Justia California Court of Appeals Opinion Summaries

Defendants Merchants Building Maintenance, LLC and Merchants Building Maintenance Company (the MBM defendants) appeal from an order of the trial court denying their joint motion to compel arbitration. The MBM defendants moved to compel arbitration of a portion of plaintiff Loren Mejia's cause of action brought against them for various violations of the Labor Code under the Private Attorneys General Act of 2004 (PAGA). The MDM defendants moved to compel arbitration of that portion of Mejia's PAGA claim in which she seeks "an amount sufficient to recover underpaid wages." The Court of Appeal reduced the issue presented as whether a court could split a single PAGA claim so as to require a representative employee to arbitrate that aspect of the claim in which the plaintiff sought to recover the portion of the penalty that represented the amount sufficient to recover underpaid wages, where the representative employee has agreed to arbitrate her individual wage claims, while at the same time have a court review that aspect of the employee's claim in which the plaintiff sought to recover the additional $50 or $100 penalties provided for in section 558 of the Labor Code for each violation of the wage requirements. The Court of Appeal concluded that a single PAGA claim seeking to recover section 558 civil penalties could not be "split" between that portion of the claim seeking an "amount sufficient to recover underpaid wages" and that portion of the claim seeking the $50 or $100 per-violation, per-pay-period assessment imposed for each wage violation. The Court affirmed the trial court's order denying the MDM defendants' motion to compel arbitration in this case. View "Mejia v. Merchants Building Maintenance" on Justia Law

Defendants-appellants Catalina Restaurant Group, Inc., Carrows Restaurants, Inc., Carrows Family Restaurants, Inc., Coco’s Bakery Restaurants, Inc. and Coco’s Restaurants, Inc. (collectively, Catalina Defendants) appealed the partial denial of their motion to compel arbitration. Plaintiff-respondent Yalila Lacayo (Lacayo) was an employee of Catalina Defendants, and filed a plaintiff’s class action complaint on behalf of herself and others similarly situated (Class Members) against Catalina Defendants in superior court alleging numerous wage and hour violations under the Labor Code, and an injunctive relief claim under California’s unfair competition law (UCL). Catalina Defendants responded by filing a motion to compel arbitration of Lacayo’s individual claims, including the UCL claim, and dismissal of the class claims (Motion). The trial court granted the Motion as to Lacayo’s individual claims; refused to dismiss the class claims, instead letting the arbitrator decide if the class claims were subject to arbitration or a class action waiver; and denied the Motion as to the UCL claim; and stayed the matter until after arbitration was completed. Catalina Defendants on appeal argued the trial court erred by: (1) refusing to enforce the individual arbitration agreement according to its terms; and (2) refusing to compel arbitration of Lacayo’s UCL claim. In supplemental briefing, both parties addressed whether Catalina Defendants could appeal the trial court’s order granting arbitration of individual claims but refusing to dismiss the classwide claims, leaving the decision for the arbitrator. The Court of Appeal found Catalina Defendants could not appeal the portion of the Motion that granted arbitration for Lacayo’s individual claims and the refusal to dismiss the class claims. The Court of Appeal only addressed the order finding that the UCL claim was not subject to arbitration, and affirmed the trial court's order denying defendants' Motion as to the UCL claim. View "Lacayo v. Catalina Restaurant Group Inc." on Justia Law

The owners and operators of a skilled nursing facility contended the trial court erred when it denied their petition to compel arbitration. They attempted to enforce arbitration in this action for elder abuse and wrongful death brought by a decedent through her husband as successor in interest, her husband individually, and their children. Appellants claimed the successor had signed the arbitration agreements as the decedent’s authorized agent. The trial court determined that although the successor did not sign the agreements as the decedent’s agent, he expressly bound himself to arbitrate all claims he held individually and as the successor in interest. As a result, the decedent’s claim for elder abuse and the husband’s individual claim for wrongful death were subject to arbitration. However, the court denied the petition because the children’s claims were not subject to arbitration, and allowing the arbitration and the litigation to proceed concurrently could result in inconsistent findings of fact and law. Finding no reversible error in the trial court’s judgment, the Court of Appeal affirmed. View "Valentine v. Plum Healthcare Group, LLC" on Justia Law

Defendant Roy Miller Freight Lines, LLC (RMFL) appealed a trial court order granting in part and denying in part its motion to compel its former employee, plaintiff William Muller (Muller), to arbitrate his wage and hour claims under the arbitration provision in his employment agreement. The trial court granted RMFL’s motion on all but one cause of action: Muller’s claim for unpaid wages, and stayed the prosecution of that remaining claim pending the completion of the arbitration. The issue this case presented for the Court of Appeal's review centered on whether the Federal Arbitration Act (FAA) applied, and more specifically, whether Muller was a transportation worker engaged in interstate commerce under 9 U.S.C. 1 (section 1) and thus exempt from FAA coverage. If he was exempt from FAA coverage, as the trial court held, Muller did not have to arbitrate his cause of action for unpaid wages because Labor Code section 229 (section 229) authorized lawsuits for unpaid wages notwithstanding an agreement to arbitrate. If the FAA applied, as RMFL contended, the FAA preempted section 229, and Muller had to submit his cause of action for unpaid wages to arbitration, along with his five other causes of action. The Court found the trial court correctly concluded Muller was exempt from FAA coverage under section 1. Even though Muller did not physically transport goods across state lines, his employer was in the transportation industry, and the vast majority of the goods he transported originated outside California. Thus, section 229 required staying the prosecution of his cause of action for unpaid wages while the other five causes of action proceed to arbitration. View "Muller v. Roy Miller Freight Lines, LLC" on Justia Law

When De Melo was hired, he signed SCI’s “Owner/Operator Agreement,” five pages long, typed in small font, with 27 clauses. The arbitration clause provides that if the parties are unable to settle a dispute, disputes “within the jurisdictional maximum for small claims will be settled in the small claims court.” All other disputes shall be settled by arbitration in accordance with the Federal Arbitration Act. The clause prohibits consolidating claims in arbitration or arbitrating any claim as a representative member of a class or in a private attorney general capacity. All parties may examine up to three witnesses per party. Each deposition is limited to two hours. Any objections based on privilege and/or confidential information are reserved for arbitration. The arbitrators have authority to award actual monetary damages only. No punitive or equitable relief is authorized. All parties bear their own costs; no attorney’s fees or other costs may be granted. "The arbitrator’s decision shall be final and legally binding and judgment may be entered thereon.” De Melo’s native language is Portuguese; he cannot fully understand documents written in English. No one asked if he wanted the documents translated nor explained the documents. He was not given time to carefully review the documents; no one told him he could have an attorney review them. De Melo filed a claim with the Labor Commissioner, seeking unpaid overtime, meal, and rest period wages, reimbursement of unlawful wage deductions and business expenses, and statutory penalties. (Lab. Code, 203, 226, 2802.) . The court of appeal affirmed the denial of a petition to compel arbitration, finding that the arbitration clause was procedurally and substantively unconscionable and that severance of the substantively unconscionable provisions was not possible because the clause was permeated with unconscionability. View "Subcontracting Concepts (CT), LLC v. De Melo" on Justia Law

The Court of Appeal reversed the trial court's denial of Sohnen's motion to compel arbitration of workplace discrimination claims brought by plaintiff, an employee of Sohnen. The court held that the record demonstrated consent to arbitration where plaintiff's continued employment was a manifestation of agreement to the arbitration provisions. The court also held that plaintiff failed to demonstrate that the arbitration agreement was unenforceable where the record contained no evidence of surprise, nor of sharp practices demonstrating substantive unconscionability. Accordingly, the court remanded for further proceedings. View "Diaz v. Sohnen Enterprises" on Justia Law

The choice-of-law clause in an arbitration agreement required that all individual claims must be arbitrated. Plaintiff filed suit against RADC on individual employment claims, as well as on representative claims under the Private Attorneys General Act of 2004 (PAGA). The trial court interpreted a choice-of-law clause in the parties' arbitration agreement and held that some, but not all, individual employment claims must be arbitrated.The Court of Appeal affirmed the part of trial court's order severing the agreement provision requiring the parties to arbitrate the PAGA claims; affirmed the order granting RADC's motion as to three individual claims; but reversed the order denying the motion as to the remaining six individual claims. As to the six claims, the court held that RADC rightly concluded that the trial court should have sent all of plaintiff's individual claims to arbitration. View "Bravo v. RADC Enterprises, Inc." on Justia Law

After its workers’ compensation insurance premiums rapidly increased, Jackpot believed that Applied Underwriters had mishandled its claims and had wrongfully failed to disclose how it calculated premiums. Jackpot filed suit. Applied sought to compel arbitration based on the arbitration agreement contained in a Request to Bind. Jackpot argued that the arbitration agreement was invalid. Applied contended that, under the Federal Arbitration Act, only the arbitrator could decide the threshold question of whether the arbitration agreement was enforceable. The trial court held that the arbitration agreement was invalid. The court of appeal affirmed. In light of Jackson’s specific arguments that the arbitration provision was unenforceable due to fraud, ambiguity, and unconscionability, the trial court was obligated to consider its validity. Allied violated California law in issuing the Request to Bind without first submitting it for regulatory approval. The policy does not provide for arbitration but allows for administrative review by the Insurance Commissioner for certain disputes and otherwise leaves Jackpot’s rights to judicial review intact. The Request to Bind’s arbitration agreement, which compels arbitration in Nebraska for a wide array of disputes, materially changes the policy's dispute-resolution terms and constituted “a collateral agreement that should have been filed and endorsed to the Policy” under Insurance Code section 11658. View "Jackpot Harvesting, Inc. v. Applied Underwriters, Inc." on Justia Law

If an employee brings a solitary Labor Code Private Attorneys General Act of 2004 (PAGA) claim, a trial court may not split that claim, sending the employee to arbitration (when he has agreed to it) to recover his underpaid wages but retaining jurisdiction to award the additional, statutorily prescribed amounts.The Court of Appeal held that splitting a PAGA claim in this manner was both legally impermissible and inconsistent with labor and arbitration law. The court explained that where, as here, the employee-plaintiff elected to file a solitary PAGA claim, splitting that claim into two effectively rewrites his complaint into one asserting an individual claim for underpaid wages (which is shunted to arbitration) and a PAGA claim (which is not). Accordingly, the court held that the trial court properly denied the motion to compel arbitration in this case and affirmed the judgment. View "Zakaryan v. The Men's Warehouse, Inc." on Justia Law

The Court of Appeal reversed the trial court's order denying Carrows' motion to compel arbitration. The court held that the language of the arbitration agreement was sufficient to apply to the current action. However, the court remanded to determine a factual issue where time was not relative, but relevant. The factual issue was whether Carrows knew that at the time plaintiff signed an arbitration agreement, plaintiff was represented by counsel. In this case, whether the arbitration agreement was unenforceable should be decided by the trial court. View "Salgado v. Carrows Restaurants, Inc." on Justia Law