Articles Posted in California Courts of Appeal

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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

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Kho worked as a mechanic for One Toyota (OTO) from 2010-2014, when his employment was terminated. Kho filed a wage claim with the California Labor Commissioner. After settlement discussions failed, OTO filed a petition to compel arbitration. Under the arbitration agreement, which OTO required Kho to execute without explanation, the wage claim was subject to binding arbitration conducted by a retired superior court judge. Because the intended procedure incorporated many of the provisions of the Code of Civil Procedure and the Evidence Code, the anticipated arbitration proceeding would resemble ordinary civil litigation. The trial court denied the petition to compel. Under the state supreme court’s 2013 “Sonic-Calabasas” decision, an arbitration agreement that waives the various advantageous provisions of the Labor Code governing the litigation of a wage claim is substantively unconscionable if it fails to provide the employee with an affordable and accessible alternative forum. The trial court concluded that the alternative anticipated by OTO’s arbitration agreement failed this standard because it effectively required Kho to retain counsel and did not expressly provide for him to recover his attorney fees if he prevailed. The court of appeal reversed, concluding the arbitration proceeding satisfies the Sonic requirements of affordability and accessibility. View "OTO, L.L.C. v. Kho" on Justia Law

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FFC and Global appealed the arbitrator's award after Global filed suit against FFC to recover amounts owed on unpaid invoices. The Court of Appeal held that the trial court prejudicially erred when it failed to apply the correct standards in reviewing the arbitrator's award; substantial evidence did not support the award and an alleged contract to be performed over a three-year period violated the statute of frauds; the arbitrator exceeded his authority by deciding a claim that FFC had not agreed to arbitrate; the arbitrator exceeded his authority when he added the Affiliates as obligors under the award; and the court deemed the appeals from the orders denying attorney fees as petitions for writ of mandate and directed the trial court to vacate its orders and to deny the motions. View "Harshad & Nasir Corp. v. Global Sign Systems" on Justia Law

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For purposes of the Iskanian rule, the Private Attorneys General Act of 2004 (PAGA) representative claims for civil penalties are limited to those where a portion of the recovery is allocated to the Labor and Workforce Development Agency. Claims for unpaid wages based on Labor Code section 558 are not allocated in this manner and, therefore, the Iskanian rule does not exempt such claims from arbitration. Applying the interpretation of the Iskanian rule and its term of art, civil penalties, to this litigation, the court concluded that some of the claims the employee was pursuing were PAGA representative claims that seek civil penalties. Under the Iskanian rule, those claims were not subject to arbitration. Therefore, the Court of Appeal affirmed the trial court's order insofar as it denied arbitration of the representative claims for civil penalties and remanded for further proceedings. View "Esparza v. KS Industries, LP" on Justia Law

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Marlene Baker LaBerge, a 73-year-old woman, was a resident and patient of a 24- hour skilled nursing facility owned by Italian Maple Holdings, LLC dba La Paloma Healthcare Center (La Paloma). LaBerge's heirs, Paul LaBerge, Suzanne Marx, and Talmadge Baker (collectively Plaintiffs) sued La Paloma and Plum Healthcare, LLC (together Defendants) for elder abuse, violations of the Patient's Bill of Rights as codified at Health and Safety Code section 1430, negligence, and wrongful death. In response, Defendants filed a petition to compel arbitration based on the two arbitration agreements that LaBerge had executed. The two arbitration agreements included language required by Code of Civil Procedure section 1295, subdivision (c), requiring such agreements to include a 30-day "cooling off" period, during which the parties to the agreement may rescind it. Ten days after LaBerge signed the agreements (and therefore, prior to the expiration of the statutorily-required 30- day rescission period), LaBerge passed away. The superior court denied the petition to compel arbitration, relying on Rodriguez v. Superior Court, 176 Cal.App.4th 1461 (2009) to conclude that the agreements were not effective until the 30-day rescission period passed without either party rescinding the agreements; because LaBerge died before the expiration of the 30-day rescission period, the agreements could not be given effect. On appeal, Defendants contended the trial court’s interpretation was wrong, and the Court of Appeal should decline to follow Rodriguez because that case was factually distinguishable from this case. The Court of Appeal concluded the trial court erred in interpreting section 1295, subdivision (c), and that the arbitration agreements were valid and enforceable. Pursuant to the plain language of section 1295, subdivision (c), the terms of those agreements governed the parties' relationship upon their execution; the fact that one signatory died before the expiration of the statutory 30-day rescission period does not render the terms of the parties' agreements unenforceable in the absence of other grounds for not enforcing them. View "Baker v. Italian Maple Holdings" on Justia Law

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Marlene Baker LaBerge, a 73-year-old woman, was a resident and patient of a 24- hour skilled nursing facility owned by Italian Maple Holdings, LLC dba La Paloma Healthcare Center (La Paloma). LaBerge's heirs, Paul LaBerge, Suzanne Marx, and Talmadge Baker (collectively Plaintiffs) sued La Paloma and Plum Healthcare, LLC (together Defendants) for elder abuse, violations of the Patient's Bill of Rights as codified at Health and Safety Code section 1430, negligence, and wrongful death. In response, Defendants filed a petition to compel arbitration based on the two arbitration agreements that LaBerge had executed. The two arbitration agreements included language required by Code of Civil Procedure section 1295, subdivision (c), requiring such agreements to include a 30-day "cooling off" period, during which the parties to the agreement may rescind it. Ten days after LaBerge signed the agreements (and therefore, prior to the expiration of the statutorily-required 30- day rescission period), LaBerge passed away. The superior court denied the petition to compel arbitration, relying on Rodriguez v. Superior Court, 176 Cal.App.4th 1461 (2009) to conclude that the agreements were not effective until the 30-day rescission period passed without either party rescinding the agreements; because LaBerge died before the expiration of the 30-day rescission period, the agreements could not be given effect. On appeal, Defendants contended the trial court’s interpretation was wrong, and the Court of Appeal should decline to follow Rodriguez because that case was factually distinguishable from this case. The Court of Appeal concluded the trial court erred in interpreting section 1295, subdivision (c), and that the arbitration agreements were valid and enforceable. Pursuant to the plain language of section 1295, subdivision (c), the terms of those agreements governed the parties' relationship upon their execution; the fact that one signatory died before the expiration of the statutory 30-day rescission period does not render the terms of the parties' agreements unenforceable in the absence of other grounds for not enforcing them. View "Baker v. Italian Maple Holdings" on Justia Law

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Prime filed suit against Kaiser, alleging that Kaiser failed to reimburse Prime for emergency medical services Prime provided to Kaiser members. On appeal, Kaiser challenged the trial court's denial of its petition to vacate an arbitration award. The Court of Appeal held that the merits of the confirmation of the panel's award on the Medicare Act preemption and exhaustion issues were not reviewable, either by appeal or by writ. Accordingly, the court issued a preemptory writ of mandate directing the trial court to vacate its judgment confirming the "Partial Final Award Re Medicare Advantage Claims" that the arbitration panel issued, and to enter a new and different order dismissing Kaiser's petition to vacate that award. View "Kaiser Foundation Health Plan v. Superior Court" on Justia Law

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Prime filed suit against Kaiser, alleging that Kaiser failed to reimburse Prime for emergency medical services Prime provided to Kaiser members. On appeal, Kaiser challenged the trial court's denial of its petition to vacate an arbitration award. The Court of Appeal held that the merits of the confirmation of the panel's award on the Medicare Act preemption and exhaustion issues were not reviewable, either by appeal or by writ. Accordingly, the court issued a preemptory writ of mandate directing the trial court to vacate its judgment confirming the "Partial Final Award Re Medicare Advantage Claims" that the arbitration panel issued, and to enter a new and different order dismissing Kaiser's petition to vacate that award. View "Kaiser Foundation Health Plan v. Superior Court" on Justia Law