Justia Arbitration & Mediation Opinion SummariesArticles Posted in California Courts of Appeal
Sellers v. JustAnswer LLC
JustAnswer LLC (JustAnswer) appealed an order denying its petition to compel arbitration. Tina Sellers and Erin O’Grady (together, Plaintiffs) used the JustAnswer website to submit a single question to an “expert” for what they believed would be a one-time fee of $5, but JustAnswer automatically enrolled them in a costlier monthly membership. After discovering additional charges to their credit cards, Plaintiffs filed a class action lawsuit against JustAnswer, alleging it routinely enrolled online consumers like them in automatic renewal membership programs without providing “clear and conspicuous” disclosures and obtaining their “affirmative consent” as mandated by the California Automatic Renewal Law. Seeking to avoid the class action litigation, JustAnswer filed a petition to compel individual arbitration, claiming Plaintiffs agreed to their “Terms of Service,” which included a class action waiver and a binding arbitration clause, when they entered their payment information on the website and clicked a button that read, “Start my trial.” In a case of first impression under California law, the Court of Appeal considered whether, and under what circumstances, a “sign-in wrap” agreement was valid and enforceable. The Court concluded the notices on the “Start my trial” screens of the JustAnswer website were not sufficiently conspicuous to bind Plaintiffs, because they were less conspicuous than the statutory notice requirements, and they were not sufficiently conspicuous under other criteria courts have considered in determining whether a hyperlinked notice to terms of services was sufficient to put a user on inquiry notice of an arbitration agreement. The Court therefore affirmed the trial court’s order denying JustAnswer’s petition to compel arbitration. View "Sellers v. JustAnswer LLC" on Justia Law
Garcia v. Expert Staffing West
The Court of Appeal concluded that the arbitration clause between a job applicant and her prospective employer does not apply to disputes between the applicant and her former employers based on the existence of a business relationship between the prospective employer and the applicant's past employers. Therefore, the arbitration agreement between plaintiff and Expert Staffing West does not apply to disputes arising between her and her former employers. In this case, the court agreed with the trial court that the arbitration agreement between plaintiff and Expert Staffing West did not apply to plaintiff's claims against Essential Seasons and Cool-Pak. Accordingly, the court affirmed the judgment. View "Garcia v. Expert Staffing West" on Justia Law
Theresa D. v. MBK Senior Living LLC
Plaintiff (K.D.) was a resident at Muirwoods when she suffered falls, resulting in a fractured hip and deteriorating health. She became bedbound and was allegedly left in unsanitary conditions and infected with scabies. Muirwoods alleged that K.D.’s daughter Tennier, signed an arbitration agreement pursuant to her authority to make health care decisions for K.D. when assisting in her placement at Muirwoods. The arbitration provision included a delegation clause providing that an arbitrator would decide whether a claim or dispute must be arbitrated. The clause specified that the agreement to arbitrate could be withdrawn within 30 days and that “agreeing to arbitration is not a condition of admission to the Community.”The court of appeal affirmed the denial o the motion to compel arbitration. The initial determination of whether Tennier was authorized to agree to arbitration on K.D.’s behalf is one for the court, not the arbitrator. Tennier was not K.D.’s agent for purposes of binding her to arbitration. Because the arbitration provision was optional, with its own signature line, it was essentially a separate agreement, Muirwoods did not establish that Tennier, who did not act pursuant to a durable power of attorney or similar authorization, could bind K.D. to an arbitration agreement as part of authorizing her admission. View "Theresa D. v. MBK Senior Living LLC" on Justia Law
Goodwin v. Comerica Bank, N.A.
Plaintiff appeals two concurrent orders denying his petition to confirm an arbitration award and granting Comerica Bank's petition to vacate the award on the ground that the arbitrator made a material omission or misrepresentation in his disclosure of prior cases involving the parties' lawyers.The Court of Appeal concluded that, because the bank failed to seek the arbitrator's disqualification within 15 days of discovering the facts requiring disqualification and before the arbitrator decided the pending fee motion, it forfeited the right to demand disqualification. Accordingly, the court reversed the order vacating the award based on the arbitrator's disqualification. Because the bank identified no other grounds for denying the petition to confirm the award, the court granted that petition. View "Goodwin v. Comerica Bank, N.A." on Justia Law
De Leon v. Pinnacle Property Management Services, LLC
Defendants Pinnacle Property Management Services, LLC (Pinnacle) and Jennifer Stewart (Stewart) appealed a trial court’s order denying their motion to compel arbitration. The court denied the motion because it determined the arbitration agreement was procedurally and substantively unconscionable. As to the former, the court noted the agreement was unconscionable because plaintiff Anthony De Leon was required to sign the arbitration agreement as a precondition to his employment. As to the latter, the court found the agreement was substantively unconscionable because of its limits on discovery and because it shortened the statute of limitations to one year on all claims. On appeal, defendants contended the arbitration agreement had low procedural unconscionability and contained only one substantively unconscionable provision: the statute of limitations provision. They alternatively claimed the court erred by failing to sever any unconscionable provisions. After careful consideration of the agreement at issue, the Court of Appeal agreed with the court’s unconscionability findings. Further, the Court held the trial court also did not abuse its discretion by refusing to sever any portion of the arbitration agreement. View "De Leon v. Pinnacle Property Management Services, LLC" on Justia Law
Gamboa v. Northeast Community Clinic
The Clinic hired Gamboa, who signed several onboarding documents. Weeks later, Gamboa sustained an injury to her hand that affected her work. After Gamboa requested medical accommodations, the Clinic terminated her employment. Gamboa sued for discrimination, retaliation, and failure to provide reasonable accommodation. The Clinic moved to compel arbitration, arguing that Gamboa had signed an arbitration agreement as part of her required onboarding documents.The court of appeal affirmed the denial of that motion. The Clinic failed to prove the existence of an arbitration agreement by a preponderance of the evidence after Gamboa produced evidence disputing an agreement. The Clinic may have met its burden on the first step by attaching to Lopez’s (the Clinic’s director of human resources) declaration a copy of the arbitration agreement purporting to bear Gamboa’s signature but Gamboa met her burden on the second step by filing an opposing declaration, saying she did not recall the agreement and would not have signed it if she had been aware of it. Lopez did not explain how she knew Gamboa had seen, much less signed, the arbitration agreement. View "Gamboa v. Northeast Community Clinic" on Justia Law
Chambers v. Crown Asset Management, LLC
In her complaint, plaintiff Pamela Chambers alleged that she received a written communication from a debt collector contracted by Crown that failed to comply with the CFDBPA’s notice formatting requirement. She filed a putative class action lawsuit against Crown Asset Management, LLC. Crown moved to compel arbitration, relying on an affidavit from an employee of Chambers’s original creditor, Synchrony Bank (Synchrony), who stated in part that “Synchrony’s records” showed a credit card account agreement containing an arbitration clause was mailed to Chambers. Chambers objected to the affidavit on various evidentiary grounds. The trial court sustained the objections and denied Crown’s motion to compel arbitration. Crown appealed, contending the trial court erred by sustaining Chambers’s evidentiary objections and denying the motion to compel. Finding no reversible error, the Court of Appeal affirmed. View "Chambers v. Crown Asset Management, LLC" on Justia Law
California Union Square L.P. v. Saks & Company LLC
Union Square owns the San Francisco building where Saks has operated a store since 1991. The lease's initial 25-year term was followed by successive options to renew; it mandates arbitration to determine Fair Market Rent for renewals. Section 3.1(c)(iv) states that “[e]ach party shall share equally the fees and expenses of the arbitrator. The attorneys’ fees and expenses of counsel for the respective parties and of witnesses shall be paid by the respective party engaging such counsel or calling such witnesses.” Section 23.10 permits a prevailing party to recover costs, expenses, and reasonable attorneys’ fees, “Should either party institute any action or proceeding to enforce this Lease ... or for damages by reason of any alleged breach ... or for a declaration of rights hereunder,The parties arbitrated a rent dispute in 2017. The trial court vacated the First Award, in favor of Union Square. To avoid re-arbitration, Union Square sought mandamus relief, which was summarily denied. While discussions concerning another arbitration were pending, Union Square filed a superior court motion to appoint the second arbitrator. The court-appointed arbitrator ruled in favor of Saks.The court of appeal affirmed the orders vacating the First Award and confirming the Second Award. Saks sought $1 million in attorneys’ fees for “litigation proceedings arising out of the arbitration,” not for the arbitrations themselves, citing Section 23.10. The court of appeal affirmed the denial of the motion. Each party agreed to bear its own attorneys’ fees for all proceedings related to settling any disagreement around Fair Market Rent under Section 3.1(c). View "California Union Square L.P. v. Saks & Company LLC" on Justia Law
Gordon v. Atria Management Co.
Janet signed a Durable Power of Attorney and Nomination of Conservator (DPOA), appointing Randall as her attorney-in-fact. The DPOA advised that it “does not authorize anyone to make medical and other health care decisions,” authorized Randall to “demand, arbitrate, and pursue litigation on [Janet’s] behalf, authorized Randall to “do all things and enter into all transactions necessary to provide for the Principal’s personal care,” including the provision of institutional residential care. Janet later moved into a residential care facility, Atria; Randall signed a one-page “Agreement to Arbitrate.”While living at Atria, Janet allegedly fell and broke her hip. Janet, through Randall as her guardian ad litem, sued Atria under the Elder Abuse and Dependent Adult Civil Protection Act (Welf. & Inst. Code 15600), asserting elder neglect and abuse, negligence, fraud, financial elder abuse, and unfair business practices, alleging that Atria failed to assist with her activities of daily living, failed to supervise her, and failed to check on her after knowing she felt dizzy and unwell. Atria sought to compel arbitration. Janet argued the arbitration clause was not enforceable because it was not signed by Janet or an agent pursuant to a valid power of attorney for healthcare. The court of appeal reversed the denial of Atria’s petition, holding that Randall was authorized to enter into the arbitration agreement. View "Gordon v. Atria Management Co." on Justia Law
Uribe v. Crown Building Maintenance Co.
Isabel Garibay appealed a trial court's confirmation of a class action settlement reached between Josue Uribe and Crown Building Maintenance Company (Crown). Uribe sued Crown as an individual regarding alleged Labor Code violations for failure to reimburse him for the cost of uniform cleaning and required footwear as a day porter doing janitorial-type work. Uribe’s suit also included a cause of action in a representative capacity for civil penalties and injunctive relief under the Labor Code Private Attorneys General Act of 2004 (PAGA). The parties reached a settlement conditioned on Uribe filing an amended complaint converting his lawsuit into a class action on his Labor Code claims and including unreimbursed employee cell phone usage costs as an additional basis for both his Labor Code and PAGA causes of action. Garibay, an unnamed member of the class once it was formed, had earlier filed in the Alameda County Superior Court a putative class action asserting Labor Code claims for unreimbursed cell phone use by Crown employees, together with a representative PAGA cause of action on that basis. When Uribe and Crown sought preliminary approval of their agreement to settle Uribe’s lawsuit on a class-wide basis, the trial court authorized Garibay to intervene as a named party in the lawsuit to oppose the settlement. The trial court later granted Uribe’s motion for preliminary approval of the settlement, and then Crown and Uribe’s joint motion for final approval. Meanwhile, the Judicial Council had referred Crown’s petition to coordinate Uribe’s and Garibay’s lawsuits to the presiding judge of the Alameda court to appoint a judge to hear the petition; that appointment remained pending at the time the judgment in Orange County was entered. After the parties advised the Alameda court no stay had been entered in the coordination proceedings, the court subsequently entered judgment. Garibay challenged the settlement after the trial court declined to rule on both Crown’s motion to dismiss Garibay’s complaint in intervention and Garibay’s motion to vacate the judgment. The Court of Appeal found Uribe's PAGA notice did not encompass a claim for unreimbursed cell phone expenses, making the notice was inadequate to support Uribe’s PAGA cause of action on that theory in his lawsuit. And because Uribe and Crown’s agreement did not allow for severance of nonviable settlement terms, judicial approval of a settlement that included Uribe’s PAGA cause of action could not survive review. The Court therefore reversed the judgment. View "Uribe v. Crown Building Maintenance Co." on Justia Law