Kinder v. Capistrano Beach Care Center

Filed 5/18/23
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
NANCY KINDER, B316937
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No. 20STCV48685)
v.
CAPISTRANO BEACH CARE
CENTER, LLC, et al.,
Defendants and Appellants.
APPEAL from a judgment of the Superior Court of
Los Angeles County. Barbara M. Scheper, Judge. Affirmed.
Peck Law Group, Steven C. Peck and Adam J. Peck for
Plaintiff and Respondent.
Lewis Brisbois Bisgaard & Smith, Lann G. McIntyre,
Suzanne L. Schmidt, Kathleen M. Walker and Jeffrey S. Healey
for Defendants and Appellants.
_______________________
INTRODUCTION
Nancy Kinder was a resident at a residential skilled
nursing facility when she sustained injuries in a fall. She sued
the facility, Capistrano Beach Care Center, LLC dba Capistrano
Beach Care Center (CBCC), and its operator, Cambridge
Healthcare Services, LLC (collectively, defendants). Defendants
petitioned to compel arbitration, claiming Kinder was bound by
arbitration agreements purportedly signed on her behalf by her
adult children, Barbara Kinder (Barbara) and James Kinder
(James). The trial court denied the petition, concluding
defendants had failed to prove Barbara or James had actual or
ostensible authority to execute the arbitration agreements on
Kinder’s behalf.
We affirm. CBCC did not meet its initial burden to make a
prima facie showing that Kinder agreed to arbitrate by
submitting arbitration agreements signed by Kinder’s adult
children. CBCC presented no evidence that Barbara or James
had actual or ostensible authority to execute the arbitration
agreement on Kinder’s behalf, beyond their own representations
in the agreements. A defendant cannot meet its burden to prove
the signatory acted as the agent of a plaintiff by relying on
representations of the purported agent alone.
FACTUAL AND PROCEDURAL HISTORY
A. Allegations in the Complaint
On September 21, 2020, Kinder was admitted to CBCC, a
licensed skilled nursing facility providing long-term custodial
care. Upon admission, Kinder was deemed to be at high risk for
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falling, but CBCC repeatedly failed to take any precautions to
prevent a fall. On November 20, 2020 Kinder fractured her hip
when she fell from an elevated bed that lacked guard rails. She
had surgery to repair the fracture.
On December 21, 2020, Kinder filed this action, asserting
claims for elder abuse (Welf. & Inst. Code, § 15600 et seq.),
violation of residents’ rights (Health & Saf. Code, § 1430,
subd. (b)), and negligence.
B. Defendants’ Petition To Compel Arbitration and Trial
Court’s Denial
On August 11, 2021, defendants filed a petition to compel
arbitration, claiming Kinder was bound by arbitration
agreements James and Barbara had purportedly executed on her
behalf. Defendants claimed James and Barbara acted as
Kinder’s agents in executing the agreements. The sole evidence
submitted by any party was a declaration of defendants’ counsel,
which stated: “Attached hereto as Exhibits ‘A,’ ‘B,’ ‘C,’ and ‘D’ are
true and correct copies of the Arbitration Agreements pertaining
to NANCY KINDER, which my office obtained from my client
who maintains said document in its ordinary course and scope of
business.” The declaration attached four arbitration agreements,
two of which purported to require the arbitration of medical
malpractice claims and two of which purported to require the
arbitration of claims other than medical malpractice. All four
agreements stated that, pursuant to Health and Safety Code
section 1430, the resident did not waive her right to bring a court
action for violations of the Patient’s Bill of Rights contained in
title 22 of the California Code of Regulations section 72527.
3
Each of the form agreements contained a signature block
with blanks for the resident’s name and signature; the resident’s
representative’s name and signature; and the facility
representative’s name and signature. Kinder’s name appears in
the “Resident Name” field on each document, but the line for her
signature is blank. In the representative’s name and signature
fields, Barbara’s name and apparent signature appears in two of
the documents, and James’s name and apparent signature
appears on the other two. The agreements that appear to bear
Barbara’s signatures are dated September 22, 2020; those
appearing to bear James’s signatures are dated November 30,
2020.
Directly above the signature block, each of the pre-printed
forms includes the following language: “By virtue of Resident’s
consent, instruction and/or durable power of attorney, I hereby
certify that I am authorized to act as Resident’s agent in
executing and delivering of [sic] this arbitration agreement.”
Kinder did not sue for malpractice, so the relevant
agreements are those for arbitration of claims other than
malpractice. Those agreements state in relevant part: “The
parties understand that, except as provided below, any claim
other than a claim for medical malpractice, arising out of the
provision of services by the Facility, the admission agreement,
the validity, interpretation, construction, performance and
enforcement thereof, or which allege violations of the Elder Abuse
and Dependent Adult Civil Protection Act, or the Unfair
Competition Act, or which seek an award of punitive damages or
attorneys’ fees, will be determined by submission to neutral
arbitration as provided by California law, and not by a lawsuit or
court process.”
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Each agreement further provides: “By signing this
arbitration agreement below, the Resident agrees to be bound by
the foregoing arbitration provisions. The Resident acknowledges
that he or she has the option of not signing this arbitration
agreement and not being bound by the arbitration provisions
contained herein. The execution of this arbitration agreement is
not a precondition to receiving medical treatment or for
admission to the Facility. This arbitration agreement may be
rescinded by written notice from either party, including the
Resident’s Legal Representative and/or Agent, if any, and as
appropriate, to the other party within thirty (30) days of
signature.”
The trial court denied defendants’ petition to compel
arbitration, concluding that defendants bore the burden of
proving Barbara or James had actual or ostensible authority to
bind Kinder to arbitration, and that defendants could not meet
that burden by relying solely on the purported agents’ own
representations. The court stated: “Since there is no evidence of
conduct by [Kinder] indicating that Barbara or James had
authority to sign the agreement on her behalf, Defendants have
failed to show the existence [of] an agency relationship.
Defendants offer no other evidence outside of the Agreements
that agency authority existed. Absent such authority, [Kinder]
cannot be bound by the arbitration agreements presented.”
Defendants’ timely appeal followed.
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DISCUSSION
A. Standard of Review
“There is no uniform standard of review for evaluating an
order denying a [petition] to compel arbitration.” (Lopez v.
Bartlett Care Center, LLC (2019) 39 Cal.App.5th 311, 317 (Lopez),
quotation marks omitted.) “[I]f the court’s denial rests solely on a
decision of law, then a de novo standard of review is employed.”
(Ibid., quotation marks omitted; accord, Garcia v. KND
Development 52, LLC (2020) 58 Cal.App.5th 736, 744 (Garcia)
[“We review de novo the legal conclusions underlying a trial
court’s denial of a petition to compel arbitration.”].)
“If the court’s order is based on a decision of fact, then we
adopt a substantial evidence standard.” (Lopez, supra,
39 Cal.App.5th at p. 317.) “Under that standard, when the trier
of fact has expressly or implicitly concluded the party with the
burden of proof did not carry the burden and that party
appeals, . . . the question for a reviewing court becomes whether
the evidence compels a finding in favor of the appellant 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.” (Garcia, supra, 58 Cal.App.5th at p. 744,
quotation marks and ellipses omitted.)
Here, defendants’ motion presents primarily a legal issue
that we review de novo: whether, under the burden shifting
framework in Gamboa v. Northeast Community Clinic (2021)
72 Cal.App.5th 158, 164-166 (Gamboa), a defendant moving to
compel arbitration meets its initial burden of proving the plaintiff
6
agreed to arbitrate solely by submitting an agreement signed by
a third party who states in the agreement he or she has authority
to sign on the plaintiff’s behalf.
B. The Trial Court Correctly Ruled Defendants Failed
To Prove Kinder Agreed To Arbitrate
“‘[T]he right to compel arbitration depends upon the
existence of a valid agreement to arbitrate between the parties.’”
(Garrison v. Superior Court (2005) 132 Cal.App.4th 253, 263.)
“‘The question of whether a valid agreement to arbitrate exists is
determined by reference to the law applicable to contracts
generally.’” (Ibid.) ‘“The party seeking to compel arbitration
bears the burden of proving the existence of a valid arbitration
agreement.”’ (Young v. Horizon West, Inc. (2013) 220 Cal.App.4th
1122, 1128 (Young).)
“‘Even the strong public policy in favor of arbitration does
not extend to those who are not parties to an arbitration
agreement or who have not authorized anyone to act for them in
executing such an agreement.’” (Young, supra, 220 Cal.App.4th
at p. 1128.) However, “‘a person who is authorized to act as the
[resident or] patient’s agent can bind the [resident or] patient to
an arbitration agreement.’” (Rogers v. Roseville SH, LLC (2022)
75 Cal.App.5th 1065, 1074 (Rogers).)
“An agent is one who represents another, called the
principal, in dealings with third persons. [Citation.] In
California, an agency is either actual or ostensible. [Citation.]
Actual agency arises when the principal’s conduct causes the
agent reasonably to believe that the principal consents to the
agent’s act on behalf of the principal. [Citations.] Ostensible
agency arises when the principal’s conduct causes the third party
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reasonably to believe that the agent has the authority to act on
the principal’s behalf.” (Rogers, supra, 75 Cal.App.5th at p. 1074,
quotation marks omitted.)
“An agency, whether actual or ostensible, cannot be created
by the conduct of the agent alone; rather, conduct by the principal
is essential to create the agency. [Citations.] The principal must
in some manner indicate that the agent is to act for the principal,
and the agent must act or agree to act on the principal’s behalf
and subject to the principal’s control. [Citations.] Thus, the
formation of an agency relationship is a bilateral matter. Words
or conduct by both principal and agent are necessary to create the
relationship.” (Rogers, supra, 75 Cal.App.5th at p. 1074,
quotation marks, ellipses, and brackets omitted.)
When a defendant contends an agreement to arbitrate is
binding because it was signed by an agent of the plaintiff, the
defendant bears the burden of proving the signatory was the
plaintiff’s actual or ostensible agent. (Rogers, supra,
75 Cal.App.5th at p. 1074.) A defendant “seeking to compel
arbitration does not meet its burden of proving the existence of
an arbitration agreement when it does not present any evidence
that the purported principal’s conduct caused the agent or the
[defendant] to believe that the agent had the authority to bind
the principal.” (Id. at p. 1075.)1 In particular, a defendant
1 The Rogers court cites a long line of well-established
authority for this proposition, including Lopez, supra,
39 Cal.App.5th at pp. 313, 319; Valentine, supra, 37 Cal.App.5th
at pp. 1086-1088; Hutcheson v. Eskaton FountainWood Lodge
(2017) 17 Cal.App.5th 937, 958; Young, supra, 220 Cal.App.4th at
pp. 1132-1134; Goldman v. Sunbridge Healthcare, LLC (2013)
220 Cal.App.4th 1160, 1173; Flores v. Evergreen at San Diego,
8
cannot meet its burden to prove the signatory acted as the agent
of a plaintiff by relying on representations of the purported agent
alone. (See Valentine v. Plum Healthcare, LLC (2019)
37 Cal.App.5th 1076, 1087 (Valentine) [“‘[o]stensible agency
cannot be established by the representations or conduct of the
purported agent; the statements or acts of the principal must be
such as to cause the belief the agency exists’”]; Flores v.
Evergreen at San Diego, LLC (2007) 148 Cal.App.4th 581, 588
[actual agency cannot be established without evidence of the
principal’s conduct].)
Here, defendants presented no evidence that Kinder did
anything to lead James and Barbara to believe they had the
actual authority to enter into arbitration agreements on her
behalf. Similarly, defendants present no evidence that Kinder
did anything to lead defendants to believe that James and
Barbara had ostensible authority to do so. Instead, defendants
contend the court should have found James and Barbara were
Kinder’s actual or ostensible agents based on their purported
certification in the arbitration agreement that they were
“authorized to act as Resident’s agent in executing and delivering
of [sic] this arbitration agreement.” As noted, courts have
consistently rejected this position in closely analogous contexts.
(See, e.g., Valentine, supra, 37 Cal.App.5th at p. 1087 [plaintiff’s
husband had signed the arbitration agreement on a line marked
“resident’s representative” beneath language stating that one’s
signature indicated the signor had the authority to enter into
such an arbitration agreement on the patient’s behalf; the
evidence was not sufficient to establish agency and plaintiff was
LLC, supra, 148 Cal.App.4th at pp. 585, 588; Pagarigan v. Libby
Care Center, Inc. (2002) 99 Cal.App.4th 298, 301-303.
9
not bound]; Pagarigan v. Libby Care Center, Inc. (2002)
99 Cal.App.4th 298, 301 [defendant did not prove actual or
ostensible authority merely by presenting evidence that
plaintiff’s daughter signed the arbitration agreement and thereby
implicitly represented she had authority; any such representation
is “totally irrelevant” because “[a] person cannot become the
agent of another merely by representing herself as such”]; see
also Flores v. Evergreen at San Diego, LLC, supra,
148 Cal.App.4th at p. 589 [plaintiff is not bound by arbitration
agreement signed by her husband; “[e]ven though [defendant]
presented evidence showing that Luis acted as if he were
Josephina’s agent, the establishment of the agency also requires
conduct on the part of Josephina conferring that status. It was
[defendant’s] burden to show the validity of the arbitration
agreement based on Josephina’s express or implied consent to
have her husband act as her agent”].)
Defendants argue that they met their initial burden by
submitting the arbitration agreements with their moving papers
and that the burden shifted to Kinder to present evidence that
Kinder did not authorize Barbara or James to enter into the
agreement. Since Kinder presented no evidence with the
opposition papers, defendants argue the court was required to
find Kinder agreed to arbitrate the dispute.
Defendants rely on Condee v. Longwood Management Corp.
(2001) 88 Cal.App.4th 215 (Condee) and Gamboa, supra,
72 Cal.App.5th 158 as support for their position. In Condee, the
petitioner moved to compel arbitration based on an arbitration
agreement purportedly signed by an agent of the respondent.
(Condee, at p. 218.) The trial court denied the petition, finding
the petitioner had not properly authenticated the agreement.
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(Ibid.) The Court of Appeal reversed and remanded, holding a
petitioner does not have to present evidence authenticating an
arbitration agreement with the moving papers; the agreement
will be presumed authentic unless and until the opposing party
challenges the agreement’s authenticity. (Id. at p. 219.) The
court did not reach the issue whether the petitioner had
presented sufficient evidence to establish agency; instead, the
court remanded the matter to “permit the trial court to consider
other issues,” including whether the patient was bound by the
agreement through the actions of his purported agent. (Id. at
p. 219 [remanding for consideration of other issues]; id. at p. 218
[setting forth other issues raised by defendant].)
Condee contains no discussion of the law of agency or how
the moving party meets its burden of proving the signatory had
the authority to execute the agreement; Condee addressed
authenticity only. (Condee, supra, 88 Cal.App.4th at pp. 218-219;
see also Ruiz v. Moss Bros. Auto Group, Inc. (2014)
232 Cal.App.4th 836, 846 [“Properly understood, Condee holds
that a petitioner is not required to authenticate an opposing
party’s signature on an arbitration agreement as a preliminary
matter in moving for arbitration or in the event the authenticity
of the signature is not challenged.”].) Kinder does not deny that
James and Barbara signed the agreements or that the
agreements are authentic; the issue is whether they had the
authority to execute them on Kinder’s behalf.
Our opinion in Gamboa, supra, 72 Cal.App.5th 158similarly does not establish the moving party can make a prima
facie showing of agency merely by attaching an arbitration
agreement purportedly signed by the agent. In Gamboa, we
articulated the shifting burdens of production that apply in
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motions to compel arbitration where the moving party seeks to
enforce an arbitration agreement signed by the opposing party.
We held “[t]he burden of persuasion is always on the moving
party to prove the existence of an arbitration agreement” but “the
burden of production may shift in a three-step process.” (Id. at
pp. 164-165.)
We explained: “First, the moving party bears the burden of
producing ‘prima facie evidence of a written agreement to
arbitrate the controversy.’ [Citation.] The moving party ‘can
meet its initial burden by attaching to the [motion or] petition a
copy of the arbitration agreement purporting to bear the
[opposing party’s] signature.’ [Citation.] Alternatively, the
moving party can meet its burden by setting forth the
agreement’s provisions in the motion. [Citation.] For this step,
‘it is not necessary to follow the normal procedures of document
authentication.’ [Citation.] . . . . [¶] If the moving party meets its
initial prima facie burden and the opposing party disputes the
agreement, then in the second step, the opposing party bears the
burden of producing evidence to challenge the authenticity of the
agreement. . . . [¶] If the opposing party meets its burden of
producing evidence, then in the third step, the moving party
must establish with admissible evidence a valid arbitration
agreement between the parties. The burden of proving the
agreement by a preponderance of the evidence remains with the
moving party.” (Gamboa, supra, 72 Cal.App.5th at pp. 165-166,
italics added.)
Under the Gamboa framework, the moving party is entitled
to a presumption, in the first instance, that the agreement to
arbitrate is authentic. But defendants here do not meet their
prima facie burden to show Kinder agreed to arbitrate the
12
dispute merely by proving the authenticity of the agreements.
Again, plaintiff does not dispute that Barbara and James signed
the agreements or that the form agreements contained language
stating that Barbara and James certified they had Kinder’s
authority to execute the agreements. But, as previously
discussed, Barbara and James’s statements alone are not
sufficient to prove Kinder authorized them to enter into an
arbitration agreement on her behalf.
Condee and Gamboa must be read in light of the long line
of authority, cited above, establishing a defendant seeking to
compel arbitration must submit evidence to prove the plaintiff
took some affirmative action that would support a finding of
actual or ostensible authority, and cannot rely on the purported
agent’s representations alone in order to meet that burden.
Condee and Gamboa must also be read in light of
Engalla v. Permanente Medical Group (1997) 15 Cal.4th 951, 972
and Rosenthal v. Great Western Financial Securities Corporation
(1996) 14 Cal.4th 394, 413, in which the Supreme Court held the
moving party bears the burden of proving the existence of a valid
arbitration agreement by a preponderance of the evidence.
Allowing the moving party to meet its initial burden by
presenting an agreement signed by a third party, without more,
would be inconsistent with this authority because it would not
constitute prima facie evidence that the plaintiff agreed to
arbitrate.
Defendants make much of the fact Kinder did not submit a
declaration in the trial court disavowing her children’s authority,
but that is of no moment: The burden never shifted to Kinder
because defendants failed to meet theirs. (See Goldman v.
Sunbridge Healthcare, LLC (2013) 220 Cal.App.4th 1160, 1173
13
(Goldman) [“[I]t was not plaintiff’s burden to show [the patient’s
wife] did not have authority to sign on behalf of her husband. It
was defendants’ burden to establish that either [the patient]
himself, or [the patient’s wife] with authority, agreed to
arbitration.”]; see also Rogers, supra, 75 Cal.App.5th at pp. 1074-
1075 [“The burden of proving that a purported agent had the
authority to act for the purported principal in a particular
circumstance lies with the persons dealing with the agent.”].)
Defendants assert Kinder led them to believe her children
had authority and effectively ratified the arbitration agreements
by “not objecting” and “allow[ing]” her children “to review
multiple arbitration agreements and act on her behalf.”
However, defendants did not produce any evidence to support
these assertions. The record is silent as to whether Kinder
objected to the arbitration agreements or whether she allowed
her children to do anything on her behalf. But even if defendants
had presented evidence to support those purported facts, that
would not be sufficient to establish ostensible agency. A
defendant cannot prove a plaintiff consented to arbitration
merely by showing the plaintiff stood idly by while the purported
agent signed on his or her behalf. (See Goldman, supra,
220 Cal.App.4th at p. 1173 [rejecting facility’s argument that the
patient’s “silence on the matter be considered to be an adoptive
admission of the arbitration agreements signed by” the patient’s
wife]; Warfield v. Summerville Senior Living, Inc. (2007)
158 Cal.App.4th 443, 448-449.)
Defendants further contend Kinder ratified the arbitration
agreements by “accepting the benefits of continuing to reside” at
the facility. There is no basis for any such inference. The
agreements expressly state the “execution of this arbitration
14
agreement is not a precondition to receiving medical treatment or
for admission to the Facility,” and thus Kinder’s agreement to
arbitrate cannot be inferred from the mere fact that she accepted
treatment. Further, defendants were prohibited by statute from
imposing any such condition. (See Health & Saf. Code, § 1599.81,
subd. (a) [“[a]ll contracts of admission that contain an arbitration
clause shall clearly indicate that agreement to arbitration is not a
precondition for medical treatment or for admission to the
facility”]; see also Warfield v. Summerville Senior Living, Inc.,
supra, 158 Cal.App.4th at pp. 450-451 [wife’s continued
acceptance of facility’s services under admission documents did
not constitute acceptance of the benefits of an agreement to
arbitrate contained in “a different, optional agreement”].)
Finally, defendants contend reversal of the trial court’s
order is necessary to “further the well-established public policy”
in favor of arbitration. But “there is no policy compelling persons
to accept arbitration of controversies which they have not agreed
to arbitrate.” (Goldman v. Sunbridge Healthcare, LLC, supra,
220 Cal.App.4th at p. 1169, quotation marks omitted; see also
Avila v. Southern California Specialty Care, Inc. (2018)
20 Cal.App.5th 835, 846 [rejecting “defendants’ tacit argument
that ‘public policy’ may override the lack of consent to
arbitration”]; Young, supra, 220 Cal.App.4th at p. 1128 [“‘the
strong public policy in favor of arbitration does not extend to
those who are not parties to an arbitration agreement or who
have not authorized anyone to act for them in executing such an
agreement’”].)
In sum, defendants failed to establish James or Barbara
had actual or ostensible authority to bind Kinder to arbitration,
and the court therefore properly denied the motion.
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DISPOSITION
The order denying the petition to compel arbitration is
affirmed. Respondent is to recover her costs on appeal.
ESCALANTE, J.*
We concur:
PERLUSS, P. J.
FEUER, J.
* Judge of the Los Angeles County Superior Court, assigned
by the Chief Justice pursuant to article VI, section 6 of the
California Constitution.
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