Jenkins v. Dermatology Management CA2/6

CourtCalifornia Court of Appeal
DecidedNovember 20, 2024
DocketB333759
StatusUnpublished

This text of Jenkins v. Dermatology Management CA2/6 (Jenkins v. Dermatology Management CA2/6) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Jenkins v. Dermatology Management CA2/6, (Cal. Ct. App. 2024).

Opinion

Filed 11/20/24 Jenkins v. Dermatology Management CA2/6 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SIX

ANNALYCIA JENKINS, 2d Civ. No. B333759 (Super. Ct. No. 22CV-0564) Plaintiff and Respondent, (San Luis Obispo County)

v.

DERMATOLOGY MANAGEMENT, LLC,

Defendant and Appellant.

Appellant Dermatology Management, LLC, employed respondent Annalycia Jenkins. After respondent had resigned from her position, she brought a class action against appellant. Appellant appeals from the trial court’s order denying its motion to compel respondent to arbitrate her claims pursuant to an arbitration agreement that she signed on her first day of work. (Code Civ. Proc., § 1294, subd. (a).) We conclude the arbitration agreement is procedurally and substantively unconscionable. We reject appellant’s contention that the trial court abused its discretion in refusing to sever the substantively unconscionable provisions and enforce the remainder of the arbitration agreement. Accordingly, we affirm. Our affirmance renders moot appellant’s contention that the trial court erroneously denied its motion to dismiss respondent’s class claims “because nothing in the [arbitration] agreement would permit [her] to bring proposed class claims in arbitration.” Factual and Procedural Background Appellant “owns and operates medical dermatology offices for patients to receive medical services, examinations, surgery, and treatments. Licensed health care providers treat patients for skin cancer, acne, and other skin conditions. [Appellant] has multiple offices across California as well as in Nevada and Arizona.” In May 2019 respondent began employment as “a medical assistant” for appellant. On her first day of work, respondent signed a three-page arbitration agreement (“the Agreement”). Appellant had pre-signed the Agreement four months earlier in January 2019. In June 2020 respondent resigned from her position with appellant. In October 2022 she filed a class action against appellant for unfair competition. (Bus. & Prof. Code, § 17200, et seq.) Appellant filed a motion to compel respondent to arbitrate her individual claims and to dismiss her class claims. Following a hearing, the court ruled that the Agreement is unenforceable because it is substantively and procedurally unconscionable. The court determined that the Agreement is substantively unconscionable because (1) there is a lack of mutuality since the Agreement requires respondent to arbitrate all of her claims, but exempts from mandatory arbitration certain claims of her

2 employer;1 (2) the Agreement “shortens the applicable statute of limitations of claims against [appellant] to one year”; (3) it imposes unreasonable restrictions on the parties’ discovery rights; and (4) it requires the parties to equally share the arbitrator’s fees and costs. The court ruled that the Agreement is procedurally unconscionable because it is “an adhesive contract” that “was prepared and signed by [appellant] months before [respondent] was hired.” Moreover, “[i]t is unlikely that any potential employee would understand the implications of [the substantively unconscionable] clauses – namely, that it would be very difficult to prevail in a case against the employer. Further, there is a ‘minimum degree of procedural unconscionability that is always present with an adhesive contract.’ [Citation.]” The court “decline[d] to sever the unconscionable terms because they are pervasive.” Enforceability of Arbitration Agreements “Federal and California law treat valid arbitration agreements like any other contract and favor their enforcement.” (Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5th 478, 492 (Ramirez).) “‘A contract is unconscionable if one of the parties lacked a meaningful choice in deciding whether to agree and the contract contains terms that are unreasonably favorable to the other party.’ [Citations.] Unconscionability has both a procedural and a substantive element. [Citation.] The party

1 The Agreement provides, “This Agreement does not cover those Claims by [appellant] for injunctive and/or other equitable relief for unfair competition and/or the use and/or unauthorized disclosure of trade secrets or confidential information, as to which [respondent] understand[s] and agree[s] that [appellant] may seek and obtain relief from a court of competent jurisdiction.”

3 resisting enforcement of an arbitration agreement has the burden to establish unconscionability.” (Ibid.) “Procedural unconscionability ‘addresses the circumstances of contract negotiation and formation, focusing on oppression or surprise due to unequal bargaining power.’ [Citation.] This element is generally established by showing the agreement is a contract of adhesion, i.e., a ‘standardized contract which, imposed and drafted by the party of superior bargaining strength, relegates to the subscribing party only the opportunity to adhere to the contract or reject it.’ [Citation.] Adhesion contracts are subject to scrutiny because they are ‘not the result of freedom or equality of bargaining.’ [Citation.] However, they remain valid and enforceable unless the resisting party can also show that one or more of the contract’s terms is substantively unconscionable or otherwise invalid.” (Ramirez, supra, 16 Cal.5th at pp. 492-493.) “Substantive unconscionability looks beyond the circumstances of contract formation and considers ‘the fairness of an agreement’s actual terms’ [citation], focusing on whether the contract will create unfair or one-sided results [citation]. Substantively unconscionable contractual clauses ‘reallocate risks in an objectively unreasonable or unexpected manner.’ [Citations.]” (Ramirez, supra, 16 Cal.5th at p. 493.) “Both procedural and substantive elements must be present to conclude a term is unconscionable, but these required elements need not be present to the same degree. [Citation.] Courts apply a sliding scale analysis under which ‘the more substantively oppressive [a] term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.’ [Citation.] ‘[W]hether a contract is fair or works unconscionable hardship is determined

4 with reference to the time when the contract was made and cannot be resolved by hindsight by considering circumstances of which the contracting parties were unaware.’” (Ramirez, supra, 16 Cal.5th at p. 493.) Standard of Review “Appellate review of an order regarding an arbitration agreement's validity is de novo if the evidence is not in conflict and the ruling is based entirely on an interpretation of law. [Citation.] If a validity ruling rests on the trial court’s resolution of evidentiary disputes, substantial evidence review applies to the court's factual findings.” (Ramirez, supra, 16 Cal.5th at p. 493.) The parties agree that the trial court’s rulings on procedural and substantive unconscionability are subject to de novo review because they are based on undisputed facts. The Agreement is Procedurally Unconscionable “A court should consider substantive unconscionability only after procedural unconscionability has been established.

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Bluebook (online)
Jenkins v. Dermatology Management CA2/6, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jenkins-v-dermatology-management-ca26-calctapp-2024.