Moore v. Valley Pacific Petroleum ServicesMoore v. Valley Pacific Petroleum Services
Valley Pacific now contends there was no factual dispute regarding the existence of the arbitration agreements, the electronic signatures were sufficiently authenticated,
BACKGROUND
Valley Pacific is a petroleum distributor. In October 2022, the company hired Sanchez as a transloading operator at a Visalia facility. He interviewed for the position the previous month with the facility‘s terminal manager, Jesse Neri. After the interview, Sanchez was given a conditional job offer letter, which he signed by hand. That letter stated that the offer of employment was conditioned upon, among other things, reading and signing an arbitration agreement.
Subsequent details of Sanchez‘s onboarding with the company are disputed by the parties. According to Neri, he told Sanchez that he would be receiving an e-mail from Paycom, “which would then start their onboarding process.” Paycom is the human resources and payroll platform used by Valley Pacific. According to the company‘s human resources director, Cara Dickson, when a new employee is offered a job with Valley Pacific, she adds that person to the Paycom system by clicking “a button that says, ‘Add new employee,’ ” and then types in the name and e-mail address listed on their job application and clicks ” ‘Create and send invitation.’ ” Paycom then sends the employee an e-mail with a link that allows them to set up an employee account by creating a username and password. After creating the account, the new employee electronically signs various documents as part of the onboarding process, including an arbitration agreement. Only after the onboarding process is complete is the employee able to clock in and out for their shifts using the Paycom platform.
Eleven days after signing the conditional offer letter, Sanchez sent Neri an e-mail saying that he had “not received anything” from Paycom. Neri forwarded the e-mail to Dickson asking for her assistance. About two hours later, Sanchez responded that he “got
Sanchez started work about a month later. According to Neri, when Sanchez arrived for his first day of work, Neri discovered that he had not completed the Paycom onboarding process. Because of this, Neri had to clock Sanchez in and out that day. The next day, the arbitration agreement was electronically signed using Sanchez‘s account on the Paycom platform. According to Sanchez, he did not create a Paycom account. Instead, on his first day of work, Neri handed him a “sticky note” with a username and password written on it. He used those credentials to log into an account that had already been created. Sanchez denied signing any documents on the Paycom platform, including the arbitration agreement. He also stated that he had a long-standing practice of not signing arbitration agreements and had not signed one in more than 10 years.
In May 2023, Valley Pacific hired Moore as a customer service representative at an Ione gas station/convenience store. After a successful interview with the store‘s manager, Lisa Bucy, Moore also hand signed a conditional job offer letter stating that the offer of employment was conditioned upon reading and signing an arbitration agreement. According to Dickson, the same onboarding process described above was applicable to Moore.
On Moore‘s first day of work, the arbitration agreement purportedly signed by him was electronically signed using his Paycom account. Moore denied signing the agreement. According to Moore, prior to his first day, Bucy gave him a stack of physical documents to take home and sign by hand. He did so and brought them back to her, but did not remember an arbitration agreement being among them. The only document that he acknowledged signing electronically using the Paycom platform was a declination of medical insurance. Although Moore admitted creating a Paycom account, he claimed that he was unable to login, so Bucy had to call HR to get him a new username and
Neri and Bucy denied signing the arbitration agreements for Sanchez and Moore, respectively. According to Dickson, no one other than the employee who created the Paycom account has access to that employee‘s username and password. Managers have access to Paycom with respect to approving timecards and time off requests, but not for viewing or signing onboarding documents. And although the HR department has access to view the onboarding documents signed by employees, no one other than the employee who created the account has the ability to sign the onboarding documents. Thus, according to Dickson, only Moore and Sanchez would have been able to access and sign the arbitration agreements through their unique login credentials on the Paycom platform. Dickson acknowledged, however, that she did not have personal knowledge of Paycom‘s security measures protecting employee accounts. She also acknowledged that she would have no way of knowing whether an employee logged into Paycom using their credentials or whether someone else logged into that employee‘s account using those same credentials. The data record pertaining to respondents’ arbitration agreements indicates that they had been “modified” by two unknown individuals, designated “224939” and “214971,” respectively.
In June 2024, Moore filed a putative class action lawsuit against Valley Pacific, alleging violations of the Labor Code and unfair competition under the Business and Professions Code. The operative complaint added Sanchez as a named plaintiff and also added a cause of action seeking civil penalties under PAGA.
Valley Pacific moved to compel arbitration of respondents’ individual claims, dismiss or stay their class claims, and stay their PAGA claims pending arbitration. Valley Pacific attached the respective arbitration agreements to the motion and submitted a declaration from Dickson. As relevant here, the company argued: “[Respondents]
Respondents opposed the motion. Relying on Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836 (Ruiz), they argued “there is no evidence linking any IP address (which is not provided) to [respondents], or any additional evidence to demonstrate that it was specifically [respondents] (and no one else, such as management personnel or otherwise) who affixed their signature[s] on the arbitration agreement[s].” Respondents also argued that Dickson‘s conclusion that only they could have signed the agreements was not supported by the evidence: “Specifically, no testimony is offered on the reliability of [Valley Pacific‘s] policies, procedures, or practices, nor would … Dickson likely have personal knowledge of the digital security of a third-party electronic application program sufficient to demonstrate that any e-signatures in [Valley Pacific‘s] records came from [respondents]’ act.”
In Valley Pacific‘s reply brief, the company argued that it met its burden of proving that respondents electronically signed the arbitration agreements, but also requested “an evidentiary hearing on the issue” if the trial court had “remaining questions.”
The trial court held an evidentiary hearing. After receiving testimony from Dickson, Neri, Bucy, Sanchez, and Moore, the trial court denied the motion, concluding that Valley Pacific did not carry its burden of proving that respondents electronically
APPLICABLE LAW AND STANDARD OF REVIEW
“A party to an arbitration agreement may seek a court order compelling the parties to arbitrate a dispute covered by the agreement.” (Brockman v. Kaiser Foundation Hospitals (2025) 114 Cal.App.5th 569, 583 (Brockman).) Subject to various exceptions, the trial court “shall order the [parties] to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists.” (
The trial court must first determine whether the parties have entered into such an agreement. (Avery v. Integrated Healthcare Holdings, Inc. (2013) 218 Cal.App.4th 50, 59.) “The trial court makes this determination using a summary procedure in the manner ‘for the making and hearing of motions.’ [Citation.] ‘In these summary proceedings, the trial court sits as a trier of fact, weighing all the affidavits, declarations, and other documentary evidence, as well as oral testimony received at the court‘s discretion, to reach a final determination.’ [Citation.]” (Brockman, supra, 114 Cal.App.5th at p. 584.)
“The party seeking arbitration has the burden of proving the existence of an arbitration agreement by a preponderance of the evidence. … The party opposing arbitration bears the burden of proving by a preponderance of the evidence any defense to the agreement‘s enforcement.” (Ramirez v. Golden Queen Mining Co., LLC (2024) 102 Cal.App.5th 821, 829, fn. omitted (Ramirez).) However, “the need to raise a defense to enforcement arises only if the moving party first meets its burden of proving the existence of an arbitration agreement between the parties.” (Brockman, supra, 114 Cal.App.5th at p. 587.) “While public policy favors contractual arbitration of disputes, arbitration is a matter of contract and a party who has not agreed to arbitrate a controversy cannot be compelled to do so.” (Id. at pp. 584-585; see Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1057 (Espejo).)
“Although the burden of persuasion is always on the moving party to prove the existence of a valid agreement to arbitrate the controversy, the burden of production may shift in a three-step process. [Citation.] ‘First, the moving party bears the burden of producing “prima facie evidence of a written agreement to arbitrate the controversy.” ’ [Citation.] ‘The arbitration proponent must first recite verbatim, or provide a copy of, the alleged agreement.’ [Citations.] The moving party can meet its initial burden ’ “by attaching a copy of the arbitration agreement purportedly bearing the opposing party‘s signature.” ’ [Citations.]” (Brockman, supra, 114 Cal.App.5th at p. 586, fns. omitted; see Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747, 755 (Iyere); Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165 (Gamboa).)
If the moving party satisfies this initial step, and the opposing party disputes the existence of a valid agreement, “then in the second step, the opposing party bears the burden of producing evidence to challenge the authenticity of the agreement. [Citation.] The opposing party can do this in several ways. For example, the opposing party may testify under oath or declare under penalty of perjury that the party never saw or does not remember seeing the agreement, or that the party never signed or does not remember signing the agreement.” (Gamboa, supra, 72 Cal.App.5th at p. 165.) If the opposing party satisfies this second step, “the third step requires the party seeking arbitration to prove by a preponderance of the evidence that the parties formed a valid contract to arbitrate their dispute.” (Ramirez, supra, 102 Cal.App.5th at p. 830.)
Where, as here, the trial court denies a motion to compel arbitration based on a finding that the moving party did not carry its burden of proving that the parties formed a valid contract to arbitrate their dispute, the question for this court is whether the trial court‘s finding is erroneous as a matter of law. (Brockman, supra, 114 Cal.App.5th at p. 587; Jones v. Solgen Construction, LLC (2024) 99 Cal.App.5th 1178, 1196.) Under this standard, we must determine ” ’ “whether the [moving party‘s] evidence was (1) ‘uncontradicted and unimpeached’ and (2) ‘of such a character and weight as to leave
DISCUSSION
As mentioned, the first step of the analysis places the burden on the party seeking arbitration to produce prima facie evidence of a written agreement to arbitrate the controversy. Valley Pacific satisfied that step by attaching to its motion copies of the arbitration agreements purportedly bearing respondents’ electronic signatures. (Espejo, supra, 246 Cal.App.4th at p. 1060.) The trial court so found, and its finding is not challenged.
In the second step, the opposing party bears the burden of producing evidence to challenge the authenticity of the agreements. If that burden is satisfied, the third step requires the party seeking arbitration to prove that the parties formed a valid contract to arbitrate their dispute. Valley Pacific argues the trial court erred at the second and third steps of the analysis. Specifically, Valley Pacific contends there was no factual dispute regarding the existence of the arbitration agreements, the electronic signatures were sufficiently authenticated, and the trial court abused its discretion in requiring an evidentiary hearing.
As to the second step of the analysis, the trial court found that respondents “shifted the burden back to [Valley Pacific] by presenting evidence that creates questions surrounding the authenticity of their signatures on the [arbitration agreements].” Valley Pacific challenges that finding, arguing that respondents, in their opposition filing, “offered nearly identical two-page declarations claiming they (1) ‘did not recall ever
Valley Pacific‘s reliance on Iyere is misplaced. That case involved an arbitration agreement bearing the plaintiffs’ apparent “handwritten” signatures. (Iyere, supra, 87 Cal.App.5th at p. 756.) The plaintiffs declared that they did not remember signing the agreement and did not know how their signatures were placed on the document. They also declared that they were given a stack of documents to sign on their first day of work, and that they immediately did so. (Ibid.) The trial court concluded that was sufficient to raise a question as to the authenticity of their signatures. But the appellate court disagreed, noting that no plaintiff had declared they had not signed the agreement or that their physical signature was forged or inauthentic. (Ibid.) The court explained: “The declarations explicitly acknowledge that [the] plaintiffs signed a ‘stack of documents’ and do not deny that the stack included the agreement. Although [the] plaintiffs state they do not recall signing the agreement, there is no conflict between their having signed a document on which their handwritten signature appears and, two years later, being unable to recall doing so. In the absence of any evidence that their purported signatures were not their own, there was no evidence that [the] plaintiffs did not in fact sign the agreement.” (Ibid.)
In so concluding, the court distinguished cases involving electronic signatures, including Ruiz, supra, 232 Cal.App.4th 836, in which the employee “averred he did not recall electronically signing the [arbitration] agreement,” thereby shifting the burden to the employer to prove that he in fact did so. (Id. at p. 844.) Explaining the difference between handwritten and electronic signatures for purposes of the second step of the
In this case, respondents’ purported signatures were electronically affixed to the arbitration agreements. In their declarations, they averred that they did not recall electronically signing the agreements. Ruiz held that such an averment was enough to shift the burden in an electronic signature case, and Iyere did not hold otherwise. Although we do not hold that such a lack of recall is always enough to challenge the authenticity of purported electronic signatures and shift the burden back to the party seeking arbitration, we agree it may be enough in some cases, and in any event, here the trial court did not base its finding that respondents satisfied their burden of production solely on their declarations. At the hearing on the motion, Sanchez denied signing any documents on the Paycom platform, including the arbitration agreement. Moore also denied signing the arbitration agreement and claimed the only document he signed electronically using the Paycom platform was a declination of medical insurance. A plaintiff‘s “denial of signing an arbitration agreement is sufficient to shift the burden.”
Turning to the third step of the analysis, the trial court found that Valley Pacific failed to carry its burden of (1) establishing that respondents used a login and unique password known only to them to sign the arbitration agreements, and (2) authenticating the electronic signatures of respondents on the arbitration agreements, and thus Valley Pacific did not establish valid arbitration agreements between the parties. As previously stated, we must determine whether Valley Pacific‘s evidence was so uncontradicted and unimpeached, and of such a character and weight, as to leave no room for the trial court to conclude that it was insufficient. (See Trinity, supra, 78 Cal.App.5th at p. 1121.) Valley Pacific has not persuaded us that it presented such evidence. (Bookout v. State of California ex rel. Dept. of Transportation (2010) 186 Cal.App.4th 1478, 1486; Fabian, supra, 42 Cal.App.5th at p. 1067.)
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In Ruiz, the defendant‘s business manager, Main, stated in a declaration in support of the motion to compel arbitration that the plaintiff, Ruiz, electronically signed an arbitration agreement on a specific date, and that the same agreement was presented to all people seeking employment with the company. (Ruiz, supra, 232 Cal.App.4th at p. 839.) After Ruiz denied any memory of signing the agreement, “Main explained in her reply declaration that the … agreement was part of an employee acknowledgment form” and that “each employee is required to log into the company‘s HR system, using his or her ‘unique login ID and password,’ to review and sign the employee acknowledgment form.” (Id. at p. 844.) The trial court denied the motion and the appellate court affirmed, explaining that although ” ‘[Ruiz‘s full name] (Electronic Signature)’ ” appeared on the agreement‘s signature line, followed by a date and time, “Main never explained how [the electronic signature] … came to be placed on the … agreement” and “did not explain how she ascertained that the electronic signature on the … agreement was ‘the act of’ Ruiz.” (Id. at pp. 841, 843-844.) Main also did not explain that Ruiz‘s electronic signature “could only have been placed on the … agreement … by a person using Ruiz‘s ‘unique login ID and password‘; that the date and time printed next to the electronic signature indicated the date and time the electronic signature was made; that all [company] employees were required to use their unique login ID and password when they logged into the HR system and signed electronic forms and agreements; and the electronic signature on the … agreement was, therefore, apparently made by Ruiz [at the date and time printed next to the signature].” (Id. at p. 844; see also Garcia, supra, 102 Cal.App.5th at pp. 45, 53 [affirming the denial of a motion to compel arbitration; the defendant submitted a declaration from an HR systems analyst stating that the plaintiff, as part of the employee onboarding process, created a unique user ID and password, clicked on a link to review the arbitration agreement, and then signed the agreement; but the declaration did not show that only the plaintiff could have placed the electronic signature on the arbitration agreement and did not explain how the declarant knew that the
In Espejo, supra, 246 Cal.App.4th 1047, the appellate court applied “the requirements articulated in Ruiz” and reversed the trial court‘s denial of the defendant‘s motion to compel arbitration. (Id. at p. 1062.) There, the defendant‘s systems consultant, Tellez, provided a detailed description of the company‘s “electronic review and signature process for … employee agreements,” including the arbitration agreement. (Id. at p. 1053.) The description was provided in a supplemental declaration, which was struck by the trial court as untimely. (Id. at p. 1055.) After concluding that the trial court abused its discretion in striking the supplemental declaration (id. at p. 1060), the appellate court explained that the declaration “offered the critical factual connection that the declarations in Ruiz lacked.” (Id. at p. 1062.) According to the court, “Tellez detailed [the company‘s] security precautions regarding transmission and use of an applicant‘s unique username and password, as well as the steps an applicant would have to take to place his or her name on the signature line of the … [arbitration agreement]. Based on this procedure, she concluded that the ‘name Jay Baniaga Espejo could have only been placed on the signature pages of the … [arbitration agreement] by someone using Dr. Espejo‘s unique user name and password. … [¶] Given this process for signing documents and protecting the privacy of the information with unique and private user names and passwords, the electronic signature was made by Dr. Espejo’ on the … [arbitration agreement] at the date, time, and IP address listed on the documents. These details satisfactorily meet the requirements articulated in Ruiz and establish that the electronic signature on the [arbitration agreement] was ‘the act of’ Espejo (
Valley Pacific argues that it too “met the Ruiz authentication requirements.” According to Valley Pacific, Dickson‘s declarations and testimony “outlined the security
We accept Valley Pacific‘s characterization of Dickson‘s declarations and testimony. However, we need not determine whether that evidence, if credited by the trial court, would have been sufficient to satisfy Ruiz. That is because the trial court credited respondents’ testimony that they were given their login credentials on “sticky notes.” We have “no power to pass on the credibility of witnesses” or “resolve conflicts in the evidence.” (See In re E.M. (2014) 228 Cal.App.4th 828, 839.) If respondents were given their login credentials by their respective managers, as the trial court found, those same managers had the ability to log into respondents’ accounts and sign the arbitration agreements. Bucy and Neri each denied doing so. But the burden was not on respondents to prove that someone else signed the arbitration agreements on their behalf. The burden was on Valley Pacific to prove that respondents signed the agreements. Finding that Valley Pacific failed in this regard, the trial court also found that the data record pertaining to respondents’ arbitration agreements indicated that the agreements had been “modified” by two unknown individuals, designated “224939” and “214971,”
On this record, the trial court‘s determination was not erroneous as a matter of law. Specifically, Valley Pacific‘s evidence was not so uncontradicted and unimpeached, and of such a character and weight, as to leave no room for the trial court to conclude that it was insufficient. (See Trinity, supra, 78 Cal.App.5th at p. 1121.)
Valley Pacific further argues that the trial court abused its discretion by holding an evidentiary hearing “in the absence of a factual dispute” because, according to Valley Pacific, the declarations Valley Pacific submitted were sufficient to authenticate respondents’ electronic signatures, and respondents’ declarations “were not sufficient to raise a factual dispute necessitating such hearing.” We disagree.
As stated previously, in ruling on a motion to compel arbitration, ” ‘the trial court sits as a trier of fact, weighing all the affidavits, declarations, and other documentary evidence, as well as oral testimony received at the court‘s discretion, to reach a final determination.’ [Citation.]” (Brockman, supra, 114 Cal.App.5th at p. 584.) The evidence provided by respondents effectively challenged the authenticity of their purported electronic signatures and shifted the burden back to Valley Pacific to prove that respondents in fact signed the agreements. Valley Pacific argued in its reply brief that it met its burden in this regard, but also requested “an evidentiary hearing on the issue” if the trial court had “remaining questions.” The trial court had remaining questions and granted the request for a hearing. Just as a litigant cannot be heard to complain that the trial court decided an issue that the litigant asked it to decide (see, e.g., Bains v. Department of Industrial Relations (2016) 244 Cal.App.4th 1120, 1126), Valley Pacific cannot now complain that the trial court granted its request for a hearing.
DISPOSITION
The order denying the motion to compel arbitration is affirmed. Respondents are entitled to costs on appeal. (
/S/
MAURO, Acting P. J.
We concur:
/S/
MESIWALA, J.
/S/
WISEMAN, J.*
* Retired Associate Justice of the Court of Appeal, Fifth Appellate District, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.