Judge Kerry Bensinger, Case Number: 23STCV15996, Date: 2024-04-26 Tentative Ruling

In February 2020, WePackItAll, LLC^{^[1]} hired Plaintiff Alex Aguilera (“Aguilera” or “Plaintiff”) as a mechanic. WePackItAll hired Plaintiff through staff agency Partners Personnel – Management Services (“PPMS”). While employed with WePackItAll, Aguilera suffered various hand injuries which required accommodations. After the first injury, WePackItAll did not accommodate Aguilera. He continued working in the same manner and fashion prior to the injury. As a result, Aguilera suffered a second hand injury. WePackItAll did not offer Aguilera any alternative light duty jobs. Aguilera later suffered a third, more serious hand injury. Aguilera returned to work with work restrictions. However, instead of accommodating Aguilera, WePackItAll terminated his employment on the grounds the company could not accommodate Aguilera’s restrictions.

On July 7, 2023, Aguilera filed a Complaint against Defendants, WePackItAll and PPMS, alleging causes of action for:

On September 28, 2023, PPMS filed a motion to compel arbitration. The court granted the motion on October 31, 2023 and stayed the action as to all parties pending the arbitration. In granting the motion, the court found the arbitration agreement was not unconscionable.

On January 23, 2024, Plaintiff filed a Proof of Personal Service indicated that WePackItAll was served with the Summons and Complaint by personal service on January 9, 2024.

On February 26, 2024, WePackItAll filed its Answer to the Complaint. The Answer asserts an affirmative defense that Plaintiff’s claims are subject to binding arbitration.

On February 27, 2024, WePackItAll filed this Motion to Compel Arbitration. On March 15, 2024, filed an amended Motion to Compel Arbitration which also requests an order consolidating the arbitration between Plaintiff and WePack ItAll with the pending arbitration between Plaintiff and PPMS.

WePackItAll moves to compel arbitration of Plaintiff’s claims as a third party beneficiary of the arbitration agreement, and for an order consolidating the arbitration proceedings between Plaintiff, PPMS, and WePackItAll.

There is no dispute WePackItAll is a third-party beneficiary of the agreement or that the agreement covers Plaintiff’s claims against WePackItAll. And it is the same agreement signed by and between PPMS and Plaintiff, which was the subject of the litigation with PPMS.

Plaintiff opposes the motion on two grounds: the agreement is unconscionable and WePackItAll waived its right to compel arbitration.

“Under California law, collateral estoppel - issue preclusion-- applies only if: (1) the issue sought to be precluded from relitigation is identical to that decided in a former proceeding; (2) the issue was actually litigated in the former proceeding; (3) the issue was necessarily decided in the former proceeding; (4) the decision in the former proceeding [was] final and on the merits; (5) the party against whom preclusion is sought [is] the same as, or in privity with, the party to the former proceeding.” (Lucido v. Superior Court (1990) 51 Cal. 3d 335, 341.)

Here, Plaintiff is precluded from relitigating whether the arbitration agreement is unconscionable. On October 31, 2023, the court granted PPMS’s motion to compel arbitration. In granting the motion, the court found that a valid arbitration agreement existed which covered Plaintiff’s claims. (See Minute Order, 10/31/23.) The issue of whether the agreement was unconscionable was litigated in this action . The court considered Plaintiff’s argument that the arbitration agreement was procedurally and substantively unconscionable. (Minute Order, 10/31/23.) The court found “that the Agreement possesses a moderate level of procedural unconscionability” and that “Plaintiff has not shown any substantive unconscionability.” (Id.) The court concluded, “Because both substantive and procedural components of unconscionability need to be present, Plaintiff has not shown the contract was unconscionable.” WePackItAll now seeks to preclude Plaintiff (the same party) from relitigating whether this arbitration agreement is unconscionable. All elements of issue preclusion are satisfied. Plaintiff is estopped from arguing against the enforceability of the arbitration agreement on the grounds of unconscionability.

Plaintiff next argues that WePackItAll waived its right to arbitrate by waiting nearly eight months after the Complaint was filed to seek arbitration.

In St. Agnes v. PacifiCare of California (2003) 31 Cal.4th 1187, 1196, the California Supreme Court adopted a multi-factor test from the Tenth Circuit opinion in Peterson v. Shearson/American Express, Inc. (10th Cir. 1988) 849 F.2d 464 wherein a court may consider: (1) whether the party’s actions are inconsistent with the right to arbitrate; (2) whether the “litigation machinery has been substantially invoked” and the parties “were well into preparation of a lawsuit” before the party notified the opposing party of an intent to arbitrate; (3) whether a party either requested arbitration enforcement close to the trial date or delayed for a long period before seeking a stay; (4) whether a defendant seeking arbitration filed a counterclaim without asking for a stay of the proceedings: (5) whether important intervening steps [e.g., taking advantage of judicial discovery procedures not available in¿arbitration] had taken place; and (6) whether the delay affected, misled, or prejudiced the opposing party.¿ (Peterson, supra, 849 F.2d at pp. 467-68; St. Agnes, at p. 1196.) ¿¿However, following the U.S. Supreme Court’s decision in Morgan, courts may no longer condition a determination of waiver on prejudice.¿ (See Morgan, supra, at p. 1713.)¿ The remaining Peterson factors are proper considerations in the waiver inquiry.¿ (Davis, supra, at p. 963.)¿

Here, the court finds WePackItAll did not waive its right to arbitrate. First, although nearly eight months separate the filing of this motion and Plaintiff’s Complaint, Plaintiff did not serve WePackItAll with the Complaint until January 9, 2024. This motion followed seven weeks later. In that short period, WePackItAll filed its Answer, this motion, and the reply in support of this motion. Plaintiff does not show how such scant activity “invokes the litigation machinery.” The answer, of course, is that Defendant has not. Plaintiff does not raise any other arguments or provide any evidence to support a finding of waiver.

Accordingly, WePackItAll’s motion to compel arbitration is GRANTED. Pursuant to Code of Civil Procedure section 1281.3, the arbitration between WePackItAll and Plaintiff is consolidated with the arbitration proceedings between Plaintiff and PPMS.

The Post-Arbitration Status Conference is CONTINUED to December 18, 2024, at 9:00 a.m.

The Order to Show Cause Re: Entry of Default as to We Pack it All, LLC is DISCHARGED.

Kerry Bensinger

Judge of the Superior Court

[1] Erroneously sued and served as “We Pack It All, LLC”.