Garcia v. KND Dev. 52, LLC

• Decision Date: 15 December 2020
• Docket Number: B301929
• Citation: 58 Cal.App.5th 736,272 Cal.Rptr.3d 706
• Court: California Court of Appeals Court of Appeals
• Parties: Maria GARCIA, Plaintiff and Respondent, v. KND DEVELOPMENT 52, LLC, et al., Defendants and Appellants.

58 Cal.App.5th 736

272 Cal.Rptr.3d 706

Maria GARCIA, Plaintiff and Respondent,

v.KND DEVELOPMENT 52, LLC, et al., Defendants and Appellants.

B301929

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

Filed December 15, 2020

Law Offices of Samer Habbas & Associates, Samer Habbas, Irvine, and Adam Kocaj, for Plaintiff and Respondent.

Giovanniello Law Group, Alexander F. Giovanniello and Thomas C. Swann, Brea, for Defendants and Appellants.

MANELLA, P. J.

INTRODUCTION

Appellants KND Development 52, LLC and THC-Orange County, LLC (Kindred Hospital Baldwin Park and Kindred Hospital Los Angeles, respectively) appeal from the trial court's order denying their petition to compel arbitration of a lawsuit brought by respondent Maria Garcia, individually and as successor in interest to her deceased husband, Ramiro Garcia, regarding Ramiro's treatment at appellants’ hospitals.¹ During or soon after the process of Ramiro's admission as a patient at Kindred Hospital Baldwin Park, Ramiro's son, Mike Garcia, signed an arbitration agreement, purportedly on Ramiro's behalf. Maria did the same at Kindred Hospital Los Angeles. Mike and Maria also signed other documents during or soon after Ramiro's admission. Following Ramiro's death, allegedly caused by appellants’ staff, Maria sued appellants for negligence (in her capacity as Ramiro's successor in interest) and wrongful death.

Appellants filed a petition to compel arbitration pursuant to the arbitration agreements Mike and Maria had executed. They argued Ramiro had conferred ostensible authority on Mike and Maria to execute the arbitration agreements on his behalf, relying on declarations executed by (1) the supervisor of the employee who signed the Baldwin Park agreement, and (2) the employee who signed the Los Angeles agreement. The Baldwin Park supervisor did not claim to have interacted with Ramiro, and the Los Angeles employee had no recollection of any interaction with him. Each declarant inferred from the arbitration agreements and her understanding of the admission process that Ramiro had nodded or shook his head in a manner authorizing the execution of the arbitration agreements on his behalf. Their inferences were contradicted by Mike and Maria, who submitted declarations in opposition to the petition. After a hearing, the trial court found appellants failed to produce sufficient evidence that Ramiro had authorized Mike and Maria to execute the arbitration agreements on his behalf. The court therefore concluded appellants failed to meet their burden to establish the existence of an enforceable arbitration agreement, and denied their petition to compel arbitration.

On appeal, appellants contend the trial court discriminated against arbitration contracts, in violation of the Federal Arbitration Act (FAA), in denying their petition to enforce the arbitration agreements signed by Mike and Maria. They fault the court for holding them to an evidentiary burden to show Ramiro authorized the execution of the arbitration agreements without questioning the validity of the other documents signed by Mike and Maria during or soon after Ramiro's admission (the validity of which was not at issue on appellants’ petition).

We affirm. Substantial evidence supported the trial court's conclusion that appellants failed to meet their burden to establish the existence of an enforceable arbitration agreement. In reaching that conclusion, the court relied on generally applicable law conditioning the validity of an arbitration agreement executed by a purported agent -- like any other contract executed by a purported agent -- on an adequate evidentiary showing that the agreement falls within the scope of authority, if any, conferred by the principal. The court did not apply this law in a fashion disfavoring arbitration contracts, and thus did not violate the FAA.

FACTUAL BACKGROUND

A. Ramiro's and Maria's Complaints

Ramiro presented for treatment at Kindred Hospital Baldwin Park on February 9, 2018. In April 2018, he was transferred to a third-party hospital, where he received surgery for gallbladder

stones. On May 25, 2018, he presented for rehabilitation services at Kindred Hospital Los Angeles. Three days later (on May 28, 2018), he was transferred back to Kindred Hospital Baldwin Park. In August 2018, Ramiro sued appellants, alleging that their staff failed to properly turn him in his hospital beds, causing him to develop pressure sores. He raised the following causes of action: (1) negligent retention, supervision, and training; (2) negligence; and (3) violation of the Elder Abuse and Dependent Adult Civil Protection Act, Welfare and Institutions Code section 15600 et seq.

In December 2018, appellants filed a petition to compel arbitration. In January 2019, before any response to the petition was filed, the parties filed a stipulation that Ramiro had recently died, that the petition was withdrawn, and that an amended complaint (attached as an exhibit) would be filed. The amended complaint, filed in February 2019, was largely identical to the original complaint, but specified that Ramiro's claims were now being brought through his widow Maria as his successor in interest, and added a wrongful death claim brought by Maria personally.

B. Appellants’ Petition

On March 25, 2019, appellants filed a new petition to compel arbitration. They relied on two arbitration agreements: (1) a February 10, 2018 "Voluntary Alternative Dispute Resolution (ADR) Agreement," signed by Ashley Tirado on behalf of Kindred Hospital Baldwin Park, and by Ramiro's son Mike as Ramiro's purported "Legal Representative"; and (2) a May 26, 2018 agreement of the same kind, signed by Iris Trapp on behalf of Kindred Hospital Los Angeles, and by Maria as Ramiro's purported legal representative. Each agreement stated at the outset (in italics) that signing was "not a precondition to the furnishing of services," and stated at the end (in boldface), "Please remember, this Agreement is optional."

Appellants concurrently filed a declaration executed by Christine Saltonstall, the chief financial officer of Kindred Hospital Baldwin Park. Saltonstall declared she was the direct supervisor of Tirado, the Admitting Associate who signed the Baldwin Park arbitration agreement. She further declared that she was familiar with Tirado's custom, habit, and practice, and that she had no reason to believe Tirado had deviated from them when interacting with Ramiro. She stated Tirado would present the admission documents, including the arbitration agreement, to each patient or patient's authorized representative, and explain the documents "if requested." She indicated that Tirado would approach the patient's next of kin as an authorized representative only if the patient first declined to personally execute the admission documents and "affirmatively state[d] with a nodding or shaking of the head that the next of kin ha[d] authority to execute the admission paperwork ...." Based on her familiarity with Tirado's custom, habit, and practice, and her review of specified documents, Saltonstall declared, "it is clear [Ramiro] gave his son, Mike Garcia, authority to execute the admission paperwork."

Appellants also submitted a similar declaration executed by Trapp, the Kindred Hospital Los Angeles receptionist who signed the Los Angeles arbitration agreement on the hospital's behalf. Trapp declared she "d[id] not specifically recall the circumstances surrounding the execution" of the agreement. She therefore relied on her custom, habit, and practice, which she described much as Saltonstall described Tirado's custom, habit, and practice (e.g., she identified the arbitration agreement as one of the admission documents she would present to each patient or patient's authorized representative and, "if requested," explain). She declared, "Again, while I do not recall the specifics regarding [Ramiro], it is my custom, habit and practice, to only approach the next of kin if the patient responded in the affirmative. Here, because the admission documents contain the signature of [Ramiro]’s wife, Maria Garcia, it is clear that [Ramiro], through a nodding or shaking of the head, gave me authority to contact Ms. Garcia for this purpose."

In their brief in support of the petition, appellants relied on Saltonstall's and Trapp's declarations to argue Ramiro had authorized Mike and Maria to execute the arbitration agreements on his behalf. They further argued, "[B]ecause Plaintiffs accept the proposition that both Mike and Maria Garcia had the authority to execute the various admission documents that now form the basis of this litigation, Plaintiffs are also required to accept that both individuals had the authority to execute the ADR Agreements." They relied on Kindred Nursing Centers Ltd. Partnership v. Clark (2017) ––– U.S. ––––, 137 S.Ct. 1421, 197 L.Ed.2d 806 ( Kindred ), asserting Kindred "makes clear that if the agent had authority to execute some contracts, the agent had authority to execute all contracts."

C. Maria's Opposition and Appellants’ Reply

In opposing appellants’ petition, Maria argued, inter alia, that appellants had failed to meet their burden to establish the existence of an enforceable arbitration agreement, as they had failed to produce evidence that Ramiro had authorized Mike and Maria to execute the arbitration agreements on his behalf. Maria relied, inter alia, on Flores v. Evergreen at San Diego, LLC (2007) 148 Cal.App.4th 581, 55 Cal.Rptr.3d 823 ( Flores ), which she described as "directly on point."²

Maria concurrently submitted declarations executed by Mike and herself. Mike and Maria expressly contradicted Saltonstall and Trapp, respectively, asserting that the factual scenarios inferred by Saltonstall and Trapp did not occur. Mike declared he was asked to sign documents on Ramiro's behalf a day after Ramiro had been admitted to Kindred Hospital Baldwin Park and had begun receiving care. He further declared he had no recollection of any...