Preview
Electronically Filed
10/20/2022 2:08 PM
Superior Court of California
County of Stanislaus
Clerk of the Court
WENDY C. YORK, SBN 166864 By: Tyler Powers Jones, Deputy
DANIEL P. JAY, SBN 215860
2 VIRGINIA L. MARTUCCI, SBN 316296
YORK LAW CORPORATION
3 1111 Exposition Boulevard, Building 500
Sacramento, California 95815
4 Ph: (916) 643-2200
Fax: (916) 643-4680
5
Attorneys for Plaintiff LARRY DIGNES (Decedent) by and through his Successors-In-Interest
6 SHEILA M. LOWS, an individual; LORI M. KIRCHERT, an individual
7
IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
8
IN AND FOR THE COUNTY OF STANISLAUS
9
10 LARRY B. DIGNES (Decedent) by and
through his Successors-In-Interest SHEILA Case No.: CV-20-004057
11 M. LOWE, an individual; LORI M.
KIRCHERT, an individual MEMORANDUM OF POINTS AND
12
AUTHORITIES IN SUPPORT OF
Plaintiff,
13 MOTION TO LIFT THE STAY AND AN
vs. ORDER ALLOCATING ARBITRATION
14 COSTS AND FEES TO DEFENDANTS
COVENANT CARE CALIFORNIA, LLC OR REMAND THE CASE TO
15 dba TURLOCK NURSING AND SUPERIOR COURT
REHABILITATION CENTER; COVENANT
16 CARE, LLC, a Delaware Corporation; and Date: October 17, 2022
DOES 1 through 50, inclusive
17 Time: 8:30
Defendants Dept: 24
18 Judge: Hon. Sonny S. Sandhu
19
Complaint filed: September 18, 2020
20
21
I. INTRQDUCTI(JN
22
"Our legal system cannot provide `equal justice under law' unless all persons have access
23
to the courts without regard to their economic means."~ Plaintiffs request the Court to lift the stay
24 and either (1) order Defendants to pay for the cost of arbitration in its entirety because they cannot
25 afford the prohibitively expensive costs, or (2) deem that Defendants waived their right to
26 arbitration and remand this case back to Superior Court. This is an elder neglect case. The Court
27 already ordered Mr. Dignes (the decedent Plaintiff who died as a result of a C. Difficile infection
28
' Roldan v. Callahan & Blaine (2013) 219 Ca1.App.4th 8`7, 94 (citing Government Code § 68630(a) [s
"California law and court procedures should ensure that court fees are not a barrier to court access for
with insufficient economic means to pay those fees"].)
{00092357.1} MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO LIFT THE STAY AND
AN ORDER ALLOCATING ARBITRATION COSTS AND FEES TO DEFENDANTS OR REMAND THE CASE TO
Si TPERT~R C'(1T iRT _ 1
1 acquired at the Defendants' skilled nursing facility and their subsequent lack of care) to arbitrate
2 his claims. The Court further determined the wrongful death claims brought by his adult
3 daughters are stayed in Superior Court because those claims are not subject to arbitration. Based
on the selected arbitrator's fees of $490 per hour, Plaintiffs estimate arbitration will cost $83,000
4
or more, which Plaintiffs cannot afford. Mr. Dignes is deceased, and his modest estate has less
5
than $2,100 remaining. His daughters are not bound by the arbitration agreement, nor can they
b
afford arbitration. Case law, basic contract law, and public policy make it clear that the Court
7
should Order Defendants to either elect to pay for arbitration in its entirety or be deemed to have
8 waived their right to arbitrate.
9 Defendants seek to force Plaintiffs (one who is deceased and two who are not bound by
10 the arbitration agreement) to bear the substantial financial burden of paying half of the arbitration
11 that could cost $83,000 or significantly more. Defendants created a scenario where an elderly
12 person they neglect (or their grieving family) has to pay huge sums for access to justice through
a private judging system. This "pay to play" system requires two Plaintiffs (one who sells
13
insurance and one wha works part-time retail) to pay the same amount for arbitration as the
14
corporate Defendants, which are a corporate enterprise with forty facilities in multiple states that
15
are funded by private equity firms, making tens (or more likely hundreds) of millions of dollars
16
per year through taxpayer-funded Medicare and Medi-Cal contracts, and whose defense and
17
arbitration costs are entirely funded through a $3,000,000 commercial insurance policy. (Decl.
18 Martucci, ¶ 15, Fnl.)
19 How is this fair by any objective measure?
20 The Plaintiffs seek an order that the Defendants must pay for arbitration in its entirety or
21 an Order remanding this case back to Superior Court if the Defendants refuse to pay.
z2 Alternatively, the Plaintiffs request the Court amend its existing Order compelling arbitration to
add that Defendants must pay for arbitration or it is deemed waived.
23
II. FACTUAL BACKGROLTNI}
24
On September 18, 2020, Plaintiff/Decedent Larry Dignes, by and through his successors
25
in interest, his daughters Sheila Lowe and Lori Kirchert, filed suit against Defendants alleging
26
causes of action for Elder Abuse and Wrongful Death, among others, arising from Mr. Dignes'
27 residency at Defendants' skilled nursing facility, Turlock Nursing and Rehabilitation (TNR). Mr.
28 Dignes was admitted to TNR on August 7, 2019, following treatment for a stroke. As a result of
the Defendants' reckless neglect, Mr. Dignes was discharged to the hospital less than a month
{00092357.1} MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO LIFT THE STAY AND '~~
AN ORDER ALLOCATING ARBITRATION COSTS AND FEES TO DEFENDANTS OR REMAND THE CASE TO
CT iPFRTtlR CnT iRT _ 7
after his admission to TNR with a C. Difficile infection, sepsis, and renal failure due to the
2 Defendants' failure to keep him safe and failure to provide care. Mr. Dignes died on August 30,
3 2019. (Declaration of Virginia Martucci ¶ 2.)
III. PROCEDURAL HISTORY
4
On April 21, 2021, Defendants filed a motion to compel arbitration, which the Plaintiffs
5
opposed. The motion was based on an arbitration provision buried in a "dispute resolution
6
agreement" given to Mr. Dignes with his admission paperwork. Defendants presented this
7
paperwork to him seven days after his admission at his bedside on a tablet computer. After
8 multiple rounds of briefing, the Caurt ultimately granted the motion on January 3, 2022, as to
9 Mr. Dignes' claims only, and stayed Plaintiff Kirchert and Lowe's wrongful death claims in
10 Superior Court. (Decl. Martucci,'~ 3, Ex. A.)
11 The parties selected Bradley Thomas, Esq. as the arbitrator through the rank and strike
12 process, whose hourly rate is $490.Q0, in additional to Judicate West's fees. (Decl. Martucci, ~ 4,
13 Ex. B, C.) Nearly a year after the Court's order, arbitration has not started because Defendants
refuse to pay for the costs and fees of arbitration, including discovery and law and motion leading
14
up to the hearing. The Court's Order did not specify how the costs and fees of the arbitration
15
would be allocated. Moreover, the language in the arbitration agreement concerning costs and
lb
fees is vague and ambiguous, leading to the current dispute over which party should be required
17
to pay for the arbitration costs for both discovery and the hearing. (Decl. Martucci, ¶~7-9, Ex. D.)
18 The cost provision within the "dispute resolution agreement" is not only vague and
19 ambiguous, but it is also unintelligible due to typographical errors:
20 "The facility will pay for the cost of the mediator's fees and reasonable costs
associated with mediation. Facility wi11 pay for the arbitrator's fees and other
21 reasonable costs associated with arbitration, unless Resident expresses in
22 writing that he/she would like up to equally share in the payment for the cost
maximum of three (3) days of hearing. If the arbitration, in which case, both
23 hearing exceeds three (3) days, the additional arbitrator's fees and costs shall
be borne equally by the Parties will split equally the cost or arbitration.
24 Except with respect to the cost of the arbitration and with respect to any costs
25 and fees that may be awarded by the arbitrator, each Party shall bear its own.
costs and attorney fees for the arbitration." (Decl. Martucci, ~¶ 16-17, Ex. E.)
26
As discussed in.f~a, this paragraph has many ambiguities. It says Defendants will pay
27
"other reasonable costs associated with arbitration." What are "other reasonable costs associated
28
with arbitration?" Defendants claim this does not mean they will pay for law and motion or
hearings. The second sentence implies Plaintiffs are liable to pay amaximum ofone-half of three
{00092357.1} MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO LIFT THE STAY AND
AN ORDER ALLOCATING ARBITRATION COSTS AND FEES TO DEFENDANTS OR REMAND THE CASE TO
CT TPFR1(1R (`(lT iRT _ 2
1 days of arbitration only if they agree in writing. The third then modifies the second and is so
2 poorly worded it cannot be reconciled with the second. Is a patient/resident obligated to pay for
3 half of three days of arbitration (assuming they opt-in}, or is a patient/resident obligated to pay
for one-half of the arbitration after three days regardless of opting in?
4
Importantly, the Defendants' admission coordinator did not explain to Mr. Dignes the
5
costs of arbitration, nor did she know how much it costs.2
6
Plaintiffs met and conferred multiple times with Defendants about the costs and Plaintiffs'
7
inability to pay. Defendants declined to pay for anything more than three days of the arbitration,
8 and would not pay for the costs of law and motion or hearings. (Dec1. Martucci ¶~7-9, Ex. D.)
9 IV. PLAINTIFFS CANNOT AFFORD THE ARBITRATION COSTS
10
Plaintiff Larry Dignes is the only Plaintiff ordered to arbitration. He is deceased. His
11
modest estate has been distributed outside of probate, and all that remains is $2,100.00. (Decl.
12 Sheila Lowe, ¶3.) Plaintiffs Sheila Lowe and Lori Kirchert were not ordered to arbitration. (Decl.
13 Martucci, ¶3, Ex. A.) Ms. Lowe is an insurance agent. Ms. Kirchert works part-time in retail.
14 ~ Plaintiffs estimate that, at a minimum, the arbitration will cost $83,000. (DecL Martucci, ¶¶4-6,
15 Ex. B, C.) This is a very conservative estimate and will be more depending on the law and motion
required, which is extensive and complex in elder neglect cases, as more fully discussed in the
16
Declaration of Virginia Martucci. (See Decl. Martucci, ~¶ 10-14.) Neither plaintiff could afford
17
to pay half of the estimated $83,000 (or more) in arbitration costs along with their household
18
expenses. (Decl. Sheila Lowe, ~¶ 4-5; Decl. Lori Kirchert, ~~ 4-5.) Nor does it make sense that
19
the adult daughters of a deceased plaintiff could be forced to pay for the arbitration under a
20
contract that they are not parties to.
21 V. LEGAL AUTHORITY AND ARGUMENT
22 A. The Court Has The Authority To Lift The Stay and Consider this Motion.
23 The Court has the authority to hear and rule on this motion. {Code of Civil Procedure §
1281.8; Aronow v. Superios~ Court (2022} 76 Ca1.App.Sth 865.) The Court in Aronow considered
24
whether a trial court that granted a defendant's petition to compel arbitration had jurisdiction to
25
lift the stay where a plaintiff demonstrates the financial inability to pay the anticipated arbitration
26
27
28 2 When Counsel asked if the coordinator knew how much arbitration costs, she replied, "I do not.'
When. asked if she told Mr. Dignes about the costs of arbitration, she replied, "I did not." Wher
asked if she knew what would happen in a situation where a resident could not afford their shad
of arbitration casts, she stated, "No." (Decl. of Martucci, ~ 18, Ex. F.)
{00092357.7 } MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO LIFT THE STAY AND
AN ORDER ALLOCATING ARBITRATION COSTS AND FEES TO DEFENDANTS OR REMAND THE CASE TO
fiTiPF.RTnR f'(1TTRT_4
costs. The Court held that it does have the authority to both lift the stay and require a defendant
2 to either pay plaintiff s share of arbitration costs or waive the right to arbitration. (Id, at 870.} The
3 Court further noted that during the time a lawsuit is stayed pending arbitration, under its vestigial
jurisdiction, a trial court may: (1) appoint arbitrators if the method selected by the parties fails;
4
(2) grant a provisional remedy, but only upon the ground. that the award to which an applicant
5
maybe entitled may be rendered ineffectual without provisional relief; and (3) confirm, correct,
6
or vacate the arbitration award. (Id. at 789 [citing Code of Civil Procedure §§ 1281.6, 1281.8(b),
7
1285.]) Unconscionable fees or a fee allocation that violates public policy may render an award
8 ineffectual without provisional relief here. Thus, the Court has the power to lift the stay, consider
9 this Motion, and make orders on costs accordingly.
10 B. Paragraph 14 Is Ambiguous and Uncertain and Must be Interpreted Against
Defendants as the Drafters.
11
12 Paragraph 14 of the Dispute Resolution Agreement is hopelessly vague, ambiguous, and
unintelligible; it must be construed against the Defendants (the drafting party.) Traditional
13
principles of contract interpretation apply when deciphering the parties' intent. (Sandqutst v.
14
Lebo Automotive, Inc. (2016} 1 Ca1.5th 233, 244; Sy First Family Ltd. Partnership v. Cheung
15
(1999) 70 Ca1.App.4th 1334, 1341-1343.) This included where an arbitration provision whose
16
application to a particular dispute is uncertain; in that case, ordinary contract principles require
17
the provision be construed against the drafter's interpretation in favor of the non-drafter's
18 interpretation. (Victoria v. Superior Court (1985) 40 Ca1.3d 734, 739.) "The reason for this rule
19 is to protect the party who did not choose the language from an unintended or unfair result."
20 (Mastrobuono v. ~"hearson Lehman Hutton, Inc. (1995) 514 U.S. 52, 63.) Under basic contract
21 principles, words in a contract that are wholly inconsistent in nature with the main intent of the
22 parties must be rejected (Civil Code § 1652.); ambiguities in written agreements are to be
construed against their drafters. (Civil Code § 1654.)
23
Here, it is undisputed that Defendants drafted the arbitration clause. It is also clear from
24
the plain reading of Paragraph 14 that it is ambiguous and uncertain. Line 2 says:
25
Facility will pay for the arbitrator's fees and other reasonable costs associated
26 with arbitration, unless Resident expresses in writing that he/she would like up
to equally share in the payment foN the cost ~narimum of three (3) days of
27 hearing.
28
The plain reading implies Defendants will pay for the arbitrator's fees and "other
reasonable costs associated with arbitration." It does not define "other reasonable costs associated
{00092357.1} MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO LIFT THE STAY AND
AN ORDER ALLOCATING ARBITRATION COSTS AND FEES TO DEFENDANTS OR REMAND THE CASE TO
SUPERIOR COURT - 5
1 ' with arbitration." When the Plaintiffs asked Defendants if that meant law and motion and
2 hearings, Defendants claimed it does not. So what does it mean?
3 The plain reading of Line 2 supports Defendants are required to pay for arbitration in its
entirety except and unless plaintiffs opt-in, in writing, to payfog° no more than three days of the
4
hearing. Then the third sentence seemingly modifies the second. Line 3 says:
5
If the arbitration, in which case, both hearing exceeds three (3) days, the
6 additional ar°bitrator's fees and costs shall be borne equally by the Parties will
split equally the cost or arbitratio~z.
7
8 Line 3 says Defendants are only required to pay for three days maximum, and then the
9 parties have to split the costs, no matter the length and no matter whether Plaintiff opts in. Line
3 has typographical errors and is so poorly worded that it cannot be reconciled with the second
10
sentence. Is a resident obligated to pay for one-half of three days of arbitration (assuming they
11
opt-in), or is a resident obligated to pay for one-half of the arbitration over more than three days
12
regardless of opting in? What about all of the other costs of arbitration (the arbitrator's
13
preparation time, hearing time for law and motion, discovery disputes, dispositive motions, and
14
the administrative costs, etc.)? Who pays for these? The paragraph is uncertain, ambiguous, and
15 must be construed against Defendants.
16 In addition, the Defendants' refusal to pay for arbitration violates public policy. California
17 courts repeatedly hold arbitration agreements unconscionable, unenforceable, and against public
18 policy when (like here} the plaintiffs are forced to pay onerous arbitration costs or where such
19 costs are not adequately disclosed. (See ArmendaYiz v. Foundation Health Psychcare Services,
Inc. (2000) 24 Ca1.4th 83, 109.) The fees here are onerous, and there is no dispute the fees and
20
costs were never disclosed to Mr Dignes. What's worse, the paragraph shifting costs to Plaintiffs
21
is vague, ambiguous, and uncertain.
22
Thus, Paragraph 14 should be construed against the drafters (the Defendants), and the
23
Court should Order Defendants to pay for all costs and fees associated with the arbitration,
24 including but not limited to costs of any hearings, law and motion, arbitrator preparation and
25 appearance time, administrative fees, and entire arbitration hearing regardless of length.
26 C. Defendants Must Either opt to Pay the Costs of Arbitration, or the Court Must
Remand Mr. Dignes' Claims Back to Superior Court.
27
28 The case law makes it clear that Defendants have a choice: they can either pay the
arbitration fees and costs or litigate Mr. Dignes' claims in Superior Court. In Roldan v. Callahan
& Blaine (2013) 219 Ca1.App.4th 87, the Court held that when a plaintiff is unable to pay the
{00092357.1} MEMORANDUM OF PAINTS AND AUTHORITIES IN SUPPORT OF MOTION TO LIFT THE STAY AND
AN ORDER ALLOCATING ARBITRATION COSTS AND FEES TO DEFENDANTS OR REMAND THE CASE TO
Si iFFRT(1R C'(~T 1RT - Fi
1 costs of arbitration, the Defendant must choose between paying the plaintiff's costs or waiving
2 its right to arbitrate, allowing the case to be remanded back to the superior court. The court
3 reasoned that to rule otherwise would cause a plaintiff to be without recourse if they were unable
to afford to proceed with the arbitration, and "would effectively result in the plaintiffs being
4
deprived of any forum to resolve their claims against the defendant." (Id. at 978; see also Weiler
5
v. Marcus & Millichap Real 'state Investment Services, Inc. (2018) 22 Ca1.App.Sth 970, 982
6
[holding when a party who has engaged in arbitration in good faith cannot afford arbitration, the
7
party may seek relief from the superior court and the court may order (1) the arbitration continue
8 so long as the other party to the arbitration agrees to pay, ar the arbitrator orders it to pay, all fees
9 and costs of the arbitration, and (2) if neither of those occurs, the arbitration shall be deemed
10 "had" and the case may proceed in the superior court.])
11 The Roldan and Weiler courts held it would be unacceptable to deny a plaintiff the ability
12 to pursue their rights due to an inability to pay the high costs of arbitration, which in the present
matter will cost over $83,000 or significantly more. (Decl. Martucci, ~¶5-6.) This is a
13
conservative estimate that contemplates atwo-week (10-day) hearing and another two weeks (10
14
days) of law and motion, hearings, and arbitrator preparation. The real cost will easily exceed the
15
estimate based on the number of motions, dispositive motions, and the motion and hearing
16
preparation time needed by the arbitrator. Especially given the amount of discovery required in
17
elder neglect cases because the Defendants are always in possession of the evidence. {Decl.
18 Martucci ¶¶11-12.)
19 Mr. Dignes is deceased, and his estate has less than $2,100.00 in assets remaining. (Decl.
2d Lowe,'~3.) Neither Mr. Dignes (nor his estate) is able to pay the high costs of arbitration. Ms.
21 Lowe and Ms. Kirchert also cannot afford arbitration—no~~ a~•e they parties to the arbitration
22 agreement a~zd wes°e not ordered to arbitration. (Declaration of Sheila Lowe ~'~2, 4-5;
Declaration of Lori Kirchert ~¶4-5.) They cannot fairly be expected to pay for the arbitration even
23
if they could afford it.3
24
Thus, under Roldan and Weiler, it runs contrary to California's commitment to justice
25
without regard to economic status to force the Plaintiffs to make the unenviable decision to either
26
27
3 Counsel's ability to pay or advance the costs for an arbitration is irrelevant. There is nothing in Rolcic
28 that allows the court to engage in an examination of a privileged retainer agreement between the plainti
and his or her counsel, or that would require a plaintiffs counsel to disclose its finances and ability to p~
plaintiffs arbitration costs up front. The focus of Roldal~ was on the plarntrffs ability to pay arbitratic
costs, not the attorney's ability to pay such fees.
{00092357.1} MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO LIFT THE STAY AND
AN ORDER ALLOCATING ARBITRATION COSTS AND FEES TO DEFENDANTS OR REMAND THE CASE TO
SUPERIOR COURT - 7
1 pay for the arbitration or lose their right to vindicate their father's claims. Accordingly,
2 Defendants have a choice: (1) either pay for the arbitration in total or (2) have it deemed that they
3 waived their right to proceed in arbitration.
D. Plaintiffs Cannot Be Forced To Pay The High Costs of Arbitration To Enforce their
4
Nonwaivable Statutory Rights or Their Common Law Claims.
5
Courts hold that exorbitantly high arbitration costs are unconscionable, especially in the
6
context of arbitration of nonwaivable statutory rights. In Armendariz v. Foundation Health
7
Psychcare Services Inc., (2000) 24 Ca1.4th 83, the Supreme Court considered the enforceability
8 of arbitration clauses in cases where plaintiffs seek to vindicate statutory rights enacted for the
9 public good. The Court held that an employee could not be required to pay arbitration fees when
10 he sued to vindicate his nonwaivable rights under the Fair Employment and Housing Act
11 (FEHA). The Court reasoned that requiring plaintiffs to pay the costs of arbitration "would
12 undermine Congress' intent" in passing the FEHA because it would "prevent employees who are
seeking to vindicate statutory rights from gaining access to a judicial forum and then require them
13
to pay for the services of an arbitrator when they would never be required to pay for a judge in
14
court." (Id. at 108).
15
The Court concluded that the right to vindicate certain statutory rights through a jury can
16
be waived, but arbitration agreements that encompass nonwaivable statutory rights must be
17
subject to "particular scrutiny." (Id. at 100.) To be valid, an arbitration agreement that waives a
18 jury trial for certain statutory rights must meet minimum requirements: (1) itmust not limit
19 statutorily imposed remedies; (2) it must allow for adequate discovery; (3) it must provide for
20 written findings to facilitate judicial review; and (4) it must not require the individual to bear
21 any cost that he or she would not have to bear if bringing the action in court (Id. at 103-111
22 [emphasis added].)
Similarly in Little v. Auto StiegZer (2003) 29 Ca1.4th 1064, the Supreme Court extended
23
the rationale of ArmendaYiz beyond FEHA to apply "generally to nonwaivable rights conferred
24
for a public benefit." (Id. at 1078). The Court in Little went beyond the protection of statutory
25
rights to "unwaivable rights derived from common law," applying the same Armendariz
26
protections tc~ common law rights that pertain to the public interest. (Id. at 1077-1079.)
27 Like Armendariz and Lzttle, Plaintiffs are vindicating nonwaivable rights that are
28 grounded in essential public policy—protecting society's elders from neglect and abuse. Mr.
Dignes' claims are premised nn the Elder Abuse and Dependent Adult Civil Protection Act
{00092357.1} MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO LIFT THE STAY AND
AN ORDER ALLOCATING ARBITRATION COSTS AND FEES TO DEPENDANTS OR REMAND THE CASE TO
Ci iPFRTl1R (`(lT TRT _ R
1 (Welfare and Institutions Code §§ 15600 et seq.), which was passed by the Legislature to protect
2 elders and dependent adults from abuse, neglect, or abandonment. When the Legislature declares
3 conduct to be contrary to public policy, the rights provided are unwaivable. (University Village
Thousand Dales, CCRC, LLC (2020) 49 Cal.App.Sth 847.) Mr. Dignes also asserts claims for
4
violation of the Patient Bi11 of Rights outlined in 22 C.C.R, § 72527, enforceable via Health and
5
Safety Code § 1430, which creates nonwaivable statutory rights.
6
In sum, the claims here are exactly the kind of claims that Little and Armendariz
7
recognized as needing special protection when it comes to arbitration, especially regarding the
8 costs. It would violate public policy and go against the weight of authority to deprive Mr. Dignes
9 of his ability to vindicate his nonwaivable rights (and his common law claims premised on
10 statutory rights) by imposing prohibitive costs to pursue those rights in arbitration.
11 Because the arbitration costs are prohibitively expensive, and Mr. Dignes' estate cannot
12 afford those costs, the Court should Order the Defendants must pay the costs or remand the case
13 to Superior Court if they refuse.
E. Ms. Lowe and Ms. Kirchert Cannot Be Forced to Pay for Arbitration When They
14
Are Not Parties to the Agreement.
15
As the Court already ruled and ordered, Ms. Lowe and Ms. Kirchert are not bound by
16
the arbitration agreement. (DecL Martucci, ¶ 3, Ex. A.) "The strong public policy in favor of
17
arbitration does not extend to those who are not parties to an arbitration agreement, and a party
18 cannot be compelled to arbitrate a dispute that he has not agreed to resolve by
19 arbitration." (Buckner v. Tamarin (2002) 98 Ca1.App.4th 140, 142, citing Benasra v. Marciano
20 (2001) 92 Cal.App.4th 987, 990; McArthur v. McArthur (2014) 24 Ca1.App.4th 651, 653, 658-
21 659 [beneficiary of amended trust not obligated to arbitrate where she did not sign arbitration
22 provision and did not accept benefits under it or seek to enforce it].)4
Mr. Dignes' daughters were not ordered to arbitration, and they did not consent to
23
arbitration or pay for it. The only parties ordered to arbitration are Mr. Dignes and the
24
Defendants. By the same token, the only parties that possibly agreed to pay for arbitration are
25
Mr. Dignes and the Defendants. To force his daughters to pay for arbitration violates simple
26
27
4 As the Court already ruled, Mr. Dignes did not bind them to the arbitration agreement as their agent
28 Further, they are not third-party beneficiaries to the contract because there is no evidence in the agreemen
evidencing an intent to benefit them. (See, Jensen v, U-Haul Co. of California (2017) 18 Ca1.App.S~' 295
301-302 [a contract must be "made expressly" for the third party's benefit and the testis "whether an inter
to benefit a third person appears from the terms of the contract."]
{00092357.1} MEMORANDUM OF POINTS AND AUTHORITIES IN SL7PPORT OF MOTION TO LIFT THE STAY AND
AN ORDER ALLOCATING ARBITRATION COSTS AND FEES TO DEFENDANTS OR REMAND THE CASE TO
ci rnFRrnR rnTruT _ a
1 contract law. Therefore, the Plaintiffs' motion must be granted, and the Court should either Order
2 Defendants to bear the costs or remand back to Superior Court.
3 F. The FAA Does Not Preclude The Court From Allocating Costs Of The Arbitration.
"Nothing in the FAA prevents states from controlling arbitration costs imposed by
4
adhesive contracts so that the remedy of prosecuting state statutory or common law public rights
5
through arbitration is not rendered illusory." (Little v. Auto Stiegler (2003) 29 Ca1.4th 1064,
6
1080). Furthermore, "the Armendariz requirements are...applications of general state law
7
contract principles regarding the unwaivability of public rights to the unique context of
8 arbitration, and accordingly are not preempted by the FAA." (Id. at 1079). Further, FAA has no
9 rule that even discusses who bears the costs and fees of arbitration. (See, 9 U.S.C. § 1-14.) The
10 Court can allocate the arbitration fees to the Defendants without running afoul of the FAA.
11 VI. CONCLUSION
12 Based on the foregoing and the accompanying papers, Plaintiffs respectfully request that
the Court lift the stay and issue an order stating either (1) Defendants pay all of the arbitrator's
13
professional and administrative fees in this case and remain in arbitration, or (2) if Defendants
14
do not agree to pay for the arbitration, they are deemed to have waived their right to arbitrate and
15
the case is remanded back to Superior Court. Alternatively, the Plaintiffs request the Court to
16
modify its existing Order. The cast provision is vague, uncertain, and ambiguous and must be
17
interpreted against the Defendants. Case law is clear: where the Plaintiffs cannot pay for
18 arbitration., Defendants can either pay the Plaintiffs' portion or waive arbitration. The Plaintiffs
19 cannot afford to pay for arbitration in this matter. As a result, Defendants must choose between
2Q paying for the arbitration or having the case remanded to Superior Court.
21 Dated: October 20, 2022 YORK I{AW CORPOR '~ON
22
23
~ENI~'Y C. ~1'ORK
24 DANIEL P. JAY
VIRGINIA L. MARTUCCI
25 Attorneys for Plaintiffs
26
27
28
{00092357.1} MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO LIFT THE STAY AND
AN ORDER ALLOCATING ARBITRATION COSTS AND FEES TO DEFENDANTS OR REMAND THE CASE TO
SI JPRRT(~R C'(ll TRT - 1 ~
COURT: Stanislaus County Superior Court
CASE NO. CV-20-004057
2
CASE NAME: Dignes v. Covenant Care California, LLC, et al.
3
PROOF OF SERVICE
4
I am a citizen of the United States, employed in the County of Sacramento, State of
5 California. My business address is 1111 Exposition Boulevard, $uilding 500, Sacramento CA
95815. I am over the age of 18 years and not a party to the above-entitled action.
6
I am readily familiar with York Law Corporation's practice for collection and
processing of correspondence for mailing with the United States Postal Service. Pursuant to
8 said practice, each document is placed in an envelope, the envelope is sealed, the appropriate
postage is placed thereon, and the sealed envelope is placed in the office mail receptacle. Each
9 day's mail is collected and deposited in a U.S. mailbox at or before the close of each day's
business. (CCP Section 1013a(3) or Fed.R.Civ.P.S(a) and 4.1; USDC (E.D. CA) L.R. 5-
ao
135(a).)
I1
On October 20, 2022, MEMORANDUM OF POINTS AND AUTHORITIES IN
12 SUPPORT OF MOTION TO LIFT THE STAY AND AN ORDER ALLOCATING
ARBITRATION COSTS AND FEES TO DEFENDANTS OR REMAND THE CASE TO
13 SUPERIOR COURT, I caused the within, to be served via:
14 XX ELECTRONIC SERVICE: I caused the documents) to be sent to the persons) via
eleCtroniC nOtifiCatiori as follows: Placed in the United States Mail at Sacramento, California in an
15 envelope with postage thereon fully prepaid addressed as follows:
16
John Supple, Esq.
l7 Robert Deering, Esq.
J. Supple Law
18
990 Fifth Avenue
19 San Rafael, CA 94901
Jsu~ple(cz~j supplelaw. com
20 rdeerin~(a,jsupplelaw.com
tdan~(a~~~ su~pielaw.