,’” and is “‘necessary to protect tenants who generally
find themselves in an inferior bargaining position.’” (Jaramillo,
supra, 111 Cal.App.4th at p. 403.) These purposes clearly apply

                                8
to elderly individuals who reside in a continuing care retirement
community.
              The chapter that includes Civil Code section 1953 has
been construed broadly to protect the rights of tenants. For
example, in Rich v. Schwab (1998) 63 Cal. App. 4th 803, 814, the
court interpreted Civil Code section 1942.5, which prohibits
retaliatory rent increases, to apply to persons who lease
mobilehome park spaces upon which the mobilehomes they own
are placed. The court relied on Civil Code section 1940,
subdivision (d), which provides, “Nothing in this section shall be
construed to limit the application of any provision of this chapter
to tenancy in a dwelling unit unless the provision is so limited by
its specific terms.” The court interpreted this provision to apply
Civil Code section 1940 to mobilehome space leases, and not just
leases for dwelling units. (Rich, at pp. 812-813.) The court relied
on the legislative intent to protect mobilehome owners “‘because
of the high cost of moving mobilehomes, the potential for damage
resulting therefrom, the requirements relating to the installation
of mobilehomes, and the cost of landscaping or lot preparation.’”
(Id. at p. 813.) The court concluded that the vulnerability of
mobilehome owners entitled them to “more, rather than less,
protection than other lessees.” (Id. at p. 814.)
              Elders entering continuing care contracts are entitled
to the same protection as mobilehome owners. Both groups face
significant economic barriers to relocating. The Legislature
recognizes that “elderly residents often . . . expend a significant
portion of their savings in order to purchase care in a continuing
care retirement community,” and that there is a need “to protect
the rights of the elderly.” (Health & Saf. Code, §§ 1770, subd. (b),
1776.)

                                 9
             Moreover, the continuing care contract statutes “shall
be liberally construed for the protection of persons attempting to
obtain or receiving continuing care.” (Health & Saf. Code, § 1775,
subd. (e).) To deny residents of a continuing care retirement
community the protection given others who contract for lodging
would be inconsistent with this express policy. The legislative
purposes of both the landlord-tenant laws and the continuing
care contract laws are best served by applying the arbitration
prohibition to the housing component of continuing care
contracts.
                             Conclusion
             Based on our examination of the statutes, the
statutory schemes, and the legislative intent, we conclude Civil
Code section 1953 prohibits enforcement of a predispute
arbitration provision for disputes arising from or related to the
tenancy provisions of a continuing care contract.
             Because we conclude that arbitration should not have
been ordered, we need not resolve the other issues raised on
appeal. 2

      2 We grant appellants’ request to take judicial notice of the
Senate Health and Human Services Committee Analysis of
Senate Bill No. 2077 (1999-2000 Reg. Sess.), amending Health
and Safety Code section 1770 et seq. (Soukup v. Law Offices of
Herbert Hafif (2006) 39 Cal. 4th 260, 279, fn. 9.) We deny
appellants’ request for judicial notice of documents received from
the Department of Social Services after the trial court entered
judgment because our disposition renders those documents
irrelevant. (Id. at p. 295, fn. 21; Vons Companies, Inc. v. Seabest
Foods, Inc. (1996) 14 Cal. 4th 434, 444, fn. 3.)

                                10
                          DISPOSITION
            The judgment is reversed. The case is remanded for
trial. Appellants shall recover their costs on appeal.
            CERTIFIED FOR PUBLICATION.

                                   TANGEMAN, J.
We concur:

             GILBERT, P. J.

             PERREN, J.

                              11
            Rocky Baio and Matthew Guasco, Judges

               Superior Court County of Ventura

                ______________________________

             Law Office of Glenn A. Harris and Glenn A. Harris,
for Plaintiffs and Appellants.

            Lewis Brisbois Bisgaard & Smith, Jeffry A. Miller,
Brittany B. Sutton and George E. Nowotny, for Defendants and
Respondents.