Williams v. 3620 W. 102nd Street, Inc.

Filed 8/24/20
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION EIGHT
KEISA WILLIAMS et al. B297824
Plaintiffs and Respondents, (Los Angeles County
Super. Ct. No. BC639290)
v.
3620 W. 102ND STREET, INC.,
et al.
Defendants and Appellants.
APPEAL from an order of the Superior Court of
Los Angeles County, Ramona G. See, Judge. Affirmed.
The Cameron Law Firm, Parry G. Cameron, James K.
Autrey and Clayton T. Lee for Defendants and Appellants.
MYBEDBUGLAWYER, Brian J. Virag and Luiza
Patrikyan for Plaintiffs and Respondents.
____________________
Five people sued about bed bugs and other problems with a
property they rented. The owners of the property moved to
compel arbitration based on agreements in the residents’ leases.
The trial court denied the motion. We affirm because state public
policy prohibits arbitration provisions in residential lease
agreements. (Civ. Code, § 1953, subd. (a)(4); Harris v. University
Village Thousand Oaks, CCRC, LLC. (2020) 49 Cal.App.5th 847,
850 (Harris).)
All statutory citations are to the California Civil Code.
I
In March 2014, Keisa Williams and Rubin Womack leased
an apartment at 3620 W. 102nd Street. They renewed the lease
in 2015. Womack lived there with Williams, Williams’s two
children, and another person. We call these five the Residents.
Two entities, 3620 W. 102nd Street, Inc. and J.K.
Residential Services, Inc., own the property where the Residents
live. We call them the Owners.
On October 2, 2016, the Residents sued the Owners for
breach of warranties of habitability, negligence, and related
claims. The Residents said the Owners failed to maintain pest
control in both their unit and the apartment’s common areas.
The Residents said they suffered personal injuries, illness, and
property damage due to bed bugs.
On March 14, 2019, the Owners filed a petition to compel
arbitration based on section XVIII of the lease agreement. The
section has the heading “Indemnification and Liability” and
includes the following arbitration clause:
“Should any dispute arise between LANDLORD and
TENANT relating to any matter (excluding an Unlawful Detainer
case or other case, filed by LANDLORD, for possession,
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arrearages under this LEASE, as such may constitute past due
rent/fees/costs and associated damages), such dispute shall be
submitted to Arbitration instead of litigated in Court. The
specific terms of Arbitration are stated in Addendum ‘B’, receipt
of which is hereby acknowledged by TENANT.”
Williams and Womack each initialed this provision when
they signed the 2014 and 2015 leases. The Owners did not
submit Addendum B with their initial motion to compel
arbitration.
The Residents opposed the petition on several grounds.
One ground was the arbitration agreement was void because the
Residents could not have validly agreed in a residential lease to
arbitrate. The Residents cited section 1953, subdivision (a)(4)
and Jaramillo v. JH Real Estate Partners, Inc. (2003) 111
Cal.App.4th 394 (Jaramillo).
In their reply the Owners said section 1953, subdivision
(a)(4) and Jaramillo did not prevent landlords and tenants from
agreeing to arbitrate.
The Owners submitted a copy of Addendum B with their
reply. The attorney for the Owners declared this copy was the
addendum the Owners had been using when the Residents signed
their leases.
Addendum B, a three-page document titled “Arbitration
Agreement,” sets forth the notice, procedures, and binding nature
of arbitration between the parties. It specifies “Tenant and
Landlord knowingly and voluntarily waive any constitutional
right to have any dispute between them decided by a court of law
and/or by a jury in court.” (All capitalization omitted.)
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Although Addendum B provides a space for the landlord
and tenant to initial each page and to sign the last page, those
spaces are blank.
On May 1, 2019, the trial court denied the petition, finding
(1) the Owners failed to show the parties had a valid arbitration
agreement and (2) the Owners had waived arbitration.
II
We affirm because the arbitration agreements in the leases
were void.
A
We independently review the trial court’s denial of
arbitration as a question of law when, as here, the evidence is not
in conflict. (Pinnacle Museum Tower Assn. v. Pinnacle Market
Development (US), LLC (2012) 55 Cal.4th 223, 236.)
B
We apply state rather than federal law. When it applies,
the Federal Arbitration Act preempts state law, but a party
seeking to enforce an arbitration agreement has the burden of
showing the case affects interstate commerce, which is the
prerequisite for the federal Act’s application. (Khalatian v. Prime
Time Shuttle, Inc. (2015) 237 Cal.App.4th 651, 657.) The Owners
have not discharged this burden. At oral argument, the Owners
conceded federal law does not apply. There is no evidence
anything connected with the facts of this case affects interstate
commerce. Neither the Owners’ petition nor the arbitration
provisions themselves mentioned federal law. In their appellate
briefing, the Owners refer to federal law just once, which was
when they quoted Engalla v. Permanente Medical Group, Inc.
(1997) 15 Cal.4th 951, 971–972: “California law incorporates
many of the basic policy objectives contained in the Federal
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Arbitration Act.” This passing reference does not claim federal
law applies here, and it indeed does not. We thus analyze this
case exclusively as a matter of state law.
C
The leases’ arbitration agreements violate state public
policy.
The trial court did not decide on this ground, but we may
affirm if the trial court’s decision is correct on any theory of law.
(E.g., Belair v. Riverside County Flood Control Dist. (1988) 47
Cal.3d 550, 568.) In other words, we will not reverse if the trial
court was right for the wrong reason. Both parties briefed this
issue in the trial court and the Owners argued it in their opening
appellate brief.
Under section 1953, subdivision (a)(4), any lease provision
in which a lessee agrees to modify or waive “procedural rights in
litigation in any action involving his rights and obligations as a
tenant” is void as contrary to public policy.
We review two cases that have interpreted section 1953,
subdivision (a)(4): Jaramillo, supra, 111 Cal. App.4th 394 and
the more recent opinion in Harris, supra, 49 Cal.App.5th 847.
We begin with the earlier case, Jaramillo. The court
affirmed a trial court’s denial of arbitration of two tenants’
negligence and habitability claims. The tenants said there was
mold in their apartment and a dangerous condition in a common
area. (Jaramillo, supra, 111 Cal.App.4th at pp. 396–397.) These
claims were about their rights and obligations as tenants.
Moreover, the plaintiffs’ procedural rights were affected because
a waiver of the right to a jury trial is inherent in an arbitration
agreement. (Id. at p. 401.)
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Jaramillo explained a tenant cannot, in a residential lease
agreement, waive rights like “the right to conduct discovery and
to have a jury trial in any affirmative action against the landlord
that involves the tenant’s rights or obligations.” (Jaramillo,
supra, 111 Cal.App.4th at pp. 403–404.) Thus a tenant “cannot
validly agree . . . to binding arbitration to resolve disputes
regarding his or her rights and obligations as a tenant.” (Id. at p.
404.)
The Jaramillo court said tenants and landlords could,
however, waive or modify procedural rights in an agreement
entirely independent of the rental agreement. (Jaramillo, supra,
111 Cal.App.4th at p. 404.) The court noted such stand-alone
waivers or modifications should be enforceable unless another
law barred them. (Ibid.) But tenants could not waive such rights
in “a residential lease agreement.” (Ibid.)
Jaramillo and its reasoning remain valid law in California.
Harris, supra, 49 Cal.App.5th 847, recently followed Jaramillo
when interpreting section 1953, subdivision (a)(4). The Harris
court found section 1953, subdivision (a)(4) applied to continuing
care contracts in retirement communities and reversed an
arbitrator’s award. (Harris, supra, at pp. 856–857.)
In Harris, several plaintiff residents of a community sued a
facility, alleging false representations about security and fees.
(Harris, supra, 49 Cal.App.5th at pp. 851–852.) The trial court
ordered arbitration because there were arbitration agreements in
the contracts. (Ibid.) But the Harris opinion found the plain
meaning of the statute voided the arbitration agreements,
because the plaintiffs alleged violations of their tenants’ rights.
(Id. at p. 853.) Harris also addressed the legislative intent of
section 1953. Quoting Jaramillo, the Harris court said the
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Legislature enacted the section to prevent tenants from
unknowingly signing away valuable rights. (Harris, supra, at p.
855.)
We follow Harris and Jaramillo and interpret section 1953,
subdivision (a)(4) to prohibit binding arbitration under the
circumstances presented in this case. As in Jaramillo, the
Residents here sued the Owners for harms based on conditions
inside their apartments and in common areas. These were claims
of violations of their tenants’ rights. The leases’ arbitration
agreements require disputes be resolved by arbitration, which
obviates the right to a jury trial. Jaramillo, supra, 111
Cal.App.4th at page 404, and Harris, supra, 49 Cal.App.5th at
page 852, specifically identified the right to have a jury trial as a
procedural right that may not be waived or modified pursuant to
section 1953, subdivision (a)(4). Thus the arbitration agreements
in this case are invalid.
We reiterate our analysis is solely under state law. The
Owners do not assert federal law applies. We do not address
whether, under federal law, the arbitration agreements would be
void.
In their opening brief, the Owners incorrectly say section
1953, subdivision (a)(4) and Jaramillo do not apply to the right to
a jury. As we have quoted, Jaramillo specifically discussed the “
‘procedural’ ” right “to have a jury trial.” (Jaramillo, supra, 111
Cal.App.4th at p. 404.) Harris similarly found section 1953,
subdivision (a)(4) applied to arbitration specifically because
arbitration waives any right to a jury trial. (Harris, supra, 49
Cal.App.5th at p. 852.)
The Owners say Jaramillo expressly approved arbitration
of habitability issues but they fail to show why that matters here.
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The Owners quote Jaramillo but omit the court’s explanation
tenants can agree to arbitrate habitability issues through “a
separate agreement to arbitrate that is entirely independent of
any lease agreement.” (Jaramillo, supra, 111 Cal.App.4th at p.
404, italics added.) The Owners’ briefs do not set forth any
argument the Residents entered an agreement to arbitrate
separate and independent from the lease agreement.
DISPOSITION
The order is affirmed. Costs are awarded to Keisa Williams
and the other respondents.
WILEY, J.
We concur:
GRIMES, Acting P. J.
STRATTON, J.
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