Justia Arbitration & Mediation Opinion Summaries

Articles Posted in California Courts of Appeal

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The Court of Appeal reversed the trial court's order denying Carrows' motion to compel arbitration. The court held that the language of the arbitration agreement was sufficient to apply to the current action. However, the court remanded to determine a factual issue where time was not relative, but relevant. The factual issue was whether Carrows knew that at the time plaintiff signed an arbitration agreement, plaintiff was represented by counsel. In this case, whether the arbitration agreement was unenforceable should be decided by the trial court. View "Salgado v. Carrows Restaurants, Inc." on Justia Law

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After plaintiff was terminated from VWB, he filed a class action against the company alleging various wage and hour violations under California labor law. The Court of Appeal affirmed the trial court's denial of VWB's petition to compel arbitration and held that the trial court correctly found that plaintiff's employment came within the Federal Arbitration Act's exemption granted to transportation workers engaged in interstate commerce. The trial court correctly found that plaintiff, employed as a delivery driver for VWB, engaged in interstate commerce through his participation in the continuation of the movement of interstate goods to their destinations. Therefore, plaintiff was exempt from the FAA. The court need not address plaintiff's alternative argument that the arbitration agreement was unenforceable. View "Nieto v. Fresno Beverage Co." on Justia Law

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Plaintiff engaged Pinel to sell his Danville home in 2008. In 2015 he filed a putative class action lawsuit on behalf of California residents who, in 2004-2011, used Pinel to buy or sell a home in California and had utilized TransactionPoint, Fidelity's real estate software program, alleging Pinel had entered into unlawful sublicensing agreements with Fidelity subsidiaries, allowing those entities to contract their settlement services to Pinel clients using TransactionPoint, and the Fidelity defendants paid unlawful sublicensing fees to Pinel for the TransactionPoint-generated business. The defendants cited the arbitration clause in plaintiff’s listing agreement, which contained a notice provision required by Code of Civil Procedure 1298(c) with spaces for the client’s and broker’s initials. Pinel produced a copy of plaintiff's listing agreement. The 1298(c) notice on the copy showed plaintiff’s initials; the space for Pinel’s initials was blank. Pinel submitted a declaration that the original listing agreement was destroyed in accordance with Pinel’s normal document retention policy; that the copy was obtained from the listing agent; that it was Pinel’s policy to allow a client to elect whether to assent to the arbitration provision by initialing paragraph 19B; that Pinel “would as a matter of policy and custom and practice adopt the election of the client and initial Paragraph 19B.” The court of appeal affirmed the denial of Pinel’s motion. Pinel failed to establish that it had initialed the arbitration provision. The language of that provision contemplated mutual agreement and that each would indicate assent by initialing the provision. View "Juen v. Alain Pinel Realtors, Inc." on Justia Law

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Real Estate of the Pacific, Inc., doing business as Pacific Sotheby's International Realty (Sotheby's), David Schroedl, and David Schroedl & Associates (DSA) (collectively, Defendants) successfully moved for summary judgment against Daniel Ryan and Patricia Ryan, individually and as trustees of the Ryan Family Trust Dated August 25, 2006 (the Ryans). This matter arose over the sale of the Ryans' house in La Jolla. During an open house hosted by Schroedl, the Ryans' next door neighbor, Hany Girgis, informed Schroedl that he intended to remodel his home, which would permanently obstruct the Property's westerly ocean view. Ney and Luciana Marinho (the Marinhos) purchased the Property for $3.86 million. Defendants received $96,5000 at the close of escrow as their commission for the sale. At no time prior or during escrow, in the real estate disclosures, or in conversation, did Defendants disclose Girgis's extensive remodeling plans or their impact on the westerly ocean view and privacy of the Property. After learning this information, the Marinhos immediately attempted to rescind the real estate sales contract for several reasons, including the magnitude and scope of the Girgis remodel, the proximity of the new structure to the property line, the loss of privacy, the elimination of any possibility of a westerly ocean view, and a potential two-year construction project. The Ryans, based in part on Defendants' advice, refused to rescind the purchase real estate sales contract. The Marinhos then demanded arbitration per the terms of the real estate sales contract and sought rescission of the contract or, in the alternative, damages. The Marinhos alleged Defendants knew about Girgis's construction plans and failed to disclose this information. The Ryans sued Defendants for negligence. The crux of Defendants' argument was that the Ryans could not establish the existence of any cause of action without an expert witness. Because the Ryans did not designate an expert witness, Defendants argued summary judgment was warranted. The superior court agreed, granting Defendants' motion. The Ryans appealed the judgment following Defendants' successful motion, contending they did not need an expert witness to establish the elements of their causes of action against Defendants. The Court of Appeal agreed and reversed the judgment. View "Ryan v. Real Estate of the Pacific" on Justia Law

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Plaintiffs Mark Correia and Richard Stow sued their former employer, NB Baker Electric, Inc. (Baker), alleging wage and hour violations and seeking civil penalties under the Private Attorney General Act of 2004 (PAGA). Baker responded by petitioning for arbitration under the parties' arbitration agreement. The agreement provided that arbitration shall be the exclusive forum for any dispute and prohibited employees from bringing a "representative action." The trial court granted the arbitration petition on all causes of action except for the PAGA claim. On the PAGA claim, the court followed the California Supreme Court decision in Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal.4th 348 (2014), and the California Court of Appeal decision in Tanguilig v. Bloomingdale's, Inc., 5 Cal.App.5th 665 (2016). The trial court stayed the PAGA claim pending the conclusion of the arbitration. Baker contended the court erred because: (1) plaintiffs' response to its arbitration petition was untimely; (2) Iskanian was no longer binding as it was inconsistent with a recent United States Supreme Court decision, Epic Systems Corp. v. Lewis, 138 S.Ct. 1612 (2018); and (3) the parties' arbitration agreement should have been interpreted to mean that if the representative-action waiver was unenforceable, the PAGA claim for statutory penalties remained subject to arbitration. The Court of Appeal determined the trial court acted within its discretion in considering plaintiffs' response to the arbitration petition despite that plaintiffs filed the response after the statutory deadline. Furthermore, Iskanian was still good law: "Although the Epic court reaffirmed the broad preemptive scope of the Federal Arbitration Act (FAA), Epic did not address the specific issues before the Iskanian court involving a claim for civil penalties brought on behalf of the government and the enforceability of an agreement barring a PAGA representative action in any forum." Therefore, the Court concluded the trial court properly ruled the waiver of representative claims in any forum is unenforceable. The Court rejected Baker's contention the court erred in failing to order plaintiffs' PAGA claim to arbitration. "We are aware the federal courts have reached a different conclusion regarding the arbitrability of a PAGA representative claim, but find these decisions unpersuasive because the courts did not fully consider the implications of the qui tam nature of a PAGA claim on the enforceability of an employer-employee arbitration agreement. Moreover, although we provided Baker the specific opportunity to do so, it failed to identify a sound basis for this court to apply the federal decisions on this issue." View "Correia v. NB Baker Electric, Inc." on Justia Law

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After EDI assigned plaintiffs to pack produce for San Miguel Produce, plaintiffs filed suit against San Miguel for labor law violations. The Court of Appeal reversed the trial court's denial of EDI and San Miguel's joint motion to compel arbitration, holding that the arbitration was mandated. The court held that EDI and San Miguel were co-employers with an identity of interests and mutual responsibility for complying with state law governing employers in the produce packing industry, and it was inconsequential that plaintiffs chose not to name EDI as a defendant. In this case, plaintiffs had agreed to arbitrate all disputes arising from their employment and, at all relevant times, EDI was plaintiffs' employer. The court remanded with directions to stay the court proceedings and to order the parties to arbitrate their dispute. View "Vasquez v. San Miguel Produce, Inc." on Justia Law

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The Court of Appeal held that (1) an attorney does not have standing to petition to compel arbitration of his clients' claims; (2) a signatory to an arbitration agreement can compel a nonsignatory parent company of a signatory subsidiary on an agency theory where (a) the parent controlled the subsidiary to such an extent that the subsidiary was a mere agent or instrumentality of the parent and (b) the claims against the parent arose out of the agency relationship; (3) the arbitrator did not exceed his authority by substituting the attorney's clients as the real parties in interest in the arbitration; and (4) the arbitrator did not exceed his authority by denying attorneys' fees to a party that prevailed in the arbitration. Therefore, the court agreed with the reasoning in Safari Associates v. Superior Court (2014) 231 Cal.App.4th 1400, and declined to follow DiMarco v. Chaney (1995) 31 Cal.App.4th 1809 . Accordingly, the court vacated and remanded with directions for the trial court to enter new orders on the petition to compel arbitration and the cross-petitions to vacate and to correct the award. The court also reversed the trial court's order denying attorneys' fees in the postarbitration proceedings. View "Cohen v. TNP 2008 Participating Notes Program, LLC" on Justia Law

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The employer, Luxor Cabs, obtained workers' compensation insurance through AUCRA under an EquityComp program. The EquityComp workers’ compensation insurance program has garnered nationwide attention from administrative agencies and judicial tribunals. In 2016, the California Insurance Commissioner issued an administrative decision concluding that the EquityComp program violated state insurance laws and that the reinsurance participation agreement (RPA) between AUCRA and the insured employer, in that case, was void as a matter of law. In 2018, the Fourth Appellate District came to a similar decision in a case essentially identical to this one involving arbitrability under an RPA. Luxor, unhappy with AUCRA's handling of claims, filed suit. The court of appeal affirmed the denial of AUCRA’s motion to compel arbitration pursuant to the terms of an RPA between an employer, Luxor Cabs, and AUCRA. The trial court properly rejected an argument that the validity of the arbitration clause should, itself, have been referred to arbitration in accordance with the RPA’s “delegation clause.” Both the delegation clause and the arbitration provision in the RPA were void and unenforceable because they each separately constituted an “endorsement” to the Policy which was not properly vetted and approved as required by Insurance Code section 11658. View "Luxor Cabs, Inc. v. Applied Underwriters Captive Risk Assurance Co." on Justia Law

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Plaintiffs Jose Robles, Christopher Rymel, and David Hagins sued defendant Save Mart Supermarkets, Inc., alleging various state law statutory employment claims. After successfully moving to sever, Save Mart moved to compel arbitration as to each plaintiff. The motions were heard together, and the trial court denied the motions by substantively identical orders. Save Mart appealed in each case. The original complaint alleged each plaintiff had been employed as an order selector at Save Mart’s Roseville Distribution Center (Rymel was also a forklift driver). Each alleged an industrial injury and torts stemming from their injuries under the California Fair Employment and Housing Act (FEHA). Hagins also alleged he was retaliated against after he reported a workplace safety hazard, purportedly a whistleblower violation under Labor Code section 1102.5. Save Mart alleged plaintiffs were members of Teamsters Local 150 and were employed by Save Mart under a CBA that covered the pleaded disputes. Save Mart argued that resolving the disputes would require interpretation of the CBA or would be “substantially dependent” on such interpretation, that the claims were “inextricably intertwined” with parts of the CBA, and that judicial resolution of them would infringe on the arbitration process set forth in the CBA. Plaintiffs opposed the motions, arguing the pleaded claims did not fall within the scope of the CBA. The Court of Appeal concurred plaintiffs' claims did not require an interpretation of the CBA, and that their claims fell outside the scope of the CBA: "Save Mart explains that disputes about the employee termination and production norm provisions of the CBA are intended to be resolved through grievances. As an abstract proposition we do not disagree. But ...plaintiffs retain an independent (nonnegotiable) state law right to be free of discipline caused by protected activity, such as whistleblowing (Hagins) or exercising his FEHA rights (all plaintiffs)." View "Rymel v. Save Mart Supermarkets" on Justia Law

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Howard alleges that Kaggle’s CEO, Goldbloom, three other members of its board of directors and three limited partnerships (the VC defendants)) abused their corporate power and breached their fiduciary duty to him by wrongfully diluting his interest in Kaggle’s stock, transferring its value to themselves through a self-dealing transaction. The defendants sought to compel arbitration of the claims and to stay proceedings, claiming that Howard had signed four separate agreements in which he consented to arbitrate disputes related to Kaggle. Three of the agreements were signed in 2011, when Howard became employed by Kaggle, and the fourth was a separation agreement executed in 2013, after Howard’s employment ended. The trial court denied the petition, concluding that the arbitration clauses in the four agreements “go to the terms and interpretation of those agreements and matters released by them. Those employment-related agreements preceded by years the issues pled in the complaint, which do not regard Howard’s employment.” The court of appeal affirmed. This dispute is based on obligations owed to minority shareholders in the company, obligations that are independent of Howard’s employment relationship and hence not subject to arbitration even under a broad understanding of the arbitration clause. View "Howard v. Goldbloom" on Justia Law