Theresa D. v. MBK Senior Living LLC

73 Cal.App.5th 18

288 Cal.Rptr.3d 87

THERESA D., Plaintiff and Respondent,

v.MBK SENIOR LIVING LLC et al., Defendants and Appellants.

A163312

Court of Appeal, First District, Division 3, California.

Filed November 30, 2021

Kathryn Stebner, Karman Marie Guadagni, Deena Kay Zacharin, Stebner & Associates, 870 Market Street, Suite 1212, San Francisco, CA 94102, Kirsten Marie Fish, Needham Kepner & Fish LLP, 1960 The Alameda Ste. 210, San Jose, CA 95126-1451, for Plaintiff and Respondent.

Jay Laurence Raftery, Thomas Beach, Darryl Craig Hottinger, Beach | Cowdrey | Jenkins, LLP, 500 East Esplanade Drive, Suite 1400, Oxnard, CA 93036, for Defendants and Appellants.

TUCHER, P.J.

Defendants, operators of the Muirwoods Memory Care assisted living facility (Muirwoods), a residential care facility for the elderly (RCFE) appeal an order denying their petition to compel arbitration of plaintiff Theresa D.'s claims against them for elder abuse and neglect.¹ We agree with the trial court that plaintiff is not bound by an arbitration agreement her daughter signed on her behalf when placing her at Muirwoods, and accordingly we affirm the order.

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff brought this action on April 2, 2021, through her son and attorney-in-fact Raymond Donahue, alleging that plaintiff was a resident at Muirwoods from July 12, 2020 through March 20, 2021, that all adult residents of Muirwoods were dependent adults or elders, that defendants knew she suffered from dementia and was at risk of falls, that they failed to provide adequate care and supervision, and that as a result she suffered four falls at Muirwoods, the fourth fall resulting in a fractured hip and deteriorating health; she became bedbound, she suffered emotional distress, and her need for care and assistance increased. The complaint also alleges she was left in unsanitary conditions and infected with scabies while at Muirwoods.

Defendants moved to compel arbitration of the dispute, asserting that plaintiff's daughter Kellie Tennier, as her authorized representative, signed an arbitration agreement pursuant to her authority to make health care decisions for plaintiff when assisting in her placement at Muirwoods. The arbitration provision required binding arbitration of "any and all claims and disputes arising from or related to this Agreement or to your residency, care or services at the Community," with the exception of claims involving "unlawful detainer proceedings (eviction) or any claims that can be brought in small claims court," and it included a delegation clause providing that an arbitrator would decide whether a claim or dispute must be arbitrated under the arbitration clause. The arbitration was to be conducted by Judicial Arbitration and Mediation Services (JAMS). The clause specified that the agreement to arbitrate could be withdrawn within 30 days and that "agreeing to arbitration is not a condition of admission to the Community."

In support of their motion, defendants provided the declaration of Jaime Gralund, the former executive director of Muirwoods, who stated Tennier had identified herself as plaintiff's authorized representative with authority to make the health care decisions required for admission and to execute the residence and services agreement, including the arbitration agreement. According to Gralund, "I discussed with Ms. Tennier ... that signing the Arbitration Agreement was not required for admission to the facility." Defendants also provided a document entitled Physician Orders for Life-Sustaining Treatment, dated July 1, 2020, signed by Tennier as "Legally Recognized Decisionmaker," and JAMS's "Comprehensive Arbitration Rules & Procedures," which provide that the arbitrator will determine "[j]urisdictional and arbitrability disputes, including disputes over the formation, existence, validity, interpretation, or scope of the agreement under which Arbitration is sought, and who are proper Parties to the Arbitration."

In opposition to the motion to compel arbitration, plaintiff argued the arbitration provision was unenforceable because she did not sign it and Tennier had neither actual nor ostensible authority to do so on her behalf, and because it was unconscionable. She submitted evidence that Donahue rather than Tennier had a general power of attorney to act on her behalf, and plaintiff's counsel declared that Tennier had been neither appointed as plaintiff's agent under an advance health care directive nor appointed as plaintiff's conservator.

The trial court denied the motion to compel arbitration, ruling that Tennier was not plaintiff's agent for purposes of binding her to arbitration. Defendants have appealed from this order.

DISCUSSION

I. General Legal Principles

In California, " ‘[g]eneral principles of contract law determine whether the parties have entered a binding agreement to arbitrate.’ " ( Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US ), LLC (2012) 55 Cal.4th 223, 236, 145 Cal.Rptr.3d 514, 282 P.3d 1217.) Although public policy favors arbitration, that policy " ‘ " ‘does not extend to those who are not parties to an arbitration agreement.’ " ’ " ( Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1057, 201 Cal.Rptr.3d 318 ( Espejo ).)

We review an order denying a motion to compel arbitration for abuse of discretion unless the matter presents a pure question of law, in which case our review is de novo. ( Espejo , supra , 246 Cal.App.4th at pp. 1056–1057, 201 Cal.Rptr.3d 318.) To the extent the court's decision is based on disputed facts, we review the decision for substantial evidence. ( NORCAL Mutual Ins. Co. v. Newton (2000) 84 Cal.App.4th 64, 71, 100 Cal.Rptr.2d 683.) There is no dispute as to the operative facts here, and our review is accordingly de novo.

When a party has filed a petition to compel arbitration, the trial court must determine in a summary proceeding whether an "agreement to arbitrate the controversy exists." ( Code Civ. Proc., §§ 1281.2, 1290.2 ; Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 412–413, 58 Cal.Rptr.2d 875, 926 P.2d 1061.) In that proceeding, "[b]ecause the existence of the agreement is a statutory prerequisite to granting the petition, the petitioner bears the burden of proving its existence by a preponderance of the evidence." ( Rosenthal , at p. 413, 58 Cal.Rptr.2d 875, 926 P.2d 1061 ; accord, Engalla v. Permanente Medical Group , Inc. (1997) 15 Cal.4th 951, 972, 64 Cal.Rptr.2d 843, 938 P.2d 903.)

When parties have agreed to arbitration, challenges to the validity of the underlying contract are for the arbitrator to decide, but challenges to the validity of the arbitration clause itself are generally for the court. ( Nielsen Contracting, Inc. v. Applied Underwriters, Inc. (2018) 22 Cal.App.5th 1096, 1107–1108, 232 Cal.Rptr.3d 282 (Nielsen Contracting ).) There is an exception, however, when "the parties have clearly and unmistakably agreed to delegate questions regarding the validity of the arbitration clause to the arbitrator." ( Id . at p. 1108, 232 Cal.Rptr.3d 282 ; accord, Aanderud v. Superior Court (2017) 13 Cal.App.5th 880, 891–892, 221 Cal.Rptr.3d 225 ( Aanderud ) [noting "clear and unmistakable evidence that the parties intended to arbitrate arbitrability"].) In such a case, a delegation clause will generally be enforced. ( Nielsen Contracting , at p. 1108, 232 Cal.Rptr.3d 282.)

II. Who Decides Whether an Arbitration Agreement Exists?

The fundamental issue in this case is whether an agreement between plaintiff and defendants to arbitrate controversies arising out of her care at Muirwoods was ever formed—that is, whether such an agreement exists. Because plaintiff did not sign the agreement personally, the answer to that question turns on whether Tennier had authority to agree to arbitration on her behalf. Defendants urge us to treat this threshold issue as one for the arbitrator, rather than for the court, under the delegation provision, which states, "You agree that an arbitrator will decide any question about whether a claim or dispute must be arbitrated under this arbitration clause," and under the rules of JAMS.

We first note that defendants acknowledge that the trial court was authorized to make a preliminary finding as to the existence of an arbitration agreement, determining whether there was a written agreement and whether it was signed on behalf of plaintiff. Indeed, they would be hard pressed not to do so in light of the well-established rule that "a trial court has no power to order parties to arbitrate a dispute that they did not agree to arbitrate." ( Bouton v. USAA Casualty Ins. Co. (2008) 43 Cal.4th 1190, 1202, 78 Cal.Rptr.3d 519, 186 P.3d 1.) But, defendants contend, questions regarding the scope of Tennier's ability to bind plaintiff to arbitration fall outside this rule and are for the arbitrator, not for the court, to decide.

As authority, defendants rely upon Rent-A-Center, West , Inc. v. Jackson (2010) 561 U.S. 63, 130 S.Ct. 2772, 177 L.Ed.2d 403 ( Rent-A-Center ). The issue there was whether, under the Federal Arbitration Act ( 9 U.S.C. § 1 et seq. ), a court could decide the unconscionability of an arbitration agreement where the agreement explicitly assigned that question to the arbitrator. ( Rent-A-Center , at p. 65, 130 S.Ct. 2772.) The agreement there, between the plaintiff and his employer, granted the arbitrator " ‘exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability or formation of this Agreement including, but not limited to any claim that all or any part of this Agreement is void or voidable.’ " ( Id . at p. 66, 130 S.Ct. 2772.) In seeking to avoid arbitration of his employment discrimination action, the plaintiff argued the arbitration agreement as a whole was unconscionable, but he did not challenge the delegation provision in particular. ( Id . at pp. 71–73, 130 S.Ct. 2772.) The high court concluded the...