Justia California Court of Appeals Opinion Summaries

In this wage-and-hour class action, the plaintiffs, employees of ACE American Insurance Company (ACE), alleged that ACE misclassified them as exempt employees and failed to provide benefits required for nonexempt employees under state law. The plaintiffs also added claims under the Private Attorneys General Act of 2004 (PAGA) for the same alleged violations. The plaintiffs had signed arbitration agreements as a condition of their employment, which required them to submit employment-related legal claims to arbitration.The Superior Court of Los Angeles County initially granted ACE's motion to compel arbitration and stayed the case pending arbitration. However, neither party initiated arbitration. The plaintiffs then moved to lift the stay, arguing that ACE was required to initiate arbitration and had waived its right to arbitrate by failing to do so. The trial court agreed with the plaintiffs, finding that ACE's inaction was inconsistent with its right to arbitrate and lifted the stay.The Court of Appeal of the State of California, Second Appellate District, reviewed the case. The court held that the plaintiffs, not ACE, were required to initiate arbitration under the terms of the arbitration agreements. The agreements specified that the party wanting to start the arbitration procedure should submit a demand, and in this context, it referred to the plaintiffs who had employment-related legal claims. The court concluded that ACE did not breach the arbitration agreements or waive its right to arbitration by failing to initiate the process. Consequently, the trial court's order lifting the stay was reversed, and ACE was awarded its costs on appeal. View "Arzate v. ACE American Insurance Company" on Justia Law

The case involves a real estate dispute where plaintiffs, represented by Kenneth J. Catanzarite, alleged they were defrauded into exchanging their interests in an apartment complex for interests in a limited liability company. The dispute was ordered into arbitration at the plaintiffs' request, and the arbitrator ruled in favor of the defendant, Plantations at Haywood, LLC. Plantations then petitioned the court to confirm the arbitration award.The Superior Court of Orange County confirmed the arbitration award and granted Plantations' motion for sanctions against Catanzarite under Code of Civil Procedure section 128.7, imposing $37,000 in sanctions. The court found that Catanzarite's opposition to the petition was frivolous and factually unsupported. Catanzarite appealed the sanctions, arguing he was statutorily allowed to file an opposition and contest the arbitrator's award.The California Court of Appeal, Fourth Appellate District, Division Three, reviewed the case. The court held that Catanzarite's arguments were without merit and unsupported by existing law or any nonfrivolous extension of existing law. The court found no abuse of discretion in the trial court's sanction award against Catanzarite. Additionally, the court granted Plantations' motion for sanctions on appeal, finding the appeal to be frivolous and without merit. The case was remanded to the trial court to determine the appropriate amount of sanctions to be awarded, with the option for Catanzarite to stipulate to the amount requested by Plantations. The order was affirmed, and Plantations was entitled to its costs on appeal. View "Plantations at Haywood 1, LLC v. Plantations at Haywood, LLC" on Justia Law

Thomas Vo signed an employment arbitration agreement with Technology Credit Union (TCU) before starting his job in 2020. The agreement required both parties to submit any employment-related disputes to binding arbitration. Vo was later terminated and sued TCU for violations of the Fair Employment and Housing Act (FEHA), including harassment, discrimination, and wrongful termination. TCU moved to compel arbitration, but Vo opposed, arguing the agreement was unconscionable because it did not allow for prehearing third-party discovery.The Santa Clara County Superior Court found the arbitration agreement procedurally unconscionable as a contract of adhesion and substantively unconscionable because it did not permit third-party discovery, relying on Aixtron, Inc. v. Veeco Instruments Inc. The court denied TCU's motion to compel arbitration, leading TCU to appeal the decision.The California Court of Appeal, Sixth Appellate District, reviewed the case de novo. The court found that while the agreement was procedurally unconscionable, it was not substantively unconscionable. The court noted that the JAMS Rules incorporated into the agreement allowed the arbitrator to order additional discovery, including third-party discovery, if necessary. The court emphasized that the agreement should be interpreted to allow adequate discovery to vindicate statutory claims, as clarified in Ramirez v. Charter Communications, Inc.The appellate court reversed the trial court's order and remanded with instructions to grant TCU's motion to compel arbitration and stay the proceedings pending arbitration. The court concluded that the arbitration agreement was enforceable and not unconscionable. View "Vo v. Technology Credit Union" on Justia Law

Kristin Casey, a former employee of D.R. Horton, Inc., filed a lawsuit against the company and one of its employees, Kris Hansen, alleging sexual harassment and other claims. D.R. Horton moved to compel arbitration based on an employment agreement that included an arbitration clause governed by California law. Casey opposed the motion, citing the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA), which allows plaintiffs to invalidate arbitration agreements in cases involving sexual harassment. The trial court granted the motion to compel arbitration, reasoning that the EFAA was inapplicable due to the choice-of-law provision in the employment agreement.The Contra Costa County Superior Court initially reviewed the case and granted the motion to compel arbitration, accepting Hansen's joinder. The court concluded that the choice-of-law provision in the employment agreement meant that California law, not the EFAA, applied. Casey then filed a petition for a writ of mandate to challenge this decision.The California Court of Appeal, First Appellate District, Division One, reviewed the case. The court held that the EFAA preempts state law attempts to compel arbitration in cases related to sexual harassment disputes. The court determined that the EFAA applies to the parties' transaction because it sufficiently involved interstate commerce. The court also concluded that the EFAA's rule of unenforceability of arbitration agreements in sexual harassment cases preempts the state law and that parties cannot contract around the EFAA through a choice-of-law provision. Consequently, the court granted Casey's petition and directed the trial court to vacate its order compelling arbitration and to enter a new order denying the motion. View "Casey v. Superior Court" on Justia Law

Justo Malo Sanchez filed a legal malpractice complaint against Consumer Defense Law Group (CDLG), Tony Cara, Peter Nisson, and Nonprofit Alliance of Consumer Advocates (collectively Defendants). Sanchez alleged that the Defendants committed legal malpractice, resulting in the loss of his house. The retainer agreement he signed included an arbitration clause, which he argued was procedurally and substantively unconscionable due to his inability to understand English and his financial inability to afford arbitration fees.The Superior Court of Orange County initially tentatively denied the Defendants' motion to compel arbitration but later granted it. Sanchez then filed a petition for extraordinary relief, arguing that the arbitration agreement was unconscionable and that he could not afford the arbitration fees.The California Court of Appeal, Fourth Appellate District, Division Three, reviewed the case. The court found substantial procedural unconscionability due to the adhesive nature of the contract, Sanchez's limited English proficiency, and the lack of a Spanish translation or explanation of the arbitration clause. The court also found substantive unconscionability because Sanchez, who was indigent and had been granted a court fee waiver, could not afford the $2,000 arbitration filing fee and additional costs estimated between $25,000 and $30,000.The court concluded that the arbitration agreement was unenforceable due to unconscionability. Additionally, under the precedent set by Roldan v. Callahan & Blaine, the court held that Sanchez could be excused from paying the arbitration fees due to his inability to afford them. The court granted Sanchez's petition, directing the superior court to vacate its order compelling arbitration and to enter an order denying the motion to compel arbitration. View "Sanchez v. Superior Court" on Justia Law

Nabors Corporate Services, Inc. (Nabors) performed oil well plug and abandonment work for the City of Long Beach (the City) between 2012 and 2014. The City had contracted with Tidelands Oil Production Company (Tidelands) for services on the Gerald Desmond Bridge Replacement Project, and Tidelands subcontracted the work to Nabors. The City and Tidelands had concluded that the work was not subject to prevailing wage laws, and Nabors was not informed otherwise during the bid process. After completing the work, Nabors faced a class action from its employees for unpaid prevailing wages, which led to arbitration awards and federal court judgments against Nabors.The Superior Court of Los Angeles County sustained demurrers by the City and Tidelands, dismissing Nabors’s claims for indemnity under Labor Code sections 1781 and 1784. The court ruled that section 1784 could not be applied retroactively to Tidelands and that the arbitration awards confirmed by the federal court did not qualify as court decisions under section 1781.The California Court of Appeal, Second Appellate District, Division Five, reviewed the case. The court affirmed the dismissal of the section 1784 claim against Tidelands, agreeing that the statute could not be applied retroactively. However, the court reversed the dismissal of the section 1781 claim against the City, holding that the federal court’s confirmation of arbitration awards did qualify as court decisions classifying the work as public work. The case was remanded with instructions to enter a new order overruling the City’s demurrer to the section 1781 cause of action. Nabors was awarded costs on appeal against the City, while Tidelands was awarded costs on appeal against Nabors. View "Nabors Corporate Services, Inc. v. City of Long Beach" on Justia Law

Plaintiff Jenny-Ashley Colon-Perez sued her former employer, Security Industry Specialists, Inc. (SIS), alleging multiple causes of action related to her employment. After SIS moved to compel arbitration, the parties agreed to arbitrate, and the trial court ordered the claims to arbitration and stayed the court action. SIS paid two arbitration fee invoices but failed to pay the third invoice within the 30-day period required by California Code of Civil Procedure section 1281.98. Colon-Perez elected to withdraw from arbitration and moved to vacate the arbitration and stay order. The trial court granted the motion, ruling that SIS had materially breached the arbitration agreement and Colon-Perez was entitled to proceed with her claims in court. SIS then moved to vacate the order under section 473(b), which the trial court denied.The trial court ruled that the Federal Arbitration Act (FAA) did not preempt section 1281.98 and that SIS had materially breached the arbitration agreement by failing to pay the fees on time. The court also found that section 1281.98 did not violate the contracts clause of the United States and California Constitutions. SIS appealed, arguing that the FAA preempted section 1281.98, that section 1281.98 violated the contracts clause, and that it was entitled to relief under section 473(b).The California Court of Appeal, First Appellate District, Division One, affirmed the trial court's orders. The court held that the FAA did not preempt section 1281.98, as the state law could be applied concurrently with federal law. The court also found that section 1281.98 did not violate the contracts clause because it served a significant and legitimate public purpose and was appropriately tailored to achieve that purpose. Additionally, the court ruled that section 473(b) relief was not available for SIS's failure to timely pay arbitration fees, as the statute's strict 30-day deadline was intended to be inflexible. View "Colon-Perez v. Security Industry Specialists" on Justia Law

A home improvement and solar panel salesperson visited the home of senior citizens Harold and Lucy West, who lived with their adult daughter Deon. The salesperson, Ilai Mitmiger, discussed a solar installation and bathroom renovation, leading to a loan agreement package being completed electronically with Harold’s signature. Harold and Lucy, both in their 90s and suffering from dementia, did not use email, computers, or mobile phones. Deon believed the renovations would be paid for by a government program, as suggested by Mitmiger. The loan documents were sent to Deon’s email, opened on a mobile device, and signed electronically in Harold’s name within seconds.The Superior Court of Los Angeles County denied Solar Mosaic LLC’s petition to compel arbitration based on the arbitration provisions in the loan agreement. The court found that Mosaic had not proven the existence of an agreement to arbitrate, specifically that Harold was the person who completed the loan documents or that Deon had the authority to bind Harold to an arbitration agreement.The California Court of Appeal, Second Appellate District, Division Eight, affirmed the trial court’s order. The appellate court held that the evidence strongly suggested Harold lacked the technical ability to execute the electronic signatures and demonstrated a factual dispute as to whether Harold actually signed the loan documents. The court also found that Mosaic had not proven Deon had the authority to bind Harold to the agreement or that Harold ratified the agreement through a recorded telephone call. The court concluded that the recorded call did not demonstrate Harold’s awareness or understanding of the loan agreement, and thus, there was no ratification. View "West v. Solar Mosaic, LLC" on Justia Law

The decedent, suffering from Parkinson’s disease, dysphagia, and dementia, was admitted to Elmcrest Care Center in February 2013. On August 4, 2017, he was found nonresponsive on the floor by Elmcrest staff, who administered CPR and called 911. He was transported to a hospital and passed away four days later. The Estate of Jose de Jesus Ortiz, represented by Ericka Ortiz, filed a civil action against Elmcrest and its staff, alleging elder abuse, neglect, negligence, willful misconduct, and fraud. The trial court compelled arbitration based on an agreement signed upon the decedent’s admission to Elmcrest.The arbitrator issued a First Interim Award on March 30, 2022, finding that the Estate did not meet its burden of proof on any of its claims. The award was labeled "interim" and allowed for further submissions by the parties to address any omitted issues. The Estate filed a request to amend the First Interim Award, arguing that damages for pre-death loss of dignity were not considered. The arbitrator issued a Second Interim Award on May 26, 2022, awarding $100,000 in damages for pre-death pain and suffering, and invited the Estate to file for attorney fees and costs.The trial court initially denied the Estate’s petition to vacate the First Interim Award, ruling it was not final. However, it later vacated the Final Award and confirmed the First Interim Award, reasoning that the First Interim Award had resolved all necessary issues. The Estate appealed.The California Court of Appeal reversed the trial court’s decision, holding that the First Interim Award was not final as it expressly reserved jurisdiction for further proceedings. The court concluded that the arbitrator did not exceed her authority in issuing the Final Award, which included the omitted decision on pre-death loss of dignity. The trial court was directed to enter a new order confirming the Final Award. View "Ortiz v. Elmcrest Care Center, LLC" on Justia Law

Julian Rodriguez, an hourly machine operator for Lawrence Equipment, Inc., filed a class action lawsuit in December 2015 alleging various wage-and-hour violations under the California Labor Code. Rodriguez claimed that Lawrence failed to pay for all hours worked, provide adequate meal and rest breaks, issue accurate wage statements, and pay final wages timely. In July 2014, Rodriguez had signed an arbitration agreement with Lawrence, which led to the arbitration of his non-PAGA claims. The arbitrator ruled in favor of Lawrence, finding that Rodriguez failed to prove any of the alleged Labor Code violations.The Superior Court of Los Angeles County confirmed the arbitration award and entered judgment in favor of Lawrence. Rodriguez appealed the judgment, but it was affirmed by the Court of Appeal. Subsequently, Lawrence moved for judgment on the pleadings, arguing that Rodriguez's remaining PAGA claim was barred by issue preclusion because the arbitrator had already determined that no Labor Code violations occurred. The trial court initially denied the motion but later granted it after the U.S. Supreme Court's decision in Viking River Cruises, Inc. v. Moriana, which influenced the court's interpretation of PAGA standing.The Court of Appeal of the State of California, Second Appellate District, Division Three, reviewed the case and affirmed the trial court's judgment. The appellate court held that the arbitrator's findings precluded Rodriguez from establishing standing as an aggrieved employee under PAGA. The court concluded that issue preclusion applied because the arbitrator's decision was final, the issues were identical, actually litigated, and necessarily decided, and the parties were the same. Consequently, Rodriguez lacked standing to pursue the PAGA claim, and the judgment of dismissal was affirmed. View "Rodriguez v. Lawrence Equipment, Inc." on Justia Law