Page 3

Fifth District C.A. Rejects Holding in Decision on Burden in Avoiding Compelled Arbitration

By a MetNews Staff Writer

The Fifth District Court of Appeal, repudiating a contrary holding by this district’s Div. Seven, has declared that where a party shows the existence of an arbitration agreement by attaching a copy of it to a petition to compel arbitration, the opponent does not create a factual dispute as to the document’s authenticity by simply disclaiming a recollection of having signed it.

Justice Donald R. Franson Jr. authored the Fifth District opinion, filed May 15 and, as modified, certified for publication on Tuesday. In parting company with this district’s Nov. 30, 2021 decision in Gamboa v. Northeast Community Clinic, it joined the First District’s Div. Four in doing so.

The First District’s decision not to follow Gamboa came in its Jan. 19, 2023 opinion in Iyere v. Wise Auto Group.

Franson wrote:

“We join Iyere in concluding that an individual is capable of recognizing his or her handwritten signature and if that individual does not deny a handwritten signature is his or her own, that person’s failure to remember signing the document does not create a factual dispute about the signature’s authenticity.”

He noted that a 2023 decision of the U.S. District Court for the Eastern District of California in Prostek v. Lincare Inc. also rejects the reasoning in Gamboa and embraces that in Iyere.

Decision in Gamboa

In Gamboa, the panel held that a man suing his ex-employer over being fired met her burden of producing evidence of the lack of her assent to what was contained in an arbitration agreement and other documents—thus shifting the burden to the employer to prove the formation of a contract—by simply declaring:

“I do not remember these documents at all....Had I been made aware of the existence of an arbitration agreement, and been explained its provisions, I would not have signed any such documents.”

Santa Clara Superior Court Judge Audra Ibarra, sitting on assignment—joined by then-Presiding Justice Dennis M. Perluss (now retired) and Justice Gail Ruderman Feuer—affirmed a decision by Los Angeles Superior Court Judge Maureen Duffy-Lewis denying a motion to compel arbitration. Ibarra wrote:

“[W]e need not decide whether Gamboa challenged the authenticity of her purported signature on the arbitration agreement. It was enough that she challenged the authenticity of the agreement by saying under penalty of perjury that she did not remember it.”

First District’s View

Quoting that language, then-Presiding Justice Stuart R. Pollak (now retired) remarked in a footnote in Iyere:

“We question how the ‘authenticity of the agreement’ can be challenged without challenging the authenticity of the plaintiff’s signature on that agreement.”

Pollak declared in the body of his opinion:

“If a party confronted with his or her handwritten signature on an arbitration agreement is unable to allege that the signature is inauthentic or forged, the fact that that person does not recall signing the agreement neither creates a factual dispute as to the signature’s authenticity nor affords an independent basis to find that a contract was not formed.”

Franson’s Opinion

In the Fifth District case, an order by Kern Superior Court Judge David R. Zulfa requiring an arbitration of an action filed by an ex-employee, Carlos Ramirez, was reversed. Ramirez had not signed an arbitration agreement but did execute an acknowledgement of the receipt of the company handbook, which included this statement:

“My signature also acknowledges and certifies that I understand and voluntarily agree to terms of the Company Arbitration Agreement.

In opposing arbitration, Ramirez said, in a declaration, as the plaintiff in Gamboa had, that he did not recall signing the acknowledgement. Franson wrote:

“The declaration…omits several significant facts. First, the declaration fails to state whether Ramirez even reviewed the arbitration agreement, the related handbook acknowledgement, or any other documents purportedly signed by him and included in the employer’s moving papers. A review of those documents, the handwritten signatures, and the handwritten initials might have improved Ramirez’s recollection.”

He continued:

“Second, the declaration does not address whether Ramirez recalled signing the handbook acknowledgement, which is the document relied upon by the employer to show his consent to arbitration. The acknowledgement included a bolded, underlined sentence stating he agreed to the terms of the arbitration agreement in the employee handbook.”

Further Omission

Franson added:

“Third, Ramirez’s declaration does not state, one way or the other, whether the handwritten signature on the handbook acknowledgement is his. Based on these omissions, we conclude Ramirez did not rebut the employer’s initial showing that an arbitration agreement existed.”

The matter was remanded to the Kern Superior Court. Franson explained:

“Ordinarily, a trial court is required to rule on the gateway issues of whether an arbitration agreement is enforceable, which includes claims of unconscionability….Here, the trial court did not reach Ramirez’s unconscionability defense and, therefore, it is appropriate to remand for further proceedings addressing that defense.”

The case is Ramirez v. Golden Queen Mining Company, LLC, 2024 S.O.S. 1856.