Cross v. Maric College
Filed 6/29/06 Cross v. Maric College CA2/2
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION TWO
| GARY CROSS et al., Plaintiffs and Respondents, v. MARIC COLLEGE et al., Defendants and Appellants. | B184529 (Los Angeles County Super. Ct. No. BC 325115) |
APPEAL from an order of the Superior Court of Los Angeles County. Rolf M. Treu, Judge. Affirmed.
Duane Morris, Keith Zakarin; Eric J. Sinrod and Minh T. Hoang for Defendants and Appellants.
The Quisenberry Law Firm, John N. Quisenberry, Heather M. McKeon and Eric L. Brown for Plaintiffs and Respondents.
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Appellants Maric College, Inc. (Maric), Modern Technology Industrial College Corporation, and Kaplan Higher Education Corporation, Inc. (collectively appellants), appeal an order of the trial court denying their motion and petition to stay and to compel arbitration. We affirm.
CONTENTIONS
Appellants contend that the trial court erred when it denied their motion to compel arbitration. Appellants further contend that the trial court erred by failing to stay the inarbitrable claims of respondent Gary Cross, 21 other named individuals, and a putative class of approximately 197 members (collectively respondents) pending the arbitration of the arbitrable claims.
BACKGROUND
On November 24, 2004, respondents filed a complaint against appellants alleging causes of action for breach of contract, unfair competition, violation of the Maxine Waters Student Protection Act (Ed. Code, § 94850 et seq.), fraud, and negligent misrepresentation. The complaint alleged that respondents were individuals enrolled in appellants' Radiologic Technology Program (RT program) in California. It further alleged that appellants promised that their RT program was accredited by a mechanism acceptable to the American Registry of Radiologic Technology (ARRT); promised respondents that after completion of appellants' RT program, respondents would be able to sit for the ARRT exam; induced respondents to enroll in the RT program; and accepted payment from respondents. According to respondents, appellants' promises were false. Appellants did not have ARRT accreditation and respondents were not permitted to sit for the ARRT examination. As a consequence, respondents have not been able to secure employment, and to the extent that employment opportunities exist for them, such employment is at a lower pay rate than that of an ARRT certified radiologic technician.
In response to respondents' complaint, appellants petitioned to compel arbitration as to all respondents, or, in the alternative, moved for an order to stay the nonarbitrable claims while the arbitrable claims proceed through arbitration. In support of their motion, appellants claimed that at least three of the named plaintiffs, and 100 putative class members, signed express agreements to arbitrate their claims for unfair competition and violation of the Maxine Waters Student Protection Act. Appellants pointed to two purported arbitration agreements. The first arbitration agreement is allegedly contained in certain of the respondents' enrollment agreements. Appellants claim that since January 2004, Maric's campus-wide policy requires that each of its enrolling students sign an enrollment agreement that contains a binding arbitration provision. Appellants allege that named plaintiff Andy Cardenas signed this agreement when he enrolled on June 10, 2004, as did 97 of the putative class members.
The second arbitration agreement is allegedly contained in certain of the plaintiffs' Sallie Mae promissory notes. Appellants claim that named plaintiffs John Manning and Keith Solomon, as well as 12 other putative class members, signed Sallie Mae promissory notes which are used by the students to pay for their education at Maric and are paid directly to Maric. While admittedly not signatories to the Sallie Mae promissory notes, appellants claim that because Maric is a third-party beneficiary to the Sallie Mae contracts, they may invoke the Sallie Mae arbitration clause in respondents' action against them.
Respondents opposed appellants' motion to compel arbitration. As factual background, respondents explained that appellants' counsel had called respondents' counsel to ask respondents' counsel to stipulate to arbitration. Respondents' counsel informed appellants' counsel that respondents were not inclined to stipulate to arbitration without any evidence that respondents had signed arbitration agreements. One or two days later, without further communication between the parties, appellants filed their motion to compel. Respondents further contended that because a large percentage of the putative class admittedly did not sign arbitration agreements, the action should not be stayed; that the enrollment agreement arbitration provisions were unconscionable; and that appellants could not enforce the Sallie Mae promissory note arbitration clauses.
On June 17, 2005, the trial court heard appellants' motion to compel arbitration and stay the proceedings. The court ruled that appellants could not enforce the Sallie Mae promissory note arbitration clause because appellants had â€
