Justia Arbitration & Mediation Opinion Summaries

Shaun Trabert purchased a used vehicle from an automobile dealer. Trabert signed a preprinted industry-drafted installment sales contract. The dealer then assigned the contract to Consumer Portfolio Services, Inc. Portfolio later repossessed Trabert's vehicle, and Trabert filed a class action complaint alleging Portfolio's repossession/default notices were defective under consumer statutes. This appeal was the second time the issue of an automobile purchaser who brought consumer claims against the creditor-assignee of the parties' sales contract came before the Court of Appeal. The first appeal involved the enforceability of an arbitration agreement in the contract. In "Trabert I," the Court held the arbitration agreement contained certain unconscionable provisions, and remanded for the court to determine whether these provisions could be severed from the remaining agreement. On remand, the trial court declined to sever the provisions and denied the creditor-assignee's motion to compel arbitration. Portfolio challenged the trial court's last order in this second appeal. After review, the Court of Appeal concluded the trial court erred in denying Portfolio's motion. "The unconscionable provisions concern only exceptions to the finality of the arbitration award, and can be deleted without affecting the core purpose and intent of the arbitration agreement. The deletion of these exceptions creates a binding arbitration award and promotes the fundamental attributes of arbitration, including speed, efficiency, and lower costs." The Court reversed and remanded with directions for the court to sever the unconscionable provisions from the arbitration agreement and granted Portfolio's motion to compel arbitration. View "Trabert v. Consumer Portfolio Services" on Justia Law

Petitioner Universal Protection Service, L.P. petitioned the Court of Appeal for a writ of mandate and/or prohibition to challenge the superior court's order granting real party in interest Floridalma Franco's demand to arbitrate her employment-related disputes with Universal and ruling the arbitrator would decide the arbitrability of Franco's class action claims. Universal argued the court legally erred in its ruling because the parties' arbitration agreement did not clearly and unmistakably submit arbitrability questions to the arbitrator, and thus it was for the superior court to decide whether the agreement authorized class and/or representative arbitration. The Court of Appeal concluded the court erred by granting Franco's petition, but nevertheless agreed with Franco that the parties' reference to American Arbitration Association (AAA) rules, which unambiguously stated that the arbitrator was to decide whether the parties' arbitration agreement permitted class arbitration, constituted clear and unmistakable evidence of their intent that the arbitrator decide this issue (which was a threshold question of arbitrability). Because the trial court reached the correct conclusion, the Court of Appeal denied Universal's petition. View "Universal Protection Services v. Super. Ct." on Justia Law

Securitas Security Services USA, Inc. petitioned the Court of Appeal for a writ of mandate and/or prohibition to challenge a superior court order granting its amended motion to compel arbitration in which the court ordered the parties to arbitrate all of real party in interest Denise Edwards's claims, including her class action and representative claims under the Private Attorneys General Act of 2004 (PAGA). Securitas argued the court impermissibly rewrote the parties' written dispute resolution agreement, which contained an express waiver of class, collective or representative claims; Securitas maintained the parties did not mutually agree to arbitrate class and/or representative claims and the agreement should have been deemed silent on arbitration of any class or representative action. It further contended the court erred by refusing to enforce the lawful class action waiver, as well as the PAGA waiver, because as to the latter, Edwards's waiver was voluntary, rendering the circumstances unlike those in "Iskanian v. CLS Transportation." Securitas argued that because "Iskanian" did not apply, the parties' arbitration agreement should have been enforced in its entirety as to Edwards's individual claims. After review, the Court of Appeal concluded that the trial court correctly ruled that Iskanian rendered the PAGA waiver within the parties' dispute resolution agreement unenforceable. However, the court then erred by invalidating and severing the waiver provision, including an enforceable class action waiver, from the agreement and sending Edwards's entire complaint, including her class action and PAGA claims, to arbitration. Though the Court granted Securitas's petition to the extent it sought to set aside the order compelling Edwards's class and PAGA claims to arbitration, it denied the remainder of its requested relief, and based on its de novo interpretation of the parties' agreement, directed the trial court to enter a new order denying Securitas's amended motion to compel arbitration. View "Securitas Security Services v. Super. Ct." on Justia Law

Entergy Arkansas, Inc. and Entergy Operations, Inc. (collectively, “Entergy”) entered into an agreement with Siemens Energy, Inc. (“Siemens”) under which Siemens was to provide Entergy with services at three nuclear facilities. The agreement included an arbitration provision. Pursuant to the agreement, Entergy and Siemens agreed that Siemens would replace a large component of a generator at Entergy’s Arkansas Nuclear One (“ANO”) facility. Siemens had a separate, long-term agreement with Bigge Crane and Rigging Co. and Claus Frederiksen (collectively, “Bigge”) under which Bigge would prove crane services for Siemens at ANO. After a crane built and operated by Bigge collapsed at ANO, killing one person, injuring ten others, and causing significant damages to ANO, Entergy filed suit against Bigge and others, alleging several tort claims. Bigge moved to compel arbitration of Entergy’s claims against Bigge as a purported third-party beneficiary of the agreement between Entergy and Siemens. The circuit court denied Bigge’s motion. The Supreme Court affirmed, holding that the circuit court did not err in concluding (1) that, under the facts of this case, issues of arbitrability were matters for judicial determination; and (2) that Bigge could not invoke arbitration. View "Bigge Crane & Rigging Co. v. Entergy Ark. Inc." on Justia Law

Franco filed a purported class action as an employee of Athens Services, claiming Labor Code and wage-order violations. He also sued in a representative capacity under the Private Attorneys General Act (Lab. Code 2698) and alleged violation of state unfair competition law. (Bus. & Prof. Code 17200). Athens petitioned to compel arbitration based on Franco’s employment agreement, alleging that it was engaged in interstate commerce under the Federal Arbitration Act (9 U.S.C. 1-16). The trial court agreed. The appeal court concluded that provisions requiring arbitration and waiving class actions were unenforceable. On remand, Athens informed the court that Franco’s actual employer was Arakelian. Franco amended the complaint to add Arakelian, which filed another petition to compel arbitration, arguing that authorities cited by the prior decision had been overruled by the U.S. Supreme Court in 2010. The trial court denied the petition, citing the law of the case doctrine and finding that Arakelian waived its right to compel arbitration by failing to earlier identify itself as Franco’s true employer. The court of appeal affirmed. The California Supreme Court vacated. The court of appeal reversed denial of the petition to compel arbitration, in light of the rule announced by the California Supreme Court in Iskanian. View "Franco v. Arakelian Enters., Inc." on Justia Law

The Unions, representing employees in five Sheriff’s Department bargaining units, entered into collective bargaining agreements with the County of Los Angeles that contained grievance procedures for resolving complaints concerning the interpretation or application of the agreements. The grievance procedures consisted of progressive steps culminating in arbitration. The Unions filed class grievances seeking overtime pay for “donning and doffing” and related activities (putting on, taking off, and maintaining their uniforms and equipment) and “off-the-clock” supervisory activities by certain employees. The county denied the grievances; the Unions filed requests for class arbitration of the grievances, which the Los Angeles County Employee Relations Commission (ERCOM) granted. The County sought a declaratory judgment that ERCOM’s order granting class or consolidated arbitration violated the parties’ agreements. The trial court refused to compel such arbitrations, ruling that Code of Civil Procedure section 1281.2 gave it discretion, in the interest of judicial economy, to stay the arbitration while it resolved issues between the parties that were not subject to arbitration, which resolution might make arbitrations unnecessary. The court of appeal reversed, holding that all of the issues between the parties were subject to individual arbitrations. View "Ass'n for L.A. Deputy Sheriffs v. Cnty. of Los Angeles" on Justia Law

Donald Porter, Marc Porter, Porter Capital Corporation, Porter Bridge Loan Company, Inc., Lowerline Corporation, Capital Partners Leasing, Inc., and Capital Partners Leasing, LLC (referred to collectively as "the Porter defendants"), appealed the denial of their motion to compel arbitration of the claims asserted against them by Byron Porter Williamson. Marc and Donald Porter are brothers; they founded Porter Capital Corporation in 1991 and thereafter established the related companies Porter Bridge Loan Company, Inc., Lowerline Corporation, CapitalPartners Leasing, Inc., and CapitalPartners Leasing, LLC. In 1992, the Porters hired their nephew Williamson as an employee of the Porter companies. In 2004, Williamson, Marc Porter, and Donald Porter entered into a shareholders agreement that made Williamson a 10% shareholder in Porter Capital Corporation, Porter Bridge Loan Company, Inc., Lowerline Corporation, and CapitalPartners Leasing, Inc. Following his termination and resignation as a shareholder of the corporations and a member of the limited liability company, Williamson demanded that his shares in the corporations and his interest in the limited-liability company be purchased by the Porter companies pursuant to the agreement. The parties, however, were unable to agree on the value of Williamson's shares and interest. Williamson sued Marc Porter, Donald Porter, and the Porter companies. Citing the arbitration provision of the agreement, the Porter defendants moved to dismiss the action without prejudice or to stay discovery and compel arbitration. Williamson opposed the motion, arguing that some or all of his claims fell within the specific-performance exception of the arbitration provision in the agreement. Following a hearing on the Porter defendants' motion to dismiss or to compel arbitration, the trial court issued an order denying the Porter defendants' motion. The Porter defendants appealed. Upon review, the Supreme Court affirmed the trial court's denial of the Porter defendants' motion to compel arbitration insofar as that motion related to Williamson's request for specific performance and injunctive relief. With regard to Williamson's remaining claims seeking rescission and alleging misrepresentation and suppression and conversion, the Court reversed the trial court's order and remanded the case with instructions for the trial court either to dismiss those claims or to grant the Porter defendants' motion to compel arbitration of them. View "Porter v. Williamson" on Justia Law

This appeal stemmed from five putative class actions filed against Wells Fargo and its predecessor, Wachovia Bank. At issue was whether Wells Fargo's waiver of its right to compel arbitration of the named plaintiffs' claims should be extended to preclude Wells Fargo from compelling arbitration of the unnamed putative class members' claims. The court concluded that because a class including the unnamed putative class members had not been certified, Article III's jurisdictional limitations precluded the district court from entertaining Wells Fargo's conditional motions to dismiss those members' claims as subject to arbitration; contrary to the position they take in this appeal, the named plaintiffs lack Article III standing to seek the court's affirmance of the district court's provision holding that if a class is certified, Wells Fargo will be estopped to assert its contractual rights to arbitration; and, therefore, the court vacated and remanded for further proceedings. View "Spears-Haymond v. Wells Fargo Bank" on Justia Law

Plaintiff, appointed the receiver of six hedge funds that were part of a Ponzi scheme orchestrated by Arthur Nadel, attempted to recover alleged "false profits" in connection with Nadel's fraudulent scheme. Herbert Schneiderman, now deceased, was among the investors who became subject to one of plaintiff's "clawback" suits. Schneiderman's estate moved to compel arbitration and the district court granted the motion. The arbitrator then granted summary judgment to the estate and denied plaintiff's motion for reconsideration. Plaintiff's motion to vacate the arbitrator's decision was denied. The court concluded that clawback actions are not categorically exempt from the Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq.; the district court did not err in determining that the parties formed a contract and that questions as to its validity were for the arbitrator to decide; the district court did not err in sending all claims to arbitration; and the arbitrator did not so exceed or imperfectly use his powers that the district court erred in declining to vacate the award. Accordingly, the court affirmed the judgment. View "Wiand v. Schneiderman" on Justia Law

Plaintiffs, former employees of Pacific Bell, took early retirement, with the option to take a pension or a lump sum payment. All chose the lump sum, persuaded to do so by Kearney, with whom each plaintiff had significant interaction, having first learned of her from presentations made at the Pacific Bell premises. All became clients of Kearney, in connection with which they signed some documents, by which Kearney came to manage and invest their retirement proceeds, in some cases for years. Dissatisfied, plaintiffs sued Kearney and AIG Financial Advisors, the successor to the company where Kearney originally worked. AIGFA filed a petition to compel arbitration, supported in part by a declaration of Kearney. Without holding an evidentiary hearing, the trial court granted the petition. That arbitration occurred, with the arbitrators ultimately issuing an award rejecting plaintiffs’ claims. After judgment was entered on the award, plaintiffs appealed. The court of appeal reversed and remanded for an evidentiary hearing. View "Ashburn v. AIG Fin. Advisors, Inc." on Justia Law