Judge: Stephen P. Pfahler, Case: 23STCV08919, Date: 2025-06-09 Tentative Ruling

Case Number: 23STCV08919    Hearing Date: June 9, 2025    Dept: 68

Dept. 68

Date: 6-9-25

Case #23STCV08919

Trial Date: Not Set

ARBITRATION

MOVING PARTY: Defendant, Simplified Transport LLC

RESPONDING PARTY: Plaintiff, Dallas Parker

RELIEF REQUESTED

Amended Petition to Compel Arbitration

SUMMARY OF ACTION

On April 21, 2023, and October 26, 2023, Plaintiff Dallas Parker filed a wage and hour violations and unfair business practices complaint and first amended complaint against Defendants Simplified Transport LLC, A1 Dedicated Transport LLC, and Ashish Wahi.

Defaults were entered against all three defendants on February 15, 2024. The court entered judgment in the amount of $50,962.79 against all defendants on May 3, 2024.

On June 27, 2024, the court entered the stipulation to set aside the defaults and judgment.

RULING: Denied.

Defendant Simplified Transport LLC filed an “amended petition” to compel arbitration. Plaintiff in opposition challenges enforceability of the arbitration agreement. Defendant in a one-day late reply maintains all employer related entities are covered by the arbitration agreement. Whether FAA or California law, the agreement enforces the right to seek arbitration.

“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 thereto refuses to arbitrate such 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 determines that: (a) The right to compel arbitration has been waived by the petitioner; or (b) Grounds exist for the revocation of the agreement.” (Code Civ. Proc., § 1281.2.)

The law creates a general presumption in favor of arbitration. In a motion to compel arbitration, the moving party must prove by a preponderance of evidence the existence of the arbitration agreement and that the dispute is covered by the agreement. The burden then shifts to the resisting party to prove by a preponderance of evidence a ground for denial (e.g., fraud, unconscionability, etc.). (Rosenthal v. Great Western Fin'l Securities Corp. (1996) 14 Cal.4th 394, 413-414; Hotels Nevada v. L.A. Pacific Ctr., Inc. (2006) 144 Cal.App.4th 754, 758.) Any challenges to the formation of the arbitration agreement should be considered before any order sending the parties to arbitration. The trier of fact weighs all evidence, including affidavits, declarations, documents, and, if applicable, oral testimony to determine whether the action goes to arbitration. (Hotels Nevada v. L.A. Pacific Ctr., Inc., supra, 144 Cal.App.4th at p. 758.)

The agreement requires arbitration for any claims arising from covered disputes. Federal Arbitration Act (FAA) governs the rules for conducting arbitration. While the FAA governs the rules for conducting arbitration, barring citation to a case precluding California law, motions to compel arbitration are still governed by California Arbitration Act regulations. (See Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, 1119; Viking River Cruises, Inc. v. Moriana (2022) 142 S.Ct. 1906; Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior University (1989) 489 U.S. 468, 477–479; Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337, 346.) “[T]he existence of a valid agreement to arbitrate is determined by reference to state law principles regarding the formation, revocation and enforceability of contracts generally. (Kinney v. United HealthCare Services, Inc. (1999) 70 Cal.App.4th 1322, 1327–1328; see Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236; Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 842.)

The court interprets the arbitration clause like any other contract, including determination of the intent of the parties and ambiguities. (Gravillis v. Coldwell Banker Residential Brokerage Co. (2006) 143 Cal.App.4th 761, 772.) “‘A contract must be so interpreted as to give effect to the mutual intention of the parties as it existed at the time of contracting, so far as the same is ascertainable and lawful.’ (Civ. Code, § 1636.) ‘The language of a contract is to govern its interpretation, if the language is clear and explicit, and does not involve an absurdity.’ (Civ. Code, § 1638.) ‘When a contract is reduced to writing, the intention of the parties is to be ascertained from the writing alone, if possible; subject, however, to the other provisions of this Title.” (Civ. Code, § 1639.) “The whole of a contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the other.’ (Civ. Code, § 1641.) ‘A contract must receive such an interpretation as will make it lawful, operative, definite, reasonable, and capable of being carried into effect, if it can be done without violating the intention of the parties.’ (Civ. Code, § 1643.) ‘The words of a contract are to be understood in their ordinary and popular sense, rather than according to their strict legal meaning; unless used by the parties in a technical sense, or unless a special meaning is given to them by usage, in which case the latter must be followed.’ (Civ. Code, § 1644.) ‘However broad may be the terms of a contract, it extends only to those things concerning which it appears that the parties intended to contract.’ (Civ. Code, § 1648.) ‘Repugnancy in a contract must be reconciled, if possible, by such an interpretation as will give some effect to the repugnant clauses, subordinate to the general intent and purpose of the whole contract.’ (Civ. Code, § 1652.) ‘Stipulations which are necessary to make a contract reasonable, or conformable to usage, are implied, in respect to matters concerning which the contract manifests no contrary intention.’ (Civ. Code, § 1655.)” (Siligo v. Castellucci (1994) 21 Cal.App.4th 873, 880–881.)

“A contract term should not be construed to render some of its provisions meaningless or irrelevant.” (Estate of Petersen (1994) 28 Cal.App.4th 1742, 1754 (footnote 4).) “A well-settled maxim states the general rule that ambiguities in a form contract are resolved against the drafter. (Citations.) But that is a general rule; it does not operate to the exclusion of all other rules of contract interpretation. It is used when none of the canons of construction succeed in dispelling the uncertainty.” (Oceanside 84, Ltd. v. Fidelity Federal Bank (1997) 56 Cal.App.4th 1441, 1448.)

The “amended petition” consists of the introduction of additional petitioner, Ashish Wahi, and maintains “Simplified” is “affiliated” with Simplified Driver Staffing LLC, with offices throughout California. Petitioner(s) further represent both Simplified entities engage in “interstate commerce within the meaning of the Federal Arbitration Act” (FAA). Plaintiff was employed by “Simplified” (Transport LLC) from October 25, 2021 until October 2022. Plaintiff later applied for a position with Simplified Drive Staffing LLC, was apparently hired, and purportedly executed an arbitration agreement on April 13, 2023. Petitioner relies on the language of the arbitration agreement regarding “any parent, subsidiary, affiliated and/or related entities, and its and their current and former directors, officers, supervisors, employees, representatives, and agents.” Petitioner maintains all claims fall within the April 13, 2023, agreement. Plaintiff filed the complaint eight days later on April 21, 2023.

The existence of the agreement remains undisputed notwithstanding the declaration of Plaintiff defining the relevant employment period from “around November 2021” to “around October 2022.”  [See Declaration of Braulio Escobedo.]

The court relies on the operative first amended complaint. The first amended complaint alleges Plaintiff began working for Simplified (collectively identified to represent A1 Dedicated Transport LLC, Simplified Transport LLC and Ashis Wahi) as a “driver on or around 2021 or 2022.” Employment “ended on or around October 2022.” [First Amend. Comp., ¶¶ 9, 11.] Nothing in the operative complaint addresses any new employment in 2023. The first part of the opposition in fact challenges the existence of any agreement with Defendants to arbitrate any claims based on the purported April 13, 2023, agreement.

Defendants apparently maintain that the term regarding all employment claims includes pre-existing claims before the execution of any agreement. The position presumably relies on the terms of the agreement, which states in relevant part: “Except as otherwise permitted by the MAP, I voluntarily agree to submit to final and binding individual arbitration any and all claims and disputes related in any way to my employment or the termination of my employment. My agreement to arbitrate applies to disputes that are already pending or have not yet been asserted, whether they exist now or arise in the future.” Defendants seek to link all claims under the general binding relationship between the Defendant entities: “The MAP applies to all Company employees, regardless of length of service or status, and covers all disputes relating to or arising out of or in connection with employment at the Company, or with any Company client or joint employer, or the termination of that employment, whether those disputes already exist today or arise in the future.”

The language presents an arguable position for retroactive application notwithstanding the new agreement with different employers. (Salgado v. Carrows Restaurants, Inc. (2019) 33 Cal.App.5th 356, 361-362.) Nevertheless, the court cannot disregard the change in employing entities simply based on the arbitration agreement language without actual, specific address from Defendants as to the intended agreement of the parties regarding retroactive application of the arbitration clause at the time of second employment term. (Garcia v. Expert Staffing West (2021) 73 Cal.App.5th 408, 414.) Even if Defendants presented factual and legal support, the court also finds additional unaddressed concern with a finding of binding relationship amongst the parties, as opposed to a catchall effort to atone for any potential oversights. (Id. at pp. 415-416.) Because the positions lack specific legal address by either party, the court declines to address unmade arguments on behalf of the parties. (Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784–785 [“When [a party] fails to raise a point or asserts it but fails to support it with reasoned argument and citations to authority, we treat the point as waived”].) Defendants’ burden remains to establish application, and the court finds insufficient support. (Rosenthal v. Great Western Fin'l Securities Corp., supra, 14 Cal.4th at pp. 413-414.) The motion is DENIED on this basis.

Even if Defendant established a valid agreement, the court finds the FAA inapplicable. Defendant cites to no specific provision in the agreement, but maintains the FAA applies due to engagement of interstate commerce. [Petition, ¶¶ 2, 8.] Again, the position lacks any evidentiary support for the basis of this representation. (Hoover v. American Income Life Ins. Co. (2012) 206 Cal.App.4th 1193, 1207.) The position in the reply regarding Plaintiff failing to establish interstate work misstates the requirement by the moving party to establish FAA applicability.

Again, even if evidence was presented, Plaintiff maintains an exemption due to the engagement of interstate transportation work. [See Parker Decl., ¶ 5.] California law finds workers engaged in facilitating interstate commerce exempt whether at a fixed location or as a local delivery driver exempted from FAA preemption. (Betancourt v. Transportation Brokerage Specialists, Inc. (2021) 62 Cal.App.5th 552, 559-561; Nieto v. Fresno Beverage Co., Inc. (2019) 33 Cal.App.5th 274, 284-285.) The court finds the lack of any evidence in the petition and declaration of Plaintiff sufficiently establishes non-exempt status, thereby precluding FAA application. The challenge in the reply regarding a purported admission of non-interstate transportation work lacks any actual evidentiary citation or support. Paragraph three (3) of the Parker Declaration only attests to being laid off in October 2022. The motion is therefore DENIED as to FAA arbitration on this basis.

Given the complaint is therefore subject to California arbitration rules, Plaintiff challenges the inability to compel arbitration as to certain wage and hour claims. “Actions to enforce the provisions of this article for the collection of due and unpaid wages claimed by an individual may be maintained without regard to the existence of any private agreement to arbitrate.” (Lab. Code, § 229; Ware v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1972) 24 Cal.App.3d 35, 45; see Kirby v. Immoos Fire Protection, Inc. (2012) 53 Cal.4th 1244, 1256-1257.) State law exclusions are preempted where Federal Arbitration Act (FAA) preemption occurs. (Carbajal v. CWPSC, Inc. (2016) 245 Cal.App.4th 227, 238; Hoover v. American Income Life Ins. Co., supra, 206 Cal.App.4th at pp. 1207-1208; see Lane v. Francis Capital Management LLC (2014) 224 Cal.App.4th 676, 68-688.)

Defendant concedes to this section of California law and offers in reply that less than “most” of the wage and hour claims are exempt from arbitration. Thus, the court should still compel arbitration as to the non-exempt claims. The court declines to determine which of the claims fall under the arbitration exemption on behalf of Defendants. (Badie v. Bank of America, supra, 67 Cal.App.4th at pp. 784–785.)

As a matter of policy, the court avoids potential piecemeal adjudication of cases. The court requires all parties participate in arbitration of all claims or the action remains with the court. Thus, in conjunction with the wage and hour claims, especially with the concession of Defendant that at least some of the otherwise less than “most” of the wage and hour claims are exempt from arbitration, the court finds potential for overlapping piecemeal adjudication of the wage and hour claims.

“On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such 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 determines that: … (c) A party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact...” (Code Civ. Proc., § 1281.2.) The right of a trial court to refuse arbitration on the possibility of conflicting rulings remains an upheld statutory rule. (Whaley v. Sony Computer Entertainment America, Inc. (2004) 121 Cal.App.4th 479, 485-486; Henry v. Alcove Investment, Inc. (1991) 233 Cal.App.3d 94, 101-102.) Because some of the causes of action indisputably remain with the court and the court declines to make the determination on behalf of Defendants as to distinctions between the bases of the wage and hour claims, including a determination of exemption on an individual basis, the court concludes the potential likelihood of potentially conflicting rulings between the court and any arbitration order compels DENIAL of the motion on this basis as well.

The court declines to consider the new argument in reply regarding the right of the arbitrator to consider the right to resolve any arbitrability issues. Regardless, because the court finds FAA not established, the basis of the position lacks support either way.

In summary, the motion is denied in its entirety for all of the reasons addressed. This order is appealable. (Code Civ. Proc., § 1294, subd. (a).)

The court will concurrently conduct the case management conference.

Moving Defendant to give notice.