Saenz v. Superior Court CA4/2 ( 2023 )

Filed 8/18/23 Saenz v. Superior Court CA4/2
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION TWO
JAMES SAENZ,
Petitioner, E081098
v. (Super.Ct.No. CIVSB2200579)
THE SUPERIOR COURT OF OPINION
SAN BERNARDINO COUNTY,
Respondent;
CITRUS NURSING CENTER et al.
Real Parties in Interest.
ORIGINAL PROCEEDINGS; petition for extraordinary writ. Wilfred J.
Schneider, Jr., Judge. Petition granted.
Law Offices of James E. Yee and James E. Yee for petitioner.
Beach Law Group, Thomas E. Beach, David W. Loy and Rachel K. Mandelberg
for Real Parties in Interest.
No appearance for Respondent.
1
This case arises from the death of nonagenarian Alice Saenz, who was admitted to
a residential care facility owned and operated by defendants and real parties in interest
Citrus Nursing Center and Sun Mar Management Services. As part of the admissions
process, she executed an arbitration agreement (the agreement). Plaintiff and petitioner
James Saenz, Ms. Saenz’s surviving son and successor-in-interest, initiated this action
and alleges that his mother’s death resulted from elder neglect, professional negligence,
negligent hiring, and violation of the patient’s bill of rights. He further asserts a wrongful
death claim on his own behalf. Real parties in interest moved for, and the superior court
ordered, arbitration of all claims.
Petitioner seeks a writ of mandate directing the superior court to vacate its
March 28, 2023 order and enter a new and different order denying the motion in its
entirety or, in the alternative, denying the motion as to petitioner only and instructing the
court to make the requisite determination under Code of Civil Procedure1 section 1281.2
for purposes of deciding whether Ms. Saenz’s claims should be adjudicated in superior
court contemporaneously with petitioner’s claims. Petitioner contends the court
prejudicially erred when it ordered his wrongful death claim to arbitration because (1) he
never entered any arbitration agreement, and (2) real parties in interest waived any right to
arbitration. He further contends the court prejudicially erred when it determined the
delegation clause in the agreement requires an arbitrator, rather than a superior court
judge, to decide issues of interpretation, applicability, and enforceability of the agreement
1 All further statutory references are to the Code of Civil Procedure unless
otherwise indicated.
2
against a nonsignatory. Real parties in interest maintain the agreement is expressly
governed by the Federal Arbitration Act (FAA) (9 U.S.C. § 1 et seq.), the court properly
interpreted the delegation clause, petitioner is bound by the agreement, and real parties in
interest did not waive their right to arbitrate.
We conclude the agreement is not enforceable against petitioner’s claim for
wrongful death, and section 1281.2 does not apply. We remand the matter back to the
superior court, order it to vacate its March 28, 2023 order, and enter a new and different
order denying the motion as to petitioner only.
I. PROCEDURAL BACKGROUND AND FACTS
Ms. Saenz was born on October 21, 1928. On April 15, 2021, she was admitted to
a skilled nursing facility owned, operated, and/or controlled by real parties in interest. As
part of the admitting process, she signed the agreement, which provides in article I,
section 1.8, that it “shall be construed and enforced in accordance with and governed by
the Federal Arbitration Act and the procedures set forth in the Federal Arbitration Act
shall govern any petition to compel arbitration.” (Italics added.) Article II, section 2.2,
states that it binds “the parties hereto, including the heirs, . . . successors, and assigns of
such parties whose claims may arise out of or relate to any services (medical or
otherwise) or goods provided by” real parties in interest. Article I, section 1.6, gives the
arbitrator “exclusive authority to resolve any Dispute relating to the interpretation,
applicability, enforceability, or formation of this Agreement.” On July 9, 2021, Ms.
Saenz passed away.
3
On January 4, 2022, petitioner initiated this action. In answer to the complaint,
real parties in interest raised the agreement as an affirmative defense. Over the following
year, petitioner propounded discovery and sought to schedule depositions; however, real
parties in interest postponed them, stating an intent to mediate. Mediation was
coordinated for November 22, 2022, but real parties in interest unilaterally canceled it.
In January 2023, real parties in interest’s current counsel sent a letter to
petitioner’s counsel asking if he would stipulate to arbitration, which was “purportedly
discussed previously with [real parties in interest’s] former counsel.” Petitioner’s counsel
did not respond. On or about February 6, 2023, real parties in interest moved to compel
arbitration. Petitioner opposed the motion, contending the agreement is unconscionable
and invalid on its face, petitioner is not a third party beneficiary, real parties in interest
waived their right to arbitrate, and petitioner may not be compelled to arbitrate his
wrongful death claim or have an arbitrator decide issues of enforceability. Rejecting
petitioner’s contentions, the superior court granted the motion on the grounds the FAA
controls, petitioner was bound by the agreement, real parties in interest did not waive
arbitration, the agreement was not unconscionable, and the delegation clause deferred
further issues of enforceability to the arbitrator. In concluding that petitioner could be
made to arbitrate his wrongful death claim, the court stated: “Although wrongful death is
technically a separate statutory cause of action in the heirs, it is in a practical sense
derivative of a cause of action in the deceased. Decedents are able to bind their heirs
through wills and other testamentary dispositions, so the concept is not new or illogical.
Instead, it is the only pragmatic solution in such a situation. (Herbert v. Superior Court
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(1985) 169 Cal.App.3d 718, 725.)” The court did not reach the issue of whether
petitioner is a third party beneficiary because he “is bound under the case law. [¶] [He]
is bound by the arbitration agreement [Ms. Saenz] signed.”
II. DISCUSSION
A. Writ Review Is Appropriate
An order compelling arbitration is interlocutory and not appealable. (International
Film Investors v. Arbitration Tribunal of Directors Guild (1984) 152 Cal.App.3d 699,
703; cf. § 1294, subd. (a) [orders denying arbitration are appealable].) “The preferred
procedure is to proceed by arbitration and attack confirmation on appeal.” (Atlas
Plastering, Inc. v. Superior Court (1977) 72 Cal.App.3d 63, 67.) Although writ relief is
rarely warranted, writ review of orders compelling arbitration is appropriate (1) “if the
matters ordered arbitrated fall clearly outside the scope of the arbitration agreement,” or
(2) the arbitration appears unduly time-consuming or expensive. (Zembsch v. Superior
Court (2006) 146 Cal.App.4th 153, 160 (Zembsch).)
Real parties in interest argue writ relief is not appropriate here because there “has
been no final determination that [petitioner’s] claim for wrongful death is subject to
arbitration.” We disagree. Acknowledging the wrongful death claim is “technically a
separate statutory cause of action in the heirs,” the superior court concluded that
petitioner is bound by the agreement because his claim is derivative of Ms. Saenz’s
claims, and she was able to bind him through the agreement just as she was able to bind
him through a will or other testamentary disposition.
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Review by writ of mandate is appropriate because the matter ordered arbitrated is
not within the scope of an enforceable arbitration agreement. (Zembsch, supra,
146 Cal.App.4th at p. 161.) Although petitioner does not assert that arbitration would be
too costly or inefficient, it necessarily follows that arbitration of any claim “compelled in
the absence of a valid, enforceable arbitration agreement is an unduly time consuming
and expensive proposition.” (Medeiros v. Superior Court (2007) 146 Cal.App.4th 1008,
1014, fn. 7.) Writ review “avoid[s] having [the] parties try a case in a forum where they
do not belong, only to have to do it all over again in the appropriate forum.” (Ibid.)
Having concluded that writ review is appropriate, we move on to the merits.
B. Petitioner Is a Third Party to the Agreement and May Not Be Compelled to
Arbitrate His Wrongful Death Claim
Petitioner contends he may not be compelled to arbitrate his wrongful death claim
because he was not a party to the agreement. We agree.
Whether an arbitration agreement is binding on a third party (e.g., a nonsignatory)
is a question of law subject to de novo review. (Daniels v. Sunrise Senior Living, Inc.
(2013) 212 Cal.App.4th 674, 680 (Daniels); Suh v. Superior Court (2010)
181 Cal.App.4th 1504, 1512.) In general, a party cannot be compelled to arbitrate a
dispute that he or she has not agreed to resolve by arbitration. (Buckner v. Tamarin
(2002) 98 Cal.App.4th 140, 142; Benasra v. Marciano (2001) 92 Cal.App.4th 987, 990
[“The strong public policy in favor of arbitration does not extend to those who are not
parties to an arbitration agreement, and a party cannot be compelled to arbitrate a dispute
that he has not agreed to resolve by arbitration.”].)
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Here, petitioner is not a party to the agreement. Therefore, he is not bound to
arbitrate his separate wrongful death claim. (Fitzhugh v. Granada Healthcare &
Rehabilitation Center, LLC (2007) 150 Cal.App.4th 469, 474 (Fitzhugh) [surviving
spouse not required to arbitrate wrongful death claim because no evidence showed that he
signed the arbitration agreement in his personal capacity].) Nonetheless, real parties in
interest assert the lack of petitioner’s signature is irrelevant because the agreement
expressly states that it is governed by the FAA and binding on Ms. Saenz’s heirs and
successors, whose claims may arise out of or relate to any services provided by real
parties in interest, and California law permits binding a nonsignatory to the agreement.
We are not persuaded.
To begin with, we agree the FAA governs the agreement. However, the court, not
the arbitrator, must decide questions of whether an arbitration agreement is enforceable
against a third party. (Benaroya v. Willis (2018) 23 Cal.App.5th 462, 469-470
[“Although a nonsignatory can be compelled to arbitrate, California case law is clear that
‘an arbitrator has no power to determine the rights and obligations of one who is not a
party to the arbitration agreement. [Citation.] The question of whether a nonsignatory is
a party to an arbitration agreement is one for the trial court in the first instance.”].)
Arbitration “does not operate without regard to the wishes of the contracting parties.”
(Mastrobuono et al. v. Shearson Lehman Hutton, Inc., et al. (1995) 514 U.S. 52, 57.)
“[N]othing in the [FAA] authorizes a court to compel arbitration . . . by any parties, that
are not already covered in the agreement. . . . [I]t ensures the enforceability of private
agreements to arbitrate, but otherwise does not purport to place any restriction on a
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nonparty’s choice of a judicial forum.” (Equal Employment Opportunity Commission v.
Waffle House, Inc. (2002) 534 U.S. 279, 289.) Since petitioner did not sign the
agreement, he is not bound to arbitrate his separate wrongful death claim. (Fitzhugh,
supra, 150 Cal.App.4th at p. 474.)
We also agree that Ms. Saenz may bind her heirs and successors whose claims
arise out of or relate to any services provided by real parties in interest. However,
petitioner’s wrongful death claim is not one of those claims because it is personal to him;
it lies independent of survivor claims. “Unlike some jurisdictions wherein wrongful
death actions are derivative, Code of Civil Procedure section 377.60 ‘creates a new cause
of action in favor of the heirs as beneficiaries, based upon their own independent
pecuniary injury suffered by loss of a relative, and distinct from any the deceased might
have maintained had he survived.’” (Horwich v. Superior Court (1999) 21 Cal.4th 272,
283.) Furthermore, the agreement does not indicate an intent to bind third parties with
claims independent of the survivor claims. (Daniels, supra, 212 Cal.App.4th at p. 680.)
When the plain language of an arbitration agreement does not contemplate third parties
signing on their own behalf, absent evidence of their intent to waive any personal claims,
the arbitration agreement is not enforceable against them individually. (Holley v.
Silverado Senior Living Management, Inc. (2020) 53 Cal.App.5th 197, 204.)
“Arbitration remains, as we mentioned above, a matter of consent.” (Ibid.; see Avila v.
Southern California Specialty Care, Inc. (2018) 20 Cal.App.5th 835, 843-844 (Avila).)
Finally, real parties in interest argue that a nonsignatory is bound to arbitrate his
claims when a preexisting relationship with a sufficient “unity of interest” (including
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agency, spousal relationship, and parent-child relationship) exists between the
nonsignatory and the signatory to the arbitration agreement. They cite the following
cases: Gross v. Recabaren (1988) 206 Cal.App.3d 771, 781 [when a “patient expressly
contracts to submit to arbitration ‘any dispute as to medical malpractice,’ and that
agreement fully complies with Code of Civil Procedure section 1295, it must be deemed
to apply to all medical malpractice claims arising out of the services contracted for,
regardless of whether they are asserted by the patient or a third party”]; Mormile v.
Sinclair (1994) 21 Cal.App.4th 1508, 1511 [same]; Herbert v. Superior Court (1985) 169
Cal.App.3d 718, 724, 726-727 [§ 1295 permits patients who sign arbitration agreements
to bind their heirs in wrongful death actions.]; and Ruiz v. Podolsky (2010) 50 Cal.4th
838, 841 [same] (Ruiz). These cases are distinguishable because they involved arbitration
agreements entered into pursuant to section 1295.2
In Ruiz, the California Supreme Court held that section 1295 permitted patients
who consented to arbitration to bind their heirs in actions for wrongful death. (Ruiz,
supra, 50 Cal.4th at p. 841.) It concluded that “all wrongful death claimants are bound
2 Section 1295, subdivision (a), states: “Any contract for medical services which
contains a provision for arbitration of any dispute as to professional negligence of a
health care provider shall have such provision as the first article of the contract and shall
be expressed in the following language: ‘It is understood that any dispute as to medical
malpractice, that is as to whether any medical services rendered under this contract were
unnecessary or unauthorized or were improperly, negligently or incompetently rendered,
will be determined by submission to arbitration as provided by California law, and not by
a lawsuit or resort to court process except as California law provides for judicial review
of arbitration proceedings. Both parties to this contract, by entering into it, are giving up
their constitutional right to have any such dispute decided in a court of law before a jury,
and instead are accepting the use of arbitration.’”
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by arbitration agreements entered into pursuant to section 1295, at least when . . . the
language of the agreement manifests an intent to bind these claimants.” (Ibid.) However,
the Court of Appeal in Avila held that this exception to the general rule that one who has
not consented cannot be compelled to arbitrate applies only when the wrongful death
claim is a result of professional negligence as defined under the Medical Injury
Compensation Reform Act (MICRA; § 1295). (Avila, supra, 20 Cal.App.5th at pp. 841-
842.)
In Avila, the decedent was admitted to defendants’ long-term acute care hospital.
His son signed an arbitration agreement as his agent under California’s statutory power of
attorney form. Five days later, the decedent died because of defendants’ neglect, and the
son initiated an action for negligence/willful misconduct, elder abuse, neglect, and
wrongful death. (Avila, supra, 20 Cal.App.5th at pp. 838-839.) Defendants
unsuccessfully petitioned to compel arbitration. (Id. at p. 839.) The issue before the
Court of Appeal was whether the Ruiz exception to the general rule, that arbitration
agreements must be the subject of consent rather than compulsion, was controlling when
the action was best characterized as being one for elder abuse, not medical negligence.
(Avila, at p. 842.) In deciding that the Ruiz exception did not apply, the Avila court
stated: “What matters is . . . the basis of the claims as pleaded in the complaint. If the
primary basis for the wrongful death claim sounds in professional negligence as defined
by MICRA, then section 1295 applies. If, [however], the primary basis is under the Elder
Abuse and Dependent Adult Civil Protection Act (Welf. & Inst. Code, § 15600 et seq.)
. . . , then section 1295 does not apply and neither does Ruiz’s exception to the general
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rule that one who has not consented cannot be compelled to arbitrate.” (Avila, at p. 842;
accord, Daniels, supra, 212 Cal.App.4th at p. 682.) Thus, the determining factor is
whether the wrongful death claim is primarily based on professional negligence or
physical elder abuse. (Ibid.)
Here, petitioner’s wrongful death claim is not based on professional negligence as
defined by MICRA. Instead, the complaint was pleaded as one for negligence/willful
misconduct, elder abuse, and neglect under the Elder Abuse and Dependent Adult Civil
Protection Act (Welf. & Inst. Code, § 15600 et seq.). “Neglect includes the failure to
assist in personal hygiene, or in the provision of food, clothing, or shelter; the failure to
provide medical care for physical and mental health needs; the failure to protect from
health and safety hazards; and the failure to prevent malnutrition or dehydration.”
(Sababin v. Superior Court (2006) 144 Cal.App.4th 81, 88.) “Under the [Elder Abuse
and Dependent Adult Civil Protection] Act, neglect ‘“refers not to the substandard
performance of medical services but, rather, to the ‘failure of those responsible for
attending to the basic needs and comforts of elderly or dependent adults, regardless of
their professional standing, to carry out their custodial obligations.’ [Citation.] Thus, the
statutory definition of ‘neglect’ speaks not of the undertaking of medical services, but of
the failure to provide medical care.”’” (Avila, supra, 20 Cal.App.5th at p. 843.)
For these reasons, we conclude the superior court erred by granting the petition to
compel arbitration as to petitioner’s wrongful death cause of action.
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C. Ms. Saenz’s Causes of Action Are Arbitrable
Petitioner contends the superior court must decide whether Ms. Saenz’s claims
should be compelled into arbitration or remain in superior court to be adjudicated
contemporaneously with his wrongful death claim. (§ 1281.2.) We disagree.
“In accordance with choice-of-law principles, the parties may limit the trial court’s
authority to stay or deny arbitration under the [California Arbitration Act] by adopting
the more restrictive procedural provisions of the FAA.” (Valencia v. Smyth (2010)
185 Cal.App.4th 153, 157 (Valencia).) “Generally, the FAA obligates federal courts to
apply state law when interpreting an arbitration clause. [Citations.] Thus, a federal court
would apply California law when determining the validity of an arbitration clause in a
case involving California residents or employees. [Citations.] [¶] . . . ‘Under California
law, ordinary rules of contract interpretation apply to arbitration agreements. . . . “‘The
fundamental goal of contractual interpretation is to give effect to the mutual intention of
the parties. . . . If contractual language is clear and explicit, it governs.’”’” (Id. at
p. 177.)
“[T]he FAA’s procedural provisions [(9 U.S.C. §§ 3, 4, 10, 11)] do not apply in
state court unless the parties expressly adopt them. . . . [T]he question is not whether the
parties adopted the CAA’s procedural provisions: The state’s procedural statutes
([Code Civ. Proc.,] §§ 1281.2, 1290.2) apply by default because Congress intended the
comparable FAA sections (9 U.S.C. §§ 3, 4, 10, 11) to apply in federal court. The
question, therefore, is whether the parties expressly incorporated the FAA’s procedural
provisions into their agreements,” thus eliminating the superior court’s authority under
12
section 1281.2, subdivision (c). (Valencia, supra, 185 Cal.App.4th at p. 177.) This
question “‘is a question of law involving interpretation of statutes and the contract (with
no extrinsic evidence). We therefore apply a de novo standard of review.’” (Id. at
pp. 161-162.)
“A state’s procedural statutes automatically apply in state court unless the parties
expressly agree otherwise.” (Valencia, supra, 185 Cal.App.4th at p. 179; see Volt
Information Sciences, Inc. v. Leland Stanford Junior University (1989) 489 U.S. 468,
476, 479 [“Arbitration under the [FAA] is a matter of consent, not coercion, and parties
are generally free to structure their arbitration agreements as they see fit. Just as they
may limit by contract the issues which they will arbitrate, . . . so too may they specify by
contract the rules under which that arbitration will be conducted.”]; Cronus Investments,
Inc. v. Concierge Services (2005) 35 Cal.4th 376, 394 [“[T]he language of the arbitration
clause . . . calling for the application of the FAA ‘if it would be applicable,’ should not be
read to preclude the application of section 1281.2[, subdivision] (c), because it does not
conflict with the applicable provisions of the FAA and does not undermine or frustrate
the FAA’s substantive policy favoring arbitration.” However, parties may expressly
designate that any arbitration proceeding is governed under the FAA’s procedural
provisions rather than state procedural law.]; Cable Connection, Inc. v. DIRECTV, Inc.
(2008) 44 Cal.4th 1334, 1352 [“Arbitration under the [FAA] is a matter of consent, not
coercion, and parties are generally free to structure their arbitration agreements as they
see fit. Just as they may limit by contract the issues which they will arbitrate [citation],
so too may they specify by contract the rules under which that arbitration will be
13
conducted.”].) Here, article I, section 1.8, of the agreement states: “This agreement shall
be construed and enforced in accordance with and governed by the Federal Arbitration
Act and the procedures set forth in the Federal Arbitration Act.” (Italics added.)
Because the agreement expressly adopts the FAA’s procedural provisions, California’s
procedural statutes do not apply. Consequently, the superior court lacks authority under
section 1281.2.3
Having concluded that petitioner’s claim is arbitrable, but Ms. Saenz’s claims are
not, we are aware that the parties may be required to participate in duplicative
proceedings. However, we are constrained by the express language in the agreement. As
the California Supreme Court has acknowledged: “[T]he FAA itself contains no
provision designed to deal with the special practical problems that arise in multiparty
contractual disputes when some or all of the contracts at issue include agreements to
arbitrate. California has taken the lead in fashioning a legislative response to this
problem, by giving courts authority to consolidate or stay arbitration proceedings in these
situations in order to minimize the potential for contradictory judgments.” (Cronus
Investments, Inc. v. Concierge Services, supra, 35 Cal.4th at p. 392.) But that authority—
section 1281.2, subdivision (c)—is inapplicable here because the parties expressly
decided that the agreement “shall be construed and enforced in accordance with and
governed by the Federal Arbitration Act and the procedures set forth in the Federal
Arbitration Act.” (Italics added.) “While we may question the wisdom of the parties’
3 Since section 1281.2 does not apply, the issue of whether real parties in interest
waived their right to arbitrate (§ 1281.2, subd. (a)) is moot.
14
choice, and decry the potential for inefficiency, delay, and conflicting rulings, the parties
were free to choose their arbitration rules. The court will not rewrite their contract.”
(Rodriguez v. American Technologies, Inc. (2006) 136 Cal.App.4th 1110, 1122.)
III. DISPOSITION
The petition for writ of mandate is granted.
Let a writ of mandate issue directing the superior court to (1) vacate its order
granting real party in interest’s motion to compel arbitration, and (2) enter a new order
denying the motion as to petitioner’s claim only.
Each party shall bear their own costs in this writ proceeding.
In the interest of justice, the clerk of this court is directed to issue the remittitur
immediately upon filing of this opinion. (Cal. Rules of Court, rule 8.490(b)(2)(A).)
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
McKINSTER
Acting P. J.
We concur:
CODRINGTON
J.
MENETREZ
J.
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