LUCY WEST et al., Plaintiffs and Respondents, v. SOLAR MOSAIC LLC, Defendant and Appellant.
B334178
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION EIGHT
Filed 10/16/24
(Los Angeles County Super. Ct. No. 23STCV03367)
CERTIFIED FOR PUBLICATION
Sheppard, Mullin, Richter & Hampton, Robert J. Guite and Khirin Bunker, for Defendant and Appellant.
Kemnitzer, Barron & Krieg, Kristin Kemnitzer, Adam McNeile and Malachi J. Haswell, for Plaintiffs and Respondents.
A home improvement and solar panel salesperson visited the home where senior citizens Harold and Lucy West lived with their adult daughter Deon.1 By the time he left, a loan agreement package had been completed electronically with Harold‘s electronic signature. A subsequent dispute led to litigation, and lender Solar Mosaic LLC (Mosaic) petitioned the court to compel arbitration based on arbitration provisions in the loan agreement. The trial court declined on the ground that Mosaic had failed to establish the existence of an agreement to arbitrate. We affirm the court‘s order.
FACTUAL AND PROCEDURAL BACKGROUND
In July 2022, Ilai Mitmiger, a sales representative for Elite Home Remodeling, Inc. (Elite), visited Harold, Lucy and Deon at the Wests’ home. Harold and Lucy were both in their 90‘s and suffered from dementia. Neither used e-mail, computers, or mobile phones.
When Mitmiger arrived, Deon woke Harold and brought him from bed into the living room. There, in Mitmiger‘s account, Mitmiger informed the Wests of the home solar installation Elite could provide and the availability of financing through Mosaic. He examined a recent electric bill and told the
In Mitmiger‘s version of events, when Mitmiger mentioned that Elite offered home renovation services, Harold and Lucy insisted he inspect their bathroom, which was in disrepair and had visible mold growth. They informed him the bathroom needed plumbing and electrical work and asked about replacing the tile. Mitmiger said he told them Elite could perform this work.
According to Deon, Mitmiger never mentioned being associated with Elite or Mosaic and instead claimed to work with a government program that helped senior citizens to fix up their homes. Harold and Lucy had previously had their home painted at no cost by Habitat for Humanity, and Deon asked if the program Mitmiger was working for was similar to Habitat for Humanity. Mitmiger said it was.
In Deon‘s account, Mitmiger said he could obtain a new shower for the only bathroom in the house that had a shower and bathtub. He said it would cost $25,000 to renovate the bathroom, but did not specify who would pay for it. Mitmiger also said he could include solar panels on the home at no additional cost. To Deon‘s knowledge, her parents had never considered installing solar panels, but Mitmiger said solar panels could lower Harold and Lucy‘s taxes and electric bills. According to Deon, they never discussed how her parents would pay any of the cost of this work, and Mitmiger did not ask for any financial information from them. Harold and Lucy lived on their retirement and Social Security benefits, and they could not afford to pay $25,000 for a home renovation. Based on what Mitmiger told them, Deon believed the renovations would be paid for, at least in part, by Mitmiger‘s government program.
During this conversation, in Deon‘s view, Harold “did not seem to understand what was going on.” According to Deon, Mitmiger obtained her e-mail address so he could send a “quote.” In Mitmiger‘s account, Harold and Lucy informed him they wanted to proceed with the installation and financing of the home solar system and a bathroom renovation, so Mitmiger asked Mosaic to send a loan agreement package by e-mail for their review and signature.
Mosaic uses DocuSign for its contracts. The signature process is: (1) documents are e-mailed from Mosaic to the signer; (2) the signer receives an e-mail requesting that they sign online; (3) the signer clicks the link in the e-mail to open the document for review, and the document has areas marked for the signer to execute; (4) the signer creates a DocuSign electronic signature and clicks to place their signature in the document; and (5) once the signature has been inserted in all the required locations, the signer confirms signing as the final step and clicks a button saying “Finish.”
The documents were sent to Deon‘s e-mail address at 6:29:20 p.m. They were viewed on a mobile device at 6:29:30 p.m. The documents were signed electronically in Harold‘s name and completed at 6:29:43 p.m.2 Harold‘s electronic signature appears in seven places in the 33-page long loan document package.
Deon told the Mosaic representative, “It‘s completed.” The Mosaic representative asked Deon if she was Harold; Deon said no. The Mosaic representative asked to speak with Harold. When asked if he understood that the telephone call was being recorded, Harold‘s response was unintelligible. The representative explained they needed to begin with identity verification and asked for consent. After a six-second pause, Harold said, “Okay.” The Mosaic representative asked for Harold‘s full name and birthdate, and after pausing for several seconds, Harold said, “What‘s the day? Oh, what‘s the year?”
After another silence from Harold, during which time another voice could be heard in the background, the representative asked, “Hello?” Harold then provided his birthdate. She asked Harold for the final four digits of his Social Security number. Harold was silent for another 10 seconds before answering.
The representative asked Harold for the telephone number and e-mail address of his account. After another pause, Harold provided a partial e-mail address, and a female voice in the background could be heard supplying him with the rest of the e-mail address, which he then repeated. The representative again asked Harold for the telephone number on the account. Harold paused
The Mosaic representative then spoke for several minutes about topics such as the estimated first payment; the multiple possible dates the first payment could be due; the possibility payments would be owed before the system was operational; the need to make a paydown of approximately 26 percent of the loan amount within 18 months of the start date in order to keep the monthly payments the same for the life of the loan; the expected rise in the monthly payment in the absence of that paydown; the fact that if he sought federal tax credits for the installation, the credit and the amount he would receive would be dependent on his personal tax situation; the annual percentage rate; the availability of autopay services; and the discount on the annual percentage rate for autopay enrollment.
Every few sentences, the Mosaic representative stopped and asked Harold if he understood. Each time Harold paused for several seconds, then responded with “yeah” or “yes.” A female voice could be heard in the background several times. The only question Harold answered immediately was whether he had any questions. As he said no, the representative concluded the call.
It took less time for the Mosaic representative to give Harold all the information about the loan and secure his one-word responses than it had taken to elicit from him his birthdate, the last 4 digits of his Social Security number, and the e-mail address and phone number associated with the account.
According to Deon, workers came to the house the following day and demolished the bathroom that was to be renovated. Deon tried to contact Mitmiger to ask how much, if anything, the work would cost her parents, but Mitmiger never responded.
Deon declared that in August 2022 she discovered the construction contract and loan agreement. Deon denied she and/or her parents had entered into a contract, and she attempted to cancel it. Elite refused. Work ceased on the West home, leaving Harold and Lucy to bathe in their kitchen sink because Elite had demolished their only shower and bathtub. Elite contended it was refused access to the home, attempted to collect payment from Harold and Lucy, and filed a mechanic‘s lien on the property. Harold and Lucy sued Elite and Mosaic.
DISCUSSION
I. Applicable Law
When a party to a civil action asks the trial court to compel arbitration of the pending claim, the court must determine whether an “agreement to arbitrate the controversy exists.” (
The trial court determines whether an agreement to arbitrate exists “using a three-step burden-shifting process.” (Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747, 755 (Iyere).) First, the party petitioning to compel arbitration must state “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.” (Cal. Rules of Court, rule 3.1330; see Iyere, at p. 755.) Signatures on the arbitration agreement need not be authenticated at this initial stage. (See Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 218-219.)
If the petitioner meets their initial burden, the burden of production shifts to the party opposing the petition to compel arbitration, who must offer admissible evidence creating a factual dispute as to the agreement‘s existence. (Iyere, supra, 87 Cal.App.5th at p. 755.) When the dispute centers on the authenticity of signatures, “[t]he opponent need not prove that his or her purported signature is not authentic, but must submit sufficient evidence to create a factual dispute and shift the burden back to the arbitration proponent, who retains the ultimate burden of proving, by a preponderance of the evidence, the authenticity of the signature.” (Ibid.)
On appeal, with respect to the burden of production, we review de novo the trial court‘s ruling that the arbitration opponent‘s evidence was
II. Burden of Production
Mosaic argues the trial court‘s ruling on the motion to compel arbitration was erroneous because once Mosaic met its initial burden of production and the burden shifted to the Wests, they failed to submit evidence sufficient to meet their burden of demonstrating a factual dispute as to the authenticity of Harold‘s electronic signatures. Mosaic is incorrect. The loan documents were sent to Deon‘s e-mail address, Deon told the Mosaic representative she would go check her e-mail, the documents were opened on a mobile phone 10 seconds after being sent, they were completed with seven electronic signatures within the space of 13 seconds, and Deon confirmed the documents’ completion. Harold was in his 90‘s, suffered from dementia, did not use a computer, mobile phone, or e-mail, and was unable to answer simple questions such as his birthdate and telephone number without assistance and significant delay. The evidence strongly suggests Harold lacked the technical facility to open his daughter‘s e-mail on what was presumably her mobile phone, create a digital signature, electronically click through and execute the loan agreement in seven locations, and submit those signatures, all in the space of 23 seconds, and it unquestionably demonstrates the existence of a factual dispute as to whether Harold actually executed the electronic signatures on the loan documents.
III. Agency/Ratification
“An agent is someone who represents another—the principal—in dealings with third parties. (
In the trial court, Mosaic argued that even if Harold did not physically sign the agreement, it was nonetheless binding upon him. First, Mosaic asserted that Deon‘s actions “in holding herself out as a representative of [Harold] on the recorded Welcome Call with a representative of [Mosaic] supported a finding that she was authorized to act as [his] agent with regard to the Loan Agreement transaction.” Second, Mosaic argued Harold later ratified the agreement through the recorded telephone call in which he responded affirmatively to information regarding the loan. The trial court, however, ruled that the brief conversation between Harold and the Mosaic representative was “insufficiently clear to demonstrate any ratification or even awareness of Deon West having just executed a loan agreement or arbitration agreement on his behalf,” and that Mosaic had not presented evidence that Deon had actual or ostensible authority to bind Harold to the agreement containing the arbitration provision.
“‘[W]here, as here, the judgment is against the party who has the burden of proof, it is almost impossible for him to prevail on appeal by arguing the evidence compels a judgment in his favor.‘” (Fabian, supra, 42 Cal.App.5th at p. 1067.)
Here, the court found the telephone call lacked sufficient weight to carry Mosaic‘s burden of proof regarding ratification, and the record does not compel a contrary finding as a matter of law. On appeal, we view all factual matters favorably to the court‘s order and do not reweigh the evidence. (Fabian, supra, 42 Cal.App.5th at p. 1067.) Given the content and brevity of the call and the lack of comprehension demonstrated by Harold during the conversation, we cannot say the recorded telephone call is of such
As for Mosaic‘s cursory, insufficiently developed argument in a footnote that Harold ratified the agreement by accepting the benefits of the loan, i.e., Elite performed work on the house for several weeks using the funds Mosaic issued pursuant to the loan agreement, “[f]ootnotes are not the appropriate vehicle for stating contentions on appeal.” (Sabi v. Sterling (2010) 183 Cal.App.4th 916, 947; see also Evans v. Centerstone Development Co. (2005) 134 Cal.App.4th 151, 160 [“We do not have to consider issues discussed only in a footnote“]; Cal. Rules of Court, rule 8.204(a)(1)(B) [requiring points on appeal to be stated under a separate heading summarizing the point].)
DISPOSITION
The order denying the petition to compel arbitration is affirmed. Respondents shall recover their costs on appeal.
CERTIFIED FOR PUBLICATION
STRATTON, P. J.
We concur:
GRIMES, J.
WILEY, J.