Filed 3/9/20 De Elenes v. Pengson CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION TWO

MARIA DE ELENES et al.,

Plaintiffs and Respondents,

v.

JOEL A. PENGSON et al.,

Defendants and Respondents;

SILVERSCREEN HEALTHCARE, INC. et al.,

Defendants and Appellants.

E071331

(Super.Ct.No. CIVDS1812153)

OPINION

APPEAL from the Superior Court of San Bernardino County. Brian S. McCarville, Judge. Affirmed.

Lewis Brisbois Bisgaard & Smith, Kathleen M. Walker, Lann G. McIntyre and Tracy D. Forbath for Defendants and Appellants.

Valentine Law Group, Kimberly A. Valentine, Jennifer L. Turner and Joseph F. Fighera for Plaintiffs and Respondents.

No appearance for Defendants and Respondents.

Plaintiffs and respondents (1) Maria de Elenes (Mother), through her successors in interest; (2) Anna Vargas (Daughter); and (3) other parties sued defendants and appellants Silverscreen Healthcare, Inc., which does business as Asistencia Villa Rehabilitation and Care Center (Villa) and other parties. The causes of action include (A) negligence; (B) elder abuse (Welf. & Inst. Code, § 15600 et seq.); (C) a violation of the Patients’ Bill of Rights (Health & Saf. Code, § 1430); and (D) wrongful death. The trial court denied Villa’s petition to compel arbitration. (Code Civ. Proc., § 1281.2.) Villa contends the trial court erred by denying its petition. We affirm the order.

FACTUAL AND PROCEDURAL HISTORY

A. COMPLAINT

The facts in this subsection are taken from the complaint. Villa is a 24-hour skilled nursing facility. Mother was born in February 1927. Mother was a Villa resident from August 20, 2015, to May 6, 2017. When admitted to Villa, Mother suffered dementia, hypertension, coronary artery disease, and type two diabetes. During Mother’s stay at Villa, due to Villa’s lack of care, Mother suffered “severe dehydration resulting in acute renal failure, withholding of diabetes treatment, preventable pressure ulcers, sepsis which went without assessment or treatment . . . , and her untimely death.”

It was further alleged in the complaint, “At all relevant times, [Mother’s] daughter[, Daughter,] held power of attorney for [Mother], and was her medical decision-maker and was thus entitled to notification by the facility of changes in her condition, recommended changes to [Mother’s] treatment, and was entitled to be informed of risks and benefits of proposed treatments prior to implementation of same.”

B. PETITION TO COMPEL ARBITRATION

Villa petitioned the trial court to compel arbitration. Villa asserted Daughter executed an arbitration agreement on behalf of Mother when Mother was admitted to Villa. Villa asserted the arbitration agreement should be enforced. Villa attached a copy of the arbitration agreement to its petition. Daughter signed the arbitration agreement in two places, both under a paragraph that read, “By virtue of Resident’s consent, instruction and/or durable power of attorney, I hereby certify that I am authorized to act as Resident’s agent in executing and delivering of this Arbitration Agreement. I acknowledge that the Facility is relying on this representation.”

C. OPPOSITION

Mother and Daughter (collectively, plaintiffs) opposed the petition. Plaintiffs asserted (1) Daughter was not Mother’s agent; (2) the arbitration agreement was substantively and procedurally unconscionable; and (3) because some of the claims were not subject to arbitration, the petition should be denied so as to not risk conflicting rulings.

In regard to Daughter not being Mother’s agent, Plaintiffs asserted Villa failed to provide evidence that Daughter was authorized to act on behalf of Mother. Plaintiffs wrote, “[Villa] lack[s] any evidence in support of [its] position that [Mother] provided to her daughter authority to execute on her behalf any documents, including any agreement to arbitrate. [Mother] was not present when these documents were signed, and she provided no express authority to her daughter.”

Daughter’s declaration was included with the opposition. Daughter declared that Mother was not present when Daughter signed the arbitration agreement in Villa’s business office. Further, Daughter declared, “My mother never provided me with verbal authorization to sign any documents on her behalf at the time I was in the Business Office at [Villa], nor did she provide me any such authorization at any time during the course of her admission at [Villa].”

D. REPLY

Villa replied to Plaintiffs’ opposition. Villa asserted the arbitration agreement was not unconscionable. Villa contended all the parties were subject to arbitration so there would be no risk of conflicting rulings. As to Daughter’s authority to sign the arbitration agreement on behalf of Mother, Villa asserted that Daughter “certified that she was authorized to act on behalf of the decedent in executing the subject contract; ‘By virtue of Resident’s consent, instruction and/or durable power of attorney, I hereby certify that I am authorized to act as Resident’s agent in executing and delivering of this Arbitration Agreement. I acknowledge that the Facility [is] relying on this representation.’ [Citation.] [Daughter] has not explained to this Court why she acted in the manner she did and made such a certification if she indeed lacked the authority to act.” (Boldface and underscore in original.)

E. HEARING

The trial court held a hearing on Villa’s petition. The trial court found the arbitration agreement was not unconscionable. The court then said, “However, I don’t find the defense has proved by a preponderance of the evidence that the document that was, in fact, appropriately signed and appropriately—that the person who did sign was authorized to do it.”

Villa asserted that Daughter signed the arbitration agreement representing that she had authorization to act on Mother’s behalf due to Mother’s “consent, instruction and/or durable power of attorney.” Therefore, Villa asserted the burden should shift to Plaintiffs to explain the inconsistencies between (1) the arbitration agreement, in which Daughter represented that she had authority to act on behalf of Mother; and (2) Daughter’s declaration, in which she disclaimed any power to act on behalf of Mother at the time Mother was admitted to Villa.

Plaintiffs responded, “[T]here’s no evidence and [Villa has] not met [its] burden to establish that [Daughter] had the authority to bind [Mother] in waiving her constitutional rights.” Plaintiffs contended, “[I]t’s very clear that [Villa has] the burden to prove that there’s an enforceable agreement. Time existed for them to conduct discovery to do what needed to be done to gather evidence to answer these questions before you. That hasn’t happened.”

The trial court said, “You have the burden. It hasn’t tilted. [¶] The motion to compel arbitration is denied.”

DISCUSSION

Villa contends the trial court erred in finding that Daughter lacked authority to bind Mother for purposes of the arbitration agreement.

“[W]hen a petition to compel arbitration is filed and accompanied by prima facie evidence of a written agreement to arbitrate the controversy, the court itself must determine whether the agreement exists and, if any defense to its enforcement is raised, whether it is enforceable. Because 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. If the party opposing the petition raises a defense to enforcement—either fraud in the execution voiding the agreement, or a statutory defense of waiver or revocation [citation]—that party bears the burden of producing evidence of, and proving by a preponderance of the evidence, any fact necessary to the defense.” (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413.)

“It is essential to the existence of a contract that there should be: [¶] 1. Parties capable of contracting; [¶] 2. Their consent; [¶] 3. A lawful object; and [¶] 4. A sufficient cause or consideration.” (Civ. Code, § 1550.) The trial court found there were not two parties capable of contracting and, thus, there was not an enforceable agreement. Specifically the trial court found Villa failed to prove that Daughter had authority to act as Mother’s agent.

“Agency ‘can be established either by agreement between the agent and the principal, that is, a true agency [citation], or it can be founded on ostensible authority, that is, 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, and a reasonable reliance thereon by such third persons.” [Citations.] “ ‘ “The principal must in some manner indicate that the agent is to act for [her], and the agent must act or agree to act on [her] behalf and subject to [her] control.” . . .’ [Citations.] Thus, the ‘formation of an agency relationship is a bilateral matter. Words or conduct by both principal and agent are necessary to create the relationship.’ ” ’ ” (Warfield v. Summerville Senior Living, Inc. (2007) 158 Cal.App.4th 443, 448, italics omitted (Warfield).)

Typically we would apply the substantial evidence standard of review to the trial court’s factual finding concerning Daughter’s authority to act as Mother’s agent. (Baxter v. Genworth North America Corporation (2017) 16 Cal.App.5th 713, 722.) However, “where the trier of fact has . . . concluded that the party with the burden of proof did not carry the burden and that party appeals, it is misleading to characterize the failure-of-proof issue as whether substantial evidence supports the judgment. . . . [¶] ‘Thus, where the issue on appeal turns on a failure of proof at trial, the question for a reviewing court becomes whether the evidence compels a finding in favor of the appellant as a matter of law. [Citations.] Specifically, the question becomes whether the appellant’s evidence was (1) “uncontradicted and unimpeached” and (2) “of such a character and weight as to leave no room for a judicial determination that it was insufficient to support a finding.” ’ ” (Sonic Manufacturing Technologies, Inc. v. AAE Systems, Inc. (2011) 196 Cal.App.4th 456, 465-466.)

As set forth ante, agency can be established in two ways. The first method is by agreement between the agent and the principal. (Warfield, supra, 158 Cal.App.4th at p. 448.) Villa did not provide an express agreement between Mother and Daughter. Villa’s provided Daughter’s signature under a paragraph that reads, “By virtue of Resident’s consent, instruction and/or durable power of attorney, I hereby certify that I am authorized to act as Resident’s agent in executing and delivering of this Arbitration Agreement. I acknowledge that the Facility is relying on this representation.”

The trial court could reasonably reject Daughter’s representation that she had Mother’s consent or power of attorney because (1) the paragraph provided by Villa was not a sworn statement by Daughter, and (2) Daughter provided a sworn statement reflecting she did not have authority to bind Mother to the arbitration agreement. Thus, the trial court could rely upon Daughter’s declaration to conclude there was not an express agreement between Mother and Daughter for Daughter to act on behalf of Mother when signing the arbitration agreement.

The second method for establishing agency is for the principal, i.e., Mother, to conduct herself or provide words that indicate an agreement for the agent, i.e., Daughter, to act on her behalf. (Warfield, supra, 158 Cal.App.4th at p. 448.) Villa did not provide evidence of Mother’s actions or words. Villa only provided evidence of Daughter’s representations concerning Mother. For example, Daughter signed under a preprinted paragraph reflecting that Mother’s “consent, instruction and/or durable power of attorney” gave Daughter the authority to act on Mother’s behalf. However, there is no evidence of Mother’s words or actions. Because there is no evidence reflecting Mother’s words or actions, the trial court could reasonably conclude that Villa failed to establish ostensible agency. In sum, we conclude the trial court did not err.

Villa contends it met its burden because “plaintiffs admitted in their complaint that ‘[a]t all relevant times’ [Daughter] ‘held power of attorney’ for [Mother] ‘and was her medical decision-maker[.]’ Plaintiffs judicially admitted that [Daughter] held a power of attorney and thus had authority to execute the arbitration agreement on behalf of [Mother].”

A factual admission in a pleading is a judicial admission. (Valerio v. Andrew Youngquist Construction (2002) 103 Cal.App.4th 1264, 1271.) A judicial admission “ ‘is fundamentally different from evidence: It is a waiver of proof of a fact by conceding its truth, and it has the effect of removing the matter from the issues.’ ” (Ibid.) In the trial court, Villa asserted the evidence supported a finding that the arbitration agreement is enforceable. In the lower court, Villa did not raise the issue of a judicial admission, which is a fundamentally different argument than one focused on evidence. (Ibid.) Because Villa did not raise the issue of a judicial admission in the trial court, we cannot reverse the order on that basis. In other words, Villa forfeited the issue for appellate review by failing to raise it in the trial court. (People v. Redd (2010) 48 Cal.4th 691, 718; North Coast Business Park v. Nielsen Construction Co. (1993) 17 Cal.App.4th 22, 28-29.)

Villa contends it can raise the judicial admission theory for the first time on appeal because it is a pure issue of law. Daughter asserts the power of attorney alleged in the complaint did not extend to allowing Daughter to waive Mother’s constitutional right to a jury trial. Thus, there is a dispute concerning the scope of Daughter’s authority pursuant to the alleged power of attorney. Neither party directs this court to where, in the record, there is a copy of the power of attorney. Because there is a dispute concerning the scope of the power of attorney and it does not appear that a copy of the power of attorney is in the record, we are not persuaded that the judicial admission theory may be raised for the first time on appeal.

Villa contends that public policy favors arbitration and therefore any doubts should be resolved in favor of arbitration. “[T]he strong policy in favor of enforcing arbitration agreements does not arise until an enforceable agreement is established.” (Baker v. Osborne Development Corp. (2008) 159 Cal.App.4th 884, 892-893.) Villa has not established that an enforceable arbitration agreement exists; therefore, we will not address the public policy in favor of arbitration.

DISPOSITION

The order is affirmed. Respondents are awarded their costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1).)

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

MILLER

J.

We concur:

McKINSTER

Acting P. J.

FIELDS

J.