Sherman v. Atria Senior Living, Inc.

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AMANDA SHERMAN, Plaintiff, v. ATRIA SENIOR LIVING, INC., Defendant.

No. 2:20-cv-02460-MCE-KJN

United States District Court, E.D. California

September 27, 2021

MEMORANDUM AND ORDER

MORRISON C. ENGLAND, SENIOR UNITED STATES DISTRICT JUDGE.

Plaintiff Amanda Sherman (“Plaintiff”) seeks to recover from her former employer, Defendant Atria Senior Living, Inc. (“Defendant”), for injuries sustained when she was purportedly wrongfully terminated based on her military deployment. Presently before the Court is Defendant's Motion to Compel Arbitration and Stay Proceedings (ECF No 23), Plaintiff's Motion for Judgment on the Pleadings (ECF No. 20), and Plaintiff's Motion to Strike New Issues Raised in Defendant's Reply to its Motion to Compel (ECF No. 31). For the reasons set forth below, Defendant's Motion to Compel is GRANTED, Plaintiff's Motion for Judgment on the Pleadings is DENIED as moot, and her Motion to Strike is DENIED.^[1]

STANDARD

“The [Federal Arbitration Act (“FAA”)] was enacted in 1925 in response to widespread judicial hostility to arbitration agreements.” AT&T Mobility LLC v Concepcion, 131 S.Ct. 1740, 1745 (2011). Under the FAA arbitration agreements “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. Section 2 of the FAA “reflect[s] . . . a ‘liberal federal policy favoring arbitration.'” Concepcion, 131 S.Ct. at 1745 (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983)). At the same time, however, § 2 reflects “the ‘fundamental principle that arbitration is a matter of contract.'” Id. (quoting Rent-A-Center, W., Inc. v. Jackson, 130 S.Ct. 2772, 2776 (2010)). “[Section] 3 requires courts to stay litigation of arbitral claims pending arbitration of those claims, ‘in accordance with the terms of the agreement'; and § 4 requires courts to compel arbitration ‘in accordance with the terms of the agreement' upon the motion of either party to the agreement . . . .” Id. at 1748.

Thus, “[b]y its terms, the [FAA] leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed.” Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985) (citing 9 U.S.C. §§ 3, 4) (emphasis in original). “The standard for demonstrating arbitrability is not a high one; in fact, a district court has little discretion to deny an arbitration motion, since the [FAA] is phrased in mandatory terms.” Republic of Nicaragua v. Standard Fruit Co., 937 F.2d 469, 475 (9th Cir. 1991). “Moreover, the scope of an arbitration clause must be interpreted liberally and ‘as a matter of federal law, any doubts concerning the scope of arbitrable disputes should be resolved in favor of arbitration.'” Concat LP v. Unilever, PLC, 350 F.Supp.2d 796, 804 (N.D. Cal. 2004) (quoting Moses H. Cone, 460 U.S. at 24; Three Valleys Mun. Water Dist. v. E.F. Hutton & Co., 925 F.2d 1136, 1144 (9th Cir. 1991); French v. Merrill Lynch, 784 F.2d 902, 908 (9th Cir. 1986)).

Thus, “[a]n order to arbitrate . . . should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage.” United Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83 (1960).

In determining whether to compel arbitration, the court may not review the merits of the dispute. Instead, the court must limit its inquiry to three steps: (1) whether the contract containing the arbitration agreement evidences a transaction involving interstate commerce; (2) whether there exists a valid agreement to arbitrate; and (3) whether the dispute(s) fall within the scope of the agreement to arbitrate. Standard Fruit, 937 F.2d at 476-78.

ANALYSIS

Defendant seeks to compel Plaintiff to arbitrate her claims against it on the basis that she entered valid arbitration agreement in connection with her employment agreeing to do so. In support of its Motion, Defendant submitted a copy of a “Agreement to Arbitrate, ” which contains Plaintiff's electronic signature, and provides:

Agreement to Arbitrate. You and Atria Senior Living Inc. and/or one of its wholly-owned subsidiaries (including their former, current, and/or future parents, subsidiaries, affiliates, divisions, related corporations, limited liability companies, partnerships, insurers, successor and predecessor entities, and each of their respective current and former employees, directors, officers, shareholders, partners, members, agents, attorneys, contractors, and representatives) (the "Company") agree to use binding arbitration, instead of going to court, for any "Covered Claims" (as defined below) that arise or have arisen between you and the Company. Your acceptance of your offer of employment with the Company is acceptance of this Arbitration Agreement.

Except as noted below, the Covered Claims under this Agreement are any disputes arising out of or in any way related to your employment (including the formation of and any separation from employment) with the Company.

You understand and agree that arbitration is the only litigation forum for resolving Covered Claims, and that you are waiving the right to a trial before a judge or jury in federal or state court in favor of arbitration. In accordance with this Agreement, the Arbitrator shall have the authority to award the same relief that would have been available in court pursuant to the law governing your Covered Claim(s).

Decl. of Julie Goetz, ECF No. 23-7, ¶ 15, Ex. A. In opposing Defendant's Motion, however, Plaintiff contends that consent to arbitrate has not been established, that the agreement is unconscionable in any event, and, finally, that it fails the strict notice requirements required under the Uniformed Services Employment and Reemployment Rights Act (“USERRA”).

A. Defendant Has Established That An Agreement To Arbitrate Exists.

While the FAA expresses a strong public policy in favor of enforcing arbitration agreements, that policy only becomes relevant if there is an arbitration agreement to be enforced in the first place. Baker v. Osborne Dev. Corp., 159 Cal.App.4th 884, 892 (2008). “[T]he question of whether a party is bound by an agreement containing an arbitration provision is a ‘threshold question' for the court to decide.” Microchip Tech. Inc. v. U.S. Philips Corp., 367 F.3d 1350, 1357 (Fed. Cir. 2004) (citing John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543 (1964)) (applying Ninth Circuit law). In determining whether an agreement to arbitrate exists, the district court “appl[ies] general state-law principles of contract interpretation, while giving due regard to the federal policy in favor of arbitration by resolving ambiguities as to the scope of arbitration in favor of arbitration.” Wagner v. Stratton Oakmont, Inc., 83 F.3d 1046, 1049 (9th Cir. 1996); see also Pokorny v. Quixtar, Inc., 601 F.3d 987, 994 (9th Cir. 2010).

Because the existence of an arbitration agreement is a statutory prerequisite to granting a petition to compel arbitration, the party seeking to enforce the agreement bears the burden of proving the agreement exists by a preponderance of the evidence. Rosenthal v. Great W. Fin. Secs. Corp., 14 Cal.4th 394, 413 (1996). “When considering a motion to compel arbitration, a court applies a standard similar to the summary judgment standard of Federal Rule of Civil Procedure 56.” Concat LP, 350 F.Supp.2d at 804 (quoting McCarthy v. Providential Corp., No. C 94-0627 FMS, 1994 WL 387852, at *2 (N.D. Cal. July 19, 1994)). “Only when there is no genuine issue of material fact concerning the formation of an agreement should a court decide as a matter of law that the parties did or did not enter into such an agreement.” Id. (citing Three Valleys Mun. Water Dist., 925 F.2d at 1141).

Under California law, “‘[g]eneral principles of contract law determine whether the parties have entered into a binding agreement to arbitrate.'” Sefarin v. Balco Properties Ltd., LLC, 235 Cal.App.4th 165, 173 (2015) (quoting Museum Tower Assn. v. Pinnacle Market Development (US) LLC, 55 Cal.4th 223, 236 (2012)). Thus, the essential element of mutual assent of the parties to be bound by the terms of the contract must be established for a valid arbitration agreement to exist. Id. (citing Donovan v. RRL Corp., 26 Cal.4th 261, 270 (2001)). Further, mutual assent of the parties to contract must be communicated by each party to one another. Cal. Civ. Code. § 1565. “Mutual assent is determined under an objective standard appl[ied] to the outward manifestations or expressions of the parties, i.e., the reasonable meaning of their words and acts, and not their unexpressed intentions or understandings.” Id. (quoting Alexander v. Codemasters Group Limited, 104 Cal.App.4th 129, 141 (2002)).

According to Plaintiff, she cannot be held to the terms of the arbitration agreement because she “adamantly denies ever being presented with, seeing, receiving, or signing an arbitration agreement, and Atria makes no claims about any conduct by Ms. Sherman that manifested her assent.” ECF No. 25 at 5. The problem with this argument is that

Defendant provides ample evidence that Plaintiff was the only one that could access its password protected system to apply her electronic signature to the arbitration agreement and that she did so during onboarding. Goetz Decl., ECF No. 23-7 7-18, Ex. A. This evidence is persuasive, and Plaintiff's bald and unsupported assertions that she did not sign the agreement or does not remember doing so are insufficient to establish any legitimate...