BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 1065|
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UNFINISHED BUSINESS
Bill No: SB 1065
Author: Monning (D)
Amended: 8/1/16
Vote: 21
SENATE JUDICIARY COMMITTEE: 6-1, 4/26/16
AYES: Jackson, Moorlach, Hertzberg, Leno, Monning, Wieckowski
NOES: Anderson
SENATE FLOOR: 26-9, 5/2/16
AYES: Allen, Beall, Block, De León, Galgiani, Glazer, Hall,
Hancock, Hernandez, Hill, Hueso, Jackson, Lara, Leno, Leyva,
Liu, McGuire, Mendoza, Mitchell, Monning, Moorlach, Nielsen,
Pavley, Roth, Wieckowski, Wolk
NOES: Anderson, Berryhill, Fuller, Gaines, Huff, Morrell,
Nguyen, Stone, Vidak
NO VOTE RECORDED: Bates, Cannella, Hertzberg, Pan, Runner
ASSEMBLY FLOOR: 79-0, 8/24/16 - See last page for vote
SUBJECT: Dismissal or denial of petitions to compel
arbitration: appeals: Elder and Dependent Adult
Civil Protection Act
SOURCE: California Advocates for Nursing Home Reform
California Alliance for Retired Americans
Congress of California Seniors
Consumer Attorneys of California
DIGEST: This bill generally provides that in an appeal from an
order dismissing or denying a petition to compel arbitration,
the court of appeal must issue its decision within 100 days
after the notice of appeal is filed if the appeal involves a
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Page 2
claim under the Elder and Dependent Adult Civil Protection Act
(EADACPA) and a party has been granted a trial preference, as
specified. This bill also provides an exception allowing the
court to grant an extension of time, only if good cause is shown
and the extension will promote the interests of justice.
Assembly Amendments narrow the bill, which previously would have
precluded a party from taking an immediate appeal of an order
dismissing or denying a petition to compel arbitration if the
opposing party has both filed an EADACPA claim and been granted
a trial preference, to, instead, provide for an expedited trial
date of such an appeal under the same circumstances (i.e. the
appeal involves an EADACPA claim and a party has been granted a
trial preference.)
ANALYSIS:
Existing law:
1) Governs arbitrations in California under the California
Arbitration Act (CAA), including the enforcement of
arbitration agreements, rules for neutral arbitrators, the
conduct of arbitration proceedings, and the enforcement of
arbitration awards.
2) Provides that a written agreement to submit to arbitration
an existing controversy or a controversy thereafter arising
is valid, enforceable and irrevocable, save upon such grounds
as exist for the revocation of any contract.
3) Provides that on a petition of a party to an arbitration
agreement alleging the existence of a written agreement to
arbitrate a controversy, if a party thereto refuses to
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arbitrate such controversy, the court shall order arbitration
of the controversy if it determines that an agreement to
arbitrate the controversy exists, unless it determines any of
the following:
The right to compel arbitration has been waived by the
petitioner;
Grounds exist for the revocation of the agreement; or
A party to the arbitration agreement is also a party to
a pending court action or special proceeding with a third
party, arising out of the same transaction or series of
related transactions and there is a possibility of
conflicting rulings on a common issue of law or fact.
1) Provides that an aggrieved party may appeal from the
following:
An order dismissing or denying a petition to compel
arbitration;
An order dismissing a petition to conform, correct or
vacate an award;
An order vacating an award unless a rehearing in
arbitration is ordered;
A judgment entered pursuant to this title; or
A special order after final judgment.
1) Provides that a writ of mandate may be issued by any court
to an inferior tribunal, corporation, board, or person, to
compel the performance of an act which the law specially
enjoins, as a duty resulting from an office, trust, or
station, or to compel the admission of a party to the use and
enjoyment of a right or office to which the party is
entitled, and from which the party is unlawfully precluded by
that inferior tribunal, corporation, board, or person.
2) Provides that a party may not appeal an order compelling
arbitration until after final judgment, but may, under
extraordinary circumstances, seek a writ of mandate to
request review of the ruling by the court of appeal in
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advance of the arbitration hearing. (Laufman v. Hall-Mack
Co. (1963) 215 Cal.App.2d 87; United Firefighters of Los
Angeles v. City of Los Angeles (1991) 231 Cal.App. 3d 1576;
Mid-Wilshire Associates v. O'Leary (1992) 7 Cal.App.4th
1450.)
3) Provides, under Section 36 of the Code of Civil Procedure,
that a party to a civil action who is over 70 years of age
may petition the court for a (trial) preference, which the
court shall grant if the court makes both of the following
findings:
The party has a substantial interest in the action as a
whole; and
The health of the party is such that a preference is
necessary to prevent prejudicing the party's interest in
the litigation.
1) Provides that the court, in its discretion, may also grant a
motion for preference that is accompanied by clear and
convincing medical documentation that concludes that one of
the parties suffers from an illness or condition raising
substantial medical doubt of survival of that party beyond
six months, and that satisfies the court that the interests
of justice will be served by granting the preference.
Further provides that, notwithstanding any other provision of
law, the court may in its discretion grant a motion for
preference that is supported by a showing that satisfies the
court that the interests of justice will be served by
granting this preference.
2) Provides that upon the granting of such a motion for
preference, the court shall set the matter for trial not more
than 120 days from that date and there shall be no
continuance beyond 120 days from the granting of the motion
for preference except for physical disability of a party or a
party's attorney, or upon a showing of good cause. Any
continuance shall be for no more than 15 days and no more
than one continuance for physical disability may be granted
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to any party.
3) Provides, generally, under the Elder Abuse and Dependent
Adult Civil Protection Act (EADACPA), civil protections and
remedies for victims of elder and dependent adult abuse and
neglect.
This bill:
1) Provides that, except as provided below, in an appeal from
an order dismissing or denying a petition to compel
arbitration filed pursuant to existing law, involving a claim
under EADACPA in which a party has been granted a preference
pursuant to Section 36 (item #7 above), the court of appeal
shall issue its decision no later than 100 days after the
notice of appeal is filed.
2) Permits the court of appeal to grant an extension of time in
the appeal only if good cause is shown and the extension will
promote the interests of justice.
3) Requires the Judicial Council to adopt rules to implement
this bill and to establish a shortened notice of appeal
period for these purposes, as specified.
4) Provides various legislative findings and declarations,
including, among other things, that the Legislature,
consistent with the joint goals of EADACPA and Section 36 of
the Code of Civil Procedure, wishes to enact a limited
expedited appeal process for a person filing a claim arising
under EADACPA who has received a court preference to expedite
the claim.
Background
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As a general matter, arbitrations provide an alternative method
of dispute resolution, outside of the courts, wherein a neutral
third party, known as the arbitrator, renders a decision after a
hearing to which both parties have had an opportunity to be
heard. Under California law, there are two distinguishable types
of arbitration: judicial arbitration (also known as
court-annexed arbitration, governed under Code Civ. Proc. Secs.
1141.10 -1141.31) and private arbitrations (also commonly known
as "contractual," "voluntary," or "nonjudicial" arbitrations;
governed under the CAA, Code Civ. Proc. Sec. 1280 et seq.).
On March 1, 2016, the Senate Judiciary Committee held an
informational hearing on the topic of private or contractual
arbitration agreements, entitled The Federal Arbitration Act,
the U.S. Supreme Court, and the Impact of Mandatory Arbitration
on California Consumers and Employees. In that hearing, many
issues facing consumers and employees who are subject to
arbitration clauses contained in standardized,
take-it-or-leave-it, or "adhesive" contracts were brought to
light. That hearing also brought to light the various
difficulties facing the State in addressing some of the
underlying, fundamental harms faced by consumers and employees
as a result of federal preemption and U.S. Supreme Court
precedent interpreting the Federal Arbitration Act. A package
of arbitration bills, of which this bill is one, arose out of
the hearing, seeking to address various fairness issues
surrounding the rules that govern the conduct and operation of
arbitrators and arbitrations in this state.
Of particular relevance to this bill, California law provides
that, as a general rule, appeals may only be taken from such
judgments or orders as are made appealable by statute. In turn,
Section 904.1 of the Code of Civil Procedure, governing the
right to appeal in a civil action, generally provides that the
right of appeal exists only upon a judgment, except there may be
an appeal from an interlocutory judgment that is made final and
conclusive. A "judgment," as referenced here, is the final
determination of the rights of the parties in an action or
proceeding. (Code Civ. Proc. Sec. 577.) Accordingly, this
"final judgment rule" seeks to limit the number of appeals
possible in light of the court's interests in expediency,
efficiency, and economy.
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Appeals in arbitration matters, however, are specifically
governed under a provision of the CAA, and the CAA diverges from
the above final judgment rule with respect to the appealability
of orders dismissing or denying a petition to compel
arbitration. Under the CAA, if a party to a contractual
arbitration agreement seeks instead to file suit in court or
refuses to submit the dispute to arbitration, disputing either
the validity or applicability of the arbitration agreement, the
other party to the arbitration agreement may seek to enforce the
arbitration by way of a motion to compel arbitration.
Generally, the court must order the parties to arbitration
unless: (1) grounds exist for the revocation of the agreement;
(2) the right to compel arbitration has been waived by the
petitioner; or (3) a party to the arbitration agreement is also
a party to a pending court action or special proceeding with a
third party, arising out of the same transaction or series of
related transactions and there is a possibility of conflicting
rulings on a common issue of law or fact. (Code Civ. Proc. Sec.
1281.2.) If, however, the court does ultimately deny the motion
to compel arbitration, the CAA provides for a statutory right to
immediately appeal that decision by the party seeking to force
arbitration (usually the defendant), thus staying the trial
until the appeal of the order denying or dismissing the
arbitration can be heard and decided. (Code Civ. Proc. Sec.
1294(a).) The CAA does not provide a similar right of immediate
appeal to a plaintiff if the court grants the defendant's motion
to compel arbitration.
This bill generally requires that a court of appeal hear an
appeal of an order dismissing or denying a motion to compel
arbitration within 100 days after the notice of appeal has been
filed if: (1) the case involves a claim under EADACPA; and (2)
the senior has received a trial preference under existing law
due to age and health. This bill authorizes the court to
provide for an extension of time if good cause is shown and the
extension will promote the interests of justice.
Comments
As stated by the author:
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California's elder abuse statute, the Elder Abuse and
Dependent Adult Civil Protection Act (EADACPA), was enacted to
protect elderly and dependent adults from abuse. [ . . . ] It
defines civil elder abuse to mean physical abuse, neglect,
financial abuse, abandonment, isolation, abduction, or other
treatment resulting in physical harm or pain or mental
suffering. (Welf. & Inst. Code [Sec.] 15610.07). Other than
financial elder abuse, these claims all require the higher
standard of "clear and convincing" proof and are thus
difficult to pursue.
Under current law, trial courts may grant victims of elder
abuse a speedy trial in light of their age and failing health.
(Code Civ. Proc. Sec. 36(a).) [ . . . ] Although the exact
number of [Section] 36 preferences granted to victims of elder
abuse each year is unknown, practitioners report that the
number is small as not many elders meet the onerous
requirements of Section 36.
Additionally, under current law, [ . . . if] the court denies
[a defendant's] motion to compel the case to arbitration
because the arbitration agreement is found to be
unconscionable, [Code of Civil Procedure] Section 1294(c)
gives the defendant the automatic right to appeal that
decision, even if the elderly plaintiff has already been
granted the right to a speedy trial under Section 36(a).
Therefore, [ . . .] a defendant who tries (and fails) to force
these elderly victims into arbitration can nonetheless
override the court's order for a preferential trial date and
delay the elder's trial another 1-3 years by filing an appeal.
The elderly victims have no similar rights-if a defendant
succeeds in forcing them into arbitration, the victims may not
delay and must proceed straight to arbitration.
The author asserts that "[t]he delay caused by the appeal is
done in the hope that the elder will not survive long enough for
the appeal to be decided, thereby reducing the defendant's
liability if the victim dies before trial" and provides several
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examples of appeals that successfully delayed the trial by over
a year. In one case, the author cites, a 90-year-old stroke
victim brought an elder abuse action against the defendant
nursing home after she was sexually assaulted at the facility
and contracted a sexually transmitted disease. The victim
succeeded both in obtaining a trial preference and in
challenging the defendant's motion to compel arbitration, but
the nursing home appealed the denial. The Sixth Circuit Court
of Appeal ultimately heard and ruled 3-0 for the victim, finding
that the arbitration agreement could not be enforced against
her. (Young v. Horizon West, Inc. (2013) 220 Cal.App.4th 1122).
Ultimately, the appeal "took almost a year and a half, and that
was even an expedited process (after the court of appeal granted
preference). Fortunately, Mrs. Young outlived this tactic, and
was able to get her case resolved. Many others in her position
do not live to see a resolution of the case." The author cites
another case, Bush v. Horizon West (2012) 205 Cal.App.4th 924,
where "the victim did not survive the nearly 2 years it took to
get the favorable appellate opinion allowing the case to get
back on the Court's trial calendar."
As such, the author writes, "SB 1065 will ensure speedy access
to justice for victims of elder abuse who have proven to the
court they are elderly and dying and have been granted a trial
court preference, meaning they obtain an early court date. The
bill expedites the time frame that the appeal must be heard.
This is similar to other proceedings that have been deemed
important to hear on an expedited process (such as child
dependency appeals). [Specifically,] SB 1065 attempts to
expedite the current 2-3 year appeal process for these
particular cases by requiring that appeals be heard within 100
days."
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Assembly Appropriations Committee, minor
absorbable costs for the Judicial Council to adopt the Rule of
Court.
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SUPPORT: (Verified8/24/16)
California Advocates for Nursing Home Reform (co-source)
California Alliance for Retired Americans (co-source)
Congress of California Seniors (co-source)
Consumer Attorneys of California (co-source)
Consumer Federation of California
OPPOSITION: (Verified8/24/16)
Judicial Council
ARGUMENTS IN SUPPORT: The Consumer Federation of California
writes:
California's elder abuse statute, the Elder Abuse and
Dependent Adult Civil Protection Act, was enacted to protect
elderly and dependent adults from abuse. Unfortunately,
current law creates an incentive for delay by permitting a
defendant who unsuccessfully tries to force an elder abuse
victim into arbitration to file an appeal and delay the
hearing another one to three years. It is routine for
defendant nursing homes who want to avoid a jury trial to file
a motion to enforce an arbitration provision, which the
facility drafted and then coerced the victim into signing at
enrollment. This delay often has the effect of denying the
abused person his or her day in court. [ . . . ]
As our society ages, it is crucial that legislative policy
address and protect the rights of our seniors who are subject
to abuse.
ARGUMENTS IN OPPOSITION: In opposition, the Judicial Council
writes that it has "a long history of opposition to legislation
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that creates statutory calendar preferences. [ . . . ] Like
other types of calendar preferences, setting an extremely tight
timeline for deciding these cases has the practical effect of
pushing other cases on the dockets of the Courts of Appeal to
the back of the line. This means that other cases, including
cases that have statutorily mandated calendar preferences, such
as juvenile cases, criminal cases, and even civil cases other
than those involving a claim of elder abuse in which a party is
also at risk of dying, will take longer to decide. Moreover,
delays in the administration of justice that would likely result
from this expedited judicial review approach would be even more
pronounced in light of the ongoing fiscal limitations faced by
the judicial branch."
ASSEMBLY FLOOR: 79-0, 8/24/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,
Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,
Cooper, Dababneh, Dahle, Dodd, Eggman, Frazier, Beth Gaines,
Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson,
Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger
Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey,
Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes,
McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte,
O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez,
Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,
Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon
NO VOTE RECORDED: Daly
Prepared by:Ronak Daylami / JUD. / (916) 651-4113
8/26/16 8:46:48
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