Judge: Michael P. Linfield, Case: 23STCV04016, Date: 2024-01-12 Tentative Ruling

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Case Number: 23STCV04016    Hearing Date: January 12, 2024    Dept: 34

SUBJECT:        Motion to Compel Arbitration and Stay Action

Moving Party: Defendant Lhuillier, Inc.

Resp. Party:    Plaintiff Diana Smyth

The Second Motion to Compel is DENIED. 

PRELIMINARY COMMENTS:

As indicated below in section I, the Court is denying Defendant’s request to take judicial notice of an order in another case Smyth v. Monique Lhuillier, Inc., Case No. 23STCV02607, that was also filed the Los Angeles Superior Court. Given that both of these cases involve the same parties, the Court wonders whether the attorneys have complied with the requirement of the California Rules of Court by filing a Notice of Related Case.

BACKGROUND:

        On February 23, 2023, Plaintiff Diana Smyth filed her Complaint against Defendant Monique Lhuillier, Inc. on a sole cause of action under the Labor Code Private Attorneys General Act of 2004 (“PAGA”).

On April 21, 2023, Defendant filed its Answer to the Complaint.

On June 30, 2023, Defendant filed its Motion to Compel Arbitration and Dismiss Non-Individual PAGA Claims (“First Motion to Compel”).

On July 18, 2023, Defendant filed its Notice of Withdrawal, by which Defendant withdrew its First Motion to Compel.

On December 14, 2023, Defendant filed its Motion to Compel Arbitration and Stay Action (“Second Motion to Compel”). In support of its Second Motion to Compel, Defendant concurrently filed: (1) Declaration of Graham G. Lambert; (2) Declaration of Sheryl Sadis; (3) Request for Judicial Notice; and (4) Proposed Order.

On December 28, 2023, Plaintiff filed her Opposition to the Second Motion to Compel. In support of her Opposition, Plaintiff concurrently filed Declaration of Zoe Yuzna.

On January 5, 2024, Defendant filed its Reply regarding the Second Motion to Compel.

ANALYSIS:

I.          Request for Judicial Notice

Defendant requests that the Court take judicial notice of an order granting a motion to compel arbitration in another case (Smyth v. Monique Lhuillier, Inc., Case No. 23STCV02607, in Superior Court of California, County of Los Angeles).

        The Court DENIES judicial notice to this item. “A written trial court ruling in another case has no precedential value in this court”. (Budrow v. Dave & Buster’s of Cal. (2009) 171 Cal.App.4th 875, 888, citations omitted; Bolanos v. Super. Ct. (2008) 169 Cal.App.4th 744, 761; Santa Ana Hosp. Med. Ctr. v. Belshé (1997) 56 Cal.App.4th 819, 831, citation omitted.)

II.       Legal Standard

“A written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract.” (Code Civ. Proc., § 1281.)

“On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate that controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists [unless it makes certain determinations].” (Code Civ. Proc., § 1281.2.)

“Under both federal and state law, arbitration agreements are valid and enforceable, unless they are revocable for reasons under state law that would render any contract revocable. . . . Reasons that would render any contract revocable under state law include fraud, duress, and unconscionability.” (Tiri v. Lucky Chances, Inc. (2014) 226 Cal.App.4th 231, 239, citations omitted.)

“The party seeking to compel arbitration bears the burden of proving by a preponderance of the evidence the existence of an arbitration agreement.¿The party opposing the petition bears the burden of establishing a defense to the agreement's enforcement by a preponderance of the evidence.¿In determining whether there is a duty to arbitrate, the trial court must, at least to some extent, examine and construe the agreement.” (Tiri, supra, at p. 239.)

III.     Discussion

A.      The Arbitration Agreements

Defendant submits two five-page documents, both titled “Arbitration Agreement” (Decl. Sadis, Exh. 1, p. 1 and Exh. 2, p.1.) One of these documents is labelled “NY Form” and the other is labelled “CA Form.” (Id. at Exh. 1, p. 2 and Exh 2, p. 2.)

Both copies of the Arbitration Agreement have Plaintiff’s signature. (Id. at Exh. 1, p. 6 and Exh. 2, p. 7.) However, neither Arbitration Agreement has the signature of Defendant’s representative, despite a section being provided on both Arbitration Agreements for such signature. (Ibid.) Sheryl Sadis, the Controller for Defendant, has not declared that Defendant subsequently signed the Arbitration Agreement.

Based on the scant evidence submitted, the Court is unable to determine that there is in fact an enforceable agreement agreed to by both parties. Thus, Defendant has not met its initial burden.

The Motion to Compel Arbitration is DENIED.

B.      Waiver

Defendant brings up the issue of waiver, arguing that Defendant has not waived its right to compel arbitration. (Second Motion to Compel, p. 18:3.)

The Court disagrees with this argument.

“Although a written agreement to arbitrate an existing or future dispute is generally enforceable, a petition to compel arbitration will be denied when the right has been waived by the proponent's failure to properly and timely assert it. This may happen in a variety of contexts, ranging from situations in which the proponent of arbitration has previously taken steps inconsistent with an intent to invoke arbitration, to instances in which the proponent has unreasonably delayed in undertaking the procedure. There is no single determinative test of waiver, and the question for the trial court is one of fact.” (Guess?, Inc. v. Super. Ct. (2000) 79 Cal.App.4th 553, 557, citations omitted.)

In Guess?, Inc., the Court of Appeal affirmed a trial court that found a defendant waived its right to compel arbitration when it filed an answer, participated in discovery, and then three months later moved to compel arbitration. (Guess?, Inc., supra, at pp. 555, 559.)

On February 23, 2023, Plaintiff filed her Complaint in this matter. On June 30, 2023 — more than four months after the Complaint was filed and more than two months after the Answer was filed — Defendant filed its First Motion to Compel. After withdrawing the First Motion to Compel on July 18, 2023, Defendant then waited until December 14, 2023, nearly ten months after the Complaint was filed,  to file its Second Motion to Compel. Trial in this matter is scheduled for April 30, 2024 – just 3.5 months from this hearing.

The Court finds that Defendant has waived its right to compel arbitration due to the lengthy and unreasonable delay in filing this motion to compel. The Court assumes that the first Motion to Compel Arbitration was withdrawn because of the pending decision in Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104.  Even if that were true, there is no reason why Defendant could not have filed a renewed motion to compel arbitration based upon a change in the law in the weeks after the decision came down in Adolph. Instead, Defendant chose to wait months before filing this motion; discovery cut-off will soon be upon us, and the Parties should already be preparing for any final pre-trial motions and trial.

Even were the Court to find that Defendant had met its burden in demonstrating that there is an enforceable arbitration agreement, the Court would find that Defendant had waived its right to enforce that agreement.

C.      Arbitrability of Representative, Non-Individual PAGA Claims

The Parties submit arguments on issues involving the arbitrability of representative, non-individual PAGA claims. Plaintiff argues that she is now only pursuing representative, non-individual PAGA claims; Defendant argues that Plaintiff has not actually dismissed her individual PAGA claim or amended her pleading to make that clear. (Opposition, pp. 3:10, 4:23–26; Reply, pp. 3:9–10, 4:3–4.)

Unlike in Viking River Cruises, Inc. v. Moriana (2022) 142 S. Ct. 1906 and Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, Plaintiff’s PAGA claims have been brought in a completely different case from all of her other claims. The latter claims were compelled to arbitration, but none of the PAGA claims have been compelled to arbitration. Moreover, the latter claims are not in a case that has either been related to this case or reached a final adjudication on the merits, meaning the arbitration of those other claims have no impact on the claims in this matter.

For the reasons discussed above — i.e., failure to demonstrate that there is an enforceable agreement and waiver — none of the PAGA claims in this case will be compelled to arbitration. Therefore, it is not necessary for Plaintiff to dismiss her individual PAGA claim in order to proceed with the representative PAGA claims in this matter.

To the extent Plaintiff does wish to dismiss her individual PAGA claim at the hearing on the Second Motion to Compel, she may do so. But it is not required for this matter to stay before the Court.

IV.      Conclusion

The Second Motion to Compel is DENIED.