Daily Blast July 31, 2017

Finally, an opinion enforcing an arbitration agreement! Today, the Court of Appeal, Fourth Appellate District, Division One (San Diego), in Baker v. Italian Maple Holdings, LLC (July 31, 2017, D069797) ___ Cal.App.5th ___, determined the validity of an arbitration agreement under Code of Civil Procedure section 1295, subdivision (c) (“section 1295(c)”), which requires arbitration agreements to include a 30-day “cooling off” period. (Slip opn., p. 2.) The court held the arbitration agreement was enforceable even though the signatory died before the expiration of the statutory 30-day rescission period. (Id. at p. 3.)

Marlene Baker LaBerge (“LaBerge”), a 73-year-old woman, resided at a 24-hour skilled nursing facility owned by defendant Italian Maple Holdings, LLC dba La Paloma Healthcare Center (“La Paloma”). (Slip opn., p. 1.) A week after arriving at La Paloma, LaBerge signed two arbitration agreements that included language required by section 1295(c). LaBerge passed away 10 days after she signed the agreements. Plaintiffs, LaBerge’s heirs, sued La Paloma and Plum Healthcare, LLC (collectively “Defendants”) for elder abuse, violation of the Patient’s Bill of Rights, negligence and wrongful death. The trial court denied Defendants’ petition to compel arbitration concluding that the agreements were not effective until the 30-day rescission period passed without either party rescinding the agreements. Defendants appealed. (Id. at p. 2.)

The Court of Appeal determined the trial court erred in interpreting section 1295(c) and that the arbitration agreements were valid and enforceable. (Slip opn., pp. 3, 19.) Section 1295(c) establishes that an arbitration agreement executed by the parties “governs . . . until or unless” either party rescinds within the 30-day rescission period. “[T]he parties entered into two agreements that conform with the requirements of section 1295, and that specifically provide that they become effective upon their execution.” (Id. at p. 3, original italics.) “Pursuant to the plain language of [section 1295(c)], the terms of those agreements governed the parties’ relationship upon their execution; the fact that one signatory died before the expiration of the statutory 30-day rescission period does not render the terms of the parties’ agreements unenforceable in the absence of other grounds for not enforcing them.” (Id. at p. 3.) Thus, the court reversed the trial court’s order denying Defendants’ motion to compel arbitration. (Id. at pp. 3, 22.)

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