Brennan v. U.S. TelePacific Corp. CA4/3 filed 2/25/13 A

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State: California

Court: California Eastern District Court

Docket No: G046225M

Case Date: 02/25/2013

Plaintiff: Brennan

Defendant: U.S. TelePacific Corp. CA4/3 filed 2/25/13 Case Details

Preview:Filed 2/25/13 Brennan v. U.S. TelePacific Corp. CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FOURTH APPELLATE DISTRICT DIVISION THREE JOURNEY BRENNAN, Plaintiff and Respondent, v. U.S. TELEPACIFIC CORP, Defendant and Appellant. G046225 (Super. Ct. No. 30-2010-00422317) ORDER MODIFYNG OPINION AND DENYING PETITION FOR REHEARING; NO CHANGE IN JUDGMENT

It is ordered that the opinion filed on January 30, 2013 be modified as follows: On page 2, in the first paragraph, delete "Telepacific" and replace it with "TelePacific."

This modification does not change the judgment. The petition for rehearing is DENIED.

THOMPSON, J. WE CONCUR:

BEDSWORTH, ACTING P. J.

ARONSON, J.

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Filed 1/30/13 Brennan v. U.S. Telepacific CA4/3 (unmodified version)

NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FOURTH APPELLATE DISTRICT DIVISION THREE

JOURNEY BRENNAN, Plaintiff and Respondent, v. U.S. TELEPACIFIC CORP., Defendant and Appellant. G046225 (Super. Ct. No. 30-2010-00422317) OPINION

Appeal from an order of the Superior Court of Orange County, Ronald L. Bauer, Judge. Affirmed. Gibson, Dunn & Crutcher, Daniel M. Kolkey, Christopher Chorba, Babak Lalezari and Melissa Case for Defendant and Appellant. Zeldes & Haeggquist, Amber L. Eck, Aaron M. Olsen; Hunt Ortmann Palffy Nieves Lubka Darling & Mah, Omel A. Nieves, Katherine J. Odenbreit and Alison C. Gibbs for Plaintiff and Respondent.

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Defendant U.S. Telepacific Corp. appeals from the denial of its motion to compel arbitration of a class action complaint filed by plaintiff Journey Brennan. Defendants motion was based on an arbitration provision allegedly contained in a contract to provide telecommunication services to plaintiff. Defendant contends the court erred in finding it failed to meet its burden to show an enforceable arbitration agreement. It argues plaintiff made a judicial admission he was bound by an arbitration agreement or is equitably estopped from denying the agreement. Defendant also claims the agreement is not unconscionable and if there are any unconscionable terms, they may be severed. Plaintiff challenges each of these arguments and also asserts defendant waived the right to compel arbitration. We agree there is insufficient evidence to show the existence of an enforceable agreement to arbitrate and affirm on that basis.

FACTS AND PROCEDURAL HISTORY

According to the complaint and plaintiffs declaration, in February 2008 plaintiff entered into an "Account Agreement" and "Service Contract" (collectively Service Contract) for defendant to provide telecommunication services; the term of the contract was two years. Plaintiff received six documents comprising the Service Contract, none of which contained an arbitration provision. The arbitration provision is in a document entitled "Terms and Conditions" (Terms and Conditions). Plaintiff declares that at the time he executed the Service Contract he did not receive the Terms and Conditions nor did defendant "call [his] attention to it." During the term of the Service Contract plaintiff, unhappy with defendants services, contacted a representative who advised him a contract could be terminated if the customer gave written notice to defendant within 60 days of expiration of a term. Plaintiff gave such notice in January 2010. His declaration states that, despite the notice, the Service Contract automatically renewed. When he spoke to a representative about 2

cancellation in June 2010, that was the first time he was informed about the Terms and Conditions, which contained an early termination fee provision. To finally effect termination of the Service Contract he was required to pay an early termination fee of over $4,000. In late 2010 plaintiff filed an action against defendant on behalf of himself and other members of the class for unfair competition, violation of Civil Code section 1671, subdivision (d) for unlawful liquidated damages, breach of contract and of the implied covenant of good faith and fair dealing, unjust enrichment, and money had and received, seeking damages and injunctive relief. Defendant filed a motion to compel arbitration after the decision in AT&T Mobility LLC v. Concepcion (2011) 563 U.S. __ [131 S.Ct. 1740, 179 L.Ed.2d 742], which restricted states from imposing certain limitations on the enforceability of arbitration agreements. The court denied the motion, ruling defendant had not shown the existence of a binding arbitration agreement and had there been such an agreement it would be unenforceable as unconscionable. It stated "the arbitration provision was not brought to the attention of nor accepted by nor known to the plaintiff."

DISCUSSION

1. Introduction ",,The right to arbitration depends upon contract; a petition to compel arbitration is simply a suit in equity seeking specific performance of that contract. [Citations.] There is no public policy favoring arbitration of disputes which the parties have not agreed to arbitrate. [Citation.] [Citation.]" (Hotels Nevada, LLC v. L.A. Pacific Center, Inc. (2012) 203 Cal.App.4th 336, 347.)

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Defendant maintains the court erred in finding it had not established the existence of a valid agreement to arbitrate as set out in the Terms and Conditions and presents three arguments in support of its claim.

2. Judicial Admissions "A judicial admission is a partys unequivocal concession of the truth of a matter." (Gelfo v. Lockheed Martin Corp. (2006) 140 Cal.App.4th 34, 48.) "An unclear or equivocal statement does not create a binding judicial admission. [Citations.]" (Stroud v. Tunzi (2008) 160 Cal.App.4th 377, 385.) Defendant asserts certain allegations in the complaint constitute judicial admissions. Essentially he relies on plaintiffs allegation that the Service Contract had an early termination provision. This provision, defendant argues, is in the Terms and Conditions, which also contains the arbitration agreement. Likewise, plaintiff alleged he gave notice of termination pursuant to the provisions of the Service Contract. The termination provision is also in the Terms and Conditions. Finally, defendant points out the Terms and Conditions are attached as an exhibit to the complaint. Defendant concludes from this that plaintiff admitted he knew of and agreed to the arbitration provision. But these allegations do not come close to satisfying the requirement that plaintiff make clear and unequivocal admissions of a fact. Nowhere does plaintiff plead or admit he agreed to the arbitration provision. Further, in addition to the allegations on which defendant relies, the complaint pleads the Terms and Conditions were effective in December 2009, almost two years after execution of the Service Contract. And attaching them as an exhibit is in no way a concession plaintiff knew of or agreed to their provisions, including the arbitration clause, at the time he entered into the Service Contract.

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Defendant also relies on a comment made by plaintiffs counsel during argument at the hearing on the motion to compel, that the early termination fee was part of the agreement plaintiff reached with defendant. But this comment is selectively parsed from the larger argument the lawyer made. In addressing contract formation and the courts question about whether plaintiff agreed to the terms of the arbitration provision, counsel stated, "A cursory review of the allegations in the complaint do reference the early termination fee provisions and the cancellation provisions that were set forth in the standardized [T]erms and [C]onditions . . . . Its uncontested that plaintiff was forced to pay an early termination fee pursuant to the [T]erms and [C]onditions and, likewise, proceeded to attempt to cancel his services within the cancellation provision under the [T]erms and [C]onditions. [

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