Judge Virginia Keeny, Case Number: 21STCV34989, Date: 2025-04-07 Tentative Ruling

Judge: Virginia Keeny, Case: 21STCV34989, Date: 2025-04-07 Tentative Ruling

Case Number: 21STCV34989 Hearing Date: April 7, 2025 Dept: 45

ROY SHAULI, ON BEHALF OF HIMSELF AND CURRENT AND FORMER AGGRIEVED STORE MANAGERS, ASSISTANT STORE MANAGERS, AND STORE MANAGER V. AI CALIFORNIA LLC

petition to confirm arbitration award/vacate the arbitrator’s award

Date of Hearing: April 7, 2025 Trial Date: None set

Department: 45 Case No.: 21STCV34989

Moving Party: Defendant AI California, LLC

Responding Party: Plaintiff Roy Shauli

BACKGROUND

This is a PAGA action. Plaintiff Roy Shauli, on behalf of himself and current and former aggrieved store managers, assistant store managers, and store managers-in-training, filed this action on September 22, 2021 against defendant AI California, LLC. The Complaint alleges one PAGA claim based on wage-and-hour violations. (Compl., ¶¶ 1, 10-11.)

In September 2022, Defendant sought to compel arbitration, which Plaintiff opposed. The court granted the motion, in part, as to Plaintiff’s individual PAGA claim on March 16, 2023. On December 12, 2024, Defendant filed a notice of issuance of arbitration award. The arbitrator awarded the final award in favor of Defendant. On February 5, 2025, Defendant filed a Petition to Confirm the Arbitration Award. Plaintiff filed an opposition to the Petition then filed a separate motion to vacate the arbitrator’s award.

[Tentative] Ruling

Defendant AI California, LLC’s Petition to Confirm Arbitration Award is GRANTED; Plaintiff’s Motion to Vacate the Arbitrator’s Award is DENIED.

DISCUSSION

Defendant seeks to confirm the arbitration award entered by the Arbitrator, which found all claims resolved in Defendant’s favor and against Plaintiff. Plaintiff opposes the petition and seeks to vacate the Arbitrator’s Award.

Until an arbitration award is confirmed by court judgment, it has only the effect of a contract between the parties. (CCP § 1287.6.) If a petition or response requesting confirmation is duly filed and served, the court must confirm the award as made, unless it corrects or vacates the award or dismisses the proceeding. (CCP § 1286; see Horn v. Gurewitz (1968) 261 Cal.App.2d 255, 258; Pacific Law Group: U.S.A. v. Gibson (1992) 6 Cal.App.4th 577, 580.) Statutes set forth specific grounds upon which an arbitrator’s award may be vacated (CCP § 1286.2). Except on these grounds, arbitration awards are immune from judicial review in proceedings to challenge or enforce the award. (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 12–13 (Moncharsh).) Thus, courts will not review the sufficiency of the evidence to support the award. (Morris v. Zuckerman (1968) 69 Cal.2d 686, 691.) Nor will courts pass upon the validity of the arbitrator’s reasoning. (Ibid.) The court simply may not substitute its judgment for that of the arbitrator. (Ibid.) Further, errors of fact or law committed by the arbitrator, no matter how egregious, are not grounds for challenging the arbitrator’s award under California law. (Moncharsh, supra, 3 Cal.4th at p. 11.)

Plaintiff argues the Arbitrator committed several errors of law and legal reasoning in his arbitration award. Plaintiff and Defendant expressly agreed in their arbitration agreement that “[t]he arbitrator shall not have the power to commit errors of law or legal reasoning, and the award may be vacated or corrected on appeal to a court of competent jurisdiction for any such error.” (COE V.1, Ex.1, pg. 2.) Because Plaintiff maintains there were several errors, plaintiff contends the court should issue an order vacating the award. (See Cable Connection, Inc. v. DIRECTV, Inc. (2008) 44 Cal.4th 1334, 1340 holding that similar language requiring an arbitrator not to commit errors of law or legal reasoning may be enforceable.) Specifically, Plaintiff maintains the Arbitrator committed an error of law and legal reasoning in finding that Plaintiff failed to establish that he worked off-the-clock while training, Plaintiff failed to exhaust his administrative remedies, the failure to pay was excused due to an overpayment of regular hours in a subsequent pay period, Plaintiff’s derivative claims failed and the Arbitrator exceeded his authority by ignoring Plaintiff’s arguments.

Defendant first argues the opposition to the petition should be denied as untimely.[1] Code of Civil Procedure section 1286.4 provides in pertinent part that “[t]he court may not vacate an award unless: (a) A petition or response requesting that the award be vacated has been duly served or filed … .” Additionally, Section 1290.6 requires that such a response be served and filed within 10 days of service of the petition, unless the timeframe is extended by agreement of the parties or “for good cause, by order of the court.” Thus “once the prevailing party in an arbitration files a petition to confirm an arbitration award, the 10-day deadline in section 1290.6 controls when a losing party must respond.” (Valencia v. Mendoza (2024) 103 Cal.App.5th 427, 443.)

Defendant argues the opposition was not properly served on Defendant’s counsel and therefore, is invalid. Specifically, the opposition was served on another attorney who has not made an appearance in this action and once discovered of their mistake, Plaintiff served counsel two weeks past the deadline.

Plaintiff notes their mistake and that the attorney who was properly served, was listed as counsel of record for Defendant on JAMS Access. (Szmanda Decl. ¶4.) Because plaintiff served at least one attorney listed on JAMS Access for the defendant, the court finds it would not in the interest of justice to ignore plaintiff’s response.

Defendant next argues the award is not subject to review for errors of law or legal reasoning on the grounds the FAA controls and therefore, Plaintiff cannot seek judicial review based on purported legal errors. Specifically, Defendant maintains when an arbitration agreement provides that “interpretation” or “enforcement” shall be governed by the FAA, the FAA precludes review of an award for purported legal errors, regardless of the language in the arbitration agreement. (See, e.g., Christensen v. Smith (2009) 171 Cal. App. 4th 931, 937.) In Christensen, the court found because the arbitration agreement provided that the interpretation of the agreement shall be governed by the FAA and the FAA does not permit parties to contract for judicial review for legal error, the trial court could not review the award for legal error. Like the provision in Christensen, the arbitration agreement here provides “interpretation and enforcement of this Agreement shall be governed by the Federal Arbitration Act.” (COE V.1, Ex.1, pg. 2.)

Because the parties agreed the Federal Arbitration Act would govern and the FAA does not allow for an expanded scope of review, the court declines to review the award for legal error.