Justia California Court of Appeals Opinion Summaries

In 2015, Joseph Semprini filed a lawsuit against his employer, Wedbush Securities, Inc., alleging 11 personal causes of action and seven class claims for alleged wage and hour violations. Semprini and Wedbush agreed that Semprini’s personal claims would be arbitrated, while the remaining claims would proceed in court. The class was certified in 2017, and the parties litigated Semprini’s class and Private Attorneys General Act (PAGA) claims in court over the next several years. In 2022, the U.S. Supreme Court ruled in Viking River Cruises, Inc. v. Moriana that an employer may enforce an employee’s agreement to arbitrate individual PAGA claims. Following this decision, Wedbush asked its workforce to sign arbitration agreements, and 24 class members, including the second named plaintiff, Bradley Swain, agreed to do so.The Superior Court of Orange County denied Wedbush’s motion to compel arbitration of the named plaintiffs’ individual PAGA claims and the claims of the 24 class members who signed arbitration agreements. The court found that Wedbush had waived its right to compel arbitration by entering into the 2015 stipulation.The Court of Appeal of the State of California Fourth Appellate District Division Three affirmed the lower court's decision. The court held that even if the Viking River decision or the 2022 arbitration agreements gave Wedbush a new right to move to compel certain claims to arbitration, Wedbush waited too long to make its motion, particularly in light of the looming trial date. The court found that Wedbush had waived its right to compel arbitration by waiting nine months after the Viking River decision and five to six months after select class members signed the new arbitration agreements to file its motion to compel arbitration. View "Semprini v. Wedbush Securities Inc." on Justia Law

The case involves an appeal by SaniSure, Inc., against a trial court's decision not to compel arbitration in a dispute with its former employee, Jasmin Vazquez. Vazquez initially worked for SaniSure from July 2019, and as part of her employment, she signed an agreement to resort to arbitration for any disputes that might arise from her employment. She eventually terminated this employment in May 2021. She returned to work for SaniSure four months later without signing any new arbitration agreement or discussing the application of the previous arbitration agreement to her new employment.Vazquez's second employment with SaniSure ended in July 2022. Later, she filed a class-action complaint alleging that SaniSure had failed to provide accurate wage statements during her second tenure. She also signaled her intent to add a derivative action under the Labor Code Private Attorney Generals Act (PAGA). SaniSure responded by submitting a “cure letter” claiming that its wage statements now comply with the Labor Code and requested that Vazquez submit her claims to binding arbitration, which Vazquez disputed.The Court of Appeal of the State of California Second Appellate District Division Six affirmed the trial court's denial of SaniSure’s motion to compel arbitration. The court found that SaniSure failed to show that Vazquez agreed to arbitrate claims arising from her second stint of employment. The court further concluded that there was no evidence of an implied agreement to arbitrate claims arising from the second employment period, as the agreement covering Vazquez’s first employment period terminated in May 2021. View "Vazquez v. SaniSure" on Justia Law

The case involves Gail Dee Lew-Williams, as the surviving spouse and successor in interest of Wilbur Williams, Jr., M.D., and Wilbur Williams, M.D., Inc. (collectively, the Williams plaintiffs) and Sevana Petrosian and her associates Salina Ranjbar, Vana Mehrabian, and Staforde Palmer (collectively, the Petrosian defendants). The Williams plaintiffs accused the Petrosian defendants of embezzling approximately $11.5 million from the Corporation’s bank accounts. The trial court compelled the case to arbitration, but the Williams plaintiffs failed to initiate arbitration proceedings. As a result, the trial court dismissed the Williams plaintiffs’ claims against the Petrosian defendants.The Williams plaintiffs appealed, arguing that they did not have the funds to initiate the arbitration and that the trial court erred in compelling arbitration. The Petrosian defendants argued that the claims were properly dismissed because the Williams plaintiffs had the funds to arbitrate and should not be allowed on appeal to challenge the trial court’s order compelling arbitration before first arbitrating their claims.The Court of Appeal of the State of California, Second Appellate District, Division Seven, concluded that once a trial court has compelled claims to contractual arbitration, the court has “very limited authority with respect to [the] pending arbitration.” If a party fails to diligently prosecute an arbitration, the appropriate remedy is for the opposing party to seek relief in the arbitration proceeding. Therefore, the Court of Appeal held that the trial court exceeded its jurisdiction when it dismissed the Williams plaintiffs’ claims against the Petrosian defendants for failure to prosecute. The court reversed the trial court's dismissal of the case. View "Lew-Williams v. Petrosian" on Justia Law

An online business, Interactive Life Forms, LLC, was sued by a customer, Brinan Weeks, who alleged that the company falsely advertised a product he purchased. In response, the company invoked an arbitration clause found in the terms of use on its website, claiming that these terms bound customers irrespective of whether they clicked on the link or provided any affirmative assent. The company argued that by using the website and making a purchase, Weeks had agreed to the terms of use, which included a provision mandating arbitration for any disputes.The trial court denied the motion to compel arbitration, finding that the company failed to show the parties agreed to arbitrate their dispute. The court held that the link to the terms of use was insufficient to put a reasonable user on notice of the terms of use and the arbitration agreement.On appeal, the Appellate Court of the State of California, Second Appellate District Division One, affirmed the trial court’s decision. It held that the company failed to establish that a reasonably prudent user would be on notice of the terms of use. The court rejected the company's argument that it should depart from precedent, which generally considers browsewrap provisions unenforceable, and also dismissed the company's claim that Federal Arbitration Act preempts California law adverse to browsewrap provisions. The court concluded there were no grounds to deviate from this precedent, and that the Federal Arbitration Act did not preempt California law concerning browsewrap agreements. The court emphasized that the company had the onus to put users on notice of the terms to which it wished to bind consumers. View "Weeks v. Interactive Life Forms, LLC" on Justia Law

In this case, Damien T. Davis and Johnetta H. Lane ("the plaintiffs") filed suit against Nissan North America, Inc. and Nissan of San Bernardino ("Nissan") after they allegedly bought a faulty Nissan vehicle with a defective transmission. Nissan attempted to compel arbitration as per the arbitration clause in the sale contract between plaintiffs and the dealership. However, the trial court denied the motion, ruling that Nissan, not being a party to the contract, could not invoke the clause based on the doctrine of equitable estoppel.Nissan appealed the decision, arguing that the trial court erred by refusing to compel arbitration based on equitable estoppel. However, the Court of Appeal, Fourth Appellate District Division One, State of California, agreed with the trial court's ruling reasoning that Nissan's reliance on the doctrine of equitable estoppel was misplaced. It explained that equitable estoppel applies when a party's claims against a non-signatory are dependent upon the underlying contractual obligations. Here, the plaintiffs' claims were not founded on the sale contract's terms, but rather on Nissan's statutory obligations under the Song-Beverly Act relating to manufacturer warranties. The court concluded that the plaintiffs are pursuing their statutory and tort claims in court, and there was no inequity in allowing them to do so.Therefore, Nissan's motion to compel arbitration was denied, and the trial court's order was affirmed. View "Davis v. Nissan North America, Inc." on Justia Law

The plaintiff, Dana Hohenshelt, filed a lawsuit against his former employer, Golden State Foods Corp., alleging retaliation under the California Fair Employment and Housing Act, failure to prevent retaliation, and violations of the California Labor Code. Golden State moved to compel arbitration in accordance with their arbitration agreement, and the trial court granted the motion, staying court proceedings. Arbitration began, but Golden State failed to pay the required arbitration fees within the 30-day deadline. Hohenshelt then sought to withdraw his claims from arbitration and proceed in court, citing Golden State's failure to pay as a material breach of the arbitration agreement under California's Code of Civil Procedure section 1281.98. The trial court denied this motion, deeming Golden State's payment, which was made after the deadline but within a new due date set by the arbitrator, as timely.The Court of Appeal of the State of California Second Appellate District disagreed with the trial court's decision. It held that the trial court had ignored the clear language of section 1281.98, which states any extension of time for the due date must be agreed upon by all parties. Golden State's late payment constituted a material breach of the arbitration agreement, regardless of the new due date set by the arbitrator. The court also rejected Golden State's argument that section 1281.98 is preempted by the Federal Arbitration Act, following precedent from other courts that held these state laws are not preempted because they further the objectives of the Federal Arbitration Act. Therefore, the court granted Hohenshelt's petition for writ of mandate, directing the trial court to lift the stay of litigation. View "Hohenshelt v. Superior Court" on Justia Law

In the case of Maryann Jones v. Solgen Construction, LLC and GoodLeap, LLC, the Court of Appeal of the State of California Fifth Appellate District affirmed the trial court's decision not to compel arbitration. The case concerned a business relationship involving the installation of home solar panels. The appellants, Solgen Construction and GoodLeap, had appealed the trial court's denial of their separate motions to compel arbitration, arguing that the court had erred in several ways, including by concluding that no valid agreement to arbitrate existed.Jones, the respondent, had filed a lawsuit alleging fraudulent misrepresentation, fraudulent concealment, negligence, and violations of various consumer protection laws. She contended that she had been misled into believing she was signing up for a free government program to lower her energy costs, not entering into a 25-year loan agreement for solar panels. The appellants argued that Jones had signed contracts containing arbitration clauses, but the court found that the appellants had failed to meet their burden of demonstrating the existence of a valid arbitration agreement. The court also held that the contract was unenforceable due to being unconscionable.The appellate court affirmed the trial court's decision, rejecting the appellants' arguments that an evidentiary hearing should have been held and that the court had erred in its interpretation of the evidence and the law. It found that the trial court had not abused its discretion and that its finding that the appellants failed to meet their burden of proof was not erroneous as a matter of law. View "Jones v. Solgen Construction" on Justia Law

Charles Ramsey, a subscriber to Comcast Cable Communications, LLC’s Xfinity services, filed a lawsuit against Comcast for violations of California’s consumer protection statutes. He alleged that Comcast engaged in unfair, unlawful, and deceptive business practices under the Consumers Legal Remedies Act (CLRA) and the unfair competition law (UCL). Ramsey’s complaint sought injunctive relief, not monetary damages. Comcast filed a petition to compel arbitration pursuant to the arbitration provision in the parties’ subscriber agreement which required the parties to arbitrate all disputes and permitted the arbitrator to grant only individual relief. The trial court denied the petition based on the Supreme Court’s decision in McGill v. Citibank, which held that a predispute arbitration provision that waives a plaintiff’s right to seek public injunctive relief in any forum is unenforceable under California law. On appeal, Comcast argued that the trial court erred in concluding that Ramsey was seeking public injunctive relief. Comcast further argued that the Federal Arbitration Act (FAA) preempts McGill. The Court of Appeal of the State of California Sixth Appellate District held that Ramsey’s complaint seeks public injunctive relief, and that McGill is not preempted, thus affirming the trial court’s order. View "Ramsey v. Comcast Cable Communications, LLC" on Justia Law

In a case heard before the Court of Appeal of the State of California Second Appellate District Division Five, Omar Kader, the plaintiff, sued his employer, Southern California Medical Center, Inc., and other defendants due to allegations of sexual harassment and assault. Kader had signed an arbitration agreement with his employer, but this was without disclosure of the ongoing sexual harassment and assault. After the enactment of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (the Act), which invalidates predispute arbitration agreements under certain circumstances, Kader brought his suit.The defendants filed a motion to compel arbitration, arguing that the Act does not invalidate the arbitration agreement in this case since the alleged sexual conduct constituted a “dispute” which preexisted the arbitration agreement and the effective date of the Act.The court concluded that a dispute for the purposes of the Act does not arise merely from the fact of injury. Instead, for a dispute to arise, a party must first assert a right, claim, or demand. In this case, there was no evidence of a disagreement or controversy until after the date of the arbitration agreement and the effective date of the Act, when Kader filed charges with the Department of Fair Employment and Housing in May 2022. Therefore, the court held that the predispute arbitration agreement is invalid, and the order denying the motion to compel arbitration was affirmed. View "Kader v. Southern California Medical Center, Inc." on Justia Law

The case involves a dispute between Onecimo Sierra Suarez, an employee, and his employer, Rudolph & Sletten, Inc. (R&S), concerning the payment of arbitration fees. Suarez had initially sued his employer for alleged wage and hour violations. R&S successfully moved to have the case resolved through arbitration, as provided in their employment agreement. However, R&S delayed in paying its share of the initial arbitration fee, leading Suarez to argue that R&S has waived its right to arbitration. The Court of Appeal, Fourth Appellate District Division One, State of California held that the employer's delay in paying the arbitration fees constituted a material breach of the arbitration agreement, thereby waiving its right to arbitration. The court concluded that R&S's payment was late, even if certain provisions of the Code of Civil Procedure could potentially extend the deadline. The court also held that R&S's argument -- that the Federal Arbitration Act (FAA) preempted California's arbitration-specific procedural rules for fee payment -- was incorrect. The court found that such rules neither prohibited nor discouraged the formation of arbitration agreements, and therefore, were not preempted by the FAA. The court granted Suarez's petition and ruled that the case should proceed in court. View "Suarez v. Super. Ct." on Justia Law