Justia California Court of Appeals Opinion Summaries

Former employees brought a putative class action against their former employer, NMG, alleging violations of the California Labor Code, and NMG moved to compel arbitration under its mandatory arbitration program for employment-related disputes. NMG submitted evidence that, at the time of plaintiff’s employment (2007-2009), it distributed to each new employee a copy of its “Mandatory Arbitration Agreement,” brochures explaining the arbitration program, and an employee handbook that included a brief description of the program The trial court initially ordered arbitration of all claims except a claim under the Labor Code Private Attorneys General Act of 2004 (PAGA) Lab. Code, 2698, but later reconsidered and denied the motion, concluding the arbitration agreement at issue was illusory. The court of appeal affirmed, rejecting arguments that the court lacked jurisdiction to reconsider its initial order; an arbitrator, rather than a court, must determine any challenges to the enforceability of the arbitration agreement; and the arbitration agreement is enforceable and encompasses all claims, including his PAGA claim. The court found multiple unconscionable aspects to the NMG Arbitration Agreement. View "Pinela v. Neiman Marcus Group, Inc." on Justia Law

Plaintiff filed suit against defendants, alleging various wage and hour violations of the Labor Code, as well as other causes of action. On appeal, defendants challenged the trial court's denial of their motion to compel arbitration of claims based on the alleged misclassification of plaintiff as an independent contractor rather than an employee. The court found that the Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq., applies to the parties’ arbitration agreement, and all of plaintiff’s claims are arbitrable; defendants did not waive their right to arbitration even though they waited 14 months after the complaint was filed to move to compel arbitration; plaintiff cannot demonstrate prejudice from the delay, which is determinative; and the court reversed the trial court’s order denying the petition to compel arbitration and remand the case to the trial court with instructions to enter an order compelling arbitration of all of plaintiff’s claims. View "Khalatian v. Prime Time Shuttle" on Justia Law

Oregel filed a class action against his former employer, PacPizza, alleging that PacPizza failed to fully reimburse delivery drivers for necessary expenses associated with using their personal vehicles to deliver pizza on PacPizza’s behalf. Seventeen months and more than 1,300 attorney hours later, PacPizza petitioned to compel arbitration. The agreement to arbitrate appeared, in a very small font, on the employment application. There is no evidence that Oregel was given a copy of the application or saw it at any point after he submitted it. The trial court denied the petition, finding PacPizza waived its right to enforce a purported arbitration agreement. The court of appeal affirmed. Although the trial court made no express finding of bad faith, the tone of its ruling is suggestive of such a finding and, had it been made, sufficient evidence would have supported the finding. While California has a strong public policy in favor of arbitration, that goal was frustrated by defendant’s conduct.” View "Oregel v. PacPizza, LLC" on Justia Law

Petitioners, truck drivers, seek relief from an order granting the motion of real party in interest Southern Counties Express to compel arbitration of petitioners’ wage and hour complaints to the Labor Commissioner. The court concluded that the trial court erred by failing to determine whether petitioners' claims are exempt from the Federal Arbitration Act, 9 U.S.C. 1 et seq. The court found writ review appropriate in this case where the order compelling arbitration was entered without having afforded the parties the hearing and consideration to which the law entitled them. Accordingly, the court vacated and remanded. View "Garcia v. Super. Ct." on Justia Law

Amis alleged that his former attorneys committed malpractice by “caus[ing]” him to execute a settlement agreement that converted his company’s corporate obligations into Amis’s personal obligations without advising Amis that he had little to no risk of personal liability in the underlying litigation. All advice he received from the attorneys regarding the settlement agreement was given during mediation. The attorneys argued that Amis could not obtain evidence to support his claims, and that the law firm could not produce evidence to defend itself, because the disclosure of such evidence was barred by the mediation confidentiality statutes, Evidence Code section 1115. The trial court agreed on both counts and entered summary judgment for the firm. The court of appeal affirmed. The California Supreme Court has broadly applied the mediation confidentiality statutes and all but categorically prohibited judicially crafted exceptions, even in situations where justice seems to call for a different result. View "Amis v. Greenberg Traurig, LLP" on Justia Law

Serafin sued her former employer Balco, alleging wrongful termination, harassment, and defamation. The trial court granted Balco’s motion to stay the litigation until the completion of binding arbitration based upon an arbitration agreement Serafin signed when she was hired. The arbitrator ultimately found in Balco’s favor on all issues, and the trial court confirmed the award, entering judgment in Balco’s favor. The court of appeal affirmed, rejecting arguments that Serafin never entered into a binding agreement to arbitrate her employment-related claims and that the arbitration agreement was unenforceable because it was procedurally and substantively unconscionable. The court found the degree of procedural unconscionability minimal, and that, because a substantively unconscionable attorney fees provision was severed by the trial court before arbitration began, no substantive unconscionability was shown View "Serafin v. Balco Props. Ltd., LLC" on Justia Law

Shaun Trabert purchased a used vehicle from an automobile dealer. Trabert signed a preprinted industry-drafted installment sales contract. The dealer then assigned the contract to Consumer Portfolio Services, Inc. Portfolio later repossessed Trabert's vehicle, and Trabert filed a class action complaint alleging Portfolio's repossession/default notices were defective under consumer statutes. This appeal was the second time the issue of an automobile purchaser who brought consumer claims against the creditor-assignee of the parties' sales contract came before the Court of Appeal. The first appeal involved the enforceability of an arbitration agreement in the contract. In "Trabert I," the Court held the arbitration agreement contained certain unconscionable provisions, and remanded for the court to determine whether these provisions could be severed from the remaining agreement. On remand, the trial court declined to sever the provisions and denied the creditor-assignee's motion to compel arbitration. Portfolio challenged the trial court's last order in this second appeal. After review, the Court of Appeal concluded the trial court erred in denying Portfolio's motion. "The unconscionable provisions concern only exceptions to the finality of the arbitration award, and can be deleted without affecting the core purpose and intent of the arbitration agreement. The deletion of these exceptions creates a binding arbitration award and promotes the fundamental attributes of arbitration, including speed, efficiency, and lower costs." The Court reversed and remanded with directions for the court to sever the unconscionable provisions from the arbitration agreement and granted Portfolio's motion to compel arbitration. View "Trabert v. Consumer Portfolio Services" on Justia Law

Petitioner Universal Protection Service, L.P. petitioned the Court of Appeal for a writ of mandate and/or prohibition to challenge the superior court's order granting real party in interest Floridalma Franco's demand to arbitrate her employment-related disputes with Universal and ruling the arbitrator would decide the arbitrability of Franco's class action claims. Universal argued the court legally erred in its ruling because the parties' arbitration agreement did not clearly and unmistakably submit arbitrability questions to the arbitrator, and thus it was for the superior court to decide whether the agreement authorized class and/or representative arbitration. The Court of Appeal concluded the court erred by granting Franco's petition, but nevertheless agreed with Franco that the parties' reference to American Arbitration Association (AAA) rules, which unambiguously stated that the arbitrator was to decide whether the parties' arbitration agreement permitted class arbitration, constituted clear and unmistakable evidence of their intent that the arbitrator decide this issue (which was a threshold question of arbitrability). Because the trial court reached the correct conclusion, the Court of Appeal denied Universal's petition. View "Universal Protection Services v. Super. Ct." on Justia Law

Securitas Security Services USA, Inc. petitioned the Court of Appeal for a writ of mandate and/or prohibition to challenge a superior court order granting its amended motion to compel arbitration in which the court ordered the parties to arbitrate all of real party in interest Denise Edwards's claims, including her class action and representative claims under the Private Attorneys General Act of 2004 (PAGA). Securitas argued the court impermissibly rewrote the parties' written dispute resolution agreement, which contained an express waiver of class, collective or representative claims; Securitas maintained the parties did not mutually agree to arbitrate class and/or representative claims and the agreement should have been deemed silent on arbitration of any class or representative action. It further contended the court erred by refusing to enforce the lawful class action waiver, as well as the PAGA waiver, because as to the latter, Edwards's waiver was voluntary, rendering the circumstances unlike those in "Iskanian v. CLS Transportation." Securitas argued that because "Iskanian" did not apply, the parties' arbitration agreement should have been enforced in its entirety as to Edwards's individual claims. After review, the Court of Appeal concluded that the trial court correctly ruled that Iskanian rendered the PAGA waiver within the parties' dispute resolution agreement unenforceable. However, the court then erred by invalidating and severing the waiver provision, including an enforceable class action waiver, from the agreement and sending Edwards's entire complaint, including her class action and PAGA claims, to arbitration. Though the Court granted Securitas's petition to the extent it sought to set aside the order compelling Edwards's class and PAGA claims to arbitration, it denied the remainder of its requested relief, and based on its de novo interpretation of the parties' agreement, directed the trial court to enter a new order denying Securitas's amended motion to compel arbitration. View "Securitas Security Services v. Super. Ct." on Justia Law

Franco filed a purported class action as an employee of Athens Services, claiming Labor Code and wage-order violations. He also sued in a representative capacity under the Private Attorneys General Act (Lab. Code 2698) and alleged violation of state unfair competition law. (Bus. & Prof. Code 17200). Athens petitioned to compel arbitration based on Franco’s employment agreement, alleging that it was engaged in interstate commerce under the Federal Arbitration Act (9 U.S.C. 1-16). The trial court agreed. The appeal court concluded that provisions requiring arbitration and waiving class actions were unenforceable. On remand, Athens informed the court that Franco’s actual employer was Arakelian. Franco amended the complaint to add Arakelian, which filed another petition to compel arbitration, arguing that authorities cited by the prior decision had been overruled by the U.S. Supreme Court in 2010. The trial court denied the petition, citing the law of the case doctrine and finding that Arakelian waived its right to compel arbitration by failing to earlier identify itself as Franco’s true employer. The court of appeal affirmed. The California Supreme Court vacated. The court of appeal reversed denial of the petition to compel arbitration, in light of the rule announced by the California Supreme Court in Iskanian. View "Franco v. Arakelian Enters., Inc." on Justia Law