Williams v. Atria Las Posas
235 Cal. Rptr. 3d 341
| Cal. Ct. App. 5th | 2018Background
- John Williams, a resident at Atria Las Posas, signed a Residency Agreement (containing an integration clause) and immediately afterward signed a separate Agreement to Arbitrate Disputes; his wife Vicktoriya Marina‑Williams signed neither.
- Williams later wandered from the facility, suffered severe injuries, and he and his wife sued Atria (and a physician) for negligence; Marina‑Williams also sued for loss of consortium.
- Atria petitioned to compel arbitration based on the separate arbitration agreement; respondents opposed on multiple grounds including the Residency Agreement’s integration clause, section 1281.2(c) (third‑party litigation exception), unconscionability, and lack of Marina‑Williams’s assent.
- The trial court denied the petition, concluding the Residency Agreement’s integration clause barred reliance on the later arbitration agreement.
- The Court of Appeal reversed that ruling as to all claims except Marina‑Williams’s loss of consortium claim, and remanded for the trial court to address the remaining defenses to arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Residency Agreement’s integration clause precludes enforcement/proof of the subsequent arbitration agreement | Integration clause makes the Residency Agreement the final, complete agreement, so later arbitration agreement cannot be enforced | Arbitration agreement was signed after the Residency Agreement and expressly covers disputes about the Residency Agreement’s enforceability | Reversed: integration clause does not bar proof/enforcement of the later arbitration agreement |
| Whether Marina‑Williams (non‑signatory) is bound to arbitrate her loss of consortium claim | Her claim should be arbitrated because it arises out of care provided to Williams | She did not sign or otherwise agree to the arbitration agreement | Affirmed as to loss of consortium: non‑signatory Marina‑Williams is not bound; her claim remains in court |
| Whether FAA procedural rules preclude application of California Code of Civ. Proc. §1281.2(c) (third‑party litigation exception) | Arbitration agreement’s choice of the FAA means FAA governs, excluding state provisions like §1281.2(c) | The agreement only incorporates the FAA conditionally; Cronus allows §1281.2(c) to apply unless parties unambiguously adopt FAA procedures | Court rejects Atria’s argument: conditional FAA language does not preclude §1281.2(c); remand for trial court to determine if §1281.2(c) applies and exercise discretion |
| Whether the arbitration agreement is unconscionable | Respondents asserted unconscionability (procedural/substantive) to avoid arbitration | Atria argued enforceability but trial court did not reach unconscionability due to its integration ruling | Remanded: trial court must decide unconscionability and other defenses in the first instance |
Key Cases Cited
- Grey v. American Management Services, 204 Cal.App.4th 803 (Cal. Ct. App. 2012) (integration clause can supersede earlier arbitration agreement when that earlier agreement predates the integrated contract)
- Avila v. Southern California Specialty Care, Inc., 20 Cal.App.5th 835 (Cal. Ct. App. 2018) (standards and issues for appellate review of orders denying petitions to compel arbitration)
- Hayter Trucking, Inc. v. Shell Western E&P, Inc., 18 Cal.App.4th 1 (Cal. Ct. App. 1993) (integration is a question of law; when parties intend a final expression, parol evidence is limited)
- Cronus Investments, Inc. v. Concierge Services, 35 Cal.4th 376 (Cal. 2005) (conditional incorporation of the FAA does not preclude application of California’s §1281.2(c))
- Rodriguez v. American Technologies, Inc., 136 Cal.App.4th 1110 (Cal. Ct. App. 2006) (parties may unambiguously select FAA procedures to preempt state arbitration procedures)