Thursday, February 7, 2013
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C.A. Says Tort Claims Against Teacher Subject to Arbitration
By KENNETH OFGANG, Staff Writer
Allegations that a private school and one of its teachers committed various torts against a student are subject to binding arbitration under an agreement signed by her parents, the Sixth District Court of Appeal ruled yesterday.
The justices reversed a Santa Clara Superior Court judge’s ruling that Shivani Bigler could not be compelled to arbitrate her claims against The Harker School and teacher Paul Itokazu. Harker is a private school offering K-12 classes in San Jose, and Bigler attended from 1999 to 2011.
Bigler sued the school for bad-faith breach of contract, defamation, and negligent hiring, training, and retention of the teacher, and sued Itokazu and the school for battery, defamation, and negligent infliction of emotional distress.
She also accused Itokazu of interference with prospective economic advantage.
Defamation Alleged
The complaint, which was originally filed on Bigler’s behalf by her parents, alleged that the then-11th grader was defamed and embarrassed when she was falsely accused of academic dishonesty and suspended for two days, an incident that caused the parents to withdraw her from the school.
Bigler also alleged that she was humiliated two months earlier when Itokazu, upon being informed that Bigler and her teammates had finished second in a local Rotary Club academic competition, “began jumping around a desk at the front of the classroom in a sarcastic ‘dance,’ sarcastically saying words to the effect that he was so happy with her second-place finish.”
The teacher “then hopped up to Shivani and wrapped his arms around her while facing her, pinning her arms to her sides” and “held Shivani tightly against him so she couldn’t move or get free of his grip, then began hopping up and down with her, repeating words of similar sarcastic import as before,” according to the complaint, before he “released her with sufficient force to cause Shivani to fall backward onto the classroom floor, backpack and all.”
In addition to Bigler’s complaint, her parents demanded arbitration of their own claims for breach of the agreement enrolling their daughter for the school year, as well as for negligent hiring, training, and retention. The defendants moved to compel arbitration of the daughter’s claims as well.
The defendants argued that Bigler—who continued the lawsuit on her own behalf after turning 18—was bound by the arbitration clause in the agreement signed by her parents, and that she was equitably estopped from refusing to arbitrate.
The clause provided “that any dispute involving the School, except with respect to my obligation to pay tuition or fees, shall be resolved by arbitration,” to “be conducted in Santa Clara County by a single neutral arbitrator according to the commercial rules of the American Arbitration Association then in effect.”
Binding Arbitration
The agreement further provided that the arbitrator’s decision would be final, binding, and non-appealable, and that the prevailing party was entitled to attorneys’ fees and costs.
Bigler conceded that as a third-party beneficiary to the contract between her parents and the school, she was bound by its lawful provisions. But she opposed the motion to compel and the grounds that the contract was adhesive, the harm she suffered rendered the arbitration remedy inadequate, the fee-shifting provision—which the defendants offered to sever—was unlawful, the plaintiff and her parents were not provided with a copy of the AAA rules, and the arbitration provision was insufficiently conspicuous.
Judge Kevin McKenney declined to compel arbitration. He found the contract as a whole unconscionable, said the parents’ demand for arbitration did not preclude the plaintiff from litigating her own claims, and concluded it was “highly unlikely” the parents had anticipated when they signed the agreement that they would be forced to arbitrate tort claims.
But Justice Franklin Elia, writing for the Court of Appeal, said the agreement was not unconscionable and that the specific claims raised by the plaintiff were within the scope of the school-student relationship contemplated by the parties.
The arbitration clause, the justice noted, was in boldfaced type at the top of the second page of a two-page contract, and was apparently present in contracts that the parents signed each year for each of their three children. At no time, Elia said, did they object to the provision or ask to negotiate on the issue, nor was the agreement one-sided, since it permitted either party to demand arbitration of any dispute, other than over tuition or fees.
That carve-out, the justice added, was not unfair to the parents, as they would have been more likely to benefit from it than the school, which normally received tuition in full before the start of the school year.
As for the scope of arbitration, Elia distinguished Victoria v. Superior Court (1985) 40 Cal.3d 734 and RN Solution, Inc. v. Catholic Healthcare West (2008) 165 Cal.App.4th 1511, both of which declined to apply arbitration agreements to tort claims.
Victoria involved an agreement between a patient and a hospital, which the court said did not extend to the patient’s claim of sexual assault by an employee because the conduct was outside the scope of the hospital-patient relationship.
RN Solution involved a claim of domestic violence between a hospital executive and the chief executive of a company that recruited nurses, who had become intimately involved during the course of the business relationship. The recruiting company sued the executive’s employer on numerous causes of action after it cancelled the parties’ contract, and the Court of Appeal held that the claims related to domestic violence were not subject to the parties’ arbitration agreement.
Elia said the cases were inapposite:
“In each of these cases, the lawsuit focused on conduct that was so removed from the professional relationship between the parties that it could not have been contemplated when they executed their agreement to arbitrate disputes. In this case, however, all of the alleged tortious conduct took place on the school campus, either in Itokazu’s classroom or at the assembly shortly thereafter, with other students present on both occasions. Each of the claims arising from the cheating accusation...referenced Shivani’s status as the third-party beneficiary of the enrollment agreement....The...cause of action for interference with prospective economic advantage specifically included the allegation that Itokazu’s reckless or negligent conduct disrupted Shivani’s ‘contractual relationship with Harker.’...The allegations of defamation included the assertion that [teachers] were acting in the course and scope of their employment and agency with Harker when they falsely accused Shivani of cheating. All of the conduct regarding the cheating accusation does, in our view, relate sufficiently to the relationship between Harker and its students that it would be encompassed in the broad provision for arbitration to which the Biglers agreed. “
Copyright 2013, Metropolitan News Company