Articles Posted in California Courts of Appeal

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Plaintiffs-respondents Virgil and Glenda Jensen contended they suffered damages caused by a negligently maintained rental truck, rented by his supervisor, Charles Scannell, which blew a tire while Virgil was driving it. Defendant-appellant U-Haul Co. of California (UHCA) appealed the trial court’s denial of its motion to compel arbitration. UHCA contended plaintiffs were bound by the arbitration agreement in the rental contract, even though neither plaintiff was a party to that contract. The Court of Appeal’s review of plaintiffs’ complaint showed that plaintiffs did not rely or depend on the terms of the rental in asserting their claims, and none of their allegations were in any way founded in or bound up with the terms or obligations of that agreement. UHCA, citing to general principles and cases that it contended were analogous, argued that plaintiffs were bound to arbitrate their claims, even though they are not signatories to the agreement between Scannell and UHCA, on any of three theories: third-party beneficiary, agency, or estoppel. The Court of Appeal was not persuaded and affirmed the trial court. View "Jensen v. U-Haul Co. of California" on Justia Law

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In 2015, State Farm filed suit against Watts, alleging subrogated product liability claims against Watts arising from a loss that occurred in November 2012. The Court of Appeal affirmed the trial court's denial of Watt's motion to compel arbitration, finding no basis for any vested right to arbitration under the circumstances of this case, where the parties have agreed to be bound by contractual terms and rules determined by a third party. In this case, the parties signed the AF arbitration agreement some years before 2012. In 2015, the AF arbitration agreement excluded product liability claims from the kinds of claims subject to compulsory arbitration under the agreement. View "State Farm General Insurance Co. v. Watts Regulator Co." on Justia Law

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This case turned on whether an attorney-in-fact made a “health care decision” by admitting her principal to a residential care facility for the elderly and, in the process, agreeing to an arbitration clause. The trial court found she acted outside the scope of her authority under the power of attorney, and the arbitration clause this appeal seeks to enforce was void. The issue this case presented for the Court of Appeal’s review centered on the scope of two statutes, the Power of Attorney Law (Prob. Code, sec. 4000 et seq. (PAL)), and the Health Care Decisions Law (Prob. Code, sec. 4600 et seq. (HCDL)), in light of the care a residential care facility for the elderly agreed to provide, and actually provided, in this instance (Health & Saf. Code, sec. 1569 et seq.). For resolution, the Court had to parse the authority of two of the principal’s relatives, one holding a power of attorney under the PAL and one holding a power of attorney under the HCDL. The Court concluded admission of decedent to the residential care facility for the elderly in this instance was a health care decision, and the attorney-in-fact who admitted her, acting under the PAL, was not authorized to make health care decisions on behalf of the principal. As a result of this conclusion, the Court affirmed the trial court’s denial of a motion by the residential care facility to compel arbitration. Because the attorney-in-fact acting under the PAL did not have authority to make health care decisions for her principal, her execution of the admission agreement and its arbitration clause are void. View "Hutcheson v. Eskaton Fountainwood Lodge" on Justia Law

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An agreement to arbitrate a Labor Code Private Attorneys General Act of 2004 (PAGA) claim, entered into before an employee is statutorily authorized to bring such a claim on behalf of the state, is an unenforceable predispute waiver. The Court of Appeal held that the trial court properly denied a petition to compel arbitration of respondents' claim under PAGA. In this case, any agreement by respondents was entered into before they were authorized to bring a PAGA claim. View "Julian v. Glenair, Inc." on Justia Law

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The Court of Appeal affirmed the trial court's order denying defendants' petition to compel arbitration of a dispute with plaintiffs. The court held that the threshold issue of whether the Federal Arbitration Act (FAA), 9 U.S.C. 1-16, applies or is preempted by the McCarran-Ferguson Act, 15 U.S.C. 1001-1015, and section 25- 2602.01(f) of the Nebraska Uniform Arbitration Act (NUAA) was for the court, and not the arbitrator, to decide; the trial court did not err by concluding that section 25-2602.01(f) of the NUAA is a statute that regulates the business of insurance within the meaning of the McCarran-Ferguson Act; application of the FAA would operate to invalidate or impair section 25-2602.01(f) of the NUAA; the trial court did not err by concluding that the McCarran-Ferguson Act applies and reverse preempts the FAA; section 25-2602.01(f) of the NUAA applies to the Reinsurance Participation Agreement (RPA) and renders the arbitration provision contained in the RPA unenforceable; and thus the trial court did not err by denying the petition to compel arbitration. View "Citizens of Humanity v. Applied Underwriters" on Justia Law

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Baxter sued her former employer, Genworth, for wrongful termination and related causes of action, based on discrimination and retaliation, arising out of her employment. Genworth moved to compel arbitration as part of Genworth’s Resolve Employee Issue Resolution Program, which consists four stages, The trial court concluded, and the court of appeal affirmed, that the arbitration agreement Baxter signed in 2006, as a condition of continued employment, is unconscionable, refusing to sever any provisions. Agreement as a condition of continued employment amounted to “modest procedural unconscionability.” The court concluded that several features of the agreement were substantively unconscionable: default discovery limitations, a prohibition against contacting witnesses, procedural deadlines that effectively shorten the statute of limitations and preclude a meaningful opportunity for a pre-litigation Fair Employment and Housing Act investigation, and accelerated hearing procedures that infringe upon an employee’s ability to adequately present his or her case. The severance of the offending provisions was not an option because the arbitration agreement is permeated by unconscionability. View "Baxter v. Genworth North America Corp." on Justia Law

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San Francisco Baseball Associates (the Giants) unsuccessfully moved to compel arbitration of the wage and hour claims of Melendez, a security guard employed at AT&T Park. Melendez argued that he and other security guards were employed “intermittingly” for specific assignments and were discharged “at the end of a homestand, at the end of a baseball season, at the end of an inter-season event like a fan fest, college football game, a concert, a series of shows, or other events,” and, under Labor Code section 201, were entitled to but did not receive immediate payment of their final wages upon each “discharge.” The Giants argued that immediate payment was not required because, under the terms of the collective bargaining agreement (CBA) between the Giants and the union, Melendez and all such security guards are not intermittent employees but are “year-round employees who remain employed with the Giants until they resign or are terminated pursuant to the CBA.” The Giants argued that the action is preempted by section 301 of the federal Labor Management Relations Act, 29 U.S.C. 185(a). The court of appeal affirmed, finding that the dispute is not within the scope of the CBA's arbitration provision but that arbitration is required by section 301. View "Melendez v. San Francisco Baseball Associates" on Justia Law

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Sargon filed a malpractice suit against BGR and BGR petitioned to compel arbitration. The Court of Appeal held that the arbitrator erred in finding that the parties' arbitration agreement included a promise to forego litigation, and thus in concluding that Sargon breached the arbitration agreement by filing a malpractice action in superior court; the arbitrator's award violated Sargon's statutory right, as articulated in the California Arbitration Act, to seek a preliminary determination of arbitrability from a court; and thus, notwithstanding the limited judicial review generally afforded arbitration awards, the present arbitration award was subject to correction. However, the court did not vacate the arbitration award in its entirety because the court could strike the portion of the arbitration award adjudicating BGR's breach of contract claim without affecting the merits of the arbitrator's summary disposition of Sargon's malpractice claim. View "Sargon Enterprises v. Browne George Ross LLP" on Justia Law

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A defendant in a putative class action can waive its right to compel arbitration against absent class members by deciding not to seek arbitration against the named plaintiff. In this wage and hour class action, the Court of Appeals held that Plan B waived its right to seek arbitration by filing and then withdrawing a motion to compel arbitration against the named plaintiff, Maria Elena Sprunk, and then waiting until after a class had been certified to seek arbitration against class members. The court held that Plan B provided sufficient evidence of the arbitration agreements; sufficient evidence supported the trial court's waiver finding; and substantial evidence supported the trial court's finding that Plan B delayed filing its motions to compel arbitration so that it could obtain a strategic advantage. The court explained that the the four-year delay resulted in Sprunk conducting class-related discovery and preparing and arguing an extensive class certification motion that never would have been necessary if individual arbitration had been ordered earlier in the case. Accordingly, the court affirmed the trial court's motion to compel arbitration. View "Sprunk v. Prisma LLC" on Justia Law

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This case arose from competing claims to a portion of the Yuba Goldfields, a 10,000-acre valley on both sides of the Yuba River near Marysville. At issue was whether an arbitration award resolving a dispute between plaintiff Cal Sierra Development, Inc. (Cal Sierra), and Western Aggregates, Inc., served as res judicata to bar Cal Sierra’s lawsuit against Western Aggregates’ licensee George Reed, Inc., and the licensee’s parent Basic Resources, Inc. The Court of Appeal concluded yes. View "Cal Sierra Development v. George Reed, Inc." on Justia Law