Milman vs. Sunshine Behavioral Health Group, LLC

Here, Defendants proffer an arbitration agreement that provides it is governed by the FAA and that broadly covers all employment-related claims, including disputes based on tort, contract, or statute, such as claims for discrimination, harassment, and/or retaliation, and therefore encompasses the claims asserted in this action. (Van Hooser Decl., ¶¶ 4, 8, Exhs. A-B.)

The court finds that Defendants met their initial burden by submitting a copy of the Arbitration Agreement purportedly signed by Plaintiff, which encompasses Plaintiff’s employment-related claims. (Van Hooser Decl., ¶ 8, Exhs. A-B.)

The burden therefore shifted to Plaintiff to produce admissible evidence to show a factual dispute and shift the burden back to Defendants regarding the agreement’s existence or authenticity.

Incomplete Agreement?

Here, Plaintiff first argues the Arbitration Agreement is unenforceable because the Arbitration Agreement is missing the caption and the beginning of the first paragraph, and as such, Defendants failed to comply with Rule 3.1330 of the California Rules of Court.

In response, Defendants demonstrate the omission was clerical and does not negate the existence or enforceability of the Arbitration Agreement. Defendants explain that the omission resulted from a scanning or photocopying error rather than an incomplete agreement. (Van Hooser Decl., ¶ 8, Exhs. A-B.) Van Hooser attests that he reviewed Plaintiff’s personnel file maintained in the ordinary course of business, which included the signed Arbitration Agreement bearing Plaintiff’s wet signature dated 8/31/21. (Ibid.) He further states that Defendants located the

complete template version of the Arbitration Agreement used at the time of Plaintiff’s hiring, including the omitted header and introductory language, and confirmed the agreement had not changed during the relevant period. (Ibid.) Van Hooser also attests that Plaintiff’s handwriting, date, and signature on the Arbitration Agreement are consistent with multiple other documents contained in Plaintiff’s personnel file. (Ibid.) He explains the omission was likely due to the office scanner pulling in the document incorrectly, thereby cutting off a portion of the top of the page. (Supp. Van Hoose Decl., ¶ 3.)

Re the Rules of Court, rule 3.1330 requires only that the arbitration provisions be stated verbatim or attached and incorporated by reference. Here, the operative arbitration provision was attached to the moving papers.

Parties Not Sufficiently Identified?

Plaintiff next argues that the Arbitration Agreement is fatally ambiguous because it repeatedly references “the Company” without identifying the applicable entity or entities.

Under California law the basic requirements for an enforceable contract are (1) parties capable of contracting, (2) the consent of those parties, (3) a lawful object, and (4) adequate consideration. (Civ. Code, § 1550; see J.B.B. Investment Partners Ltd. v. Fair (2019) 37 Cal.App.5th 1, 9.) Where a contract is so uncertain and indefinite that the intention of the parties in material particulars cannot be ascertained, the contract is void and unenforceable. (Bustamante v. Intuit, Inc. (2006) 141 Cal. App. 4th 199, 209.) In determining whether there is mutual consent, the court will often consider extrinsic evidence and resolve a question of fact. (Eagle Fire & Water Restoration, Inc. v. City of Dinuba (2024) 102 Cal.App.5th 448, 468.)

Here, the identity of the contracting parties is reasonably ascertainable from the surrounding circumstances and related employment documents, including Plaintiff’s offer letter identifying the employer as “Sunshine Behavioral Health Group dba Chapters Capistrano,” as well as Plaintiff’s acknowledged employment relationship with

Defendants. (Van Hooser Decl., ¶¶ 7-8, Exhs. A-C.) Accordingly, the court may reasonably ascertain the parties’ mutual intent to be bound by the Arbitration Agreement, and the failure to specifically identify “the Company” does not render the agreement fatally ambiguous.

Superseded Agreement?

Next, Plaintiff argues that the Arbitration Agreement was superseded by a subsequent written employment agreement dated 8/22/22 (“Employment Agreement”).

The execution of a contract in writing, whether the law requires it to be written or not, supersedes all the negotiations or stipulations concerning its matter which preceded or accompanied the execution of the instrument. (Civ. Code, § 1625.)

Here, the Employment Agreement provides, in pertinent part:

16. Entire Agreement. Employee agrees that Employee does not rely, and has not relied, upon any representation or statement not set forth herein by the Company or any of its agents, representatives, or attorneys. This Agreement contains the entire and exclusive agreement of the Parties hereto on any of the subjects described herein, whether written or oral. This Agreement supersedes any prior agreements between Employee and the Company on any of the subjects described herein, whether written or oral, and cannot be varied, contradicted, or supplanted by evidence of any prior or contemporaneous discussion, correspondence, or oral or written agreements, arrangements, or memoranda of any kind. This Agreement may not be amended or modified otherwise than by a written agreement executed by the Company and Employee or their respective successors and legal representatives.

(Van Hooser Decl., Exh. C [Employment Agreement, p. 6, emphasis supplied].)

Importantly, the Employment Agreement does not mention arbitration, dispute resolution, waiver of jury trial, or the forum for resolving employment-related disputes. Instead, it addresses substantive employment terms such as Plaintiff’s position, duties, compensation, confidentiality obligations, and at-will employment status. Because the integration clause is limited to the “subjects described herein,” it does not supersede the separately executed Arbitration Agreement.

Plaintiff’s reliance on Grey v. American Management Services (2012) 204 Cal.App.4th 803 is misplaced. Unlike Grey, where the superseding agreement itself contained a narrower arbitration provision, the Employment Agreement here is entirely silent regarding arbitration and dispute resolution. Moreover, the integration clause is expressly limited to the “subjects described herein.”

Not Properly Authenticated?

Plaintiff attests that she never received, reviewed, or signed the purported Arbitration Agreement and challenges the authenticity of the signature appearing on the document. (Milman Decl., ¶¶ 3–5.) Milman declares under penalty of perjury that while the signature on the 8/22/22 Employment Agreement “is unmistakably my own”, the signature contained in the purported Arbitration Agreement “does not resemble the way I sign my name.” (Milman Decl., ¶ 6.)

Interestingly, the signatures on the employment agreement and the arbitration agreement appear more similar to each other than the signature now presented in Plaintiff’s 5/1/26 declaration. Further, multiple signatures purporting to be from Plaintiff have been presented and Defendants submitted a declaration from Stephen Van Hooser, custodian of personnel and employment records, attesting that he reviewed Plaintiff’s personnel file maintained in the ordinary course of business, that it was Defendants’ regular practice to provide new hires with the Arbitration Agreement and related onboarding documents, and that the signed Arbitration Agreement was contained in Plaintiff’s personnel file. (Van Hooser Decl., ¶¶ 5–8, Exhs. A-B.) Defendants further authenticated the

Arbitration Agreement by comparing Plaintiff’s signature on the agreement with numerous additional documents contained in Plaintiff’s personnel file, including approximately 25 additional signature exemplars. (Supp. Van Hooser Decl., ¶ 2, Exh. 1.)

On the record before the court, Plaintiff’s conclusory denial and claimed lack of recollection are insufficient to overcome Defendants’ prima facie showing authenticating the Arbitration Agreement. To the extent Plaintiff contends the signature is forged or otherwise inauthentic, Plaintiff has not submitted sufficient evidence showing such.

Enforcement by Non-Signatory?

Plaintiff also argues that Defendant Chapters Capistrano, LLC cannot enforce the Arbitration Agreement because it is not a named party to the agreement. Plaintiff argues the agreement refers only to “the Company,” an undefined term, and Defendants’ evidence identifies the employer as “Sunshine Behavioral Health Group dba, Chapters Capistrano,” not as separate legal entities.

Under the doctrine of equitable estoppel, a nonsignatory may enforce an arbitration agreement where the plaintiff’s claims against the nonsignatory are dependent upon, founded in, or inextricably intertwined with the obligations imposed by the agreement containing the arbitration clause. (Goldman v. KPMG LLP (2009) 173 Cal.App.4th 209, 217-219.) Equitable estoppel applies where a plaintiff alleges substantially interdependent and concerted misconduct by both a signatory and nonsignatory arising from the same underlying contractual relationship. (Boucher v. Alliance Title Co., Inc. (2005) 127 Cal.App.4th 262, 271-273.)

Here, Plaintiff’s claims against Defendants arise from the same alleged employment relationship and underlying conduct, and Plaintiff alleges both entities jointly employed her. (FAC, ¶¶ 1, 13-14, 17.) Because the claims are intertwined with the employment relationship governed by the Arbitration Agreement, Chapter Capistrano, LLC may enforce the Arbitration Agreement.

Unconscionable?

Plaintiff also argues that the Arbitration Agreement is unenforceable because it is unconscionable.

The doctrine of unconscionability refers to “an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party.” (Sonic-Calabasas A, Inc. v. Moreno (2013) 57 Cal.4th 1109, 1133.) It consists of both procedural and substantive components – “the former focusing on oppression or surprise due to unequal bargaining power, the latter on overly harsh or one-sided results.” (Ibid.)

In order to be unenforceable due to unconscionability, “’[procedural and substantive unconscionability] must both be present.’” (Armendariz v. Found Health Psychcare Servs., Inc., 24 Cal.4th at 114, quoting Stirlen v. Supercuts, Inc. (1997) 51 Cal.App.4th 1519, 1533; see also, Wherry v. Award, Inc. (2011) 192 Cal.App.4th 1242, 1246 [“To be voided on [unconscionability] ground[s], the agreement must be both procedurally and substantively unconscionable.”].) However, “they need not be present in the same degree.” (Armendariz, 24 Cal.4th at 114; Parada v. Superior Court (2009) 176 Cal.App.4th 1554, 1570.)

“Essentially a sliding scale is invoked which disregards the regularity of the procedural process of the contract formation, that creates the terms, in proportion to the greater harshness or unreasonableness of the substantive terms themselves. In other words, the more substantively unconscionable the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.” (Armendariz, 24 Cal.4th 83 at 114.)

“The party resisting arbitration bears the burden of proving unconscionability.” (Pinnacle Museum Tower Ass’n v. Pinnacle Market Dev. (US), LLC (2012) 55 Cal.4th 223, 247.)

Procedural Unconscionability

Procedural unconscionability concerns the manner in which the contract was negotiated and the parties' circumstances at that time. It focuses on the factors of surprise and oppression. (Kinney v. United Healthcare Servs. (1999) 70 Cal.App.4th 1322, 1329.)

These factors “include, but are not limited to (1) the amount of time the party is given to consider the proposed contract; (2) the amount and type of pressure exerted on the party to sign the proposed contract; (3) the length of the proposed contract and the length and complexity of the challenged provision; (4) the education and experience of the party; and (5) whether the party’s review of the proposed contract was aided by an attorney.” (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 126-127.)

Thus, the Supreme Court instructs courts to first determine whether an arbitration agreement is adhesive. (See Armendariz, 24 Cal. 4th at 114-115.) “Oppression generally takes the form of a contract of adhesion, which, imposed and drafted by the party of superior bargaining strength, relegates to the subscribing party only the opportunity to adhere to the contract or reject it.” (Carmona v. Lincoln Millennium Car Wash, Inc. (2014) 226 Cal.App.4th 74, 84, quotations and citations omitted.)

Plaintiff contends the Arbitration Agreement is procedurally unconscionable because it was presented on a take-it-or-leave-it basis as part of an onboarding packet, without an opportunity to negotiate, adequate time for review, or advisement regarding consultation with counsel. Plaintiff further argues the arbitration provision was obscured within a multi-section document titled “Applicant’s Statement & Agreement,” without a separate heading clearly identifying it as an arbitration agreement or waiver of jury trial rights.

While some degree of procedural unconscionability may exist because the agreement was presented in the employment context, any such unconscionability appears to be minimal. The arbitration provisions comprise most of the two-page agreement and are not hidden within a lengthy or confusing document. Further, there is no

evidence Plaintiff was rushed, pressured, misled, or prevented from reviewing the agreement before signing.

Substantive Unconscionability

In order to be invalid, the arbitration agreement must also be substantively unconscionable. “Substantive unconscionability pertains to the fairness of an agreement's actual terms and to assessments of whether they are overly harsh.” (Carmona v. Lincoln Millennium Car Wash, Inc., 226 Cal.App.4th at 85, quotations and citations omitted.) “A contract term is not substantively unconscionable when it merely gives one side a greater benefit; rather, the term must be so one-sided as to ‘shock the conscience.’” (Ibid.)

The “paramount consideration” is the mutuality of the obligation to arbitrate. (Nyulassy v. Lockheed Martin Corp. (2004) 120 Cal.App.4th 1267, 1287.) “Substantive unconscionability focuses on the one-sidedness or overly harsh effect of the contract term or clause.” (Harper v. Ultimo (2003) 113 Cal.App.4th 1402, 1406-1407.) An arbitration agreement “lacks basic fairness and mutuality if it requires one contracting party, but not the other, to arbitrate all claims arising out of the same transaction or occurrence or series of transactions or occurrences.” (Armendariz, 24 Cal.4th at 120.)

Plaintiff argues that the Arbitration Agreement is substantively unconscionable because it repeatedly refers to “the Company” without identifying the applicable entity or entities, thereby allegedly allowing Defendants to selectively invoke the agreement across multiple related entities. While uncertainty regarding the parties to an arbitration agreement may contribute to unconscionability concerns in some circumstances, the Arbitration Agreement here is bilateral on its face and governs disputes arising from Plaintiff’s employment relationship. (Van Hooser Decl., ¶ 8, Exhs. A-B.) The agreement does not contain the type of one-sided provisions limiting remedies, restricting discovery, imposing unfair costs, or exempting employer claims from arbitration that typically support a finding of substantive unconscionability. Moreover, Plaintiff’s claims against both Defendants arise from the

same alleged employment relationship and operative facts. Accordingly, any alleged ambiguity regarding “the Company,” standing alone, is insufficient to render the Arbitration Agreement substantively unconscionable.

Because Plaintiff has failed to demonstrate substantive unconscionability, the minimal procedural unconscionability present is insufficient to render the Arbitration Agreement unenforceable.

Waiver?

Plaintiff also argues that Defendants waived their right to compel arbitration through unreasonable delay.

The right to compel arbitration is contractual and may be waived, either expressly or through conduct inconsistent with an intent to arbitrate. (See Code Civ. Proc., § 1281.2; Davis v. Blue Cross of Northern Calif. (1979) 25 Cal.3d 418, 425.) However, delay alone does not establish waiver. In determining a waiver, the court can consider whether: (1) the party's actions are inconsistent with the right to arbitrate; (2) “the litigation machinery has been substantially invoked” and the parties “were well into preparation of a lawsuit” before the party notified the opposing party of an intent to arbitrate; (3) a party either requested arbitration enforcement close to the trial date or delayed for a long period before seeking a stay; (4) a defendant seeking arbitration filed a counterclaim without asking for a stay of the proceedings; and (5) “important intervening steps [e.g., taking advantage of judicial discovery procedures not available in arbitration] had taken place.” (Quach v.

California Commerce Club, Inc. (2024) 16 Cal.5th 562, 573, 580.)

Here, the record does not support a finding of waiver. The record shows that after Plaintiff filed this employment action on 12/11/25, Defendants made multiple unsuccessful attempts to have Plaintiff submit her claims to arbitration. (Javier Decl., ¶¶ 3-10, Exhs. 1-9.) Defendants repeatedly advised Plaintiff of their intent to file a motion to compel arbitration if no stipulation is reached. (Id.) Defendant thereafter filed an Answer on 2/18/26 and filed this motion to compel arbitration shortly

thereafter, on 2/24/26. Plaintiff does not show that Defendants acted inconsistently with an intent to arbitrate, such as by engaging in extensive discovery, filing substantive motions, or posting jury fees.

Accordingly, Plaintiff has not demonstrated that Defendants waived their right to compel arbitration.

In sum, the court GRANTS Defendants’ motion to compel arbitration.

The court also VACATES the 11/23/26 jury trial and STAYS this action pending resolution of the parties’ arbitration. (Code Civ. Proc., § 1281.4.)

The court sets a Status Conference re Arbitration for November 16, 2026 at 9:00 am, in Dept. W8. Plaintiff’s counsel SHALL file and serve a status report regarding the arbitration no later than 10 court days prior to the hearing.

Defendants to give notice.

18 Wong vs. Makhail Demurrer (re Third Amended Complaint) (x2) Motion to Strike Motion to Be Relieved as Counsel of Record (x2)

The operative pleading is the Third Amended Complaint (“TAC”), which contains a single cause of action for “invasion of privacy through publication of private facts and false light publicity”, asserted against all defendants.

Plaintiffs’ opposing briefs (ROAs 427, 429) are unhelpful. The briefs fail to state whether they are responding to the demurrer/motion to strike brought by Defendant Makhail or Defendants Powerstone and Mourer, or both. More importantly, Plaintiffs appear to be responding to arguments not made in any of the moving papers (e.g., statute of limitations, standing, sham pleading) and claims not made in the TAC (e.g., fraud, IIED, NIED).

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