Judge: Marcella O. Mclaughlin, Case: 37-2023-00051797-CU-OE-CTL, Date: 2024-05-03 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - May 02, 2024

05/03/2024  09:00:00 AM  C-72 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Marcella O McLaughlin

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Civil - Unlimited  Other employment Motion Hearing (Civil) 37-2023-00051797-CU-OE-CTL NEUBECKER VS EVANS HOTELS LLC [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion - Other, 01/17/2024

A. Defendants' motion to compel arbitration and stay proceedings is DENIED.

'The party seeking to compel arbitration has the burden of proving the existence of an enforceable arbitration agreement by a preponderance of the evidence, and a party opposing the petition bears the burden of proving by a preponderance any fact necessary to its defense.' Baker v. Italian Maple Holdings, LLC (2017) 13 Cal.App.5th 1152, 1157.

Here, defendants have established – and plaintiff does not dispute – the existence of an agreement to arbitrate between the parties. (Belef Decl., Ex. 1.) The burden shifts to plaintiff to show that the agreement is unenforceable. Plaintiff argues that the agreement is unenforceable because it is 'null and void.' The court agrees.

An unenforceable wholesale PAGA waiver is one that requires an employee as a condition of employment to waive their right to bring representative PAGA claims in any forum. DeMarinis v. Heritage Bank of Commerce (2023) 98 Cal.App.5th 776, 789-90. 'The focus of this determination is whether the waiver requires an employee to forgo a 'substantive' right (e.g., to seek civil penalties for Labor Code violations on behalf of the state), as opposed to merely changing 'how those rights will be processed' (e.g., in an arbitral forum under arbitral rules).' Id. at 790.

In this case, the parties agreed in the waiver clause that 'EACH MAY BRING CLAIMS AGAINST THE OTHER ONLY IN THEIR INDIVIDUAL CAPACITY AND NOT AS A PLAINTIFF, CLASS MEMBER, OR OTHERWISE AGGRIEVED PERSON IN ANY PURPORTED CLASS, COLLECTIVE, REPRESENTATIVE, QUI TAM, OR MASS ACTION.' (Belef Decl., Ex. 1 at p. 2.) The parties further agreed that '[i]f Employee breaches this provision, any such class action, representative proceeding, mass action or consolidated claim shall be dismissed forthwith.' (Id.) The court concludes that these provisions require plaintiff to abandon his right to bring representative PAGA claims in any forum. See DeMarinis, 98 Cal.App.5th at 789-90; see also Westmoreland v. Kindercare Education LLC (2023) 90 Cal.App.5th 967, 982.

Defendants contend that the waiver clause should not be construed as a wholesale waiver because the third sentence of the waiver provision provides that 'Employee and Company are both waiving the right to trial by jury and their right to participate in a class, representative, qui tam, or mass action to the fullest extent allowed by law.' (Belef Decl., Ex. 1 at p. 2 (emphasis added).) Defendants, however, do not cite any authority supporting their position. Moreover, the 'fullest extent allowed by law' phrase only applies to the waiver of the right to participate in a representative action. Defendants, the drafters of Calendar No.: Event ID:  TENTATIVE RULINGS

3077980  14 CASE NUMBER: CASE TITLE:  NEUBECKER VS EVANS HOTELS LLC [IMAGED]  37-2023-00051797-CU-OE-CTL the arbitration agreement, could have used the phrase in connection with the right to bring a representative action. But they did not. 'In construing a contract, it is not a court's prerogative to alter it, to rewrite its clear terms, or to make a new contract for the parties.' Moss Dev. Co. v. Geary (1974) 41 Cal.App.3d 1, 9.

Accordingly, the court finds that the waiver clause constitutes an unenforceable wholesale waiver of plaintiff's right to bring representative PAGA claims. Pursuant to the 'poison pill' provision, if the waiver clause is found to be unenforceable, 'then the entirety of [the] arbitration agreement shall be null and void.' (Belef Decl., Ex. 1 at p. 2.) The motion to compel arbitration is therefore denied.

B. Defendants' alternative request to stay this action pursuant to the rule of exclusive concurrent jurisdiction is DENIED.

Under the rule of exclusive concurrent jurisdiction, 'when two or more courts have subject matter jurisdiction over a dispute, the court that first asserts jurisdiction assumes it to the exclusion of the others.' Shaw v. Superior Court (2022) 78 Cal.App.5th 245, 255. 'Because it is a policy rule, the application of the rule in a given case depends upon the balancing of countervailing policies.' BBBB Bonding Corp. v. Caldwell (2021) 73 Cal.App.5th 349, 374.

Here, the first-filed case is currently stayed. See Howitson v. Evans Hotels LLC, Case No. 2020-26768.

No evidence has been provided as to when the stay will be lifted. As such, the court is not persuaded that a stay of this matter will serve the public policies underlying the rule of exclusive concurrent jurisdiction.

C. Defendants' requests for judicial notice (ROA 11, 30) are granted as to the complaint filed in the Howitson matter and denied as to this court's ruling in Rodeles v. Evans Hotels, LLC, Case No.

2023-44549. See Evid. Code § 452(d); see also Harrott v. County of Kings (2001) 25 Cal.4th 1138, 1148 ('Trial court decisions are not precedents binding on other courts under the principle of stare decisis.').

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