O'Dell v. Aya Healthcare, Inc.

CourtDistrict Court, S.D. California
DecidedOctober 15, 2024
Docket3:22-cv-01151
StatusUnknown

This text of O'Dell v. Aya Healthcare, Inc. (O'Dell v. Aya Healthcare, Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
O'Dell v. Aya Healthcare, Inc., (S.D. Cal. 2024).

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 LAURA O’DELL, HANNAH BAILEY, Case No.: 22cv1151-CAB-MMP HOLLY ZIMMERMAN, and LAUREN 12 MILLER, individually and on behalf of all ORDER: (1) DENYING MOTION TO 13 others similarly situated, CONFIRM ARBITRATION AWARD [Doc. No. 81]; AND (2) GRANTING 14 Plaintiffs, IN PART MOTION TO LIFT STAY, 15 v. AWARD FEES AND COSTS, AND IMPOSE SANCTIONS [Doc. No. 107] 16 AYA HEALTHCARE, INC., 17 Defendant. 18 19 On June 17, 2024, Defendant Aya Healthcare, Inc. (“Defendant” or “Aya”) filed a 20 motion to confirm Lauren Miller Arbitration Award. [Doc. No. 81.] On August 19, 21 2024, Plaintiff Lauren Miller (“Plaintiff”) filed a motion to lift stay, award fees and costs, 22 and impose sanctions. [Doc. No. 107.] Both motions have been fully briefed. For the 23 reasons set forth below, Defendant’s motion to confirm the arbitration award is DENIED 24 and Plaintiff’s motion to lift stay, award fees and costs and impose sanctions is 25 GRANTED IN PART. 26 BACKGROUND 27 On September 27, 2022, Plaintiffs Laura O’Dell, Hannah Bailey, Holly 28 Zimmerman, and Lauren Miller (“Plaintiffs”) filed a First Amended Class and 1 Collective Action Complaint against Defendant Aya Healthcare Inc. alleging that Aya 2 engaged in a bait-and-switch scheme by cutting its travel nurses’ pay rates mid-contract, 3 after they had incurred expenses to travel to a new location (often out-of-state). [Doc. No. 4 15, ¶¶ 15-31.] Plaintiffs also alleged that for travel employees who worked more than 40 5 hours in a workweek (or 8 hours in a workday), Aya miscalculated their rates of overtime 6 pay by improperly categorizing significant portions of their compensation as “stipends” 7 (i.e., expense reimbursement) and then excluding the value of those stipends from their 8 “regular rate” of pay when compensating overtime hours, in violation of the FLSA and 9 state law. Id. ¶¶ 78-97; 179-88. Plaintiffs thus asserted 13 causes of action against Aya 10 arising out of common law, several California statutes, and the FLSA. Id. ¶¶ 109-154, 11 161-188, 194-234. 12 In response to Plaintiffs’ complaint, Aya moved to Compel Arbitration and 13 Dismiss Court Action. [Doc. No. 21 (“Motion to Compel”).] After full briefing from the 14 parties, the Court granted Aya’s Motion to Compel in part, finding that Plaintiffs did not 15 adequately challenge the delegation clause and “[b]ased on the language of the 16 Delegation Clause in the Arbitration Agreement, the Court cannot decide threshold issues 17 of validity and enforceability and therefore, compels arbitration on the arbitrability of 18 Plaintiffs’ claims.” [Doc. No. 64, at 7.] Further, “[i]n the interest of justice and in order to 19 avoid duplicative proceedings,” the Court granted a stay of the Plaintiffs’ claims against 20 Aya, “pending a decision on the arbitrability of Plaintiffs’ claims.” Id. 21 Plaintiff Miller filed a Demand for Arbitration before the American Arbitration 22 Association (“AAA”) in San Diego on June 7, 2023. [Doc No. 87-2.] Her Demand related 23 solely to the enforceability of Aya’s Arbitration Agreement and asked the Arbitrator to 24 find that the agreement is unenforceable because it (1) was procedurally and 25 substantively unconscionable under California law and/or that (2) Aya fraudulently 26 induced her to enter the purported Agreement. Id. at 18. Both parties signed a form 27 agreeing to have AAA administer the dispute and to be bound by the AAA Employment 28 Arbitration Rules.[Doc. No. 87-3.] 1 In accordance with the AAA arbitrator selection process, Gayle Eskridge was 2 assigned as the Arbitrator. [Doc. No. 107-2, Declaration of J. Austin Moore (“Moore 3 Dec.”) ¶ 8.] Plaintiff Miller informed the Arbitrator that she only intended to pursue her 4 claim that her Arbitration Agreement with Aya was procedurally and substantively 5 unconscionable under California law. [Doc. No. 87-5, at 4.] After briefing from the 6 parties and a hearing, Arbitrator Eskridge rendered her decision on March 19, 2024. 7 [Moore Dec. ¶¶ 10-12.] She found that Aya’s Arbitration Agreement had three 8 procedurally unconscionable provisions—the mediation cost provision, the arbitration 9 cost provision, and the venue provision—but held those provisions could be severed and 10 the remainder of the Agreement was enforceable. [Doc. No. 87-5.] 11 Two days later, on March 21, 2024, the AAA case manager for the arbitration 12 sent correspondence to the parties stating as follows: “We have received the Arbitrator’s 13 final invoice and it exceeds the amount estimated and requested. Therefore, we are at this 14 time, requesting an additional $11,525.00 to cover for the arbitrator’s compensation for 15 time incurred.” [Doc. No. 87-6, at 5-6.] The invoice further stated: “Payment is due upon 16 receipt of this letter and attached invoice … As this arbitration is subject to California 17 Code of Civil Procedure 1281.98, payment must be paid by 30 days from the date of this 18 letter. Pursuant to California Code of Civil Procedure 1281.98, the AAA cannot grant any 19 extensions to this payment deadline unless agreed upon by all parties.” Id. at 5 (emphasis 20 in original). 21 On May 16, 2024—56 days from the date of the Arbitrator’s invoice—the AAA 22 case administrator sent the parties another email stating: “This will confirm that we have 23 not received the payment in the amount of $11,525.00 for Arbitrator’s Compensation 24 requested and invoiced in our letter dated March 21, 2024.” [Doc. No. 87-7, at 2-3.] It 25 continued: “Pursuant to CA CCP 1281.98, AAA requests Claimant to review the relevant 26 section of the statute and provide a response on how they wish to proceed.” Id. at 2. 27 Plaintiff did so that same day, informing the AAA that “pursuant to CCP § 1281.98(b)(1), 28 Claimant Miller elects to withdraw the claim from arbitration and proceed in a court of 1 appropriate jurisdiction.” Id. Thereafter, the AAA issued a letter dated May 17, 2024 2 closing the matter. [Doc No. 87-8, at 3-4.] 3 On June 3, 2024, the parties jointly filed a Status Report updating the Court 4 regarding the status of the Miller Arbitration. [Doc. No. 77.] It informed the Court that 5 Aya had failed to pay its arbitration fees and that the AAA terminated the arbitration. The 6 report noted that “Plaintiff Miller intends to move this Court or another court of 7 competent jurisdiction to hear her claim on the basis that Aya materially breached the 8 parties’ agreement to arbitrate under the AAA Employment Rules and pursuant to 9 California Code of Civil Procedure § 1281.98(b)(1).” Id. 10 On June 18, Aya filed a Motion to Confirm Miller Arbitration Decision and 11 Maintain Stay of Court Action, arguing that because the arbitration award had already 12 been issued, Aya’s payment of the outstanding invoice was not necessary to “continue the 13 arbitration,” thus rendering CCP § 1281.98 inapplicable. [Doc. No. 81-1, at 7-10.] Aya 14 also argues that CCP § 1281.98 is preempted by the FAA. [Doc. No. 96 at 7-14.] Plaintiff 15 Miller thereafter filed an opposition brief [Doc. No. 87 at 9-17] and, later, a Motion to 16 Lift Stay, Award Fees and Costs, and Impose Sanctions [Doc. No. 107]. 17 DISCUSSION 18 A. Motion to Confirm Arbitration Award; Motion to Lift Stay. 19 Defendant seeks to confirm the arbitrator’s award, notwithstanding its failure to 20 timely pay the arbitrator’s invoice. Plaintiff contends Defendant waived its right to 21 compel arbitration when it materially breached the parties' arbitration agreements under 22 Cal. Code Civ. Proc. §1281.98 by failing to timely pay the balance due for the Miller 23 arbitration.

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O'Dell v. Aya Healthcare, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/odell-v-aya-healthcare-inc-casd-2024.