Kourtakis v. Capistrano Beach Care Center CA4/3 ( 2024 )

Filed 9/16/24 Kourtakis v. Capistrano Beach Care Center CA4/3
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 THREE
PAMELA KOURTAKIS,
Plaintiff and Respondent, G062935
v. (Super. Ct. No. 30-2021-
01205006)
CAPISTRANO BEACH CARE
CENTER, LLC et al., OPINION
Defendants and Appellants.
Appeal from an order of the Superior Court of Orange County,
David J. Hesseltine, Judge. Reversed and remanded with directions.
Lewis Brisbois Bisgaard & Smith, Lann G. McIntyre, Tracy D.
Forbath, Suzanne L. Schmidt, Kathleen M. Walker and Jeffrey S. Healey for
Defendants and Appellants.
Law Offices of Felicia C. Curran and Felicia C. Curran for
Plaintiff and Respondent.
Plaintiff Pamela Kourtakis filed a complaint against Capistrano
Beach Care Center, LLC and Cambridge Healthcare Services, LLC
(collectively, the Capistrano defendants), asserting claims both in her
capacity as successor in interest to her deceased mother, Lucille Kourtakis,
1
and in her individual capacity. The complaint alleges Lucille passed away
after residing for approximately seven months at a skilled nursing facility
that was owned and operated by the Capistrano defendants (the facility). The
Capistrano defendants appeal from an order denying their petition to compel
arbitration of Pamela’s individual claims.
This is the second appeal in this matter. The Capistrano
defendants previously petitioned to compel arbitration of all claims contained
in the complaint based on an arbitration agreement signed by Pamela but not
by Lucille; the trial court denied the petition. In the first appeal, a panel of
this court affirmed the order denying the petition as to Pamela’s claims as
successor in interest to Lucille but remanded to the trial court to determine
whether Pamela’s individual claims must be arbitrated. (Kourtakis v.
Capistrano Beach Care Center, LLC et al. (Feb. 2, 2023, G060922) [nonpub.
opn.] (Kourtakis I).) On remand, following supplemental briefing by the
parties, the trial court denied the petition as to Pamela’s individual claims on
the ground the arbitration agreement was unconscionable.
We reverse. The trial court erred by concluding the arbitration
agreement was substantively unconscionable and denying the petition to
compel arbitration of Pamela’s individual claims on that basis. We remand
with directions for the trial court to determine, in the first instance, whether
1
As Pamela and Lucille Kourtakis share the same last name, we
refer to them by their first names; we intend no disrespect.
2
any of the other arguments raised by Pamela in her opposition to the petition
has merit.
FACTUAL AND PROCEDURAL HISTORY
I.
THE COMPLAINT
In June 2021, Pamela filed a complaint against the Capistrano
defendants. We summarize the allegations of the complaint relevant to the
issues presented in this appeal as follows. Lucille was admitted to the facility
for rehabilitation after she broke her shoulder. Lucille’s weight dropped 20
pounds during the approximately seven-month period she resided at the
facility. During a visit on July 5, 2020, Pamela purportedly saw Lucille
“cough repeatedly, gasp for air, try to catch her breath, and throw up.”
Pamela “was in a panic because she knew that [Lucille] needed emergency
treatment at the hospital, but the [n]urse was giving her push back and
would not agree to let [Lucille] be transported to the hospital.” Pamela took
Lucille to the hospital, where Lucille was diagnosed with, among other
things, respiratory distress and severe protein and calorie malnourishment.
Lucille passed away on July 22, 2020.
The complaint asserts claims for wrongful death and negligent
infliction of emotional distress by Pamela in her individual capacity. It also
asserts claims in her capacity as Lucille’s successor in interest for (1) reckless
or willful neglect of an elder in violation of the Elder Abuse and Dependent
Adult Civil Protection Act (Welf. & Inst. Code, § 15600 et seq.; Elder Abuse
Act) and (2) violation of the Patient Bill of Rights (Health & Saf. Code,
§ 1430, subd. (b)).
3
II.
THE PETITION TO COMPEL ARBITRATION
The Capistrano defendants filed a petition to compel arbitration
(the petition) based on a two-page arbitration agreement, entitled
“RESIDENT–FACILITY ARBITRATION AGREEMENT,” which Pamela
signed on Lucille’s behalf and “as an Individual” (Agreement). (Boldface
omitted.) On the first page of the Agreement, the line designated for
“Resident Name” is blank, as are two lines designated for “Initials.” The
Agreement also states on the first page: “Residents shall not be required to
sign this arbitration agreement as a condition of admission to this facility.”
The Agreement contains eight articles, two of which are most relevant to this
appeal.
First, Article 4 provides: “This Agreement shall be binding for
any dispute, except for disputes pertaining to collections or evictions. This
Agreement is binding on all parties, including the Resident’s representatives,
executors, family members, and heirs who bring any claims individually or in
a representative capacity. The Resident’s representatives, agents, executors,
family members, successors in interest and heirs who execute this Agreement
below on the signature line are doing so not only in their representative
capacity for the Resident, but also in their individual capacity and thus agree
that any claims brought individually by any such representatives, agents,
executors, family members, representatives, successors in interest and heirs
are subject to binding arbitration. This Agreement may be rescinded by
written notice within thirty (30) days of signature.”
Second, Article 6 provides: “Resident and Facility agree that
California substantive law, including California Code of Civil Procedure
§667.7 and Civil Code §§3333.1-3333.2 applies to any and all claims arising
4
out of the care, treatment and services provided to the Resident by the
Facility. The parties agree that California Code of Civil Procedure §1281.2(c)
is excluded from this Agreement as the parties mutually desire to have any
and all disputes submitted to binding arbitration. The parties do not want
any claims not subject to arbitration to impede any and all other claims from
being ordered to binding arbitration. The expenses and fees of the
arbitrator(s) shall be apportioned equally among all parties except as
otherwise permitted by law.”
The Agreement concludes with two notices written in red font.
The first notice provides: “By signing this contract you are agreeing to have
any issue of medical malpractice decided by neutral arbitration and you are
giving up your right to a jury or court trial. See Article 1 of this contract.”
(Boldface and some capitalization omitted.) The second notice provides: “By
signing this contract you are agreeing to have all claims, including claims
other than a claim for medical malpractice, decided by arbitration and you
are giving up your right to a jury or court trial and you agree that no party
shall adjudicate any claim on a class action basis.” (Boldface and some
capitalization omitted.)
Pamela’s signature appears on the line labeled under each notice
as “Signature on behalf of the Resident and as an Individual[.]” Signatures
appear on the corresponding lines labeled for the facility representative. The
line under each notice labeled “Resident’s Signature” is blank.
III.
THE TRIAL COURT DENIES THE PETITION AND THE CAPISTRANO DEFENDANTS
APPEAL; THE APPELLATE COURT AFFIRMS IN PART AND REMANDS THE MATTER
The trial court denied the petition as to Pamela’s claims made in
her capacity as successor in interest to Lucille on the ground Lucille had not
5
entered into the Agreement and the Capistrano defendants failed to show
Pamela was authorized to enter the Agreement on Lucille’s behalf. The trial
court denied the petition as to the claims Pamela brought in her individual
capacity by exercising its discretion under Code of Civil Procedure section
2
1281.2, subdivision (c) to avoid inconsistent rulings.
On appeal, a panel of this court affirmed the order denying the
petition as to the claims Pamela brought in her capacity as successor in
interest to Lucille on the ground the Capistrano defendants failed to show the
existence of a valid agreement to arbitrate Lucille’s claims for elder abuse
and violation of Health and Safety Code section 1430. (Kourtakis I, supra,
G060922.) As to the claims Pamela brought in her individual capacity, the
appellate court concluded the trial court erred by denying the petition based
on section 1281.2, subdivision (c) before determining whether the Agreement
was an enforceable agreement between the Capistrano defendants and
Pamela. (Kourtakis I, supra, G060922.) The court then remanded the matter
with directions that the trial court determine whether such an agreement
exists and, if so, whether Pamela’s individual claims are arbitrable under it.
(Ibid.)
2
Section 1281, subdivision (c) of the Code of Civil Procedure
provides in part a trial court shall order arbitration of a controversy if it
determines that an agreement to arbitrate the controversy exists unless it
finds “[a] party to the arbitration agreement is also a party to a pending court
action or special proceeding with a third party, arising out of the same
transaction or series of related transactions and there is a possibility of
conflicting rulings on a common issue of law or fact.”
All further undesignated code sections are to the Code of Civil
Procedure.
6
IV.
ON REMAND, THE TRIAL COURT CONCLUDES THE AGREEMENT IS
UNENFORCEABLE AS UNCONSCIONABLE AND DENIES THE PETITION
Following remand, the Capistrano defendants filed supplemental
briefing in support of the petition as to Pamela’s individual claims. Pamela
filed supplemental opposition to the petition, which included her declaration.
In that declaration, Pamela described the circumstances surrounding her
execution of the Agreement as follows: “Some time after [Lucille] moved into
[the facility], I was asked to step into the office of a gentleman named Carlos
at [the facility]. I am not sure of Carlos’ exact title, but he is part of the
business office of the facility. [Lucille] was not present for this conversation.
Carlos had some papers, and he said, now that [Lucille] had moved in, they
wanted me to sign the admitting paperwork. He did not give me an
opportunity to read the papers, and he did not give me a copy of the papers.
He did say that one of the papers was for arbitration, and he told
me . . . where to sign. He did not tell me that I did not need to sign the
papers. He said that everyone signs the papers. I did not know that I did not
need to sign the arbitration papers in order for [Lucille] to stay there. I was
afraid that they might ask [Lucille] to leave if I did not sign. I did not want to
say or do anything that would make them not want to keep [Lucille] as a
patient, because she needed rehabilitation therapies to recover from the
shoulder injury. So I signed where he asked me to sign. Carlos is the only
person from [the facility] that I recall speaking to regarding the arbitration
paperwork.” Pamela also said there was no money in her mother’s estate.
The trial court denied the petition as to Pamela’s individual
claims after finding the Agreement was unconscionable and, thus, not
enforceable against Pamela. Regarding procedural unconscionability, the
7
trial court recognized “Pamela declare[d] she thought she needed to sign the
agreement to get care for her mother, she was not given time to read the
agreement, she was not given a copy, and she signed where she was asked to
sign.” The trial court noted the Capistrano defendants did not provide any
evidence to the contrary, and it found Pamela’s version of events to be
credible given there was no resident name or initials on the first page of the
Agreement. The trial court found further support for procedural
unconscionability because the Agreement was “captioned as ‘Resident-
Facility Arbitration Agreement,’ [the Agreement] refers in Article 2 to ‘any
dispute between Resident and Capistrano,’ Pamela’s name was not on the
agreement, and Article Four, which is the provision purporting to requiring
[sic] Pamela to arbitrate claims in her individual capacity, was inserted into
the agreement without any heading or highlighting to draw attention to it.”
The trial court noted the signature block’s reference to “Signature on behalf
of the Resident and as an Individual” reduced the amount of procedural
unconscionability but did not eliminate it. Ultimately, the trial court
concluded there was “a fair degree of procedural unconscionability.”
The trial court also concluded there was a fair degree of
substantive unconscionability. The trial court determined two provisions
were substantively unconscionable: (1) the provision exempting “disputes
pertaining to collections or evictions[,]” which the trial court described as
being the most likely that the Capistrano defendants would bring against
residents, and (2) the provision stating “[t]he expenses and fees of the
arbitrator(s) shall be apportioned equally among all parties except as
otherwise permitted by law.” For these reasons, the trial court determined
8
the Agreement could not be enforced against Pamela as to her individual
claims.
The Capistrano defendants filed a timely notice of appeal.
DISCUSSION
For the reasons we will explain, the trial court erred by denying
the petition as to Pamela’s individual claims on the ground the Agreement
was unenforceable as unconscionable. While the Agreement had some degree
of procedural unconscionability, it was devoid of substantive
unconscionability.
I.
OVERVIEW OF THE UNCONSCIONABILITY DOCTRINE AND
THE APPLICABLE STANDARD OF REVIEW
“‘“[G]enerally applicable contract defenses, such
as . . . unconscionability, may be applied to invalidate arbitration agreements
without contravening” the FAA’ or California law.” (OTO, L.L.C. v. Kho
(2019) 8 Cal.5th 111, 125 (OTO).) “A contract is unconscionable if one of the
parties lacked a meaningful choice in deciding whether to agree and the
contract contains terms that are unreasonably favorable to the other party.”
(Ibid.) There are thus both procedural and substantive elements. (Ibid.)
Procedural unconscionability “‘addresses the circumstances of contract
negotiation and formation, focusing on oppression or surprise due to unequal
bargaining power,’” and ‘“[s]ubstantive unconscionability pertains to the
fairness of an agreement’s actual terms and to assessments of whether they
are overly harsh or one-sided.’” (Ibid.) “[C]ourts are required to determine the
unconscionability of the contract ‘at the time it was made.’” (Sanchez v.
Valencia Holding Co., LLC (2015) 61 Cal.4th 899, 920.)
9
While “[b]oth procedural unconscionability and substantive
unconscionability must be shown, . . . ‘they need not be present in the same
degree’ and are evaluated on ‘“a sliding scale.”’” (Pinnacle Museum Tower
Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 247
(Pinnacle).) “‘[T]he more substantively oppressive the contract term, the less
evidence of procedural unconscionability is required to come to the conclusion
that the term is unenforceable, and vice versa.’” (Ibid.) “‘The ultimate issue in
every case is whether the terms of the contract are sufficiently unfair, in view
of all relevant circumstances, that a court should withhold enforcement.’”
(OTO, supra, 8 Cal.5th at p. 126.) Notably, “[t]he degree of unfairness
required for unconscionability must be as rigorous and demanding for
arbitration clauses as for any other contract clause.” (Id. at p. 125.) As the
party asserting unconscionability, Pamela has the burden of proving it. (See
id. at p. 126.)
On appeal, the Capistrano defendants argue the trial court erred
in denying the petition as to Pamela’s individual claims because there is no
procedural or substantive unconscionability. “Whether an agreement is
unconscionable presents a question of law which we review de novo.” (Lopez
v. Bartlett Care Center, LLC (2019) 39 Cal.App.5th 311, 320 (Lopez).)
However, “‘“factual issues may bear on that determination. [Citations.] Thus,
to the extent the trial court’s determination that the arbitration agreement
was unconscionable turned on the resolution of conflicts in the evidence or on
factual inferences to be drawn from the evidence, we consider the evidence in
the light most favorable to the trial court’s ruling and review the trial court’s
factual determinations under the substantial evidence standard.”’” (Ibid.)
10
II.
THE AGREEMENT IS MODERATELY PROCEDURALLY UNCONSCIONABLE
“[P]rocedural unconscionability requires oppression or surprise.
‘“Oppression occurs where a contract involves lack of negotiation and
meaningful choice, surprise where the allegedly unconscionable provision is
hidden within a prolix printed form.”’” (Pinnacle, supra, 55 Cal.4th at p. 247.)
“‘The circumstances relevant to establishing oppression include, but are not
limited to (1) the amount of time the party is given to consider the proposed
contract; (2) the amount and type of pressure exerted on the party to sign the
proposed contract; (3) the length of the proposed contract and the length and
complexity of the challenged provision; (4) the education and experience of
the party; and (5) whether the party’s review of the proposed contract was
aided by an attorney.’” (OTO, supra, 8 Cal.5th at pp. 126–127.)
We conclude the Agreement here has a moderate degree of
procedural unconscionability. This court’s decision in Lopez, supra, 39
Cal.App.5th 311 is instructive. In Lopez, the daughter of a deceased resident
of a nursing facility sued the facility, among others, as successor in interest
and individually. (Id. at pp. 313–314.) The daughter, but not the deceased
resident, had signed a two-page arbitration agreement titled “RESIDENT-
FACILITY ARBITRATION AGREEMENT” on a signature block labeled
“Resident Representative/Agent Signature.” (Ibid.) Article four of that
arbitration agreement “purport[ed] to bind ‘in their individual capacity’ any
persons ‘who execute this Agreement below on the “Resident
Representative/Agent Signature” line,’ thereby mandating arbitration of the
representative’s individual claims against the Facility and any claims
brought in a representative capacity.” (Id. at p. 314, fn. omitted.) Lopez
determined the petition to compel arbitration was properly denied as to the
11
claims brought as successor in interest because the daughter had no
authority to execute the arbitration agreement on behalf of the deceased
resident. (Id. at pp. 317–320.) Lopez also concluded the arbitration agreement
was unenforceable as to the daughter’s individual claim because it was
unconscionable. (Id. at pp. 320–322.)
As for procedural unconscionability, the appellate court in Lopez,
supra, 39 Cal.App.5th at page 321 determined “the brevity of the arbitration
agreement and the fact it contained boldface and red lettering does not
overcome the fact the agreement on its face is between a resident and the
facility. Nowhere does the agreement warn that a person who signs as a
resident’s representative or agent is agreeing to be bound in his or her
individual capacity and representative capacity. Article four contains no
heading or other warning that it includes a provision waiving the individual
trial rights of one who signs the agreement as a resident’s representative or
agent. Nor does the signature block warn of the purported dual capacity in
which the representative is signing.”
The Agreement before us is similar to the one in Lopez. As in
Lopez, the agreement appears on its face to be between the resident and the
facility with the title “RESIDENT – FACILITY ARBITRATION
AGREEMENT.” (Boldface omitted.) And the Agreement’s article four here
similarly has no heading or warning regarding waiver of individual trial
rights for one who signs. But there is a difference: the signature block here
indicates: “Signature on behalf of the Resident and as an Individual.” We
agree with the trial court the signature block difference reduces but does not
eliminate the procedural unconscionability. While the signature block may
provide some warning of signing in a dual capacity, it does not alone make
clear what exactly the signer is potentially waiving in his or her individual
12
capacity. Again, the title of the document indicates it is an arbitration
agreement between the resident and facility.
Pamela’s declaration provides further support for a finding of
some degree of procedural unconscionability. Pamela stated in her
declaration filed in opposition to the petition someone named Carlos at the
facility brought her into his office, where he said “they wanted [her] to sign
the admitting paperwork[,]” “did not give [her] an opportunity to read the
3
papers,” and “told [her] where to sign” and “everyone signs the papers.” The
Capistrano defendants assert Pamela’s declaration needed to provide more
details about how the Capistrano defendants caused Pamela to not have
enough time to review the Agreement, but the trial court credited Pamela’s
version of events and found the Capistrano defendants introduced no
contrary evidence.
The Capistrano defendants argue the Agreement was not
unconscionable because it did not constitute an adhesive contract. They point
to language in cases where the “[u]nconscionability analysis begins with an
inquiry into whether the contract is one of adhesion.” (Armendariz v.
Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 113.)
According to the Capistrano defendants, this means adhesion is a
“foundational” issue, essentially arguing there can be no unconscionability
unless there is an adhesive contract.
3
The Capistrano defendants also suggest there is no procedural
unconscionability because Pamela should be presumed to have read and fully
understood the Agreement regardless of the circumstances. Their argument
is unavailing as it would lead to virtually eliminating any surprise and
oppression analysis, regardless of the circumstances.
13
“An adhesive contract is standardized, generally on a preprinted
form, and offered by the party with superior bargaining power ‘on a take-it-
or-leave-it basis.’” (OTO, supra, 8 Cal.5th at p. 126.) The Capistrano
defendants assert the Agreement was not an adhesive contract because it
stated the resident was not required to sign as a condition of admission to the
facility. The Capistrano defendants, however, are incorrect on the law. As a
panel of this court has stated, “[a]dhesion is not a prerequisite for
unconscionability.” (Harper v. Ultimo (2003) 113 Cal.App.4th 1402, 1409.)
III.
THE AGREEMENT IS NOT SUBSTANTIVELY UNCONSCIONABLE
“Substantive unconscionability examines the fairness of a
contract’s terms. This analysis ‘ensures that contracts, particularly contracts
of adhesion, do not impose terms that have been variously described as
“‘“overly harsh”’” [citation], “‘unduly oppressive’” [citation], “‘so one-sided as
to “shock the conscience”’” [citation], or “unfairly one-sided”’” (OTO, supra, 8
Cal.5th at pp. 129–130.) These descriptors “‘point to the central idea that the
unconscionability doctrine is concerned not with “a simple old-fashioned bad
bargain” [citation], but with terms that are “unreasonably favorable to the
more powerful party.”’” (Id. at p. 130.) “‘“‘[T]he paramount consideration in
assessing [substantive] conscionability is mutuality.’”’ [Citation.] Unilateral
terms with ‘overly harsh effect[s]’ are the hallmark of substantive
unconscionability.” (Nelson v. Dual Diagnosis Treatment Center, Inc. (2022)
77 Cal.App.5th 643, 662.)
Here, the trial court concluded two provisions in the Agreement
were substantively unconscionable. First, the trial court determined there
was substantive unconscionability because the Agreement exempted from
arbitration “disputes pertaining to collections or evictions.” Relying on Lopez,
14
supra, 39 Cal.App.5th 311, the trial court reasoned: “The agreement lacks
mutuality because it requires residents to arbitrate those claims they are
most likely to bring against the facility (medical malpractice, personal injury,
elder abuse) while allowing the facility to pursue in court the actions it is
most likely to bring against residents (evictions and collections), which is
clearly ‘one-sided,’ benefitting only the facility, and thus rendering the
agreement substantively unconscionable.” (Italics added.)
In Lopez, supra, 39 Cal.App.5th at pages 321–322, the appellate
court concluded a similar provision, which excepted from arbitration
“disputes pertaining to collections or evictions,” was substantively
unconscionable. The appellate court rejected as frivolous an argument by the
nursing facility that this provision did not benefit only the nursing facility,
instead concluding “the provision is clearly ‘one-sided,’ benefiting only the
[nursing] [f]acility, . . . [rendering] the agreement itself substantively
unconscionable.” (Ibid.)
The Capistrano defendants argue that part of the analysis in
Lopez, supra, 39 Cal.App.5th 311 is inapplicable to the issue presented
here—which is limited to whether the Agreement is substantively
unconscionable as to Pamela’s claims brought by her in her individual
capacity only. The Agreement’s carve-out for claims pertaining to collections
and evictions does not result in a lack of mutuality between the Capistrano
defendants and Pamela in her individual capacity because those claims are
not the type of claim the Capistrano defendants would bring against her as
an individual (as opposed to Lucille’s successor in interest). Pamela is not a
resident of the facility who could be evicted. Furthermore, nothing in the
record suggests Pamela might be personally liable to the Capistrano
defendants in a matter pertaining to collections. Pamela does not contend she
15
agreed to pay for any part of Lucille’s stay at the facility (if, for example,
4
insurance did not cover the costs).
Second, the trial court found the Agreement substantively
unconscionable based on the following provision: “The expenses and fees of
the arbitrator(s) shall be apportioned equally among all parties except as
otherwise permitted by law.” The trial court explained: “The effect thereof
would plainly be to impose a potentially substantial expense on any potential
plaintiffs, including individuals attempting to assert claims for elder abuse.”
Relying on Bickel v. Sunrise Assisted Living (2012) 206 Cal.App.4th 1(Bickel), the trial court concluded: “Such a requirement, which could prevent
meritorious claims from being prosecuted entirely, is contrary to public
policy.”
In Bickel, the plaintiff, who had been a resident at an assisted
living facility, filed a lawsuit against that facility alleging several violations
of the Elder Abuse Act. (Bickel, supra, 206 Cal.App.4th at pp. 4–5.) When
that facility moved to compel arbitration, the plaintiff argued the agreement
was unconscionable and contrary to public policy because she was entitled to
seek the recovery of attorney fees and costs under the Elder Abuse Act but
the agreement provided for each party to bear its own arbitration costs and
fees. (Id. at p. 6.) Noting the right to recover attorney fees and costs pursuant
to Welfare and Institutions Code section 15657 of the Elder Abuse Act is
unwaivable, the appellate court “conclude[d] that the waiver of plaintiff’s
statutory right to attorney fees and costs under the Elder Abuse Act was
contrary to public policy and, therefore, the trial court correctly severed that
4
In the trial court, Pamela’s counsel declared she was “informed
and believe[d] that [Lucille’s] stay at that facility was paid for by MediCal
insurance.”
16
provision from the residency agreement.” (Bickel, supra, 206 Cal.App.4th at
pp. 6, 13.) The Bickel court also noted its “decision is limited to the particular
statute and waiver before [it].” (Ibid.)
Unlike Bickel, supra, 206 Cal.App.4th 1, the Agreement here does
not require a waiver of any right to seek attorney fees and costs under the
Elder Abuse Act. The Agreement provides for the splitting of expenses and
fees of the arbitrator(s) “except as otherwise permitted by law.” Significantly,
Pamela does not argue that this cost/fees splitting aspect of the Agreement is
substantively unconscionable as to her individual claims. While Pamela
asserted a claim for a violation of the Elder Abuse Act as Lucille’s successor
in interest, a claim not at issue in this appeal, she has not made such a claim
against the Capistrano defendants in her individual capacity. Furthermore,
in the limited context of evaluating the substantive unconscionability of the
Agreement, she makes no argument on appeal about her own financial ability
to proceed in arbitration and does not otherwise argue the Agreement’s costs
provision is substantively unconscionably as to her individual claims.
For these reasons, Pamela failed to carry her burden of
establishing the Agreement was substantively unconscionable as to the
claims she brought in her individual capacity. (See Pinnacle, supra, 55
Cal.4th at p. 247 [“party resisting arbitration bears the burden of proving
unconscionability”].)
IV.
WE REMAND FOR CONSIDERATION OF PAMELA’S OTHER ARGUMENTS RAISED IN
OPPOSITION TO THE PETITION
Because the Agreement was not shown to suffer from substantive
unconscionability, the trial court erred by denying the petition on the ground
the Agreement was unenforceable as unconscionable with respect to Pamela’s
17
individual claims. (See Pinnacle, supra, 55 Cal.4th at p. 247 [“both procedural
unconscionability and substantive unconscionability must be shown”].)
Having found the Agreement to be unenforceable as unconscionable, the trial
court did not reach the other arguments asserted by Pamela for the denial of
the petition as to her individual claims. At the hearing on that petition, the
trial court stated: “[W]e don’t ever get to whether the FAA and all those other
matters come into play because, as indicated, it’s based on the
unconscionability issue.” We therefore remand the matter to the trial court to
consider the other arguments raised by Pamela in opposition to the petition.
DISPOSITION
The order denying the petition to compel arbitration as to
Pamela’s individual claims is reversed. The matter is remanded to the trial
court for further proceedings consistent with this opinion. Appellants shall
recover their costs on appeal.
MOTOIKE, ACTING P. J.
WE CONCUR:
DELANEY, J.
GOODING, J.
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