Perez v. Kaiser Found. Health Plan

• Decision Date: 16 May 2023
• Docket Number: A165140
• Parties: MARIA PEREZ et al., Plaintiffs and Appellants, v. KAISER FOUNDATION HEALTH PLAN, INC., et al., Defendants and Respondents.
• Court: California Court of Appeals Court of Appeals

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MARIA PEREZ et al., Plaintiffs and Appellants, v. KAISER FOUNDATION HEALTH PLAN, INC., et al., Defendants and Respondents.

A165140

California Court of Appeals, First District, Third Division

May 16, 2023

CERTIFIED FOR PARTIAL PUBLICATION ^[*]

Superior Court of Sonoma County, No. SCV-261649 Hon. Jennifer V. Dollard.

Law Office of Douglas C. Fladseth and Douglas C. Fladseth; Evans Kingsbury and Noreen M. Evans, for Appellants.

Rankin, Shuey, Ranucci, Mintz, Lampasona & Reynolds, S Bradford Harper; Marion's Inn, Mark Palley and Yvonne M Pierrou, for Respondents.

RODRÍGUEZ, J.

Vicente and Maria Perez^[1] appeal from a judgment confirming an arbitration award for Kaiser Foundation Health Plan, Inc. (KFHP), Kaiser Foundation Hospitals, and The Permanente Medical Group, Inc. (collectively Kaiser). The Perezes contend there was no valid arbitration agreement, and therefore the trial court erred by granting Kaiser's motion to compel arbitration. They also argue the award must be vacated because the arbitrator failed to comply with his continuing duty to disclose the results of other cases involving Kaiser - cases initially disclosed as pending when the arbitrator was appointed but that resolved during the Perezes' arbitration. Unpersuaded by the arguments adequately raised and supported in plaintiffs' briefs (Reyes v. Kosha (1998) 65 Cal.App.4th 451, 466, fn. 6), we affirm.

BACKGROUND

Kaiser is a licensed health care service plan that provides or arranges hospital and professional health care services for plan members. Employers who offer Kaiser's health care services must distribute a document titled "Evidence of Coverage" each year to Kaiser subscribers. The document provides enrollees or subscribers with information regarding their benefits, rights, and obligations as Kaiser members. The Evidence of Coverage includes an arbitration clause stating "Any dispute shall be submitted to binding arbitration if," as relevant here, the claim "arises from or is related to an alleged violation of any duty incident to or arising out of or relating to this Evidence of Coverage or a Member Party's relationship to [Kaiser], including any claim for medical or hospital malpractice." The clause further explains members - including a member's relative - enrolled in Kaiser's Evidence of Coverage "thus give up their right to a court or jury trial" unless the claim falls within certain exceptions not relevant here.

Francis Coppola Winery, LLC (Coppola) employees may select Kaiser health care coverage through Coppola's online benefits enrollment process. Employees selecting the Kaiser plan are instructed, "you must agree to the authorization agreement by clicking on the 'Save' button." The agreement allows Coppola to enroll employees in the Kaiser plan and to deduct premiums from their paychecks. It also confirms the length of health care coverage and circumstances for paying for coverage if employees terminate coverage.

In a separate section of the authorization agreement - titled "Kaiser Foundation Health Plan, Inc., and Kaiser Permanente Insurance Company Arbitration Agreement" - Kaiser notifies enrollees of a mandatory arbitration requirement. (Fn. omitted.) The disclosure states, in relevant part: "I understand . . . any dispute between myself, my heirs, relatives . . . on the one hand and [KFHP], Kaiser Permanente Insurance Company (KPIC), any contracted health care providers . . . on the other hand, for alleged violation of any duty arising out of or related to . . . any claim for medical or hospital malpractice" - such as a claim medical services "were improperly, negligently, or incompetently rendered" - "must be decided by binding arbitration under California law and not by lawsuit or resort to court process." (Fn. omitted.) It continues, "I agree to give up our right to a jury trial and accept the use of binding arbitration. I understand that the full arbitration provision is contained in the Evidence of Coverage and in the Certificate of Insurance." The clause also identifies certain disputes that are not subject to binding arbitration, such as ones involving dental plans.

Under the disclosure is a notice advising employees that "By clicking the SAVE button below, I understand that this action will serve as my electronic signature of agreement to the conditions provided in the [KFHP] and [KPIC] Arbitration Agreement (above)." Immediately below this notice, the web page includes a note stating, "If you do not wish to accept the arbitration agreement above you must click on the CANCEL button below." Doing so returns the employee to the plan selection screen to select a different health plan. At the bottom of the web page are three buttons, "BACK," "SAVE," and "CANCEL."

I.

Coppola purchased a winery in March 2014 and hired some of the winery's employees, including Maria. Coppola wanted to quickly enroll the employees in its benefits program to prevent any lapse in benefits. New Coppola employees had an orientation where they learned about available benefit programs. Eligible employees received a welcome letter containing a summary of benefits and identifying their first-time usernames and log in information required for using the online enrollment system.

During the orientation, employees chose and signed up for benefits using Coppola laptops. Two to four employees shared one to two laptops per table. When employees logged into the online site, they could view their own basic information, select benefits, and add any dependents they wanted to cover. Three members of Coppola's human resources team were present and available to answer questions as people went through the process. Pursuant to the company's best practice, human resources employees weren't to sit at a computer and act on behalf of an employee. Records reflect Maria and Andrea were enrolled as Kaiser members as of April 1, 2014.

II.

In 2017, Andrea filed a complaint against Kaiser alleging negligence and fraud arising out of its failure to timely diagnose and treat her aggressive cancer. Kaiser, citing Maria's membership agreement, petitioned to compel arbitration and stay the lawsuit. In her opposition, Andrea argued Kaiser failed to comply with Health and Safety Code section 1363.1, which sets forth specific requirements for disclosing arbitration agreements with health care service plans like Kaiser's. She also disputed Maria agreed to arbitrate. Maria declared she was unaware of ever signing an agreement waiving rights to a jury trial and being bound to arbitration. No one explained the arbitration agreement to her. She further did not understand that clicking a "SAVE" button constituted an agreement to arbitrate claims. Although Maria admitted she had a fairly good understanding of English, she was not a native speaker and declared she could not read English well enough to understand she was agreeing to arbitration. Maria also stated she did not operate the computer; it was solely operated by a Coppola human resources employee.

During a hearing on the motion to compel arbitration, Coppola's director of people operations testified regarding the online enrollment system and benefits orientation. To start the process, employees were given a temporary password by the human resources department. To continue beyond the home page, employees needed to immediately change the temporary password to a password of their own choosing. The director assumed Maria logged into the benefit system - a screenshot of Maria's benefits page has a date and time stamp with Maria's name, the criteria for logging into the system. The director did not fill out forms on behalf of the employees; moreover, while she did not know if anyone personally assisted Maria in completing forms, she was in the room and did not see any of the other human resources team fill out the forms on behalf of employees.

Rather than testifying she did not sign up for benefits, Maria testified she did not remember working on one of the laptops to enroll for benefits. She noted she did not know how to use the computer. Instead, she asked an employee for assistance. She did recall she was "there signing in. And we had to sign because - because Francis Coppola wanted to help previous workers to continue so that we didn't stay without coverage."

After hearing testimony and assessing credibility, the trial court found the weight of the evidence supported the conclusion that Maria operated a computer and personally selected the "SAVE" button to secure health insurance, thereby also indicating her agreement to arbitration. The court determined an arbitration notice would have displayed on the computer screen, and Maria would have had to click "SAVE" to enroll herself and Andrea for Kaiser benefits. And Maria did click "SAVE" because both she and Andrea were successfully enrolled in Kaiser. The court concluded Kaiser proved the existence of an agreement to arbitrate by a preponderance of the evidence and granted Kaiser's motion to compel arbitration.

III.

In May 2018, the Perezes and Kaiser selected an arbitrator from a list of 12 potential candidates. Both parties were sent a disclosure statement listing the arbitrator's prior and pending cases involving Kaiser, those in which he had served or was currently serving as arbitrator. In May and August 2020, the arbitrator sent notices informing the parties he had agreed to arbitrate additional cases involving Kaiser. Although these additional cases resolved during the Perezes' arbitration, the arbitrator did not disclose the outcomes to the Perezes. After an arbitration in February 2021, the arbitrator concluded Kaiser was not liable for Andrea's death.

The Perezes moved to vacate the arbitration award, arguing it was infected by bias, corruption,...