This Is Not How You Get to Arbitration

Garcia v. Haralambos Bev. Co., No. B296923 (D2d5 Jan 4, 2020)  

At the time this employment class action filed, Defendant knew that it had a policy requiring employees to sign arbitration agreements, we well as a checklist indicating that the individual Plaintiffs had so signed, but did not believe it had the signed agreement itself. Litigation proceeded apace, including a couple CMCs, some discovery, some discovery disputes. 

About two years into the case, Defendant—which claimed to have located a signed arbitration agreement—moved to compel. But the trial court found, and the Court of Appeal agrees, that Defendant waited too long. Moreover, Defendant participated in all kinds of litigation activity that is inconsistent with a right to arbitrate. That activity continued even after the signed agreement had been located. So the trial court was correct to determine that Defendant waived any right to arbitrate.

Affirmed.

Harley Dealer Can't Ride Free (With or Without Being Hassled by the Man) on Bank's Arb Clause

Fuentes v. TMCSF, Inc., No. E066242 (Aug. 23, 2018)

Plaintiff bought a Harley. He brought a CLRA/UCL/FAL class action against the Dealer for various misrepresentations in its sales practices. His sales contract does not have an arb clause. But his finance agreement does. Although Plaintiff didn’t sue the bank, Dealer tries to enforce the arbitration rights in that agreement anyway. But none of the theories that permit a non-party to compel arbitration apply. The Court here goes through incorporation, agency, third party beneficiary, and estoppel. But there’s also alter ego, which apparently is not an issue here. So the trial court correctly denied Dealer’s motion to compel arbitration.

Affirmed.

Accord The Wild Angels.

No Demand Needed to Compel Arbitration

Hundai Amco Am., Inc. v. S3H, Inc., No. G049204 (D4d3 Dec. 17, 2014)

Section 1281.2 of the Code of Civil Procedure says that “[o]n 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[.]” The court here reads “a party thereto refuses to arbitrate such controversy” to mean that a defendant moving to compel arbitration needs to establish that it previously served an arbitration demand on the plaintiff. But the fact that a plaintiff has sued on open court is—at least implicitly—pretty obvious evidence of a refusal to arbitrate the dispute. So showing that a (futile) demand has been made is unnecessary.

Reversed.

Nothing to See Here. Move Along (to Arbitration).

Sanchez v. Carmax Auto Superstores, No. B244772 (D2d1 Mar. 4, 2014)
 
This is an employment dispute that the defendant moved to compel into arbitration based on an arbitration agreement with its employee. The trial court denied the motion because it found that the agreement was “permeated with unconscionabililty. But Justice Johnson and two of his colleagues in Division One disagree. Because entering the agreement was a take-it-or-leave-it condition of employment, the court agrees that it is mildly procedurally unconscionable. When it comes to substantive unconscionabilty, however, none of the issues raised by the plaintiff or the trial court meet the mark. Mild limitations on discovery, a requirement that plaintiff fill out a claim form, the fact that arbitrated claims would be preclusive on future lawsuits, a requirement that the arbitrator apply the law of at-will employment to the at-will employed plaintiff’s claim, the arbitrator’s discretion to make factual findings, a confidentiality provision, and a prohibition on consolidation of different plaintiffs’ claims were all run-of-the-mill arbitration provisions that did not render the agreement substantively unconscionable. So the agreement should have been enforced by the trial court.

Reversed.