Williams v. Atria Las Posas, 2d Civil No. B282513

• Court: California Court of Appeals
• Writing for the Court: TANGEMAN, J.
• Citation: 24 Cal.App.5th 1048,235 Cal.Rptr.3d 341
• Parties: John WILLIAMS et al., Plaintiffs and Respondents, v. ATRIA LAS POSAS, Defendant and Appellant.
• Decision Date: 27 June 2018
• Docket Number: 2d Civil No. B282513

24 Cal.App.5th 1048
235 Cal.Rptr.3d 341

John WILLIAMS et al., Plaintiffs and Respondents,
v.
ATRIA LAS POSAS, Defendant and Appellant.

2d Civil No. B282513

Court of Appeal, Second District, Division 6, California.

Filed June 27, 2018

Lewis Brisbois Bisgaard & Smith, Lann G. McIntyre, Brittany Bartold Sutton, San Diego, Catherine M. Asuncion and Jeffrey Healey, Los Angeles, for Defendant and Appellant.

Law Offices of Terence Geoghegan, Terence Geoghegan ; Law Offices of John R. Contos and John R. Cantos, for Plaintiffs and Respondents.

TANGEMAN, J.

24 Cal.App.5th 1050

Atria Las Posas (Atria) appeals from an order denying its petition to compel arbitration. The trial court denied the petition because of an integration clause in an agreement the parties signed. It determined that the clause precluded Atria from relying on a separate agreement containing an arbitration clause. We reverse the order because the integration clause does not preclude proof of the arbitration agreement, and we remand to the trial court with directions to consider other objections raised by respondents to the arbitration agreement.

FACTUAL AND PROCEDURAL HISTORY

John Williams, M.D., suffered major injuries, including a traumatic brain injury, in a bicycle accident. Vicktoriya Marina-Williams is his wife.

Atria is an entity which owns and operates a residential care facility for elder or dependent adults. After his bicycle accident, Williams was admitted to Atria’s facility. At that time, Marina-Williams explained to Atria's representatives that her husband had previously been placed in a locked "Memory Unit" due to his cognitive impairments.

Atria personnel asked Williams to sign a "Residency Agreement," and he did so. Marina-Williams did not sign the agreement. The agreement contains an integration clause which reads in relevant part as follows: "This Residency Agreement and all of the Attachments and documents

235 Cal.Rptr.3d 344

referenced in this Residency Agreement constitute the entire agreement between you and us regarding your stay in our Community and super[s]edes all prior agreements regarding your residency." The Residency Agreement does not contain an arbitration clause.

Immediately after signing the Residency Agreement, Williams signed a separate "Agreement to Arbitrate Disputes." "Article I: Arbitration" provides in relevant part as follows: "It is understood that any and all legal claims or civil actions arising out of or relating to care or services provided to you at [Atria] ... or relating to the validity or enforceability of the Residency Agreement for [Atria], will be determined by submission to arbitration as provided by: (1) the Federal Arbitration Act (FAA), 9 U.S.C., Sections 1 - 16, or (2) CA law, in the event a court determines that the FAA does not apply." Again, Marina-Williams did not sign this agreement.

24 Cal.App.5th 1051

Shortly after his admission to Atria, Williams walked away from the facility. When last observed at 5:00 a.m., he had not yet had his breakfast or his morning medications. Several hours later, paramedics found him lying in a ditch five miles away. He suffered kidney failure, respiratory arrest, heat stroke, and a second traumatic brain injury.

Williams and Marina-Williams sued Atria and Williams's primary care physician, Steven Barr, M.D. In one cause of action, they alleged that both Atria and Barr were negligent. In another, Marina-Williams sued both Atria and Barr for loss of consortium.

Atria petitioned to compel arbitration based upon the arbitration agreement. Williams and Marina-Williams opposed the petition. They argued that the integration clause in the Residency Agreement bars proof of the arbitration agreement; that the third party litigation exception to arbitration in Code of Civil Procedure section 1281.2, subdivision (c) (hereafter section 1281.2(c) ) applies; that the arbitration agreement is unconscionable; and that Marina-Williams is not a party to nor bound by the arbitration agreement.¹ The trial court denied the petition after concluding that the integration clause of the Residency Agreement is "dispositive."

DISCUSSION

1. The Integration Clause

Atria contends that the trial court erred when it concluded that the integration clause in the Residency Agreement precludes it from relying on the arbitration agreement. We agree and reverse.

" ‘ " ‘There is no uniform standard of review for evaluating an order denying a [petition] to compel arbitration. [Citation.] If the court's order is based on a decision of fact, then we adopt a substantial evidence standard. [Citations.] Alternatively, if the court's denial rests solely on a decision of law, then a de novo standard of review is employed. [Citations.]’ " ’ [Citation.]" ( Avila v. Southern California Specialty Care, Inc. (2018) 20 Cal.App.5th 835, 839-840, 230 Cal.Rptr.3d 42 ( Avila ).) When the parties to an agreement express their intention that it is the final and complete expression of their agreement, an integration occurs. Such a contract may not be contradicted by evidence of other agreements. Whether an agreement is an integration, i.e., intended as the final and complete expression of the parties' agreement, is a question of law for de novo review.

235 Cal.Rptr.3d 345

( Hayter Trucking, Inc. v. Shell Western E&P, Inc. (1993) 18 Cal.App.4th 1, 14-15, 22 Cal.Rptr.2d 229.)

24 Cal.App.5th 1052

Here the trial court concluded that the Residency Agreement was intended by the parties as the complete and final expression of their agreement. In doing so, it relied on Grey v. American Management Services (2012) 204 Cal.App.4th 803, 139 Cal.Rptr.3d 210 ( Grey ). But Grey is inapposite.

In Grey , the plaintiff applied for employment and was required to sign an "issue resolution agreement" (IRA) as a condition to having his application considered. ( Grey , supra , 204 Cal.App.4th at p. 805, 139 Cal.Rptr.3d 210.) The IRA included a broad arbitration provision. ( Ibid . ) Later, he was hired and signed an employment agreement. The employment agreement included a more limited arbitration provision and an integration clause. ( Ibid . ) When the plaintiff sued years later for employment discrimination, harassment, and retaliation, his employer asserted a right to arbitrate based on the broad arbitration provision of the IRA. ( Id . at p. 806, 139 Cal.Rptr.3d 210.)

The Grey court concluded that the employment agreement superseded the IRA, and the employer therefore could not rely on the terms of the IRA to compel arbitration, because an integrated agreement " ‘may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement.’ [Citation.]" ( Grey , supra , 204 Cal.App.4th at p. 807, 139 Cal.Rptr.3d 210 ; see Code Civ. Proc., § 1856, subd. (a).) "Since the IRA predates the employment contract, it was superseded by that contract's integration clause." ( Grey , at p. 808, 139 Cal.Rptr.3d 210.)

Here, a review of the timing of the two agreements, as well as their contents, establishes that the Residency Agreement was not intended as the final and complete expression of the parties' agreement. By its express terms, it superseded "prior" agreements. But the arbitration agreement was signed after the Residency Agreement. And the arbitration agreement expressly provides that it applies to claims regarding "the validity or enforceability of the Residency Agreement."² The trial court erred in concluding that the integration clause in the Residency Agreement precludes proof of the later signed Agreement to Arbitrate Disputes.

2. Other Defenses to Arbitration

Our conclusion that proof of the arbitration agreement is not barred by the integration clause does not,...