CARLOS RAMIREZ, Plaintiff and Respondent, v. GOLDEN QUEEN MINING COMPANY, LLC, Defendant and Appellant.
F086371 (Super. Ct. No. BCV-22-102808)
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FIFTH APPELLATE DISTRICT
Filed 5/15/24
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS. California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
Belden Blaine Raytis, T. Scott Belden, Kaleb L. Judy and Tyler D. Anthony for Defendant and Appellant.
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OPINION
Carlos Ramirez filed a class action lawsuit against his former employer alleging various violations of the Labor Code and unfair competition. The employer moved to compel arbitration. The trial court denied the motion on the ground that the employer failed to demonstrate the existence of an executed arbitration agreement. The employer appealed, contending it carried the initial burden of making a prima facie showing that a written arbitration agreement existed. The employer also contended Ramirez’s statements that he did not recall being presented with or signing an arbitration agreement were insufficient to rebut its initial showing and create a factual dispute about the authenticity of a handwritten signature.
There is a split of authority among the Courts of Appeal as to what constitutes sufficient evidence to create a factual dispute about the authenticity of a handwritten signature on a document agreeing to arbitration. (Cf. Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747, 757–758 (Iyere) with Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 164–165 (Gamboa).) We join Iyere in concluding that an individual is capable of recognizing his or her handwritten signature and if that individual does not deny a handwritten signature is his or her own, that person’s failure to remember signing the document does not create a factual dispute about the signature’s authenticity. (Iyere, supra, at p. 757.)
Here, Ramirez’s declaration asserts he does not recall ever being presented with or signing an arbitration agreement. The declaration, however, omits several significant facts. First, the declaration fails to state whether Ramirez even reviewed the arbitration agreement, the related handbook acknowledgement, or any other documents purportedly signed by him and included in the employer’s moving papers. A review of those documents, the handwritten signatures, and the handwritten initials might have improved Ramirez’s recollection. Second, the declaration does not address whether Ramirez recalled signing the handbook acknowledgement, which is the document relied upon by the employer to show his consent to arbitration. The acknowledgement included a bolded, underlined sentence stating he agreed to the terms of the arbitration agreement in the employee handbook. Third, Ramirez’s declaration does not state, one way or the other, whether the handwritten signature on the handbook acknowledgement is his. Based on these omissions, we conclude Ramirez did not rebut the employer’s initial showing that an arbitration agreement existed.
FACTS
Appellant Golden Queen Mining Company, LLC (Queen Mining) is a California limited liability company that operates the Soledad Mountain gold and silver mine in Mojave, California. The open-pit mine operates 24 hours per day, 365 days per year. Queen Mining’s operations use equipment, explosives and chemicals obtained from sources outside California. All the gold and silver recovered from the crushed ore is sold to a refinery outside of California. Based on its purchases and sales, Queen Mining contends its business operations involve interstate commerce and, therefore, the Federal Arbitration Act (FAA;
In March 2019, Ramirez was hired by Queen Mining as a nonexempt hourly employee to perform electrical work. Ramirez’s employment ended in August 2022. As part of Queen Mining’s onboarding process, new employees are provided with many documents including an employee handbook containing an arbitration agreement. The documents allegedly provided to Ramirez are described below.
PROCEEDINGS
In October 2022, Ramirez filed a class action complaint against Queen Mining alleging causes of action for failure to pay overtime wages, pay minimum wages, provide meal periods, provide rest periods, pay all wages due upon termination, provide accurate wage statements, indemnify employees for expenses incurred in performing their jobs, and pay for vested, unused vacation time upon termination.
Motion to Compel
In April 2023, Queen Mining filed a motion to compel arbitration and supporting declarations. The declaration of Latasha Marshall, Queen Mining’s human resources manager, asserted Ramirez “signed an ‘Arbitration Agreement’ on or about March 28, 2019.” Marshall attached as exhibits to her declaration copies of (1) a two-page arbitration agreement, (2) a handbook acknowledgement purportedly signed by Ramirez and dated March 28, 2019, and (3) six other documents purportedly signed by Ramirez and dated March 28, 2019.
Ramirez opposed the motion, contending that Queen Mining could not prove the existence of an arbitration agreement between the parties because (1) Queen Mining had failed to authenticate the proffered arbitration agreement and (2) even if authentic, a signature on an employee handbook acknowledgement did not constitute valid assent to arbitration. Alternatively, Ramirez argued any such agreement was unenforceable because it was procedurally and substantively unconscionable.
Ramirez’s declaration in support of his opposition to the motion to compel is relatively short and, therefore, to accurately describe his evidence, we quote the declaration’s last six numbered paragraphs:
“3. In or around March 2019, I was hired by [Queen Mining] to work as a non-exempt hourly employee. My duties included electrical work.
“4. I do not recall ever being presented with an arbitration agreement, either in person or electronically.
“5. I do not recall ever signing an arbitration agreement for [Queen Mining], either on paper or electronically.
“6. Nobody ever informed me about an arbitration agreement, a desire for me to sign an arbitration agreement, or explained to me what an arbitration agreement is.
“7. Until my counsel explained it to me, I did not know what arbitration was. If someone had explained to me what an arbitration agreement was, I would not sign it.
“8. As I do not recall ever being provided with or signing an arbitration agreement, I do not believe the Court should consider any such claim or document offered by [Queen Mining] to be genuine.”
Ramirez’s opposition papers also included evidentiary objections to the statement in Marshall’s declaration that he “signed an ‘Arbitration Agreement’ on or about March 28, 2019.” Ramirez argued (1) the assertion lacked foundation and was not supported by required preliminary facts; (2) Marshall lacked personal knowledge and had made an improper factual conclusion; and (3) the assertion was an improper legal conclusion in that Ramirez never signed an arbitration agreement and only purportedly signed an acknowledgement of the employee handbook.
Queen Mining’s reply papers argued Ramirez’s employment as an electrical worker, which involved keeping the mine’s electrical power distribution systems connected to the electrical grid, involved or affected interstate commerce and, thus, the FAA applied. Queen Mining asserted that because Ramirez did not deny signing the “HANDBOOK ACKNOWLEDGEMENT,” which contains a bolded, underlined sentence stating he agreed to the terms of the arbitration agreement, the burden did not shift back to it to authenticate his signature. Queen Mining’s reply was supported with Marshall’s supplemental declaration, which included a complete copy of Queen Mining’s “Employee Information & Handbook” as an attachment. The arbitration agreement is set forth on pages 30 and 31 of the handbook. Queen Mining argued Ramirez’s signature on the handbook acknowledgement was sufficient to establish his assent to the arbitration agreement contained in the handbook. Addressing Ramirez’s defense to enforcement, Queen Mining asserted the arbitration agreement was neither procedurally nor substantively unconscionable.
Hearing and Decision
In May 2023, the trial court heard the motion to compel arbitration. At the beginning of the hearing, the court announced its tentative decision to deny the motion based on a finding that Queen Mining failed to demonstrate the existence of an executed arbitration agreement. Counsel for Queen Mining argued Iyere, supra, 87 Cal.App.5th 747, was directly on point and established Ramirez’s statement that he did not recall signing the arbitration agreement was insufficient to rebut Queen Mining’s initial showing. Counsel for Ramirez argued that nothing in Iyere should cause the court to reverse its tentative. After hearing from counsel, the trial court took the matter under submission and stated it would reread Iyere.
The trial court’s subsequent written ruling denied the motion, repeating the tentative decision’s finding that Queen Mining “has failed to demonstrate the existence of an executed arbitration agreement.” The ruling stated the court believed the separate arbitration agreement at issue in Iyere was distinguishable from the arbitration provision included in Queen Mining’s more comprehensive employee handbook and, thus, the court viewed Esparza v. Sand & Sea, Inc. (2016) 2 Cal.App.5th 781 as more persuasive.1 The court also sustained Ramirez’s evidentiary objections to Marshall’s factual assertion that Ramirez “signed an ‘Arbitration Agreement’ on or about March 28, 2019.”
Appeal
In June 2023, Queen Mining filed an appeal. About two weeks later, Queen Mining’s attorney filed a mandatory Judicial Council form APP-004, Civil Case Information Statement. (See
DISCUSSION
I. ESTABLISHING THE EXISTENCE OF AN ARBITRATION AGREEMENT
When presented with a motion or petition to compel arbitration, a trial court must determine whether an “agreement to arbitrate the controversy exists.” (
The party seeking arbitration has the burden of proving the existence of an arbitration agreement by a preponderance of the evidence. (Nielsen Contracting, Inc. v. Applied Underwriters, Inc. (2018) 22 Cal.App.5th 1096, 1106.) The agreement must be in writing to be valid
Although the party seeking arbitration bears the ultimate burden of proof as to the existence of an arbitration agreement, the burden of producing evidence on the issue may shift pursuant to a three-step process recognized by California courts. (Iyere, supra, 87 Cal.App.5th at p. 755; Gamboa, supra, 72 Cal.App.5th at pp. 164–165.) The first step requires the party seeking arbitration to carry the initial burden of presenting prima facie evidence of a written agreement to arbitrate the controversy. (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413 (Rosenthal); Gamboa, supra, at p. 165.) If that initial burden is met, the second step requires the party opposing arbitration to carry the burden of producing evidence to challenge the authenticity of the agreement. (Gamboa, supra, at p. 165.) If the opposing party meets the burden of producing sufficient evidence, 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. (Id. at pp. 165–166.)
A. Step One: Initial Showing
1. Basic Principles
How a party seeking arbitration makes the initial prima facie showing that an arbitration agreement exists is addressed in
“A petition to compel arbitration or to stay proceedings pursuant to
Code of Civil Procedure sections 1281.2 and1281.4 must state, in addition to other required allegations, the provisions of the written agreement and the paragraph that provides for arbitration. The provisions must be stated verbatim or a copy must be physically or electronically attached to the petition and incorporated by reference.”
2. The Evidence Produced
Queen Mining’s motion to compel arbitration alleged Ramirez signed an acknowledgement of an arbitration agreement on or about March 28, 2019. The motion was supported with Marshall’s declaration, which asserted (1) Ramirez was employed by Queen Mining from approximately 2019 to August 2021; (2) she was a custodian of records for Queen Mining; (3) Queen Mining keeps personnel files that contain documents made in the regular course of its business, such as employee applications, write-ups, and documents noting the dates an employee is hired or terminated; (4) Queen Mining kept a personnel file for Ramirez; (5) Ramirez signed an arbitration agreement on or about March 28, 2019; and (6) true and correct copies of the arbitration agreement, the acknowledgement of the arbitration agreement signed by Ramirez, and other documents signed by Ramirez were attached as exhibits to the declaration.
The arbitration agreement stated that, “[i]n the event of any dispute arising under or involving any provision of this Agreement … or any dispute regarding employee’s employment, … employee and Company agree to submit any such dispute to binding arbitration pursuant to the provisions of the Federal Arbitration Act[.]” The two-page arbitration agreement attached to Marshall’s declaration did not contain a signature block and was not signed or initialed. The “HANDBOOK ACKNOWLEDGEMENT” attached to Marshall’s declaration included the following:
“My signature also acknowledges and certifies that I understand and voluntarily agree to terms of the Company Arbitration Agreement.
“Furthermore, I understand that, because the Company cannot anticipate every issue that may arise during my employment, if I have any questions regarding the contents of the Handbook, I should consult Human Resources.
“I have carefully read this Acknowledgement.”
Another document attached to Marshall’s declaration was a “NEW HIRE ORIENTATION CHECKLIST.” The checklist’s left-hand column contains 19 items under a heading stating “I have filled out and returned the following to HR.” The initials “CR” are handwritten in blue ink next to 18 of the items, including “Arbitration Agreement” and “Handbook Acknowledgement.” The checklist’s right-hand column contains 14 items under a heading stating “I acknowledge receipt of the following.” All 14 items have the handwritten initials “CR” next to them. The items include “Arbitration Agreement,” “Corporate Governance,” and “Employee Handbook.” The employee signature line at the bottom of the checklist appears to contain Ramirez’s handwritten signature and is dated “3-28-19.”
The attachments to Marshall’s declaration also include five other documents appearing to contain Ramirez’s handwritten signature along with the “3-28-19” date. These entries are handwritten in blue ink that appears to match the ink used for the signature on the handbook acknowledgement and the signature and initials on the checklist.
3. The Prima Facie Showing Was Made
We conclude as a matter of law that Queen Mining carried its initial burden and made a prima facie showing of the existence of a written arbitration agreement. Queen Mining alleged the existence of an agreement and supported that allegation by complying with Rule 3.1330. (Iyere, supra, 87 Cal.App.5th at p. 755.) As a result, the burden of producing evidence shifted to Ramirez.
B. Step Two: Rebutting the Initial Showing
When the burden has shifted to the party opposing arbitration, that party must “identify a factual dispute as to the agreement’s existence” and must present admissible evidence to support the existence of that factual dispute. (Iyere, supra, 87 Cal.App.5th at p. 755.) For example, if a party disputes the authenticity of his or her signatures, the party “must offer admissible evidence creating a factual dispute as to the authenticity of the[] signatures. The opponent need not prove that his or her purported signature is not authentic, but must submit sufficient evidence to create a factual dispute
1. The Split in Authority
In Gamboa, an employee injured her hand at work and was terminated after she requested a medical accommodation. The employee sued her former employer for discrimination, retaliation, and failure to provide reasonable accommodation. (Gamboa, supra, 72 Cal.App.5th at p. 163Ibid.) The employee’s opposition to the motion included her declaration, which stated (1) she had reviewed the arbitration agreement included in the employer’s moving papers, (2) she did “ ‘not remember these documents at all,’ ” (3) no one had ever told her about an arbitration agreement or explained it until after her lawsuit began, and (4) “ ‘[h]ad I been made aware of the existence of an arbitration agreement, and been explained its provisions, I would not have signed any such documents.’ ” (Id. at pp. 163, 167.) The trial court denied the motion to compel arbitration. (Id. at p. 164.) The Second District, Division Seven, affirmed. (Id. at p. 171.) The court addressed whether the employee’s evidence was sufficient to satisfy her burden at step two by stating: “[W]e need not decide whether Gamboa challenged the authenticity of her purported signature on the arbitration agreement. It was enough that she challenged the authenticity of the agreement by saying under penalty of perjury that she did not remember it.” (Id. at p. 168.)
In Iyere, three employees who had been terminated by their employer filed a joint complaint alleging many employment-related causes of action. (Iyere, supra, 87 Cal.App.5th at p. 752Ibid.) The trial court denied the motion, concluding the employer failed to prove the authenticity of the plaintiffs’ signatures on the arbitration agreements and the agreements were procedurally and substantively unconscionable. (Id. at p. 754.) The First District, Division Four, reversed and remanded the matter with directions to grant the employer’s motion. (Id. at pp. 761–762.)
The First District addressed whether the “plaintiffs’ evidence was sufficient to create a factual dispute shifting the burden of production back to” the employer. (Iyere, supra, 87 Cal.App.5th at p. 756Id. at p. 755.) The employer’s moving papers included copies of arbitration agreements bearing the plaintiffs’ apparent handwritten signatures. The plaintiffs’ opposition papers included each plaintiff’s declaration stating that, on the first day of work, he (1) was given a stack of documents, (2) was told to quickly sign the documents so he could get to work, and (3) signed the stack of documents immediately and returned them. (Id. at p. 756.) Each declaration also stated: “ ‘I do not recall ever reading or signing any document entitled Binding Arbitration Agreement …. I do not know how my signature was placed on [the document].’ ” Each plaintiff further stated that if he had understood that the agreement waived his right to sue the employer, he would not have signed it. (Ibid.)
The First District concluded the declarations did not create a factual dispute as to whether the plaintiffs signed the agreements, stating:
“The declarations explicitly acknowledge that plaintiffs signed a ‘stack of documents’ and do not deny that the stack included the agreement. Although 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 plaintiffs did not in fact sign the agreement.” (Iyere, supra, 87 Cal.App.5th at p. 756.)
The First District distinguished cases involving a plaintiff’s statement that he or she did not recall electronically signing an arbitration agreement because “the individual’s inability to recall signing electronically may reasonably be regarded as evidence that the person did not do so. However, an individual is capable of recognizing his or her own personal signature. If the individual does not deny that the handwritten personal signature is his or her own, that person’s failure to remember signing is of little or no significance.” (Iyere, supra, 87 Cal.App.5th at p. 757.)
The First District acknowledged that the court in Gamboa had reached a different conclusion about the inability to remember signing an agreement by hand and disagreed with Gamboa’s conclusion. (Iyere, supra, 87 Cal.App.5th at p. 758Gamboa that treated electronic signatures and handwritten signatures “as ‘a distinction without a legal difference’ because ‘electronic and handwritten signatures have the same legal effect and are equally enforceable.’ [Citations.]” (Iyere, supra, at p. 758.) The First District rejected that reasoning because “there is a considerable difference between the evidence needed to authenticate the two.” (Ibid.)
2. Ramirez’s Evidence Did Not Carry His Burden
Having chosen which principles of law should govern the evidence needed to carry the second step of the burden-shifting framework, we next consider how those principles apply to the evidence presented in this case. Stated in broad terms, the issue presented is whether Ramirez produced sufficient evidence to create a factual dispute about the existence of an enforceable arbitration agreement and, as a result, shifted the burden of production back to Queen Mining. (See Iyere, supra, 87 Cal.App.5th at p. 756.) Stated in more specific terms, the issue is whether Ramirez’s evidence created a factual dispute as to the authenticity of the signature on the “HANDBOOK ACKNOWLEDGEMENT,” which included a bolded, underlined sentence stating he agreed to the terms of the arbitration agreement. If the answer to that question is “no,” then the question becomes whether Ramirez’s evidence created a factual dispute on an alternate ground that would lead to the conclusion the parties did not form a contract to arbitrate their disputes. (See generally,
Because Ramirez had the burden of producing evidence, we describe some seemingly obvious points that are omitted from his declaration. First, unlike Gamboa’s declaration in support of her opposition, Ramirez’s declaration did not state he reviewed the arbitration agreement and other documents attached to Marshall’s declaration. The idea that a witness’s inspection of a writing may refresh the witness’s memory is long established. (See
Second, Ramirez’s declaration did not state he examined any of the seven handwritten signatures on the documents that Queen Mining contended he purportedly signed. Similarly, he did not state whether he examined the 32 sets of the initials “CR” that were handwritten on the checklist included in Queen Mining’s moving papers. As a result, Ramirez’s declaration did not address whether the signatures or initials were inauthentic or forged.
Third, Ramirez’s declaration did not state he did not recall signing the “HANDBOOK ACKNOWLEDGEMENT,” which is the specific document relied upon by Queen Mining to manifest Ramirez’s assent to arbitration. The distinction between a signed arbitration agreement and a signed acknowledgement is significant in the context of this case because Ramirez’s opposition papers explicitly raised that distinction. For instance, one of the grounds asserted in his objection to the statement in Marshall’s declaration asserting he “signed an ‘Arbitration Agreement’ on or about March 28, 2019,” was that Ramirez never signed an arbitration agreement and only purportedly signed an acknowledgement of the employee handbook. Thus, the wording of Ramirez’s declaration leaves open the possibility that he does recall signing the acknowledgement.
Having identified some of Ramirez’s omissions, we next consider the evidence Ramirez actually presented to carry his second-step burden of producing evidence. Ramirez’s declaration stated (1) he did “not recall ever being presented with an arbitration agreement,”3 (2) he did “not recall ever signing an arbitration agreement,” (3) no one informed him about an arbitration agreement, informed him of a desire that he sign an arbitration agreement, or explained to him what an arbitration agreement was, and (4) if someone had explained to him what an arbitration agreement was, he would not sign it.
Our evaluation of Ramirez’s evidence begins with whether he offered sufficient evidence to create a factual dispute about the authenticity of his signature on the “HANDBOOK ACKNOWLEDGEMENT.” His declaration does not assert the signature on that document is not his and, furthermore, does not even state that he cannot recall signing that particular document.
We next evaluate whether the evidence offered by Ramirez creates a factual dispute about whether the parties formed an enforceable contract to arbitrate their employment-related disputes. As concluded by the First District, the inability to recall signing a document does not “afford[] an independent basis to find that a contract was not formed.” (Iyere, supra, 87 Cal.App.5th at p. 758.)
Consequently, the burden of producing evidence never shifted back to Queen Mining. Based on Ramirez’s failure to carry his second step burden, the trial court should never have reached the third step in the burden-shifting framework. After concluding an arbitration agreement existed, the trial court should have addressed whether Ramirez had proven by a preponderance of the evidence that the agreement was unconscionable and, thus, not enforceable. (See Nielsen Contracting, Inc. v. Applied Underwriters, Inc., supra, 22 Cal.App.5th at p. 1106 [party opposing arbitration bears the burden of proving by a preponderance of the evidence any defense to the agreement’s enforcement].)
II. REMAND FOR FURTHER PROCEEDINGS
Ordinarily, a trial court is required to rule on the gateway issues of whether an arbitration agreement is enforceable, which includes claims of unconscionability. (Balandran v. Labor Ready, Inc. (2004) 124 Cal.App.4th 1522, 1530.) Here, the trial court did not reach Ramirez’s unconscionability defense and, therefore, it is appropriate to remand for further proceedings addressing that defense. (Ibid.)
DISPOSITION
The order denying the motion to compel arbitration is reversed. The matter is remanded to the trial court for further proceedings not inconsistent with this opinion.
FRANSON, J.
WE CONCUR:
LEVY, Acting P. J.
POOCHIGIAN, J.