Justia California Court of Appeals Opinion Summaries

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

Plaintiffs Lisa Lombardo, Daniel Bates, and James Bates sued Gramercy Court as heirs of Elizabeth Stein, alleging wrongful death, negligence, elder abuse, and gross negligence due to the care Stein received at Gramercy Court's nursing facility. Stein developed bedsores and died shortly after being transferred back to the hospital. Gramercy Court petitioned to compel arbitration based on an agreement Lombardo signed on Stein's behalf, but the trial court denied the petition.The Superior Court of Sacramento County found that Stein's durable power of attorney did not grant Lombardo the authority to sign arbitration agreements on Stein's behalf. The court also determined that Stein did not give Lombardo ostensible authority through her actions. Additionally, the court ruled that the arbitration agreement was not enforceable against Lombardo's or the other plaintiffs' individual claims.The Court of Appeal of the State of California, Third Appellate District, reviewed the case and affirmed the trial court's decision. The appellate court held that Lombardo did not have actual or ostensible authority to bind Stein to the arbitration agreement. The durable power of attorney did not explicitly grant Lombardo the authority to enter into arbitration agreements, and there was no evidence that Stein's conduct led Gramercy Court to believe Lombardo had such authority. The court also concluded that the arbitration agreement did not apply to the plaintiffs' individual claims, as Lombardo was not a party to the agreement in her individual capacity. The appellate court affirmed the trial court's order denying Gramercy Court's petition to compel arbitration. View "Lombardo v. Gramercy Court" on Justia Law

Christina Leeper entered into an independent contractor agreement with Shipt, Inc. to provide services as a Shipt shopper. The agreement included an arbitration clause requiring all disputes to be resolved through binding arbitration. Leeper filed a complaint against Shipt and its parent company, Target Corporation, under the Private Attorneys General Act of 2004 (PAGA), alleging that Shipt misclassified her and other workers as independent contractors, violating multiple provisions of the Labor Code. Leeper sought civil penalties and injunctive relief on behalf of herself and other aggrieved employees.The Superior Court of Los Angeles County denied Shipt and Target's motion to compel arbitration, reasoning that Leeper's PAGA action did not include any individual claims subject to arbitration under the parties' agreement. The court concluded that the action was solely a representative PAGA suit without any individual causes of action to compel to arbitration.The California Court of Appeal, Second Appellate District, reviewed the case and reversed the lower court's decision. The appellate court held that every PAGA action necessarily includes an individual PAGA claim based on the unambiguous statutory language and legislative history. Consequently, the court directed the lower court to issue a new order compelling arbitration of Leeper's individual PAGA claim and staying the litigation of the representative PAGA claim portion of the lawsuit. The appellate court awarded costs on appeal to Shipt and Target. View "Leeper v. Shipt, Inc." on Justia Law

Pauline Mary Huff filed a class action and a Private Attorneys General Act (PAGA) action against her former employer, Interior Specialists, Inc., alleging various wage-and-hour violations. Huff opposed the motion to compel arbitration, arguing that the arbitration agreement was invalid because it was signed by someone else named "William" in DocuSign. The trial court found sufficient evidence that Huff consented to the agreement and granted the motion to compel arbitration.The trial court consolidated the class and PAGA actions. Interior Specialists then moved to compel Huff’s PAGA claims to arbitration. The trial court reiterated its earlier finding that Huff validly signed the agreement and, relying on the U.S. Supreme Court’s decision in Viking River Cruises, Inc. v. Moriana, ordered Huff’s individual PAGA claims to arbitration and dismissed her nonindividual PAGA claims without prejudice for lack of standing.Huff appealed the October 21, 2022 order, arguing that the trial court erred in dismissing her nonindividual PAGA claims and in finding that she signed the arbitration agreement. The California Court of Appeal, Fourth Appellate District, concluded that Huff timely appealed the October 21 order. On the merits, the court reversed the dismissal of Huff’s nonindividual PAGA claims based on the California Supreme Court’s decision in Adolph v. Uber Technologies, Inc., which rejected Viking River’s interpretation of California law on standing. The court did not address Huff’s arguments concerning the electronic signature, as the reversal based on Adolph rendered it unnecessary.The court remanded the case with directions to stay Huff’s nonindividual PAGA claims pending the completion of arbitration. Huff was awarded her costs on appeal. View "Huff v. Interior Specialists, Inc." on Justia Law

Annalycia Jenkins, a former employee of Dermatology Management, LLC, filed a class action lawsuit against her employer after resigning. She alleged unfair competition, and the employer sought to compel arbitration based on an agreement Jenkins signed on her first day of work. The trial court denied the motion to compel arbitration, finding the agreement both procedurally and substantively unconscionable.The San Luis Obispo County Superior Court found the arbitration agreement substantively unconscionable due to its lack of mutuality, shortened statute of limitations, unreasonable discovery restrictions, and requirement for the parties to equally share the arbitrator’s fees and costs. Procedurally, the court noted the agreement was a contract of adhesion, pre-signed by the employer months before Jenkins was hired, and presented to her on a take-it-or-leave-it basis without the presence of the Chief People Officer.The California Court of Appeal, Second Appellate District, Division Six, reviewed the case de novo and affirmed the lower court’s decision. The appellate court agreed that the arbitration agreement was procedurally unconscionable due to the inequality of bargaining power and the pre-signed nature of the agreement. It also upheld the finding of substantive unconscionability, noting the lack of mutuality, the unreasonable one-year statute of limitations, the unfair cost-sharing provision, and the restrictive discovery terms. The court concluded that the trial court did not abuse its discretion in refusing to sever the unconscionable provisions, as doing so would condone an illegal scheme and incentivize employers to draft one-sided agreements. The order denying the motion to compel arbitration was affirmed. View "Jenkins v. Dermatology Management, LLC" on Justia Law

Stephnie Trujillo filed a complaint against her former employer, J-M Manufacturing Company (JMM), and four former coworkers, alleging unlawful sexual/gender discrimination, harassment, failure to prevent such actions, retaliation, and seeking injunctive relief. The parties negotiated and entered into a post-dispute stipulation for arbitration, which was approved by the trial court. Arbitration commenced, and JMM paid the arbitrator’s invoices for over a year. However, JMM failed to pay an invoice by the due date of September 12, 2022, but paid it immediately upon being reminded on October 18, 2022. Trujillo then sought to withdraw from arbitration under California Code of Civil Procedure section 1281.98, which the trial court granted.The Superior Court of Los Angeles County granted Trujillo’s motion to withdraw from arbitration, finding that JMM’s late payment constituted a material breach under section 1281.98, which does not allow exceptions for inadvertent delays or lack of prejudice. The court lifted the stay on trial court proceedings, allowing the case to proceed in court.The California Court of Appeal, Second Appellate District, Division Eight, reviewed the case. The court held that section 1281.98 did not apply because the parties entered into a post-dispute stipulation to arbitrate, not a pre-dispute arbitration agreement. Additionally, JMM was not considered the “drafting party” as defined by section 1280, subdivision (e), which refers to the company that included a pre-dispute arbitration provision in a contract. The appellate court reversed the trial court’s order and remanded with instructions to deny Trujillo’s motion to withdraw from arbitration and to reinstate the stay of trial court proceedings pending completion of arbitration. View "Trujillo v. J-M Manufacturing Co., Inc." on Justia Law