Court Opinion

ID: 4700575
Source: CourtListenerOpinion
Date Created: 2021-07-01 19:05:29.240894+00
Date Added: 2024-06-11T08:06:11.360366
License: Public Domain

Filed 7/1/21 Hawkins v. Rechnitz CA2/8
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         SECOND APPELLATE DISTRICT

                                      DIVISION EIGHT

OPAL RENEE HULET                                              B304828
HAWKINS,
                                                              (Los Angeles County
     Plaintiff and Respondent,                                 Super. Ct. No. 19STCV30411)

                   v.

SHLOMO RECHNITZ et al.,

   Defendants and Appellants.

     APPEAL from orders of the Superior Court of Los Angeles
County. Barbara M. Scheper, Judge. Affirmed.

     Giovanniello Law Group, Alexander F. Giovanniello,
Thomas C. Swann and Erik Bressler for Defendants and
Appellants.

      Garcia & Artigliere, Stephen M. Garcia and William M.
Artigliere for Plaintiff and Respondent.

                                        **********
       Defendants and appellants Shlomo Rechnitz, Centinela
Skilled Nursing & Centre East, LLC, doing business as Osage
Healthcare & Wellness Centre, Brius Management Company and
Rockport Administrative Services, LLC appeal from the orders
denying their motions to compel arbitration of the elder abuse
complaint filed by plaintiff and respondent Opal Renee Hulet
Hawkins. The trial court found the arbitration agreement could
not be enforced against plaintiff because defendants failed to
prove plaintiff’s mother had authority to sign the agreement on
plaintiff’s behalf.
       We affirm.
       FACTUAL AND PROCEDURAL BACKGROUND
       In December 2015, plaintiff was admitted to defendant
Centinela Skilled Nursing & Centre East, a residential nursing
facility doing business as Osage Healthcare & Wellness Centre
(hereafter Osage Healthcare). Defendants Brius Management
Company and Rockport Administrative Services are entities
owned by defendant Shlomo Rechnitz and are involved in the
operation and management of Osage Healthcare.
       During the admission process, plaintiff’s mother, Martha
Hulet, signed several documents on behalf of her daughter,
including an admission agreement and an arbitration agreement.
Ms. Hulet signed all of the documents on December 28, 2015, and
is identified in those documents variously as plaintiff’s
“[r]epresentative,” “agent” or “[l]egal [g]uardian.” The arbitration
agreement identifies Ms. Hulet as plaintiff’s “ ‘Legal
Representative’ and/or ‘Agent.’ ” None of the documents was
signed by plaintiff. The record does not contain any power of
attorney executed by plaintiff or any other document expressly
authorizing Ms. Hulet to act as plaintiff’s agent.
       The arbitration agreement invokes the Federal Arbitration
Act (FAA; 9 U.S.C. § 1 et seq.) and provides that any dispute

                                 2
relating to the care and treatment of plaintiff shall be submitted
to and resolved by binding arbitration. The description of claims
covered by the agreement specifically includes any and all claims
for elder abuse. The signatories to the arbitration agreement are
Martha Hulet and an illegible signature of a representative for
Osage Healthcare (the actual name of the facility is handwritten
as “Centinela SN and Wellness Centre” but the parties do not
raise the misnomer as an issue).
       Three days before the admission paperwork was signed,
plaintiff was apparently examined by a doctor who reported that
she suffered from numerous ailments including “delirium.” The
doctor checked a box on the examination form that stated
plaintiff had “the capacity to understand and make decisions.”
       In August 2019, after plaintiff had been discharged from
the Osage Healthcare facility, plaintiff, by and through her
guardian ad litem, filed an action for elder abuse against
defendants. The entity defendants and defendant Rechnitz are
sued as alter egos of Osage Healthcare. Plaintiff alleged that at
the time of her admission to defendants’ facility, she had suffered
a “brain aneurism that affected her short-term memory” as well
as other ailments, but she was still “able to walk and talk.”
Plaintiff alleged numerous acts of neglect and negligent medical
care by defendants, including overmedication that resulted in her
being transferred to a hospital “where her stomach was pumped,”
lack of supervision resulting in a fall and a broken ankle, and
general decline in health.
       The entity defendants filed a motion to compel arbitration,
attaching the five-page arbitration agreement signed by
plaintiff’s mother. Defendant Rechnitz, who was served later,
filed a separate motion to compel arbitration raising the same
arguments as the entity defendants. Defendants argued that
plaintiff’s mother was her lawful agent and plaintiff was

                                 3
therefore bound by the arbitration agreement signed on her
behalf.
       In opposing the motions, plaintiff submitted a declaration
by Ms. Hulet. Ms. Hulet stated she did not have a power of
attorney to act on her daughter’s behalf and that her daughter
had never said she wanted or authorized her to act as her agent.
       The trial court denied defendants’ motions, finding that
defendants failed to show plaintiff authorized her mother “either
expressly or ostensibly” to act as her agent in signing the
arbitration agreement.
       Defendants appealed (case No. B304828). Defendant
Rechnitz filed a separate appeal (case No. B307251) from the
denial of his motion after being dismissed from the appeal of the
entity defendants’ motion. We consolidated the appeals for
briefing, argument and decision under case No. B304828.
       Plaintiff filed a motion to dismiss the consolidated appeal
and for sanctions. We are not persuaded the appeal is frivolous
and therefore deny the motion to dismiss and request for
sanctions. However, we affirm the orders denying the motions to
compel arbitration on the merits.
                            DISCUSSION
       Where, as here, the trial court’s decision regarding
arbitrability depends on the resolution of disputed facts, “we
review the decision for substantial evidence.” (Baker v. Italian
Maple Holdings, LLC (2017) 13 Cal.App.5th 1152, 1158; accord,
Engineers & Architects Assn. v. Community Development Dept.
(1994) 30 Cal.App.4th 644, 653, & Lopez v. Bartlett Care Center,
LLC (2019) 39 Cal.App.5th 311, 317 (Lopez).)
       The factual issue here is straightforward: Was there
credible evidence Martha Hulet had authority to execute the
arbitration agreement on plaintiff’s behalf? The answer is no.

                                4
       It is undisputed there was no written power of attorney
authorizing Martha Hulet to act as plaintiff’s agent, nor any
words or conduct by plaintiff expressly authorizing Ms. Hulet to
act on her daughter’s behalf. Therefore, plaintiff can be bound by
the arbitration agreement only if there is evidence of ostensible
agency.
       “[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).) “ ‘To hold otherwise would give any agent,
not the authority, but the naked power to bind his principal to
any contract within the general scope of his duties, however
fantastic or detrimental to the principal’s interest such contract
may be.’ ” (Valentine v. Plum Healthcare Group, LLC (2019)
37 Cal.App.5th 1076, 1087 (Valentine).)
       There must be evidence of “ ‘some intentional conduct or
neglect on the part of the alleged principal creating a belief in the
minds of third persons that an agency exists.’ ” (Flores, supra,
148 Cal.App.4th at p. 588.) “ ‘[T]he “formation of an agency
relationship is a bilateral matter. Words or conduct by both
principal and agent are necessary to create the relationship.” ’ ”
(Ibid.; see also Civ. Code, § 2317 [“Ostensible authority is such as
a principal, intentionally or by want of ordinary care, causes or
allows a third person to believe the agent to possess.”].)
       Defendants, as the parties seeking to compel arbitration,
bore the burden of proving there was an agency relationship
between Martha Hulet and plaintiff in order to establish plaintiff
was bound by the arbitration agreement. (Pinnacle Museum
Tower Assn. v. Pinnacle Market Development (US), LLC (2012)
55 Cal.4th 223, 236 [party moving to compel arbitration bears

                                 5
burden of proving enforceable agreement to arbitrate]; accord,
Lopez, supra, 39 Cal.App.5th at p. 317; Young v. Horizon West,
Inc. (2013) 220 Cal.App.4th 1122, 1128 (Young) [“ ‘Even the
strong public policy in favor of arbitration does not extend to
those who are not parties to an arbitration agreement or who
have not authorized anyone to act for them in executing such an
agreement.’ ”].)
       The evidence presented by defendants consisted almost
entirely of copies of the admission paperwork signed by Martha
Hulet. Defendants argued that plaintiff never objected to her
mother signing the admission paperwork so she could be
admitted to Osage Healthcare. Defendants conceded that
plaintiff, at the time of admission, suffered from “cognitive
impairment, seizure disorder, delirium, hypokalemia and failure
to thrive” but that she nevertheless had the capacity to authorize
her mother to act as her agent. In so arguing, defendants offered
only a one-page excerpt from plaintiff’s medical records in which
a doctor apparently examined plaintiff three days before the
admission paperwork was signed by Ms. Hulet. The doctor
acknowledged plaintiff’s various ailments but also opined she had
“the capacity to understand and make decisions.”
       Defendants did not offer evidence plaintiff was present in
the same room with her mother when her mother signed the
arbitration agreement (or any of the admission paperwork) on
December 28, 2015, or that plaintiff was otherwise aware her
mother was signing those documents. Nor did defendants offer
any evidence of plaintiff’s mental state or medical condition on
December 28, 2015.
       Defendants contend the one-page medical record stating
that on December 25, 2015, a doctor believed plaintiff had the
capacity to understand and make decisions, along with the fact
plaintiff remained silent and did not object to her mother signing

                                6
the admission paperwork, was sufficient to support a finding of
ostensible agency.
       Similar arguments have been rejected by numerous courts.
For example, in Young, supra, 220 Cal.App.4th 1122, the court
affirmed the denial of a skilled nursing facility’s motion to compel
arbitration of a patient’s negligence complaint. (Id. at p. 1127.)
The patient’s daughter had signed the arbitration agreement on
behalf of her mother. Young explained, “[t]he trial court here was
clearly not convinced that plaintiff did anything to permit an
inference of ostensible authority. The admissions coordinator . . .
stated in her declaration that it was her ‘custom and practice’ to
provide the arbitration agreement to the resident ‘and/or his legal
representative/agent [and] answer any questions that he/she may
have.’ . . . [E]ven if we assume that [the admissions coordinator]
showed the agreement to the ‘resident’ (i.e., plaintiff) on this
occasion, there is no evidence of a response by plaintiff that
permitted a reasonable belief that her daughter was authorized
to sign an arbitration agreement as her agent. Likewise, in its
role as trier of fact the superior court was entitled to reject as
insufficient [the admissions coordinator’s] statement that ‘[b]ased
on my custom and practice, I would have confirmed with [the
resident] that [her daughter] had her permission to sign
documents on the resident’s behalf.’ ” (Id. at p. 1134, fn. omitted.)
      Similarly in Lopez, supra, 39 Cal.App.5th 311, a residential
nursing facility moved to compel arbitration of a resident’s
negligence action where the only signatory to the arbitration
agreement was the resident’s daughter. (Id. at pp. 313–314.)
The facility submitted a declaration of one of its employees who
attested she heard the resident give her daughter the authority
to sign the arbitration agreement. (Id. at p. 315.) The daughter
submitted an opposing declaration stating her mother never gave
her authority to act as her agent and that her mother was not

                                 7
even in the room when she was given the agreement to sign. (Id.
at pp. 315–316.)
       In affirming the trial court’s denial of the facility’s motion,
the court reasoned, “[o]ur task begins and ends with a
determination of whether substantial evidence supports the trial
court’s factual finding [the plaintiff] did not authorize [her
daughter] 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.]” ’ [Citation.] We conclude [the daughter’s]
declaration submitted in opposition to the petition to compel
arbitration constitutes substantial evidence supporting the trial
court’s finding [the daughter] had no authority, either actual or
ostensible, to waive [the plaintiff’s] trial rights.” (Lopez, supra,
39 Cal.App.5th p. 318; see also Valentine, supra, 37 Cal.App.5th
at pp. 1087–1089 [wife’s purported silence and failure to object to
husband signing arbitration agreement on her behalf insufficient
to support finding of ostensible agency] & Flores, supra, 148
Cal.App.4th at pp. 587–588 [nonsignatory patient not bound by
arbitration agreement signed by husband because no evidence
demonstrated he was her agent].)
       Like the defendants in Young, Lopez, Valentine and Flores,
defendants failed to satisfy their movant’s burden. Defendants
failed to demonstrate with credible evidence that plaintiff’s
mother had the authority to sign the arbitration agreement on
plaintiff’s behalf, and the trial court was within its authority as
factfinder to credit Ms. Hulet’s opposing declaration. Substantial
evidence supports the trial court’s denial of defendants’ motions.
       Finally, we disagree with defendants’ contention the trial
court’s ruling runs afoul of Kindred Nursing Ctrs. Ltd. P’ship v.
Clark (2017) ___U.S.___ [137 S.Ct. 1421, 1424–1425] (Kindred).

                                  8
       In Kindred, the United States Supreme Court reversed a
decision by the Kentucky Supreme Court that declined to give
effect to two arbitration agreements signed by family members of
two nursing home residents. The two family members (the wife
and daughter respectively of the two residents) each held general
powers of attorney to act on behalf of their loved ones. (Kindred,
supra, 137 S.Ct. at pp. 1425–1426.) The Kentucky Supreme
Court concluded that because the rights to a jury trial and access
to the courts were guaranteed by the state Constitution, a
general power of attorney did not provide authority for an agent
to waive those rights and agree to arbitration unless it
“ ‘expressly so provide[d].’ ” (Kindred, at p. 1426.) Kindred held
that Kentucky’s judge-made rule “single[d] out arbitration
agreements for disfavored treatment” and therefore violated the
FAA. (Kindred, at p. 1425.)
       But Kindred did not conclude the FAA preempts generally
applicable state laws regarding agency or the evidentiary
requirements to prove an agreement, including an arbitration
agreement, falls within the scope of authority, if any, conferred
by a principal.
       In denying defendants’ motions, the trial court applied
general principles of agency law and did not apply or articulate
any rule or requirement unique to arbitration agreements.
Defendants say that plaintiff did not contest her mother’s
authority to sign the other admission documents and therefore
the arbitration agreement was singled out for disfavored
treatment in direct violation of Kindred.
       We are not persuaded. The other documents signed by
plaintiff’s mother during the admission process are not at issue.
The focus of plaintiff’s argument and the trial court’s ruling was
the arbitration agreement because that is the only agreement
defendants sought to enforce. (See Garcia v. KND Development

                                9
52, LLC (2020) 58 Cal.App.5th 736, 743–744; id. at p. 747 [“We
cannot infer discrimination from the mere fact that the court’s
ruling was limited to appellants’ arbitration agreements, as only
those agreements were at issue on appellants’ petition.”].)
                         DISPOSITION
      The orders denying defendants’ motions to compel
arbitration are affirmed. Plaintiff shall recover her costs of
appeal.

                        GRIMES, Acting P. J.
      WE CONCUR:

                        WILEY, J.

                        OHTA, J.*

*     Judge of the Los Angeles Superior Court, assigned by the
Chief Justice pursuant to article VI, section 6 of the California
Constitution.

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