Justia California Court of Appeals Opinion Summaries

Articles Posted in Arbitration & Mediation
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In May 2017, plaintiff Joseph Mejia bought a used motorcycle from Defendant DACM, Inc. (Del Amo) for $5,500. Mejia paid $500 cash and financed the remainder of the purchase price with a WebBank-issued Yamaha credit card he obtained through the dealership purchasing the motorcycle. In applying for the credit card, Mejia signed a credit application acknowledging he had received and read WebBank’s Yamaha Credit Card Account Customer Agreement (the credit card agreement), which contained an arbitration provision. Sometime after his purchase, Mejia filed a complaint against Del Amo on behalf of himself and other similarly situated consumers alleging Del Amo “has violated and continues to violate” the Rees-Levering Automobile Sales Finance Act by failing to provide its customers with a single document setting forth all the financing terms for motor vehicle purchases made with a conditional sale contract. The trial court denied Del Amo’s petition to compel arbitration, finding the arbitration provision was unenforceable under McGill v. Citibank, N.A., 2 Cal.5th 945 (2017) because it barred the customer from pursuing “in any forum” his claim for a public injunction to stop Del Amo’s allegedly illegal practices. Del Amo contended the trial court erred in ruling the arbitration provision was unenforceable under McGill, arguing: (1) McGill did not apply because, due to a choice-of-law provision in the contract, Utah law rather than California law governed the dispute; (2) if California law applied, the arbitration provision “does not run afoul of McGill” because Mejia did not seek a public injunction; (3) the arbitration clause was not unenforceable under McGill because the provision did not prevent a plaintiff from seeking public injunctive relief in all fora; and (4) if the arbitration provision was unenforceable under McGill, the Federal Arbitration Act (FAA) preempted McGill and required enforcement of the clause. The Court of Appeal found no merit to any of Del Amo's contentions and affirmed the district court's order. View "Mejia v. DACM Inc." on Justia Law

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The lawsuit underlying this appeal involves a "spin-off" of the Fast & Furious franchise, a project ultimately released as Fast & Furious Presents: Hobbs & Shaw (the film), on which Moritz allegedly worked as a producer pursuant to an oral agreement with Universal. After Moritz filed suit for breach of a binding oral agreement regarding Moritz's work on the film, appellants moved to compel arbitration based on arbitration agreements in the written producer contracts regarding Moritz's work for Universal on the Fast & Furious franchise.The Court of Appeal affirmed the trial court's denial of appellants' motion to arbitrate, holding that the arbitration agreements from the Fast & Furious movies did not apply to the Hobbs & Shaw spin-off dispute. The court stated that not only is it not clear and unmistakable here that the parties agreed to delegate arbitrability questions concerning Hobbs & Shaw to an arbitrator, no reasonable person in their position would have understood the arbitration provisions in the Fast & Furious contracts to require arbitration of any future claim of whatever nature or type, no matter how unrelated to the agreements nor how distant in the future the claim arose. The court explained that the Federal Arbitration Act (FAA) requires no enforcement of an arbitration provision with respect to disputes unrelated to the contract in which the provision appears. In this case, appellants' argument that an arbitration provision creates a perpetual obligation to arbitrate any conceivable claim that Moritz might ever have against them is plainly inconsistent with the FAA's explicit relatedness requirement. View "Moritz v. Universal City Studios LLC" on Justia Law

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In 2008, appellants Robert and Linda Shivers rented a residential property in La Habra from respondent Wilfred Rivera. Almost seven years later, Rivera filed an unlawful detainer action against the Shivers, alleging they had not paid rent. He later amended his pleading to add causes of action based on the allegation they had damaged the property and taken appliances when they vacated it. The Shivers filed a cross-complaint, alleging Rivera had failed to make repairs to the property and had left it untenantable. The case was originally assigned to limited civil jurisdiction but was later reclassified to unlimited civil. Upon reassignment, the new trial judge ordered counsel to meet and confer regarding the appointment of a referee under Code of Civil Procedure section 638, and a status conference on the subject was scheduled for March 19, 2018. At the status conference, the parties advised the court they could not agree on a referee. The court took the matter under submission, but warned that a referee would be appointed if the parties could not agree on one. Thereafter, in a minute order dated one month later, the trial court, instead of appointing a referee, sua sponte ordered the matter to judicial arbitration. The issue this case presented for the Court of Appeal's review centered on whether the arbitration, originally statutory in nature, morphed into a contractual arbitration as the result of a vague stipulation by counsel for the parties. Neither side ever seemed to have entertained the notion that the completed arbitration was anything but binding, and treated it as such. The trial judge, however, decided on his own that the arbitration was not what the parties intended, a conclusion derived from their actions rather than their explicit words. As a result, the trial court denied the appellants’ petition to confirm, vacated the award, and set a trial date in the case. After review, the Court of Appeal concluded the trial court erred in not confirming the arbitration award and reversed it. View "Rivera v. Shivers" on Justia Law

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The Court of Appeal reversed the trial court's order denying the employer's motion to compel arbitration. The court held that the employee demonstrated his assent to the arbitration clause by signing the acknowledgment, and the employer had no duty to call the arbitration agreement to the employee's attention. The court found that provisions in the arbitration clause concerning arbitrator's fees and costs and attorney fees are unenforceable, but they may be severed, and the rest of the agreement is enforceable. Accordingly, on remand, the trial court is directed to sever the offending provisions concerning arbitration fees and costs and attorney fees from the agreement and otherwise grant the motion to compel arbitration. View "Conyer v. Hula Media Services, LLC" on Justia Law

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Plaintiffs filed suit against defendants, the property owners, claiming that the property they rented had bed bugs and other problems. The property owners then moved to compel arbitration based on agreements in plaintiffs' leases.The Court of Appeal affirmed the trial court's denial of the property owners' motion for arbitration, holding that state public policy prohibits arbitration provisions in residential lease agreements. The court held that the arbitration agreements in the leases were void under Civil Code 1953, subdivision (a)(4), and that Jaramillo v. JH Real Estate Partners, Inc. (2003) 111 Cal.App.4th 394, and Harris v. University Village Thousand Oaks, CCRC, LLC. (2020) 49 Cal.App.5th 847, 850, specifically identified the right to have a jury trial as a procedural right that may not be waived or modified under section 1953, subdivision (a)(4). View "Williams v. 3620 W. 102nd Street, Inc." on Justia Law

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Davis filed sued individual Red Bull executives for age and sexual harassment and hostile work environment in violation of the Fair Employment and Housing Act, and for intentional and negligent infliction of emotional distress. Davis was 56 years old, had been employed by Red Bull for 15 years, and was in a mid-level managerial sales position until he was terminated.Red Bull filed a demand for arbitration with the American Arbitration Association. The individual defendants moved to compel Davis to submit his claims to arbitration. Davis filed a separate lawsuit against Red Bull seeking a declaratory judgment that his claims were not subject to the arbitration agreement. That agreement specifies it is “intended to cover all civil claims which involve or relate in any way to [Davis’s] employment (or termination of employment) with Red Bull, including, but not limited to, claims of employment discrimination or harassment on the basis of . . . sex, age, . . . claims for wrongful discharge, [and] claims for emotional distress.”The trial court concluded and the court of appeal affirmed that the agreement was unconscionable and unenforceable. The court noted the "adhesion" nature of the agreement, which is not mutual and the arbitral discovery process does not guarantee adequate discovery. View "Davis v. Kozak" on Justia Law

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Since 1986, the GSW NBA basketball team has played their home games at the Authority's Oakland arena. A 1996 License Agreement gave GSW certain obligations to pay the debt incurred in renovating the arena if GSW “terminates” the agreement. In 2012, GSW announced its intention to construct a new arena in San Francisco. GSW did not exercise the renewal option in the Agreement, and, on June 30, 2017, its initial term expired. GSW initiated arbitration proceedings, seeking a declaration that it was no longer obliged to make debt payments if it allowed the License Agreement to expire rather than terminating it.The arbitrator ruled in favor of the Authority and against GSW, awarding the Authority attorney fees. The court of appeal affirmed. Based on extrinsic evidence, the arbitrator found the parties intended to adhere to the terms of a pre-agreement Memorandum of Understanding, which required the team to continue making debt payments after the initial term. The 1996 License Agreement is reasonably susceptible to the parties’ competing interpretations, so parol evidence was admissible to prove what the parties intended. Even assuming that the arbitrator addressed a question of law when she interpreted the Agreement, the parties intended to include a termination of the agreement upon GSW’s failure to exercise the first two options to renew. View "Oakland-Alameda County Coliseum Authority v. Golden State Warriors, LLC" on Justia Law

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Jarboe was hired by DKD. Shortly after he began working, Jarboe was transferred to Leehan. Following his termination at Leehan, Jarboe brought this wage and hour action individually and on behalf of a putative class against the Hanlees Auto Group, its 12 affiliated dealerships (each us a separate corporate entity), 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 but denied the motion as to the other defendants. The trial court allowed Jarboe’s claim under the Private Attorneys General Act of 2004 (PAGA), Labor Code section 2698, to proceed in court against all defendants. The trial court refused to stay the litigation pending arbitration of Jarboe’s claims against DKD. The court of appeal affirmed, rejecting an argument that the other defendants are entitled to enforce the arbitration agreement between Jarboe and DKD as third party beneficiaries of Jarboe’s employment agreement or under the doctrine of equitable estoppel. View "Jarboe v. Hanlees Auto Group" on Justia Law

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After encountering problems with their used 2011 Dodge Grand Caravan, plaintiffs Dina C. and Pastor O. Felisilda brought an action against Elk Grove Auto Group, Inc., doing business as Elk Grove Dodge Chrysler Jeep (Elk Grove Dodge) and the manufacturer, FCA US LLC (FCA) for violation of the Song-Beverly Consumer Warranty Act. Relying on the retail installment sales contract signed by the Felisildas, Elk Grove Dodge moved to compel arbitration. FCA filed a notice of nonopposition to the motion to compel. The trial court ordered the Felisildas to arbitrate their claim against both Elk Grove Dodge and FCA. In response, the Felisildas dismissed Elk Grove Dodge. The matter was submitted to arbitration, and the arbitrator found in favor of FCA. The trial court confirmed the arbitrator’s decision. The Felisildas appealed, contending: (1) the trial court lacked jurisdiction to compel them to arbitrate their claim against FCA for lack of notice that the motion to compel included FCA; and (2) the trial court lacked discretion to order the Felisildas to arbitrate their claim against FCA because FCA was a nonsignatory to the sales contract. After review, the Court of Appeal concluded the Felisildas forfeited their claim regarding lack of notice by arguing against FCA’s participation in arbitration. Furthermore, the Court concluded the trial court correctly determined the Felisildas’ claim against FCA was encompassed by the arbitration provision in the sales contract. View "Felisilda v. FCA US LLC" on Justia Law

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Defendants Silverado Senior Living Management, Inc., and Subtenant 350 W. Bay Street, LLC dba Silverado Senior Living – Newport Mesa appealed a trial court's denial of its petition to compel arbitration of the complaint filed by plaintiffs Diane Holley, both individually and as successor in interest to Elizabeth S. Holley, and James Holley. Plaintiffs filed suit against defendants, who operated a senior living facility, for elder abuse and neglect, negligence, and wrongful death, based on defendants’ alleged substandard treatment of Elizabeth. More than eight months after the complaint was filed, defendants moved to arbitrate based on an arbitration agreement Diane had signed upon Elizabeth’s admission. At the time, Diane and James were temporary conservators of Elizabeth’s person. The court denied the motion, finding that at the time Diane signed the document, there was insufficient evidence to demonstrate she had the authority to bind Elizabeth to the arbitration agreement. Defendants argued the court erred in this ruling as a matter of law, and that pursuant to the Probate Code, the agreement to arbitrate was a “health care decision” to which a conservator had the authority to bind a conservatee. Defendants relied on a case from the Third District Court of Appeal, Hutcheson v. Eskaton FountainWood Lodge, 17 Cal.App.5th 937 (2017). After review, the Court of Appeal concluded that Hutcheson and other cases on which defendants relied are distinguishable on the facts and relevant legal principles. "When the Holleys signed the arbitration agreement, they were temporary conservators of Elizabeth’s person, and therefore, they lacked the power to bind Elizabeth to an agreement giving up substantial rights without her consent or a prior adjudication of her lack of capacity. Further, as merely temporary conservators, the Holleys were constrained, as a general matter, from making long-term decisions without prior court approval." Accordingly, the trial court was correct that the arbitration agreement was unenforceable as to Elizabeth. Furthermore, because there was no substantial evidence that the Holleys intended to sign the arbitration agreement on their own behalf, it could not be enforced against their individual claims. The Courttherefore affirmed the trial court’s order denial to compel arbitration. View "Holley v. Silverado Senior Living Management" on Justia Law