O'Connor v. Pletcher

• Decision Date: 16 October 2015
• Docket Number: B259610
• Citation: O'Connor v. Pletcher, B259610 (Cal. App. Oct 16, 2015)
• Court: California Court of Appeals
• Parties: BRITTANY O'CONNOR, Plaintiff and Respondent, v. MITCHELL PLETCHER et al., Defendants and Appellants.

BRITTANY O'CONNOR, Plaintiff and Respondent, v. MITCHELL PLETCHER et al., Defendants and Appellants.

B259610

COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION FIVE

October 16, 2015

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Los Angeles County Super. Ct. No. BC517543)

APPEAL from an order of the Superior Court of Los Angeles County, Robert L. Hess, Judge. Affirmed.

Long & Delis, John A. Delis and Warren B. Campbell and Mitchell Pletcher, in pro. per., for Defendants and Appellants.

Herrera & Associates and Alex H. Herrera for Plaintiff and Respondent.

I. INTRODUCTION

Defendants, Mitchell Pletcher and Kyle Aaron, appeal from an order denying their motion to compel arbitration. Plaintiff, Brittany O'Connor, was employed by Mr. Pletcher's production company as a dancer and choreographer for a theatrical show. Plaintiff filed a complaint against defendants and other individuals for various causes of action, including violations of the Fair Employment and Housing Act.

Defendants moved to compel arbitration, citing an arbitration agreement signed by plaintiff and a codefendant, Mitchell Anthony Productions, LLC (the production company.) Plaintiff argued the agreement was unconscionable. The trial court denied defendants' motion. The trial court found the contract was adhesive and imposed by defendants who were in a superior bargaining position. The trial court also found the arbitration provision required plaintiff to pay arbitration costs for her Fair Employment and Housing Act claims, which was impermissible.

Defendants contend the arbitration provision was not unconscionable and should be enforced. In the reply brief, defendants contend for the first time in this litigation in the alternative that any unconscionable provision should be severed. We affirm the order denying the motion to compel arbitration..

II. BACKGROUND

A. Plaintiff's Complaint

Plaintiff filed her complaint on August 8, 2013. She alleges the following. Mr. Pletcher resides in Irvine, California. He is the sole shareholder, director, and officer of the production company. He is also the sole shareholder, director, and officer of Concord Investment Counsel, Incorporated, an investment company (the investment company). Both companies are businesses based in Irvine, California. Mr. Aron is the senior analystand portfolio manager for the investment company. Mr. Aron is accused of being a coconspirator and accomplice of Mr. Pletcher.

Plaintiff was hired by defendants to perform in a musical theater production called "Beautiful" in Manhattan Beach, California. Mr. Pletcher is the owner and producer of the musical. Defendants made misrepresentations regarding the production team's experience and false promises regarding compensation and work schedules. Defendants breached contracts by not performing, including promises regarding compensation and work schedule. Mr. Pletcher sexually harassed plaintiff and defendants created a hostile work environment for this to occur.

Plaintiff alleges numerous causes of action against defendants, including: fraud; constructive fraud; conspiracy to defraud; intentional and negligent misrepresentation; intentional interference with economic advantage; written and oral contract breach; contract breach by failure of consideration; breach of the good faith and fair dealing implied covenant; anticipatory breach; violations of the Fair Employment and Housing Act (disparate impact, failure to prevent harassment and discrimination, hostile work environment, and sexual harassment); intentional emotional distress infliction; sexual battery; intentional misclassification as an independent contractor; and unfair business practices in violation of Business and Professions Code section 17200.

B. Motion to Compel Arbitration

On September 24, 2013, Mr. Pletcher filed a motion to compel arbitration. Mr. Pletcher cited to an independent contractor's agreement (the agreement) signed by plaintiff with the production company. Mr. Pletcher signed on behalf of the production company. The agreement contains an arbitration provision, which provides: "In the event of any dispute arising under or involving any provision of this Agreement or any dispute regarding claims involving unlawful discrimination and/or unlawful harassment, not arising out of the termination of employment, or the termination of employment . . . , contractor [plaintiff] and the Company agree to submit any such dispute to bindingarbitration pursuant to the provisions of the Federal Arbitration Act, 9 U.S.C. section 1, et. Seq. [sic], if applicable, or the provisions of Title of Part III [sic] of the California Code of Civil Procedure, commencing at Section 1280 et. seq. . . . if the Federal Arbitration Act does not apply to contractor's employment . . . ." The arbitration provision further provides, "The contractor and the Company shall each bear their own costs for legal representation at any such arbitration and the cost of the arbitrator, court reporter, if any, and any incidental costs of arbitration." Mr. Pletcher contended that under both state and federal law, the arbitration provision should be enforced as to all of plaintiff's claims. On May 15, 2014, Mr. Aron joined in Mr. Pletcher's motion to compel arbitration. Mr. Pletcher later moved to reschedule the motion to compel arbitration hearing and re-filed his motion on June 3, 2014.

On August 5, 2014, plaintiff filed her opposition. Plaintiff argued the arbitration provision was unconscionable. Plaintiff contended procedural unconscionability was present based on the take-it-or-leave-it nature of the contract. Plaintiff argued the agreement was substantively unconscionable because the arbitrator selection process would always produce one favored by defendants. And plaintiff asserted the arbitration provision apportioned arbitration costs to the employee. Plaintiff also argued defendants waived arbitration and the arbitration provision did not apply to several claims. Plaintiff submitted a declaration in support in which she declared: "As a condition of my employment, Mr. Pletcher forced me, and every cast member, to sign an Independent Contractor Agreement. Mr. Pletcher did not allow for any negotiations, and presented the agreement on a 'take it or leave it' basis. The [agreement] was drafted entirely by Mr. Pletcher . . . . The process of signing the agreement and agreeing to the terms presented were dictator like in that Defendants had overwhelming bargaining power, and I had none. I was left with no choice but to either accept it as is, or not get the job."

C. Order Denying Motion to Compel Arbitration

On August 21, 2014, the trial court heard argument on the motion to compel arbitration. The trial court subsequently issued an order denying the motion. First, the trial court found: "Plaintiff has met her burden to demonstrate the agreement is procedurally unconscionable as having been presented to her on a take-it-or-leave-it basis as a condition of her employment, as set forth in her declaration. At oral argument, Mr. Pletcher suggested that [plaintiff's] experience gave her superior bargaining power to him. The Court is not persuaded that this was the case. While there is no direct evidence either way, the background facts pleaded in this case make it appear that there were more dancers who had appropriate professional qualifications looking for work than there were available places in this production. There is no evidence to suggest that [plaintiff] was the only person who could serve as a dancer and/or dance captain on this production. The Court does not find the assertion that [plaintiff] was in an equal or even superior bargaining position to be persuasive." The trial court was not persuaded that plaintiff was the one who demanded an arbitration provision to be included in the agreement. Finally, the trial court found the arbitration provisions to be substantively unconscionable. The arbitration provision provides that plaintiff would always bear her own legal fees and the costs of arbitration. The trial court found such a provision, especially as they pertained to plaintiff's Fair Employment and Housing Act claims, would be impermissible. Additionally, the trial court found the arbitration provision failed to unambiguously provide for discovery. The trial court found the arbitration provision unenforceable, citing Wherry v. Award, Inc. (2011) 192 Cal.App.4th 1242, 1246-1250. Defendants appealed the order.

III. DISCUSSION

A. Legal Standards

Both state and federal laws favor enforcement of valid arbitration agreements. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 97 (Armendariz); Wagner Construction Co. v. Pacific Mechanical Corp. (2007) 41 Cal.4th 19, 25 [strong public policy in favor of arbitration].) However, courts will not enforce arbitration provisions that are unconscionable or contrary to public policy. (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (U.S.), LLC (2012) 55 Cal.4th 223, 247 (Pinnacle Museum); Armendariz, supra, 24 Cal.4th at p. 114.) Under the terms of the arbitration provision, the Federal Arbitration Act applies. The United States Supreme Court has held: "[Title 9, United States Code, section 2] permits arbitration agreements to be declared unenforceable 'upon such grounds as exist at law or in equity for the revocation of any contract.' This saving clause permits agreements to arbitrate to be invalided by 'generally applicable contract defenses, such as fraud, duress, or unconscionability,' but not by defenses that apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at...