Motion-Secondary: DIGNES, LARRY B vs COVENANT CARE CALIFORNIA LLC

On September 18, 2020 a Motion-Secondary was filed involving a dispute between Dignes, Larry B, Kirchert, Lori M, Larry B Dignes, Lori M Kirchert, Lowe, Sheila M, Sheila M Lowe, and Covenant Care California Llc, Covenant Care Llc, for Elder Abuse or Dependent Adult Abuse: Unlimited in the District Court of Stanislaus County.

Preview
Electronically Filed
6/24/2021 10:07 AM
1 WENDY C. YORK,SBN 166864 Superior Court of California
VIRGINIA L. MARTUCCI,SBN 316296 County of Stanislaus
2 YORK LAW CORPORATION Clerk of the Court
1111 Exposition Boulevard, Building 500 By: Kimberly Mean, Deputy
3 Sacramento, California 95815
Ph: (916)643-22Q0
4 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
6

7 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA

8 IN AND FOR THE COUNTY OF STANISLAUS

10 LARRY B. DIGNES (Decedent} by and Case No.: CV-20-004057
through his Successors-In-Interest SHEILA
11 M. LOWE, an individual; LORI M. PLAINTIFFS' OPPOSITION TO
KIRCHERT, an individual DEFENDANTS'MOTION TO COMPEL
12 ARBITRATION
Plaintiff,
13 vs. DATE: July 8, 2021
TIME: 8:30 a.m.
14 COVENANT CARE CALIFORNIA,LLC DEPT: 24
dba TURLOCK NURSING AND JUDGE: Hon. Sonny S. Sandhu
15 REHABILITATION CENTER; COVENANT
CARE,LLC,a Delaware Corporation; and
16 DOES 1 through 50, inclusive Complaint Filed: 9/18120
Trial Date: Not Yet Set
17 Defendants.

{00067686.1}PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTION TO COMPEL ARBITRATION
1 TABLE OF CONTENTS

2 Pages)
3 I. SUMMARY OF ARGUMENT .......................................................................................... 1

4 II. FACTUAL BACKGROUND ............................................................................................. 1

5 A. The Dispute Resolution Agreement.............................................................................. 1
6
B. The Arbitration Agreement Covers the Conduct, Costs, and Rules of Arbitration....... 2
7
C. The Deposition of Deanna Brummel............................................................................. 3
8

9 III. STANDARD OF LAW.......................................................................................................4

1p A. State Law, Rather than the Federal Arbitration Act, Applies ....................................... 4

11 B. This Court Has Authority to Determine Arbitrarily ...................................................... 5
12 jV. THE ARBITRATION AGREEMENT IS UNCONSCIONABLE ..................................... S
13
A. The Agreement is Procedurally Unconscionable ..........................................................6
14
1. The Agreement is Highly Procedurally Unconscionable Because It Is
15 ~ppressive.................................................................................................................6
16 2. The Agreement is Procedurally Unconscionable Because It Results in
17 Surprise ..................................................................................................................... 8

1S B. The Agreement Is Substantively Unconscionable......................................................... 9

19 1. Fees are Hidden and Prohibitively Expensive ......................................................... 9

20 2. Plaintiffs' Discovery Rights Under the Agreement are Severely Limited............. 10
Z1
3. The Agreement Lacks Mutuality of Obligation ..................................................... 11
22
4. The Agreement Deprives Plaintiffs of Constitutional and Statutory Rights.......... 11
23
C. Due to the Extent ofthe Unconscionability, the Court Should Strike the Entire
24
Agreement................................................................................................................... 12
25
V. THE AGREEMENTDOES NOT BIND PLAINTIFFS SHEILA LOWE AND
26 LORI KIRCHERT, WHO ARE NON-SIGNATORIES................................................... 12

27 VI. PLAINTIFFS' WRONGFUL DEATH CLAIMS AND THE PATIENT RIGHTS'
28 CLAIMS ARE NOT ARBITRABLE,AND THE COURT SHOULD DENY
{oo0~olo6.i}
-1-
1 ARBITRATION TO AVOID CONFLICTING RULES .................................................. 14
2 VII. DEFENDANTS FAILED TO AUTHENTICATE THE SIGNATURE ........................... 15
3
VIII. CONCLUSION .................................................................................................................15
4

28
{000~oio6.i}
11
1 TABLE OF AUTHORITIES

2
State Cases
3
Armendar^zz v. Foundation Health Psychare Services, Inc.(2000)24 Ca1.4th $3, 114........6, 9, 12
4

5 A vila v. Southern California Specialty Care, Inc. (2018)20 Cai.App.Sth 835, 841-843 .... 4, 14, 15

6 Baltazar v. Forever 2~, Inc. (2Q16)62 Cal.4th 1237, 1243-1244...................................................6

7 Benar~ya v. Wzllis(2018)23 Cal.App.Sth 462, 464-465................................................................. 5
8
Benas~~a v. Marczano (2001)92 Cal.App.4th 987, 990................................................................. 12
9
Bzrl v. HeNitage Care, LLC (2009) 172 Cal.App.4th 1313.......................................................... 14
10
Buckne~~ v. Tamarin (2002)98 Cal.App.4th 140, 142............................................................. 13, 14
11

12 Burh v. Ho~~izon West(2012)205 Ca1.App.4th 924, 929.............................................................. 14

13 I County ofContra Costa v. Kaiser Foundation Health Plan, Inc.(1996)
47 Ca1.App.4th 237, 245 ............................................................................................................. 12
14
Fitzhugh v. Granada Healthcare &Rehabilitation Center, LLC(2007)
15
150 Cal.App.4th 469, 471 ........................................................................................................... 13
16
Goldman v. Banbridge Healthcare, LLC(2013)220 Cal.App.4th 1160, 1169 .............................. 5
17
Grafton Partners, L.P. v. Superior Court(2005) 36 Cal. 4th 944, 951 ........................................ 11
18
Graham v. Scissor^-Tail, Inc.(1981)28 Ca1.3d 8Q7, 817................................................................ 6
19

20 Goss v. RecabaNen (1988)206 Cal.App.3d 771 .......................................................................... 14

21 Gutieri°ez v. Autowest, ~nc._(2003) 114 Cal. App. 4th 77, 87...................................................... 8, 9

22 Ishkanian v. CLS T~^ansp. LLC(2014)59 Ca1.4th 348, 388-3$9 .................................................. 14
23
Caswell v. AG Seal Beach, LLC(2010) 189 Ca1.App.4th 1399.................................................... 14
24
Little v. Auto Stiegler, Inc. (2003)29 Ca1.4th 1064, 1076, 1081-1085........................................... 9
25
Lopez v. Bartlett Care Center, LLC(2019)39 Ca1.App.Sth 311 .................................................. 11
26
Roman v. Superior Court(2009) 172 Ca1.App.4th 1462, 1469 .................................................... 11
27

28 Ruiz v. Moss Brothers Auto Group,Inc.(2014)232 Ca1.App.4th 836 ......................................... 15
{000~oio6.i}
111
1
Ruiz v. Podolsky (2010} 50 Ca1.4th 838, 841, 114 Cal.Rptr.3d 263 ............................................. 14
2
Sababin v. Superi~~~ Court(2006) 144 Ca1.App.4th 81, 89 .......................................................... 14
3

4 Sanchez v. Western Pizza Ent., Inc. (2009) 172 Ca1.App.4th 154, 165 .......................................... 5

5 SJnith v. Ben Sennett, Inc. (2005) 133 Ca1.App.4th 1507, 1523 ................................................... 11
6 Sonic-Calabasas A, Inc. v. Moreno(2013)57 Ca1.4th 1109, 1133 ................................................ 5
7
Ting v. AT&T(2003) 319 F.3d 1126, 1151-1152 ......................................................................... 12
8
Tiri v. Lucky Chances, Inc.(2014)226 Cal.App.4th 231, 245 ....................................................... 6
9
Valencia v. Smith (2010) 185 Cal.App.4th 153, 17~ ...................................................................... 5
10

11 Valentine v. Plum Healthcare Grp., LLC(2019)37 Cal. App. Sth 1076, 1084 ........................... 14

12 ~, VictoNia v. Sup. Ct. (1985)40 Ca1.3d 734, 739........................................................................... 5,6

13 Zullo v. Superior Coz~~t, supra, 197 Ca1.App.4th at p. 484, 127 Ca1.Rptr.3d 461 .......................... 6
14 '

2$
{000~oio6.i}
1V
1 STATE STATUTES
2 Code of Civil Procedure § 1430.................................................................................................... 11
3
Civil Code §1633.9 ...................................................................................................................... 15
4
Civil Code § 1654 ........................................................................................................................... 5
5
Civil Code § 3294 ......................................................................................................................... 10
6

7 Code of Civii Procedure § 1281.2....................................................................................... 5, 14, 15

8 Code of Civil Procedure § 2017.310............................................................................................. 11

9 Health and Safety Cade § 1430(b)................................................................................................ 14
10 Welfare and Institutions Code § 15657......................................................................................... 10
11

15 j

28
{000~oiob.i}
V
1 I. SUMMARY OF ARGUMENT

2 On September 18, 2020, Plaintiff Larry Dignes, by and through his successors in

3 Sheila Lowe and Lori Kirchert, filed suit against Defendants alleging cases of action for
4 Abuse and Wrongful Death, among others, arising from Ms. Dignes' residency at Defendants
5 skilled nursing facility, Turlock Nursing and Rehabilitation (TNR). Mr. Dignes was admitted t~
6 TNR on August 7, 2019 following treatment for a stroke. As a result of Defendants' reckl

7 neglect, Mr. Dignes was discharged to the hospital less than a month after admission, and
8 diagnosed with an untreated C. Difficile infection, sepsis, and renal failure. Mr. Dignes died
9 August 30, 2019. In response to Plaintiffs' Complaint, Defendants seek to force Plaintiffs' claims

10 arbitration based on a "Dispute Resolution Agreement" purportedly signed by Mr. Dignes that
11 among other defects, is so unconscionable that it is unenforceable and violates the law because i
12 forces non-signatories to arbitrate claims which are not subject to arbitration. Therefore, the Cour

13 should deny the Motion to Compel. Arbitration.

14 II. FACTUAL BACKGROUND

15 A. The Dispute Resolution Agreement.

16 The Dispute Resolution Agreement ("Agreement" or "Arbitration Agreement") is
17 arbitration agreement in disguise. This six-page Dispute Resolution Agreement requires residf
18 who have a dispute with TNR to first participate in mediation and then binding arbitration.(D

19 Brummel, Ex A.) The only parties to the Agreement are Mr. Dignes and TNR. Ms. Brumr.

20 Defendants' admissions' department employee who presented the Agreement to Mr. Digs
21 claimed in her declaration to give the Agreement to Mr. Dignes to sign on the day of admissi

22 (Decl. Brummel,~ 5.) She stated that generally residents sat next to her at a computer so they co

23 review admissions documents together. (Decl. Brummel, ~3.) In reality, Mr. Dignes signed
24 admissions packet (including the Agreement) eight days after admission. Mr. Dignes did not
25 down at Ms. Brummel's computer; rather, Ms. Brummel brought an iPad to Mr. Dignes' room ;

26 stood at his bedside while she scrolled through nearly 100 pages of electronic documents on an iPad

27 As she reviewed the documents, Ms. Brummel placed Mr. Dignes' electronic signature

28 only once at the beginning of the process) on the documents, including on the Arbi

{00067686.1}PLAINTIFFS' OPPOSITION TO DEPENDANTS' MOTION TO COMPEL ARBITRATION - 1
1 Agreement. Plaintiffs Sheila Lowe, Mr. Dignes' daughter and Power of Attorney, and Lori

2 first learned of the purported Arbitration Agreement after the filing ofthe Complaint. At no time

3 they sign the Agreement.(Dec1. Martucci, x[14, 22, Ex. D.)

4 1: The Arbitration Agreement Covers the Conduct, Costs, and Rules of Arbitration.

5 The Agreement signed by TNR on August 15, 2019 covers the conduct, costs, and rules

6 arbitration.(Decl. Brummel, Ex. A.)For example, the agreement requires the parties to give up thei

7 constitutional right to a jury trial, on the premise that arbitration is "often less expensive" than court

8 (Decl. Brummel, Ex. A, ~4.) The Agreement requires arbitration through Judicate West, o:
9 alternatively ADR (which presumably means ADR Services, Inc.)(Id. at ¶7.) Paragraph 7 refers thf

10 parties to the Judicate West website for arbitration rules.

11 The Agreement states that TNR will pay for the mediatar's fees and costs, as we11
12 arbitrator's fees and costs for up to three days of hearing. (Id. at X14.) If the hearing exceeds tiv

13 days, the parties must equally bear the costs and fees. (Id. at ¶14.) As of 2021, Judicate W
14 charges a $500 filing fee, a $250.00 case management fee, and a $750.00 fee for all hearings that

15 two days or less. This does not include the individual fees for each arbitrator, which are set by t

16 arbitrators and range from $450.00 to $1,500.00 per hour. (DecL Martucci, ~5.) Similarly, AI

17 Services, Inc. charges a $450.00 per party fee, and arbitrators set their own fees. Based on the
18 fees, athree-day arbitration could cost anywhere from $10,800 to $36,000. Most elder abt
19 arbitrations and trials last longer than two weeks. Atwo-week arbitration would cost anywhere frc

20 $36,000 to $120,000 for the arbitrator's fees alone, not including pre-hearing discovery, heart
21 preparation, and other administrative costs.(Decl. Martucci, ~5.)

22 In addition to these exorbitant fees, the rules of arbitration sharply curtail a Plaintiff's

23 to discovery. Judicate West allows for one deposition as a matter of right, only 20 Specia
24 Interrogatories and 20 Requests for Production. (DecL Martucci,'~4 Ex. A.) Under ADR Service

25 Inc. rules, discovery is not permitted unless ordered by the arbitrator. (Decl. Marcucci, ¶6 Ex. B.

26 The Agreement requires confidentiality of the proceedings and any award and requires Mr. Digne

27 to waive his right to "representative, consolidated, or class treatment of any claim."(Id. at X15.) Ms

28 Brummel misrepresented to residents they had a right to rescind within 30 days. However, a

{00067686.1} PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTT4N TO COMPEL ARBITRATION - 2
1 read of Paragraph 16 reveals that even if a resident rescinds the Agreement, Arbitration applies

2 disputes "arising before the rescission."(Id. at ¶16.) Thus, the right to rescind is limited.

3 ICS The Deposition of Deanna Brummel.

4 Plaintiffs' counsel deposed Ms. Brummel on May 27, 202L Ms. Brummel has no

5 ( ~ medical training or certificates. Ms. Brummel stated that it was her job to test residents' capacity

6 sign agreements, and she would do that by looking at the resident's orders in the file, looking

7 Powers of Attorney on file, and asking the residents simple questions to determine whether they hac

8 capacity. If a resident had a Power of Attorney but inadvertently signed an Agreement, Ms
9 Brummel would not go back and correct that or have the person with Power of Attorney re-sign the

10 documents.(Deci. Martucci, ¶13, Ex. D.)

11 The Arbitration Agreement is the last document in a 7S to 100-page electronic

12 packet presented to residents after they are assigned a room. Despite being titled a
13 Resolution Agreement," Ms. Brummel refers to it as an "Arbitration Agreement." Ms. Brume

14 stated that in 2019 when Mr. Dignes was a resident, she went to residents' rooms at their bedside

15 go over admissions paperwork. Holding an iPad, she would scroll through the 100-page electron

16 packet, explaining relevant parts. The resident signed their name once at the beginning of t
17 process. There is no place where residents acknowledge or place their signature anywhere on t

18 documents other than on tl~e first signature. Rather, Ms. Brummel clicks the signature lines to pla

19 the residents' electronic signature throughout the packet. In total, it takes 15 to 20 minutes to

20 over the Admissions packet, including the Agreement.(DecL Martucci, ¶15, Ex. D.)

21 Throughout the deposition, Ms. Brummel confused mediation and arbitration, likely due

22 the convoluted Agreement. When asked to describe arbitration, Ms. Brummel had

23 articulating what arbitration is: "I would let them know that it's -- they are signing this due to

24 negligence was happening at the facility, and they wanted to go forth and sue the company
25 arbitration is where a third party mediator comes in and they go from there, whatever the issues

26 and they would try to resolve it."(Id.)

27 Ms. Brummel does not go over the Agreement paragraph by paragraph with residents.

28 completed approximately 2 to 10 intakes per day, five days a week at TNR for three and a

{OOQ67686.1} PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTION TO COMPEL ARBITRATION - 3
1 years. Thus, throughout her employment, she likely performed anywhere from 1,500 to 9,C
2 admission signings. Less than 20 times during her employment with TNR did a resident decline

3 Agreement. Although Ms. Brummel told residents that arbitration is less expensive than traditio:

4 Court, she does not know how much Arbitration costs. Ms. Brummel does not know the arbitrate

5 rules and did not give residents a copy of those rules with the Agreement. Ms. Brummel did ~

6 inform residents they could consult with an attorney prior to signing. She does now know whet]

7 the Agreement is negotiable, does not tell residents they can negotiate, and did not volunteer

8 residents that they had a right to rescind the Agreement. Importantly, Ms. Brummel does not kn~

9 whether the Agreement binds resident's families, and she does not inform residents that ~
10 Agreement would bind their families.(Decl. Martucci, X16-18, Ex. D.)

11 Ms. Brummel claims to have an independent recollection of Mr. Dignes. This is

12 given the thousands of admissions she completed during her employment. She said in

13 declaration that Mr. Dignes signed the Agreement on the day he was admitted, but 1

14 acknowledged at deposition that she does not know when he signed. Ms. Brummel described

15 she stood at Mr. Dignes' bedside as she reviewed the iPad with him. She did not tell Mr. Dig

16 about the cost of arbitration, but explained to Mr. Dignes that "if they decided to sue the comp

17 due to negligence, and they wanted to arbitrate, a third party would come in." Ms. Brummel did

18 tell 1VIr. Dignes that any other claims other than those for negligence would be covered by

19 Agreement. She did not te11 Mr. Dignes that the Agreement was negotiable, that it could

20 rescinded, or that it bound his heirs/successors.(DecL Martucci, X19-21, Ex. D.)

21 IIL STANDARD OF LAW

22 A. State Law,Rather than the Federal Arbitration Act, Applies.

23 The Federal Arbitration Act("FAA")does not apply; only California procedural law apple

24 "The procedural aspects of the FAA do not apply in stake court absent an express provision in t7

25 arbitration agreement."(Avila v. Southern California Specialty Care, Inc.(2018) 20 Cal.App.S
26 835.) Defendants admit the existence of a valid contract is governed by California law. {Motion

27 Compel Arbitration ["MTC"], p. 4:9-16.) Regardless of whether the FAA or California applies, bo

28 the FAA and the California Arbitration Act, Code of Civil Procedure § 1280, et seq.("CAA

{Q0067686.1}PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTIQN TO COMPEL ARBITRATION - 4
1 employ the same rules of contract interpretation (state law). (See, Valencia v. Smith (2010) 1!
2 Cal.App.4th 153, 177 [Generally, the FAA obligates federal courts to apply state law why
3 interpreting an arbitration clause"..."even when the [FAA] applies, interpretation of the arbitrati<

4 agreement is governed by state law principles...."]) In interpreting arbitration agreements, bas
5 principles of contract law apply.(Sanchez v. Western Pizza Ent., Inc.(2009) 172 Ca1.App.4th 15

6 165.) As with other contracts, ambiguities in standard form arbitration agreements are to 1

7 construed against the drafter.(Victoria v. Sub. Ct.(1985)40 Cal.3d 734, 739; see also, Civil Code

8 1654.) Accordingly, California law applies to the analysis ofthe enforceability ofthe agreement.

9 B. This Court Has Authority to Determine Arbitrability.

10 Defendants may argue that the arbitrator, rather than this Court, has the authority
11 determine arbitrability of the Agreement. (Decl. Brummel, Ex A, X11.) However, the Agreeme
12 does not clearly and unmistakably delegate authority to the arbitrator. Tt is also well-settled that tl

13 Court, rather than the arbitrator, has the sole authority to "determine whether anon-signatory to tl

14 arbitration agreement can be compelled to arbitrate. The authority to decide that question resides, ~

15 law, solely with the trial court." (Benaroya v. Willis (2018) 23 Ca1.App.Sth 462, 467; see al
16 Goldman v. Sunbridge Healthcare, LLC (2013) 220 Cal.App.4th 1160, 1169 ["there is no polio
17 compelling persons to accept arbitration of controversies which they have not agreed to arbitrate.''

18 Here, Plaintiffs Sheila Lowe and Lori Kirchert are non-signatories to the purported Arbitratic
19 Agreement, so the Court has the sole authority to determine whether the Agreement is enforceable.

20 IV. THE ARBITRATION AGREEMENT IS UNCONSCIONABLE

21 The Court has the authority to deny arbitration where it finds grounds exist for the rescis

22 of an arbitration agreement. (Code of Civil Procedure § 1281.2.) Here, the Agreement i
23 unconscionable, and the Court should decline to enforce it. Unconscionability refers to "an absenc

24 of meaningful choice of the part of one of the parties together with contract terms which ar
25 unreasonably favorable to the other party." (Sonic-Calabasas A, Inc. v. Moreno (2013) 57 Ca1.4t1

26 1 109, 1133.) Unconscionability has procedural and substantive elements. Both "`must be present i~

27 ~ order for a court to exercise its discretion to refuse to enforce a contract or clause under the

28 of unconscionability.' But they need not be present in the same degree.... [T]he more

{00067686.1} PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTION TO COMPEL ARBITRATION - 5
1 oppressive the contract term, the less evidence of procedural unconscionability is required to com

2 to the conclusion that the term is unenforceable, and vice versa."(Armendariz v. Foundation Healt~

3 Psychcare Services, Inc. (2000) 24 Cai.4th 83, 114 [citations omitted].) "The issue in every case i

4 whether the terms of the contract are sufficiently unfair, in view of all relevant circumstances, that

5 court should withhold enforcement." (Baltazar v. Forever 21, Inc. (2016) 62 Ca1.4th 1237, 1243

6 1244.) Here, both procedural and substantive unconscionability permeate the Arbitration Agreemen

7 such that it should be rescinded.

8 A. The AEreement is Proceduraliv Unconscionable.

9 Procedural unconscionability focuses on two factors: oppression and surprise. (Zullo v

10 Superior Court, supra, 197 Cal.App.4th at p. 4$4, 127 Ca1.Rptr.3d 461.)"`Oppression' arises frc

11 an inequality of bargaining power which results in no real negotiation and `an absence

12 meaningful choice.' `Surprise' involves the extent to which the supposedly agreed-upon terms of t

13 bargain are hidden in the prolix printed form drafted by the party seeking to enforce the disput

14 terms."(Tiri v. Lucky Chances, Inc.(2014)226 Ca1.App.4th 231, 245 [internal citations omitted].)

15 1. The Agreement is Highly Procedurally Unconscionable Because it is Oppres

16 Courts defined adhesion contracts as a "standardized contract, which, imposed and

17 by the party of superior bargaining strength, relegates to the subscribing party only the opportur

18 to adhere to the contract or reject it."(Graham v. Scissor-Tail, Inc.(1981) 28 Cal.3d 807, 817.)':

19 hallmarks of adhesion include when one party drafts a contract, the parties fail to engage
20 meaningful negotiation, and the contract is found as one part of a much larger group of docume~

21 (VictoNia v. Superior Court (1985) 40 Ca1.3d 734, 743.) Here, the Arbitration Agreement is

22 oppressive adhesion contract because it was the last document buried in a 100-page electro

23 admission packet presented to Defendant at his bedside. Ms. Brummel did not tell Mr. Dignes

24 could negotiate the contract, nor did she tell him he could. rescind the Agreement. The Agreem

25 was described in an inaccurate and cursory manner to Mr. Dignes, and Ms. Brummel laced
2b electronic signature on the Agreement. Mr. Dignes himself did not even sign the Agreement, eit

27 literally or symbolically, which arguably renders the entire agreement invalid.

{00067686.1} PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTION TO COMPEL ARBITRATION - 6
1 Defendants argue "Decedent did not have to agree to arbitration as a precondition to

2 admitted to the Facility; his agreement to arbitration was completely voluntary."(MTC,p. 4:25-27.

3 What Defendants fail to mention is that Mr. Dignes had already been in the facility for ei ~ht day;

4 when TNR presented the "Dispute Resolution Agreement" to him at his bedside.(DecL Mariucci

5 ¶14.) Later that night, he would fall wkile using the restroom, and two days later he began to shove

6 symptoms of afacility-acquired C. Difficile infection. Mr. Dignes was in poor health and already it

7 the facility for over a week. What choice would a resident meaningfully have other than to sign

8 documents presented to him at his bedside after living in a facility for eight days.

9 Defendants argue "Decedent had the opportunity to rescind the Arbitration

10 within thirty days of execution." (MTC, p. 43:28-4:3.} Mr. Dignes was not informed he coup

11 rescind the contract, and the rescission paragraph itself is oppressive because it only applies t.

12 claims that arise after rescission. Mr. Dignes died as a result of TNR's neglect within 15 days o

13 signing, so he unfortunately lacked time to rescind.

14 As an aside, any argument by Defendants that Mr. Dignes had capacity must be ignored

15 lack of foundation and speculation. Defendants cite to Paragraph 2 of Ms. Brummel's declarat

16 for the allegation that "Decedent did not lack capacity to execute the Arbitration Agreement."I T

17 citation is entirely misleading and unsubstantiated. Nowhere in Ms. Brummel's declaration does

18 claim to have knowledge that Mr. Dignes had capacity to sign the Dispute Resolution Agreement

19 August 15. Nor could she—she has no medical training and no medical licensing. Ms. Brummel

20 not confirm with Mr. Dignes' doctor that he had capacity on August 15, and she did not know t

21 he had a POA on file, meaning he arguably should not have signed on behalf of himself. Thus,

22 argument about capacity must be disregarded. (DecL Martucci, ¶23, Ex. E.)

23 In sum, the disparity in bargaining power and oppression is clear: TNR is a sophisti

24 party operated by corporate entities that own at least 20 facilities in California alone.2 Mr. Di

25 was an 81-year-old stroke victim rehabbing in Defendants' facility following a hospital stay.

26 than present the admissions paperwork and Arbitration Agreement to Mr. Dignes on the day he

•
'See Defendants' Motion to Compel Arbitration, p. 5:3-4, citing Brummel Decl.
2 See Covenant Care's website: hops:ll~~vw.cavenantcare.coml~acatians-l~v-~~a~nei.
{00067686.1} PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTION TO COMPEL ARBITRATION - 7
1 admitted (when his family was present), or another time when his Power of Attorney, Sheila L<

2 was present(she visited every other day), Defendants presented these documents to Mr. Dignes <

3 he had been living at TNR for ei h~
t dam. The Arbitration Agreement is oppressive given

4 disparity in bargaining power, combined with the non-negotiable contract of adhesion prese~

5 bedside to a resident who had been in the facility for eight. days.

6 2. The Agreement is Procedurally Unconscionable Because It Results in Surprise.

7 "Surprise" is defined as "the extent to which the supposedly agreed-upon terms of

8 bargain are hidden in the prolix printed form drafted by the party seeking to enforce the disputer

9 terms."(Gutierrez v. Autowest, Inc.(2003) 114 Cal. App. 4th 77, 87.) The Agreement would resin

10 in surprise if enforced for several reasons. First, the Agreement was buried at the end of a~

11 electronic packet of 100 pages of admissions paperwork. The Agreement is contained within a six

12 page contract masquerading as a "Dispute Resolution Agreement." This is not a dispute resolution

13 agreement; hidden after three benign paragraphs about non-binding mediation is the binding

14 arbitration agreement and waiver of the constitutional right to a jury trial. The convoluted structure

15 of the agreement itself results in surprise.

16 Second, failing to include the costs and expenses in the Agreement causes Plaintiffs to

17 subject to surprise and oppression. Even the closest reading of the agreement would not reveal th~

18 costs of arbitration, which can be prohibitively high. The Agreement states that the Facility will pa:

19 for the arbitrator's fees for up to three days of hearing, at which point the parties will equally sharp

20 costs. (Decl. Brummel, Ex A., p. 3.) Ms. Brummel does not know the costs of arbitration, nor dig

21 she tell Mr. Dignes the costs.(Decl. Martucci, X17, Ex D.) These costs may only be ascertained b;

22 reviewing Judicate West or ADR Services Inc.'s websites and making telephone and email inquirie

23 to request the hourly rates. Lulled by the claim in Paragraph 4 that arbitration "is often les

24 expensive and a faster way to resolve disputes compared to going to court," a signatory to thi

25 Agreement would be surprised to find out that it casts $1,500 in total fees simply to file a claim wit]

26 Judicate West. The arbitrator's fees range anywhere from $450 to $1,500 per hour. Plaintiffs

27 Counsel has an arbitration currently scheduled in a similar elder abuse case, and the hearing i
28 scheduled for two weeks, or eighty hours. Based on Judicate West's fee range, atwo-week hearing

{00067686.1} PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTION TO COMPEL ARBITRATION - 8
1 ~(could cost anywhere from $36,000 on the low end to $120,000 on the high end for the arbitrator'

2 ~ ~ hearing fees alone.

3 Thus, a resident trying to determine what an arbitration will cost (assuming the
4 knows to look for this information), has to review the Agreement, check websites for rules
5 ( administrative fees, and call Judicate West to even be able to reasonably estimate what
6 arbitrator's fees might be. If Mr. Dignes believed he would save costs by agreeing to arbitrate,

7 Judicate West administrative fees and arbitrator's fees (amounting potentially to over a
8 thousand dollars) would be an unfair surprise.

9 Finally, a signatory may also be surprised to learn that Paragraph 5, 6, and 14 (pages 2-3
10 waive the signor's and their heirs' rights to a jury trial, as well as requires confidentiality.
11 would also result in surprise to Mr. Dignes given that Ms. Brummel did not tell him that by sign

12 the Agreement, he waived his heirs rights. Thus, the totality of the circumstances demonstrates

13 Arbitration Agreement is significantly procedurally unconscionable.

14 B. The Agreement Is Substantively Unconscionable.

15 Substantive unconscionability may be shown if the disputed contract provision falls

16 the non-drafting party's reasonable expectations. (Gutierrez v. Autowest, Inc. (2003) 11
17 Cal.App.4th 77, $9 [holding it is unconscionable to force arbitration where that process requires
18 consumer to pay fees he or she cannot afford because such provisions are "unduly harsh and onE

19 sided, defeats the expectations of the nondrafting party, and shocks the conscience."]) Here, tr
20 terms ofthe Agreement render it substantively unconscionable.

21 1. Fees are Hidden and Prohibitively Expensive.

22 As discussed supra, the Agreement is silent on the fees and costs. "Where a consumer

23 into an adhesive contract that mandates arbitration, it is unconscionable to condition that process

24 the consumer posting fees he or she cannot pay...while arbitration may be within the reasona~
25 expectations of consumers, a process that builds prohibitively expensive fees into the arbitrati~
26 process is not." (Gutierrez v. Autowest, Inc. (2003) 114 Cal. App. 4th 77, 89-90.) The court
27 Gutierrez further declared, "To state it simply: it is substantively unconscionable to require
28 consumer to give up the right to utilize the judicial system, while imposing arbitral forum fees tr

{00067686.1} PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTION TO COMPEL ARBITRATION - 4
1 are prohibitively high."(Id. at 90; see also Armendariz v. Foundation Health Psychare Services, Inc

2 (2000} 24 Ca1.4th 83, 118; Little v. Auto Stiegler, Inc. (2003) 29 Cal.4th 1064, 1076, 1081-1085.

3 Here, the Agreement is substantively unconscionable given the arbitration hearing will cost between

4 $36,000 and over $100,000. The fact that TNR offers to pay three days' of fees and costs fo

5 arbitration is inconsequential given that the hearing will likely take two weeks or more. This i

6 prohibitively expensive, supporting the Agreement is substantively unconscionable.

7 2. Plaintiffs' Discovery Rights Under the Agreement are Severely Limited.

8 Discovery rights in arbitration will be limited, which will severely prejudice Plaintiffs

9 Judicate West's rules permit discovery at the discretion of the arbitrator, and allow for onE

10 deposition as a matter of right. (DecL Martucci, ~(4, Ex. A, Rule 8.) Each party may propound 2(

11 special interrogatories, 20 requests for production, and unlimited requests for admissions as to the

12 authenticity of documents only. (Id.) Similarly, under the ADR Services, Inc. rules, discovery is

Case Info

Judge

Sandhu, Sonny S. Track Judge’s New Case

Case No.

(Subscribe to View)

Document Filed Date

June 24, 2021

Case Filing Date

September 18, 2020

County

Parties

COVENANT CARE CALIFORNIA LLC Defendant
COVENANT CARE CALIFORNIA LLC Defendant
COVENANT CARE LLC Defendant
COVENANT CARE LLC Defendant
DIGNES, LARRY B Plaintiff
DIGNES, LARRY B Plaintiff
DEERING, ROBERT R, Esq. Attorney for the Defendant
YORK, WENDY C, Esq. Attorney for the Plaintiff
KIRCHERT, LORI M Plaintiff
KIRCHERT, LORI M Plaintiff
LARRY B DIGNES Plaintiff
LORI M KIRCHERT Plaintiff
LOWE, SHEILA M Plaintiff
LOWE, SHEILA M Plaintiff
SHEILA M LOWE Plaintiff
John Supple Attorney
Brian Cohen Attorneys for Defendants
Daniel Jaffe Attorneys for Plaintiffs
Daniel Jay Attorneys for Plaintiffs
Matthew Schroeder Attorneys for Defendants
Virginia Martucci Attorneys for Plaintiffs
Irene Takahashi Attorney
Cole Elliott Attorney
Bradley Thomas Attorney

For full print and download access, please subscribe at https://www.trellis.law/.

Motion-Secondary: DIGNES, LARRY B vs COVENANT CARE CALIFORNIA LLC

Preview

Related Topics

Case Info

Parties