Case Number: BC677057 Hearing Date: March 14, 2018 Dept: 46

Case Number: BC674316
RENE MARGARY VS ARGAOSY UNIVERSITY-LOS ANGELES/EMDC

Filing Date: 08/31/2017
Case Type: Othr Breach Contr/Warr-not Fraud

03/14/2018
Motion to Compel Arbitration

TENTATIVE RULING

Motion is GRANTED pursuant to the pertinent provisions of the 2/5/2016 Enrollment Agreement between the parties, CCP §1281.2, and the points and authorities stated below. Action is ordered stayed. The matter is ordered to be resolved by binding arbitration. The parties are ordered to commence arbitration within 20 days with the American Arbitration Association (“AAA”) under its Commercial Arbitration Rules and applicable Supplementary Procedures for Consumer Related Disputes (“AAA Rules”) and in accordance with the terms of this Jury Waiver and Agreement to Binding, Individual Arbitration quoted at length below. The agreement states that the rules for the arbitration may be found at the following web site: www.adr.org; or, by calling 18007787879. OSC Re: Status of Arbitration is set for hearing for 11/1/2018 at 8:30 a.m. in Dept. 46.

DISCUSSION

The Federal Arbitration Act (hereinafter, “FAA”) provides, in pertinent part, that:

“A written provision in…a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract…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).

“A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition [the court]…for an order directing that… arbitration proceed in the manner provided for in such agreement.” (9 U.S.C. § 4).

“Section 2 is a congressional declaration of a liberal federal policy favoring arbitration agreements, notwithstanding any state substantive or procedural policies to the contrary. The effect of the section is to create a body of federal substantive law of arbitrability, applicable to any arbitration agreement within the coverage of the Act.’ Moses H. Cone Memorial Hospital v. Mercury Construction Corp. (1983) 460 U.S. 1, 24…[T]his body of substantive law is enforceable in both state and federal courts. Southland Corp. v. Keating (1984) 465 U.S. 1, 11-12…Section 2…embodies a clear federal policy of requiring arbitration unless the agreement to arbitrate is not part of a contract evidencing interstate commerce or is revocable ‘upon such grounds as exist at law or in equity for the revocation of any contract.’ 9 U.S.C. § 2.” Perry v. Thomas (1987) 482 U.S. 483, 489.

CCP §1281.2 states, in pertinent part, as follows:

On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists, unless it determines that:

(a) The right to compel arbitration has been waived by the petitioner; or

(b) Grounds exist for the revocation of the agreement.

(c) A party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact . . . .

CCP §1281.4 states in part that:

If a court of competent jurisdiction, whether in this State or not, has ordered arbitration of a controversy which is an issue involved in an action or proceeding pending before a court of this State, the court in which such action or proceeding is pending shall, upon motion of a party to such action or proceeding, stay the action or proceeding until an arbitration is had in accordance with the order to arbitrate or until such earlier time as the court specifies.

CCP §1281.6 provides the following:

If the arbitration agreement provides a method of appointing an arbitrator, that method shall be followed . . . In the absence of an agreed method, or if the agreed method fails or for any reason cannot be followed, or when an arbitrator appointed fails to act and his or her successor has not been appointed, the court, on petition of a party to the arbitration agreement, shall appoint the arbitrator.

When a petition is made to the court to appoint a neutral arbitrator, the court shall nominate five persons from lists of persons supplied jointly by the parties to the arbitration or obtained from a governmental agency concerned with arbitration or private disinterested association concerned with arbitration. The parties to the agreement who seek arbitration and against whom arbitration is sought may within five days of receipt of notice of the nominees from the court jointly select the arbitrator whether or not the arbitrator is among the nominees. If the parties fail to select an arbitrator within the five-day period, the court shall appoint the arbitrator from the nominees.

On or about 2/5/16, Plaintiff entered into a written Agreement with Defendant Argosy entitled “Enrollment Agreement” (hereinafter, “Agreement”). (See Complaint). The Agreement states as follows:

“JURY WAIVER AND AGREEMENT TO BINDING ARBITRATION

Student and Argosy University, irrevocably waive our rights to a trial by jury and agree instead that any and all disputes, no matter how described, pleaded or styled, between me and Argosy University (including its parent and past and present affiliates, employees, agents, and landers), or related to any aspect of my relationship with or any act or omission by Argosy University, (“Claim”) shall be resolved by individual binding arbitration, conducted by the American Arbitration Association (“AAA”) under its Commercial Arbitration Rules and applicable Supplementary Procedures for Consumer Related Disputes (“AAA Rules”) and in accordance with the terms of this Jury Waiver and Agreement to Binding, Individual Arbitration (“Arbitration Agreement”). Student can obtain a copy of the AAA Rules at www.adr.org or by calling 18007787879.

This Arbitration Agreement, however, does not modify Student’s right, if any, to file a grievance with any state educational licensing agency or accrediting body.

1. Student is strongly encouraged to first attempt to resolve the Claim by using the General Student Complaint Procedure outlined in the Catalog.

2. Neither party shall file or maintain any lawsuit in court against the other, and any suit filed in violation of this Arbitrati4 Agreement shall be dismissed by the court in favor of arbitration conducted pursuant to this Arbitration Agreement. The parties agree that the moving party shall be entitled to an award of costs and fees of compelling arbitration.

3. The arbitration shall take place before a single, neutral arbitrator in the federal judicial district in which Student resides unless the parties agree otherwise.

4. Student will be responsible for paying a portion of the AAA filing fee at the time his/her Claim is filed in an amount equal to $200 or the applicable filing fee of the court of general jurisdiction in the district/circuit near me, whichever fee is less. The parties shall bear the expense of their own attorneys, experts and witnesses, unless the applicable law provides, and the arbitrator determines, otherwise.

5. Student agrees not to combine or consolidate any Claims with those of other students, such as in a class or mass action, or to have any Claims be arbitrated or litigated jointly or consolidated with any other person’s claims. Further, the parties agree that the arbitrator shall have no authority to join or consolidate claims by more than one person. I understand that I may opt out of this single case provision by delivering via certified mail return receipt a written statement to that effect to the Vice President and Senior Counsel of Argosy University, EDMC at 210 Sixth Avenue, Suite 3300 Pittsburgh, PA 15222 within 30 days of my first execution of an Enrollment Agreement.

6. The Federal Arbitration Act (FAA), including all its substantive and procedural provisions and related federal decisional law shall govern this Arbitration Agreement to the fullest extent possible. All determinations as to the scope, enforceability, validity and effect of this Arbitration Agreement shall be made by the arbitrator, and not by a court. However, any issue concerning the validity of paragraph 5 above must be decided by a court, and an arbitrator does not have authority to consider the validity of paragraph 5. If for any reason, paragraph 5 is found to be unenforceable, any putative class or mass action may only be heard in court on a nonjury basis and may not be arbitrated under this Agreement.

7. The arbitrator shall have the power to award any remedy that directly benefits the parties to this Arbitration Agreement (provided the remedy would be available from a court under the law where the Arbitration Agreement was executed) but not the power to award relief for the benefit of anyone not a party to this Arbitration Agreement.

8. Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction.

9. Notwithstanding any provision in the Catalog or Enrollment Agreement, this Arbitration Agreement shall not be modified except by written agreement signed by both parties. Any or all of the provisions set forth in this Arbitration Agreement may also be waived by the party against whom the Claim is asserted, but such waiver shall be in writing, physically signed (not merely electronically signed) by the party waiving, and specifically identify the provision or provisions being waived. Any such waiver shall not waive or affect any other portion of the Arbitration Agreement.

10. This Arbitration Agreement shall survive the termination of Student’s relationship with Argosy University.

11. If any part(s) of this Arbitration Agreement are found to be invalid or unenforceable, then such specific part(s) shall be of no force and effect and shall be severed, but the remainder of the Arbitration Agreement shall continue in full force and effect.

STUDENT UNDERSTANDS AND ACKNOWLEDGES THAT S/HE IS WAIVING HIS/HER RIGHT TO A JURY TRIAL, TO ENGAGE IN DISCOVERY

(EXCEPT AS PROVIDED IN THE AAA RULES), AND TO LITIGATE THE DISPUTE OR CLAIM IN ANY COURT. FURTHER, STUDENT

UNDERSTANDS AND ACKNOWLEDGES THAT S/HE WILL NOT HAVE THE RIGHT TO PARTICIPATE AS A REPRESENTATIVE OR MEMBER OF ANY CLASS ACTION AGAINST ARGOSY UNIVERSITY.” (Id.) (emphasis in original).

Under California law, arbitration agreements are valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. Blake v. Ecker (2001) 93 Cal.App.4th 728, 741 (overruled on other grounds by Le Francois v. Goel (2005) 35 Cal.4th 1094.) ”Arbitation is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.” United Steelworkers of America v. Warrior & Gulf Nav. Co. (1960) 363 U.S. 574, 582. “‘There are exceptions to the general rule that a nonsignatory to an agreement cannot be compelled to arbitrate and cannot invoke an agreement to arbitrate, without being a party to the arbitration agreement.’” JSM Tuscany, LLC v. Superior Court (2011) 193 Cal.App.4th 1222, 1236-37 (citing Westra v. Marcus & Millichap Real Estate Investment Brokerage Co., Inc. (2005) 129 Cal.App.4th 759, 765; Rowe v. Exline (2007) 153 Cal.App.4th 1276, 1284). “[A] signatory plaintiff who sues on a written contract containing an arbitration clause may be estopped from denying arbitration if he sues nonsignatories as related or affiliated persons with the signatory entity.” JSM Tuscany, LLC, 193 Cal.App.4th at 1238 (citing Turtle Ridge Media Group, Inc. v. Pacific Bell Directory (2006) 140 Cal.App.4th 828, 833; Metalclad Corp. v. Ventana Environmental Organizational Partnership (2003) 109 Cal.App.4th 1705, 1713-14.) “As the court in Turtle Ridge explained: ‘[T]he equitable estoppel doctrine applies when a party has signed an agreement to arbitrate but attempts to avoid arbitration by suing nonsignatory defendants for claims that are ‘based on the same facts and are inherently inseparable’ from arbitrable claims against signatory defendants.”’ JSM Tuscany, LLC, 193 Cal.App.4th at 1238 (citing Turtle Ridge, 140 Cal.App.4th at 833.) “Claims that rely upon, make reference to, or are intertwined with claims under the subject contract are arbitrable.” JSM Tuscany, LLC, 193 Cal.App.4th at 1238 (citing Boucher v. Alliance Title Co. (2005) 127 Cal.App.4th 262, 269-70.)

A party petitioning to compel arbitration has the burden of establishing the existence of a valid agreement to arbitrate and the party opposing the petition has the burden of proving, by a preponderance of the evidence, any fact necessary to its defense. (Banner Entertainment, Inc. v. Superior Court (1998) 62 Cal.App.4th 348, 356-57.)

Plaintiff has pled the agreement; therefore, Defendants need do no more to prove its existence. Plaintiff bears the burden of proving it is unenforceable, which she has made no attempt to do. Therefore, Defendants’ motion is GRANTED. The court compels the parties to submit to arbitration of this case, and the case is STAYED pending arbitration.

IT IS SO ORDERED:

Frederick C. Shaller, Judge