Judge: Armen Tamzarian, Case: 23STCV25003, Date: 2024-11-15 Tentative Ruling

Case Number: 23STCV25003    Hearing Date: November 15, 2024    Dept: 52

Defendants’ Motion to Compel Arbitration and Stay Proceedings

Defendants Dick Browning, Inc., Matthew Browning, Kent C. Browning, Peter Browning, and Scott Dickinson move to compel arbitration of this action by plaintiff George Langarcia.  Defendants further move to stay the proceedings.

Evidentiary Objections

            Plaintiff makes two objections to the declaration of Jeanine Tesoro.  Both objections are overruled.

Validity of Agreement to Arbitrate

            Defendants meet their burden of showing plaintiff agreed to arbitrate employment disputes.  Plaintiff argues the court cannot enforce the agreement for three reasons.

            First, plaintiff contends the agreement is unenforceable due to the following provision: “Both the Dealership and I agree that any arbitration proceeding must move forward under the FAA’s procedural provisions even if the claims may also involve or relate to parties who are not parties to the arbitration agreement and/or claims that are not subject to arbitration; in other words, a court may not refuse to enforce this arbitration agreement and may not stay the arbitration proceeding, despite the provisions of CCP section 1281.2(c).”  (Tesoro Decl., Ex. A, § 3, p. 2.)

            Plaintiff provides no authority that such a provision makes the agreement unenforceable.  To the contrary, there is binding authority directly on point.  “[P]arties may limit the trial court’s authority to stay or deny arbitration under the CAA by adopting the more restrictive procedural provisions of the FAA.’ ”  (Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337, 345.)  The Court of Appeal held that, by adopting the FAA, the agreement “ ‘thereby eliminat[ed] the trial court’s authority’ ” to deny a motion to compel arbitration “ ‘under section 1281.2(c).’ ”  (Id. at p. 346.)  Here, the agreement similarly incorporates the FAA’s procedural provisions.  Moreover, even if the provision limiting the court’s authority under section 1281.2(c) were invalid, that would not make the entire agreement unenforceable. 

            Second, plaintiff argues the agreement does not meet two requirements under Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83 (Armendariz).  Plaintiff contends the agreement does not include provisions stating (1) the arbitrator has the power to award all relief available in court, and (2) defendants will bear all costs unique to arbitration. 

            Failing to specifically provide for everything required under Armendariz does not make the agreement invalid.  “Armendariz held that an employee can be compelled to arbitrate unwaivable statutory claims only if certain minimum requirements are satisfied,” including that the “agreement may not limit the statutory remedies available” and “the employer must bear all costs that are unique to arbitration.”  (Sanchez v. Western Pizza Enterprises, Inc. (2009) 172 Cal.App.4th 154, 175–176.)  But “Armendariz held that to the extent that the arbitration agreement was silent on these issues, these requirements must be implied as a matter of law.”  (Id. at p. 176; accord Little v. Auto Stiegler, Inc. (2003) 29 Cal.4th 1064, 1084.)  Plaintiff has these rights even if the parties’ agreement does not expressly provide for them.   

Third, plaintiff argues the agreement is not mutual because defendant Dick Browning, Inc. did not sign it.  It is well established that the drafting party can enforce an arbitration agreement it did not sign.  (See, e.g., Cruise v. Kroger Co. (2015) 233 Cal.App.4th 390, 398.)  The issue is whether the employer intended to be bound, not whether it signed the document.  (Ibid.)  The agreement shows Dick Browning, Inc. intended to be bound.  It provides, “[T]he Dealership and I agree to utilize binding arbitration as the sole and exclusive means to resolve all” disputes between them.  (Tesoro Decl., Ex. A, § 3, p. 1.)  It further provides, “Both the Dealership and I agree that any claim, dispute, and/or controversy covered by this agreement shall be submitted to and determined exclusively by binding arbitration under the Federal Arbitration Act.”  (Id., p. 2.)  The arbitration provision is mutual.

Individual Defendants

Plaintiff also argues the individual defendants (Matthew Browning, Kent C. Browning, Peter Browning, and Scott Dickinson) cannot enforce the agreement because they have no admissible evidence that they are owners or officers of the corporation.  The court rejects this argument for three reasons. 

First, defendants present testimony that Matthew Browning, Kent C. Browning, and Peter Browning are all owners of the corporation, while Scott Dickinson was its executive vice president.  (Tesoro Decl., ¶ 5.)

Second, the agreement is not limited to claims against owners or officers.  It provides, “This agreement to submit to binding arbitration applies to any and all claims between me and the Dealership (or its parent or subsidiary companies, owners, directors, officers, managers, employees, agents, and parties affiliated with its employee benefit and health plans).”  (Tesoro Decl., Ex. A, § 3, p. 1.) 

Third, plaintiff asserts the individual defendants are liable because they employed him or controlled his employment.  A defendant who is not a party to the agreement “may enforce the arbitration agreement, ‘when a plaintiff alleges a defendant acted as an agent of a party to an arbitration agreement.’ ”  (Garcia v. Pexco, LLC (2017) 11 Cal.App.5th 782, 788; accord Rowe v. Exline (2007) 153 Cal.App.4th 1276, 1284 [“a nonsignatory sued as an agent of a signatory may enforce an arbitration agreement”].) 

Plaintiff’s complaint alleges, “Defendants MATTHEW BROWNING, KENT C. BROWNING, PETER BROWNING, and SCOTT DICKINSON are individuals residing within the state of California and whom from in or about January 7, 2019 to on or about October 28, 2022: (1) exercised control over Plaintiff’s wages, hours, and/or working conditions; (2) caused Plaintiff to suffer or permit to work; (3) had an ‘at-will’ employment relationship with Plaintiff; and/or (4) engaged Plaintiff in such a manner so as to create a common law employment relationship with Plaintiff, and/or are individuals liable for the wage and hour violations committed by the other Defendant employers.”  (¶ 2.)  It further alleges all individual defendants are alter egos of the corporation (id., ¶ 4) and acted as one another’s “agents, servants, employees, joint venturers or co-conspirators” (id., ¶ 5). 

Plaintiff cannot contend the individual defendants are not entitled to compel arbitration while also alleging they are liable as his employers or as his employer’s alter egos or agents.

Disposition

            Defendants Dick Browning, Inc., Matthew Browning, Kent C. Browning, Peter Browning, and Scott Dickinson’s motion to compel arbitration and stay proceedings is granted.  Plaintiff George Langarcia is ordered to arbitrate this action against defendants.  The court hereby stays the entire action pending resolution of the parties’ arbitration proceeding.