Justia California Court of Appeals Opinion Summaries

Articles Posted in Arbitration & Mediation
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The Private Attorney General Act (Labor Code 2698) allows an employee, as a proxy for state enforcement agencies, to sue an employer on behalf of herself and other aggrieved employees for Labor Code violations. When the parties have an arbitration agreement, California law blocks the employer from enforcing that agreement with respect to representative PAGA claims for civil penalties; the agreement may be enforceable with respect to other claims, including claims for victim-specific relief (like unpaid wages). Lime rents electric scooters. Olabi entered into an agreement to locate, recharge, and redeploy Lime's scooters. The agreement required the parties to arbitrate “any and all disputes,” including Olabi’s classification as an independent contractor but contained an exception for PAGA representative actions. Olabi sued, alleging Lime intentionally misclassified him and others as independent contractors, resulting in Labor Code violations; he included claims under the Unfair Competition Law and PAGA. Lime petitioned to compel arbitration, arguing Olabi was required to arbitrate independent contractor classification disputes and that the PAGA exception did not cover the unfair competition claim or the PAGA claim to the extent that Olabi sought victim-specific relief. Olabi voluntarily dismissed his unfair competition claim and disavowed any claim for victim-specific relief. The trial court denied Lime’s petition and granted Olabi leave to amend. The court of appeal affirmed. The language of the arbitration agreement broadly excludes PAGA actions View "Olabi v. Neutron Holdings, Inc." on Justia Law

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Landlord's 131,000-square-foot San Francisco building has been leased to Saks for a department store since 1991. The initial 25-year lease period is followed by options to renew at “ ‘Fair Market Rent.” If the parties are unable to agree to the rent amount, they are to submit the issue to arbitration. Saks exercised its option to renew the Lease. The parties were unable to agree on rent and selected arbitrator Kleczewski. Kleczewski reviewed the evidence and briefs. Landlords’s rent determination was $13,917,364; Saks’ determination was $6,250,000. Kleczewski’s own fair market rent determination was approximately $10.9 million. Pursuant to the principles of “baseball” arbitration, he ruled the annual rent would be $13,917,364. The trial court vacated the award, finding that the parties carefully defined the scope of the arbitrator’s authority but Kleczewski violated that agreement by visiting New York properties that influenced his decision. The parties participated in a second arbitration hearing before a different arbitrator who found in favor of Saks. The trial court confirmed the award. The court of appeal affirmed. Code of Civil Procedure section 1286.25 provides that courts “shall vacate” awards that are the product of procedural irregularities. The parties were clear from the outset that Kleczewski was not authorized to perform his own due diligence. View "California Union Square L.P. v. Saks & Co. LLC" on Justia Law

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In November 2007, Marten performed surgery on Doe’s face and neck. In June 2008, Doe sent Marten a letter stating she was considering suing him and demanded that he preserve her documents, files, and photos. In November, Doe’s attorney served Marten with a written demand for arbitration pursuant to a Physician-Patient Arbitration Agreement. In January 2009 Marten’s counsel responded, identifying an arbitrator, without questioning the origin of the agreement or disputing that Marten had signed it. The applicable one-year statute of limitations ran in March 2009. (Code Civ. Proc.340.5) In May 2009, Merten subpoenaed and obtained the records of Dr. Daniel, whom Doe earlier consulted. Located within Daniel’s records was a signed arbitration agreement. Nearly three years later, Marten’s counsel first confronted Doe with the arbitration agreement and refused to continue with the arbitration. Doe sued for medical malpractice and medical battery. The court overruled dismissal motions, finding triable issues as to whether equitable tolling or equitable estoppel disallowed the statute of limitations defense. The court imposed sanctions after hearing evidence that Marten destroyed electronically stored information. After the close of evidence, the trial court dismissed the medical battery claim. On the malpractice claim, the jury awarded over $6.3 million in damages. The court then found the malpractice claim time-barred. The court of appeal reversed in part. The medical malpractice claim was not time-barred because Merten’s conduct actually and reasonably induced Doe to refrain from filing a timely action. View "Doe v. Marten" on Justia Law

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Civil Code section 1953 prohibits enforcement of a predispute arbitration provision for disputes arising from or related to the tenancy provisions of a continuing care contract. The Court of Appeal held that the trial court erred when it ordered the parties' dispute to arbitration, because the agreements compelling arbitration arising from or related to the tenancy provisions of the continuing care contracts are void as contrary to public policy. Accordingly, the court reversed and remanded for trial. View "Harris v. University Village Thousand Oaks, CCRC, LLC" on Justia Law

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Jarboe was hired by DKD of Davis, doing business as Hanlees Davis Toyota. Shortly after he began working, Jarboe was transferred to Leehan of Davis, doing business as Hanlees Chrysler Dodge Jeep Ram Kia. Following his termination at Leehan, Jarboe brought a wage and hour action against the Hanlees Auto Group, its 12 affiliated dealerships, including DKD and Leehan, and three individuals. The defendants moved to compel arbitration based on an employment agreement between Jarboe and DKD. The trial court granted the motion as to 11 of the 12 causes of action against DKD of Davis but denied the motion as to the other defendants and allowed Jarboe’s claim under the Private Attorneys General Act, Labor Code 2698. to proceed in court against all defendants. The court refused to stay the causes of action allowed to proceed in litigation pending arbitration of Jarboe’s claims against DKD. The court of appeal affirmed, rejecting an argument by Hanlees, its affiliated dealerships, and the individual defendants that they were entitled to enforce the agreement to arbitrate between Jarboe and DKD as third party beneficiaries of Jarboe’s employment agreement or under the doctrine of equitable estoppel. The trial court did not err in failing to stay the litigation under Labor Code section 1281. View "Jarboe v. Hanlees Auto Group" on Justia Law

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Noe hired attorney Dorit to evaluate the medical records of Noe’s deceased mother for a potential medical malpractice suit. Noe agreed to pay Dorit a $10,000 non-refundable retainer fee, intended to cover Dorit’s time spent evaluating the claim, plus “the costs of additional medical records and/or expert medical review if indicated.” The agreement stated, “Should there arise any disagreement as to the amount of attorney fees and/or costs, Client agrees to enter into binding arbitration of such issue or dispute before the Bar Association of San Francisco.” Ultimately, Dorit said he did not think a malpractice claim was viable. Noe later asked Dorit to return some or all of the retainer fee. Dorit refused. Noe filed a request for arbitration. An arbitrator awarded Noe nothing and allocated him the entire filing fee. Because neither party requested a trial de novo, the award became binding under the Mandatory Fee Arbitration Act MFAA). Months later, Dorit sued Noe for malicious prosecution based on the initiation of arbitration. Noe filed a special motion to strike under Code of Civil Procedure section 425.16, the anti-SLAPP statute. The court of appeal reversed the denial of his motion. A malicious prosecution claim cannot be based on an MFAA arbitration. View "Dorit v. Noe" on Justia Law

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Younan worked for Fleming, 2009-2016. In 2017, he filed a complaint with the Labor Commission, seeking $22,000 in commissions, plus penalties and interest. Fleming asserted to the Labor Commissioner that the complaint should be dismissed because the parties signed an (attached) arbitration agreement. The Commissioner did not dismiss the complaint but Fleming did not file a petition to compel arbitration. A hearing was set for August 2018. In July, Fleming filed an Answer that contained affirmative defenses, including that arbitration was the proper forum. On August 7, Fleming moved to vacate the August 13 hearing and dismiss the complaint because Younan’s employment application and agreement required arbitration, again stating that “[Fleming] is prepared to file a motion with the Superior Court seeking to compel arbitration.” Both parties appeared at the August 13 hearing. Fleming’s motion was denied because Fleming had failed to obtain a stay from the superior court. In December, the Labor Commissioner awarded Younan commissions plus interest and liquidated damages. Fleming filed a notice of appeal; a de novo trial was scheduled for March 2019. In February, Fleming filed an unsuccessful petition to compel arbitration, stay proceedings and vacate the order. The court of appeal affirmed, finding that Fleming waived its right to arbitration by taking steps inconsistent with an intent to invoke arbitration, including delaying its request to the superior court until after a full hearing. Fleming also failed to establish an agreement to arbitrate existed. View "Younan v. Fleming Distribution Co." on Justia Law

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The Court of Appeal affirmed the trial court's confirmation of an arbitration award in favor of Impact regarding a contractual dispute with VVA. In rejecting VVA's arguments, the court was guided by the general policy in favor of arbitration and, more specifically, in favor of interpreting arbitration awards to give effect to parties' stated desire to avoid court involvement. In the published portion of the opinion, the court held that the arbitrator did not exceed his authority in awarding the remedy. The court also held that there is no basis for vacating the award, because the award is not incomplete or uncertain for failure to expressly address third party consent. View "VVA-TWO, LLC v. Impact Development Group, LLC" on Justia Law

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The Court of Appeal affirmed the trial court court's order granting plaintiff's motion for a preliminary injunction to enjoin arbitration. The court held that the trial court did not abuse its discretion when it found that plaintiff demonstrated a likelihood he would prevail on the issue of whether his claim was arbitrable. In this case, plaintiff would likely prevail on the merits because he cannot be compelled to submit any portion of his representative Private Attorneys General Act of 2004 claim to arbitration. The court also held that the trial court did not abuse its discretion when it found that plaintiff demonstrated that the interim harm he would suffer if the injunction was denied outweighed the harm AmeriHome would suffer if the injunction was granted. View "Brooks v. AmeriHome Mortgage Co., LLC" on Justia Law

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After plaintiff made four purchases of precious metals from defendants, he filed suit alleging that defendants misled him. Plaintiff, as trustee for the Dennison Family Trust, purchased the precious metals after seeing television commercials promoting such investments. The Court of Appeal held that the arbitration agreement does not clearly and unmistakably delegate authority to the arbitrator to decide unconscionability; the arbitration agreement is unconscionable based on lack of mutuality, limitations on defendants' liability, and the statute of limitations; and the court could not save the arbitration agreement by severing a single offending clause because the agreement is permeated with unconscionable terms. Accordingly, the court affirmed the trial court's judgment. View "Dennison v. Rosland Capital LLC" on Justia Law