Murillo v. Santa Barbara Corp. Fitness CA2/6

Filed 8/26/20 Murillo v. Santa Barbara Corp. Fitness CA2/6
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion
has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SIX
DINA MURILLO, 2d Civ. No. B299891
(Super. Ct. No. 18CV04396)
Plaintiff and Respondent, (Santa Barbara County)
v.
SANTA BARBARA
CORPORATE FITNESS, INC.
et al.,
Defendants and Appellants.
Some employers use computerized systems to inform
prospective employees of job requirements and to obtain their
consent to arbitration agreements. This saves time and avoids
unnecessary accumulation of paper documents. Here we decide
whether an employer has shown that its computerized system
provided its employee with an adequate opportunity to consent to
arbitration.
Defendants Santa Barbara Corporate Fitness, Inc. (SBCF)
and Angel Banos appeal an order denying their motion to compel
arbitration of a lawsuit filed by plaintiff Dina Murillo in which
she alleged sexual harassment/wrongful termination. We
conclude, among other things, that the trial court correctly ruled
that a valid arbitration agreement did not exist, and that Murillo
did not sign an arbitration agreement and did not know one
existed. We affirm.
FACTS
On September 6, 2018, Murillo filed a complaint alleging,
among other things, causes of action for sexual harassment and
wrongful termination. SBCF answered the complaint, denied her
allegations, and filed a motion to compel arbitration. SBCF
claimed Murillo executed an Employee Agreement to Arbitrate
(EAA) when she applied for employment with the company. It
claimed that after her employment was terminated, Murillo’s
lawsuit fell within the provisions of the EAA.
SBCF acquired the company for which Murillo was an
employee. SBCF established a new orientation process that all
prospective employees of the former company had to complete to
become SBCF employees. Instead of the prospective employees
reviewing written documents, it created an “automated” system
to present various pre-employment related documents for them to
review.
SBCF claims this “on-boarding” process requires: 1) the
multiple prospective employees from the prior business to sit
down at an area containing multiple computer laptops; 2) each
prospective employee logs into their respective computer; 3) they
then scroll down to review various employment-related
documents displayed on the computer screen; 4) they “click” on
various “tabs” and electronically input their initials or names to
2.
reflect that they have reviewed the particular documents; and 5)
they must click on the various tabs to be hired.
SBCF notes that included within the pre-employment
documents is the EAA. This document provides, in relevant part,
that the employee agrees to “submit to final and binding
arbitration any and all claims and disputes that are related in
any way to [his or her] employment or the termination of [his or
her] employment.” There is a place for the employee to sign and
date the EAA at the bottom of this document. The EAA provides,
“The signed original copy of this agreement must be given to your
supervisor and it will be filed in your personnel file; the other
copies . . . are for your personal records.” (Italics added.)
The document reflects that Murillo did not sign or date the
EAA.
Murillo opposed the motion to compel arbitration. She
claimed SBCF did not present sufficient evidence to show that
she was presented with the EAA during her on-boarding process.
She claimed her on-boarding process did not give her the
opportunity to consent to arbitration. She attached a declaration
stating, among other things, that she did not sign the EAA, and
when she applied for employment, no one informed her that there
was an arbitration agreement. No one told her she was giving up
her right to a jury trial. Murillo was not aware of the existence of
any arbitration agreement while she worked at the company.
She claims she did not waive her right to a jury trial. She
declared the on-boarding process was “chaotic” and “rushed.” It
did not give her a chance to properly review the documents on the
computer screen. She was confused during the on-boarding
process.
3.
Murillo declared that she and the other prospective
employees “were only directed to scroll down and date or fill in
fields by either inputting [their] initials or [their] name.” “The
connection to the laptops went down a few times, leaving some
employees to either start over or try to figure out how to navigate
to where they left off.” She and other employees were not given
sufficient time to read the documents.
The trial court denied the motion. It found SBCF did not
meet its burden to prove there was a valid arbitration agreement.
DISCUSSION
A Valid Arbitration Agreement
Under federal and state law, there is a strong public policy
favoring arbitration as a “ ‘speedy and relatively inexpensive
means of dispute resolution.’ ” (Adajar v. RWR Homes, Inc.
(2008) 160 Cal.App.4th 563, 568.) “Under both federal and state
law, however, arbitration cannot be compelled absent an
arbitration agreement.” (Id. at p. 569.)
A party to litigation may petition or move the court to stay
litigation to enforce an arbitration agreement. “The petitioner
bears the burden of proving the existence of a valid arbitration
agreement by the preponderance of the evidence . . . .” (Engalla
v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972.)
On a motion to compel arbitration, the “trial court sits as a trier
of fact.” (Ibid.)
“An arbitration clause is a contractual agreement.”
(Salgado v. Carrows Restaurants, Inc. (2019) 33 Cal.App.5th 356,
359.) “[A]n essential component to a contract is the consent of the
parties to the contract.” (Mitri v. Arnel Management Co. (2007)
157 Cal.App.4th 1164, 1170, italics added.) The consent of both
parties must be communicated “ ‘by each to the other.’ ” (Ibid.)
4.
Courts “will not create a term of a contract between the parties
that the evidence does not show was ever agreed upon by the
parties.” (Id. at p. 1173.)
Moreover, “[c]ourts may refuse to enforce unconscionable
contracts and this doctrine applies to arbitration agreements.”
(Salgado v. Carrows Restaurants, Inc., supra, 33 Cal.App.5th at
p. 362.)
There is a strong policy favoring arbitration, but there is
also a “basic precept that arbitration ‘is a matter of consent, not
coercion.’ ” (Stolt-Nielsen S.A. v. AnimalFeeds International
Corp. (2010) 559 U.S. 662, 681 [176 L.Ed.2d 605, 622].) An
employee’s opportunity to review and understand whether there
is an arbitration requirement is a relevant factual issue in
determining whether he or she ever gave consent to arbitration.
(Kinney v. United HealthCare Services, Inc. (1999) 70 Cal.App.4th
1322, 1330.) Consent is not present where an employee is
“pressured” and did not have an opportunity to know that
arbitration was a requirement of employment. (Ibid.)
The trial court correctly noted that the EAA specifies
several requirements to complete the arbitration agreement,
including: 1) the employee must sign and date the agreement, 2)
the original signed agreement must be given to the supervisor
and placed in the personnel file, and 3) the employee must be
provided a copy of the signed agreement.
But here there was no compliance with any of these
requirements. Because the EAA was never signed by Murillo, the
trial court could reasonably find the agreement was not
completed. (Mitri v. Arnel Management Co., supra, 157
Cal.App.4th at p. 1171.)
5.
SBCF claims there is no need for a signed arbitration
agreement.
That may be true in many cases. But here the EAA itself
specifies that the employee must sign it and the signed
agreement is delivered to the supervisor. SBCF may not claim
the procedure required by the EAA is irrelevant. Where the
arbitration agreement sets forth the relevant requirements and
procedure to initiate the agreement, those requirements cannot
be ignored. (Brinkley v. Monterey Financial Services, Inc. (2015)
242 Cal.App.4th 314, 354.) They are conditions precedent that
must be complied with to determine whether the agreement went
into effect. (Mitri v. Arnel Management Co., supra, 157
Cal.App.4th at p. 1171.) Moreover, the absence of the employee’s
signature on the document that requires a signature is one highly
relevant factor a trier of fact may consider in determining
whether there ever was consent to arbitration by the employee.
SBCF cites Diaz v. Sohnen Enterprises (2019) 34
Cal.App.5th 126. There the court held, “[W]hen an employee
continues his or her employment after notification that an
agreement to arbitration is a condition of continued employment,
that employee has impliedly consented to the arbitration
agreement.” (Id. at p. 130.)
But Diaz is distinguishable. There, the employee was
advised of and knew about the arbitration agreement. Here, by
contrast, there is evidence from Murillo’s declaration from which
the trial court could reasonably find Murillo did not know of the
existence of the arbitration agreement during her employment.
In the motion, SBCF contended that Murillo “agreed to the
EAA by acknowledging the [employee] handbook” in her
computer clicking. But the trial court noted that the “handbook
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does not include an arbitration agreement.” The court said the
“electronic signature block, assuming it was executed by Murillo,
indicates that she reviewed the handbook and nothing else.”
SBCF contends its human resources witness Chelsey Banos
testified that the handbook included the EAA. It claims the trial
court was required to accept that testimony and the other facts
she stated regarding how the on-boarding process worked
because they were uncontradicted. But the credibility of a
witness is exclusively decided by the trial court and conflicts in
evidence are resolved by the trial court. (Carlson v. Home Team
Pest Defense, Inc. (2015) 239 Cal.App.4th 619, 630; In re Daniel
G. (2004) 120 Cal.App.4th 824, 830.) Murillo’s declaration
presented facts from which a trier of fact could reasonably infer
the on-boarding process was not working the way SBCF and
Banos had indicated. The trial court could reasonably find that
there were several contested factual issues and that Banos’s
testimony was contradicted. Murillo also claims the court could
question Banos’s credibility because Banos had given
contradictory statements under oath about the date the on-
boarding process occurred.
Moreover, Murillo claims much of Banos’s testimony
supports her position. She notes Banos could not recall whether
she (Banos) ever mentioned the existence of the EAA to her
during the on-boarding process. Banos spent only 15 to 20
seconds explaining the paperwork to the new employees. Banos
did not know whether someone else could have signed or entered
Murillo’s name on the relevant documents. There were two
versions of the employee handbook. Banos did not know which
version was loaded onto Murillo’s computer. The trial court could
reasonably infer these admissions “left a critical gap in the
7.
evidence supporting the petition.” (Ruiz v. Moss Bros. Auto
Group, Inc. (2014) 232 Cal.App.4th 836, 844.)
On this motion, “the trial court sits as a trier of fact.”
(Engalla v. Permanente Medical Group, Inc., supra, 15 Cal.4th at
p. 972.) As to factual issues, we look to whether there is
substantial evidence to support express or implied findings by the
trial court. We do not weigh the evidence. (In re Daniel G.,
supra, 120 Cal.App.4th at p. 830.) We draw all reasonable
inferences to support the judgment or order. SBCF has not
shown why the trial court could not accept Murillo’s statements
in her declaration. That declaration provides evidence to support
findings that there was no knowledge or consent by her to
arbitrate and to waive her right to a jury trial. From it, the court
could draw a reasonable inference that the on-boarding process,
which SBCF claims to have resulted in consent to arbitrate, was
not the actual process Murillo received. It could find Murillo did
not have adequate time to read or review the relevant documents.
As the trial court noted, Murillo’s evidence indicated the process
was “chaotic” and “rushed.” That is not the type of environment
that provides an employee time to adequately consider whether
he or she wants to agree and consent to an arbitration.
SBCF highlights exhibit E to Banos’s supplemental
declaration and notes it contains Murillo’s name, and under it the
phrase, “[By] signing this document you are legally bound to the
agreements contained within.” In her declaration, Banos said
exhibit E was a “copy of the last screen” Murillo would have seen
in her view of the computer images in her on-boarding process.
SBCF claims exhibit E binds Murillo as a matter of law.
Murillo responds: 1) the issue is not about a paper exhibit
prepared for the motion to compel arbitration, but rather what
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she actually saw on the computer screen on the day she was
there; 2) Murillo’s counsel showed Banos did not have the ability
to know exactly what was on the screen at that time; 3) Banos’s
credibility had been impeached and the trial court could therefore
disregard her declaration and the exhibit attached to it; 4) exhibit
E is of questionable validity because it contains the date
September 17, 2016, but Banos testified the on-boarding process
occurred on October 1, 2016; 5) Banos testified she could not be
sure that someone else at a different time had not placed her
(Murillo’s) signature on the document; and 6) SBCF did not
introduce sufficient foundation evidence to support the admission
of the computer image evidence and its claims about images she
(Murillo) would have seen.
In addition, exhibit E has a strange appearance. It appears
to be two documents combined into one, with one document
superimposed over and partially covering the other document.
SBCF has not shown why a trier of fact could not diminish the
weight to be given to exhibit E or question its validity.
We have reviewed SBCF’s remaining contentions and
conclude it has not shown grounds for reversal.
DISPOSITION
The order is affirmed. Costs on appeal are awarded to
respondent.
NOT TO BE PUBLISHED.
GILBERT, P. J.
We concur:
YEGAN, J. PERREN, J.
9.
Donna D. Geck, Judge
Superior Court County of Santa Barbara
______________________________
Manning & Kass, Ellrod, Ramirez, Trester, LLP,
Al M. De La Cruz, Michael A. Weismantel and Ladell Hulet
Muhlestein, for Defendants and Appellants Santa Barbara
Corporate Fitness, Inc. and Angel Banos.
James H. Cordes and Associates, James H. Cordes and
Angelica J. Caro for Plaintiff and Respondent.
10.