West v. Solar Mosaic, LLC ( 2024 )

Filed 10/16/24
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION EIGHT
LUCY WEST et al., B334178
Plaintiffs and Respondents, (Los Angeles County
Super. Ct. No.23STCV03367)
v.
SOLAR MOSAIC LLC,
Defendant and Appellant.
APPEAL from an order of the Superior Court of Los
Angeles County, Elaine Lu, Judge. Affirmed.
Sheppard, Mullin, Richter & Hampton, Robert J. Guite and
Khirin Bunker, for Defendant and Appellant.
Kemnitzer, Barron & Krieg, Kristin Kemnitzer, Adam
McNeile and Malachi J. Haswell, for Plaintiffs and Respondents.
_______________________
A home improvement and solar panel salesperson visited
the home where senior citizens Harold and Lucy West lived with
their adult daughter Deon. 1 By the time he left, a loan
agreement package had been completed electronically with
Harold’s electronic signature. A subsequent dispute led to
litigation, and lender Solar Mosaic LLC (Mosaic) petitioned the
court to compel arbitration based on arbitration provisions in the
loan agreement. The trial court declined on the ground that
Mosaic had failed to establish the existence of an agreement to
arbitrate. We affirm the court’s order.
FACTUAL AND PROCEDURAL BACKGROUND
In July 2022, Ilai Mitmiger, a sales representative for Elite
Home Remodeling, Inc. (Elite), visited Harold, Lucy and Deon at
the Wests’ home. Harold and Lucy were both in their 90’s and
suffered from dementia. Neither used e-mail, computers, or
mobile phones.
When Mitmiger arrived, Deon woke Harold and brought
him from bed into the living room. There, in Mitmiger’s account,
Mitmiger informed the Wests of the home solar installation Elite
could provide and the availability of financing through Mosaic.
He examined a recent electric bill and told the Wests he “believed
they could potentially reduce their electric bill by going solar” and
“might be eligible to receive tax credits.” According to Mitmiger,
“all three family members” asked him questions about “how solar
works.” Harold and Lucy, Mitmiger declared, “appeared to be
excited about moving forward with a home solar system.” Also
according to Mitmiger, Deon told him “the family had previously
1 We refer to the Wests by their first names for clarity.
2
spoken with two other contracting companies about a potential
home solar installation but that Elite seemed to be the right
company for the job.” Mitmiger said he heard Deon suggest to
her parents that Elite should perform the work.
In Mitmiger’s version of events, when Mitmiger mentioned
that Elite offered home renovation services, Harold and Lucy
insisted he inspect their bathroom, which was in disrepair and
had visible mold growth. They informed him the bathroom
needed plumbing and electrical work and asked about replacing
the tile. Mitmiger said he told them Elite could perform this
work.
According to Deon, Mitmiger never mentioned being
associated with Elite or Mosaic and instead claimed to work with
a government program that helped senior citizens to fix up their
homes. Harold and Lucy had previously had their home painted
at no cost by Habitat for Humanity, and Deon asked if the
program Mitmiger was working for was similar to Habitat for
Humanity. Mitmiger said it was.
In Deon’s account, Mitmiger said he could obtain a new
shower for the only bathroom in the house that had a shower and
bathtub. He said it would cost $25,000 to renovate the bathroom,
but did not specify who would pay for it. Mitmiger also said he
could include solar panels on the home at no additional cost. To
Deon’s knowledge, her parents had never considered installing
solar panels, but Mitmiger said solar panels could lower Harold
and Lucy’s taxes and electric bills. According to Deon, they never
discussed how her parents would pay any of the cost of this work,
and Mitmiger did not ask for any financial information from
them. Harold and Lucy lived on their retirement and Social
Security benefits, and they could not afford to pay $25,000 for a
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home renovation. Based on what Mitmiger told them, Deon
believed the renovations would be paid for, at least in part, by
Mitmiger’s government program.
During this conversation, in Deon’s view, Harold “did not
seem to understand what was going on.” According to Deon,
Mitmiger obtained her e-mail address so he could send a “quote.”
In Mitmiger’s account, Harold and Lucy informed him they
wanted to proceed with the installation and financing of the home
solar system and a bathroom renovation, so Mitmiger asked
Mosaic to send a loan agreement package by e-mail for their
review and signature.
Mosaic sent documents to Deon’s e-mail address. An initial
set of documents apparently did not process correctly, so an Elite
employee telephoned Mosaic and the documents were re-sent.
Speaking with Deon, the Mosaic representative said she had sent
the documents to “Harold’s E-mail address,” and Deon said, “Oh,
my E-mail address? Okay. I’ll go—I’ll go to my E-mail.”
Mosaic uses DocuSign for its contracts. The signature
process is: (1) documents are e-mailed from Mosaic to the signer;
(2) the signer receives an e-mail requesting that they sign online;
(3) the signer clicks the link in the e-mail to open the document
for review, and the document has areas marked for the signer to
execute; (4) the signer creates a DocuSign electronic signature
and clicks to place their signature in the document; and (5) once
the signature has been inserted in all the required locations, the
signer confirms signing as the final step and clicks a button
saying “Finish.”
The documents were sent to Deon’s e-mail address at
6:29:20 p.m. They were viewed on a mobile device at 6:29:30 p.m.
The documents were signed electronically in Harold’s name and
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completed at 6:29:43 p.m. 2 Harold’s electronic signature appears
in seven places in the 33-page long loan document package.
Deon told the Mosaic representative, “It’s completed.” The
Mosaic representative asked Deon if she was Harold; Deon said
no. The Mosaic representative asked to speak with Harold.
When asked if he understood that the telephone call was being
recorded, Harold’s response was unintelligible. The
representative explained they needed to begin with identity
verification and asked for consent. After a six-second pause,
Harold said, “Okay.” The Mosaic representative asked for
Harold’s full name and birthdate, and after pausing for several
seconds, Harold said, “What’s the day? Oh, what’s the year?”
After another silence from Harold, during which time
another voice could be heard in the background, the
representative asked, “Hello?” Harold then provided his
birthdate. She asked Harold for the final four digits of his Social
Security number. Harold was silent for another 10 seconds
before answering.
The representative asked Harold for the telephone number
and e-mail address of his account. After another pause, Harold
provided a partial e-mail address, and a female voice in the
background could be heard supplying him with the rest of the e-
mail address, which he then repeated. The representative again
asked Harold for the telephone number on the account. Harold
paused and then provided a partial telephone number. The
representative asked for the area code. Harold was silent for
several seconds, and the female voice in the background could be
2 Mitmiger declared he had stepped out of the room to take a
telephone call while the loan documents were completed.
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heard, after which time Harold said something inaudible and
then gave his zip code. The representative asked for the area
code again, after which time Harold gave a full telephone
number.
The Mosaic representative then spoke for several minutes
about topics such as the estimated first payment; the multiple
possible dates the first payment could be due; the possibility
payments would be owed before the system was operational; the
need to make a paydown of approximately 26 percent of the loan
amount within 18 months of the start date in order to keep the
monthly payments the same for the life of the loan; the expected
rise in the monthly payment in the absence of that paydown; the
fact that if he sought federal tax credits for the installation, the
credit and the amount he would receive would be dependent on
his personal tax situation; the annual percentage rate; the
availability of autopay services; and the discount on the annual
percentage rate for autopay enrollment.
Every few sentences, the Mosaic representative stopped
and asked Harold if he understood. Each time Harold paused for
several seconds, then responded with “yeah” or “yes.” A female
voice could be heard in the background several times. The only
question Harold answered immediately was whether he had any
questions. As he said no, the representative concluded the call.
It took less time for the Mosaic representative to give
Harold all the information about the loan and secure his one-
word responses than it had taken to elicit from him his birthdate,
the last 4 digits of his Social Security number, and the e-mail
address and phone number associated with the account.
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According to Deon, workers came to the house the following
day and demolished the bathroom that was to be renovated.
Deon tried to contact Mitmiger to ask how much, if anything, the
work would cost her parents, but Mitmiger never responded.
Deon declared that in August 2022 she discovered the
construction contract and loan agreement. Deon denied she
and/or her parents had entered into a contract, and she
attempted to cancel it. Elite refused. Work ceased on the West
home, leaving Harold and Lucy to bathe in their kitchen sink
because Elite had demolished their only shower and bathtub.
Elite contended it was refused access to the home, attempted to
collect payment from Harold and Lucy, and filed a mechanic’s
lien on the property. Harold and Lucy sued Elite and Mosaic.
Mosaic petitioned the trial court to compel arbitration
based on arbitration provisions in the electronically-completed
loan agreement. The trial court denied the petition on the
ground that Mosaic had not met its ultimate burden of proving
the existence of an arbitration agreement, specifically finding
Mosaic had not proven Harold was the person who completed the
loan documents or that Deon had the authority to bind Harold to
an arbitration agreement. Mosaic appeals.
DISCUSSION
I. Applicable Law
When a party to a civil action asks the trial court to compel
arbitration of the pending claim, the court must determine
whether an “agreement to arbitrate the controversy exists.”
(Code Civ. Proc., § 1281.2; Rosenthal v. Great Western Fin.
Securities Corp. (1996) 14 Cal.4th 394, 413.) “Because the
existence of the agreement is a statutory prerequisite to granting
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the petition, the petitioner bears the burden of proving its
existence by a preponderance of the evidence.” (Rosenthal, at
p. 413.)
The trial court determines whether an agreement to
arbitrate exists “using a three-step burden-shifting process.”
(Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747, 755 (Iyere).)
First, the party petitioning to compel arbitration must state “the
provisions of the written agreement and the paragraph that
provides for arbitration. The provisions must be stated verbatim
or a copy must be physically or electronically attached to the
petition and incorporated by reference.” (Cal. Rules of Court,
rule 3.1330; see Iyere, at p. 755.) Signatures on the arbitration
agreement need not be authenticated at this initial stage. (See
Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th
215, 218–219.)
If the petitioner meets their initial burden, the burden of
production shifts to the party opposing the petition to compel
arbitration, who must offer admissible evidence creating a factual
dispute as to the agreement’s existence. (Iyere, supra,
87 Cal.App.5th at p. 755.) When the dispute centers on the
authenticity of signatures, “[t]he opponent need not prove that
his or her purported signature is not authentic, but must submit
sufficient evidence to create a factual dispute and shift the
burden back to the arbitration proponent, who retains the
ultimate burden of proving, by a preponderance of the evidence,
the authenticity of the signature.” (Ibid.)
On appeal, with respect to the burden of production, we
review de novo the trial court’s ruling that the arbitration
opponent’s evidence was sufficient to create a factual dispute
shifting the burden back to the proponent of arbitration. (Iyere,
8
supra, 87 Cal.App.5th at pp. 755–756.) With respect to the
ultimate question whether an agreement to arbitrate exists,
“ ‘ “[i]f the court’s order is based on a decision of fact, then we
adopt a substantial evidence standard.” ’ [Citation.] When, as
here, the court’s order denying a motion to compel arbitration is
based on the court’s finding that petitioner failed to carry its
burden of proof, the question for the reviewing court is whether
that finding is erroneous as a matter of law. [Citations.] ‘
“Specifically, the question becomes whether the appellant’s
evidence was (1) ‘uncontradicted and unimpeached’ and (2) ‘of
such a character and weight as to leave no room for a judicial
determination that it was insufficient to support a finding.’ ” ’ ”
(Fabian v. Renovate America, Inc. (2019) 42 Cal.App.5th 1062,
1066–1067 (Fabian).) “ ‘ “[U]nless the trial court makes specific
findings of fact in favor of the losing [party], we presume the trial
court found the [party’s] evidence lacks sufficient weight and
credibility to carry the burden of proof. [Citations.] We have no
power on appeal to judge the credibility of witnesses or to
reweigh the evidence.” ’ [Citation.] ‘The appellate court cannot
substitute its factual determinations for those of the trial court; it
must view all factual matters most favorably to the prevailing
party and in support of the judgment. [Citation.] “ ‘All conflicts,
therefore, must be resolved in favor of the respondent.’ ” ’ ” (Id.
at p. 1067.)
II. Burden of Production
Mosaic argues the trial court’s ruling on the motion to
compel arbitration was erroneous because once Mosaic met its
initial burden of production and the burden shifted to the Wests,
they failed to submit evidence sufficient to meet their burden of
demonstrating a factual dispute as to the authenticity of Harold’s
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electronic signatures. Mosaic is incorrect. The loan documents
were sent to Deon’s e-mail address, Deon told the Mosaic
representative she would go check her e-mail, the documents
were opened on a mobile phone 10 seconds after being sent, they
were completed with seven electronic signatures within the space
of 13 seconds, and Deon confirmed the documents’ completion.
Harold was in his 90’s, suffered from dementia, did not use a
computer, mobile phone, or e-mail, and was unable to answer
simple questions such as his birthdate and telephone number
without assistance and significant delay. The evidence strongly
suggests Harold lacked the technical facility to open his
daughter’s e-mail on what was presumably her mobile phone,
create a digital signature, electronically click through and
execute the loan agreement in seven locations, and submit those
signatures, all in the space of 23 seconds, and it unquestionably
demonstrates the existence of a factual dispute as to whether
Harold actually executed the electronic signatures on the loan
documents.
Mosaic argues the evidence was insufficient to demonstrate
a factual dispute because “Harold himself never submitted any
declaration or affidavit to support the assertion that he did not
sign the Loan Agreement.” 3 Mosaic offers no authority to support
its contention that a personal declaration from Harold was
required to shift the burden of production back to Mosaic, and we
3 Respondents request we take judicial notice of the trial
court’s August 2023 order appointing a guardian ad litem for
Harold as support for their assertion that Harold could not have
submitted a declaration in opposition to the motion to compel
arbitration. We deny the request because the order is not
necessary to resolve the issues presented on appeal.
10
are not aware of any such authority. Mosaic has not
demonstrated any error.
III. Agency/Ratification
“An agent is someone who represents another—the
principal—in dealings with third parties. (Civ. Code, § 2295.)
‘An agent has such authority as a principal actually or ostensibly
confers upon him. ([Id.,] § 2315.) Actual authority is such as a
principal intentionally confers upon an agent, or intentionally or
by want of ordinary care allows the agent to believe himself to
possess. ([Id.,] § 2316.) Ostensible authority is such as a
principal, intentionally or by want of ordinary care, causes or
allows a third person to believe the agent to possess.’ ” (Enmark
v. KF Community Care, LLC (Sept. 25, 2024, B333022)
___ Cal.App.5th ___, ___ [2024 Cal.App.LEXIS 606, p. *8]
(Enmark).) Agency may be created, and authority conferred, by a
principal’s subsequent ratification of an agent’s conduct. (Civ.
Code, § 2307.) “Ordinarily, the law requires that a principal be
apprised of all the facts surrounding a transaction before he will
be held to have ratified the unauthorized acts of an agent.
However, where ignorance of the facts arises from the principal’s
own failure to investigate and the circumstances are such as to
put a reasonable man upon inquiry, he may be held to have
ratified despite lack of full knowledge.” (Volandri v. Hlobil (1959)
170 Cal.App.2d 656, 659.)
In the trial court, Mosaic argued that even if Harold did not
physically sign the agreement, it was nonetheless binding upon
him. First, Mosaic asserted that Deon’s actions “in holding
herself out as a representative of [Harold] on the recorded
Welcome Call with a representative of [Mosaic] supported a
finding that she was authorized to act as [his] agent with regard
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to the Loan Agreement transaction.” Second, Mosaic argued
Harold later ratified the agreement through the recorded
telephone call in which he responded affirmatively to information
regarding the loan. The trial court, however, ruled that the brief
conversation between Harold and the Mosaic representative was
“insufficiently clear to demonstrate any ratification or even
awareness of Deon West having just executed a loan agreement
or arbitration agreement on his behalf,” and that Mosaic had not
presented evidence that Deon had actual or ostensible authority
to bind Harold to the agreement containing the arbitration
provision.
On appeal, Mosaic argues that the recorded telephone call
does in fact demonstrate Harold’s ratification of the loan
agreement. 4 Mosaic points out that its representative repeatedly
referred to a loan during the conversation, Harold responded in
4 Sensibly, Mosaic does not renew the argument it made in
the trial court that Deon was Harold’s actual or ostensible agent.
Mosaic presented no evidence that Harold consented to Deon
acting as his agent, and the Mosaic representative did not ask
Harold whether he had authorized Deon to act on his behalf.
“The hallmarks of actual agency are consent and control:
‘ “ ‘Agency is the relationship which results from the
manifestation of consent by one person to another that the other
shall act on his behalf and subject to his control, and consent by
the other so to act.’ ” ’ ” (Enmark, supra, __ Cal.App.5th at p. ___,
[2024 Cal.App.LEXIS 606, p. *9].) As for ostensible agency, it is
plain that Mosaic did not believe Deon was authorized to act as
Harold’s agent. Had Mosaic believed Deon was entitled to act for
Harold, there would have been no reason for the representative to
ask Deon to put Harold on the phone—the representative would
have run through the required disclosures with Deon and
inquired of Deon, not Harold, whether she understood.
12
the affirmative to the representative’s questions whether he
understood, and Harold neither objected to a loan nor disputed
the stated repayment obligations. 5 It argues Harold was made
aware of the transaction during the call and had a reasonable
duty to inquire of the representative regarding the circumstances
of the loan. Mosaic concludes that because Harold did not object
to the loan transaction during the telephone call, he ratified his
daughter’s conduct and is thus bound by the arbitration provision
in the loan agreement.
“ ‘ “[W]here, as here, the judgment is against the party who
has the burden of proof, it is almost impossible for him to prevail
on appeal by arguing the evidence compels a judgment in his
favor.” ’ ” (Fabian, supra, 42 Cal.App.5th at p. 1067.)
Here, the court found the telephone call lacked sufficient
weight to carry Mosaic’s burden of proof regarding ratification,
and the record does not compel a contrary finding as a matter of
law. On appeal, we view all factual matters favorably to the
court’s order and do not reweigh the evidence. (Fabian, supra,
42 Cal.App.5th at p. 1067.) Given the content and brevity of the
call and the lack of comprehension demonstrated by Harold
during the conversation, we cannot say the recorded telephone
5 Mosaic contended at oral argument that it may be inferred
that Harold understood the arrangements being made because he
had been fully informed about and discussed the contract with
Mitmiger in the family’s living room. However, Mitmiger’s
declaration does not indicate that Harold personally discussed
any contract during this meeting, nor does it identify any specific
statement or action by Harold indicating any understanding of
the transactions entered into in his name. To the contrary, Deon
observed in her declaration that Harold did not appear to
understand what was happening.
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call is of such a character and weight as to leave no room for a
judicial determination that it was insufficient to support a
finding of ratification. 6 (See ibid.)
As for Mosaic’s cursory, insufficiently developed argument
in a footnote that Harold ratified the agreement by accepting the
benefits of the loan, i.e., Elite performed work on the house for
several weeks using the funds Mosaic issued pursuant to the loan
agreement, “[f]ootnotes are not the appropriate vehicle for stating
contentions on appeal.” (Sabi v. Sterling (2010) 183 Cal.App.4th
916, 947; see also Evans v. Centerstone Development Co. (2005)
134 Cal.App.4th 151, 160 [“We do not have to consider issues
discussed only in a footnote”]; Cal. Rules of Court, rule
8.204(a)(1)(B) [requiring points on appeal to be stated under a
separate heading summarizing the point].)
6 At oral argument, Mosaic argued that the trial court did
not expressly find that Harold lacked capacity, so the evidence
does not establish he was incapable of entering into or ratifying
the contract. There was no need for the court to make any
finding about Harold’s overall competence or lack of capacity; all
that matters in this analysis is whether Harold understood what
was happening here, and the trial court found the recorded
conversation did not demonstrate any awareness on Harold’s part
that Deon had just entered into a loan agreement on his behalf.
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DISPOSITION
The order denying the petition to compel arbitration is
affirmed. Respondents shall recover their costs on appeal.
CERTIFIED FOR PUBLICATION
STRATTON, P. J.
We concur:
GRIMES, J.
WILEY, J.
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