Case Number: BC520168    Hearing Date: November 07, 2014    Dept: 46

Case Number: BC520168
NELLY R RACZA ET AL VS J K RESIDENTIAL SERVICES INC
Filing Date: 09/03/2013
Case Type: Other Employment Complaint (General Jurisdiction)

J.K. Residential Services, Inc.’s Motion to Compel Arbitration of claims by
(1) Diosdad Racza; (2) Manuel Dimas; (3)Vilma Moreira, and (4) Daniel A. Dimas

TENATIVE RULING: The motions by defendant to compel plaintiffs Diosdado D. Racza Edgar Moreira Castro, Vilma Moreira, and Daniel A. Dimas are all DENIED for the reasons stated below. In each case Defendant has waived the right to demand arbitration at this stage in the litigation. Additionally, the court finds that no valid arbitration agreement has been shown to exist as to defendants Moreira and Castro.

This tentative ruling is posted at 11:30 a.m. on 11/6/2014 and the matter is set for hearing on 11/07/2014 at 8:30 a.m. / If there are no parties other than Plaintiff/Petitioner, then Plaintiff/Petitioner may submit to the tentative without appearance by telephonic notification to the clerk of Dept. 46 between 8:00 a.m. and 4:30 p.m. on a date prior to the hearing or morning prior to the hearing by calling (213) 974-5665, and the court will issue the tentative ruling as the final ruling. If the other parties have appeared in the action, then the parties must first confer and all agree that the tentative ruling will be the final ruling on the matter. If the parties to the matter before the court all agree, a representative of the parties may call the clerk and submit without an appearance, and the court will issue the tentative ruling as the final ruling. If an order is required, it should be lodged directly in Dept. 46 with a copy to adverse/other parties, if any.

J.K. Residential Services, Inc.’s Motion to Compel Arbitration of claims by (1) Diosdad Racza and (2) Manuel Dimas

On 9/3/13 Plaintiffs, including Diosdado D. Racza (hereinafter, “D. Racza”) and Manuel A. Dimas (hereinafter, “Dimas”) filed their complaint for (1) Violation of CA Labor Code §§ 510 and 1198 (Unpaid Overtime); (2) Violation of CA Labor Code §§ 1194 and 1194.2 (Unpaid Minimum Wages); (3) Violation of CA Labor Code §§ 226.7 and 512(a) (Unpaid Meal Period Premiums); (4) Violation of CA Labor Code § 226.7 (Unpaid Rest Period Premiums); (5) Violation of CA Labor Code §§ 226(a) & 1174 (Non-Compliant Wage Statements); (6) Violation of CA Labor Code §§ 201 and 203 (Wages Not Timely Paid Upon Termination); (7) Violation of CA Labor Code §§ 2800 and 2802 (Unpaid Business Expenses and (8) Violation of CA Business & Professions Code §§ 17200, et seq. against Ds J.K. Residential Services, Inc. (hereinafter, “D”) and DOES 1-50.

On 10/21/13, Defendant answered the complaint.

On 8/29/14, an “Order Permitting Ps to File a FAC” was filed [per parties’ stipulation] but it does not appear that the FAC has been filed.

Defendant moves this court, per CCP § 1281.2, for an order compelling arbitration of Plaintiff D. Racza’s claims, on the basis that she entered into a valid and enforceable written arbitration agreement with D. D also requests a stay, per CCP § 1281.4.

Re: Diosdado D. Racza

Request for Judicial Notice

Plaintiff D. Racza’s Request for Judicial Notice [“RJN”] (i.e., of the complaint filed 8/30/13 in Case No. 13K12328, styled 3344 Chapman Street, LLC v. Monge, et al.) is GRANTED, to the extent that this court may take judicial notice of its existence and filing date.

Discussion
‘
On 12/19/12, P D. Racza executed a “Dispute Resolution Agreement” (hereinafter, “Agreement”); said Agreement states, in relevant part, as follows:

“Mutual Promise to Resolve Claims by Binding Arbitration:
In signing this Agreement, both the Employer and the Employee agree that all claims or disputes covered by this Agreement must be submitted to binding arbitration, and that this binding arbitration will be the sole and exclusive remedy for resolving any such claim or dispute. This promise to resolve claims by arbitration is equally binding upon the Employer and the Employee.

Consideration and Right to Opt-Out: This Agreement is intended to be of mutual benefit to the Employer and the Employee. The Employee’s employment after the effective date of this Agreement is consideration for and constitutes a commitment by Employee to abide by the terms of the Agreement. If the Employee does not want to accept this Agreement, the Employee must send a signed, written notice to Employer’s Human Resources Department either by mail at J.K. Residential Services, Inc., 2016 Riverside Drive, Los Angeles, California 90039, or by fax at (323) 669-0666, within thirty (30) days of signing this Agreement. The notice should state that the Employee has received a copy of the Agreement and does not wish to accept the Agreement. The Employee understands and acknowledges that any decision to opt-out of this Agreement will not cancel any arbitration agreement(s) previously signed by the Employee with Employer, or affect the Employee’s obligation to arbitrate disputes under the terms of any existing agreement(s).

Claims Covered by the Agreement:This Agreement applies to the following allegations, disputes, and claims for relief Employee may presently or in the future have against the Employer or against its officers, directors, employees, or agents in any way related to Employee’s employment or termination of employment, and all claims that the Employer may presently or in the future have against the Employee in any way related to Employees employment or termination, except as expressly excluded under the section below called ‘Claims Not Covered by the Agreement.’ Claims covered by this Agreement include, but are not limited to: wrongful discharge under statutory and common law; claims for discrimination including, but not limited to, claims based on sex, race, sexual harassment, sexual orientation, marital status, religion, national origin, veteran status, age, pregnancy, leave of absence, medical condition, handicap or disability arising out of Title VII, the Americans with Disabilities Act, the California Fair Employment and Housing Act, the Family and Medical Leave Act, the California Family Rights Act, the Age Discrimination in Employment Act, the Fair Labor Standards Act, the Age Discrimination in Employment Act, the Pregnancy Discrimination Act, the Railroad Labor Act, the Equal Pay Act or the Jones Act or other laws; trade secret claims; claims for theft of Employer property or confidential information; retaliatory discharge; tortuous conduct; exempt status; compensation disputes including wages, overtime, penalties, bonus payments and benefits; contractual violations (although no contractual relationship is hereby created other than this Agreement); ERISA violations; issues involving drug/alcohol testing; and any other statutory and common law claims under any law of the United States or State or local agency. This Agreement is made subject to the Federal Arbitration Act.

Nothing in this Agreement precludes Employee from filing a charge or from participating in an administrative investigation of a charge before an appropriate government agency such as the Equal Employment Opportunity Commission, the California Department of Fair Employment and Housing, the National Labor Relations Board or similar state agency. Similarly, the Agreement does not preclude the parties from conciliating any charge pending before an appropriate government agency.

Claims Not Covered by the Agreement: The following claims or disputes are not covered by this Agreement: claims for unemployment insurance benefits; claims for workers’ compensation benefits; claims under the Private Attorneys General Act (‘PAGA’); claims seeking only monetary recovery where the total amount of the claim does not exceed $7,500; or if both Employee and Employer agree, in writing, that a dispute is not covered by the Agreement. The Waiver of Class Action and Representative Action Rights section below is expressly incorporated herein by reference…

Procedures: Unless expressly agreed otherwise herein, the arbitration proceedings shall be conducted in accordance with the Employment Dispute Resolution Rules (‘EDR Rules’) of the American Arbitration Association (‘AAA’) in effect at the time the demand for arbitration is made, in the office of the AAA closest to Employee’s place of employment or at a mutually agreed upon site. The EDR Rules may be found at www.adr.org in the Rules & Procedures section, or a copy will be provided to you by J.K.’s Human Resources Department upon request.
The Employee is free to hire his/her own attorney for the proceedings at his/her own expense, but is not required to do so…

Discovery: ‘Discovery’ is the term used to describe the ways each party can find out relevant information from the other party. All discovery shall be completed within the time period provided by the Arbitrator, The Arbitrator shall order such discovery as the Arbitrator considers necessary to a full and fair exploration of the issues in dispute. Discovery will consist of the following: (1) Each party shall have the right to take depositions of fact witnesses and any expert witness designated by another party. The Arbitrator shall determine the number of depositions to be taken and the length of each deposition if the parties cannot agree. (2) Each party also shall have the opportunity to obtain documents from the other side through ‘requests for production of documents.’ The Arbitrator shall designate the number of requests which may be propounded if the parties cannot agree. (3) Each party shall have the opportunity to obtain information from the other side through the use of ‘lnterrogatories.’ The Arbitrator shall designate the number of Interrogatories each side may propound if the parties cannot agree. (4) The subpoena right specified below applies to discovery. Additional discovery may be had only where the Arbitrator so orders, upon a showing of substantial need.

Designation of Witnesses: At least 30 days before the arbitration, the parties must exchange lists of witnesses, including any expert, and copies of all exhibits to be used at the arbitration.

Subpoenas: Each party shall have the right to subpoena witnesses and documents for the arbitration.

Selection and Power of Arbitrator: (1) The parties shall attempt to agree upon an arbitrator to hear the dispute. If agreement is not reached within thirty (30) days of receipt of the notice for arbitration, the party seeking arbitration shall request from AAA a list of seven (7) arbitrators experienced in arbitrating labor and/or employment disputes. Each party may reject any or all of the arbitrators on the list. The AAA then assigns an arbitrator from among those acceptable to both parties. If there is no mutually acceptable arbitrator on the first list, the AAA will send a second list, from which each party again may delete any unacceptable arbitrator. If there is no mutually acceptable arbitrator on that list either, the AAA will send out a third list, where the parties will alternately strike names until only one arbitrator is left. (2) The Arbitrator shall apply the substantive law of the state in which the claim arose, or federal law, or both, as applicable to the claim(s) asserted. The Federal Rules of Evidence shall apply. (3) The Arbitrator shall have authority to hear and rule on a motion to dismiss and/or a motion for summary judgment by any party and shall apply the standards governing such motions under the Federal Rules of Civil Procedure. (4) Either party, at its expense, may arrange for and pay the cost of a court reporter to provide a stenographic record of proceedings. The other party may obtain a copy of the record by paying the reporters normal fee for it. (5) Unless Employee and Employer agree otherwise, the Arbitrator will issue a final and binding written decision within 30 days after the hearing is closed. The decision shall set forth a summary of the claim(s), the factual basis and legal principles for the decision, and the award, if any, and the damages or other relief granted, if any. Judgment on any award by the Arbitrator may be entered in any court having jurisdiction thereof.

Judicial Review: Judicial review of the Arbitrator’s final decision is limited to determining whether (1) the award was procured by corruption, fraud or other undue means; (2) there was corruption in the arbitrator; (3) the rights of the party were substantially prejudiced by misconduct of a neutral arbitrator; (4) the arbitrator exceeded his/her power; (5) the rights of the party were substantially prejudiced by the arbitrator’s refusal to postpone the hearing upon sufficient cause being shown or the arbitrator’s refusal to hear evidence material to the controversy; or (6) the arbitrator failed to disclose a ground for disqualification of which the arbitrator was aware. The judicial review may also correct an award and confirm it if it determines that there was an evident miscalculation of figures or an evident mistake in the description of the award; the Arbitrator exceeded his/her powers but the award may be corrected without affecting the merits of the decision; or the award is imperfect in a matter of form, not affecting the merits of the controversy.

No Loss of Rights: This procedure, and the Agreement implementing it, does not create or destroy any legal rights; it only changes the forum in which those rights will be resolved: in a way that may be beneficial to both parties. In other words, the Employee will be able to arbitrate exactly the same substantive claims he/she could bring in court, and the Arbitrator will apply exactly the same laws and principles as would a judge or jury. The Arbitrator can award to the winning party the same recovery the party would be entitled to in a court of law subject to the same limitations used by courts of law…

Arbitration Fees and Costs: The Employer and Employee acknowledge that there are two types of administrative fees and costs associated with the arbitration: (i) a filing fee with the AAA and (ii) payment to the arbitrator for his/her services. The parties agree that such fees will be allocated as follows:
(1) The Employee will pay a filing fee to AAA equal to the lower of the fee for filing a lawsuit in the state or federal court in the jurisdiction where the arbitration claim is filed. The Employer will pay the remaining portion of the filing fee, If Employee is unable to pay the filing fee, Employee may apply for a hardship waiver from the AAA.
(2) The Employer will pay the fees and costs of the Arbitrator and any other fees and costs charged by AAA unique to arbitration.
(3) Each party will be responsible for their own attorney’s fee, if any; however, if any party prevails on a statutory claim which allows the prevailing party to be awarded attorney’s fees, or if there is a written agreement providing for the payment of attorneys fees, the Arbitrator may award reasonable fees to the prevailing party as provided by law.
(4) If either party pursues a claim covered by this Agreement by any means other than arbitration, the responding party will be entitled to dismissal of such action.

Confidentiality:
The Arbitrators decision is confidential. Neither Employee nor the Employer may publicly disclose the terms of the award unless:
• Agreed to in writing by the other party, or
• Subpoenaed by a court to testify, or
• Required by law

Severability:
The provisions of this Agreement are severable and independent, and the invalidity, illegality or unenforceability of any provision herein shall not affect the validity, legality or enforceability of the remaining provisions of this Agreement…”

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 C.A.4th 728, 741 (overruled on other grounds by Le Francois v. Goel (2005) 35 C.4th 1094). 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 C.A.4th 348, 356-57.

Claim of Unconscionability

D. Racza claims that the Agreement is unconscionable. “In determining whether an arbitration clause is unconscionable, courts generally apply a two-prong test. [Citations.] They determine whether the clause is procedurally unconscionable and whether it is substantively unconscionable.” Villa Milano Homeowners Assn. v. Il Davorge (2000) 84 C.A.4th 819, 828.

“’[U]nconscionability has both a “procedural” and a “substantive” element. [Citations.] The procedural element focuses on two factors: “oppression” and “surprise.” [Citations.] “Oppression” arises from an inequality of bargaining power which results in no real negotiation and “an absence of meaningful choice.” [Citations.] “Surprise” involves the extent to which the supposedly agreed-upon terms of the bargain are hidden in a prolix printed form drafted by the party seeking to enforce the disputed terms. [Citations.]’ The substantive prong of unconscionability encompasses ‘“overly harsh” or “one-sided” results.’ Stated another way, ‘[t]he substantive component of unconscionability looks to whether the contract allocates the risks of the bargain in an objectively unreasonable or unexpected manner.’ Both procedural and substantive unconscionability must be present to deny enforcement to the contract, but there may be an inverse relation between the two components, ‘such that the greater the unfair surprise or inequality of bargaining power, the less unreasonable the risk reallocation which will be tolerated.’” Fittante v. Palm Springs Motors, Inc. (2003) 105 C.A.4th 708, 722-723.

(1) Procedural Unconscionability

With respect to procedural unconscionability, “a compulsory predispute arbitration agreement is not rendered unenforceable just because it is required as a condition of employment or offered on a ‘take it or leave it’ basis.” Lagatree v. Luce, Forward, Hamilton & Scripps (1999) 74 C.A.4th 1105, 1127.

Additionally, D. Racza’s declaration is devoid of any facts suggesting that she did not understand the Agreement; rather, she attests only that:

“4. On or about December 19, 2012, I was called into Rowena Vinuya’s office to execute some documents. I was given several sets of documents, including the arbitration agreement now at issue, and instructed to execute all the documents. At that particular moment, I did not have sufficient time to review and/or analysis [sic] the entire arbitration agreement, but I nevertheless signed it.
5. Furthermore, aside from not being able to review the proffered arbitration agreement in its entirety, the contents of the agreement were also never explained to me. Unlike alleged [sic] by Defendant, Ms. Vinuya did not discuss the contents of the arbitration agreement with me prior to me signing it.” (P D. Racza’s Declaration, ¶¶ 4 & 5).

“[T]he law effectively presumes that everyone who signs a contract has read it thoroughly, whether or not that is true. A basic rule of contract law is, ‘”in the absence of fraud, overreaching or excusable neglect, that one who signs an instrument may not avoid the impact of its terms on the ground that he failed to read the instrument before signing it.”’ (Stewart v. Preston Pipeline Inc. (2005) 134 C.A.4th 1565). Moreover, courts must also presume parties understood the agreements they sign, and that the parties intended whatever the agreement objectively provides, whether or not they subjectively did: ‘”Where the parties have reduced their agreement to writing, their mutual intention is to be determined, whenever possible, from the language of the writing alone.” … “[T]he parties’ expressed objective intent, not their unexpressed subjective intent, governs.”’ (In re Tobacco Cases I (2010) 186 C.A.4th 42, 47).” Roldan v. Callahan & Blaine (2013) 219 C.A.4th 87, 93.

“’”Reasonable diligence requires the reading of a contract before signing it. A party cannot use his own lack of diligence to avoid an arbitration agreement.”’(Brookwood v. Bank of America [(1996)] 45 C.A.4th 1667, 1674).” 24 Hour Fitness, Inc. v. Superior Court (1998) 66 C.A.4th 1199, 1215.

Although P D. Racza’s opposition states that “plaintiffs primarily spoke Spanish” (13:3), she did not advise, in her declaration, that there was any such language barrier that prevented her from understanding the Agreement.

Also, the fact that Plaintiff was not provided with the AAA rules does not indicate procedural unconscionability. In Peng v. First Republic Bank (2013) 219 C.A.4th 1462, the 1st District, Division One Court of Appeal determined that an employment contract’s arbitration provision was not rendered procedurally unconscionable by the employer’s failure to attach AAA rules, because they did not have any substantive impact on the Plaintiff’s rights under the arbitration agreement. Similarly here, because all of the Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 C.4th 83, 102 requirements (i.e., it must “(1) provide[] for neutral arbitrators, (2) provide[] for more than minimal discovery, (3) require[] a written award, (4) provide[] for all of the types of relief that would otherwise be available in court, and (5)…not require employees to pay either unreasonable costs or any arbitrators’ fees or expenses as a condition of access to the arbitration forum”) are expressly provided for in the Agreement and because plaintiff has a right to mutually agree to any AAA provider, the AAA rules have no substantive impact on plaintiff’s rights, and not attaching them does not indicate procedural unconscionability.

Plaintiff then has not shown procedural unconscionability.

(2) Substantive Unconscionability

Plaintiff first argues that the Agreement lacks mutuality, but the provisions in the agreement clearly make it mutual. There is an entire paragraph entitled “Mutual Promise to Resolve Claims by Binding Arbitration.”

Other defenses to the Arbitration Contract

Plaintiff also argues that Defendant is forum shopping. This argument is irrelevant, in that it focuses on Defendant’s litigation strategy rather than on the terms of the Agreement.

Plaintiff then complains that the confidentiality provision is substantively unconscionable, but this argument is without merit. This is not a case involving a “large class of customers,” as in Ting v. AT&T (9th Cir. 2003) 319 F.3d 1126. See Kilgore v. KeyBank, Nat. Ass’n (9th Cir. 2013) 718 F.3d 1052, 1059, fn. 9.

The Waiver Defense

Defendant’s contention that the Defendant has waived its right to compel arbitration does have merit. The court finds that Defendant has waived its right to compel arbitration.

“The law on waiver of the right to arbitration is ‘well defined.’ (Keating[ v. Superior Court (1982)] 31 C.3d [584,] at p. 604). Because ‘[a]rbitration is strongly favored,’ courts must ‘closely scrutinize any claims of waiver.’ (Ibid.) A ‘party seeking to establish waiver’ bears a heavy burden of proof. (Id. at p. 605.) ‘[T]here is no “single test” in establishing waiver.’ (Ibid.) ‘[T]he relevant factors include whether the party seeking arbitration (1) has “previously taken steps inconsistent with an intent to invoke arbitration,” (2) “has unreasonably delayed” in seeking arbitration, (3) or has acted in “bad faith” or with “willful misconduct.”’ (Ibid.).” Adolph v. Coastal Auto Sales, Inc. (2010) 184 C.A.4th 1443, 1450.

“Our Supreme Court has more recently expanded its summary of the ‘factors [that] are relevant and properly considered in assessing waiver claims.’ (St. Agnes Medical Center v. PacifiCare of California (2003) 31 C.4th 1187, 1196). ‘”In determining waiver, a court can consider ‘(1) whether the party’s actions are inconsistent with the right to arbitrate; (2) whether “the litigation machinery has been substantially invoked” and the parties “were well into preparation of a lawsuit” before the party notified the opposing party of an intent to arbitrate; (3) whether a party either requested arbitration enforcement close to the trial date or delayed for a long period before seeking a stay; (4) whether a defendant seeking arbitration filed a counterclaim without asking for a stay of the proceedings; (5) “whether important intervening steps [e.g., taking advantage of judicial discovery procedures not available in arbitration] had taken place”; and (6) whether the delay “affected, misled, or prejudiced” the opposing party.’”’
(Ibid.).” Id.

“’Waiver does not occur by mere participation in litigation.’ (Keating, supra, 31 C.3d at p. 605.). ‘”[A]s an abstract exercise in logic it may appear that it is inconsistent for a party to participate in a lawsuit for breach of a contract, and later to ask the court to stay that litigation pending arbitration. Yet the law is clear that such participation, standing alone, does not constitute a waiver [citations], for there is an overriding federal policy favoring arbitration…. [M]ere delay in seeking a stay of the proceedings without
some resultant prejudice to a party [citation], cannot carry the day.”’ (Id. at pp. 605–606.).” Id.

“’California’s arbitration statutes reflect “’a strong public policy in favor of arbitration as a speedy and relatively inexpensive means of dispute resolution.’”’ (St. Agnes, supra, 31 C.4th at p. 1204, italics added.) Accordingly, ‘[p]rejudice typically is found only where the petitioning party’s conduct has substantially undermined this important public policy or substantially impaired the other side’s ability to take advantage of the benefits and efficiencies of arbitration. [¶] For example, courts have found prejudice where the petitioning party used the judicial discovery processes to gain information about the other side’s case that could not have been gained in arbitration [citations]; where a party unduly delayed and waited until the eve of trial to seek arbitration [citation]; or where the lengthy nature of the delays associated with the petitioning party’s attempts to litigate resulted in lost evidence.’ (Ibid.).” Id. at 1451.

Here, Defendant’s attorney Aashish Bhargava (hereinafter, “Bhargava”), attests that she “advised Plaintiff’s counsel early in this litigation that Defendant may seek to compel arbitration.” (Bhargava Declaration, ¶ 4). This lawsuit was filed on 9/3/13. D answered the complaint on 10/21/13. On 1/28/14, Judge Murphy set this matter for a 1/14/15 trial. Notwithstanding this, Defendant’s counsel delayed until 9/8/14 before sending out “correspondence to Plaintiff’s counsel enclosing an executed copy of Plaintiff’s Agreement and requesting Plaintiff to stipulate to binding arbitration.” (Id.). This instant motion was filed on 10/20/14, less than 3 months before the then-scheduled trial and almost exactly one year after Defendant filed its responsive pleading. Plaintiff’s counsel, Boris Koron (hereinafter, “Koron”), moreover, attests that:

“9. In or about October 2013, Defendant’s counsel requested certain plaintiffs involved in the underlying litigations, including Plaintiff Racza, to stipulate to binding arbitration as prescribed by an arbitration agreement the parties entered into. After reviewing the proffered arbitration agreements, plaintiffs, including Plaintiff Racza, declined to stipulate to arbitration…I communicated plaintiffs’ decision to Defendant’s counsel, and advised them that they would have to compel plaintiffs into arbitration.
10. However, Defendant did not immediately request a stay in the action or seek to compel arbitration. Instead, Defendant actively engaged in the discovery process. For an entire year of litigation, Defendant’s counsel continued to express their intent to compel arbitration on plaintiffs, including Plaintiff Racza. I continued to reassure Defendant’s counsel that the plaintiffs, including Plaintiff Racza, would not stipulate to submit to binding arbitration…
14. Since the filing of the related litigations, the parties have actively engaged in the discovery process. I have reviewed and examined the entire discovery that has been exchanged by the parties thus far in these litigations. Defendant has produced more than 3,000 pages of documents in response to plaintiffs’ discovery requests, including the discovery requests from Plaintiff Racza…Defendant has propounded thousands of interrogatories, all of which plaintiffs, including Plaintiff Racza, have responded to. The parties engaged in numerous meet and confer efforts related to discovery issues, including subpoenas that were issued by Defendant but later withdrawn. I have personally exchanged hundreds of e-mails and letters with Defendant’s counsel thus far in the litigation. Defendant noticed Plaintiff Racza’s deposition, along with 13 other plaintiffs from this action, but later took those depositions off calendar…” (Koron Declaration, ¶¶ 9, 10 and 14).

From the court’s perspective Defendant has “unduly delayed and waited until the eve of trial to seek arbitration.”

Re: Daniel A. Dimas

Dimas’ RJN is GRANTED.

The court cannot determine from the declaration of Mr. Dimas whether or not there is a valid arbitration agreement because Mr. Dimas’s declaration is somewhat vague on the issue of expressly stating he does not read English is directed to provide the court with the additional declarations referred to below on or before 11/25/2014.

However, the issue is really moot as the court finds that defendants waived their right to arbitration for the same reasons as above regarding Mr. Racza.

Defendant’s reliance on Craig v. Brown & Root, Inc. (2013) 84 C.A.4th 416 for the proposition that “a unilateral, implied-in-fact arbitration agreement may be enforced against an employee to require the employee to arbitrate all claims against his or her employer” is distinguishable. The 2nd District, Division 4 Court of Appeal in Gorlach v. Sports Club Co. (2012) 209 C.A.4th 1497, 1508-1509 explained:

“Sports Club cites Brown & Root[, supra,] 84 C.A.4th 416 for the proposition that the trial court was required to find an implied contract because the evidence was undisputed that Gorlach continued in Sports Club’s employ after learning about the arbitration agreement. In Brown & Root, plaintiff Craig began working for defendant Brown & Root’s predecessor in 1981. In 1993, Brown & Root established a dispute resolution program that required all employee-employer disputes to be submitted to binding arbitration. In a memorandum sent to its employees, Brown & Root informed its employees: ‘The enclosed brochure explains the procedures as well as how the Dispute Resolution Program works as a whole …. IT APPLIES TO YOU. It will govern all future legal disputes between you and the Company that are related in any way to your employment.’ (Id. at p. 419). Brown & Root sent copies of the memorandum and brochure to Craig’s home in May 1993 and fall 1994. (Id. at pp. 419-420). Brown & Root terminated Craig’s employment in April 1997. Craig sued. Brown & Root petitioned to compel arbitration; the trial court granted the petition, and the Court of Appeal affirmed. It reasoned that because general principles of contract law determine whether the parties have entered a binding agreement to arbitrate, ‘a party’s acceptance of an agreement to arbitrate may be express [citations] or implied-in-fact where, as here, the employee’s continued employment constitutes her acceptance of an agreement proposed by her employer [citations].’ (Id. at p. 420). In the case before it, evidence credited by the trial court showed that Brown & Root twice sent copies of its memorandum and brochure to Craig, in 1993 and again in 1994. (Id. at p. 421). The court concluded: ‘Accordingly, there is substantial evidence (1) that the memorandum and brochure were received by Craig in 1993 and again in 1994; (2) that she continued to work for Brown & Root until 1997; and (3) that she thereby agreed to be bound by the terms of the Dispute Resolution Program, including its provision for binding arbitration.’ (Id. at p. 422).

We do not agree that Brown & Root governs the present case. In Brown & Root, the employee memorandum did not ask employees to sign an arbitration agreement; it simply informed them that any employment-related dispute would henceforth be subject to arbitration. The employee handbook in the present case is different: Rather than unilaterally imposing an arbitration requirement, the handbook told employees that, ‘As a condition to employment, all Team Members must sign the Mutual Agreement to Arbitrate Claims.’ (Italics added.) In other words, the handbook told employees that they must sign the arbitration agreement, implying that it was not effective until (and unless) they did so. Because Gorlach never signed the arbitration agreement, we cannot imply the existence of such an agreement between the parties.”

Similarly, the Agreement here contains a “VOLUNTARY AGREEMENT” provision, which states as follows:

“I acknowledge and agree that I have carefully read each and every page of this Agreement and that I understand its terms. I further represent that I understand that I can review this Agreement with legal counsel of my choosing if I desire of want legal advice related to the Agreement and its terms. I represent that I have entered into this Agreement voluntarily and without duress, pressure or coercion from any person and without relying on any promises or representations by the Employer other than those contained in this Agreement itself. I am not under the influence of alcohol or any other impairing substance, nor am I under any mental incapacity that would affect me at the time of signing this Agreement.” (Motion, Exhibit “A”).

The Agreement likewise implies that it is not effective until and unless they signed same.

Re: Vilma Moreira

Moreira has attested, in relevant part, as follows:

“3. I worked for Defendant J.K. Residential Services, Inc. (‘Defendant’) as a resident manager from about February 1, 2002 until March 21, 2014.
4. I remember receiving documents from Ms. Rowena Vinuya on or about December 19, 2012.
5. Based on my personal knowledge from dealing with Ms. Vinuya, I am informed and believe that Ms. Vinuya did not speak Spanish during the time I worked for Defendant. Throughout my employment with Defendant, Ms. Vinuya communicated with me through an interpreter.
6. I have reviewed the arbitration agreement being proffered by Defendant in support of its motion to compel arbitration. After review, I believe the signature on the arbitration agreement is not mine. I believe the signature was forged. I have reviewed the signatures on Exhibits “6”-“8” attached to the Declaration of Boris Koron in support of my opposition, and I can confirm they are mine. Comparing the signatures on Exhibits “6”-“8”versus the signature on the proffered arbitration agreement, it becomes apparent the signature on the arbitration agreement was not signed by me…” (P Moreira Declaration, ¶¶ 3-6).

The foregoing declaration (as well as the referenced exhibits) infers that P Moreira reads and/or understands Spanish only. This is bolstered by the fact that the Employment Application (Declaration of Boris Koron [hereinafter, “Koron”], Exhibit “6”), the “Employee Acknowledgment of the Medical Provider Network” (Id., Exhibit “7”) and the EEO/Affirmative Action/Veteran Disclosure (Id., Exhibit “8”), all of which were executed on the same date of the Agreement, were Spanish versions. This evidence is stronger than the other co-plaintiffs and is sufficient basis for the court to conclude that the arbitration agreement is not valid as Moreira did not read or understand English.

Additionally, Plaintiff Moreira contends that her signature on the Agreement was forged. Defendant basically skirts over this contention, stating that “P’s signature is exactly the same on each and every one of the documents she signed [on 12/19/12].” (Reply, 3:10-11; emphasis theirs). However, this is insufficient to place the validity of the signature in issue over Plaintiff’s denial of authenticity. For this additional reason, Defendant cannot meet its initial burden of establishing the existence of a valid agreement to arbitrate. The court need not address the parties’ unconscionability or waiver arguments, but in light of the possibility of review does so.

It is apparent that for the same reasons cited with the other plaintiffs, Defendant has waived its rights to enforce the arbitration agreement.Defendant has “unduly delayed and waited until the eve of trial to seek arbitration.”

Re: Edgar Moreira Castro

Castro’s RJN should be GRANTED, to the extent noted above.

The hearing on this motion should be CONTINUED; in the interim, P Castro’s counsel should be instructed to re-submit P Castro’s declaration, with an executed Spanish version and an English version accompanied by a translator’s declaration. P Castro’s declaration should expressly state whether or not he can read and/or understand English. In the alternative, D’s motion should be DENIED.

Plaintiff Castro has attested in his declaration to facts similar to those alleged by Plaintiff Moreira. For the same reasons therefore Defendant cannot meet its initial burden of showing that there is a valid arbitration agreement.

With that said, Defendant has waived the right to compel arbitration, as set forth above.

IT IS SO ORDERED:

Frederick C. Shaller, Judge