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Patricia Lee v. Southern California University For Professional Studies

December 22, 2010

PATRICIA LEE, PLAINTIFF AND RESPONDENT,
v.
SOUTHERN CALIFORNIA UNIVERSITY FOR PROFESSIONAL STUDIES, DEFENDANT AND APPELLANT.



Appeal from orders of the Superior Court of Orange County, (Super. Ct. No.05CC00274) David C. Velasquez, Judge.

The opinion of the court was delivered by: Moore, J.

Lee v. South. Cal. Univ. for Prof. Studies

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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

OPINION

Affirmed.

This is an appeal from the trial court's denial of the second petition to compel arbitration filed by Southern California University for Professional Studies (SCUPS) in this case and from the court's order certifying a class action. In the appeal from the denial of SCUPS's first motion to compel arbitration, we held that simply because some members of a potential class (not including the named plaintiff) signed an arbitration agreement, it was improper to require those who did not sign such an agreement to arbitrate their claims. (Lee v. Southern California University for Professional Studies (2007) 148 Cal.App.4th 782, 784 (Lee I).)

While this case has been through many procedural maneuverings since, the trial court ultimately certified a class that only included students who did not sign arbitration agreements. We conclude this was not an abuse of discretion and the class was properly certified. Given the composition of the class, no students who signed arbitration agreements were before the court, and the motion to compel arbitration was therefore properly denied.

I FACTS

We review the facts from our prior opinion. "Southern California University for Professional Studies (SCUPS) is a private post-secondary institution in Santa Ana, California. It operates under the Bureau for Private Post-secondary and Vocational Education (the Bureau), part of the California Department of Consumer Affairs. SCUPS provides educational programs, primarily through distance learning, which may lead to a number of different degrees. "In July 2000, Lee enrolled as a student in SCUPS's four-year juris doctorate program. According to the catalog in effect at the time, SCUPS had a cancellation and refund policy that permitted refunds only during an eight-day cancellation period. Lee paid a total of $2,800 to enroll, comprising one year's tuition and a $100 application fee.

"After the eight-day cancellation period had expired, Lee became ill and was incapable of completing any coursework. She alleges that she notified SCUPS of her illness and asked to be placed on a non-bar track, to continue her studies but not for the sake of obtaining a degree. Lee claims SCUPS did not act on this request.

"In November 2002, SCUPS sent a letter to Lee informing her she was not making satisfactory academic progress and was being administratively withdrawn from SCUPS. In 2004, Lee filed a complaint with the Bureau, alleging she had been unjustly terminated from the juris doctor program and that SCUPS had refused to refund her prepaid tuition. After a number of administrative proceedings, Lee alleges the Bureau ultimately found, among other things, that SCUPS was required to use the statutory formula for refunds if a student had completed less than 60 percent of an educational program. The Bureau also found problems with SCUPS's student complaint procedures.

"Based on the Bureau's findings, Lee filed a civil complaint alleging violation of the Consumers Legal Remedies Act (Civ. Code, § 1750 et seq.) (CLRA) and the unfair competition law (Bus. & Prof. Code, § 17200 et seq.) (UCL). She filed the case as a putative class action under the CLRA, seeking to represent consumers similarly situated. The complaint proposed to define the class as, 'All adult student consumers who enrolled in and paid the tuition charged for the materials and services supplied in a course program with SCUPS and who subsequently either voluntarily withdrew or were administratively withdrawn by SCUPS and who did not receive a refund of their paid tuition from SCUPS upon their dismissal.'

"In response to the complaint, SCUPS filed a petition to compel arbitration and to stay the trial court proceedings. SCUPS claimed that 519 students had been dropped or dismissed from its program during a four-year period, and of those, 408 (none of whom were law students) had signed enrollment agreements containing arbitration clauses. The remaining 111, like Lee, were law students whose enrollment agreements did not include arbitration clauses." (Lee I, supra, 148 Cal.App.4th at pp. 784-785.)

We affirmed the trial court's denial of SCUPS's motion to compel arbitration. (Lee I, supra, 148 Cal.App.4th at p. 784.) SCUPS argued that because some potential class members had signed an arbitration agreement, Lee was required to arbitrate, even though she had never signed such an agreement. (Id. at p. 786.) We disagreed, noting, among other principles, that "arbitration requires consent; the parties must mutually agree to resolve their disputes in an alternate forum. 'The strong public policy in favor of arbitration does not extend to those who are not parties to an arbitration agreement, and a party cannot be compelled to arbitrate a dispute that he has not agreed to resolve by arbitration. [Citation.]' [Citations.] Very limited circumstances exist under which a nonparty to an arbitration agreement can be bound by someone else's consent (e.g., agency, a spousal relationship or parent/minor child relationship), and none of those exist here. [Citation.]" (Ibid.)

Following our decision in Lee I, the case was remanded to the trial court. SCUPS answered the complaint, and discovery proceeded. In August 2008, SCUPS filed motions to strike the class allegations and for judgment on the pleadings. The basis for these motions was that Education Code section 94820, upon which Lee had predicated her claims under the CLRA and UCL, had expired.*fn1 The trial court found that while the pertinent code section had expired, she could maintain claims based on unfair or deceptive practices based on misrepresentations in SCUPS's literature. Several months later, SCUPS again filed motions to strike the class allegations and for ...


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