Defendants AG Seal Beach, LLC, AG Facilities Operations, LLC, and Country Villa Service Corporation appeal from the trial court’s order denying their petition to compel arbitration of plaintiff Louise Laswell’s action against them for elder abuse and related claims. Because we conclude that the trial court erred in denying the petition to compel arbitration, we reverse the order and remand the matter for entry of a new order granting the petition.
FACTUAL AND PROCEDURAL BACKGROUND
1. The Complaint, Answer and the Trial Court’s Grant of Trial Preference
On June 26, 2009, Laswell, by and through her daughter Susan Lyons, under a power of attorney, filed a complaint alleging that Laswell had received improper care and treatment at the 24-hour health facility in Seal Beach where she resided from October 21, 2008, to December 10, 2008. Laswell was admitted into the facility at age 92 for postoperative rehabilitative care following hip surgery. In her complaint, she named as defendants AG Seal Beach, LLC, the licensee and operator of the heаlth facility doing business as Country Villa Seal Beach Healthcare Center; AG Facilities Operations, LLC, the owner of AG Seal Beach, LLC, and Country Villa Seal Beach Healthcare Center; and Country Villa Service Corporation, doing business as Country Villa Health Services, the management company of Country Villa Seal Beach Healthcare Center in charge of the day-to-day operation, patient care and maintenance of the health facility (collectively, defendants).
According to the сomplaint, while Laswell resided at Country Villa Seal Beach Healthcare Center, she was neglected, abandoned and abused, resulting in injuries to her body, severe anemia, an infection in the coccyx area, right lower lobe pneumonia and malnutrition. Laswell alleged causes of action against all defendants for elder abuse under the Elder Abuse and Dependent Adult Civil Protection Act (Welf. & Inst. Code, § 15600 et seq.); negligence; willful misconduct; and violation of Penal Code section 368, and an additional cause оf action against AG Seal Beach, LLC, as the licensee of the health facility, for violation of Health and Safety Code section 1430, subdivision (b).
Soon thereafter, on September 10, 2009, Laswell filed a motion for trial preference under Code of Civil Procedure section 36, subdivisions (a) and (d), on grounds that she was 93 years old and had been certified twice by a physician for hospice care as terminally ill with a life expectancy of less than six months and, as a result, that trial preference was necessary to preserve her interests and prevent prejudice in the matter. After a case management conference, the trial court granted the motion, noting that Laswell was 93 years old and terminally ill, and set a trial date of February 1, 2010.
2. The Petition to Compel Arbitration and the Trial Court’s Denial of the Petition
On or about November 19, 2009, defendants moved to compel arbitration, asserting that a valid arbitration agreement provided for arbitration of “any and all disputes or claims . . . arising out of the provision of services by the [f]acility,” defined as Country Villa Seal Beach Healthcare Center, or that “allege violations of the Elder Abuse and Dependent Adult Civil Protection Act.” According to defendants, the arbitration agreement complied with all of the requirements specifiеd in Health and Safety Code section 1599.81 for arbitration clauses in contracts of admission to health facilities,*
Laswell opposed the petition, arguing, as relevant to this appeal, that (1) the arbitration agreement was invalid and unenforceable because Laswell laсked
In reply, defendants conceded that, as specified in Health and Safety Code section 1599.81, subdivision (d), the cause of action for violation of Heаlth and Safety Code section 1430, subdivision (b), was not subject to arbitration, but argued it was a small component of Laswell’s case, could be litigated in court to determine any statutory remedies and attorney fees after arbitration and should not operate as a pleading tactic to defeat a valid arbitration agreement and undermine the public policy in favor of arbitration. Defendants also asserted that Laswell had not demonstrated mental incapacity and that all defendants were related Country Villa entities, represented by the same counsel, and would consent to arbitration.
Although the trial court concluded that defendants had made a “prima facie case for arbitration,” it denied the petition to compel arbitration. Viewing whether to compel arbitration as a discretionary question, the court decided that it would not “make[] sense to send the matter to arbitration” because (1) there were parties who would not participate in the arbitration given that they were not pаrt of the agreement; (2) there were some causes of action not subject to arbitration; (3) the trial date was set for less than two months away and the case would proceed just as expeditiously in court as in arbitration; (4) Laswell was 93 years old and there need not be two proceedings under the circumstances; and (5) the question of arbitration should have been raised more promptly, such as when Laswell had moved for trial preference, although that failure was not necessarily a waiver of the right to arbitrate.
Defendants timely appealed. (Code Civ. Proc., § 1294, subd. (a) [order denying petition to compel arbitration is appealable].)
DISCUSSION
1. California Has a Strong Public Policy Favoring Contractual Arbitration and Thus Requiring Enforcement of Valid Arbitration Agreements
A trial court is required to order a dispute to arbitration when the party seeking to compel arbitration proves the existence of a valid arbitration agreement covering the dispute. (Garrison v. Superior Court (2005)
One of the limited exceptions to the enforcement of contractual arbitration provisions is where “[a] party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact.” (Code Civ. Proc., § 1281.2, subd. (c).) This exception “ ‘addresses the peculiar situation that arises when a controversy also аffects claims by or against other parties not bound by the arbitration agreement.’ ” (Cronus Investments, Inc. v. Concierge Services (2005)
If the prerequisites of the exception exist in a particular case, i.e., there are third parties not subject to arbitration on claims arising out of the same transaction or related transactions, and a possibility of conflicting rulings on common issues of law or fact, then the trial court has discretion to deny or stay arbitration. (Code Civ. Proc., § 1281.2, subd. (c).) “ ‘The court’s discretion under [the exception, however,] does not come into play until it is ascertained that the subdivision applies, which requires the threshold determination of whether there are nonarbitrable claims against at least one of the
In general, “[t]here is no uniform standard of review for evaluating an order denying a motion to compel arbitration. [Citation.] If the court’s order is based on a decision of fact, then we adopt a substantial evidence standard. [Citations.] Alternatively, if the court’s denial rests solely on a decision of law, then a de novo standard of review is employed. [Citations.]” (Robertson v. Health Net of California, Inc. (2005)
2. Code of Civil Procedure Section 1281.2, Subdivision (c)’s Exception to Enforcement of Arbitration Agreements Does Not Apply Here and Thus the Trial Court Did Not Have Discretion to Deny the Petition to Compel Arbitration
Although concluding that defendants had set forth a “prima facie case for arbitration,” the trial court exercised discretion to deny arbitration, initially concluding that there were defendants who would not participate in the arbitration because they were not parties to the agreement. The trial court thus at least implicitly concluded that the threshold requirement for application of Codе of Civil Procedure section 1281.2, subdivision (c), that there were third parties not subject to the arbitration agreement was met and, as a result, it had discretion to deny arbitration. But the trial court’s conclusion that Code of Civil Procedure section 1281.2, subdivision (c), applies was erroneous and, therefore, it had no discretion to deny arbitration.
As noted, the arbitration agreement provided for arbitration of “any and all disputes or claims . . . arising out of the provision of services by the [fjacility,” defined as Country Villa Seal Beach Healthcare Center, or that “allege violations of the Elder Abuse and Dependent Adult Civil Protection Act,” and was signed by a representative of the facility. The trial court seemingly adopted Laswell’s argument that the agreement covered only AG Seal Beach, LLC, doing business as Country Villa Seal Beach Healthcare Center—the facility where Laswell had resided—and the presence of AG Facilities Operations, LLC, and Country Villa Service Corporation as defendants in the action demonstrated that there were third parties not subject to the
“The term ‘third party’ for purposes of [Code of Civil Procedure] section 1281.2 . . . must be construed to mean a party that is not bound by the arbitration agreеment.” (RN Solution, Inc. v. Catholic Healthcare West, supra,
Although the arbitration agreement defined “facility” as Country Villa Seal Beach Healthcare Center and the agreement was signed by a representative of the “facility,” AG Facilities Operations, LLC, and Country Villa Service Corporation equally are bound by the agreement and thus entitled to enforce it against Laswell. According to Laswell’s own allegations, all defendants are related Country Villa entities. AG Seal Beach, LLC, the licensee and operator of the facility doing business as Country Villa Seal Beach Healthcare Center, entered into a management agreement with Country Villa Service Corporation, doing business as Country Villa Health Services, to operate the facility. The arbitration agreement in fact was written on letterhead of Country Villa Health Services. AG Facilities Operations, LLC, is the owner of AG Seal Beach, LLC, and the facility Country Villa Seal Beach Healthcare Center. And defense counsel stated in connection with the petition to compel arbitration that all defendants were represented by the same counsel and would participate in the arbitration proceedings. Further, the substance of Laswell’s allegations is that all defendants are responsible for the improper care that she received while she resided at Country Villa Seal Beach Healthcare Center, demonstrating her claims against all defendants are based on the same facts and theory and are inherently inseparable. Under these circumstances, AG Facilities Operations, LLC, and Country Villa Service Corporation can enforce the arbitration agreement against Laswell and thus are not third parties within the meaning of Code of Civil Procedure section 1281.2, subdivision (c). (RN Solution, Inc. v. Catholic Healthcare West, supra,
Because no defendant in this case is a third party to the arbitration agreement, the discretion afforded by Code of Civil Procedure section 1281.2, subdivision (c), does not come into play and thus the trial court erred as a matter of law in denying defendants’ petition to comрel arbitration. (Rowe v. Exline, supra,
Laswell’s reliance on Birl v. Heritage Care, LLC (2009)
Finally, Laswell’s advanced age and the trial court’s decision to grant her trial preference have no relevance to whether Code of Civil Procedure section 1281.2, subdivision (c), applies and, given it does not, whether to grant the
DISPOSITION
The order denying the petition to compel arbitration is reversed and the matter is remanded with directions for the trial court to enter a new order granting the petition to compel arbitration of all causes of action except that against AG Seal Beach, LLC, for violation of Health and Safety Code section 1430, subdivision (b). Defendants shall recover their costs on appeal.
Mallano, P. J., and Johnson, J., concurred.
Notes
Health and Safety Code section 1430, subdivision (b), allows “[a] current or former resident or patient of a skilled nursing facility ... or intermediate care facility . . . [to] bring a civil action against the licensee of a facility who violates any rights of the resident or patient as set forth in the Patients Bill of Rights in Section 72527 of Title 22 of the California Code of
Health and Safety Code section 1599.81 requires that “(a) All 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, [ft] (b) All arbitration clauses shall be included on a form separate from the rest of the admission contract. This attachment shall contain space for the signature of any applicant who agrees to arbitration of disputes, [ft] (c) On the attachments, clauses referring to arbitration of medical malpractice claims, as provided for under Section 1295 of the Code of Civil Procedure, shall be clearly separated from othеr arbitration clauses, and separate signatures shall be required for each clause, [ft] (d) In the event the contract contains an arbitration clause, the contract attachment pertaining to arbitration shall contain notice that under Section 1430, the patient may not waive his or her ability to sue for violation of the Patient’s Bill of Rights.” The parties do not dispute that the arbitration agreement signed by Laswell complied with these statutory requirements.
Because, as noted, the presence of a nonarbitrable cause of action does not trigger Code of Civil Procedure section 1281.2, subdivision (c), Laswell’s additional contention that her elder abuse cause of action is nonarbitrable does not change our conclusion that the trial court lacked discretion to deny arbitration. Because we direct the trial court to grant the petition to compel arbitration, we note that the elder abuse cause of action may appropriately be resolved in arbitration. (Hogan v. Country Villa Health Services (2007)
As noted, Code of Civil Procedure section 1281.2 contains three limited exceptions to the mandatory enforcement of valid arbitration agreements. On appeal, Laswell primarily defends the trial court’s ruling under subdivision (c) of the statute, which we conclude does not apply here. She also asserts in one paragraph of her respondent’s brief that the arbitrаtion agreement is not valid because she lacked the capacity to enter into any agreement, presumably suggesting the exception in section 1281.2, subdivision (b)—that “[g]rounds exist for the revocation of the agreement”—applies. That assertion lacks merit. By concluding that defendants made a “prima facie case for arbitration,” the trial court necessarily found that Laswell had the capacity to enter the arbitration agreement. Substantial evidence—based on medical reports, after she fell and broke her hip, indicating that Laswell was alert and oriented as to person, place and time, lives alone and recounted her daily routine and family illness history-—supports the trial court’s finding, and we, therefore, cannot disturb it on appeal. (Robertson v. Health Net of California, Inc., supra,