Justia California Court of Appeals Opinion Summaries

Marlene Baker LaBerge, a 73-year-old woman, was a resident and patient of a 24- hour skilled nursing facility owned by Italian Maple Holdings, LLC dba La Paloma Healthcare Center (La Paloma). LaBerge's heirs, Paul LaBerge, Suzanne Marx, and Talmadge Baker (collectively Plaintiffs) sued La Paloma and Plum Healthcare, LLC (together Defendants) for elder abuse, violations of the Patient's Bill of Rights as codified at Health and Safety Code section 1430, negligence, and wrongful death. In response, Defendants filed a petition to compel arbitration based on the two arbitration agreements that LaBerge had executed. The two arbitration agreements included language required by Code of Civil Procedure section 1295, subdivision (c), requiring such agreements to include a 30-day "cooling off" period, during which the parties to the agreement may rescind it. Ten days after LaBerge signed the agreements (and therefore, prior to the expiration of the statutorily-required 30- day rescission period), LaBerge passed away. The superior court denied the petition to compel arbitration, relying on Rodriguez v. Superior Court, 176 Cal.App.4th 1461 (2009) to conclude that the agreements were not effective until the 30-day rescission period passed without either party rescinding the agreements; because LaBerge died before the expiration of the 30-day rescission period, the agreements could not be given effect. On appeal, Defendants contended the trial court’s interpretation was wrong, and the Court of Appeal should decline to follow Rodriguez because that case was factually distinguishable from this case. The Court of Appeal concluded the trial court erred in interpreting section 1295, subdivision (c), and that the arbitration agreements were valid and enforceable. Pursuant to the plain language of section 1295, subdivision (c), the terms of those agreements governed the parties' relationship upon their execution; the fact that one signatory died before the expiration of the statutory 30-day rescission period does not render the terms of the parties' agreements unenforceable in the absence of other grounds for not enforcing them. View "Baker v. Italian Maple Holdings" on Justia Law

Prime filed suit against Kaiser, alleging that Kaiser failed to reimburse Prime for emergency medical services Prime provided to Kaiser members. On appeal, Kaiser challenged the trial court's denial of its petition to vacate an arbitration award. The Court of Appeal held that the merits of the confirmation of the panel's award on the Medicare Act preemption and exhaustion issues were not reviewable, either by appeal or by writ. Accordingly, the court issued a preemptory writ of mandate directing the trial court to vacate its judgment confirming the "Partial Final Award Re Medicare Advantage Claims" that the arbitration panel issued, and to enter a new and different order dismissing Kaiser's petition to vacate that award. View "Kaiser Foundation Health Plan v. Superior Court" on Justia Law

Plaintiffs filed suit against Vivint Solar, seeking rescission of an agreement in which Vivint Solar agreed to install a solar power generating system on their property in exchange for their agreement to purchase solar power generated by the system. Plaintiffs alleged individual and class claims for declaratory relief and violations of the Unfair Competition Law (UCL). The Court of Appeal held that the delegation clause in the arbitration provision of the agreement was enforceable and therefore it was the arbitrator, not the court, who was required to determine the enforceability of the arbitration provision and whether it covered class claims. The court issued a peremptory writ of mandate commanding the trial court to vacate that portion of its order in which it found the arbitration provision was not unconscionable or unenforceable, the claims asserted in the complaint were arbitrable, and the arbitration provision's prohibition against bringing class claims was enforceable. The court also vacated the order dismissing the class claims. The court denied in all other respects. View "Aanderud v. Superior Court of Kern County" on Justia Law

The procedural provisions of the Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq., do not apply to a motion to compel arbitration in a California state court, where the arbitration agreement was governed by the FAA (because it involves interstate commerce), but the agreement has no choice-of-law provision, and no provision stating the FAA's procedural provisions govern the arbitration. The Court of Appeal held that the California procedure applies in these circumstances, and the trial court did not abuse its discretion when it denied an insurer's motion to compel arbitration with its insured, based on the possibility of conflicting rulings in pending litigation with third parties. Accordingly, the court affirmed defendant's motion to compel arbitration. View "LA Unified School District v. Safety National Casualty Corp." on Justia Law

Plaintiff Carmen Zubillaga was injured in an automobile accident. The other driver was at fault. Her insurer, defendant Allstate Indemnity Company (Allstate), rejected her demand for $35,000, the full amount of her remaining underinsured motorist (UIM) coverage, although it made her a series of offers increasing to $15,584 instead. After an arbitrator awarded plaintiff $35,000, the amount of her demand, she sued Allstate for breach of the implied covenant of good faith and fair dealing. While an insurance company has no obligation under the implied covenant of good faith to pay every claim its insured makes, the insurer cannot deny the claim, without fully investigating the grounds for its denial. To protect its insured’s contractual interest in security and peace of mind, it is essential that an insurer fully inquire into possible bases that might support the insured’s claim before denying it. The Court of Appeal found the problem in this case was that the undisputed facts showed the insurer’s opinions were rendered in October and November 2012, but insurer continued to rely on them through the arbitration in September 2013, without ever consulting with its expert again or conducting any further investigation. Summary judgment in favor of the insurer was reversed and the matter remanded for further proceedings. View "Zubillaga v. Allstate Indemnity Company" on Justia Law

This case turned on whether an attorney-in-fact who admitted her principal to a residential care facility for the elderly made a “health care” decision. If she did, as the trial court found, she acted outside the scope of her authority under the power of attorney, and the admission agreement she signed, and its arbitration clause this appeal sought to enforce, were void. On these facts the Court of Appeal concluded the decision was health care decision, and the attorney-in-fact who admitted her, acting under the PAL, was not authorized to make those kinds of decisions on behalf of the principal. As a result of this conclusion, the Court affirmed the trial court’s denial of a motion by the residential care facility to compel arbitration. Because the attorney-in-fact acting under the PAL did not have authority to admit the principal to the residential care facility for the elderly, her execution of the admission agreement and its arbitration clause were void. View "Hutcheson v. Eskaton Fountainwood Lodge" on Justia Law

In consolidated class actions, plaintiffs claimed the brokers who represented them in the sale of their homes and a group of companies that provided services in connection with those sales violated their fiduciary duties by failing to disclose alleged kickbacks paid by the service providers to the brokers in connection with the sales. Defendants filed motions to compel arbitration on the basis of three separate agreements, at least one of which was executed by each plaintiff. The trial court found the arbitration clauses in two of the agreements inapplicable, but compelled the signatories of the third agreement to arbitrate with their brokers. Invoking the doctrine of equitable estoppel, the court also required the signatories of the third agreement to arbitrate their claims against the service providers, who were not parties to the arbitration agreements. The court of appeals reversed with respect to the two arbitration clauses the lower court found inapplicable. Each of the plaintiffs executed one or the other of these two agreements. The court dismissed the cross-appeal of the plaintiffs who were required to arbitrate because an order compelling arbitration is not appealable. View "Laymon v. J. Rockcliff, Inc." on Justia Law

Attorney filed suit, seeking payment of unpaid fees. Client filed an answer and, one year later, asked for arbitration pursuant to his retainer agreement. The court compelled arbitration that resulted in no recovery by either side. Six days after the award, Client asked the arbitrator to award him costs under Code of Civil Procedure section 998 because Attorney’s recovery was less favorable than an offer that Client made two months before demanding arbitration. When the arbitrator responded that he no longer had jurisdiction, Client asked the court to confirm the award, with Section 998 costs. The court confirmed the arbitration award but determined that Client failed to make a timely section 998 claim to the arbitrator and denied Client’s request for costs. The court of appeals reversed, rejecting Attorney’s suggestion that Client should have presented his section 998 request for costs to an arbitrator before the arbitration award was rendered. An offer which is not accepted “cannot be given in evidence upon the trial or arbitration.” In his request to confirm the award, Client established that the arbitrator had refused to hear any evidence of Attorney’s rejection of Client’s section 998 offer; Client timely presented his claim to the arbitrator, who should have reached the merits of that claim. View "Heimlich v. Shivji" on Justia Law

Temporary staffing company Real Time Staffing Services, LLC doing business as Select Staffing (Real Time) hired Garcia in 2011 as an hourly employee. Real Time then assigned Garcia to work for Pexco, LLC. As part of the hiring process with Real Time, Garcia filled out an employment application which included an arbitration agreement between Garica and Real Time. Pexco was not a signatory to the arbitration agreement. Garcia filed suit against Real Time, Pexco, and Aerotek, Inc. for violations of the Labor Code and unfair business practices pertaining to payment of wages during his assignment with Pexco. The operative complaint alleged “each and every one of the acts and omissions alleged herein was performed by, and/or attributable to, all DEFENDANTS, each acting as agents and/or employees, and/or under the direction and control of each of the other DEFENDANTS, and that said acts and failures to act were within the course and scope of said agency, employment and/or direction and control.” Each cause of action in the operative complaint was alleged against “All Defendants” and no distinction was made between Real Time or Pexco. Real Time and Pexco moved to compel individual arbitration of Garcia’s claims. The trial court granted the motion to compel arbitration. Garcia appealed the order granting Pexco’s motion to compel individual arbitration. The Court of Appeal found Garcia was equitably estopped from denying Pexco’s right to arbitrate and the agency exception applied. View "Garcia v. Pexco, LLC" on Justia Law

Farrar was hired by Direct Commerce as its vice-president of business development and negotiated an employment agreement set forth in a six-page offer letter detailing her compensation, additional bonus structure, and stock options. The agreement also included an arbitration provision, set off by the same kind of underlined heading and spacing as the other enumerated paragraphs of the agreement. When Farrar sued Direct, alleging breach of contract, conversion, wrongful termination, breach of the covenant of good faith and fair dealing, and failure to pay wages owed and waiting time penalties, the employer unsuccessfully sought to compel arbitration. The trial court found the arbitration provision procedurally and substantively unconscionable. The court of appeals reversed. While the arbitration provision is one-sided, as it excludes any claims arising from the confidentiality agreement Farrar also signed, that offending exception is readily severable and, on this record, should have been severed. View "Farrar v. Direct Commerce, Inc." on Justia Law