Tuesday, May 24, 2016

Doctor, this One Was Clearly You

Espejo v. S. Cal. Permanente Med. Grp., No. B262717 (D2d4 Apr. 22, 2016)

In an employment dispute between a doctor and a hospital group, Hospital petitioned to compel arbitration based on an arb clause in Doctor’s employment contract. The arbitration question comes down to whether Doctor actually executed the agreement.

A declaration in support of Hospital’s original petition to compel attached the agreements containing the arb clause. The declaration said that Doctor had been sent hyperlinks to the agreements and required to sign them electronically. It was, however, rather vague about they way this process worked. But then—in response to the recently issued decision in Ruiz v. Moss Bros. Auto Group, Inc., 232 Cal. App. 4th 869 (2014), which addressed how to authenticate electronic signatures under Civil Code § 1633.7—the Hospital submitted a supplemental declaration providing additional detail on the mechanics of the e-signature process. The supplemental declaration was filed several days before Doctor’s opposition was filed.

Doctor challenged the petition with his own declaration that somewhat disputed the merits. He also moved to strike the supplemental declaration as untimely under Code of Civil Procedure § 1005(b), which requires motion papers to be filed sixteen court days before the hearing. The court agreed and struck the declaration. Then, relying on Ruiz, it found that the Hospital failed to sufficiently authenticate the e-signed arb contract, and denied the petition for lack of a binding agreement. Hospital appealed.

Hospital more or less concedes that its initial declaration doesn’t satisfy the Ruiz standard. So the whole appeal basically comes down to whether it was proper to strike of the supplemental declaration. There are two potential arguments for why it was error for the trial court to do so.

The easy one is that the declaration was a response to the post-motion-filing decision in Ruiz. Particularly since the trial court relied on Ruiz to deny the motion, it was only fair to permit Hospital to respond to new authority on a relatively first impression issue. Perhaps the trial court should have kicked the hearing and given everyone a little more time to address Ruiz. For some inexplicable reason, however, the Hospital never made the argument in its AOB. So it was forfeited on appeal.

The other argument deals with who bears the burden on authentication. If Hospital didn’t bear the burden to authenticate the e-signed docs in the first instance, doing so as an offer of proof on reply in response to an objection from Doctor would have been sufficient. And if it would have been fine to do it on reply, it follows that a supplemental filing provided before the opp even came in might have been early, but it clearly wasn’t too late.

So far as the burden goes, petitions to compel are a little different than ordinary motions. Some cases, based on § 1281.2 of the Code of Civil Procedure and Rule of Court 3.1330, hold that to petition to compel, you just need to come forward with a copy of the agreement. There’s no evidentiary obligation to authenticate the agreement from the outset. Even though, if challenged, the petitioner bears the ultimate burden. Under these cases, Hospital didn’t bear the burden to authenticate the contract in its opening papers. So the court erred in striking the supplemental declaration.

The court goes on to file that the supplemental declaration would have been enough to verify the e-signed agreement. The agreement in Ruiz didn’t make the cut because the moving party failed to come forward with any evidence that the signing of the agreement could be attributed to any volitional act by Mr. Ruiz. But here, the supplemental declaration showed that Doctor needed to sign in to a password-protected site. There was thus ample evidence that the arbitration contract was, in fact, e-signed by the Doctor himself and not by some other person.


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