Judge: Frank M. Tavelman, Case: 23STCV04720, Date: 2023-12-01 Tentative Ruling

Case Number: 23STCV04720    Hearing Date: December 1, 2023    Dept: A

LOS ANGELES SUPERIOR COURT

NORTH CENTRAL DISTRICT - BURBANK

DEPARTMENT A

MOTION TO COMPEL ARBITRATION & STAY MATTER

NOTICE:

The Court is not requesting oral argument on this matter.  Pursuant to California Rules of Court, Rule 3.1308(a)(1) notice of intent to appear is required.  Unless the Court directs argument in the Tentative Ruling, no argument will be permitted unless a “party notifies all other parties and the court by 4:00 p.m. on the court day before the hearing of the party’s intention to appear and argue.  The tentative ruling will become the ruling of the court if no notice of intent to appear is received.”  

Notice may be given either by email at BurDeptA@LACourt.org or by telephone at (818) 260-8412.

ALLEGATIONS: 

John P. Shulak (“Plaintiff”) brings this action against his former employer Guaranteed Rate, Inc. (“Defendant”). Plaintiff alleges numerous wage and hour violations during the time he served as a mortgage salesperson for Defendant. Plaintiff seeks penalties pursuant to the Private Attorneys General Act (PAGA).

Before the Court is a Motion to Compel Arbitration, Dismiss Representative Claims, and Stay Action brought by Defendant. Plaintiff opposes and Defendant replies.

ANALYSIS: 

I.                    LEGAL STANDARD 

Code of Civil procedure § 1281.2 states: “[o]n petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement arbitrate the controversy exists.”

A party seeking to compel arbitration has the initial burden to prove, by a preponderance of the evidence, the existence of a valid and enforceable arbitration agreement. (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972.) If the moving party has met its initial burden, then the burden shifts to respondents to prove the falsity or unenforceability of the arbitration agreement. (Ibid.) 

II.                 MERITS

The Court first addresses Defendant’s request that this matter be stayed pending determination of a related case in federal court.

Plaintiff and Defendant both inform that Plaintiff filed a separate suit in Los Angeles County Superior Court, Case No. 22STCV40567 on December 8, 2022. (Johnson Decl. ¶ 2, Exh 1.) Defendant states that this previous suit alleges the same wage and hour claims as this case. (Johnson Decl. ¶¶ 2-3.) The case was subsequently removed to federal court. (Johnson Decl. ¶¶ 2-3.) Defendant thereafter filed a motion to compel arbitration and dismiss class claims on August 25, 2023. (Johnson Decl. ¶ 4.) The motion is pending before the District Court.

Defendant requests the Court issue a stay in this matter pending the District Court’s decision. Plaintiff opposes a stay, arguing that although the individual PAGA claims are based on the same controversy, the representative PAGA claims cannot be ordered to arbitration. Plaintiff also opposes on grounds that open-ended stays are improper, citing Dependable Highway Express, Inc. v. Navigators Ins. Co. (9th Cir. 2007) 498 F.3d 1059, 1066. Lastly, Plaintiff argues that a stay should not be imposed because there is no way to know whether the District Court’s ruling will result in issue preclusion.

C.C.P. § 1281.4. provides, in relevant part, “If an application has been made to a court of competent jurisdiction, whether in this State or not, for an order to arbitrate a controversy which is an issue involved in an action or proceeding pending before a court of this State and such application is undetermined, the court in which such action or proceeding is pending shall, upon motion of a party to such action or proceeding, stay the action or proceeding until the application for an order to arbitrate is determined and, if arbitration of such controversy is ordered, until an arbitration is had in accordance with the order to arbitrate or until such earlier time as the court specifies.”

The Court finds that Defendant has shown sufficient issue overlap to justify the imposition of a stay in this matter. The same alleged wage and hour violations serve as the basis for both cases. Both cases concern the same agreement whose language must be analyzed to determine arbitrability.

One overlapping issue is sufficient to justify the imposition of a stay. (Heritage Provider Network, Inc. v. Superior Court (2008) 158 Cal.App.4th 1146, 1152.) “Section 1280, subdivision (c), defines ‘controversy’ as ‘any question arising between parties to an agreement whether such question is one of law or of fact or both.’” (Id. [internal citations omitted]) “Neither section 1280 nor section 1281.4 is written in the plural: A controversy can be a single question of law or fact, and a stay shall be issued upon proper motion if the court has ordered arbitration of a controversy that is also an issue involved in an action or proceeding pending before it.” (Id. [internal citations omitted].)

However, “if the issue which is the controversy subject to arbitration is severable, the stay may be with respect to that issue only.” (C.C.P. § 1281.4) In order to request an issue be severed from a stay under C.C.P. § 1281.4, a party must prove that their claim is independent from the matter in the arbitration. (Federal Ins. Co. v. Superior Court (Mackey) (1998) 60 Cal.App.4th 1370, 1375.)

Here, it appears each issue in this case and the federal case are overlapping. Whether Plaintiff’s representative claims should be dismissed is a question currently before the District Court. Regardless of whether Plaintiff believes case law indicates the representative claims will remain, that determination is not for Plaintiff to make. Any decision by this court as to the severability of the representative claims would be a direct interference with the decision of the District Court. Plaintiff has not met its burden to prove that the representative claims are separate from the matter in the arbitration.

The Court finds Plaintiff’s argument that this stay is open ended to be similarly unpersuasive. The stay which Defendant request has a definite end, that is when the District Court renders its ruling on the motion to compel arbitration and dismiss representative claims.

Lastly, the Court disagrees with Plaintiff’s argument as to the indeterminate nature of issue preclusion from the District Court’s eventual ruling. C.C.P. § 1281.4 does not condition the stay to be granted on the guarantee that issue preclusion will occur. Plaintiff has shown that the issues before the District Court are the same as those before this Court. Plaintiff is not required to show that the eventual ruling would necessarily preclude this Court from ruling on any of those issues.

Plaintiff has met its statutory burden to impose a stay in this action until such time as the District Court has rendered its decision. Plaintiff has conversely failed to show that any of the issues in this litigation are severable such that a stay would not be imposed, and the Court could rule on this motion. Accordingly, the Court orders this action STAYED and rules the motion to compel arbitration is MOOT.

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RULING:

In the event the parties submit on this tentative ruling, or a party requests a signed order or the court in its discretion elects to sign a formal order, the following form will be either electronically signed or signed in hard copy and entered into the court’s records. 

ORDER 

Guaranteed Rate, Inc.’s Motion to Compel Arbitration came on regularly for hearing on December 1, 2023, with appearances/submissions as noted in the minute order for said hearing, and the court, being fully advised in the premises, did then and there rule as follows: 

THIS ACTION IS STAYED PENDING THE DISTRICT COURT’S DETERMINATION OF DEFENDANT’S MOTION TO COMPEL ARBITRATION.

THIS MOTION TO COMPEL ARBITRATION IS MOOT.

THE COURT VACATES ALL EXISTING DATES AND SETS A STATUS CONFERENCE RE: DISTRICT COURT’S ARBITRATION DETERMINATION FOR MAY 8, 2024 AT 9:00 A.M.

UNLESS ALL PARTIES WAIVE NOTICE, DEFENDANT TO GIVE NOTICE.

IT IS SO ORDERED. 

DATE:  December 1, 2023                            _______________________________ 

                                                                        F.M. TAVELMAN, Judge 

Superior Court of California 

County of Los Angeles