Dulce Fuentes vs California Psychcare Inc

Case Number

24CV06834

Case Type

Hearing Date / Time

Fri, 12/12/2025 - 10:00

Nature of Proceedings

CMC; Petition to Compel Arbitration

Tentative Ruling

For the reasons set forth herein, the motion of defendant California Psychcare, Inc., to compel arbitration is denied. Defendant’s alternative request for stay of this action is also denied.

Background:

On December 6, 2024, plaintiff Dulce Fuentes filed the original complaint in this action consisting of a cause of action under the Labor Code Private Attorneys General Act of 2004 (PAGA, Lab. Code, § 2698 et seq.). The complaint asserts PAGA claims based upon various violations of the Labor Code.

On January 7, 2025, defendant California Psychcare, Inc. (Psychcare) filed its answer to the complaint generally denying the allegations thereof and asserting 23 affirmative defenses.

On June 9, 2025, Psychcare filed a motion for judgment on the pleadings asserting that plaintiff failed to state a cause of action because plaintiff asserts a non-individual PAGA and does not seek to assert any individual PAGA claim against Psychcare. Alternatively, Psychcare sought to stay the action pending disposition of the California Supreme Court’s review in Leeper v. Shipt, Inc. (2024) 107 Cal.App.5th 1001, review granted April 16, 2025, S289305 (Leeper).

On August 1, 2025, the court denied Psychcare’s motion for judgment on the pleadings or alternatively to stay the action.

On August 15, 2025, Psychcare filed this motion to compel arbitration. The motion is opposed by plaintiff.

Analysis:

“On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate that controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists, unless it determines that: [¶] (a) The right to compel arbitration has been waived by the petitioner.” (Code Civ. Proc., § 1281.2, subd. (a).)

Psychcare argues that this PAGA action must be arbitrated on an individual basis because of an arbitration agreement between plaintiff and Psychcare, citing Leeper. As Psychcare points out, the issue of whether a PAGA action may proceed is on review in the California Supreme Court.

The Leeper court held that “that every PAGA action necessarily includes an individual PAGA claim.” (Leeper, supra, 107 Cal.App.5th at p. 1005.) On that basis, the Leeper court reversed a trial court denial of an employer’s motion to compel arbitration, and directed the trial court to enter a new order compelling the parties to arbitrate the employee’s individual PAGA claim and staying the representative PAGA claim portion of the lawsuit. (Ibid.)
 

Other courts have disagreed with Leeper. For example, the court in Rodriguez v. Packers Sanitation Services LTD., LLC (2025) 109 Cal.App.5th 69, 81, review granted May 14, 2025, S290182 (Rodriguez) expressly stated that Leeper was not persuasive and affirmed the denial of a motion to compel arbitration of an action that asserts only non-individual PAGA claims.

Similarly, in Balderas v. Fresh Start Harvesting, Inc. (2024) 101 Cal.App.5th 533, 536 (Balderas), the court held that “an employee who does not bring an individual claim against her employer may nevertheless bring a PAGA action for herself and other employees of the company.” Balderas thus disagrees with the underpinning of Leeper.

As the court explained in detail in denying Psychcare’s motion for judgment on the pleadings, the court does not find Leeper persuasive and instead will follow Balderas and Rodriguez for the reasons set forth in those opinions. Because there is no enforceable arbitration agreement as to plaintiff’s non-individual PAGA claim, there is no basis to compel arbitration. This is a sufficient reason to deny the motion to compel arbitration.

In addition to this basis for denying the motion, plaintiff argues that Psychcare has waived its right to compel arbitration (to the extent it exists) because of its participation in litigation.

“To establish waiver under generally applicable contract law, the party opposing enforcement of a contractual agreement must prove by clear and convincing evidence that the waiving party knew of the contractual right and intentionally relinquished or abandoned it. [Citations.] Under the clear and convincing evidence standard, the proponent of a fact must show that it is ‘highly probable’ the fact is true. [Citation.] The waiving party’s knowledge of the right may be ‘actual or constructive.’ [Citation.] Its intentional relinquishment or abandonment of the right may be proved by evidence of words expressing an intent to relinquish the right or of conduct that is so inconsistent with an intent to enforce the contractual right as to lead a reasonable factfinder to conclude that the party had abandoned it.” (Quach v. California Commerce Club, Inc. (2024) 16 Cal.5th 562, 584 (Quach).)

“The waiver inquiry is exclusively focused on the waiving party’s words or conduct; neither the effect of that conduct on the party seeking to avoid enforcement of the contractual right nor that party’s subjective evaluation of the waiving party's intent is relevant. [Citations.] This distinguishes waiver from the related defense of estoppel, ‘which generally requires a showing that a party’s words or acts have induced detrimental reliance by the opposing party.’ [Citations, fn.] To establish waiver, there is no requirement that the party opposing enforcement of the contractual right demonstrate prejudice or otherwise show harm resulting from the waiving party’s conduct.” (Quach, supra, 16 Cal.5th at p. 585.)

Plaintiff argues that Psychcare’s delay in seeking arbitration and its litigation conduct demonstrate waiver. “Unreasonable delay in seeking arbitration may, standing alone, constitute a waiver of a right to arbitrate.” (Spracher v. Paul M. Zagaris, Inc. (2019) 39 Cal.App.5th 1135, 1138–1139.)

Psychcare argues in reply that its filing of a motion for judgment on the pleadings and providing objections-only responses are not inconsistent with an intent to arbitrate, especially where the party has not sought to litigate the merits of the dispute or obtained a decision on the merits in court. (Reply, at p. 4, citing St. Agnes Medical Center v. PacifiCare of California (2003) 31 Cal.4th 1187, 1203 (St. Agnes).)

The citation to St. Agnes is problematic. “ ‘[W]hile ‘ “[w]aiver does not occur by mere participation in litigation” ’ if there has been no judicial litigation of the merits of arbitrable issues, ‘ “ ‘waiver could occur prior to a judgment on the merits if prejudice could be demonstrated.’ ” ’ [Citation.]” (St. Agnes, supra, 31 Cal.4th at p. 1203.) As the above quotation from Quach indicates, the requirement of prejudice articulated in St. Agnes has been abrogated. (Quach v. California Commerce Club, Inc. (2024) 16 Cal.5th at p. 583.) What reasonably remains of this rule following Quach is that litigation conduct must be viewed as evidence of waiver whether or not the litigation conduct results in prejudice to the opposing party.

Plaintiff filed this action in December 2024; Psychcare filed its answer on January 7, 2025. The answer includes as its eighteenth affirmative defense that the parties agreed to binding arbitration.

According to Psychcare’s counsel, attorney Adrienne L. Conrad, arbitration was raised with counsel for plaintiff by email in January 2025. (Conrad decl., ¶ 5.) In a case management conference statement filed on behalf of Psychcare on March 25, 2025, Psychcare did not state its willingness to participate in binding private arbitration, but identified a motion to compel arbitration as an expected motion. (Statement, filed Mar. 25, 2025, ¶¶ 10(c)(5) [no box checked], 15.)

Instead of filing a motion to compel arbitration, either by itself or as an alternative remedy, Psychcare filed a motion for judgment on the pleadings. In the motion for judgment on the pleadings (MJP), Psychcare asserts that “Plaintiff may state a claim for relief under PAGA if, and only if, she pleads that she is seeking recovery on behalf of others and on behalf of herself. Thus, by expressly disclaiming her individual PAGA claim, Plaintiff has rendered her complaint improper and inadequate.” (MJP Motion, at p. 2.) Accordingly, Psychcare argued that the motion should be granted and plaintiff’s complaint should be dismissed without leave to amend. (Ibid.) Alternatively, the court should stay the action pending the disposition of review in Leeper. (Ibid.)

On August 1, 2025, the court denied the MJP, that is, the court determined as a matter of law that plaintiff could assert non-individual PAGA claims based upon the allegations of the complaint. After this legal determination, on August 15, Psychcare filed this motion to compel arbitration.

This sequence of events demonstrate that Psychcare knew of its claim that plaintiff’s complaint was subject to arbitration from at least the time of the filing of its answer, but Psychcare intentionally did not move to compel arbitration until after it obtained a determination by the court (and not through arbitration) that plaintiff could maintain its PAGA action. This strategic decision shows an intent to waive its claimed right to arbitration. The court finds that there is clear and convincing evidence that Psychcare waived its claim of right to compel arbitration. This is an alternative basis for denying the motion to compel.

The court will also deny the alternative request to stay this action pending the Supreme Court’s disposition of Leeper both because there is now apparently no scheduled hearing in the Supreme Court to resolve Leeper and because the alternative holding of waiver moots the issues presented in Leeper.

In opposition to the motion, plaintiff requests that the court take judicial notice of the complaint in this action, the answer, and the court’s ruling on the motion for judgment on the pleadings. These requests are granted. (See Evid. Code, § 452, subd (d)(1).) Judicial notice does not extend to the truth of matters set forth in court documents.