Espejo v. S. Cal. Permanente Med. Grp.

• Decision Date: 22 April 2016
• Docket Number: B262717
• Court: California Court of Appeals Court of Appeals
• Parties: Jay ESPEJO, Plaintiff and Respondent, v. SOUTHERN CALIFORNIA PERMANENTE MEDICAL GROUP et al., Defendants and Appellants.

246 Cal.App.4th 1047

201 Cal.Rptr.3d 318

Jay ESPEJO, Plaintiff and Respondent,

v.SOUTHERN CALIFORNIA PERMANENTE MEDICAL GROUP et al., Defendants and Appellants.

B262717

Court of Appeal, Second District, Division 4, California.

Filed April 22, 2016

McNicholas & McNicholas, Matthew S. McNicholas, Los Angeles; The deRubertis Law Firm, David M. deRubertis, Studio City, Alyssa K. Schabloski, Los Angeles; Esner, Chang & Boyer, Holly N. Boyer, Shea S. Murphy, Pasadena and Joseph S. Persoff for Plaintiff and Respondent.

Cole Pedroza, Kenneth R. Pedroza and Maureen M. Home for Defendants and Appellants.

COLLINS

, J.

INTRODUCTION

Jay Espejo, M.D., sued defendants Southern California Permanente Medical Group, Kaiser Foundation Health Plan, Inc., Kaiser Foundation Hospitals, and Joseph Huang, M.D. (collectively, defendants) alleging wrongful termination and whistleblower retaliation. Defendants petitioned to compel arbitration pursuant to Espejo's employment agreement and associated documents. The trial court denied the petition, finding that defendants failed to establish the existence of an enforceable arbitration agreement between the parties. On appeal, defendants argue the trial court erred in reaching that conclusion, and in striking a supplemental declaration filed in support of their petition. They further contend the arbitration agreement was valid and neither procedurally nor substantively unconscionable. We conclude the trial court erroneously excluded the declaration as untimely and further, the declaration established the existence of an agreement to arbitrate. We therefore reverse and remand to the trial court for consideration of the remaining issues raised by the parties.

FACTUAL AND PROCEDURAL HISTORY

A. Espejo's Lawsuit

Espejo is a board certified family medicine physician. He was hired as an associate physician by defendant Southern California Permanente Medical Group (SCPMG) effective September 1, 2011. SCPMG is a "general partnership for the practice of medicine." SCPMG contracts with defendant Kaiser Foundation Health Plan, Inc. (Kaiser Health Plan) to provide medical services to Kaiser Health Plan members in Southern California. Defendant Kaiser Foundation Hospitals (Kaiser) is the corporate entity that owns and operates the medical centers and hospitals through which SCPMG provides these medical services. Defendant Huang is a partner physician and administrator with SCPMG.

Espejo filed a complaint against defendants on October 30, 2014, alleging causes of action for wrongful termination in violation of public policy and whistleblower retaliation. Espejo claimed he was terminated in retaliation for his reports of "inappropriate prescribing practices" by another physician working at a Kaiser facility.

B. Petition to Compel Arbitration

On December 19, 2014, defendants filed a petition to compel arbitration. The petition alleged that Espejo's employment with SCPMG was "governed" by three documents: the Employee Physician Contract, the Dispute Resolution Procedure (DRP), and SCPMG's Rules and Regulations (R&R). Defendants alleged these documents were provided to Espejo as part of his offer of employment. Specifically, on May 3, 2011, SCPMG sent an email to Espejo containing his offer of employment as a staff physician with SCPMG and directing him to follow the included hyperlink to SCPMG's "Applicant Home Page and your employment contract." The email further stated that Espejo would have until May 24, 2011 "to review and electronically sign or decline" his employment contract.

In a declaration submitted in support of the petition, Julie Tellez, a SCPMG systems consultant,¹ claimed that the Applicant Home Page to which Espejo was routed contained hyperlinks to four documents—a copy of his employment agreement, the DRP, the R&R, and a benefits handbook.

According to Tellez, "[s]ince 2006, the majority of Associate SCPMG physician employee contracts and agreements, including those of [Espejo], are [sic] executed online. The online process requires the physician to review and electronically sign his or her employment contract and all related agreements." Tellez further stated that on May 22, 2011 Espejo "electronically signed" the copy of the DRP attached as an exhibit to defendants' petition.

Defendants also included a declaration from Erin Bui, a project manager employed by SCPMG whose duties included "reviewing physician employment agreements and advising" regarding compensation policies. Bui stated that in order to "finalize his employment agreement, Dr. Espejo was required to digitally sign his employment agreement and the [DRP]." Bui then stated, without further explanation, that "Espejo signed both documents."

Defendants attached copies of all three documents to their petition for arbitration. The Employee Physician Contract sets forth the terms and conditions of the employment relationship between Espejo and SCPMG. Section XII, titled "Dispute Resolution and Mandatory Binding Arbitration," states: "Physician and SCPMG agree to follow the Dispute Resolution Procedure, Rules and Regulations, section 1I, a copy of which is attached." The last section, immediately above the signature block, contains an acknowledgement by the signing physician that he or she has read the contract and agrees to its terms, "including those set forth in Section XII herein regarding internal dispute resolution and arbitration." The physician signature line contains the typed name "Jay Baniaga Espejo" and the date May 22, 2011 at 3:15 p.m. The next line lists an IP address purportedly identifying the location where the document was signed. The contract also was electronically signed by SCPMG's Area Medical Director on May 3, 2011.

Defendants attached three versions of the R&R to their petition, each identified as a "Rewrite" from 2009, 2011, and 2013, respectively. Defendants do not specify which version was provided in the hyperlinks sent to Espejo in 2011. Section 1.I in all three versions contains a "Dispute Resolution Procedure," and states that "[t]his DRP applies to any dispute involving a Physician and SCPMG that would otherwise be cognizable in a court of law," with certain identified exceptions not relevant here. We refer to Section 1.I of the R&R as the "R&R–DRP."²

Finally, the copy of the DRP included with defendants' petition bears the full title "Dispute Resolution Procedure for All Physicians and SCPMG Approved by SCPMG Board of Directors May 18, 2006." It contains the same language regarding its applicability as the R&R–DRP. The acknowledgement paragraph above the signature line indicates an agreement that the signer has received and read a copy of the DRP, and agrees to abide by the DRP, "and by any changes made to it from time to time by the SCPMG Board of Directions." The signature line bears the typed name "Jay Baniaga Espejo" and is dated May 22, 2011 at 3:16 p.m. The following line states the document "was signed" at the same IP address as the employment agreement.

C. Supplemental Declaration

On January 22, 2015, defendants filed a supplemental declaration from Tellez in support of their petition to compel arbitration.³ In her supplemental declaration, Tellez supplied additional details regarding the electronic review and signature process for SCPMG's employee agreements. Specifically, she stated that once the "Area Medical Director decides to make a physician an offer of employment, [the director] completes the employment agreement, and electronically signs the agreement, an email is generated to the applicant" with a link to the SCPMG Applicant Homepage. Access to the applicant homepage "requires the use of a private and unique username and password," both of which are provided by phone "directly and orally to the applicant." After logging into SCPMG's online system with this username and password, "the first thing Dr. Espejo would be required to do is re-set his password to one of his own choosing. He cannot proceed to the next page unless he re-sets his password." At that point, according to Tellez, Espejo would have to "opt to agree to complete the employment documents using an electronic signature." Once he agreed, he would be directed to the portion of the Applicant Homepage containing the four hyperlinks to his employment agreement, the DRP, the R&R, and a benefits handbook. "Dr. Espejo only had access to these documents by logging in and using his unique user name and password."

Tellez further elaborated on the signature process. "On the signature page of the employment agreement Dr. Espejo was prompted to either accept or decline the employment agreement." If he accepted, "he was prompted to complete his name as he would sign it. Whatever name he typed into this entry is what populated on the signature line of the contract." "Once that information was input and accepted by Dr. Espejo, then the employment agreement was finalized, including his name, date, time, and the IP address where Dr. Espejo electronically signed the agreement." Tellez then outlined the same process with respect to the DRP. She stated that the "name Jay Baniaga Espejo could have only been placed on the signature pages of the employment agreement and the DRP by someone using Dr. Espejo's unique user name and password.... [¶] Given this process for signing documents and protecting the privacy of the information with unique and private user names and passwords, the electronic signature was made by Dr. Espejo" to the employment agreement and the DRP at the date, time, and IP address listed on the documents. Tellez therefore concluded that the copies of the employee agreement and the DRP attached to defendants' petition were true and correct copies of the documents "electronically signed by Dr. Espejo on May 22, 2011, and kept and maintained in SCPMG's records."

D. Opposition and Reply

Espejo filed his opposition to the petition four days later on January 26, 2015. Citing Ruiz,

he argued that defendants failed to properly authenticate his signature ...