Judge Peter Wilson, Case 2023-01320258 2023-08-10 Tentative Ruling

Judge: Peter Wilson, Case: 2023-01320258, Date: 2023-08-10 Tentative Ruling

Defendant Islands Restaurants, L.P.’s motion to compel arbitration is DENIED, for the reasons which follow.

Legal Standard

Both the Federal Arbitration Act (“FAA”) and the California Arbitration Act (“CAA”) require the existence of a valid Arbitration Agreement, before arbitration can be compelled. (9 U.S.C. § 2; CCP. § 1281.2.)

"The petitioner bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence, and a party opposing the petition bears the burden of proving by a preponderance of the evidence any fact necessary to its defense.” (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4^th 951, 972; accord Green Tree Financial Corp.-Alabama v. Randolph (2000) 531 U.S. 79, 91-92.)

“In California, ‘[g]eneral principles of contract law determine whether the parties have entered a binding agreement to arbitrate.’” (Serafin v. Balco Properties Ltd., LLC (2015) 235 Cal.App.4th 165, 173.) “An essential element of any contract is the consent of the parties, or mutual assent.” (Id.) “Further, the consent of the parties to a contract must be communicated by each party to the other.” (Id.) “Mutual assent is determined under an objective standard applied to the outward manifestations or expressions of the parties, i.e., the reasonable meaning of their words and acts, and not their unexpressed intentions or understandings.” (Id.) “A contract must be interpreted to give effect to the mutual, expressed intention of the parties. Where the parties have reduced their agreement to writing, their mutual intention is to be determined, whenever possible, from the language of the writing alone.” (See Ben-Zvi v. Edmar Co. (1995) 40 Cal.App.4th 468, 473).

Requests for Judicial Notice

Defendant’s request for judicial notice (Ex. C) is GRANTED. (Cal. Evid. Code § 452.)

Plaintiff’s request for judicial notice (Exs. 1-2) is GRANTED. (Cal. Evid. Code § 452.)

Merits

The parties dispute the threshold issue, i.e., whether a valid agreement to arbitrate exists.

To meet its burden, Defendant offers the Declaration of Reiko Matsumoto, Vice-President, Human Capital, for Islands Restaurants, L.P. (ROA 16.) While Ms. Matsumoto explains the employee onboarding process, she at no time purports to have personal knowledge concerning Plaintiff's review and signing of the various documents presented during this process. Nevertheless, Plaintiff does not dispute his review and signature of the various documents, including the arbitration agreement. Instead, as he correctly points out, the arbitration agreement relied upon by Defendant, Exhibit A to Ms. Matsumoto's declaration, expressly states that Plaintiff both opts into the agreement, and opts out of the agreement.

Defendant addresses this patent ambiguity by urging that the election to opt in somehow ends the inquiry. In Reply, Defendant argues as follows:

“In deciding whether an agreement to arbitrate exists, the Court need only look at the agreement’s language established the parties’ mutual assent to submit all employment-related disputes to arbitration. There is no dispute that the parties intended to submit to any dispute between them to private arbitration. Both parties signed the signature block at the end of the arbitration agreement and the arbitration agreement is clear that both parties were agreeing to submit the disputes to arbitration. Plaintiff was also given thirty days after the signing of the agreement to revoke his acceptance, but he did not do so.” Reply 2:8-14.

Looking at the agreement’s language, it is of course not clear that Plaintiff agreed to arbitration when, immediately after opting in, he opted out. Indeed, there appear to be only two possible interpretations. Either it is hopelessly ambiguous whether Plaintiff agreed to arbitrate, or the ambiguity is resolved by concluding that having opted in, Plaintiff opted out as the agreement permitted him to do. In either event, no enforceable agreement to arbitrate exists.

Defendant’s reliance on Martinez v. BaronHR, Inc., (2020) 51 Cal.App.5th 962 does not assist it. That case did not concern a contradictory election to both agree to arbitrate and refuse to arbitrate. Instead, because the parties in Martinez signed the agreement, which by it express terms bound them to arbitration, their mutual failure to also initial a jury waiver provision contained therein did not preclude the court from finding a mutual agreement to arbitrate. (Id. at 970.)

Accordingly, the Court finds Defendant has failed to prove the existence of a valid agreement to arbitrate between Defendant and Plaintiff.

Exclusive Concurrent Jurisdiction

Defendant seeks a stay of the case based on exclusive concurrent jurisdiction. Specifically, Defendant asserts the doctrine should be applied to stay this action based on two cases, (1) Juan Carlos Alejo v. Islands Restaurants, LLC et al., and (2) Robert Thompson v. Islands Restaurants, LP.

The Court disagrees.

Under the doctrine 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 Ct. of Contra Costa Cnty. (2022) 78 Cal. App. 5th 245, 255.) “The rule is based upon the public policies of avoiding conflicts that might arise between courts if they were free to make contradictory decisions or awards relating to the same controversy and preventing vexatious litigation and multiplicity of suits.” (Id.) “If the court exercising original jurisdiction has the power to bring before it all the necessary parties, the fact that the parties in the second action are not identical does not preclude application of the rule.” (Id.) “Moreover, the remedies sought in the separate actions need not be precisely the same so long as the court exercising original jurisdiction has the power to litigate all the issues and grant all the relief to which any of the parties might be entitled under the pleadings.” (Id.)

While it appears the Thompson case was filed prior to the instant action (ROA 10), Defendant has failed to present evidence of the claims or issues in that case. Defendant’s conclusory statement that “the allegedly aggrieved employees in the instant matter are all included in the set of employees represented in the earlier filed lawsuits, and the theories of liability pursued by the plaintiffs of each action are virtually identical” is insufficient.

Plaintiff provided the Complaint in the Alejo matter and it appears to have been filed prior to the instant action. (Plaintiff’s RJN Ex. 1.) However, it does not include a PAGA claim and Plaintiff has provided proof the individual claims in that action have been ordered to arbitration. (Id. Ex. 2.)

Under the circumstances, while in general there may be "wage and hour" violations at issue in all three cases, the Court is not satisfied that the issues presented in each are such that the doctrine of exclusive concurrent jurisdiction applies here. If the parties believe the cases should be tried together, to avoid duplication of effort or cost, or for any other reason, they of course have other remedies to seek that result.

Defendant is ordered to give notice.