Justia Arbitration & Mediation Opinion Summaries

In 2020, several residents at a skilled nursing facility died from coronavirus infections. Family members of the deceased sued the facility and its alleged alter egos, asserting claims including elder abuse, negligence, and wrongful death. The defendants moved to compel arbitration based on agreements signed by family members rather than the decedents. The trial court denied the motion, finding no evidence that the family members had authority to sign on behalf of the decedents, and that the agreements did not bind the family members in their individual capacities. For one agreement where a family member had power of attorney, the court exercised its discretion to deny arbitration to avoid conflicting results.The Shasta County Superior Court denied the motion to compel arbitration. It found that the defendants did not provide evidence that the family members had authority to sign the arbitration agreements on behalf of the decedents. Additionally, the court ruled that the agreements did not bind the family members in their individual capacities. For the agreement involving a power of attorney, the court denied arbitration to prevent conflicting rulings between court and arbitration proceedings.The California Court of Appeal, Third Appellate District, reviewed the case. It affirmed the lower court's decision, holding that the defendants failed to establish that the family members were authorized agents of the decedents. The court also found that the family members did not sign the agreements in their individual capacities, and thus were not bound by them. Furthermore, the court upheld the trial court's discretion to deny arbitration for the claim involving a power of attorney to avoid conflicting rulings. The order denying the motion to compel arbitration was affirmed. View "Hearden v. Windsor Redding Care Center" on Justia Law

This case involves a dispute over an arbitration award in a real estate transaction. The plaintiffs, Miguel and Lizette Valencia, purchased a home from the defendants, Armando Mendoza, Coastal Holdings, LLC, and Class A Realty, Inc. After discovering undisclosed defects in the home, the Valencias initiated an arbitration proceeding against the defendants. The arbitrator ruled in favor of the Valencias, awarding them damages for repairs, loss of use, statutory penalties, and inspection fees, as well as punitive damages and attorneys' fees.The defendants appealed the arbitration award to the Superior Court of Los Angeles County, arguing that the court erred in denying their petition to vacate the arbitration award and in confirming the Valencias' petition to confirm the award. The defendants also contended that the arbitrator committed legal error by excluding key evidence from the arbitration hearing. The trial court affirmed the arbitration award, finding that the defendants' petition to vacate the award was untimely and that they failed to show that the arbitrator erred in its rulings excluding evidence.On appeal to the Court of Appeal of the State of California, Second Appellate District, Division Seven, the defendants argued that the trial court erred in not considering the evidence they submitted with their late-filed petition to vacate the arbitration award. The appellate court affirmed the trial court's decision, holding that the defendants failed to meet their burden of establishing the existence of error in the arbitration award. The court also found that the trial court did not abuse its discretion in confirming the award without considering the defendants' untimely evidence. View "Valencia v. Mendoza" on Justia Law

Dominique Keeton, an employee of Tesla, Inc., filed a lawsuit against her employer alleging discrimination, harassment, and retaliation. The parties agreed to resolve the dispute through arbitration as per their employment agreement. However, when Tesla failed to pay its arbitration fees within the stipulated 30-day window, Keeton moved to vacate the order submitting the dispute to arbitration. The trial court granted Keeton's motion, ruling that Tesla had materially breached the arbitration agreement, thereby allowing Keeton to proceed with her claims in court.Tesla appealed the decision, arguing that the trial court erred in granting Keeton's motion to vacate. Tesla's arguments were threefold: the arbitration agreement delegated issues of arbitrability to the arbitrator; the Federal Arbitration Act (FAA) preempts the relevant section of the California Code of Civil Procedure; and the same section of the California Code of Civil Procedure constitutes an unconstitutional impairment of the arbitration agreement.The Court of Appeal of the State of California, First Appellate District, disagreed with Tesla's arguments and affirmed the trial court's decision. The court found that the arbitration agreement did not clearly delegate issues of arbitrability to the arbitrator. It also held that the FAA did not preempt the relevant section of the California Code of Civil Procedure, and that this section did not unconstitutionally impair the arbitration agreement. The court concluded that Tesla had materially breached the arbitration agreement by failing to pay its arbitration fees within the stipulated time, and thus Keeton was entitled to proceed with her claims in court. View "Keeton v. Tesla" on Justia Law

The case revolves around an employment dispute between Nelida Soltero and Precise Distribution, Inc. Soltero, who was placed at Precise Distribution by a temporary staffing agency, Real Time Staffing Services, filed a class action complaint against Precise Distribution for alleged failure to provide required meal periods and rest breaks to employees, among other claims. Precise Distribution sought to compel arbitration based on an arbitration agreement between Soltero and Real Time. However, Real Time was not a party to the lawsuit.The Superior Court of San Bernardino County denied Precise Distribution's motion to compel arbitration. Precise Distribution argued that it should be able to compel arbitration under the agreement between Soltero and Real Time, despite not being a party to it, based on theories of equitable estoppel, third-party beneficiary, or agency.The Court of Appeal, Fourth Appellate District Division One State of California, affirmed the lower court's decision. The court concluded that Precise Distribution was not a party to the arbitration agreement between Soltero and Real Time and could not compel arbitration based on the theories it proposed. The court found that Soltero's claims against Precise Distribution were not dependent upon or founded in the underlying contractual obligations of the agreement containing the arbitration clause. Furthermore, Precise Distribution was not an intended third-party beneficiary of the arbitration agreement, and there was no evidence of an agency relationship between Precise Distribution and Real Time. Therefore, the court affirmed the order denying Precise Distribution's motion to compel arbitration. View "Soltero v. Precise Distribution" on Justia Law

Carlos Ramirez, an employee, filed a class action lawsuit against his former employer, Golden Queen Mining Company, alleging various violations of the Labor Code and unfair competition. The employer moved to compel arbitration, but the trial court denied the motion, stating that the employer failed to demonstrate the existence of an executed arbitration agreement. The employer appealed, arguing that it had made a prima facie showing that a written arbitration agreement existed and that Ramirez’s statements that he did not recall being presented with or signing an arbitration agreement were insufficient to rebut its initial showing.The Superior Court of Kern County had initially denied the employer's motion to compel arbitration on the grounds that the employer failed to demonstrate the existence of an executed arbitration agreement. The court found that the employer's evidence, which included an unsigned arbitration agreement and a handbook acknowledgement purportedly signed by Ramirez, was insufficient to establish the existence of an arbitration agreement.The Court of Appeal of the State of California Fifth Appellate District reversed the lower court's decision. The appellate court concluded that Ramirez did not provide sufficient evidence to rebut the employer’s initial showing that an arbitration agreement existed. The court found that Ramirez's failure to recall signing the document did not create a factual dispute about the signature’s authenticity. The court also noted that Ramirez’s declaration did not state whether he had reviewed the arbitration agreement or other documents purportedly signed by him, nor did it address whether he recalled signing the handbook acknowledgement, which included a statement that he agreed to the terms of the arbitration agreement. The court therefore reversed the order denying the motion to compel arbitration and remanded the case for further proceedings to address Ramirez’s unconscionability defense. View "Ramirez v. Golden Queen Mining Co." on Justia Law

The case involves Ling Mueller and Paul Mueller, a married couple who separated in 2017. During their marriage, they cultivated cannabis and buried the proceeds on their property. They initially attempted to use a collaborative law process to dissolve their marriage. They signed an agreement that outlined the collaborative process, including a confidentiality clause. However, the agreement also explicitly stated that it did not create any legally enforceable rights or obligations. During the second collaborative session, Ling became angry and left the meeting abruptly when asked about investments she had made using the proceeds from the couple's marijuana operation. She subsequently initiated divorce proceedings in family court.In the family court, Paul subpoenaed both parties' collaborative attorneys to testify about statements Ling made during the second collaborative session. Ling argued that the confidentiality clause in the agreement shielded her statements from disclosure. However, the court found the agreement, including the confidentiality clause, to be unenforceable. It also found that Ling had waived the confidentiality provision. As a result, it allowed the parties' collaborative attorneys to testify about the second collaborative session. The court found Ling to be not credible and ordered her to make a $161,077 equalizing payment.In the Court of Appeal of the State of California First Appellate District Division Five, the sole issue on appeal was the admissibility of testimony about the second collaborative session. This depended on whether the confidentiality clause was enforceable despite the agreement's multiple statements that it created no enforceable rights or obligations. The court found that the agreement unequivocally stated that it did not give either party enforceable legal rights. Therefore, the court affirmed the family court's decision that the confidentiality clause was unenforceable. View "Mueller v. Mueller" on Justia Law

The case involves an employee, Pamela Cook, who filed a lawsuit against her employer, the University of Southern California (USC), and two coworkers, alleging discrimination and harassment. USC moved to compel arbitration based on an arbitration agreement signed by Cook as a condition of her employment. The agreement required Cook to arbitrate all claims against USC, its agents, affiliates, and employees, regardless of whether they arose from the employment relationship. The trial court denied the motion, finding the arbitration agreement was permeated by unconscionability, which could not be severed from the agreement. USC appealed this decision.The Superior Court of Los Angeles County had previously denied USC's motion to compel arbitration. The court found that the arbitration agreement was both procedurally and substantively unconscionable. Procedurally, the court found the agreement to be a contract of adhesion, made a condition of Cook's employment. Substantively, the court found the agreement to be unconscionable due to its infinite scope, covering all of Cook's claims regardless of their relation to her employment, and its infinite duration, surviving the termination of Cook's employment indefinitely. The court also found a lack of mutuality in the agreement, as it required Cook to arbitrate her claims against USC and all of USC’s “related entities,” but did not require USC’s “related entities” to arbitrate their claims against Cook.The Court of Appeal of the State of California Second Appellate District Division Four affirmed the trial court's decision. The appellate court agreed with the lower court's findings of both procedural and substantive unconscionability. The court found that the arbitration agreement was one-sided, overly broad in scope, and indefinite in duration. The court also agreed with the lower court's refusal to sever the unconscionable provisions and enforce the remainder of the agreement, finding that the agreement was permeated with unconscionability. View "Cook v. University of Southern California" on Justia Law

The case involves an employee, Massiel Hernandez, and her employer, Sohnen Enterprises. Hernandez signed an arbitration agreement with Sohnen, which stated that any disputes would be governed by the Federal Arbitration Act (FAA). When Hernandez filed a complaint against Sohnen for disability discrimination and Labor Code violations, the parties agreed to arbitrate. However, Sohnen failed to pay the arbitration fees within 30 days of the due date. Hernandez then filed a motion to withdraw from arbitration and litigate in state court, as permitted under California Code of Civil Procedure section 1281.97. The trial court granted the motion, finding that Sohnen had breached the arbitration agreement.Sohnen appealed, arguing that the FAA, not California law, governed the arbitration agreement and preempted section 1281.97. The Court of Appeal of the State of California, Second Appellate District, Division Five, agreed with Sohnen. The court found that the arbitration agreement was governed by the FAA, including both its substantive and procedural provisions. As a result, the procedures of section 1281.97 did not apply, and the trial court's order was reversed. The court also held that even if section 1281.97 did apply, it would still reverse the order because the FAA preempts the provisions of section 1281.97 that mandate findings of breach and waiver when an agreement falls within the scope of the FAA and does not expressly adopt California arbitration laws. View "Hernandez v. Sohnen Enterprises" on Justia Law

The case revolves around a dispute between Winston Mar and SierraConstellation Partners, LLC (Sierra) and Lawrence Perkins (collectively, Sierra defendants). Mar, who was a partner in Sierra, sought a buyout of his partnership interest. Sierra defendants moved to compel arbitration of Mar's action, based on an arbitration agreement included in Sierra's employee handbook. Mar had refused to sign the arbitration agreement, stating that he would not be bound by it and that Sierra could terminate his employment if it objected. Sierra argued that Mar's continued employment for 19 months after the introduction of the arbitration agreement constituted assent to the agreement.The Superior Court of Los Angeles County denied Sierra defendants' motion to compel arbitration. The court found that Sierra defendants failed to meet their burden to establish the existence of an arbitration agreement because Mar clearly stated that he refused to sign the arbitration agreement and Sierra could terminate his employment if it objected.On appeal, the Court of Appeal of the State of California, Second Appellate District, Division Seven, affirmed the lower court's decision. The appellate court held that while an employee's continued employment can generally be taken as assent to an arbitration agreement, this is not the case when the employee promptly rejects the arbitration agreement and makes clear he or she refuses to be bound by the agreement. In this case, Mar promptly and unequivocally rejected the arbitration agreement, and thus, there was no mutual assent to arbitrate. View "Mar v. Perkins" on Justia Law

Isabel Garcia, an employee of RAC Acceptance East, LLC (RAC), filed a lawsuit against RAC, Stoneledge Furniture LLC (Stoneledge), and Inderjit Singh, alleging ten claims related to sexual harassment. RAC, Stoneledge, and Singh sought to compel arbitration based on an arbitration agreement they claimed Garcia electronically signed during her employment onboarding process. Garcia denied signing the agreement and argued that RAC failed to prove she executed the agreement.The trial court denied the petitions to compel arbitration. It found that while RAC had initially shown an agreement to arbitrate by providing the agreement, Garcia's denial of signing the agreement shifted the burden back to RAC to prove by a preponderance of the evidence that her electronic signature was authentic. The court found that RAC failed to meet this burden as the declaration provided by RAC did not present sufficient details of the onboarding process to establish how Garcia must have signed the agreement. The court also found that the agreement did not have the appearance of an electronically signed document created in Taleo, the third-party electronic workforce management platform used by RAC.On appeal, the Court of Appeal of the State of California First Appellate District Division Three affirmed the trial court's decision. The appellate court found that the trial court did not err in deciding whether any agreement to arbitrate existed in the first place, rather than delegating that decision to an arbitrator. The appellate court also found that RAC failed to prove the existence of the arbitration agreement. The court concluded that RAC's evidence did not show that only Garcia could have placed the electronic signature on the arbitration agreement. The court also found that the trial court did not abuse its discretion in denying RAC’s request for an evidentiary hearing. View "Garcia v. Stoneledge Furniture LLC" on Justia Law