Filed 3/3/15 Benthin v. Emeritus Corp. CA1/5

                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS
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              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                       FIRST APPELLATE DISTRICT

                                                  DIVISION FIVE


GENEVA BENTHIN et al.,
         Plaintiffs and Respondents,
                                                                     A141385
v.
EMERITUS CORPORATION et al.,                                         (Solano County
                                                                     Super. Ct. No. FCS038463)
         Defendants and Appellants.


         Emeritus Corporation and Emeritus Westwind Gardens appeal from an order
denying their renewed motion to compel arbitration. Appellants contend the trial court
abused its discretion because (1) appellants had acted with reasonable diligence in
obtaining a valid copy of the power of attorney that was needed to establish a binding
arbitration agreement, (2) equitable estoppel applied, and (3) public policy favors
arbitration. We conclude the order from which they appeal is a nonappealable order, treat
the appeal as a writ petition, and deny the petition as meritless.

                               I. FACTS AND PROCEDURAL HISTORY
         For about two years before her death, Geneva Benthin (Benthin) lived at Emeritus
at Westwind Gardens, a residential care facility for the elderly that is managed and
operated by Emeritus Corporation. We refer to Emeritus at Westwind Gardens and
Emeritus Corporation collectively as “Emeritus.”




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       As part of the paperwork for Benthin’s admission to Emeritus in August 2008,
Benthin’s daughter, Joyce Root (Root), signed a Resident Agreement and checked two
boxes on the agreement indicating that Root was the responsible party and had power of
attorney to act on Benthin’s behalf.
       On that same day, Root signed an “Agreement to Resolve Disputes by Binding
Arbitration” (Arbitration Agreement) as Benthin’s “authorized representative.” As
relevant here, the Arbitration Agreement required arbitration of claims arising out of
Emeritus’s provision of services or its acts or omissions that cause injury.
       Root also presented Emeritus with two powers of attorney: a “Uniform Statutory
Form Power of Attorney” and a “California Advance Health Care Directive Including
Power of Attorney for Health Care.” The documents were purportedly signed by
Benthin, but Benthin’s signature was neither notarized nor acknowledged by witnesses.

       A. Respondents’ Lawsuit
       Around 5:50 a.m. on September 7, 2010, Benthin fell on Emeritus’s premises and
suffered terminal injuries. Benthin’s successors-in-interest—respondents Root, Donna
Morgan, and Elnora Good—sued Emeritus for damages, asserting causes of action for
elder abuse, fraud, wrongful death, and violation of Health and Safety Code section
123110.

       B. Emeritus’s Petition to Compel Arbitration
       In October 2011, Emeritus filed a petition to compel arbitration of respondents’
claims, setting a hearing date for four months later in February 2012. Emeritus based its
petition on the Resident Agreement, the Arbitration Agreement, and the power of
attorney forms in its possession.
       Six days after Emeritus filed its petition, Emeritus and respondents stipulated to
conduct discovery. Respondents agreed that Emeritus’s participation in discovery would
not waive its right to seek arbitration.
       Respondents opposed Emeritus’s petition, arguing among other things that
Emeritus had failed to meet its burden of establishing a valid agreement on Benthin’s


                                             2
behalf to arbitrate, because the powers of attorney forms attached to the petition did not
include a notarization or witness acknowledgment, and therefore did not establish valid
powers of attorney.
       In reply, Emeritus countered that the Arbitration Agreement was valid and that
Root in any event had ostensible authority to sign the agreement based on her own
statements and the power of attorney forms.

       C. Denial of Petition to Compel Arbitration
       At the hearing on Emeritus’s petition, Emeritus asserted its belief that there was a
valid power of attorney somewhere in existence—that is, one that was witnessed or
notarized—but not all of the pages had been provided to Emeritus when Benthin was
admitted. The court asked Emeritus’s attorney if she needed time to conduct discovery on
the issue, and counsel requested that the hearing be continued, “if necessary,” so
Emeritus could depose Root and have her “produce the durable power of attorney.” The
court acknowledged that it “would be extremely important to the court to know” whether
the power of attorney was valid. When asked about Emeritus’s request for additional time
to conduct discovery, respondents’ attorney stated, “That would be fine,” but claimed
there were other issues that compelled denial of Emeritus’s petition. The court took the
matter under submission.1
       By written order filed on February 23, 2012, Emeritus’s petition was denied. The
court found that Emeritus failed to establish the existence of an arbitration agreement,
because the power of attorney form was neither notarized nor acknowledged by



1
        At the hearing on the petition, the court asked respondents’ attorney, “What do
you know or not know about the completeness of the Durable Power of Attorney that is
out there right now?” Respondents’ attorney replied: “What I do know—and there’s two
issues here, if I may. One is, it’s their burden of proof. It’s—they provided the
arbitration agreement, along with the admission documents. Those were provided to me
before they were attached to their petition and did not have a Durable Power of Attorney.
[¶] Second is I don’t have any outside information that there is a Durable Power of
Attorney. This argument and this petition, it is all made within the framework of their
moving papers.” (Italics added.)

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witnesses. (Citing Prob. Code, §§ 4401, 4402, 4121.) The court also rejected Emeritus’s
argument that Root signed the Arbitration Agreement as Benthin’s ostensible agent.

       D. Emeritus’s First Appeal
       Emeritus appealed from the court’s denial of the petition to compel arbitration
(A134748). In May 2013, we filed an unpublished opinion affirming the order. We held
the trial court did not err in concluding that the powers of attorney were invalid and
provided no basis for enforcing the Arbitration Agreement, since the copies attached to
Emeritus’s papers were not notarized or acknowledged by two witnesses. We also held
that the court did not err in ruling Root was not Benthin’s ostensible agent when she
signed the Arbitration Agreement.
       In addition, we held that the court did not err in declining to grant the continuance
Emeritus requested orally at the hearing. We explained: “Emeritus was the party that
had filed the petition to compel arbitration based on an arbitration agreement that, on its
face, could not be enforced unless the signatory had authority to sign it on Benthin’s
behalf. Before even filing the motion, therefore, Emeritus should have considered
whether the powers of attorney it was relying upon were valid—namely, whether they
were acknowledged by witnesses or notarized. Upon finding that the powers of attorney
in Emeritus’s own files had no witness signatures or notarization, Emeritus could have
sought leave to conduct its requested discovery before filing its motion to compel
arbitration—or at least within the four months between the time it filed its petition and
the hearing.”
       We then addressed Emeritus’s arguments on this issue, many of which Emeritus
repeats in this appeal. “Emeritus points out that unilaterally conducting discovery on the
merits before the hearing might have waived Emeritus’ right to arbitrate. But surely no
waiver could have been implied if Emeritus had obtained court permission to conduct
discovery limited to the issue of the validity of the powers of attorney in connection with
the existence and enforceability of the Arbitration Agreement: obviously if a court can
continue the hearing to allow a party to engage in such limited discovery (as Emeritus



                                             4
requests), it can also permit such discovery before the hearing without a waiver of
arbitration resulting. It was not an abuse of discretion for the court to deny Emeritus’
request for a continuance on the ground that its delay in seeking discovery was
unjustified and unreasonable. [¶] . . . [¶] Emeritus also contends there was adequate
reason to continue the hearing because it sees a good chance that discovery will indeed
reveal a valid power of attorney. In particular, Emeritus argues, a notary page might well
exist because Benthin signed the healthcare directive (which included a power of attorney
for healthcare) under the written instruction to ‘[s]ign the document in the presence of the
witnesses or the Notary.’ Emeritus also notes that respondents did not submit a
declaration averring that the powers of attorney were not notarized or acknowledged by
witnesses. The fact remains, however, that no matter how fruitful Emeritus might think
the discovery will be, Emeritus had plenty of time to seek it before the hearing on the
petition. Emeritus has not shown that the trial court was irrational or arbitrary in
declining to continue the hearing. [Fn. omitted.]”
       We concluded: “In the final analysis, the trial court did not abuse its discretion in
failing to order a continuance of the hearing to allow Emeritus discovery on the validity
of the powers of attorney. As respondents’ attorney indicated at the hearing on Emeritus’
petition, the issue before the court was whether the documents Emeritus had presented in
support of its petition were sufficient to establish a valid power of attorney, not whether
the powers of attorney were, in fact, notarized or signed by the requisite witnesses and
thus valid.”

       E. Post-Appeal Discovery Disclosing a Valid Power of Attorney
       After we issued our opinion in the prior appeal, Emeritus propounded its initial
written discovery on respondents. Following a meet and confer process, respondents
provided discovery responses including, among other things, a uniform statutory form
power of attorney that was notarized. Root also admitted she held a uniform statutory
form power of attorney, but she denied holding a valid California advance health care
directive because it was not duly acknowledged.



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       Emeritus asked respondents to stipulate to arbitration, but received no response.

       F. Emeritus’s Renewed Motion to Compel Arbitration
       Emeritus thereafter filed a “Motion for Reconsideration,” citing Code of Civil
Procedure section 1008, subdivision (b).2 Despite the motion’s name, the parties agree it
was a renewed motion to compel arbitration (§ 1008, subd. (b)), rather than a motion for
reconsideration of the court’s prior ruling (§ 1008, subd. (a)).
       In its motion, Emeritus asked the court to order the case to arbitration because
Emeritus had finally received a copy of a power of attorney that included a notarization,
this valid power of attorney constituted a new fact and circumstance, and Emeritus was
reasonably diligent in obtaining this discovery.3 Respondents argued that Emeritus had
not been diligent, because it could have conducted discovery before the hearing on the
original petition to compel arbitration.

       G. Denial of Emeritus’s Renewed Motion
       After a hearing, the court denied Emeritus’s renewed motion by written order filed
on January 22, 2014. The court found: “Defendants [Emeritus] have not established that,
in the exercise of reasonable diligence, they could not have obtained a copy of the valid
durable power of attorney before the petition to compel arbitration was adjudicated. As
the moving party, the burden was on defendants to establish that Joyce Root had a valid
power of attorney when she signed the arbitration agreement on behalf of Geneva
Benthin. Had defense counsel exercised reasonable diligence, she would have realized
prior to receiving plaintiffs’ opposition that the invalid power of attorney on which she
was relying to support the petition to compel arbitration was not sufficient, and she would
have taken steps to obtain a valid one. Even after the petition was filed, the parties
entered into a stipulation to conduct discovery prior to the hearing on the petition.
(Declaration of Daniel Newman, paragraph 2). Yet defense counsel conducted no

2
      All statutory references hereafter are to the Code of Civil Procedure.
3
      Emeritus also provided a copy of a letter ostensibly authored by Root to Emeritus
on March 11, 2011, requesting Benthin’s medical records and representing that she
possessed a power of attorney to act on Benthin’s behalf.

                                              6
discovery to obtain a copy of the valid durable power of attorney from plaintiffs during
this time.”

       H. Emeritus’s Motion to Recall the Remittitur in This Court
       Emeritus next turned to this court and filed a motion asking us to recall the
remittitur in the first appeal (A134748), contending the decision was brought about by a
misrepresentation of facts, mistake or inadvertence. We denied the motion.

       I. Emeritus’s Current Proceedings in This Court
       Claiming uncertainty as to whether an order denying a renewed motion to compel
arbitration is an appealable order, Emeritus pursued both a petition for writ of mandate in
this court (A141370) and the instant appeal. We issued an order deferring further action
on the writ petition pending the appeal’s resolution.

                                    II. DISCUSSION
       Emeritus contends the trial court erred in denying its renewed motion to compel
arbitration. Respondents disagree and contend the order denying Emeritus’s motion is
not appealable. We address the last issue first.

       A. Appealability
       An order denying an original petition to compel arbitration is immediately
appealable. (§ 1294, subd. (a).) An order denying a motion for reconsideration of a prior
ruling under section 1008, subdivision (a), is not appealable. (§ 1008, subd. (g).) The
parties debate the appealability of an order denying a renewed motion under section
1008, subdivision (b).4
       The only published decision to address the issue held that a renewed motion under
section 1008, subdivision (b) is not appealable. (Tate v. Wilburn (2010) 184 Cal.App.4th

4
       Section 1008, subdivision (b) states in part: “A party who originally made an
application for an order which was refused in whole or in part . . . may make a
subsequent application for the same order upon new or different facts, circumstances, or
law, in which case it shall be shown by affidavit what application was made before, when
and to what judge, what order or decisions were made, and what new or different facts,
circumstances, or law are claimed to be shown.”

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150, 152, 156, 159-160 (Tate).) Emeritus urges us not to follow Tate, contending among
other things that Tate is distinguishable because it dealt with a renewed motion to set
aside a child support order, while this case involves a renewed motion to compel
arbitration, which implicates the public policy in favor of arbitration agreements. We
conclude the order in this case is not appealable.
        We further conclude, however, that under the circumstances we should exercise
our discretion to treat the appeal as a writ petition and reach the merits. (See Tate, supra,
184 Cal.App.4th at p. 160, fn. 10; Phillips v. Sprint PCS (2012) 209 Cal.App.4th 758,
768 [“In the interest of justice and to avoid unnecessary delay, we will treat the appeal as
a petition for a writ of mandate and proceed on that basis”].) Because we reach the
merits in this proceeding, we will dismiss the pending writ proceeding (A141370) as
moot.

        B. Denial of Renewed Motion for Lack of Reasonable Diligence
        A party filing a renewed motion under section 1008, subdivision (b) must show
(1) new or different facts, circumstances, or law, and (2) “a satisfactory explanation for
the previous failure to present the allegedly new or different evidence or legal authority
offered in the second application.” (Kerns v. CSE Ins. Group (2003) 106 Cal.App.4th
368, 383; Thompson v. Superior Court (1972) 26 Cal.App.3d 300, 310.)
        In the matter before us, the purported “new” fact was that the power of attorney
was valid because there was, indeed, a notarization. The issue, therefore, was whether
Emeritus provided a satisfactory explanation for failing to present the notarized copy in
connection with its original petition to compel arbitration. (See Garcia v. Hejmadi
(1997) 58 Cal.App.4th 674, 690 [requirement of a satisfactory explanation is synonymous
with “a strict requirement of diligence”].)
        The court did not err in concluding Emeritus could have obtained a valid copy of
the power of attorney earlier with the exercise of reasonable diligence. The papers in
Emeritus’s possession, when it filed its initial petition to compel arbitration, did not
include the notarization or witness acknowledgment necessary for the power of attorney



                                              8
to be valid. From this, Emeritus knew or should have known that the documents it would
be able to attach to its petition would not suffice to establish a binding arbitration
agreement. There was no showing that Emeritus could not have obtained a stipulation or
order of discovery on this limited issue before filing the petition. Furthermore, the parties
stipulated to conduct discovery six days after the petition was filed, without prejudice to
Emeritus’s pursuit of arbitration, giving Emeritus about four months before the hearing to
obtain discovery of the valid power of attorney. Moreover, respondents’ opposition to
the petition, served about two weeks before the hearing, asserted that the papers attached
to the petition did not demonstrate a valid power of attorney, leaving Emeritus nearly two
weeks before the hearing to attempt expedited discovery and cure the defect. Under the
circumstances, it was not an abuse of discretion to conclude that Emeritus failed to
exercise reasonable diligence in obtaining a complete copy of a valid power of attorney.
       Emeritus’s arguments to the contrary lack merit. It claims the notarized power of
attorney could not have been discovered before filing its petition to compel arbitration
because “Emeritus had no reason to doubt the validity of the powers of attorney.” In
particular, Emeritus contends Root represented that she held valid powers of attorney to
act on her mother’s behalf when she obtained Benthin’s admission to Emeritus’s facility,
checked the box on the Resident Agreement, and requested Benthin’s medical records.
Furthermore, respondents’ attorney did not contend there was no valid power of attorney
when asked to stipulate to arbitration.
       But Emeritus’s understanding that there was a valid power of attorney did not
diminish its obvious need to obtain a complete copy of it before seeking to compel
arbitration, rather than relying on papers that lacked the requisite notarization and were
insufficient as a matter of law. As we stated in our earlier opinion: “Finally, Emeritus
argues that it reasonably believed that a notary page existed because Benthin signed the
health care power of attorney under the instruction, ‘Sign the document in the presence of
the witnesses or the Notary.’ . . . If Emeritus did indeed look at that language, it would
have been naturally led to inquire, ‘so where are the witnesses’ signatures or
notarization’?”


                                               9
       On a slightly different tack, Emeritus argues in its reply brief that it had no reason
to take discovery because it could not have anticipated respondents taking the position
that the powers of attorney were invalid, and when respondents finally did so, there was
not enough time to conduct discovery.
       Again, we must disagree. In the first place, whether or not Emeritus thought
plaintiffs would object to the insufficiency of the documents on which Emeritus was
relying, Emeritus certainly knew or should have known that the documents did not meet
the requisites of the statute. Moreover, Emeritus became keenly aware of respondents’
objection when it received their opposition papers, about two weeks (or, as Emeritus calls
it, nine court days) before the hearing. At that point, Emeritus still had time to move for
a continuance of the hearing or an order shortening time for discovery, or even to serve a
deposition notice. (See § 2025.270, subd. (a) [oral deposition may be scheduled on 10
calendar days’ notice].)
       Emeritus’s reliance on Film Packages, Inc. v. Brandywine Film Productions, Ltd.
(1987) 193 Cal.App.3d 824 (Film Packages) is accordingly misplaced. There, the Court
of Appeal held that the trial court did not err in granting the plaintiff’s renewed motion
for a right to attach order, in light of depositions taken after the previous attachment
hearings, since the trial court found that the depositions “shed new light on the case.”
(Id. at p. 829.) The appellate court declined to find that the information uncovered in
these depositions could have been obtained earlier, because there is often no reasonable
opportunity in attachment proceedings to undertake the meaningful discovery that can
occur later. (Id. at pp. 829-830.) But Film Packages is distinguishable for two reasons.
First, the matter before us is not an attachment proceeding; indeed, Emeritus had months
to conduct discovery before the hearing on its petition to compel. Second, Film Packages




                                             10
merely held that the trial court did not err in its ruling; by no means did it hold that a trial
court would necessarily abuse its discretion if it reached a contrary conclusion.5
       Emeritus further contends it did not conduct discovery because it “had concerns
about waiving its right to compel arbitration.” We rejected this argument in Emeritus’s
prior appeal, when we stated “surely no waiver could have been implied if Emeritus had
obtained court permission to conduct discovery limited to the issue of the validity of the
powers of attorney in connection with the existence and enforceability of the Arbitration
Agreement: obviously if a court can continue the hearing to allow a party to engage in
such limited discovery (as Emeritus requests), it can also permit such discovery before
the hearing without a waiver of arbitration resulting.” Moreover, just six days after
Emeritus’s initial petition was filed, the parties stipulated to conduct discovery and
plaintiffs agreed that Emeritus’s participation in discovery would not constitute a waiver
of its right to compel arbitration.
       Lastly, Emeritus argues that respondents should not be allowed to escape their
agreement to arbitrate based on “the technical argument that the defense has the burden
of producing a complete copy of the power of attorney with its petition to compel
arbitration, and Emeritus failed to do so.” But the requirement that Emeritus demonstrate
the existence of a binding arbitration agreement (and therefore, in this case, a valid power
of attorney) is not a mere technicality; it is what the Legislature has required before a
court strips a party of its right to trial. (§ 1281.2.) And while the law does not honor

5
        The other cases on which Emeritus relies are plainly inapposite. In Graham v.
Hansen (1982) 128 Cal.App.3d 965 (Graham), facts obtained after the denial of an initial
summary judgment motion were held sufficient to support the granting of a renewed
summary judgment motion under section 1008, subdivision (b). (Id. at pp. 969-970.)
However, Graham did not even address the issue here—whether the moving party
demonstrated sufficient diligence in discovering the new facts. In Hollister v. Benzl
(1999) 71 Cal.App.4th 582, the trial court had authority to reconsider an order compelling
arbitration, in light of documents that were produced to plaintiff after the earlier hearing,
where the plaintiff had requested the documents and made a motion to compel their
discovery before that hearing. (Id. at pp. 584-585.) Here, Emeritus did not propound any
discovery, much less make a motion to compel, before the hearing on its petition to
compel arbitration.

                                               11
form over substance, neither does it require the trial court to turn a blind eye to the
moving party’s failure to fulfill the relevant statutory requisites.

       C. Emeritus’s Equitable Estoppel Argument
       Emeritus contends respondents should be equitably estopped from asserting that
Emeritus failed to exercise reasonable diligence in seeking discovery regarding the
validity of the powers of attorney. The argument is unavailing.
       In the first place, Emeritus did not raise the issue in the trial court. It did not argue
equitable estoppel in its moving papers or in its reply memorandum in support of its
renewed motion to compel arbitration; and at the hearing on the motion, Emeritus argued
judicial estoppel, not equitable estoppel. Emeritus cannot now complain about an issue it
never asked the trial court to address. (Hepner v. Franchise Tax Bd. (1997) 52
Cal.App.4th 1475, 1486.)
       Second, the argument fails on the merits. To establish equitable estoppel,
Emeritus had to prove (1) respondents knew the facts; (2) respondents intended their
conduct to be acted upon, or acted such that Emeritus had a right to believe the conduct
was so intended; (3) Emeritus was ignorant of the facts; and (4) Emeritus relied upon
respondents’ conduct to its injury. (See Hopkins v. Kedzierski (2014) 225 Cal.App.4th
736, 756.)
       Emeritus argues that respondents “knew a valid power of attorney existed” and
“represented that a valid power of attorney always existed in this case,” but “Emeritus did
not know and had no reason to know that the powers of attorney were invalid” and “did
not realize that the powers of attorney were missing a notary page.” Emeritus further
contends it “relied upon Root’s representations of authority to its detriment in not
pursuing discovery on the validity of the powers of attorney before the hearing on the
motion to compel arbitration.”
       However, the fact that respondents knew a valid power of attorney existed and
represented that a valid power of attorney existed demonstrates that their representations
were consistent with the truth. Certainly no estoppel arises on that basis. Emeritus’s



                                              12
claim that it “did not know and had no reason to know that the powers of attorney were
invalid” is confusing, since the powers of attorney were not invalid—it is just that the
incomplete papers in Emeritus’s possession did not demonstrate their validity. And if
Emeritus is really claiming that it did not know the papers in its possession failed to
establish a valid power of attorney, it certainly had reason to know, since the statutory
prerequisites are clear. For the same reason, Emeritus’s claim that it did not know the
powers of attorney in its possession were missing a notary page is untenable. (Simmons
v. Ghaderi (2008) 44 Cal.4th 570, 584-585 [equitable estoppel requires a showing that
the party seeking the estoppel was actually and permissibly ignorant of the truth and
induced to rely on the other party’s representation or concealment].)
       To the extent Emeritus is asserting an estoppel claim based on respondents’ failure
to disclose their intent to contest the validity of the powers of attorney, respondents never
represented they would not contest a petition to compel arbitration that was based on
papers that failed to establish a binding arbitration agreement. And in fact, respondents
did contest the petition on this ground, two weeks before the hearing on the petition,
when there was still time for Emeritus to do something about it.

       D. Public Policy
       Emeritus urges that the arbitration agreement should be enforced in light of the
public policy in favor of arbitration under the Federal Arbitration Act and California law.
However, Emeritus provides no authority that this public policy precludes a trial court
from denying a renewed motion to compel arbitration where, as here, the party seeking
arbitration had failed to exercise reasonable diligence in proving the existence of a
binding arbitration agreement.
       Emeritus fails to establish error.

                                    III. DISPOSITION
       The appeal is dismissed. The constructive petition for writ of mandate is denied.
Appellants shall bear the costs incurred by respondents in this proceeding.




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                          NEEDHAM, J.



We concur.




SIMONS, Act. P. J.




BRUINIERS, J.




                     14
