Justia Arbitration & Mediation Opinion SummariesArticles Posted in California Courts of Appeal
Soni v. Cartograph, Inc.
Plaintiff, doing business as The Soni Law Firm (collectively Soni), appealed from a judgment awarding attorney fees under the Mandatory Fee Arbitration Act (MFAA in favor of Defendants Timothy Tierney and Cartograph, Inc., formerly known as Simplelayers, Inc. (collectively Tierney). On appeal, Soni contends: he was the prevailing party for the purposes of an attorney fees award under sections 6203 and 6204; he was also the prevailing party under the parties’ contractual attorney fees provisions; he was entitled to an award of attorney fees because he was not a self-represented litigant; and even if Tierney were entitled to fees, the amount was excessive. The Second Appellate District affirmed. The court held that the statutory attorney fees provisions of sections 6203 and 6204 govern rather than the attorney fees provision of the parties’ contract. The trial court properly awarded attorney fees to Tierney as the prevailing party under sections 6203 and 6204. Further, Tierney’s attorneys worked half as many hours as Soni’s attorneys on the matters at issue, and Tierney’s attorneys billed substantially lower total fees than the charges that Soni incurred and sought to recover in his competing motion for attorney fees. The trial court examined the bills carefully and reduced the amount awarded to Tierney for duplicative work by one attorney. Accordingly, the court held that no abuse of discretion has been shown as to the amount of fees awarded. View "Soni v. Cartograph, Inc." on Justia Law
Ford Motor Warranty Cases
Plaintiffs filed claims against the Ford Motor Company (FMC) for alleged defects in vehicles the company manufactured. FMC filed a motion to compel arbitration of plaintiffs’ claims based on the arbitration provision in the sale contracts. Plaintiffs opposed FMC’s motion, including on the grounds that FMC had waived its right to compel arbitration through its litigation conduct. The trial court denied FMC’s motion on its merits. The Second Appellate District affirmed. The court explained that it agreed with the trial court that FMC could not compel arbitration based on Plaintiffs’ agreements with the dealers that sold them the vehicles. Equitable estoppel does not apply because, contrary to FMC’s arguments, Plaintiffs’ claims against it in no way rely on the agreements. FMC was not a third-party beneficiary of those agreements, as there is no basis to conclude Plaintiffs and their dealers entered into them with the intention of benefitting FMC. And FMC is not entitled to enforce the agreements as an undisclosed principal because there is no nexus between Plaintiffs’ claims, any alleged agency between FMC and the dealers, and the agreements. View "Ford Motor Warranty Cases" on Justia Law
Seifu v. Lyft, Inc.
Plaintiff, a former driver for Defendant Lyft, Inc., filed suit against Lyft under the Private Attorneys General Act of 2004 (PAGA). He alleged that Lyft misclassified him and other drivers as independent contractors rather than employees, thereby violating multiple provisions of the Labor Code. Lyft moved to compel arbitration based on the arbitration provision in the “Terms of Service” (TOS) that it required its drivers to accept. The trial court denied the motion, finding the PAGA waiver in the arbitration provision unenforceable under then-controlling California law. Lyft appealed, and the Second Appellate District affirmed the denial of Lyft’s motion to compel arbitration. Lyft petitioned the United States Supreme Court for a writ of certiorari. The Court granted Lyft’s petition and remanded the case for further consideration in light of Viking River Cruises, Inc. v. Moriana (2022). The Second Appellate District reversed in part and affirmed in part the trial court’s order. The court remanded the matter to the trial court with directions to (1) enter an order compelling Plaintiff to arbitrate his individual PAGA claim and (2) conduct further proceedings regarding Plaintiff’s non-individual claims. The court explained that it is not bound by the analysis of PAGA standing set forth in Viking River. PAGA standing is a matter of state law that must be decided by California courts. The court explained that until it has guidance from the California Supreme Court, its review of PAGA and relevant state decisional authority leads the court to conclude that a plaintiff is not stripped of standing to pursue non-individual PAGA claims simply because their individual PAGA claim is compelled to arbitration. View "Seifu v. Lyft, Inc." on Justia Law
Sitrick Group v. Vivera Pharmaceuticals
Vivera Pharmaceuticals, Inc. (Vivera) was developing a medical test kit, but had received “negative publicity” from its litigation with a rival company. Vivera hired Sitrick Group, LLC (Sitrick) to manage a public relations campaign. Vivera did not make any payments and Sitrick filed demands for arbitration with Judicial Arbitration and Mediation Services (JAMS). Judge Swart was selected to serve as an arbitrator in a separate matter between Sitrick and Legacy Development (the Legacy matter). In that matter, Sitrick was employing the same law firm (but a different lawyer) as was representing it in the arbitration with Vivera. Sitrick filed petitions to confirm the arbitration award. Vivera asked the trial court to vacate the arbitrator’s award due to Judge Swart’s inadequate disclosure of the Legacy matter. The trial court issued an order confirming the arbitrator’s award. The Second Appellate District affirmed. The court explained that the California Arbitration Act (the Act) requires arbitrators to disclose, among other things, matters that the Ethics Standards for Neutral Arbitrators in Contractual Arbitration (Ethics Standards) dictate must be disclosed. At issue here is whether the Ethics Standards require a retained arbitrator in a noncommercial case to disclose in one matter that he has been subsequently hired in a second matter by the same party and the same law firm. The court held “no,” at least where the arbitrator has previously informed the parties—without any objection thereto—that no disclosure will be forthcoming in this scenario. Because the arbitrator’s disclosures were proper here, the trial court properly overruled an objection based on inadequate disclosure. View "Sitrick Group v. Vivera Pharmaceuticals" on Justia Law
Hang v. RG Legacy I
Plaintiff Jimmy Hang sued defendants RG Legacy I, LLC, 1899 Raymond LLC, and Arlene Rosales for elder abuse and negligent hiring and supervision. The RG Legacy parties filed a petition to compel arbitration of those claims pursuant to arbitration agreements Jimmy entered on the decedent, Daniel Hang’s behalf when Daniel was admitted to a RG Legacy parties’ skilled nursing facility. Jimmy opposed the petition arguing, inter alia, Daniel had been indigent and his estate had no funds to pay arbitration fees and costs. Citing Roldan v. Callahan & Blaine, 219 Cal.App.4th 87 (2013), the trial court found Daniel was indigent at the time of his death and granted the petition to compel arbitration on the condition that, within 15 days, the RG Legacy parties agreed to pay all arbitration fees and costs, or waive the right to arbitrate the matter. The RG Legacy parties did not agree to pay all arbitration fees and costs and instead filed this appeal. The Court of Appeal affirmed: substantial evidence supported the trial court’s findings of Daniel’s indigence, and the trial court properly applied the holdings of Roldan and its progeny in ordering the RG Legacy parties to either agree to pay all arbitration fees and costs or waive arbitration. The RG Legacy parties’ refusal to so agree, within the time specified, effected the court’s denial of their petition to compel arbitration. View "Hang v. RG Legacy I" on Justia Law
Piplack v. In-N-Out Burgers
Defendant In-N-Out Burgers appealed a trial court’s denial of its motion to compel arbitration of the claims of plaintiffs Tom Piplack and Donovan Sherrod for penalties under the Labor Code Private Attorneys General Act of 2004 (PAGA). Defendant argued Viking River Cruises, Inc. v. Moriana, 142 S.Ct. 1906 (2022), rendered while defendant’s appeal was pending, required plaintiffs’ individual PAGA claims to be arbitrated and all remaining representative claims dismissed for lack of standing. Plaintiffs contended: (1) the agreement did not require arbitration of individual PAGA claims; (2) defendant waived its right to arbitration by participating in trial proceedings; (3) plaintiff Sherrod was not bound by the arbitration agreement because he entered it before reaching the age of majority and disaffirmed it after reaching that age; and (4) that plaintiffs had standing to pursue representative PAGA claims in court even if their individual claims were sent to arbitration. The Court of Appeal concluded the arbitration agreements required individual PAGA claims to be arbitrated and defendant did not waive its right to compel arbitration. Accordingly, as to plaintiff Piplack, the Court of Appeal reversed: his individual PAGA claim had to be arbitrated. As to plaintiff Sherrod, the Court remanded for the trial court to consider his arguments regarding disaffirmance in the first instance, as those arguments were not properly briefed or decided in the trial court because they were irrelevant under pre-Viking law. View "Piplack v. In-N-Out Burgers" on Justia Law
Algo-Heyres v. Oxnard Manor
Plaintiff suffered a stroke on August 18, 2009. He was hospitalized at St. John’s Regional Medical Center for two weeks, followed by a month in St. John’s inpatient rehabilitation facility. He entered Oxnard Manor, a skilled nursing facility, on October 3. Four days later, on October 7, Plaintiff signed an arbitration agreement. It stated that he gave up his right to a jury or court trial, and required arbitration of claims arising from services provided by Oxnard Manor, including claims of medical malpractice, elder abuse, and other torts. Plaintiff remained a resident at Oxnard Manor until his death nine years later, individually and as Plaintiff’s successors in interest, sued Oxnard Manor for elder abuse/neglect, wrongful death, statutory violations/breach of resident rights, and negligent infliction of emotional distress. Oxnard Manor filed a petition to compel arbitration. Both sides relied on medical records to demonstrate whether Plaintiff had the mental capacity to consent to the arbitration agreement. The Second Appellate District affirmed. The court explained that evidence here that Plaintiff scored below the level necessary to “solve complex problems such as managing a checking account” supports the conclusion that he was unable to manage his financial affairs. But regardless of whether the presumption of Civil Code section 39, subdivision (b) applied, substantial evidence established that Plaintiff lacked the capacity to enter an arbitration agreement. View "Algo-Heyres v. Oxnard Manor" on Justia Law
Gostev v. Skillz Platform, Inc.
Galarsa v. Dolgen California, LLC
Plaintiff sued her former employer, Dolgen California, LLC (Dollar General), to recover civil penalties under the Private Attorneys General Act of 2004 for various Labor Code violations suffered by her or by other employees. Dollar General moved to compel arbitration, which the superior court denied. In November 2021, the Fifth Appellate District affirmed the trial court’s order. That affirmance was vacated by the United States Supreme Court when it granted Dollar General’s petition for writ of certiorari and remanded the case for further consideration in light of Viking River Cruises, Inc. v. Moriana. The Fifth Appellate District reversed in part the order denying the motion to compel arbitration judgment. The court affirmed Plaintiff’s Type O claims. The court reversed as to Plaintiff’s Type A claims, and the court remanded the matter with directions that the trial court enters a new order requiring Plaintiff to arbitrate the Type A claims. The court concluded Viking River and the Federal Arbitration Act do not invalidate the rule of California law that a provision in an arbitration agreement purporting to waive an employee’s right to pursue representative actions is not enforceable as to representative claims pursued under PAGA. Second, the severability clause in the arbitration agreement allows the unenforceable waiver provision to be stricken from the arbitration agreement. Third, the surviving provisions of the agreement require arbitration of the PAGA claims that seek to recover civil penalties for Labor Code violations suffered by Plaintiff. View "Galarsa v. Dolgen California, LLC" on Justia Law
JPV I L.P. v. Koetting
Tribal lending entities (TLEs) retained the LLCs to manage their online lending programs. In 2017, the relationships began to deteriorate. The LLCs and their managing members, the Koettings, allegedly persuaded customers to continue borrowing from new lenders controlled by the Koettings. The TLEs terminated the agreements and claimed breach of contractual and fiduciary duties, fraud, theft, failure to safeguard customer data, and failure to transfer revenue owed. The LLCs also accused the TLEs of breaching the agreements. An arbitrator ruled against the LLCs and the Koettings.The court of appeal reversed in part because the TLEs failed to demonstrate that the Koettings clearly consented to the arbitrator’s determination of whether they as nonsignatories were bound by the arbitration agreement in the contracts between the TLEs and the LLCs. JPV (successor to the TLEs) unsuccessfully moved to amend the judgment to add the Koettings as judgment debtors on an alter ego theory.JPV argued the trial court abused its discretion by disregarding the collateral estoppel effect of the arbitrator’s findings underlying the judgment against the LLCs and failing to consider all circumstances relevant to the alter ego inquiry, including the arbitral findings that the LLCs wrongfully diverted the TLEs’ customers and business opportunities to other entities controlled by the Koettings. The court of appeal vacated. The trial court made erroneous legal assumptions and misunderstood the proper scope of its discretion. View "JPV I L.P. v. Koetting" on Justia Law