Ferrell v. CubeSmart

• Court: District Court, S.D. California
• Decided: February 24, 2025
• Docket: 3:24-cv-02305
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 DAWN FERRELL, Case No.: 24-cv-02305-AJB-KSC Plaintiff, 12 ORDER GRANTING DEFENDANT’S 13 v. MOTION TO COMPEL ARBITRATION AND STAY ACTION 14 CUBESMART, an out-of-state California 15 corporation; and DOES 1 through 100, inclusive, (Doc. No. 6) 16 Defendants. 17

18 Before the Court is Defendant CubeSmart, L.P.’s (“Defendant” or “CubeSmart”) 19 motion to compel arbitration and stay Plaintiff Dawn Ferrell’s (“Plaintiff”) civil action. 20 (Doc. No. 6.) The Court set a briefing schedule for the motion, directing that any opposition 21 be filed by January 9, 2025. (Doc. No. 7.) Plaintiff did not file an opposition or otherwise 22 respond to Defendant’s motion. Pursuant to Civil Local Rule 7.1.d.1, the Court finds this 23 matter suitable for determination on the papers and without oral argument. Accordingly, 24 the Court hereby VACATES the hearing currently set for April 17, 2025. For the reasons 25 set forth herein, the Court GRANTS CubeSmart’s motion to compel arbitration and stay 26 action. 27 28 1 I. BACKGROUND 2 CubeSmart is a real estate company focused on ownership, operation, acquisition, 3 and development of self-storage facilities throughout the United States. (Declaration of 4 John Hueber (“Hueber Decl.”), Doc. No. 6-4, ¶ 3.) 5 Plaintiff was previously employed by CubeSmart beginning April 2022 as a Store 6 Manager. (Complaint (“Compl.”), Doc. No. 1-2. ¶ 1.) Plaintiff resigned her employment 7 with CubeSmart approximately a year and a half later. (Id. ¶ 50.) 8 As part of CubeSmart’s onboarding process, new hires receive an Arbitration 9 Agreement which must be reviewed and acknowledged by the new hire prior to starting 10 employment. (Hueber Decl. ¶ 4.) The Arbitration Agreement states in relevant part: 11 I . . . hereby agree to utilize CubeSmart L.P.’s Formal Dispute Resolution Program to pursue any pre-employment, employment or post-employment 12 dispute, claim, or controversy . . . against CubeSmart L.P. . . . regarding any 13 alleged unlawful act regarding my application for employment, employment or the termination of my employment which could have otherwise been 14 brought before an appropriate court including, but not limited to . . . the 15 Americans with Disabilities Act; The Fair Labor Standards Act; . . . any state anti-discrimination statutes; wage and hour laws; retaliation statutes, equal 16 pay laws; any other federal, state or local civil or human rights law or any 17 other local, state or federal law, regulation or ordinance. . . . Except as expressly stated in “Claims Not Covered by the Agreement,” the Company 18 and Employee agree to arbitrate before a neutral arbitrator any and all existing 19 or future Covered Claims between or among them, pursuant to this Agreement and CUBESMART’s Dispute Resolution Rules. 20

21 (Doc. No. 6-7 at 2.) 22 Plaintiff initiated this action by filing her Complaint in the Superior Court of 23 California, County of San Diego. (See generally Compl.) The Complaint contains eleven 24 causes of action, asserting claims for (1) failure to provide meal and rest periods in violation 25 of California Labor Code §§ 226.7, 512; (2) failure to pay wages in violation of California 26 Labor Code §§ 201, 1194; (3) failure to pay overtime compensation in violation of 27 California Labor Code §§ 510, 1194; (4) failure to provide itemized wage and hour 28 statements in violation of California Labor Code § 226, et seq.; (5) failure to maintain time 1 records in violation of public policy; (6) retaliation in violation of Gov’t Code § 12940, et 2 seq.; (7) age discrimination in violation of Gov’t Code § 12940, et seq.; (8) failure to 3 prevent discrimination, harassment, and retaliation in violation of Gov’t Code § 12940(k); 4 (9) constructive discharge in violation of public policy; (10) intentional infliction of 5 emotional distress; and (11) negligent infliction of emotional distress. (Id.) 6 CubeSmart subsequently removed the action to federal court. (Doc. No. 1.) The 7 instant motion to compel arbitration and stay case follows. 8 II. LEGAL STANDARD 9 The Federal Arbitration Act (“FAA”), 9 U.S.C. § 1, et seq., governs the enforcement 10 of arbitration agreements involving commerce. See Am. Express Co. v. Italian Colors Rest., 11 570 U.S. 228, 232–33 (2013). The FAA “leaves no place for the exercise of discretion by 12 a district court, but instead mandates that district courts shall direct the parties to proceed 13 to arbitration on issues as to which an arbitration agreement has been signed.” Dean Witter 14 Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985). Accordingly, the court’s role under the 15 FAA is to determine “(1) whether a valid agreement to arbitrate exists and, if it does, 16 (2) whether the agreement encompasses the dispute at issue.” Chiron Corp. v. Ortho 17 Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000). 18 III. DISCUSSION 19 CubeSmart argues that Plaintiff must arbitrate her claims because she signed a valid 20 arbitration agreement as part of her employment contract that encompasses all of her 21 claims. Plaintiff has not filed a response to this motion and the deadline to do so has passed. 22 Therefore, CubeSmart’s motion to compel arbitration is unopposed. Under Local Rule 23 7.1.f.3(c), a party’s failure to timely file an opposition “may constitute a consent to the 24 granting of a motion.” As such, the Court may construe Plaintiff’s non-opposition as a 25 consent to arbitrate and stay the action and grant CubeSmart’s motion on that basis. In the 26 interest of completeness, however, the Court considers (1) whether a valid agreement to 27 arbitrate exists, and if it does, (2) whether the agreement encompasses the dispute at issue. 28 Chiron Corp., 207 F.3d at 1130. 1 A. Whether a Valid Arbitration Agreement Exists 2 On a motion to compel arbitration of a dispute, the “threshold inquiry is whether the 3 parties agreed to arbitrate.” Van Ness Townhouses v. Mar Indus. Corp., 862 F.2d 754, 756 4 (9th Cir. 1988). The party seeking to compel arbitration “has the burden of proving the 5 existence of an agreement to arbitrate by a preponderance of the evidence.” Knutson v. 6 Sirius XM Radio Inc., 771 F.3d 559, 565 (9th Cir. 2014). To determine whether a valid 7 agreement to arbitrate exists, we “apply ordinary state law principles that govern the 8 formation of contracts.” Norcia v. Samsung Telecomms. Am., LLC, 845 F.3d 1279, 1283 9 (9th Cir. 2017) (citation and internal quotation marks omitted). 10 Here, CubeSmart presented evidence that a valid agreement exists. (Doc. No. 6-1 at 11 15). CubeSmart asserts that Plaintiff agreed to be bound by an agreement to arbitrate when 12 she reviewed and electronically acknowledged the Parties’ Arbitration Agreement on May 13 20, 2022, at 2:25 p.m., and continued working for CubeSmart, accepting the benefits of 14 employment, for eighteen months until her resignation. (Id. at 17). 15 A party moving to compel arbitration meets its initial burden by attaching a copy of 16 a purported agreement to arbitrate along with the nonmoving party’s signature. Espejo v. 17 So. Cal. Permanente Med. Grp., 246 Cal. App. 4th 1047, 1060 (2016). Under California 18 Civil Code Section 1633.7, an electronic signature “has the same legal effect as a 19 handwritten signature.” Ruiz v. Moss Bros. Auto Grp., Inc., 232 Cal. App. 4th 836, 843 20 (2014). “Still, any writing must be authenticated before the writing . . . may be received in 21 evidence.” Id. (citing Cal. Evid. Code § 1401). Pursuant to California Civil Code Section 22 1633.9(a), “an electronic record or electronic signature is attributable to a person if it was 23 the act of the person. . . . [which] may be shown in any manner, including a showing of the 24 efficacy of any security procedure applied to determine the person to which the electronic 25 record or electronic signature was attributable.” Courts have previously held that the 26 moving party meets this burden by submitting a declaration detailing the company’s 27 “security precautions regarding transmission and use of an applicant’s unique username 28 1 and password, as well as the steps an applicant would have to take to place his or her name 2 on the [agreement].” See Espejo, 246 Cal. App. 4th at 1062. 3 In this case, CubeSmart’s Learning Management System (“LMS”) Administrator, 4 John Hueber, states in his declaration that “[a]t or around the time of hire, all CubeSmart 5 employees are required to complete an electronic onboarding process through its LMS, 6 which includes receiving, reviewing, and acknowledging receipt and acceptance of the 7 Arbitration Agreement prior to starting employment with CubeSmart.” (Hueber Decl. ¶ 4.) 8 When an individual is hired as a new CubeSmart employee, a system-generated profile in 9 LMS is automatically created and an automated system-generated email is sent to the store 10 email address where the new employee is assigned to work. (Id. ¶ 7.) The welcome email 11 is addressed to the new hire individually and contains a unique username and a default 12 password for that individual only. (Id. ¶ 7.) The new employee is then instructed to use 13 those credentials to log into LMS for the first time, and thereafter the employee is prompted 14 to change the password. (Id.) The employee cannot proceed any further within LMS 15 without changing the password, and no one other than the employee knows or has access 16 to the new password they create. (Id.) 17 After logging into the LMS, Plaintiff would then be presented with a screen that 18 states “Formal Dispute Resolution Program and Arbitration Agreement 19 Acknowledgment.” (Id. ¶ 11.) From there, the employee must click the “Next” button, and 20 then would be presented with instructions to click the “View Agreement” button, which 21 would open the Arbitration Agreement on their screen for review. (Id.) In order to 22 acknowledge that they had read and understood the Arbitration Agreement, the employee 23 would then have to click a button which states as follows: “I acknowledge that I have 24 received and understood CubeSmart’s Formal Dispute Resolution Program and Arbitration 25 Agreement.” (Id.; Doc. No. 6-6 at 4–5.) This acknowledgment must be completed before 26 the employee can move onto the next step in the process. (Hueber Decl. ¶ 11.) Once the 27 acknowledgment is confirmed, the employee clicks the “Continue” button to complete the 28 process. (Id.; Doc. No. 6-6 at 6.) Once a course is completed, an electronic record is 1 generated within CubeSmart’s LMS confirming receipt and completion of this 2 acknowledgment, which is also sent to the employee via email and a copy is kept as part 3 of their personnel file. (Hueber Decl. ¶¶ 12, 16.) A course completion record is maintained 4 within CubeSmart’s LMS and kept in the course of CubeSmart’s regularly conducted 5 business activity. (Id. ¶ 16.) Plaintiff’s Online Course Activities transcript, an electronic 6 record and report of all the trainings and acknowledgments assigned to and completed by 7 Plaintiff, shows she completed the 2022 Arbitration Agreement acknowledgment on 8 May 20, 2022, at 2:25 p.m. (Hueber Decl. ¶ 18; Doc. No. 6-8 at 2.) 9 Based on the foregoing, and Plaintiff’s lack of opposition, the Court finds 10 CubeSmart has shown by a preponderance of the evidence that there is a valid Arbitration 11 Agreement to which Plaintiff consented. See Knutson, 771 F.3d at 565; Espejo, 246 Cal. 12 App. 4th at 1060. 13 B. Whether the Arbitration Agreement Encompasses the Claims at Issue 14 Next, the Court considers whether the Arbitration Agreement covers Plaintiff’s 15 claims. Arbitration is a matter of contract, and a party “cannot be required to submit to 16 arbitration any dispute which [s]he has not agreed so to submit.” Tracer Rsch. Corp. v. 17 Nat’l Env’t Servs. Co., 42 F.3d 1292, 1294 (9th Cir. 1994) (citation omitted). “Any doubts 18 concerning the scope of arbitrable issues should be resolved in favor of arbitration.” Moses 19 H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24–25 (1983). 20 Upon review of the parties’ contract, the Court finds that Plaintiff’s claims are 21 encompassed by the Arbitration Agreement. The Arbitration Agreement is broad, requiring 22 Plaintiff to arbitrate “any alleged unlawful act regarding . . . [her] employment which could 23 have otherwise been brought before an appropriate court” and covers “any and all existing 24 or future Covered Claims between the CUBESMART and Employee.” (Doc. No. 6-7 at 25 2.) The Covered Claims include, but are not limited to, claims brought under 26 “anti-discrimination statutes; wage and hour laws; retaliation statutes, equal pay laws; any 27 other federal, state or local civil or human rights law or any other local, state or federal law, 28 regulation or ordinance; or any public policy, contract, tort or common law.” (Id.) 1 Here, Plaintiff’s Complaint contains eleven causes of action, all of which arose from 2 her former employment with CubeSmart. Because Plaintiff’s claims allege unlawful acts 3 concerning her employment, they all fall within the scope of the Arbitration Agreement. 4 (See generally Compl.) Again, Plaintiff presented no response to the contrary. 5 Based on the foregoing, the Court finds that the FAA requires it to enforce the 6 Arbitration Agreement in accordance with its terms and to grant CubeSmart’s motion to 7 compel arbitration. See Dean Witter Reynolds, Inc., 470 U.S. at 218; Chiron Corp., 207 8 F.3d at 1130. Accordingly, the Court GRANTS CubeSmart’s motion to compel arbitration. 9 C. Stay of Action 10 Section 3 of the FAA provides the Court “shall on application of one of the parties 11 stay the trial of the action until such arbitration has been had in accordance with the terms 12 of the agreement.” 9 U.S.C. § 3. CubeSmart has made such a request. (Doc. 6-1 at 22–23.) 13 Accordingly, the Court STAYS this action pending completion of arbitration. 14 IV. CONCLUSION 15 For the reasons stated herein, the Court enters the following orders. 16 • CubeSmart’s motion to compel arbitration and stay case is GRANTED. 17 (Doc. No. 6.) 18 • Pursuant to the FAA, the Court STAYS the judicial proceedings pending 19 the outcome of the parties’ arbitration. See 9 U.S.C. § 3; Smith v. Spizzirri, 20 601 U.S. 472, 478 (2024) (“When a district court finds that a lawsuit 21 involves an arbitrable dispute, and a party requests a stay pending 22 arbitration, § 3 of the FAA compels the court to stay the proceeding.”). 23 • The parties are HEREBY ORDERED to file a joint status report with this 24 Court, detailing the progress of the arbitration no later than August 25, 25 2025 and every 90 days thereafter. 26 • The parties are FURTHER ORDERED to notify the Court that arbitration 27 proceedings have concluded within fourteen days of the issuance of the 28 1 arbitrator’s decision. As this action is stayed pending the completion of 2 arbitration, all dates currently on the calendar in this case are VACATED. 3 4 IT IS SO ORDERED. 5 || Dated: February 24, 2025

7 United States District Judge 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 AA RAANEF □□□□□□□□□