49 Cal.App.5th 847
Cal. Ct. App.2020Background
- Appellants (five residents) lived at University Village Thousand Oaks (a continuing care retirement community) under written continuing care contracts that included a predispute binding arbitration clause covering “any and all claims … arising from or related to the Agreement or to your residency, care or services.”
- Contracts charged monthly fees described as payment for residence, care and services and granted a right to live in a specified unit; residents could be moved to different care units with fee adjustments.
- Appellants sued for misrepresentations and related causes of action (including elder abuse, misrepresentation, negligence) alleging defects tied to the housing/fee/security components of their residency.
- The trial court compelled arbitration over appellants’ objections, an arbitrator awarded judgment to UVTO on all claims, and the trial court confirmed the award; appellants appealed.
- Appellants argued the arbitration clauses are void as contrary to public policy under Civil Code §1953(a)(4) (prohibiting waiver of procedural litigation rights in dwelling lease/rental agreements) and raised other arbitration-related challenges; the court considered whether §1953 applies to continuing care tenancy provisions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Civ. Code §1953(a)(4) (ban on waiving procedural litigation rights in dwelling leases) applies to tenancy provisions of continuing care contracts | Residents pay for right to live in units and thus are “persons who hire dwelling units”; predispute arbitration waiving procedural rights is void | Continuing care contracts differ from standard residential leases and are governed by a separate statutory scheme that does not displace arbitration | Held: §1953 applies to tenancy components of continuing care contracts; arbitration clauses covering those tenancy disputes are void |
| Whether the trial court properly ordered/confirmed arbitration and the award should stand | Arbitration unenforceable because waiver of tenant procedural rights is void; award should be vacated | Arbitration enforceable; trial court properly compelled arbitration and confirmed award | Held: Because arbitration should not have been ordered under §1953, the judgment confirming the award is reversed and case remanded for trial |
| Appellants’ other challenges to arbitration process (arbitrator exceeded authority, refused evidence, absent essential party/conflicting rulings) | Arbitrator exceeded authority and process defects warrant vacatur or reversal | Arbitrator’s ruling valid; procedural complaints insufficient | Held: Court did not reach these issues because it resolved the case on statutory preclusion grounds |
Key Cases Cited
- Armendariz v. Foundation Health Psychcare Services, Inc., 24 Cal.4th 83 (2000) (statutory rights contrary to public policy cannot be waived by arbitration)
- Jaramillo v. JH Real Estate Partners, Inc., 111 Cal.App.4th 394 (2003) (Civil Code §1953 bars predispute arbitration in residential lease agreements)
- Bickel v. Sunrise Assisted Living, 206 Cal.App.4th 1 (2012) (statutory elder-abuse remedies and related protections are unwaivable)
- Lewis Operating Corp. v. Superior Court, 200 Cal.App.4th 940 (2011) (distinguishes scope of §1953 protections where claims unrelated to essential shelter)
- Rich v. Schwab, 63 Cal.App.4th 803 (1998) (broad construction of landlord-tenant protections to vulnerable residential arrangements)
- Cooper v. Lavely & Singer Professional Corp., 230 Cal.App.4th 1 (2014) (statutory-preclusion question reviewed de novo)