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Tentative Ruling
Judge Colleen Sterne
Department 5 SB-Anacapa
1100 Anacapa Street P.O. Box 21107 Santa Barbara, CA 93121-1107


Onkar Singh v. Allied Health Resource, Inc., et al.

Case No: 18CV05946
Hearing Date: Mon Feb 03, 2020 9:30

Nature of Proceedings: Petition Compel Arbitration/Stay Case


Onkar Singh v. Allied Health Resources, Inc., et al., #18CV05946

Judge Sterne


Hearing Date:                February 3, 2020



Petition to Compel Arbitration and Stay All Civil Court Proceedings



For Plaintiff: David P. Myers, et al. (The Myers Law Group – Rancho Cucamonga)

For Defendant: Nora K. Stilestein (Sheppard, Mullin, et al. – Los Angeles)


Tentative Ruling: The court denies defendant Santa Barbara Cottage Hospital’s petition to compel arbitration and stay all civil court proceedings.


Background: On December 4, 2018, plaintiff Onkar Singh filed his complaint against defendants Allied Health Resources, Inc., Santa Barbara Cottage Hospital, and Kevin Saiki. On November 13, 2019, Singh filed his first amended complaint (FAC) against Cottage and Doe defendants (the caption still lists Allied and Saiki as defendants). In the FAC, Singh alleges:



All defendants acted as agents, employees, and/or under the direction and control of each of the other defendants. [FAC ¶7] Each defendant operated as a joint employer and/or integrated enterprise with another defendant. [FAC ¶8] Singh was an employee of Cottage until he was terminated on or about November 5, 2015. Cottage contracted with Allied and Saiki to perform all cardiac perfusion services at Cottage starting in November 2015. Singh performed cardiac perfusion services for defendants “as an employee of Cottage” until Cottage terminated his employment. [FAC ¶11] Singh entered an Independent Contractor Agreement with Allied to continue performing perfusion services at Cottage. [FAC ¶13] Cottage asked Singh to perform tasks for Cottage that were outside of Singh’s agreement with Allied and Saiki including training other perfusionists for Cottage. [FAC ¶16]


In or about November 2017, Singh learned that Defendant Cottage would be hiring three perfusionist employees and terminating its contract with Allied and Saiki. Saiki informed Singh that he could continue working at Cottage under the agreement with Allied until the agreement ended. [FAC ¶18] At Cottage’s request, Singh agreed to be on-call and remained the emergency on-call perfusionist at Cottage until his termination. In November 2017, Saiki informed Singh that this on-call arrangement with Cottage was not something Singh would be compensated for under his agreement with Allied. [FAC ¶19]


On November 22, 2017 Singh met with Cottage employees Lisa Moore and Diana Lovan. Moore promised Singh one of the three clinical perfusionist employee positions available at Cottage and informed Singh that he would need to go through the formal application and interview process, so it would take a few months before Singh was officially offered the Cottage employee perfusionist position. [FAC ¶20] Following this meeting, Singh contacted Cottage’s “OR Director” regarding his application and the interview process. [FAC ¶21]


On March 1, 2018, Saiki asked to meet with Singh in the employee locker room with a Cottage Security Guard present. In this meeting, at Cottage’s direction, Saiki told Singh to pack his things from his locker, took Singh’s Cottage Hospital badge, and asked Singh to leave Cottage escorted by the security guard. Saiki did not give Singh any reason for asking Singh to leave and did not explain whether Singh’s services were being terminated. [FAC ¶27] In May 2018, Cottage notified Singh that he would not be hired by Cottage as a perfusionist. [FAC ¶29]


The causes of action against Cottage are: 1) discrimination and retaliation in violation of Labor Code § 98.6; 2) discrimination and retaliation in violation of Labor Code § 1102.5; 3) retaliation in violation of H&S Code § 1278.5; 4) breach of oral contract; 5) breach of the covenant of good faith and fair dealing; 6) declaratory judgment; 7) fraud and misrepresentation; 8) promissory fraud; 9) negligent misrepresentation; and 10) wrongful termination in violation of public policy. None of these causes of action are asserted against Allied or Saiki.


On January 17, 2020, Singh dismissed defendants Allied and Saiki from the action with prejudice. There is no MSC, trial, or CMC date scheduled.


Petition to Compel Arbitration and to Stay Action: Cottage petitions to compel arbitration under Singh’s agreement with Allied as a non-signatory to that agreement on the ground that Singh alleged that Cottage is Allied’s agent; Singh is equitably estopped from denying a non-signatory the right to compel arbitration because the causes of action against Cottage are intimately founded in and intertwined with the underlying contract obligations; and Cottage can enforce the Allied agreement as a third-party beneficiary. (This last ground is asserted only in the reply.) Cottage also seeks a stay pending arbitration. Singh opposes the motion.


Analysis: CCP § 1281.2 provides that, upon petition of a party alleging the existence of a written agreement to arbitrate a controversy, and that a party thereto refuses to arbitrate the controversy, the court shall order the parties to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists. Arbitration is a matter of contract, and a party cannot be required to submit to arbitration any dispute which he has not agreed to submit. Metters, v. Ralphs Grocery Co., 161 Cal.App.4th 696, 701 (2008). CCP § 1281.4 provides that, upon motion of a party, the court shall stay a proceeding pending completion of the arbitration.


The parties engage in substantial discussion of whether the Federal Arbitration Act (FAA) applies. The court acknowledges that the FAA has a broad reach. However, it is not necessary to address this issue as the FAA and the California Arbitration Act and jurisprudence under both are not significantly different for purposes of the present petition.


1. Agreement: The arbitration agreement at issue is the Independent Contractor Agreement (hereafter, “the agreement”) among Allied, Singh, and Mesa Health Services, Inc. The recitals indicate that Allied is engaged in the business of providing cardiovascular perfusion services and has contracted to provide such services to the patients of clients, including Cottage. Singh is the sole shareholder of Mesa, which is in the business of providing cardiovascular perfusion services. Allied was to pay Mesa for services in accordance with an attached fee schedule.


The arbitration clause provides: “If the Parties have been unable to resolve any claim, controversy, difference, demand or cause of action relating to or arising out of this Agreement through the mediation as provided by subparagraph (a), either Party may submit the matter to arbitration. The arbitration shall be administered by the American Arbitration Association in accordance with its commercial arbitration rules. Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.” Any party may seek compliance with the arbitration clause by petitioning a California court.


Saiki signed the agreement on behalf of Allied and Singh signed it on behalf of Mesa and himself. Cottage is not a signatory to the agreement.


2. Agency: The general rule is that “only a party to an arbitration agreement is bound by or may enforce the agreement.” Thomas v. Westlake, 204 Cal.App.4th 605, 613 (2012). There are exceptions to this rule, including the exception “that when a plaintiff alleges a defendant acted as an agent of a party to an arbitration agreement, the defendant may enforce the agreement even though the defendant is not a party thereto.” Id. at 614. When a plaintiff has “alleged all defendants acted as agents of one another, [plaintiff] is bound by the legal consequences of [the] allegations.” Id.


In the FAC, the allegation is that defendants are agents of each other. The FAC’s caption notwithstanding, Allied and Saiki are not named as defendants in the FAC and, therefore, the allegation of agency only applies to Cottage and Doe defendants. (Allied and Saiki were later dismissed from the action with prejudice.)


Cottage argues that Singh cannot ignore the allegations of a prior complaint. “[W]here an amended complaint attempts to avoid defects set forth in a prior complaint by ignoring them. The court may examine the prior complaint to ascertain whether the amended complaint is merely a sham. … “A pleader may not attempt to breathe life into a complaint by omitting relevant facts which made his previous complaint defective. Moreover, any inconsistencies with prior pleadings must be explained; if the pleader fails to do so, the court may disregard the inconsistent allegations.” Vallejo Development Co. v. Beck Development Co., 24 Cal.App.4th 929, 946 (1994) [internal quotations and citations omitted]. “While it is true a demurrer lies only for defects appearing on the face of the complaint, a complaint may be rendered defective by proof of admissions made in a superseded pleading by the plaintiff in the same case.” Kenworthy v. Brown, 248 Cal.App.2d 298, 302 (1967).


This jurisprudence applies in the case of demurrers to amended complaints. Cottage does not argue that the FAC is a sham. Cottage does not point to jurisprudence holding that prior allegations are binding for purposes of a petition to compel arbitration, though the reasoning would seem to apply if the claims in the FAC fall within the scope of the arbitration clause.


3. Equitable Estoppel: Under the FAA, “a signatory to an agreement containing an arbitration clause may be compelled to arbitrate its claims against a nonsignatory when the relevant causes of action rely on and presume the existence of the contract.” Boucher v. Alliance Title Co., 127 Cal.App.4th 262, 269 (2005).


Cottage points out that, in the FAC, Singh repeatedly refers to the agreement in the FAC. But it does not necessarily follow that the causes of action in the FAC relate to or arise out of the agreement.


In the first cause of action, Singh alleges that Cottage violated Labor Code § 98.6 “when it failed to hire [Singh] for an available perfusionist position that Singh was qualified for.” [FAC ¶33] In the third cause of action, Singh alleges that Cottage retaliated against him by not hiring him after he complained “about perfusionists not being fully trained, and not following proper patient safety protocol.” [FAC ¶¶50, 51] In the fourth cause of action, Singh alleges that Cottage breached an oral agreement to hire him after the expiration of his agreement with Allied. [FAC ¶¶57-59] In the fifth cause of action, he alleges that Cottage breached the implied covenant of good faith and fair dealing when it did not hire him. [FAC ¶62] In the seventh, eighth, and ninth fraud and negligent misrepresentation causes of action, Singh alleges Cottage made misrepresentations about hiring him and that he would be compensated for training Cottage’s employee perfusionists. [FAC ¶¶70, 80, 91] These allegations do not relate to or arise out of the independent contractor agreement with Allied. They are based on alleged oral contract or promise to hire him after the expiration of the Allied agreement. Singh expressly alleges that Cottage terminated its agreement with Allied and that he was informed the on-call arrangement he had with Cottage was not something Singh would be compensated for under his agreement with Allied. [FAC ¶19]


In the second cause of action, Singh alleges that “Defendants”–meaning Cottage and Does–retaliated against him through all of its actions described in the FAC, including terminating him. [FAC ¶43] In the tenth cause of action he alleges that Cottage wrongfully terminated him. [FAC ¶100] Cottage could not terminate Singh’s relationship with Allied. He alleges Cottage terminated him from the work he was doing for Cottage outside the Allied agreement.


In the sixth cause of action, Singh states that he “contends that he is owed further distributions pursuant to the various agreements between the parties for all the reasons stated within this Complaint.” [FAC ¶66] In the context of the FAC, this is an allegation that he is owed distributions under the alleged agreements with Cottage, not the agreement with Allied.


This analysis demonstrates that equitable estoppel does not apply. It also demonstrates that, even assuming the prior allegations of agency make the arbitration agreement applicable to Cottage, the causes of action in the FAC do not relate to or arise out of that agreement with Allied. Rather, they relate to or arise out of an alleged oral agreement with Cottage and representations Cottage made regarding future employment.


4. Third Party Beneficiary: In its reply, Cottage argues that it is a third-party beneficiary of the agreement between Singh and Allied. It is not proper to raise new issues in a reply. “Obvious reasons of fairness militate against consideration of an issue raised initially in the reply brief of an appellant.” Varjabedian v. City of Madera, 20 Cal.3d 285, 295 n11 (1977). That case involved a reply filed on appeal but the principle applies equally here.


Regardless, it does not matter whether Cottage is a third-party beneficiary as the court has determined that the causes of action in the FAC do not relate to or arise out of the Allied agreement.


5. Stay: Since the court is not granting the petition to compel arbitration, the request for a stay pending arbitration is moot.


6. Order: The court denies defendant Santa Barbara Cottage Hospital’s petition to compel arbitration and stay all civil court proceedings.

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