Fabian v. Renovate America, Inc.

• Court: California Court of Appeal
• Decided: December 4, 2019
• Docket: D075519
• Status: Published

Opinion

Filed 11/19/19; Certified for Publication 12/4/19 (order attached)

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

ROSA FABIAN, D075519

Plaintiff and Respondent,

v. (Super. Ct. No. 37-2018-00023808- RENOVATE AMERICA, INC., CU-BT-NC)

Defendant and Appellant.

APPEAL from a judgment of the Superior Court of San Diego County, Earl H.

Maas III, Judge. Affirmed.

Reed Smith, Jesse L. Miller, James M. Neudecker, Matthew T. Peters and Dennis

Peter Maio for Defendant and Appellant.

Golden & Cardona-Loya, Octavio Cardona-Loya II for Plaintiff and Respondent.

Renovate America, Inc. (Renovate) appeals from an order denying its petition to

compel arbitration of Rosa Fabian's claims related to the financing and installation of a

solar energy system in her home. Renovate contends the trial court erred in ruling that

the company failed to prove by a preponderance of the evidence that Fabian

electronically signed the subject contract. We reject this contention and affirm. FACTUAL AND PROCEDURAL BACKGROUND

A. Fabian's Complaint

Fabian filed a complaint against Renovate alleging that solar panels she purchased

for her home were improperly installed. Fabian alleged that, in early 2017, Renovate

made an unsolicited telephone call to her home about financing the solar panels and

"signed" her name on a financial agreement. All communications between Fabian and

Renovate's representative occurred telephonically and she was never presented with any

documents to sign. Fabian claims she did not sign a financial agreement with Renovate;

nevertheless, Renovate incorporated the solar panel payments set forth in the financial

agreement into her mortgage loan payments. Fabian thus alleged that Renovate violated:

(1) the Consumers Legal Remedies Act (Civ. Code § 1750 et seq.), (2) the Unfair

Competition Law (Bus. & Prof. Code § 17200 et seq.), and (3) the California Contract

Translation Act (Civ. Code § 1632).

B. Renovate's Petition to Compel Arbitration

Renovate filed a petition to compel arbitration of Fabian's claims and stay judicial

proceedings pending arbitration, supported by an Assessment Contract (Contract) that

Renovate claimed Fabian had signed electronically. The Contract states that it was

"made and entered into" on February 28, 2017, between the Western Riverside Council

of Governments (WRCOG)1 and the joint property owners, Fabian and her adult

daughter, Diana S. The Contract includes an arbitration agreement, which states:

1 Renovate is WRCOG's Program Administrator. 2 ''Section 13. Arbitration Agreement. Please read this Section (''Arbitration Agreement'') carefully. It is part of this Contract and affects the Property Owner's rights. It contains A JURY TRIAL WAIVER and procedures for MANDATORY BINDING ARBITRATION AND A CLASS ACTION WAIVER.''

The arbitration agreement further states:

''All claims and disputes arising out of or relating to the [Home Energy Renovation Opportunity] Program, the Contract and/or the Improvements that cannot be resolved informally or in small claims court shall be resolved by binding arbitration on an individual basis under the terms of this Arbitration Agreement. The Arbitration Agreement applies to the Property Owner and WRCOG.''

The last paragraph of the arbitration agreement states:

''By initialing below, the Property Owner acknowledges and agrees to the terms set forth in Sections 4 [Existing Mortgage Disclosure], 12 [Waivers, Acknowledgments and Contract] and 13 [Arbitration Agreement] above.''

The letters "DS" and the printed electronic initials ''RF'' appear in a box at the end of the

arbitration agreement. The last paragraph of the Contract states:

''IN WITNESS WHEREOF, the Authority and the Property Owner have caused this Contract to be executed in their respective names by their duly authorized representatives, all as of the Effective Date. The 'Effective Date' is defined as the last date entered with signatures of the parties below.''

The words "DocuSigned by:" and the printed electronic signature ''Rosa Fabian''

appear in a signature box at the end of the Contract. The date "2/28/2017," a 15-digit

alphanumeric character, and the words "Identity Verification Code: ID Verification

Complete" also appear in the signature box.

In a supporting declaration, Mike Anderson, Renovate's Senior Director of

Compliance Operations, asserted that Fabian "entered into" the Contract on February 28,

2017 to finance the installation of a solar energy system.

3 C. Fabian's Opposition

Opposing the petition, Fabian stated in a declaration stated that Renovate solicited

her by telephone and "placed" her into a financial agreement for an already-installed solar

energy system on her home. Fabian asserted that she only discussed financing with

Renovate telephonically, Renovate provided her with no documents to sign, she did not

sign the Contract physically or electronically, and what purports to be her electronic

signature was ''placed'' on the Contract without her consent, authorization, or knowledge.

D. Renovate's Reply

In its reply, Renovate asserted Fabian did not dispute that she negotiated the

Contract and thus acknowledged that she "entered into" the financial agreement by

declaring Renovate ''placed'' and ''signed'' her name onto the ''alleged'' financial

agreement. Renovate argued that Fabian did not address how her electronic signature

appeared on the Contract given Anderson's declaration that Fabian signed the Contract

based on records that Renovate maintained in the ordinary course of its business.

E. The Discovery

After conducting a motion hearing, the court continued the matter ''to allow the

parties to conduct discovery as to whether [Fabian] electronically [signed] the subject

contract" and "file a supplemental brief and/or declaration" on the issue.

The parties engaged in discovery, which included Anderson's deposition. Fabian's

attorney filed a supplemental declaration stating that Anderson "testified that neither he

nor any employee of [Renovate's] company was present when the alleged agreement was

electronically 'docusigned' '' and that Renovate's "belief [Fabian] electronically signed the

4 subject agreement is not based on first-hand knowledge.'' Renovate's attorney filed an

opposing declaration disagreeing and stating that Anderson's "deposition confirmed that

[Fabian] and her adult daughter were both present when the electronic signatures on the

subject contract were signed." Renovate's attorney further declared that Anderson

"testified that, based on his extensive experience," "[Fabian] was present and signed the

document," and "that records confirmed the witness' location when she signed the

contract."

F. The Trial Court's Ruling

After hearing argument, the court ordered: ''[Renovate]'s motion to compel

arbitration is denied. [Renovate] has failed to establish that [Fabian] electronically

[signed] the subject contract.''

DISCUSSION

Renovate contends the trial court erred in denying its petition to compel arbitration

based on a finding that Renovate failed to prove by a preponderance of the evidence that

Fabian electronically signed the Contract.

A. Standard of Review

As a preliminary matter, the parties dispute the appropriate standard of review for

this case. Renovate argues that de novo review applies because the trial court ruled that

Renovate failed to carry its burden to prove the authenticity of Fabian's electronic

signature on the Contract, a question of law. Fabian argues that we should review the

court's ruling of arbitrability under the more deferential ''substantial evidence standard''

5 because the court determined that she did not sign the Contract, which is a question of

fact.

" 'There is no uniform standard of review for evaluating an order denying a motion

to compel arbitration.' " (Carlson v. Home Team Pest Defense, Inc. (2015)

239 Cal.App.4th 619, 630.) Generally, " '[i]f the court's order is based on a decision of

fact, then we adopt a substantial evidence standard.' " (Ibid.) When, as here, the court's

order denying a motion to compel arbitration is based on the court's finding that

petitioner failed to carry its burden of proof, the question for the reviewing court is

whether that finding is erroneous as a matter of law. (Juen v. Alain Pinel Realtors, Inc.

(2019) 32 Cal.App.5th 972, 978-979; see also Sonic Manufacturing Technologies, Inc. v.

AAE Systems, Inc. (2011) 196 Cal.App.4th 456, 465 (Sonic) [where trier of fact concludes

that the party with the burden of proof fails to carry the burden, it is "misleading" to

characterize the standard of review as one of substantial evidence].) " 'Specifically, the

question becomes whether the appellant's evidence was (1) "uncontradicted and

unimpeached" and (2) "of such a character and weight as to leave no room for a judicial

determination that it was insufficient to support a finding.' " (Juen, at pp. 978-979; see

also Almanor Lakeside Villas Owners Assn. v. Carson (2016) 246 Cal.App.4th 761, 769

[same].)

For this reason, " ' [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. That is because unless the trial court makes

specific findings of fact in favor of the losing [party], we presume the trial court found

6 the [party's] evidence lacks sufficient weight and credibility to carry the burden of proof.

[Citations.] We have no power on appeal to judge the credibility of witnesses or to

reweigh the evidence.' " (Patricia A. Murray Dental Corp. v. Dentsply Internat., Inc.

(2018) 19 Cal.App.5th 258, 270.) "The appellate court cannot substitute its factual

determinations for those of the trial court; it must view all factual matters most favorably

to the prevailing party and in support of the judgment. [Citation.] ' "All conflicts,

therefore, must be resolved in favor of the respondent." [Citation.]' [Citation.]" (Dreyer's

Grand Ice Cream, Inc., v. County of Kern (2013) 218 Cal.App.4th 828, 838.)

B. The Trial Court Did Not Err in Denying Renovate's Petition

Renovate met its initial burden to show an agreement to arbitrate by attaching a

copy of the Contract to its petition, which purportedly bears Fabian's electronic initials

and signature. (Espejo v. Southern California Permanente Medical Group (2016)

246 Cal.App.4th 1047, 1057.) Because Fabian declared that she did not sign the

Contract, however, Renovate then had "the burden of proving by a preponderance of the

evidence that the electronic signature was authentic." (Ruiz v. Moss Bros. Auto Group,

Inc. (2014) 232 Cal.App.4th 836, 846 (Ruiz); see also Espejo, at pp. 1059-1060.)

"[T]he burden of authenticating an electronic signature is not great." (Ruiz, supra,

232 Cal.App.4th at p. 844; Civ. Code § 1633.9, subd. (a) [an electronic signature is

attributable to a person if it is the act of the person]; Evid. Code, § 1400, subd. (a);

People v. Skiles (2011) 51 Cal.4th 1178, 1187 [the means of authenticating a writing are

not limited to those specified in the Evid. Code].) The party seeking authentication may

carry its burden ''in any manner,'' including by presenting evidence of the contents of the

7 contract in question and the circumstances surrounding the contract's execution. (Ruiz, at

p. 844.) Here, the trial court found that Renovate did not carry its burden to establish the

authenticity of Fabian's electronic signature on the Contract. As we explain, Renovate's

evidence was not " ' "of such a character and weight as to leave no room for a judicial

determination" ' " that Renovate failed to establish that Fabian electronically signed the

Contract. (Sonic, supra, 196 Cal.App.4th at p. 466.)

Renovate offers two items to show that the trial court erred in denying its petition

to compel arbitration: (1) the Contract bearing Fabian's printed electronic initials and

signature, which is purportedly authenticated by DocuSign; and (2) a declaration from

Anderson.2 We consider each in turn.

1. The Contract

Renovate first contends the Contract bearing Fabian's printed electronic initials

and signature is authenticated by DocuSign. Standing alone, that fact is not sufficient to

compel a result in Renovate's favor as a matter of law.

Citing to Newton v. Am. Debt Servs (N.D. Cal. 2012) 854 F.Supp.2d 712

(Newton), Renovate argues that DocuSign renders Fabian's electronic initials and

signature "legally binding." Newton explained DocuSign is a company used to

electronically sign documents in compliance with the U.S. Electronic Signatures in

Global and National Commerce Act (ESIGN), 15 U.S.C. § 7001 et seq. (Newton, at p.

2 Renovate also offered the printed electronic initials and signature of Diana S. that appear on the Contract and are purportedly authenticated by DocuSign as evidence that the trial court erred. However, Diana S. is not a party to the underlying complaint or this appeal. 8 731.) Under ESIGN, electronic records and signatures in compliance with ESIGN are

legally binding. (Ibid.) DocuSign permits a company to send documents to a customer

for their signature. (Ibid.) The customer opens the document for review containing areas

marked for the signatory to execute. (Ibid.) The signer creates a signature and must click

a button confirming their signature once they have completed all form fields and signed

in all required places. (Ibid.)

Renovate's reliance on Newton is misplaced because, unlike here, the declarant in

that case proved that the "docusigned" electronic signature was the plaintiff's by

explaining the process used to verify the signature. (Newton, supra, 854 F.Supp.2d at

p. 731.) There, the defendant submitted a declaration stating that it sent a contract to the

plaintiff using DocuSign, and that the plaintiff signed the Client Signature portion of the

contract. (Ibid.) Once signed, the signature was assigned an identifying code, such as the

one that appeared above the plaintiff's signature on the subject contract. (Ibid.)

Here, Renovate did not provide any evidence from or about DocuSign in its

petition, reply, or supplemental declaration. Indeed, the word "DocuSign" does not

appear in any of Renovate's moving papers. Renovate offered no evidence about the

process used to verify Fabian's electronic signature via DocuSign, including who sent

Fabian the Contract, how the Contract was sent to her, how Fabian's electronic signature

was placed on the Contract, who received the signed the Contract, how the signed

Contract was returned to Renovate, and how Fabian's identification was verified as the

person who actually signed the Contract. We thus find Renovate's DocuSign

authentication argument unsupported and unpersuasive.

9 2. Anderson's Declaration

Renovate also contends Anderson's declaration supports a finding as a matter of

law that Fabian's electronic signature is authentic. We disagree.

The facts in this case mirror those of Ruiz, supra, 232 Cal.App.4th 836. There, the

appellate court affirmed the denial of a petition to compel arbitration after the defendant-

employer proffered an electronically signed arbitration agreement. (Id. at pp. 838, 840.)

In support of its petition, the defendant submitted the declaration of its business manager

who ''summarily asserted'' that the plaintiff-employee electronically signed the

agreement. (Id. at pp. 839, 843.) In his opposing declaration, the plaintiff-employee

claimed he did not recall signing the agreement. (Id. at p. 840.) The defendant-employer

then filed a reply declaration from the same manager attempting to authenticate the

plaintiff's signature; however, the court held that the manager's declarations were

insufficient to support such a finding. (Id. at pp. 838, 840-842, 846.) Specifically, the

court stated that the manager did not explain: how, or on what basis, the manager inferred

that the electronic signature was "the act of" the plaintiff-employee; that the date and time

printed on the agreement were accurate; that the electronic signature could only have

been placed on the agreement by a person using the plaintiff-employee's unique

identification number and password; and that the agreement was therefore signed by the

plaintiff. (Id. at p. 844.)

Here, as in Ruiz, Anderson only ''summarily asserted'' that Fabian "entered into"

the Contract on February 28, 2017. Anderson did not state anywhere in his declaration

that Fabian actually signed the contract, electronically or otherwise. Anderson did not

10 explain, for instance, who presented Fabian with a physical or electronic copy of the

Contract, the specific location where the Contract was signed, the time when the Contract

was signed, or how Anderson ascertained that Fabian was present when the Contract was

signed. Nor did Anderson make any reference to DocuSign or the process used to obtain

and verify Fabian's "docusigned" electronic initials and signature.

Even after Fabian disputed signing the Contract, Anderson did not suggest how

the electronic signature could have only been placed on the Contract by Fabian. For

example, Anderson did not make clear the meaning of the letters "DS" or the significance

of the words "DocuSigned By:" that appear above Fabian's electronic initials and

signature. Most importantly, Anderson did not explain how Fabian's electronic initials

and signature were the "act of Fabian" by offering evidence that DocuSign assigned

Fabian a unique "identity verification code" to initial and sign the Contract. Anderson

did not explain the significance of the 15-digit alphanumeric characters or the words

"Identity Verification Code: ID Verification Complete" that appear below Fabian's

electronic signature. By not providing any specific details about the circumstances

surrounding the Contract's execution, Anderson offered little more than a bare statement

that Fabian "entered into" the Contract without offering any facts to support that

assertion. This left a critical gap in the evidence supporting Renovate's petition.

3. Conclusion

To prevail on appeal, Renovate was required to establish that its evidence

compelled a finding in its favor as a matter of law. The Contract and Anderson's

declaration do not compel this finding. We thus conclude that the trial court did not err in

11 denying Renovate's petition to compel arbitration based on Renovate's failure to prove,

by a preponderance of the evidence, that Fabian electronically signed the Contract.

Accordingly, we affirm.

DISPOSITION

The order denying the petition to compel arbitration is affirmed. Fabian shall

recover her costs on appeal.

IRION, J.

WE CONCUR:

HALLER, Acting P. J.

O'ROURKE, J.

12 Filed 12/4/19

CERTIFIED FOR PUBLICATION

v. (Super. Ct. No. 37-2018-00023808- RENOVATE AMERICA, INC., CU-BT-NC)

Defendant and Appellant. ORDER CERTIFYING OPINION FOR PUBLICATION

THE COURT:

The opinion in this case filed November 19, 2019, was not certified for

publication. It appearing the opinion meets the standards for publication specified in

California Rules of Court, rule 8.1105(c), the request pursuant to rule 8.1120(a) for

publication is GRANTED.

IT IS HEREBY CERTIFIED that the opinion meets the standards for publication

specified in California Rules of Court, rule 8.1105(c); and ORDERED that the words "Not to Be Published in the Official Reports" appearing

on page 1 of said opinion be deleted and the opinion herein be published in the Official

Reports.

cc: All parties