Baker v. Italian Maple Holdings, LLC, D069797

• Decision Date: 31 July 2017
• Docket Number: D069797
• Citation: 220 Cal.Rptr.3d 887,13 Cal.App.5th 1152
• Court: California Court of Appeals Court of Appeals
• Parties: Talmadge BAKER, Individually and as Personal Representative, etc., et al., Plaintiffs and Respondents, v. ITALIAN MAPLE HOLDINGS, LLC, et al., Defendants and Appellants.

13 Cal.App.5th 1152

220 Cal.Rptr.3d 887

Talmadge BAKER, Individually and as Personal Representative, etc., et al., Plaintiffs and Respondents,

v.ITALIAN MAPLE HOLDINGS, LLC, et al., Defendants and Appellants.

D069797

Court of Appeal, Fourth District, Division 1, California.

Filed July 31, 2017

Williams Iagmin and Jon R. Williams, San Diego, for Defendants and Appellants.

Pick Law and Lukas I. Pick, San Diego, for Plaintiffs and Respondents.

AARON, J.

I.INTRODUCTION

Marlene Baker LaBerge, a 73-year-old woman, was a resident and patient of a 24-hour skilled nursing facility owned by Italian Maple Holdings, LLC dba La Paloma Healthcare Center (La Paloma). Approximately a week after LaBerge arrived at the facility, La Paloma's staff presented LaBerge with two arbitration agreements that included language required by Code of Civil Procedure ¹ section 1295, subdivision (c). Section 1295, subdivision (c) requires such agreements to include a 30-day "cooling off" period, during which the parties to the agreement may rescind it. Ten days after LaBerge signed the agreements (and therefore, prior to the expiration of the statutorily-required 30-day rescission period), LaBerge passed away.

LaBerge's heirs, Paul LaBerge, Suzanne Marx, and Talmadge Baker (collectively Plaintiffs) sued La Paloma and Plum Healthcare, LLC (together Defendants) for elder abuse, violations of the Patient's Bill of Rights as codified at Health and Safety Code section 1430, negligence, and wrongful death. In response, Defendants filed a petition to compel arbitration based on the two arbitration agreements that LaBerge had executed. The superior court denied the petition to compel arbitration, relying on Rodriguez v. Superior Court (2009) 176 Cal.App.4th 1461, 98 Cal.Rptr.3d 728 ( Rodriguez ) to conclude that the agreements were not effective until the 30-day rescission period passed without either party rescinding the agreements; because LaBerge died before the expiration of the 30-day rescission period, the agreements could not be given effect.

On appeal, Defendants contend that the trial court erred in concluding that the agreements were not effective until after the 30-day rescission period. They argue that this court should decline to follow Rodriguez , supra , 176 Cal.App.4th 1461, 98 Cal.Rptr.3d 728 because that case is factually distinguishable from the instant matter, and further contend that the Rodriguez court erroneously interpreted section 1295, subdivision (c). Alternatively, Appellants maintain that this court should follow the recent case of Scott v. Yoho (2016) 248 Cal.App.4th 392, 204 Cal.Rptr.3d 89 and conclude that the 30-day rescission period contained in section 1295, subdivision (c) violates the Federal Arbitration Act (FAA) and is thus preempted.

We conclude that the trial court erred in interpreting section 1295, subdivision (c), and that the arbitration agreements are valid and enforceable. In reaching this conclusion, we disagree with the court's analysis in Rodriguez , supra , 176 Cal.App.4th 1461, 98 Cal.Rptr.3d 728. Section 1295, subdivision (c) establishes that an arbitration agreement executed by the parties "governs ... until or unless" either party rescinds within the 30-day rescission period. In this case, the parties entered into two agreements that conform with the requirements of section 1295, and that specifically provide that they become effective upon their execution . Pursuant to the plain language of section 1295, subdivision (c), the terms of those agreements governed the parties' relationship upon their execution; the fact that one signatory died before the expiration of the statutory 30-day rescission period does not render the terms of the parties' agreements unenforceable in the absence of other grounds for not enforcing them.²

We therefore reverse the trial court's order denying Defendants' motion to compel arbitration.

II.FACTUAL AND PROCEDURAL BACKGROUND

LaBerge was admitted to La Paloma's 24-hour care nursing facility on September 18, 2014. At that time, she was diagnosed with high blood pressure and osteomyelitis (a bone infection).

A week after LaBerge's admission to the nursing facility, staff from the facility presented LaBerge with two arbitration agreements. The first one was entitled "Attachment F [¶] Arbitration of Medical Malpractice Disputes [¶] (Optional for Residents and Facility)" (Attachment F, some capitalization omitted). The second one was entitled "Attachment G [¶] Arbitration of Dispute Other Than Medical Malpractice [¶] (Optional for Residents and Facility)" (Attachment G, some capitalization omitted).

Attachments F and G both contained the following language:

"By signing this arbitration agreement below, the Resident agrees to be bound by the foregoing arbitration provision. The Resident acknowledges that he or she has the option of not signing this arbitration agreement and not being bound by the arbitration provisions contained herein. The execution of this arbitration agreement is not a precondition to receiving medical treatment or for admission to the Facility. This arbitration agreement may be rescinded by written notice from either party, including the Resident's Legal Representative and/or Agent, if any, and as appropriate, to the other party within thirty (30) days of signature."

Both arbitration agreements bear a date stamp of September 25, 2014, which was seven days after LaBerge was admitted to the nursing facility. There is no other evidence in the record regarding when LaBerge signed these agreements or the circumstances surrounding her signing.

On October 5, 2014, LaBerge began sweating profusely and became very nauseated. The nursing facility staff found her vomiting in the restroom. The record discloses that LaBerge asked the staff for assistance, but the staff left LaBerge alone. At approximately 8:30 p.m., staff found LaBerge on the floor of the bathroom. Her face had turned blue. LaBerge had fallen and had sustained serious injuries to her head and body.

When the paramedics arrived, the nursing facility staff informed them that they had seen LaBerge suffer a heart attack.

LaBerge passed away after she was taken to the hospital. An autopsy revealed that she died as a result of blunt force injuries to her head and torso.

Plaintiffs, the heirs to LaBerge's estate, brought suit against Defendants, alleging four causes of action, including elder abuse, a violation of Health and Safety Code section 1430, negligence, and wrongful death. Defendants filed a petition to compel arbitration, asserting that LaBerge had agreed, pursuant to Attachments F and G, to arbitrate the claims asserted in the lawsuit brought by Plaintiffs. In setting forth their position, Defendants averred in their motion to compel arbitration that LaBerge was competent at the time she signed the agreements. In anticipation of an argument by Plaintiffs that the agreements at issue did not comply with certain requirements of section 1295, subdivision (c), Defendants also asserted that La Paloma was engaged in interstate commerce, that the arbitration agreements were therefore governed by the FAA, and that the FAA preempts any state law requirements that apply only to certain arbitration agreements, and not to all contracts.³

Plaintiffs opposed the petition to compel arbitration, arguing that under the holding in Rodriguez , supra , 176 Cal.App.4th 1461, 98 Cal.Rptr.3d 728, Defendants' motion to compel must be denied.

The trial court relied on Rodriguez to conclude that because LaBerge died before the expiration of the 30-day rescission period under section 1295, subdivision (c), Defendants could not establish that an enforceable arbitration agreement exists. The trial court did not address Defendants' contention that the FAA preempts the requirements imposed by section 1295, subdivision (c).

Defendants filed a timely appeal.

III.DISCUSSION

A. Standards relating to motions to compel arbitration

The party seeking to compel arbitration has the burden of proving the existence of an enforceable arbitration agreement by a preponderance of the evidence, and a party opposing the petition bears the burden of proving by a preponderance any fact necessary to its defense. ( Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972, 64 Cal.Rptr.2d 843, 938 P.2d 903 ( Engalla ); Rosenthal v. Great Western Fin. Securities Corp . (1996) 14 Cal.4th 394, 413, 58 Cal.Rptr.2d 875, 926 P.2d 1061 ( Rosenthal ) ["Because the existence of the agreement is a statutory prerequisite to granting the petition [to compel arbitration], 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."].)

In considering a petition to compel arbitration, "the court sits as a trier of fact, weighing all the affidavits, declarations, and other documentary evidence, as well as oral testimony received at the court's discretion to reach a final determination." ( Engalla , supra , 15 Cal.4th at p. 972, 64 Cal.Rptr.2d 843, 938 P.2d 903.) At a hearing on a petition to compel arbitration, the issue of whether an arbitration agreement exists is a "preliminary question to be determined by the court...." ( Pagett v. Hawaiian Ins. Co. (1975) 45 Cal.App.3d 620, 622, 119 Cal.Rptr. 536 ; see § 1281.2.) If that preliminary question requires the resolution of factual issues, then the court must resolve such issues in the course of the hearing on the petition.

" ‘Ordinarily, we review a denial of a petition to compel arbitration for abuse of discretion. [Citation.] However, where the trial court's denial of a petition to arbitrate presents a pure question of law, we review the order de novo.’ " ( Mendez v. Mid-Wilshire...