Case Name: Samuel Schwartz, et al. v. The Sovereign Grand Lodge, et al.
Case No.: 1-14-CV-269305

Defendant Odd Fellows Home of California, dba Saratoga Retirement Community (“Defendant”) filed a motion to compel arbitration of all claims alleged in the Complaint. Plaintiff Samuel Schwartz filed a motion for trial preference pursuant to CCP 36(a).

1) Motion to Compel Arbitration

“The prevailing view is that [procedural and substantive unconscionability] must both be present in order for a court to exercise its discretion to refuse to enforce a contract or clause under the doctrine of unconscionability.” (Armendariz v. Foundation Health Psychcare Services [“Armendariz”] (2000) 24 Cal.4th 83, 114 [internal citation and quotation marks omitted].)

Plaintiffs argue that the arbitration agreement is both procedurally and substantively unconscionable. All parties agree that the admission agreement in question is offered to all potential residents on a take-it-or-leave-it basis, and Plaintiffs’ evidence shows that Defendant was asked to remove the arbitration clause and that request was refused. The evidence establishes that the admission agreement with the arbitration provision was presented to her legal representative on a take it or leave it basis, and that Defendants in general are unwilling to negotiate or remove that provision from its agreements with any potential resident.

There is no dispute that the admission agreement was drafted by Defendants and it appears to be a standard, pre-printed form which has characteristics of what is commonly referred to in the present context as a “contract of adhesion,” and all parties have confirmed that it was non-negotiable. See Ajamian v. CantorCO2E (2012) 203 Cal.App.4th 771; Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114. Moreover, Defendant’s failure to provide the relevant arbitration rules to the Plaintiffs before the agreement was signed failed to give them full notice of the terms of the arbitration clause, the procedures applicable to the arbitration, and in what ways their rights would be impacted by an arbitration. See Trivedi v. Curexo Technology Corp. (2010) 189 Cal.App.4th 387, 393; Sparks v. Vista Del Mar Child & Family Services (2012) 207 Cal.App.4th 1511, 1523.

Plaintiffs argue that the arbitration agreement is also substantively unconscionable. The agreement itself provides that both parties shall bear their own attorney fees and the cost of the arbitration. Under the Elder Abuse claims, Plaintiffs would be entitled to recover attorney fees and costs if that claim is successful, and arbitration costs can be quite expensive. The arbitration clause placed the Plaintiffs at greater risk than if Elder Abuse claims are heard in the Superior Court. Ajamian, supra, 203 Cal.App.4th at 798; Armendariz, supra, 24 Cal.4th at pp. 110-111, 113.

The arbitration clause is unfairly one-sided, as it allows Defendants to bring certain claims in State Court, but severely limits the types of claims that Plaintiffs can bring. Armendariz, supra, 24 Cal.4th at 120.

Accordingly, the motion to compel arbitration is DENIED as both procedurally and substantively unconscionable.

Finally, the complaint includes claims brought by Plaintiffs who are not bound by the arbitration provision, in addition to the claims brought as successors in interest to the estate of Joselyn Schwartz. The claims brought by the other Plaintiffs arise out of the same transactions or series of related transactions, and there is a possibility of conflicting rulings on a common issue of law or fact. The motion is therefore also DENIED pursuant to CCP 1281.2(c).

Any stay in effect as a result of filing the Petition to compel arbitration is immediately lifted.

2) Motion for Trial Preference

The Court finds that Plaintiff Samuel Schwartz meets the criteria specified in CCP 36(a)(1) and (2), and the motion for trial preference is GRANTED. Counsel shall personally appear in court, and meet and confer on a trial date within 120 days and other appropriate orders to allow the parties to complete trial preparation, such as orders shortening time for motions and discovery. If necessary, the Court will set a trial setting conference to take place within the next week or two, to allow the parties to confer with witnesses and experts to determine availability, with the understanding the that trial must be set within 120 days after February 3, 2015, or no later than June 1, 2015.