Nelson v. Dual Diagnosis Treatment Ctr., Inc.

• Decision Date: 19 April 2022
• Docket Number: G059565
• Parties: Brandon NELSON et al., Plaintiffs and Respondents, v. DUAL DIAGNOSIS TREATMENT CENTER, INC., et al., Defendants and Appellants.
• Court: California Court of Appeals Court of Appeals

77 Cal.App.5th 643

292 Cal.Rptr.3d 740

Brandon NELSON et al., Plaintiffs and Respondents,

v.DUAL DIAGNOSIS TREATMENT CENTER, INC., et al., Defendants and Appellants.

G059565

Court of Appeal, Fourth District, Division 3, California.

Filed April 19, 2022

Beach Law Group, Thomas E. Beach, Oxnard, and Danyl C. Hottinger for Defendants and Appellants.

The Homampour Law Firm, Arash Homampour, Sherman Oaks; The Ehrlich Law Firm and Jeffrey I. Ehrlich for Plaintiffs and Respondents.

OPINION

GOETHALS, J.

Dual Diagnosis Treatment Center, Inc., doing business as Sovereign Health of San Clemente, and its owner, Tonmoy Sharma, (collectively Sovereign) appeal from the trial court's denial of Sovereign's motion to compel arbitration of claims asserted by Allen and Rose Nelson in their first amended complaint, including on behalf of their deceased son, Brandon Nelson.¹ The Nelsons alleged a cause of action for wrongful death and, on behalf of Brandon, negligence, negligence per se, dependent adult abuse or neglect, negligent misrepresentation, and fraud. According to the complaint, despite concluding that 26-year-old "Brandon requires 24 hour supervision ... at this time" after admitting him to its residential facility following his recent symptoms of psychosis

, Sovereign personnel allowed him to go to his room alone, where he hung himself with the drawstring of his sweatpants.

The trial court denied Sovereign's motion to compel arbitration on two grounds. First, the court found Sovereign failed to meet its burden to authenticate an electronic signature as Brandon's on Sovereign's treatment center enrollment agreement. The alleged agreement contained the arbitration clause on which Sovereign relied to compel arbitration.² Second, the trial court found that, even assuming Brandon signed the agreement, it was procedurally and substantively unconscionable, precluding enforcement against Brandon or, derivatively, his parents.

Sovereign challenges the trial court's authentication and unconscionability findings. As it did below, Sovereign also contends as a preliminary matter that the agreement delegated to an arbitrator-rather than the trial court-threshold questions such as the scope and enforceability of the agreement.

As we explain, Sovereign fails to demonstrate error. The trial court found it had the authority to determine preliminary issues of arbitrability such as the validity and enforceability of the enrollment agreement. On our de novo review of that written document, we agree. The trial court also correctly found the agreement was unconscionable; that finding moots any question of whether Brandon actually signed it or whether his parents would have been bound by it if he did. We therefore do not reach the authentication question, and we affirm the trial court's order denying Sovereign's motion to compel arbitration.

FACTUAL AND PROCEDURAL BACKGROUND

In late January 2018, Brandon, a recent UCLA engineering graduate, suffered a sudden onset of symptoms of psychosis

. He asked a friend who was a police officer for his gun so he could shoot himself because he felt "evil" and "like an animal." The officer contacted the Santa Monica Police Department; as a result, Brandon was committed on a 72-hour psychiatric hold ( Welf. & Inst. Code,§ 5150 ( section 5150 )). Over the next six weeks, he received mental health treatment first at the Las Encinas Mental Hospital (LEMH) in Pasadena and later at Mission Hospital Laguna Beach (Mission Hospital).

Brandon's LEMH records included certification that he was "GRAVELY DISABLED" because he was "paranoid, delusional, fearful," and "feels he is being recorded." He was discharged from LEMH on or about February 23, 2018. His discharge lasted only three days. On February 26, he was again admitted on a section 5150 hold, this time at Mission Hospital as a result of a renewed threat to kill himself. That hospital's "Involuntary Patient Advisement" stated "You are being placed in this psychiatric facility because it is our professional opinion, that as a result of a mental health disorder, you are likely to ... [if] Harm yourself."

On February 27, Brandon gave his father a durable power of attorney (DPOA) over his affairs, including those relating to his financial, legal, and "personal and family care." The DPOA specifically authorized Brandon's father "to enter into contracts and commit my resources with respect to the provision of my residential care in a convalescent hospital, skilled nursing home, or alternative residential facility."

On March 1st, a certification review found probable cause to extend Brandon's hold at Mission Hospital for 14 days because he was "[g]ravely disabled" and "[a] danger to himself." The certification described Brandon as unable to "mediate impulsivity" and exhibiting "poor insight" and "poor judgment." It further opined he was "easily frustrated," "disorganized," and his behavior was "mercurial" and "unpredictable."

Mission Hospital apparently discharged Brandon to Sovereign's care on March 7, 2018. According to the Nelsons' complaint, on the evening of March 6, a doctor determined that Brandon "needed continued inpatient care," but the next day around noon another doctor "ordered Brandon to be released home to his parents so that Brandon and [his parents] could find an appropriate facility with adequate licensing, services, and qualifications for Brandon's next phase of treatment." The complaint alleges Brandon was discharged without his parents' knowledge, and Sovereign was not equipped or licensed to handle his condition. According to the Nelsons, at Sharma's behest, Brandon was "shipped off to one of Sovereign's unlicensed sober living homes instead of being discharged to his family." The Nelsons allege that Sovereign "lacked the necessary licensing to provide any modicum of mental health treatment."

It is not clear from the record what time Brandon arrived at Sovereign's facility on March 7 or how he got there. Lori Sherlock, a Sovereign employee who electronically signed Brandon's enrollment agreement that day, testified somewhat inconsistently that she did not recall Brandon or "do[ing] his intake," but also that "he seemed agitated when we did the intake," so "I asked for a licensed professional to see him." According to Sherlock, Brandon was evaluated "that night at the house," which presumably references Sovereign's residential location.³

Diana Miltenburg, a Sovereign employee licensed as a clinical social worker, conducted a "Biopsychosocial Assessment" of Brandon on March 7.⁴ The assessment described Brandon's "Precipitating Crisis" as follows: "Brandon reports that he is waiting for his medication to be delivered, that he has not had his medications for ‘almost 24 hours’[.] Brandon states ‘I am going to relapse

if I don't get my medications ...."

The assessment indicated Brandon believed "people on tv [were] addressing [him]"; he was experiencing auditory hallucinations; and he was "acutely aware that his state of mind was impaired." Brandon displayed "[e]xtreme psychomotor agitation" and "curled up in [a] fetal position"; he howled, yelled, and shouted, and, at least initially, "was able to engage" only "minimally in conversation." Brandon's intermittent "[y]elling and shouting," in which he pleaded "for the negative thoughts in his head to ‘STOP,’ [i]ncreased throughout the interview," and then "[d]ecreased after taking his medications."

The assessment stated under "Issues with Concentration" that Brandon was "[u]nable to focus and concentrate for more than 10-20 seconds at a time."

The assessment elsewhere described Brandon as having "limited attention span, concentration and focus."

Under a "Relapse Potential" heading on the assessment, the Sovereign interviewer placed a checkmark in the yes box for the question: "Has patient failed a lower level of care?" In the next field, in response to the prompt, "If yes, explain," the interviewer wrote: "Brandon requires 24 hour supervision and support at this time. Without medications Brandon is at high risk of further psychological decompensation and loss of independent functioning."

Brandon hung himself the day following his admission. According to the Nelsons' complaint, Sovereign delayed providing Brandon with his psychotropic medications so that his prescription could be filled by a Sovereign-owned pharmacy. The complaint alleged that around 4:00 p.m. on March 8, 2018, Brandon began "screaming uncontrollably and exhibiting signs that he was a danger to himself." Sovereign did not give Brandon his medication until 6:20 p.m., but Brandon "began screaming once again around 7:00 p.m. and exhibiting signs that he was a danger to himself. Despite this, around 7:45 p.m., Sovereign allowed Brandon to go to his room unattended and unsupervised." There, he made a loop with the drawstring of his sweatpants and hung himself from an overhead fire sprinkler.

Brandon's parents filed suit in July 2019, and filed their first amended complaint in December 2019. Sovereign thereafter filed its motion to compel arbitration. The trial court denied the motion, finding Sovereign failed to meet its burden to authenticate Brandon's signature. The court also found the enrollment agreement and, therefore, its arbitration provisions unenforceable due to the presence of both procedural and substantive unconscionability.

DISCUSSION

A core objective of both the Federal Arbitration Act (FAA) ( 9 U.S.C. § 1 et seq. ) and the California Arbitration Act ( Code Civ. Proc., § 1280 et seq. ) is to ensure the enforcement of arbitration agreements " ‘in accordance with their terms.’ " ( Avery v. Integrated Healthcare Holdings, Inc. (2013) 218 Cal.App.4th 50, 59, 159 Cal.Rptr.3d 444 ( Avery ) , italics omitted.) Arbitration is fundamentally a matter of contract ( ibid. ) , and thus "[a] petition to compel arbitration is simply a suit in equity [to compel] specific performance of a contract." ( Aanderud v. Superior Court (2017) 13 Cal.App.5th 880, 890, ...