Justia Arbitration & Mediation Opinion Summaries

A salesperson from Elite Home Remodeling, Inc. visited the home of Harold and Lucy West, both in their 90s and suffering from dementia, to discuss solar panel installation and home renovation. The salesperson, Ilai Mitmiger, allegedly obtained Harold's electronic signature on a loan agreement with Solar Mosaic LLC (Mosaic) through Deon, the Wests' daughter, who provided her email for the documents. The loan agreement was signed electronically in Harold's name within seconds, despite Harold's apparent lack of understanding and technical ability.The Superior Court of Los Angeles County denied Mosaic's petition to compel arbitration, finding that Mosaic failed to prove the existence of an agreement to arbitrate. The court determined that Mosaic did not establish that Harold signed the loan documents or that Deon had the authority to bind Harold to the agreement.The California Court of Appeal, Second Appellate District, Division Eight, affirmed the trial court's order. The appellate court held that the evidence presented, including Harold's dementia and lack of technical skills, created a factual dispute about the authenticity of Harold's electronic signatures. The court also found that Mosaic did not prove Deon had the authority to act as Harold's agent or that Harold ratified the agreement during a recorded phone call with Mosaic. The court concluded that the recorded call did not demonstrate Harold's awareness or understanding of the loan agreement, thus failing to establish ratification. The order denying the petition to compel arbitration was affirmed. View "West v. Solar Mosaic, LLC" on Justia Law

Sergio Ramirez, a former police officer, 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. Despite the acquittal, the internal investigation concluded that Ramirez had violated several departmental policies, leading to his termination. Ramirez appealed the decision through the administrative appeal process outlined in the Memorandum of Understanding (MOU) between the City and the Indio Police Officers’ Association.The arbitrator, after a full evidentiary hearing, recommended Ramirez's reinstatement with full back pay and benefits. However, the City Manager upheld the termination, citing Ramirez's poor judgment, dishonesty, and conduct unbecoming of an officer. Ramirez then 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, affirming the City Manager's decision.The Court of Appeal, Fourth Appellate District, reviewed the case and affirmed the lower court's judgment. The court held that the MOU clearly vested the City Manager with the final authority to make disciplinary decisions, including the power to reject the arbitrator's advisory findings. The court found that the City Manager had conducted a thorough review of the arbitrator's recommendations and the evidence before making the final decision. The court also concluded that the administrative appeal process provided Ramirez with due process, as it included notice, an opportunity to respond, and a meaningful hearing. The judgment of the Superior Court was affirmed, upholding Ramirez's termination. View "Ramirez v. City of Indio" 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 faced severe and pervasive harassment and discrimination based on her sexual orientation and gender identity, and that she was misclassified as an exempt employee, leading to unpaid wages and denied breaks. Liu also alleged that she was retaliated against for refusing to participate in illegal practices and for whistleblowing, which led 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 Liu's allegations of sexual harassment were insufficient to state a claim and that the arbitration agreement should be enforced for the non-sexual harassment claims. The trial court found that Liu had adequately stated a claim for sexual harassment and, based on the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA), ruled that the arbitration agreement was unenforceable for all of Liu's 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 of sexual harassment, the entire case is exempt from arbitration at the plaintiff's election. The court emphasized that the EFAA's language invalidates arbitration agreements with respect to the entire case, not just the sexual harassment claims. This interpretation avoids the inefficiency of having separate proceedings for different claims and aligns with the legislative intent to protect plaintiffs from being compelled into arbitration for sexual harassment disputes. View "Liu v. Miniso Depot CA, Inc." on Justia Law

Plaintiffs, who are users of Coinbase's cryptocurrency platform, filed a complaint against Coinbase, Inc. alleging violations of the Consumer Legal Remedies Act (CLRA), the California False Advertising Law (FAL), and the California Unfair Competition Law (UCL). They sought public injunctive relief, claiming Coinbase misrepresented its security features to the public. Coinbase's user agreement, which plaintiffs accepted, included an arbitration clause. Coinbase moved to compel arbitration, arguing the plaintiffs sought private injunctive relief, which is subject to arbitration.The San Francisco Superior Court denied Coinbase’s motion to compel arbitration, finding 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 case, Aggarwal I, where plaintiffs sought individual relief, supporting the conclusion that the current complaint sought public injunctive relief.The California Court of Appeal, First Appellate District, reviewed the case de novo. The court affirmed the trial court’s decision, holding that the plaintiffs’ complaint indeed sought public injunctive relief. The court explained that public injunctive relief under the CLRA, FAL, and UCL is intended to prohibit unlawful acts that threaten future injury to the public, rather than redress individual wrongs. The court found that the plaintiffs’ allegations and requests for relief were aimed at preventing Coinbase from continuing its allegedly deceptive practices, which primarily benefit the public. Consequently, the arbitration provision in Coinbase’s user agreement could not compel arbitration of the plaintiffs’ claims for public injunctive relief. View "Kramer v. Coinbase, Inc." on Justia Law

In 2022, Congress amended the Federal Arbitration Act (FAA) by passing the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA), which renders arbitration agreements unenforceable at the plaintiff’s election in sexual assault and sexual harassment cases arising on or after March 3, 2022. Jane Doe filed a lawsuit in 2023 against her employer, Second Street Corporation, and two supervisors, alleging sexual harassment, discrimination, and wage-and-hour violations. The defendants moved to compel arbitration based on an arbitration provision in the employee handbook. The trial court denied the motion, concluding that the EFAA rendered the arbitration provision unenforceable for all of Doe’s claims and allowed her to file a first amended complaint adding additional claims, including constructive wrongful termination.The Superior Court of Los Angeles County denied the defendants' motion to compel arbitration, finding that Doe’s sexual harassment claims, which included conduct both before and after the EFAA’s effective date, were exempt from mandatory arbitration. The court also ruled that all of Doe’s other claims were exempt from arbitration under the EFAA because they were part of the same case. Additionally, the court permitted Doe to file a first amended complaint.The California Court of Appeal, Second Appellate District, affirmed the trial court’s order. The appellate court held that under the EFAA’s plain language, Doe’s sexual harassment claims, which alleged continuing violations both before and after the EFAA’s effective date, were not subject to mandatory arbitration. The court also held that the EFAA invalidates an arbitration clause as to the entire case, not just the claims alleging sexual harassment. Therefore, the trial court properly denied the motion to compel arbitration and did not abuse its discretion by allowing Doe to file a first amended complaint. View "Doe v. Second Street Corp." on Justia Law

A woman named Lisa was under a conservatorship due to being gravely disabled from a mental disorder. Her father, Scott, was appointed as her conservator and placed her in a skilled nursing facility. Scott signed two optional arbitration agreements with the facility on Lisa's behalf. After Lisa died, her parents sued the facility's owners and operators, alleging various claims including wrongful death. The defendants sought to compel arbitration based on the agreements Scott signed.The Superior Court of Los Angeles County denied the petition to compel arbitration. The court found no evidence that Scott had the authority to bind Lisa to the arbitration agreements for the successor claims. Additionally, the court found that neither Scott nor Lisa's mother, Marilyn, signed the agreements in their individual capacities, thus the wrongful death claim was not subject to arbitration.The California Court of Appeal, Second Appellate District, reviewed the case. The court held that the conservatorship order did not give Scott the authority to sign the arbitration agreements on Lisa's behalf. The court reasoned that the conservatorship order did not explicitly or implicitly authorize Scott to waive Lisa's right to a jury trial. Furthermore, the court found that the wrongful death claim was not subject to arbitration because Scott did not sign the agreements in his individual capacity, and Marilyn did not sign them at all. The court affirmed the lower court's decision, denying the petition to compel arbitration. View "Enmark v. KC Community Care" on Justia Law

A former employee, Campbell, filed a putative class action lawsuit against her employer, Sunshine Behavioral Health, LLC, alleging wage and hour violations. Campbell claimed that employees were not paid proper overtime, were required to work through meal and rest breaks without compensation, were not paid minimum wage, and were not paid in a timely manner. Sunshine initially proceeded with litigation and agreed to participate in mediation. However, Sunshine later claimed to have discovered an arbitration agreement signed by Campbell, which included a class action waiver.The Superior Court of Orange County found that Sunshine had waived its right to compel arbitration. Despite allegedly discovering the arbitration agreement in November 2022, Sunshine continued to engage in mediation discussions and did not inform Campbell or the court of its intent to compel arbitration until March 2023. Sunshine's delay and conduct were deemed inconsistent with an intent to arbitrate, leading the court to conclude that Sunshine had waived its right to arbitration.The California Court of Appeal, Fourth Appellate District, Division Three, reviewed the case and affirmed the lower court's decision. The appellate court found clear and convincing evidence that Sunshine had waived its right to arbitration. The court noted that Sunshine's actions, including agreeing to mediation on a class-wide basis and delaying the motion to compel arbitration, were inconsistent with an intent to arbitrate. The court emphasized that Sunshine's conduct demonstrated an intentional abandonment of the right to arbitrate, thus affirming the order denying the motion to compel arbitration. View "Campbell v. Sunshine Behavioral Health" on Justia Law

Petitioners purchased a new 2020 Ford Super Duty F-250 from Fairway Ford in San Bernardino, financing the purchase through the dealer and signing a sale contract that included an arbitration provision. The truck developed mechanical issues during the warranty period, and after unsuccessful repair attempts by Ford of Ventura, the petitioners filed a lawsuit under the Song-Beverly Consumer Warranty Act against Ford Motor Company (FMC) and Ford of Ventura. FMC moved to compel arbitration based on the arbitration provision in the sale contract between the petitioners and the non-party dealer.The trial court granted FMC's motion to compel arbitration, finding that FMC could enforce the arbitration provision as a third-party beneficiary of the sale contract and that the petitioners were estopped from refusing to arbitrate their claims. The petitioners moved for reconsideration twice, citing appellate decisions that disapproved of the precedent relied upon by the trial court. Both motions for reconsideration were denied, with the trial court maintaining its original order compelling arbitration.The California Court of Appeal, Second Appellate District, reviewed the case and concluded that FMC and Ford of Ventura are neither intended third-party beneficiaries of the sale contract nor entitled to enforce the arbitration provision under the doctrine of equitable estoppel. The court found that the sale contract did not express an intent to benefit FMC and that the petitioners' claims against FMC and Ford of Ventura were based on warranty obligations independent of the sale contract. The appellate court issued 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

Trudy Maxwell, a 93-year-old resident of Atria Park of San Mateo, died after ingesting an industrial strength cleaner mistakenly served to her by an Atria employee. Trudy’s eight surviving children, including James Maxwell III (James III), filed a lawsuit against Atria Management Company and related entities, alleging negligence, wrongful death, and elder abuse. The trial court denied Atria’s motion to compel arbitration, concluding that James III, who signed the arbitration agreement, was not authorized to do so under his durable power of attorney (DPOA) because he was not authorized to make health care decisions for Trudy. Instead, Trudy’s daughter, Marybeth, held the power of attorney for health care.The Atria defendants appealed, arguing that James III had the authority to sign the arbitration agreement and that all of Trudy’s heirs were bound to arbitrate their wrongful death claims. They also contended that California’s Code of Civil Procedure section 1281.2(c), which allows an exception to arbitration when third-party claims may be affected, was preempted by the Federal Arbitration Act (FAA).The California Court of Appeal, First Appellate District, Division One, 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 recent 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 directed the trial court to determine whether the DPOA was valid and whether James III had the authority to agree to arbitration despite Marybeth holding the health care POA. Additionally, the court noted that the wrongful death claims of Trudy’s children were not subject to arbitration as they were not parties to the arbitration agreement. View "Maxwell v. Atria Management Co., 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), for employment-related disputes. The arbitration provider issued an invoice for $27,200, which Anoke’s counsel mistakenly paid. The arbitration provider marked the invoice as paid and closed, then refunded the payment 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 to compel X to pay her arbitration-related attorney fees and costs, arguing that X’s payment was untimely because it was not made within 30 days of the first invoice. The superior court denied the petition, reasoning that since the first invoice was nullified after Anoke’s attorney mistakenly paid it and X timely paid the second invoice, X met the statutory deadline.The California Court of Appeal, First Appellate District, reviewed the case. The court held that the statutory deadline for payment was tied to the due date set by the arbitration provider’s invoice. Since the first invoice was paid (albeit mistakenly) and the second invoice was paid within 30 days, there was no default. The court affirmed the superior court’s order, concluding that the arbitrator acted within its authority by issuing a second invoice and that the statute did not require the arbitrator to reinstate the first invoice after it had been paid and closed. The court also noted that the reasons for a timely payment are irrelevant under the statute. View "Anoke v. Twitter" on Justia Law