Preview
Electronically Filed
4/26/2023 8:58 AM
Superior Court of California
County of Stanislaus
Clerk of the Court
WENDY C. YORK, SBN 166864 By: Angela Mesa, 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 Pll: (916) 643-2200
Fax: (916) 643-4680
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Attorneys for Plaintiff LARRY DIGNES (Decedent) by and through his Successors-In-Interest
SHEILA M. LOWE, an individual; LORI M. KIRCHERT, an individual
IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
IN AND FOR THE COUNTY OF STANISLAUS
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 PLAINTIFFS'ENEWED MOTION TO
vs. LIFT THE STAY AND AN ORDER
14 ALLOCATING ARBITRATION COSTS
COVENANT CARE CALIFORNIA, LLC AND FEES TO DEFENDANTS OR
15 dba TURLOCK NURSING AND REMAND THE CASE TO SUPERIOR
REHABILITATION CENTER; COVENANT COURT
16 CARE, LLC, a Delaware Corporation; and
DOES 1 through 50, inclusive Date: May 23, 2023
17
Defendants Time: 8:30
18 Dept: 24
19 Judge: Hon. Sonny S. Sandhu
20 Complaint filed: September 18, 2020
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22 I. INTRODUCTION
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Plaintiffs bring this renewed Motion'o lift the stay and seek a Court Order remanding
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this case back to Superior Court based on Decedent Larry Dignes'nability to pay for arbitration
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that could cost anywhere from $ 80,000 to $ 300,000 or more. As shown by the declarations and
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exhibits, Mr. Dignes'nly bank account had a balance of $ 1,803.13 as of March 2023. He,
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28 'laintiffs filed their initial motion to lift the stay and remand to Superior Court, which the Court
heard on November 17, 2022. The Court denied the Motion without prejudice, indicating
Plaintiffs may re-file the Motion and provide evidence of the inability of Mr. Dignes'state to
bear arbitration costs with declarations and supporting exhibits.
100098817.11 MEMQRANDUM QF PQINTs AND AUTHGRITIEs IN sUPPoRT QF PLAINTIFFs'ENEwED MGTIGN
TO LIFT THE STAY AND AN ORDER ALLOCATING ARBITRATION COSTS AND FEES TO DEFENDANTS OR
REMAND THE CASE TO SUPERIOR COURT - I
1
therefore, cannot pay for arbitrafion. His fundamental right to a forum he can afford should
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outweigh the Defendants'ontractual right to arbitrate. (Kang v. RG Legacy L LLC (2023) 88
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Cal.App.5th 1243, 1258.) A comparable elder neglect arbitration several years ago with similar
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facts (death following facility-acquired C. Difficile infection) handled by Plaintiffs'ounsel cost
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$ 284,729.78. Put simply, Mr. Dignes'state is penniless compared to the average cost of
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arbitration and compared to the Defendants'bility to pay. Based on his inability to pay, the
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Court should remand Mr. Dignes'laims to Superior Court. Alternatively, the Court should order
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Defendants to pay for all arbitration costs and fees in their entirety, and issue an order requiring
Defendants to pay the initiating fees and costs for arbitration no later than fifteen (15) days from
the Court's Order. Should Defendants refuse to do so within fifteen (15) days, the Court should
find they waived arbitration and remand back to Superior Court.
13 IL FACTUAL BACKGROUND
14 A. Brief Procedural Background.
15 On September 18, 2020, Plaintiff/Decedent Larry Dignes filed the instant lawsuit through
16 his successors, his daughters Sheila Lowe and Lori Kirchert, alleging causes of action for Elder
17 Abuse and Wrongful Death, among others, arising &om Mr. Dignes'esidency at
Defendants'killed
nursing facility Turlock Nursing and Rehabilitation (TNR). Mr. Dignes was admitted to
TNR on August 7, 2019, following hospitalization for a stroke. As a result of the
Defendants'eckless
neglect, Mr. Dignes was discharged back to the hospital less than a month after his
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Defendants'2
admission to TNR with a C. Difficile infection, sepsis, and renal failure due to the
failure to keep him safe and failure to provide care. Mr. Dignes died on August 30, 2019. (Decl.
of Virginia Martucci g 2.)
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On April 21, 2021, Defendants filed a motion to compel arbitration based on an electronic
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Defendants'6
"dispute resolution agreement" Mr. Dignes purportedly signed after being in the
facility for over a week. Plaintiffs opposed that Motion. The Court granted arbitration as to Mr.
Dignes'laims only and stayed the wrongful death claims in Superior Court. (Decl. Martucci,
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$3, Ex. A.)
100098817.I 1 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS'ENEWED MOTION
TO LIFT THE STAY AND AN ORDER ALLOCATING ARBITRATION COSTS AND FEES TO DEFENDANTS OR
REMAND THE CASE TO SUPERIOR COURT - 2
Plaintiffs moved to lift the stay and remand Mr. Dignes'laims to Superior Court on
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October 20, 2022, based on Mr. Dignes'nability to pay and the ambiguous and poorly worded
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language of the dispute resolution agreement. (Decl. Martucci, $ 5, Ex. B.) The Court denied the
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Motion without prejudice. The Court stated in its Order:
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6 Given the ambiguity surrounding the "reasonable costs" interpretation and
defendant's unwillingness to pay for all arbitration costs, counsel is advised
7 that the court can at a later date:
~ Find that reasonable costs include discovery and order defendants
to cover these discovery costs.
9 Remand the matter to court as the expense of arbitration is more
than plaintiffs can bear and certainly more than they would pay in court,
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(Decl. Martucci, $ 6, Ex. C.)
Per the Court's Order, the parties attended mediation with thc Honorable Ben Davidian
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(Rct.) on March 22, 2023. No resolution was reached. Judge Davidian stated something to the
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effect of mediation was premature because the "tomato needed to ripen on the vine" since no
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Defendants'5
discovery has taken place. Plaintiffs served discovery and met and conferred on
initial responses over a year ago at this point, and discovery has been stayed due to the dispute
over arbitration fees and costs. (Decl. Martucci, tt 6.)
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B. Mr. Dignes'ank Account Presently Has Less than $ 2,000.
Mr. Dignes was of modest means. At the time of his death, he was a widow. He was on a
fixed income of $ 1,647.66 a month, including his pension &om working decades for Foster Farms
(totaling $ 197.66 per month) and his social security of $ 1,450.00. (Decl. Lowe, $ 4.) He lived in
a 55-plus mobile home community, where his monthly rent was $ 715.13. (Decl. Lowe, g 5.) After
23 paying rent, Mr. Dignes had approximately $ 932.53 left to pay the remainder of his monthly bills.
24 (Decl. Lowe, $ 6.) His monthly bills included electricity, gas, home phone, alarm system, co-
25 pays for doctor's visits, $ 104.03 for television, $ 96.00 monthly for United Healthcare
26 supplemental insurance, approximately $ 100.00 per month for home and car insurance, in
addition to food, regular Church donations, and incidentals. (Decl. Lowe, g 6.) He had little to
nothing left over each month after paying bills. The only significant assets Mr. Dignes owned at
the time of his death were a 2010 Nissan Sentra and his mobile home. (Decl. Lowe, $ 7.) He had
100098B17.1} MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS'ENEWED MOTION
TO LIFT THE STAY AND AN ORDER ALLOCATING ARBITRATION COSTS AND FEES TO DEFENDANTS OR
REMAND THE CASE TO SUPERIOR COURT - 3
I
no investments, stocks, retirement investments, bonds, or other assets to Ms. Lowe's knowledge,
2
who was a co-signor on his bank account and DPOA. (Decl. Lowe, $ 7.) The month he died, Mr.
3
Dignes had $ 3,059.24 in his bank account. (Decl. Lowe, Ex. A [see September 5, 2019
4
statement].) Included in Exhibit A to the Declaration of Ms. Lowe are Mr. Dignes'ank
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statements from June to September 2019 and statements over the last six months. Plaintiffs can
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provide additional statements should the Court request,
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Ms. Lowe was the administrator of Mr. Dignes'ill and has signature power over his
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checking account. (Decl. Lowe, $$ 10, 21.). Following his death, Mr. Dignes'aughters received
life insurance of $ 15,000. (Decl. Lowe, $ 8.) They deposited the insurance money into his bank
account and used it to make repairs to his mobile home before selling it. (Decl. Lowe, tt 8.) His
mobile home was sold and the proceeds, totaling less than $ 50,000, were deposited into Mr.
Dignes'ccount. (Decl. Lowe, $ 10.) Ms. Lowe distributed money to their family from Mr.
14 Dignes'ank account according to his will. (Decl. Lowe, $ 10.) Ms. Lowe sold small items that
15 Mr. Dignes owned, like artwork, military insignia pins, and some magazines on eBay. Profits
16 from those sales have been deposited into his account. The account remains open for any other
items sold by eBay and incidentals that have come up. As of March 22, 2023, his bank account
had a balance of $ 1,803.13. (Decl. Lowe, $ 12.)
When Mr. Dignes became a resident of the Defendants'acility, Ms. Lowe planned on
talking to her father because he was close to running a monthly deficit. She was going to
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recommend he sell his mobile home aller he was discharged and move in with her given how
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tight his finances were. (Decl. Lowe, $ 13.)
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The Court did not order Ms. Lowe and Ms. Kirchert's claims to arbitration, and neither
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can afford to pay for the arbitration. (Decl. Lowe, f[ 13; Decl. Kirchert, tt 4.)
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III. LEGAL AUTHORITY AND ARGUMENT
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A. The Court Has The Authority To Lift The Stay and Consider this Motion
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The Court has the authority to hear and rule on this motion, and this Court permitted
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Plaintiffs to re-file the instant motion and provide supporting documentation of Mr.
Dignes'00098817.11
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS'ENEWED MOTION
TO LIFT THE STAY AND AN ORDER ALLOCATING ARBITRATION COSTS AND FEES TO DEFENDANTS OR
REMAND THE CASE TO SUPERIOR COURT - 4
1
inability to pay. (Code of Civil Procedure tj 1281.8; Aronow v. Superior Court (2022) 76
2
Cal.App.5th 865.) The Court in Aronow considered whether a trial court that granted a
3
defendant's petition to compel arbitration had jurisdiction to lift the stay where a plaintiff
4
demonstrates the financial inability to pay the anticipated arbitration costs. The Court held that it
does have the authority to both lift the stay and require a defendant to either pay the plaintiffs
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share of arbitration costs or waive the right to arbitration. (Id. at 870.) The Court further noted
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that during the time a lawsuit is stayed pending arbitration, under its vestigial jurisdiction, a trial
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court may: (1) appoint arbitrators if the method selected by the parties fails; (2) grant a provisional
I0
remedy, but only upon the ground that the award to which an applicant may be entitled may bc
rendered ineffectual without provisional relief; and (3) confirm, correct, or vacate the arbitration
award. (Id. at 789 [citing Code of Civil Procedure tj) 1281.6, 1281.8(b), 1285.]) Unconscionable
13 fees or a fee allocation that violates public policy may render an award ineffectual without
provisional relief here. Thus, the Court has the power to lift the stay, consider this Motion, and
15 make orders on costs accordingly.
16
B. Arbitration Will Cost Thousands More than Mr. Dignes Would Pay to Litigate in
17 Superior Court.
18 In their initial Motion regarding the arbitration costs, the Plaintiffs provided a
19 conservative estimate that arbitration would cost approximately $ 83,000 based on a two-week
20 arbitration and ten additional days of law and motion. (Decl. Martucci, $ 5, Ex. B.) However,
21 pursuant to the Court's December 2022 Order, the Plaintiffs gathered costs &om actual
22 arbitrations in two similar elder neglect cases to show that arbitration will cost more than
23 lifigation in Court. The average cost of arbitration in those cases is over $ 251,000. The first case,
24 handled by the Plaintiffs'ounsel, was also a C. Difficile case like the instant case The total cost
of arbitration through trial and post-trial was $ 284,729.78. The cost of the trial alone in that case
totaled $ 154,448.00. (Decl. Martucci, $ 10, Ex. F.) The second case is a case posted by JAMS
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in its quarterly Consumer Case Information Spreadsheet. The lead attorney in that case handles
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similar cases as the Plaintiffs'ounsel. JAMS charged $ 217,625.00 in arbitrator fees in that case.
In both of these cases, the costs were allocated 100 percent to Defendants/Respondents. (Decl.
100098817.11 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS'ENEWED MOTION
TO LIFT THE STAY AND AN ORDER ALLOCATING ARBITRATION COSTS AND FEES TO DEFENDANTS OR
REMAND THE CASE TO SUPERIOR COURT - 5
1
Martucci, $ 11, Ex. G.) These are two real examples that show arbitration fees are exorbitant2
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and above and beyond the other routine costs of litigation, such as the costs of depositions and
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experts for hial.
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C. Mr. Dignes'state Cannot Afford Arbitration.
As discussed in the Declaration of Sheila Lowe, Mr. Dignes was of modest means and
died with few assets. He was on a fixed income of $ 1,647.66 a month. His pension from working
decades for Foster Farms was $ 197. 66 per month. He lived in a 55-plus mobile home community,
9 where his monthly rent was $ 715.13. After paying rent, Mr. Dignes had approximately $ 932.53
10 left to pay the remainder of his monthly bills. Before he died, Ms. Lowe planned on talking to
11 her father because he was close to running a monthly deficit. She was going to recommend he
12 move in with her given his fixed income and near deficit. (Decl. Lowe, $ 13.) His bank account
13 has less than $ 2,000 presently. (Decl. Lowe, Ex. A.) He cannot afford the cost of arbitration with
14 the arbitrator's hourly rate of $ 490.00 per hour, plus administrative fees.
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D. Because Mr. Dlgnes Cannot Afford Arbitration, the Defendants Must Opt to Pay
16 for Arbitration, or the Court Must Remand to Superior Court.
17 Defendants have a choice: they can either pay the arbitration fees and costs or litigate Mr.
18 Dignes'laims in Superior Court. In Roldan v. Callahan & Blaine (2013) 219 Cal.App.4th 87,
19 the Court held that when a plaintiff is unable to pay the costs of arbitration, the Defendant must
20 choose between paying the costs or waiving its right to arbitrate, allowing the case to be remanded
back to the superior court. The court 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
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effectively result in the plaintiffs being deprived of any forum to resolve their claims against the
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What is worse, consumers like Mr. Dignes statistically lose significantly more in arbitration
26 than the commercial Defendants who force consumers into arbitration. One study found that,ore
people climb Mount Everest in a year (with a better success rate) than prevail in consumer
arbitration cases. (AAJ Research, Forced Arbitration During a Pandemic: Corporations Double
2g Down (October 27, 2021), AAJ, available at: httns://www.iustice.oru/resources/research/forced-
arbitration-in-a-nandemic.) That study, published by two professors (one fiom University of
California, Los Angeles and one from Cornell), found "On average, employees and consumers
win less often and receive much lower damages in arbitration than they do in court." (Id.)
100098817.1) MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS'ENEWED MOTION
TO LIFT THE STAY AND AN ORDER ALLOCATING ARBITRATION COSTS AND FEES TO DEFENDANTS OR
REMAND THE CASE TO SUPERIOR COURT - 6
1
defendant." (Id. at 978; scc also }}reiler v. Ilfarcus 4 Ivfi lliciiap Real Estate Investment Services,
2
Inc. (2018) 22 Cal.App.5th 970, 982 [holding when a party who has engaged in arbitration in
3
good faith and cannot afford arbitration, the party may seek relief from the superior court and the
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court may order (1) the arbitration continue so long as the other party to the arbitration agrees to
5
pay, or the arbitrator orders it to pay, all fees and costs of the arbitration, and (2) if neither of
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those occurs, the arbitration shall be deemed "had" and the case may proceed in the superior
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court.])
The Roldan and Veiler courts held it would be unacceptable to deny a plaintiff the ability
to pursue their rights due to an inability to pay the high costs of arbitration. The two sample elder
neglect cases, which are exemplary of the work involved in this case, totaled an average of over
$ 251,000
13 Recently in Ilang v. RG Legacy I, LLC, the Court considered whether a Defendant skilled
14 nursing facility should pay for Court-Ordered arbitration where the Plaintiff/decedent died
15 penniless. Plaintiffs who represented the estate of the resident argued in opposition to an appeal
16 by the defendants regarding costs of arbitration that their father died indigent and had no money
17 in his estate to pay arbitration costs and fees. ((2023) 88 Cal.App.5th 1243, 1247.) They cited
Roldan and argued the Court should order Defendants to pay all costs associated with arbitration
if the Court upheld the arbitration agreement. The Plaintiffs filed a declaration stating that their
father's bank account had a balance of -$ 12.00 and his savings account had $ 389.22. His only
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source of income was from the Social Security Administration in the monthly amount of $ 826. 00.
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(Id. at 1256.) The Court found the estate indigent and affirmed the lower Court's order requiring
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the Defendant skilled nursing facility to either agree to pay all arbitration fees and costs or waive
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arbihation. (Id. at 1257-58.) The Court reasoned that "the rule cannot be that a party who had
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voluntarily entered an arbitration agreement later loses the right to pursue claims if that party is
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indigent and without means to pay the agreed share of arbitration fees and costs." (Id, at 1258,)
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Like in Hang, Mr. Dignes is deceased and his estate is indigent; he has less than $ 2,000
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remaining in his bank account. (Decl. Lowe, ft3.) Neither Mr. Dignes (nor his estate) can pay the
(00098817.I } MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS'ENEWED MOTION
TO LIFT THE STAY AND AN ORDER ALLOCATING ARBITRATION COSTS AND FEES TO DEFENDANTS OR
REMAND THE CASE TO SUPFRIOR COURT 7 —
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high costs of arbitration. Ms. Lowe is rctircd and Ms. Kirchert works part-time. (Decl. Lowe,
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$ 13; Decl. Kirchert, t[ 4.) More importantly, they cannot fairly be expected to pay for the
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arbihation they are not parties to even if they could afford it.s
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It runs contrary to California's commitment to justice without regard to economic status
5
to force the Plaintiffs to make the unenviable decision to either pay for the arbitration or lose
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their right to vindicate their father's claims. Defendants have a choice: (1) either pay for the
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arbitration in total or (2) waive their right to proceed in arbitration.
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E. Ms. Lowe and Ms. Kirchert Are Not Subject to Arbitration.
As the Court has already ruled and ordered, Ms. Lowe and Ms. Kirchert are not bound by
the arbitrafion agreement. (DecL Martucci, tt 3, Ex. A.) "The strong public policy in favor of
arbihation does not extend to those who are not parties to an arbitration agreement, and a party
13 cannot be compelled to arbitrate a dispute that he has not agreed to resolve by
14 arbitration." (Buckner v. Tainarin (2002) 98 Cal.App.4th 140, 142, citing Benasra v. Marciano
15 (2001) 92 CaLApp.4th 987, 990; McArthur v. McArthur (2014) 24 Cal.App.4th 651, 653, 658-
16 659 [beneficiary of amended trust not obligated to arbitrate where she did not sign arbitration
17 provision and did not acceptbenefits under it or seek to enforce it].) Ms. Lowe and Ms. Kirchert
do not consent to arbitration or to pay for it. The only parties Court-ordered to arbitration are
Mr. Dignes and the Defendants. Because the Plaintiffs demonstrated an inability of Mr. Dignes
to pay, the Court should grant the Motion and either Order Defendants to bear the costs or remand
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back to Superior Court.
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F. The FAA Does Not Preclude The Court From Allocating Costs Of Arbitration.
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'ounsel's ability to pay or advance the costs for an arbitration is irrelevant. There is nothing in Roldan
that allows the court to engage in an examination of a privileged retainer agreement between the plaintifi
and his or her counsel, or that would require a plaintiff s counsel to disclose its finances and ability to pay
plaintiffs arbitration costs up front. The I'ocus of Roldan was on the plaintiff's ability to pay arbitration
27 costs, not the anarney's ability to pay such fees.
4
As the Court already ruled, Mr. Digncs did not bind them to the arbitration agreement as their agent.
28 Further, they are nct third-party beneficiaries to the contract because there is no evidence in the agreemeni
evidencing an intent to benefit them. (See, Jensen v. L-IIaul Co. af California (2017) 18 Ca}.App.5~ 295.
301-302 [a contract must be "made expressly" for the third party' benefit and the test is "whether an inteni
to benefit a third person appears from the terms of Ihe contract."]
(00098817.1} MEMORANDUM OF PODITS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS'ENEWED MOTION
TO LIFT THE STAY AND AN ORDER ALLOCATING ARBITRATION COSTS AND FEES TO DEFENDANTS OR
REMAND THE CASE TO SUPERIOR COURT - 8
"Nothing in the FAA prevents states from controlling arbitration costs imposed by
2
adhesive contracts so that the remedy of prosecuting state statutory or common law public rights
3
through arbitration is not rendered illusory." (Iittle v. Auto Stiegler (2003) 29 Cal.4th 1064,
4
1080). Furthermore, "the Arinendariz requirements are...applications of general state law
contract principles regarding the unwaivability of public rights to the unique context of
6
arbitration, and accordingly are not preetnpted by the FAA." (Id. at 1079). Further, FAA has no
7
rule that even discusses who bears the costs and fees of arbitration. ( See 9 U.S.C. I}
1-14. ) The
Court can allocate the arbitration fees to the Defendants without running afoul of the FAA.
G. Defendants Are Not Entitled to Discovery on This Issue.
Defendants will argue they are entitled to discovery on the issue of the ability to pay under
Aronow. lAronow v. Superior Court (2022) 76 Cal.App.5th 865, 884.) However, the Court in
13 Aronow held that "[w]here a party to a contract with an arbitration provision opposes a motion
14 to compel arbitration on the ground of inability to pay the costs, the movine party can ask leave
15 to conduct limited discovery directed only to the opponent's financial circumstances." (Aronow
16 v. Superior Court (2022) 76 Cal.App.5th 865, 884 [emphasis added].) Defendants are not the
17 moving party—they already moved to compel arbihation, which the Court granted. They did not
ask for discovery at any time during the numerous rounds of briefing related to their motion, even
though the Plaintiffs argued costs of arbitration were prohibitively expensive. Plaintiffs have been
unable to conduct discovery because this case has been stalled due to the Defendants'efusal to
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pay for arbitration. To the extent the Court grants Defendants limited discovery, it should be
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limited only to the issue of ability to pay for arbitration by Mr. Dianes'state onlv. and Plaintiffs
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should have the equal opportunity to do discovery into Defendants'bility to pay, including into
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what insurance they have that is funding their litigation defense.
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IV. CONCLUSION
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Based on the foregoing and the accompanying papers, the Plaintiffs respectfully request
27
that the Court lift the stay and issue an order remanding this case back to Superior Court given
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that Mr. Dignes'state cannot afford arbitration. Alternatively, the Plaintiffs seek an Order
100098817.1} MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS'ENEWED MOTION
'fo LIFT THE STAY AND AN ORDER ALLOCATING ARBITRATION COSTS AND FEES TO DEFENDANTS OR
REMAND THE CASE TO SUPERIOR COURT - 9
I
requiring Defendants to pay all of the costs and fees of arbitration, including all of the arbitrator's
2
fees, any adminisnative fees assessed by Judicate West, including all costs of case management,
3
law and motion, and the hearing; if Defendants do not agree to pay for the arbitration and do not
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pay for the fees to initiate arbitration within fifteen (15) days of this Court's Order, they are
5
deemed to have waived their right to arbitrate and the case is remanded back to Superior Court.
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Dated: April 25, 2023 YORK
By:
WL8N& C. CWORK
10 DANIEL P. JAY
VIRGINIA L. MARTUCCI
Attorneys for Plaintiffs
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100098817.1) MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS'ENEWED MOTION
TO LIFT THE STAY AND AN ORDER ALLOCATING ARBITRATION COSTS AND FEES TO DEFENDANTS OR
REMAND THE CASE TO SUPERIOR COURT - 10
COURT: Stanislaus County Superior Court
CASK NO. CV-20-004057
CASK NAME: Dignes v. Covenant Care California, LLC, et al.
PROOF OF SERVICE
I am a citizen of the United States, employed in the County of Sacramento, State of
California. My business address is 1111 Exposition Boulevard, Building 500, Sacramento CA
95815. I am over the age of 18 years and not a party to the above-entitled action.
7 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'
business. (CCP Section 1013a(3) or Fed.R.Civ.P.5(a) and 4.1; USDC (E.D. CA) L.R. 5-
10
135(a).)
On April 25, 2023, I caused the within, MEMORANDUM OF POINTS AND
12 AUTHORITIES IN SUPPORT OF PLAINTIFFS'ENEWED MOTION TO LIFT
THE STAY AND AN ORDER ALLOCATING ARBITRATION COSTS AND FEES TO
13 DEFENDANTS OR REMAND THK CASE TO SUPERIOR COURT, I caused the within,
to be served via:
14
ELECTRONIC SERVICE: Based on a Court order or on an agreement by the parties to
15
16
described'bove
accept service by e-mail or electronic transmission, I caused the document
to be sent from e-mail my address (vmartucci vorklawfirm.net) to the persons at
the e-mail address(es) listed below.
17
John Supple, Esq.
18 Robert Deering, Esq.
J. Supple Law
19 990 Fifth Avenue
San Rafael, CA 94901
20 JsunnleRi sunnlelaw.corn
rdeerinu@isunnlelaw.corn
tdsnu&isunnlelaw.corn
22 docket@i sunnlelaw.corn
mschroeder@i suoolelaw.corn
23
California,
24 I declare that I am employed in the office of a member of the bar of this Court at whose
direction the service was made and that this Declaration is executed on April 25, 2023, at
25 Sacramento, California. I declare under penalty of 'tgy d th 1 f th State of
that the foregoing is true and correct.
26
27
28 Magcci
Virginia/
/00065905.1) Proof Of Service —
1
Preview
Electronically Filed 4/26/2023 8:58 AM Superior Court of California County of Stanislaus Clerk of the Court WENDY C. YORK, SBN 166864 By: Angela Mesa, 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 Pll: (916) 643-2200 Fax: (916) 643-4680 5 Attorneys for Plaintiff LARRY DIGNES (Decedent) by and through his Successors-In-Interest SHEILA M. LOWE, an individual; LORI M. KIRCHERT, an individual IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA IN AND FOR THE COUNTY OF STANISLAUS 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 PLAINTIFFS'ENEWED MOTION TO vs. LIFT THE STAY AND AN ORDER 14 ALLOCATING ARBITRATION COSTS COVENANT CARE CALIFORNIA, LLC AND FEES TO DEFENDANTS OR 15 dba TURLOCK NURSING AND REMAND THE CASE TO SUPERIOR REHABILITATION CENTER; COVENANT COURT 16 CARE, LLC, a Delaware Corporation; and DOES 1 through 50, inclusive Date: May 23, 2023 17 Defendants Time: 8:30 18 Dept: 24 19 Judge: Hon. Sonny S. Sandhu 20 Complaint filed: September 18, 2020 21 22 I. INTRODUCTION 23 Plaintiffs bring this renewed Motion'o lift the stay and seek a Court Order remanding 24 this case back to Superior Court based on Decedent Larry Dignes'nability to pay for arbitration 25 that could cost anywhere from $ 80,000 to $ 300,000 or more. As shown by the declarations and 26 exhibits, Mr. Dignes'nly bank account had a balance of $ 1,803.13 as of March 2023. He, 27 28 'laintiffs filed their initial motion to lift the stay and remand to Superior Court, which the Court heard on November 17, 2022. The Court denied the Motion without prejudice, indicating Plaintiffs may re-file the Motion and provide evidence of the inability of Mr. Dignes'state to bear arbitration costs with declarations and supporting exhibits. 100098817.11 MEMQRANDUM QF PQINTs AND AUTHGRITIEs IN sUPPoRT QF PLAINTIFFs'ENEwED MGTIGN TO LIFT THE STAY AND AN ORDER ALLOCATING ARBITRATION COSTS AND FEES TO DEFENDANTS OR REMAND THE CASE TO SUPERIOR COURT - I 1 therefore, cannot pay for arbitrafion. His fundamental right to a forum he can afford should 2 outweigh the Defendants'ontractual right to arbitrate. (Kang v. RG Legacy L LLC (2023) 88 3 Cal.App.5th 1243, 1258.) A comparable elder neglect arbitration several years ago with similar 4 facts (death following facility-acquired C. Difficile infection) handled by Plaintiffs'ounsel cost 5 $ 284,729.78. Put simply, Mr. Dignes'state is penniless compared to the average cost of 6 arbitration and compared to the Defendants'bility to pay. Based on his inability to pay, the 7 Court should remand Mr. Dignes'laims to Superior Court. Alternatively, the Court should order 8 Defendants to pay for all arbitration costs and fees in their entirety, and issue an order requiring Defendants to pay the initiating fees and costs for arbitration no later than fifteen (15) days from the Court's Order. Should Defendants refuse to do so within fifteen (15) days, the Court should find they waived arbitration and remand back to Superior Court. 13 IL FACTUAL BACKGROUND 14 A. Brief Procedural Background. 15 On September 18, 2020, Plaintiff/Decedent Larry Dignes filed the instant lawsuit through 16 his successors, his daughters Sheila Lowe and Lori Kirchert, alleging causes of action for Elder 17 Abuse and Wrongful Death, among others, arising &om Mr. Dignes'esidency at Defendants'killed nursing facility Turlock Nursing and Rehabilitation (TNR). Mr. Dignes was admitted to TNR on August 7, 2019, following hospitalization for a stroke. As a result of the Defendants'eckless neglect, Mr. Dignes was discharged back to the hospital less than a month after his 21 23 Defendants'2 admission to TNR with a C. Difficile infection, sepsis, and renal failure due to the failure to keep him safe and failure to provide care. Mr. Dignes died on August 30, 2019. (Decl. of Virginia Martucci g 2.) 24 On April 21, 2021, Defendants filed a motion to compel arbitration based on an electronic 25 27 Defendants'6 "dispute resolution agreement" Mr. Dignes purportedly signed after being in the facility for over a week. Plaintiffs opposed that Motion. The Court granted arbitration as to Mr. Dignes'laims only and stayed the wrongful death claims in Superior Court. (Decl. Martucci, 28 $3, Ex. A.) 100098817.I 1 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS'ENEWED MOTION TO LIFT THE STAY AND AN ORDER ALLOCATING ARBITRATION COSTS AND FEES TO DEFENDANTS OR REMAND THE CASE TO SUPERIOR COURT - 2 Plaintiffs moved to lift the stay and remand Mr. Dignes'laims to Superior Court on 2 October 20, 2022, based on Mr. Dignes'nability to pay and the ambiguous and poorly worded 3 language of the dispute resolution agreement. (Decl. Martucci, $ 5, Ex. B.) The Court denied the 4 Motion without prejudice. The Court stated in its Order: 5 6 Given the ambiguity surrounding the "reasonable costs" interpretation and defendant's unwillingness to pay for all arbitration costs, counsel is advised 7 that the court can at a later date: ~ Find that reasonable costs include discovery and order defendants to cover these discovery costs. 9 Remand the matter to court as the expense of arbitration is more than plaintiffs can bear and certainly more than they would pay in court, 10 (Decl. Martucci, $ 6, Ex. C.) Per the Court's Order, the parties attended mediation with thc Honorable Ben Davidian 12 (Rct.) on March 22, 2023. No resolution was reached. Judge Davidian stated something to the 13 effect of mediation was premature because the "tomato needed to ripen on the vine" since no 14 16 Defendants'5 discovery has taken place. Plaintiffs served discovery and met and conferred on initial responses over a year ago at this point, and discovery has been stayed due to the dispute over arbitration fees and costs. (Decl. Martucci, tt 6.) 17 B. Mr. Dignes'ank Account Presently Has Less than $ 2,000. Mr. Dignes was of modest means. At the time of his death, he was a widow. He was on a fixed income of $ 1,647.66 a month, including his pension &om working decades for Foster Farms (totaling $ 197.66 per month) and his social security of $ 1,450.00. (Decl. Lowe, $ 4.) He lived in a 55-plus mobile home community, where his monthly rent was $ 715.13. (Decl. Lowe, g 5.) After 23 paying rent, Mr. Dignes had approximately $ 932.53 left to pay the remainder of his monthly bills. 24 (Decl. Lowe, $ 6.) His monthly bills included electricity, gas, home phone, alarm system, co- 25 pays for doctor's visits, $ 104.03 for television, $ 96.00 monthly for United Healthcare 26 supplemental insurance, approximately $ 100.00 per month for home and car insurance, in addition to food, regular Church donations, and incidentals. (Decl. Lowe, g 6.) He had little to nothing left over each month after paying bills. The only significant assets Mr. Dignes owned at the time of his death were a 2010 Nissan Sentra and his mobile home. (Decl. Lowe, $ 7.) He had 100098B17.1} MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS'ENEWED MOTION TO LIFT THE STAY AND AN ORDER ALLOCATING ARBITRATION COSTS AND FEES TO DEFENDANTS OR REMAND THE CASE TO SUPERIOR COURT - 3 I no investments, stocks, retirement investments, bonds, or other assets to Ms. Lowe's knowledge, 2 who was a co-signor on his bank account and DPOA. (Decl. Lowe, $ 7.) The month he died, Mr. 3 Dignes had $ 3,059.24 in his bank account. (Decl. Lowe, Ex. A [see September 5, 2019 4 statement].) Included in Exhibit A to the Declaration of Ms. Lowe are Mr. Dignes'ank 5 statements from June to September 2019 and statements over the last six months. Plaintiffs can 6 provide additional statements should the Court request, 7 Ms. Lowe was the administrator of Mr. Dignes'ill and has signature power over his 8 checking account. (Decl. Lowe, $$ 10, 21.). Following his death, Mr. Dignes'aughters received life insurance of $ 15,000. (Decl. Lowe, $ 8.) They deposited the insurance money into his bank account and used it to make repairs to his mobile home before selling it. (Decl. Lowe, tt 8.) His mobile home was sold and the proceeds, totaling less than $ 50,000, were deposited into Mr. Dignes'ccount. (Decl. Lowe, $ 10.) Ms. Lowe distributed money to their family from Mr. 14 Dignes'ank account according to his will. (Decl. Lowe, $ 10.) Ms. Lowe sold small items that 15 Mr. Dignes owned, like artwork, military insignia pins, and some magazines on eBay. Profits 16 from those sales have been deposited into his account. The account remains open for any other items sold by eBay and incidentals that have come up. As of March 22, 2023, his bank account had a balance of $ 1,803.13. (Decl. Lowe, $ 12.) When Mr. Dignes became a resident of the Defendants'acility, Ms. Lowe planned on talking to her father because he was close to running a monthly deficit. She was going to 21 recommend he sell his mobile home aller he was discharged and move in with her given how 22 tight his finances were. (Decl. Lowe, $ 13.) 23 The Court did not order Ms. Lowe and Ms. Kirchert's claims to arbitration, and neither 24 can afford to pay for the arbitration. (Decl. Lowe, f[ 13; Decl. Kirchert, tt 4.) 25 III. LEGAL AUTHORITY AND ARGUMENT 26 A. The Court Has The Authority To Lift The Stay and Consider this Motion 27 The Court has the authority to hear and rule on this motion, and this Court permitted 28 Plaintiffs to re-file the instant motion and provide supporting documentation of Mr. Dignes'00098817.11 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS'ENEWED MOTION TO LIFT THE STAY AND AN ORDER ALLOCATING ARBITRATION COSTS AND FEES TO DEFENDANTS OR REMAND THE CASE TO SUPERIOR COURT - 4 1 inability to pay. (Code of Civil Procedure tj 1281.8; Aronow v. Superior Court (2022) 76 2 Cal.App.5th 865.) The Court in Aronow considered whether a trial court that granted a 3 defendant's petition to compel arbitration had jurisdiction to lift the stay where a plaintiff 4 demonstrates the financial inability to pay the anticipated arbitration costs. The Court held that it does have the authority to both lift the stay and require a defendant to either pay the plaintiffs 6 share of arbitration costs or waive the right to arbitration. (Id. at 870.) The Court further noted 7 that during the time a lawsuit is stayed pending arbitration, under its vestigial jurisdiction, a trial 8 court may: (1) appoint arbitrators if the method selected by the parties fails; (2) grant a provisional I0 remedy, but only upon the ground that the award to which an applicant may be entitled may bc rendered ineffectual without provisional relief; and (3) confirm, correct, or vacate the arbitration award. (Id. at 789 [citing Code of Civil Procedure tj) 1281.6, 1281.8(b), 1285.]) Unconscionable 13 fees or a fee allocation that violates public policy may render an award ineffectual without provisional relief here. Thus, the Court has the power to lift the stay, consider this Motion, and 15 make orders on costs accordingly. 16 B. Arbitration Will Cost Thousands More than Mr. Dignes Would Pay to Litigate in 17 Superior Court. 18 In their initial Motion regarding the arbitration costs, the Plaintiffs provided a 19 conservative estimate that arbitration would cost approximately $ 83,000 based on a two-week 20 arbitration and ten additional days of law and motion. (Decl. Martucci, $ 5, Ex. B.) However, 21 pursuant to the Court's December 2022 Order, the Plaintiffs gathered costs &om actual 22 arbitrations in two similar elder neglect cases to show that arbitration will cost more than 23 lifigation in Court. The average cost of arbitration in those cases is over $ 251,000. The first case, 24 handled by the Plaintiffs'ounsel, was also a C. Difficile case like the instant case The total cost of arbitration through trial and post-trial was $ 284,729.78. The cost of the trial alone in that case totaled $ 154,448.00. (Decl. Martucci, $ 10, Ex. F.) The second case is a case posted by JAMS 27 in its quarterly Consumer Case Information Spreadsheet. The lead attorney in that case handles 28 similar cases as the Plaintiffs'ounsel. JAMS charged $ 217,625.00 in arbitrator fees in that case. In both of these cases, the costs were allocated 100 percent to Defendants/Respondents. (Decl. 100098817.11 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS'ENEWED MOTION TO LIFT THE STAY AND AN ORDER ALLOCATING ARBITRATION COSTS AND FEES TO DEFENDANTS OR REMAND THE CASE TO SUPERIOR COURT - 5 1 Martucci, $ 11, Ex. G.) These are two real examples that show arbitration fees are exorbitant2 2 and above and beyond the other routine costs of litigation, such as the costs of depositions and 3 experts for hial. 4 C. Mr. Dignes'state Cannot Afford Arbitration. As discussed in the Declaration of Sheila Lowe, Mr. Dignes was of modest means and died with few assets. He was on a fixed income of $ 1,647.66 a month. His pension from working decades for Foster Farms was $ 197. 66 per month. He lived in a 55-plus mobile home community, 9 where his monthly rent was $ 715.13. After paying rent, Mr. Dignes had approximately $ 932.53 10 left to pay the remainder of his monthly bills. Before he died, Ms. Lowe planned on talking to 11 her father because he was close to running a monthly deficit. She was going to recommend he 12 move in with her given his fixed income and near deficit. (Decl. Lowe, $ 13.) His bank account 13 has less than $ 2,000 presently. (Decl. Lowe, Ex. A.) He cannot afford the cost of arbitration with 14 the arbitrator's hourly rate of $ 490.00 per hour, plus administrative fees. 15 D. Because Mr. Dlgnes Cannot Afford Arbitration, the Defendants Must Opt to Pay 16 for Arbitration, or the Court Must Remand to Superior Court. 17 Defendants have a choice: they can either pay the arbitration fees and costs or litigate Mr. 18 Dignes'laims in Superior Court. In Roldan v. Callahan & Blaine (2013) 219 Cal.App.4th 87, 19 the Court held that when a plaintiff is unable to pay the costs of arbitration, the Defendant must 20 choose between paying the costs or waiving its right to arbitrate, allowing the case to be remanded back to the superior court. The court 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 23 effectively result in the plaintiffs being deprived of any forum to resolve their claims against the 24 25 What is worse, consumers like Mr. Dignes statistically lose significantly more in arbitration 26 than the commercial Defendants who force consumers into arbitration. One study found that,ore people climb Mount Everest in a year (with a better success rate) than prevail in consumer arbitration cases. (AAJ Research, Forced Arbitration During a Pandemic: Corporations Double 2g Down (October 27, 2021), AAJ, available at: httns://www.iustice.oru/resources/research/forced- arbitration-in-a-nandemic.) That study, published by two professors (one fiom University of California, Los Angeles and one from Cornell), found "On average, employees and consumers win less often and receive much lower damages in arbitration than they do in court." (Id.) 100098817.1) MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS'ENEWED MOTION TO LIFT THE STAY AND AN ORDER ALLOCATING ARBITRATION COSTS AND FEES TO DEFENDANTS OR REMAND THE CASE TO SUPERIOR COURT - 6 1 defendant." (Id. at 978; scc also }}reiler v. Ilfarcus 4 Ivfi lliciiap Real Estate Investment Services, 2 Inc. (2018) 22 Cal.App.5th 970, 982 [holding when a party who has engaged in arbitration in 3 good faith and cannot afford arbitration, the party may seek relief from the superior court and the 4 court may order (1) the arbitration continue so long as the other party to the arbitration agrees to 5 pay, or the arbitrator orders it to pay, all fees and costs of the arbitration, and (2) if neither of 6 those occurs, the arbitration shall be deemed "had" and the case may proceed in the superior 7 court.]) The Roldan and Veiler courts held it would be unacceptable to deny a plaintiff the ability to pursue their rights due to an inability to pay the high costs of arbitration. The two sample elder neglect cases, which are exemplary of the work involved in this case, totaled an average of over $ 251,000 13 Recently in Ilang v. RG Legacy I, LLC, the Court considered whether a Defendant skilled 14 nursing facility should pay for Court-Ordered arbitration where the Plaintiff/decedent died 15 penniless. Plaintiffs who represented the estate of the resident argued in opposition to an appeal 16 by the defendants regarding costs of arbitration that their father died indigent and had no money 17 in his estate to pay arbitration costs and fees. ((2023) 88 Cal.App.5th 1243, 1247.) They cited Roldan and argued the Court should order Defendants to pay all costs associated with arbitration if the Court upheld the arbitration agreement. The Plaintiffs filed a declaration stating that their father's bank account had a balance of -$ 12.00 and his savings account had $ 389.22. His only 21 source of income was from the Social Security Administration in the monthly amount of $ 826. 00. 22 (Id. at 1256.) The Court found the estate indigent and affirmed the lower Court's order requiring 23 the Defendant skilled nursing facility to either agree to pay all arbitration fees and costs or waive 24 arbihation. (Id. at 1257-58.) The Court reasoned that "the rule cannot be that a party who had 25 voluntarily entered an arbitration agreement later loses the right to pursue claims if that party is 26 indigent and without means to pay the agreed share of arbitration fees and costs." (Id, at 1258,) 27 Like in Hang, Mr. Dignes is deceased and his estate is indigent; he has less than $ 2,000 28 remaining in his bank account. (Decl. Lowe, ft3.) Neither Mr. Dignes (nor his estate) can pay the (00098817.I } MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS'ENEWED MOTION TO LIFT THE STAY AND AN ORDER ALLOCATING ARBITRATION COSTS AND FEES TO DEFENDANTS OR REMAND THE CASE TO SUPFRIOR COURT 7 — 1 high costs of arbitration. Ms. Lowe is rctircd and Ms. Kirchert works part-time. (Decl. Lowe, 2 $ 13; Decl. Kirchert, t[ 4.) More importantly, they cannot fairly be expected to pay for the 3 arbihation they are not parties to even if they could afford it.s 4 It runs contrary to California's commitment to justice without regard to economic status 5 to force the Plaintiffs to make the unenviable decision to either pay for the arbitration or lose 6 their right to vindicate their father's claims. Defendants have a choice: (1) either pay for the 7 arbitration in total or (2) waive their right to proceed in arbitration. 8 E. Ms. Lowe and Ms. Kirchert Are Not Subject to Arbitration. As the Court has already ruled and ordered, Ms. Lowe and Ms. Kirchert are not bound by the arbitrafion agreement. (DecL Martucci, tt 3, Ex. A.) "The strong public policy in favor of arbihation does not extend to those who are not parties to an arbitration agreement, and a party 13 cannot be compelled to arbitrate a dispute that he has not agreed to resolve by 14 arbitration." (Buckner v. Tainarin (2002) 98 Cal.App.4th 140, 142, citing Benasra v. Marciano 15 (2001) 92 CaLApp.4th 987, 990; McArthur v. McArthur (2014) 24 Cal.App.4th 651, 653, 658- 16 659 [beneficiary of amended trust not obligated to arbitrate where she did not sign arbitration 17 provision and did not acceptbenefits under it or seek to enforce it].) Ms. Lowe and Ms. Kirchert do not consent to arbitration or to pay for it. The only parties Court-ordered to arbitration are Mr. Dignes and the Defendants. Because the Plaintiffs demonstrated an inability of Mr. Dignes to pay, the Court should grant the Motion and either Order Defendants to bear the costs or remand 21 back to Superior Court. 22 F. The FAA Does Not Preclude The Court From Allocating Costs Of Arbitration. 23 24 'ounsel's ability to pay or advance the costs for an arbitration is irrelevant. There is nothing in Roldan that allows the court to engage in an examination of a privileged retainer agreement between the plaintifi and his or her counsel, or that would require a plaintiff s counsel to disclose its finances and ability to pay plaintiffs arbitration costs up front. The I'ocus of Roldan was on the plaintiff's ability to pay arbitration 27 costs, not the anarney's ability to pay such fees. 4 As the Court already ruled, Mr. Digncs did not bind them to the arbitration agreement as their agent. 28 Further, they are nct third-party beneficiaries to the contract because there is no evidence in the agreemeni evidencing an intent to benefit them. (See, Jensen v. L-IIaul Co. af California (2017) 18 Ca}.App.5~ 295. 301-302 [a contract must be "made expressly" for the third party' benefit and the test is "whether an inteni to benefit a third person appears from the terms of Ihe contract."] (00098817.1} MEMORANDUM OF PODITS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS'ENEWED MOTION TO LIFT THE STAY AND AN ORDER ALLOCATING ARBITRATION COSTS AND FEES TO DEFENDANTS OR REMAND THE CASE TO SUPERIOR COURT - 8 "Nothing in the FAA prevents states from controlling arbitration costs imposed by 2 adhesive contracts so that the remedy of prosecuting state statutory or common law public rights 3 through arbitration is not rendered illusory." (Iittle v. Auto Stiegler (2003) 29 Cal.4th 1064, 4 1080). Furthermore, "the Arinendariz requirements are...applications of general state law contract principles regarding the unwaivability of public rights to the unique context of 6 arbitration, and accordingly are not preetnpted by the FAA." (Id. at 1079). Further, FAA has no 7 rule that even discusses who bears the costs and fees of arbitration. ( See 9 U.S.C. I} 1-14. ) The Court can allocate the arbitration fees to the Defendants without running afoul of the FAA. G. Defendants Are Not Entitled to Discovery on This Issue. Defendants will argue they are entitled to discovery on the issue of the ability to pay under Aronow. lAronow v. Superior Court (2022) 76 Cal.App.5th 865, 884.) However, the Court in 13 Aronow held that "[w]here a party to a contract with an arbitration provision opposes a motion 14 to compel arbitration on the ground of inability to pay the costs, the movine party can ask leave 15 to conduct limited discovery directed only to the opponent's financial circumstances." (Aronow 16 v. Superior Court (2022) 76 Cal.App.5th 865, 884 [emphasis added].) Defendants are not the 17 moving party—they already moved to compel arbihation, which the Court granted. They did not ask for discovery at any time during the numerous rounds of briefing related to their motion, even though the Plaintiffs argued costs of arbitration were prohibitively expensive. Plaintiffs have been unable to conduct discovery because this case has been stalled due to the Defendants'efusal to 21 pay for arbitration. To the extent the Court grants Defendants limited discovery, it should be 22 limited only to the issue of ability to pay for arbitration by Mr. Dianes'state onlv. and Plaintiffs 23 should have the equal opportunity to do discovery into Defendants'bility to pay, including into 24 what insurance they have that is funding their litigation defense. 25 IV. CONCLUSION 26 Based on the foregoing and the accompanying papers, the Plaintiffs respectfully request 27 that the Court lift the stay and issue an order remanding this case back to Superior Court given 28 that Mr. Dignes'state cannot afford arbitration. Alternatively, the Plaintiffs seek an Order 100098817.1} MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS'ENEWED MOTION 'fo LIFT THE STAY AND AN ORDER ALLOCATING ARBITRATION COSTS AND FEES TO DEFENDANTS OR REMAND THE CASE TO SUPERIOR COURT - 9 I requiring Defendants to pay all of the costs and fees of arbitration, including all of the arbitrator's 2 fees, any adminisnative fees assessed by Judicate West, including all costs of case management, 3 law and motion, and the hearing; if Defendants do not agree to pay for the arbitration and do not 4 pay for the fees to initiate arbitration within fifteen (15) days of this Court's Order, they are 5 deemed to have waived their right to arbitrate and the case is remanded back to Superior Court. 6 Dated: April 25, 2023 YORK By: WL8N& C. CWORK 10 DANIEL P. JAY VIRGINIA L. MARTUCCI Attorneys for Plaintiffs 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 100098817.1) MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS'ENEWED MOTION TO LIFT THE STAY AND AN ORDER ALLOCATING ARBITRATION COSTS AND FEES TO DEFENDANTS OR REMAND THE CASE TO SUPERIOR COURT - 10 COURT: Stanislaus County Superior Court CASK NO. CV-20-004057 CASK NAME: Dignes v. Covenant Care California, LLC, et al. PROOF OF SERVICE I am a citizen of the United States, employed in the County of Sacramento, State of California. My business address is 1111 Exposition Boulevard, Building 500, Sacramento CA 95815. I am over the age of 18 years and not a party to the above-entitled action. 7 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' business. (CCP Section 1013a(3) or Fed.R.Civ.P.5(a) and 4.1; USDC (E.D. CA) L.R. 5- 10 135(a).) On April 25, 2023, I caused the within, MEMORANDUM OF POINTS AND 12 AUTHORITIES IN SUPPORT OF PLAINTIFFS'ENEWED MOTION TO LIFT THE STAY AND AN ORDER ALLOCATING ARBITRATION COSTS AND FEES TO 13 DEFENDANTS OR REMAND THK CASE TO SUPERIOR COURT, I caused the within, to be served via: 14 ELECTRONIC SERVICE: Based on a Court order or on an agreement by the parties to 15 16 described'bove accept service by e-mail or electronic transmission, I caused the document to be sent from e-mail my address (vmartucci vorklawfirm.net) to the persons at the e-mail address(es) listed below. 17 John Supple, Esq. 18 Robert Deering, Esq. J. Supple Law 19 990 Fifth Avenue San Rafael, CA 94901 20 JsunnleRi sunnlelaw.corn rdeerinu@isunnlelaw.corn tdsnu&isunnlelaw.corn 22 docket@i sunnlelaw.corn mschroeder@i suoolelaw.corn 23 California, 24 I declare that I am employed in the office of a member of the bar of this Court at whose direction the service was made and that this Declaration is executed on April 25, 2023, at 25 Sacramento, California. I declare under penalty of 'tgy d th 1 f th State of that the foregoing is true and correct. 26 27 28 Magcci Virginia/ /00065905.1) Proof Of Service — 1