Judge: Matthew C. Braner, Case: 37-2023-00025846-CU-OE-CTL, Date: 2024-04-05 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

DEPT.:

EVENT DATE:

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HALL OF JUSTICE

TENTATIVE RULINGS - April 04, 2024

04/05/2024  09:00:00 AM  C-60 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Matthew C. Braner

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Civil - Unlimited  Other employment Motion Hearing (Civil) 37-2023-00025846-CU-OE-CTL DIAZ VS AVIS BUDGET GROUP INC [IMAGED] CAUSAL DOCUMENT/DATE FILED:

Defendant Aston Carter, Inc. ('Aston Carter')'s motion to compel arbitration of Plaintiffs Viviana Diaz and Jessica Flores's individual PAGA claims and stay Plaintiffs' non-individual PAGA claims is GRANTED.

Defendant Avis Budget Group, Inc. and Avis Budget Car Rental, LLC (collectively the 'Avis Defendants')'s joinder to Aston Carter's motion is GRANTED.

Defendant Ariete Car Rental, Inc. ('Ariete')'s joinder to Aston Carter's motion is GRANTED.

Aston Carter's request for judicial notice is denied as irrelevant, as these trial court minute orders in other actions have no precedential value, and the court could only take judicial notice of their existence.

In light of this determination, the court need not address Plaintiffs' evidentiary objections to the declaration of Michael S. Kun.

Preliminarily, the court notes that Plaintiffs Viviana Diaz and Jessica Flores did not object to the joinders to Aston Carter's motion filed by the Avis Defendants and Ariete, and Plaintiffs addressed the arguments that the arbitration agreements also apply to the Avis Defendants and Ariete. (ROA #22, 25.) The court also notes that Plaintiffs opposed Aston Carter's motion on the grounds that no party in this action is a signatory to the agreement between Plaintiff Diaz and non-party AeroTek, Inc. ('AeroTek'), none of the Defendants can compel Plaintiffs to arbitration under the third-party beneficiary exception or the equitable estoppel doctrine, and Plaintiffs' claims are not arbitrable as Plaintiffs have not brought individual PAGA claims in this action. The court will interpret this as a concession that Plaintiffs received and electronically signed the agreements, the Federal Arbitration Act controls, the relevant arbitration agreements are valid and enforceable, and that the applicable agreements are not procedurally or substantively unconscionable.

Under 'both federal and state law, the threshold question presented by a petition to compel arbitration is whether there is an agreement to arbitrate.' (Long v. Provide Commerce, Inc. (2016) 245 Cal.App.4th 855, 861 (citation omitted).) 'The petitioner bears the burden of proving the existence of a valid arbitration agreement by a preponderance of the evidence, while a party opposing the petition bears the burden of proving by a preponderance of the evidence any fact necessary to its defense.' (Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 842.) However, parties moving to compel arbitration are not required to introduce evidence authenticating the other party's signature until the authenticity of the document is challenged. (See generally Espejo v. So. Cal. Permanente Medical Group (2016) 246 Cal.App.4th 1047 [finding trial court abused its discretion by striking reply declaration establishing Calendar No.: Event ID:  TENTATIVE RULINGS

3022950  17 CASE NUMBER: CASE TITLE:  DIAZ VS AVIS BUDGET GROUP INC [IMAGED]  37-2023-00025846-CU-OE-CTL authenticity].) As the party seeking to compel arbitration, Aston Carter has the burden of proving by a preponderance of the evidence the existence of an arbitration agreement. (Tiri v. Lucky Chances, Inc. (2014) 226 Cal.App.4th 231, 239.) As the parties opposing arbitration, Plaintiffs have the burden of establishing, by a preponderance of the evidence, a defense to the agreements' enforcement. (Id.) Here, Aston Carter has met its initial burden by presenting the agreements bearing the electronic signatures or electronic acknowledgements of each Plaintiff for each agreement (two agreements signed by Plaintiff Diaz and one agreement signed by Plaintiff Flores). (ROA #17, Collum Dec., ¶¶ 13-25, Exs.

4, 28; ROA #47, Golabiewski Dec., ¶¶ 6-7, Exs. 13-16.) The first agreement electronically signed by Plaintiff Diaz on May 10, 2021, was between Plaintiff Diaz and her employer, AeroTek. (ROA #17, Collum Dec., Ex. 4.) Plaintiff Diaz's first agreement covered 'all disputes, claims, complaints, or controversies ('Claims') that I may have against Aerotek, Inc [ sic] and/or any of its subsidiaries, affiliates, officers, directors, employees, agents, and/or any of its clients or customers (collectively and individually the 'Company')... including contract claims; tort claims; discrimination and/or harassment claims; retaliation claims; claims for wages, compensation, penalties or restitution; and any other claim under any federal, state, or local statute, constitution, regulation, rule, ordinance, or common law, arising out of and/or directly or indirectly related to my application for employment with the Company, and/or my employment with the Company, and/or the terms and conditions of my employment with the Company, and/or termination of my employment with the Company.' (Ibid., underlining added.) The agreement electronically signed by Plaintiff Flores on October 14, 2022, was between Plaintiff Flores and her employer, Aston Carter, and contained identical language to Plaintiff Diaz's first agreement. (Id. at Ex. 28.) The second agreement electronically signed by Plaintiff Diaz on February 15, 2023, was between Plaintiff Diaz and her employer, Aston Carter, and contained identical language to the two other agreements. (ROA #47, Golabiewski Dec., Ex. 13.) The parties dispute whether all the Defendants named in this action can rely on the arbitration agreements to compel Plaintiffs to arbitration, given that many of the Defendants are not signatories to the agreements. Aston Carter contends that it (along with the Avis Defendants and Ariete) can invoke the arbitration agreements under the third-party beneficiary exception and/or the equitable estoppel doctrine. Plaintiffs contend Defendants have not provided evidence they are third-party beneficiaries, and the equitable estoppel doctrine does not apply.

'It is well established that a non-signatory beneficiary of an arbitration clause is entitled to require arbitration.' (Harris v. Superior Court (1986) 188 Cal.App.3d 475, 478.) To invoke the third-party beneficiary exception, a party must show the arbitration clause was made expressly for their benefit.

(Ronay Family Limited Partnership v. Tweed (2013) 216 Cal.App.4th 830, 838.) 'It is 'not necessary that the beneficiary be named and identified as an individual. A third party may enforce a contract where he shows that he is a member of a class of persons for whose benefit it was made.' ' (Id. at pp. 838-839.) The doctrine of equitable estoppel is an exception to the general rule that 'only a party to an arbitration agreement may enforce the agreement.' (Felisilda v. FCA US LLC (2020) 53 Cal.App.5th 486, 495.) Under this doctrine, 'a nonsignatory defendant may invoke an arbitration clause to compel a signatory plaintiff to arbitrate its claims when the causes of action against the nonsignatory are 'intimately founded in and intertwined' with the underlying contract obligations.' (Boucher v. Alliance Title Co., Inc. (2005) 127 Cal.App.4th 262, 271.) Moreover, a nonsignatory may invoke arbitration under the equitable estoppel doctrine when a signatory 'attempts to avoid arbitration by suing nonsignatory defendants for claims that are ' 'based on the same facts and are inherently inseparable' ' from arbitrable claims against signatory defendants.' (Metalclad Corp. v. Ventana Env't Organizational P'ship (2003) 109 Cal.App.4th 1705, 1713, citations omitted.) The doctrine of equitable estoppel 'prevents a party from playing fast and loose with its commitment to arbitrate, honoring it when advantageous and circumventing it to gain undue advantage.' (Id. at p. 1714, citations omitted.) Here, Aston Carter may compel Plaintiffs to arbitration as a signatory to Plaintiff Flores's arbitration Calendar No.: Event ID:  TENTATIVE RULINGS

3022950  17 CASE NUMBER: CASE TITLE:  DIAZ VS AVIS BUDGET GROUP INC [IMAGED]  37-2023-00025846-CU-OE-CTL agreement and Plaintiff Diaz's second arbitration agreement. Aston Carter is the same employer with whom each Plaintiff agreed to arbitrate claims arising from their employment relationship with Aston Carter and/or the terms and conditions of that relationship. (ROA #17, Collum Dec., Ex. 28; ROA #47, Golabiewski Dec., Ex. 13.) Aston Carter may also rely on Plaintiff Diaz's first arbitration agreement with non-party AeroTek to compel her arbitration. The first arbitration agreement provides that claims against AeroTek or its 'affiliates' must be submitted to arbitration, demonstrating the agreement was made expressly for the benefit of AeroTek's affiliates. (ROA #17, Collum Dec., Ex. 4.) Aston Carter has provided evidence it is an affiliate of AeroTek and therefore has shown it is a third-party beneficiary under Plaintiff Diaz's first arbitration agreement. (Corp. Code, § 150; ROA #18, Shultis Dec., ¶ 2.) Similarly, Ariete may rely on the agreements to compel Plaintiffs to arbitration as a third-party beneficiary. All three agreements provide that claims against the 'clients' and/or 'customers' of AeroTek or Aston Carter must be submitted to arbitration, demonstrating the agreements were made expressly for the benefit of AeroTek and/or Aston Carter's clients and customers. (ROA #17, Collum Dec., Exs. 4, 28; ROA #47, Golabiewski Dec., Ex. 13.) Aston Carter has provided evidence that Ariete is a client of both AeroTek and Aston Carter, and Plaintiffs were employed to provide services to Ariete. (ROA # 17, Collum Dec., Exs. 10, 16, 34, 40; ROA #18, Shultis Dec., ¶¶ 3-4.) This evidence separates this case from Hernandez v. Meridian Management Services, LLC (2023) 87 Cal.App.5th 1214, 1220-1222, where the nonsignatories to the arbitration agreement failed to show they were third-party beneficiaries under the agreement as the non-party signatory's 'agents.' Additionally, the court concludes that Ariete and the Avis Defendants may rely on the arbitration agreements under the equitable estoppel doctrine. Defendants' position that equitable estoppel applies is based on Plaintiffs' allegations that Plaintiffs entered into a joint employment relationship with Aston Carter, the Avis Defendants, and Ariete. Here, the Complaint makes the same allegations against all named Defendants, who are all allegedly Plaintiffs Diaz and Flores's employers. (ROA #1, Complaint, ¶¶ 3, 7-8, 11-12, 16.) Plaintiffs allege that Defendants failed to pay their current and former employees certain wages for missed meal periods and missed rest breaks, failed to pay minimum wage, failed to pay overtime compensation, failed to provide accurate wage statements, failed to reimburse business expenses, and failed to pay wages upon separation, thereby rendering them aggrieved employees. (Id.

at ¶¶ 11-14, 16.) These allegations are made without separate factual distinctions as to each Defendant, and these causes of action are covered by the scope of the arbitration agreements. (See ROA #17, Collum Dec., Exs. 4, 28; ROA #47, Golabiewski Dec., Ex. 13.) Thus, the substance of Plaintiffs' causes of action are inseparable and so intertwined with the arbitration agreements that it would be unfair for Plaintiffs to avoid arbitration.

Finally, the court rejects Plaintiffs' argument that they have no individual PAGA claim to send to arbitration (on the grounds they bring this case 'in a Representative capacity only') and therefore Aston Carter improperly moves to compel individual claims to arbitration that are not before the court. Plaintiffs' attempt to distance themselves from their 'individual' PAGA claim is contrary to the plain language of the PAGA statute. Under PAGA, violations of the Labor Code triggering civil penalties 'may, as an alternative, be recovered through a civil action by an aggrieved employee on behalf of himself or herself and other current or former employees pursuant to the procedures specified in Section 2699.3.' (Lab.

Code, § 2699, subd. (a), underlining added.) Although Plaintiffs rely on Leshane v. Tracy VW, Inc. (2022) 78 Cal.App.5th 159, that case is distinguishable. Leshane predated Viking River and did not address the distinction between individual and non-individual PAGA claims. Moreover, the plaintiffs in Leshane dismissed their individual non-PAGA claims brought on behalf of themselves as former employees under the Labor Code and proceeded only with their PAGA claims for civil penalties, but the defendant sought to compel arbitration of the individual claims the Plaintiffs dismissed. (Leshane, supra, 78 Cal.App.5th at pp. 162-163, 166.) Given the dismissal of Plaintiffs' individual non-PAGA claims in Leshane, 'any question pertaining to plaintiffs' individual claims under the Labor Code is not 'between parties' and not a controversy.' (Id. at p. 166.) In contrast, Plaintiffs in this action have not brought any non-PAGA claims on their own behalf.

Moreover, as the court sees it, the only way to harmonize the United States Supreme Court's decision in Calendar No.: Event ID:  TENTATIVE RULINGS

3022950  17 CASE NUMBER: CASE TITLE:  DIAZ VS AVIS BUDGET GROUP INC [IMAGED]  37-2023-00025846-CU-OE-CTL Viking River with the California Supreme Court's decision in Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, is to interpret 'individual PAGA claim' to refer to the potential civil penalties connected to the specific Labor Code violations suffered by an individual aggrieved employee. However, these civil penalties are not 'damages' in the conventional sense, considering PAGA's qui tam nature. The court therefore does not believe a PAGA plaintiff can do what Plaintiffs are attempting to do in this case: unilaterally waive the right to such penalties in connection with alleged violations of the Labor Code by Defendants specific to them. The court draws this conclusion because it believes the right to such penalties is in fact held by the State, through the LWDA, and not by Plaintiffs.

Accordingly, Aston Carter's motion to compel arbitration of Plaintiffs' individual PAGA claims is GRANTED. The joinders to the motion by the Avis Defendants and Ariete are GRANTED.

Litigation in this case as to the non-individual PAGA claims is STAYED pending completion of arbitration.

The court will vacate the Civil Case Management Conference and set a status conference for October 11, 2024, at 10:45 a.m.

The minute order is the order of the court.

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