Justia Arbitration & Mediation Opinion Summaries

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

Five diabetic patients, Henry J. Hebert, Traci Moore, Aliya Campbell Pierre, Tiffanie Tsakiris, and Brenda Bottiglier, were prescribed the Dexcom G6 Continuous Glucose Monitoring System (Dexcom G6) to manage their diabetes. The device allegedly malfunctioned, failing to alert them of dangerous glucose levels, resulting in serious injuries and, in Hebert's case, death. The patients and Hebert's daughters filed separate product liability actions against Dexcom, Inc., the manufacturer. Dexcom moved to compel arbitration, arguing that each patient had agreed to arbitrate disputes when they installed the G6 App on their devices and clicked "I agree to Terms of Use."The trial court granted Dexcom's motions to compel arbitration in all five cases. The plaintiffs petitioned the appellate court for a writ of mandate directing the trial court to vacate its orders compelling them to arbitrate. The appellate court consolidated the cases and issued an order directing Dexcom to show cause why the relief sought should not be granted.The appellate court concluded that the trial court erred. Although a clickwrap agreement, where an internet user accepts a website’s terms of use by clicking an “I agree” or “I accept” button, is generally enforceable, Dexcom’s G6 App clickwrap agreement was not. The court found that Dexcom undid whatever notice it might have provided of the contractual terms by explicitly telling the user that clicking the box constituted authorization for Dexcom to collect and store the user’s sensitive, personal health information. For this reason, Dexcom could not meet its burden of demonstrating that the same click constituted unambiguous acceptance of the Terms of Use, including the arbitration provision. Consequently, arbitration agreements were not formed with any of the plaintiffs. The court granted the petitions and directed the trial court to vacate its orders granting Dexcom’s motions to compel arbitration and to enter new orders denying the motions. View "Herzog v. Superior Court" on Justia Law

The case revolves around the death of Skyler A. Womack (Skyler) at Silverscreen Healthcare, Inc., a skilled nursing facility. Skyler's parents, Jonie A. Holland (Holland) and Wayne D. Womack (Wayne), filed a lawsuit against Silverscreen, alleging dependent adult abuse and negligence on behalf of Skyler, as well as their own claim for wrongful death. Silverscreen moved to compel arbitration of the entire complaint based on an arbitration agreement between Skyler and Silverscreen.The Superior Court of Los Angeles County granted Silverscreen’s motion to compel arbitration for the survivor claims but denied the motion for the wrongful death cause of action. The court reasoned that the parents did not have an enforceable arbitration agreement with Silverscreen. The court's decision was heavily influenced by the case Avila v. Southern California Specialty Care, Inc.Silverscreen appealed the decision to the Court of Appeal of the State of California, Second Appellate District. The appellant argued that, according to Ruiz v. Podolsky, the parents are bound by the arbitration agreement signed by Skyler, and therefore, the parents’ wrongful death claim should be subject to arbitration. The appellate court agreed with Silverscreen, stating that Ruiz governs this matter. Consequently, under Ruiz and Code of Civil Procedure section 1295, the parents’ wrongful death claim must go to arbitration along with Skyler’s survivor claims. The court reversed the trial court's decision and remanded the case with directions. View "Holland v. Silverscreen Healthcare, Inc." on Justia Law

The case involves a dispute between Andrew Reynosa and his former employer, Advanced Transportation Services, Inc. (ATS). Reynosa had signed an arbitration agreement with ATS during his employment. After leaving the company, he filed a complaint for damages against ATS, which was then moved to arbitration as per the agreement. However, Reynosa later filed a motion to withdraw from arbitration, arguing that ATS had twice failed to pay the required arbitration fees within the stipulated 30-day period, thereby waiving its right to compel him to proceed with arbitration.The Tulare County Superior Court denied Reynosa's motion to withdraw from arbitration. The court found that the parties had mutually agreed to extend the deadline for payment of the arbitration fees, and ATS had paid the fees within the extended deadline. Therefore, the court concluded that ATS had not materially breached the arbitration agreement.Reynosa then petitioned the Court of Appeal of the State of California, Fifth Appellate District, seeking a writ of mandate directing the superior court to vacate its order and grant his motion to withdraw from arbitration. The appellate court granted Reynosa's request for a stay of the arbitration proceedings and issued an order to show cause why writ relief should not be granted.The appellate court concluded that the superior court had erroneously denied Reynosa's motion to withdraw from arbitration. The court found that ATS had materially breached the arbitration agreement by failing to pay the arbitration fees within the stipulated 30-day period. The court held that Reynosa was entitled to withdraw from arbitration and proceed in a court of appropriate jurisdiction. The court issued a writ of mandate directing the superior court to vacate its order and grant Reynosa's motion to withdraw from arbitration. The court also ordered the superior court to address Reynosa's requests for sanctions under the relevant code of civil procedure. View "Reynosa v. Superior Court" on Justia Law

The case involves Christine Matlock Dougherty, who sued U.S. Behavioral Health Plan, California (USB) for claims related to her son's healthcare. Dougherty's son, Ryan, was enrolled in a UnitedHealthcare HMO health plan, which Dougherty had access to through her employer. Ryan admitted himself into a residential treatment facility for severe drug addiction, but USB denied coverage for his stay after three days, arguing that he could be treated at home. Ryan fatally overdosed shortly after his discharge from the facility. Dougherty then sued USB, claiming that its wrongful denial of coverage for Ryan's treatment caused his death. USB petitioned to compel arbitration of her claims, but the trial court denied the petition, stating that USB's arbitration agreement was not enforceable because it did not comply with the disclosure requirements imposed by Health & Safety Code section 1363.1.The trial court denied USB's petition to compel arbitration on the grounds that the arbitration agreement did not comply with the disclosure requirements of Health & Safety Code section 1363.1. The court found that there were two separate contracts, one between Dougherty and UnitedHealthcare, and another between Dougherty and USB. The court ruled that the arbitration agreement in the supplement, which governed Dougherty's claims against USB, did not comply with section 1363.1's disclosure requirements.The Court of Appeal of the State of California Fourth Appellate District Division Two reversed the trial court's decision. The appellate court concluded that USB forfeited its argument that the issue of whether the arbitration agreement was valid under the disclosure requirements of section 1363.1 was delegated to the arbitrator. However, the court agreed with USB that the trial court erroneously denied USB’s petition because USB complied with section 1363.1. The court found that the only "health care service plan" at issue that "includes terms that require binding arbitration" is Dougherty’s plan with UnitedHealthcare, which includes both the EOC and the supplement as components of the plan. Therefore, the court concluded that there was no section 1363.1 violation and reversed the trial court's order denying the petition to compel arbitration. View "Dougherty v. U.S. Behavioral Health Plan" on Justia Law

The case involves Angel Mondragon, an employee of Sunrun Inc., who was required to sign an arbitration agreement as a condition of his employment. The agreement covered most disputes related to Mondragon’s employment but excluded claims brought under the Private Attorney General Act of 2004 (PAGA). After his employment ended, Mondragon filed a complaint asserting several causes of action under PAGA. Sunrun filed a motion to compel arbitration of Mondragon’s claims, which the trial court denied. Sunrun appealed the decision, arguing that the trial court erred in ruling on whether Mondragon’s claims were arbitrable.The Superior Court of Los Angeles County had previously denied Sunrun's motion to compel arbitration. The court ruled that it, not the arbitrator, should decide questions of arbitrability. The court also ruled that the arbitration agreement unambiguously excluded PAGA claims and did not differentiate between individual PAGA claims and PAGA claims brought on behalf of other employees.The Court of Appeal of the State of California Second Appellate District Division Seven affirmed the decision of the lower court. The court concluded that Mondragon, an unsophisticated party, did not delegate arbitrability decisions to the arbitrator. The court also concluded that the language of the arbitration agreement did not require Mondragon to arbitrate his individual PAGA claims. Therefore, the court affirmed the decision of the lower court. View "Mondragon v. Sunrun Inc." on Justia Law