Justia Arbitration & Mediation Opinion Summaries

The plaintiffs, Robert and Stephen Samuelian, co-founded Life Generations Healthcare, LLC (the Company) and later sold a portion of their ownership interest. The Company adopted a new operating agreement that included a noncompetition provision. The Samuelians challenged the enforceability of this provision in arbitration, where the arbitrator found it invalid per se under California Business and Professions Code section 16600, as it arose from the sale of a business interest. The arbitrator also found the corporate opportunities provision invalid and ruled the Company’s forced buyout of the Samuelians was invalid.The Superior Court of Orange County reviewed the arbitrator’s ruling de novo, as the parties had agreed the arbitrator could not commit errors of law. The court confirmed the arbitrator’s award, finding no legal error in applying the per se standard to the noncompetition provision and agreeing with the arbitrator’s findings on the invalidity of the corporate opportunities provision and the lack of fiduciary duties owed by the Samuelians.The California Court of Appeal, Fourth Appellate District, Division Three, reviewed the case. The court held that the arbitrator erred in applying the per se standard to the noncompetition provision. The court determined that the reasonableness standard should apply to noncompetition agreements arising from the partial sale of a business interest, as such agreements may have procompetitive benefits and are not inherently anticompetitive. The court also found that an operating agreement can impose fiduciary duties on members in a manager-managed company.The Court of Appeal reversed the trial court’s judgment confirming the arbitration award and directed the trial court to deny the Samuelians’ petition to confirm the award and grant the Company’s motion to vacate the entire award, including the portion awarding attorney fees and costs. View "Samuelian v. Life Generations Healthcare, LLC" on Justia Law

Sarah Anoke and other employees initiated arbitration proceedings against their employer, X (comprising Twitter, Inc., X Holdings I, Inc., X Holdings Corp., X Corp., and Elon Musk), to resolve employment-related disputes. The arbitration provider issued an invoice for $27,200, which was mistakenly paid by Anoke’s counsel. The arbitration provider marked the invoice as paid and closed, refunded the payment to Anoke’s counsel, and issued a new invoice to X, which X paid within 30 days.Anoke petitioned the Superior Court of the City and County of San Francisco for an order compelling X to pay their arbitration-related attorney fees and costs, arguing that X’s payment was untimely as it was not made within 30 days of the first invoice. The superior court denied the petition, reasoning that since the arbitrator nullified the first invoice after Anoke’s attorney mistakenly paid it and X timely paid the second invoice, X met the statutory deadline.The Court of Appeal of the State of California, First Appellate District, Division Five, reviewed the case. The court held that the statutory deadline for payment of arbitration fees under Code of Civil Procedure section 1281.97 was not violated. The court found that the first invoice was paid by Anoke’s counsel, and the second invoice was paid by X within the 30-day period. The court concluded that the arbitrator acted within its authority by issuing a second invoice after refunding the mistaken payment. The court affirmed the superior court’s order denying Anoke’s motion to compel arbitration with attorney fees and costs. View "Anoke v. Twitter" on Justia Law

Trudy Maxwell, a 93-year-old resident of Atria Park of San Mateo, died after consuming an industrial strength cleaner mistakenly served as a beverage by an Atria employee. Trudy’s eight children, including James Maxwell III, filed a lawsuit against Atria Management Company and related entities, alleging negligence, wrongful death, and elder abuse. James III, holding a durable power of attorney (DPOA), had signed an arbitration agreement with Atria, which the defendants sought to enforce.The San Mateo County Superior Court denied the defendants' motion to compel arbitration, ruling that James III was not authorized to sign the arbitration agreement because he did not have the authority to make health care decisions for Trudy. The court also found that the arbitration agreement did not bind Trudy’s children regarding their wrongful death claims and that California procedural rules, including section 1281.2(c), were not preempted by the Federal Arbitration Act (FAA).The California Court of Appeal, First Appellate District, Division One, reviewed the case. The court reversed the trial court’s order denying arbitration and remanded the case for further proceedings. The appellate court instructed the trial court to reconsider the validity of the arbitration agreement in light of the California Supreme Court’s decision in Harrod v. Country Oaks Partners, LLC, which held that agreeing to an optional arbitration agreement is not a health care decision. The appellate court also affirmed that the wrongful death claims of Trudy’s children are not subject to arbitration, as they are independent and personal claims not bound by the arbitration agreement. The court further held that section 1281.2(c) was not preempted by the FAA, allowing the trial court to stay or deny arbitration to avoid conflicting rulings. View "Maxwell v. Atria Management Co., LLC" on Justia Law

Petitioners Isai Lopez Rivera and Helen Espinosa purchased a new 2020 Ford Super Duty F-250 from Fairway Ford in San Bernardino, financing the purchase through the dealer. They received a 3-year/36,000-mile warranty from Ford Motor Company (FMC) but did not buy an optional service contract. After experiencing mechanical issues with the truck, they sought repairs at Ford of Ventura, an authorized service center. When the repairs failed, they filed a lawsuit under the Song-Beverly Consumer Warranty Act against FMC and Ford of Ventura, but not against the selling dealer, Fairway Ford.The trial court granted FMC's motion to compel arbitration based on an arbitration provision in the sale contract between the petitioners and the non-party dealer. The court found that FMC could enforce the arbitration provision as a third-party beneficiary and that the petitioners were estopped from refusing arbitration. Petitioners moved for reconsideration twice, citing appellate decisions that disapproved of the precedent relied upon by the trial court, but both motions were denied.The California Court of Appeal, Second Appellate District, reviewed the case. The court concluded that FMC and Ford of Ventura are not third-party beneficiaries of the sale contract and that the petitioners are not estopped from objecting to arbitration. The court found that the sale contract did not show an intent to benefit FMC and that the petitioners' claims against FMC and Ford of Ventura were independent of the sale contract. The appellate court granted the petition for a writ of mandate, directing the trial court to vacate its orders compelling arbitration and denying reconsideration, and to enter a new order denying FMC's motion to compel arbitration. View "Rivera v. Superior Court" on Justia Law

Lisa Enmark was under an LPS conservatorship when she moved into a skilled nursing facility. Her father, Scott Enmark, signed two optional arbitration agreements with the facility as her representative. After Lisa died, her parents sued the facility's owners and operators, asserting both successor and individual claims. The defendants petitioned to compel arbitration, but the trial court denied the petition, finding no evidence of Scott’s authority to bind Lisa to arbitration on the successor claims and noting that neither Scott nor Lisa’s mother, Marilyn Warhol, signed the agreements in their individual capacities.The Superior Court of Los Angeles County found that Scott did not have the authority to sign the arbitration agreements on Lisa’s behalf and that Scott and Marilyn did not sign the agreements in their individual capacities. The court denied the petition to compel arbitration, leading the defendants to appeal the decision.The California Court of Appeal, Second Appellate District, reviewed the case. The court held that the LPS conservatorship order did not confer actual or ostensible authority on Scott to sign the arbitration agreements on Lisa’s behalf. The court also found that the execution of the arbitration agreements was not a health care decision and that Scott’s authority under the conservatorship did not extend to binding Lisa or her heirs to arbitration. Additionally, the court ruled that Scott and Marilyn’s wrongful death claim was not subject to arbitration as they did not sign the agreements in their individual capacities. The court affirmed the trial court’s order denying the petition to compel arbitration. View "Enmark v. KC Community Care" on Justia Law

Plaintiffs Darren Kramer, Manish Aggarwal, Mostafa El Bermawy, and Amish Shah filed a complaint against Coinbase, Inc. for public injunctive relief under the Consumer Legal Remedies Act (CLRA), the California False Advertising Law (FAL), and the California Unfair Competition Law (UCL). They alleged that Coinbase misrepresented its security features, which led to financial losses. The plaintiffs had accepted Coinbase’s user agreement, which included an arbitration provision. Coinbase moved to compel arbitration, arguing that the plaintiffs sought private injunctive relief, which should be subject to arbitration.The San Francisco Superior Court denied Coinbase’s motion to compel arbitration, concluding that the plaintiffs sought public injunctive relief, which is not subject to arbitration under California law. The court noted that the complaint exclusively sought public injunctive relief and did not request any relief that would solely benefit the plaintiffs or existing Coinbase customers. The court also referenced a related federal action (Aggarwal I) where the plaintiffs sought individual relief, further supporting the conclusion that the current complaint sought public injunctive relief.The California Court of Appeal, First Appellate District, reviewed the case and affirmed the trial court’s decision. The appellate court held that the plaintiffs’ complaint sought public injunctive relief, as it aimed to prohibit Coinbase from continuing its allegedly deceptive practices that misled the general public about its security features. The court distinguished this case from others where the relief sought was primarily for the benefit of the plaintiffs or a specific group of individuals. The court concluded that the requested injunctive relief had the primary purpose and effect of protecting the public, thus falling under the definition of public injunctive relief as established in McGill v. Citibank, N.A. Consequently, the arbitration provision could not be enforced to compel arbitration of the public injunctive relief claims. View "Kramer v. Coinbase, Inc." on Justia Law

A former employee, Liu, sued her employer, Miniso, alleging various employment-related claims, including sexual harassment, sex discrimination, and wage and hour violations. Liu claimed that she was subjected to severe and pervasive sexual harassment and discrimination based on her sexual orientation and gender identity. She also alleged that Miniso misclassified her as an exempt employee, resulting in unpaid wages and denied rest and meal breaks. Liu further claimed that she faced retaliation for refusing to participate in illegal practices and for whistleblowing, leading to her constructive termination.The Superior Court of Los Angeles County denied Miniso's motion to compel arbitration of Liu's claims. Miniso argued that the arbitration agreement Liu signed should compel arbitration of all her claims, except for the sexual harassment claims, which they conceded were exempt under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA). The trial court found that Liu had adequately stated a claim for sexual harassment and ruled that the EFAA invalidated the arbitration agreement for all of Liu's claims, not just the sexual harassment claims.The California Court of Appeal, Second Appellate District, affirmed the trial court's decision. The appellate court held that under the EFAA, if a plaintiff's case includes at least one claim related to sexual harassment, the entire case is exempt from arbitration. The court reasoned that the plain language of the EFAA invalidates the arbitration agreement with respect to the entire case, not just the specific claims of sexual harassment. Consequently, Liu could not be compelled to arbitrate any of her claims, and the trial court's denial of Miniso's motion to compel arbitration was upheld. View "Liu v. Miniso Depot CA, Inc." on Justia Law

Former police officer Sergio Ramirez was terminated by the City of Indio Police Department following an internal affairs investigation. Ramirez was initially placed on administrative leave after being charged with rape and sexual assault, though he was later acquitted of all criminal charges. The internal investigation produced conflicting reports, with one concluding Ramirez violated multiple conduct standards and another finding the allegations "not sustained." The Chief of Police issued a Notice of Termination, citing Ramirez's poor judgment, dishonesty, and conduct unbecoming of an officer.Ramirez appealed the termination through the administrative appeal procedure outlined in the Memorandum of Understanding (MOU) between the City and the Indio Police Officers’ Association. An arbitrator conducted a three-day evidentiary hearing and recommended Ramirez's reinstatement with full back pay and benefits. However, the City Manager reviewed the arbitrator's findings and upheld the termination, citing Ramirez's poor judgment, dishonesty, and conduct that embarrassed the department.Ramirez petitioned the Superior Court of Riverside County for a writ of mandate, arguing that the City Manager should have deferred to the arbitrator's findings on the weight and credibility of the evidence. The superior court denied the petition, finding that the MOU clearly vested the final decision-making authority in the City Manager and that the City Manager's findings were supported by sufficient evidence.The Court of Appeal, Fourth Appellate District, Division One, State of California, affirmed the superior court's judgment. The court held that the MOU's language and framework did not require the City Manager to defer to the arbitrator's findings on relevancy, weight, and credibility of the evidence. The court also found that the administrative appeal procedure provided Ramirez with due process, as it included notice, an opportunity to respond, and a meaningful hearing before an independent arbitrator, with the City Manager conducting a thorough review before making the final decision. View "Ramirez v. City of Indio" on Justia Law

A home improvement and solar panel salesperson visited the home of senior citizens Harold and Lucy West, who lived with their adult daughter Deon. The salesperson, Ilai Mitmiger, discussed a solar installation and bathroom renovation, leading to a loan agreement package being completed electronically with Harold’s signature. Harold and Lucy, both in their 90s and suffering from dementia, did not use email, computers, or mobile phones. Deon believed the renovations would be paid for by a government program, as suggested by Mitmiger. The loan documents were sent to Deon’s email, opened on a mobile device, and signed electronically in Harold’s name within seconds.The Superior Court of Los Angeles County denied Solar Mosaic LLC’s petition to compel arbitration based on the arbitration provisions in the loan agreement. The court found that Mosaic had not proven the existence of an agreement to arbitrate, specifically that Harold was the person who completed the loan documents or that Deon had the authority to bind Harold to an arbitration agreement.The California Court of Appeal, Second Appellate District, Division Eight, affirmed the trial court’s order. The appellate court held that the evidence strongly suggested Harold lacked the technical ability to execute the electronic signatures and demonstrated a factual dispute as to whether Harold actually signed the loan documents. The court also found that Mosaic had not proven Deon had the authority to bind Harold to the agreement or that Harold ratified the agreement through a recorded telephone call. The court concluded that the recorded call did not demonstrate Harold’s awareness or understanding of the loan agreement, and thus, there was no ratification. View "West v. Solar Mosaic, LLC" on Justia Law

The decedent, suffering from Parkinson’s disease, dysphagia, and dementia, was admitted to Elmcrest Care Center in February 2013. On August 4, 2017, he was found nonresponsive on the floor by Elmcrest staff, who administered CPR and called 911. He was transported to a hospital and passed away four days later. The Estate of Jose de Jesus Ortiz, represented by Ericka Ortiz, filed a civil action against Elmcrest and its staff, alleging elder abuse, neglect, negligence, willful misconduct, and fraud. The trial court compelled arbitration based on an agreement signed upon the decedent’s admission to Elmcrest.The arbitrator issued a First Interim Award on March 30, 2022, finding that the Estate did not meet its burden of proof on any of its claims. The award was labeled "interim" and allowed for further submissions by the parties to address any omitted issues. The Estate filed a request to amend the First Interim Award, arguing that damages for pre-death loss of dignity were not considered. The arbitrator issued a Second Interim Award on May 26, 2022, awarding $100,000 in damages for pre-death pain and suffering, and invited the Estate to file for attorney fees and costs.The trial court initially denied the Estate’s petition to vacate the First Interim Award, ruling it was not final. However, it later vacated the Final Award and confirmed the First Interim Award, reasoning that the First Interim Award had resolved all necessary issues. The Estate appealed.The California Court of Appeal reversed the trial court’s decision, holding that the First Interim Award was not final as it expressly reserved jurisdiction for further proceedings. The court concluded that the arbitrator did not exceed her authority in issuing the Final Award, which included the omitted decision on pre-death loss of dignity. The trial court was directed to enter a new order confirming the Final Award. View "Ortiz v. Elmcrest Care Center, LLC" on Justia Law