Taylor v. Eclipse Senior Living, Inc.

Opinion

10 JENNIFER JANET TAYLOR, CASE NO. 20-cv-0190-LAB-WVG 11 individually and on behalf of all 12 others similarly situated, ORDER DENYING MOTION TO COMPEL ARBITRATION Plaintiff, 13 WITHOUT PREJUDICE [Dkt. 17] 14 vs. 15 ECLIPSE SENIOR LIVING, INC.; ECLIPSE PORTFOLIO 16 OPERATIONS LLC, and EC OPCO 18 Defendant.

19 Defendants Eclipse Senior Living, Inc., Eclipse Portfolio Operations LLC, 20 and EC Opco CA Partner V LLC (collectively, “Eclipse”) filed a motion to 21 compel arbitration and to dismiss or stay this action. Plaintiff Jennifer Janet 22 Taylor opposes, in part because the arbitration agreement in question doesn’t 23 mention any Eclipse entity—it purports to bind, instead, “Elmcroft Senior 24 Living.” Eclipse tries to avoid this problem by asserting that Elmcroft is its 25 fictitious name, but if that’s so, Eclipse hasn’t registered that name with the 26 California Secretary of State and so it can’t enforce any agreements signed 27 under that name until it does so. It can’t enforce the arbitration agreement 1 against Taylor under the present circumstances, and so the Motion to Compel 2 Arbitration and Stay Proceedings is DENIED WITHOUT PREJUDICE. 4 “From approximately March 2019 to September 2019,” Taylor allegedly 5 worked as a nurse for Eclipse at the Grossmont Gardens senior living facility 6 in La Mesa, California. Compl., Dkt. 1 ¶ 12. In January 2019, Eclipse sent 7 Taylor a letter offering her employment “with Elmcroft by Eclipse Senior Living 8 at Grossmont Gardens.” Dkt. 17-3 at 9. Taylor signed an employee handbook 9 on February 11, 2019. Id. at 12. Among other things, the handbook included a 10 meal period policy, overtime protocol, and an arbitration agreement between 11 her and “the Company,” which was defined as “Elmcroft Senior Living.” 12 In September of 2019, Taylor’s employment ended. She filed a putative 13 class action against Eclipse four months later, asserting ten causes of action 14 under the Fair Labor Standards Act, the California Labor Code, and the 15 California Business and Professions Code. Eclipse now moves to enforce the 16 arbitration agreement. 18 The California Secretary of State’s Records show that Eclipse is 19 registered in California under the name “Eclipse Senior Living, Inc.”1 “Elmcroft 20 Senior Living,” to the extent it is a tradename under which Eclipse operates, is 21 a fictitious business name under California law. Cal. Bus. & Prof. Code § 17900 22 (defining “fictitious business name,” “[i]n the case of a . . . foreign corporation,” 23 as “any name other than the corporate name stated in its articles of 24 incorporation filed with the California Secretary of State”). A corporation 25 “regularly transact[ing] business in [California] for profit under a fictitious 26

27 1 The Court takes judicial notice of these records. See Fed. R. Evid. 201(b), 1 business name” must file a fictitious name statement with the California 2 Secretary of State within 40 days of beginning to transact business under that 3 name. Cal. Bus. & Prof. Code § 17910. If it fails to do so, it may not “maintain 4 any action upon or on account of any contract made, or transaction had, in the 5 fictitious business name in any court of this state until the fictitious business 6 name statement has been executed, filed, and published.” Cal. Bus. & Prof. 7 Code § 17918; see also Platte River Ins. Co. v. P & E Automation, Inc., Case 8 No. 12-05778 JGB-AJW, 2013 WL 12123688 (applying Section 17918 in 9 federal court in California). “Noncompliance [with this statute] prevents a 10 fictitiously-named business from enforcing obligations owed to it until it places 11 on record its true nature and ownership.” Hydrotech Systems, Ltd. v. Oasis 12 Waterpark, 52 Cal. 3d 988, 1001 n.8 (1991). Failure to comply doesn’t 13 invalidate a business’s agreements, though, it only precludes enforcement of 14 those agreements until the fictitious name is registered. Id. 15 Crediting (for the purposes of this analysis) Eclipse’s representation that 16 it signed the agreements, but under the Elmcroft name that it operates under, 17 leads only to the conclusion that Eclipse can’t enforce the arbitration 18 agreement, albeit temporarily. It failed to register the Elmcroft name within 40 19 days of beginning to transact business under that name in California, as 20 required. See Dkt. 17-3 at 2 (declaring that Eclipse started to manage 21 Grossmont Gardens under the Elmcroft name on January 21, 2018); Cal. Bus. 22 & Prof. Code § 17910. Since Eclipse is using that name in violation of California 23 law, Cal. Bus. & Prof. Code § 17918, it can’t enforce any agreements 24 purporting to bind “Elmcroft Senior Living.” Hydrotech, 52 Cal. 3d at 1001 n.8. 25 The arbitration agreement that Eclipse seeks to enforce is via its Motion to 26 Compel Arbitration is such an agreement, and so that Motion is DENIED 27 WITHOUT PREJUDICE. (Dkt. 17.) Eclipse’s response to the Complaint will be 1 || California’s fictitious-name statutes prior to that deadline, it may renew its 2 ||motion to compel arbitration by an ex parte motion to reconsider this Order 3 || based on that change in circumstances. 5 g || Dated: March 15, 2021 bu / A. ‘by WN 7 Hon. LARRY ALAN BURNS 3 United States District Judge 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28