Filed 10/21/13 Johnson v. Servicon Systems CA2/5

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for 

publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication 

or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FIVE

CLARENCE B. JOHNSON,

Plaintiff and Appellant,

v.

SERVICON SYSTEMS, INC.,

Defendant and Respondent.

 B245201

 (Los Angeles County

 Super. Ct. No. BC477835)

APPEAL from an order of the Superior Court of Los Angeles County, Joanne 

O‟Donnell, Judge. Reversed with directions.

Rastegar Law Group, Farzad Rastegar and Thomas S. Campbell for Plaintiff and 

Appellant.

Jackson Lewis, Mindy S. Novick, Sherry L. Swieca, Sandra J. McMullan and 

Adam Y. Siegel for Defendant and Respondent.
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I. INTRODUCTION

Plaintiff, Clarence B. Johnson, appeals from an order compelling arbitration and 

dismissing all class claims. Plaintiff filed an original and first amended complaint against 

defendant, Servicon Systems, Incorporated. Defendant filed a petition to compel 

arbitration of plaintiff‟s individual claims only. The petition sought dismissal of all class 

claims. On October 26, 2012, the trial court dismissed the purported class claims. But 

the court granted defendant‟s petition to compel arbitration of plaintiff‟s individual 

claims. We conclude the trial court should not have dismissed the class claims.

II. BACKGROUND

A. Complaint

On January 26, 2012, plaintiff filed a complaint against defendant on behalf of all 

similarly situated current and former employees. On April 12, 2012, plaintiff filed a first 

amended complaint. Plaintiff alleges against defendant: failure to provide required rest 

periods; failure to provide required meal periods; failure to pay overtime compensation; 

failure to provide accurate statements and to maintain required records; failure to pay 

minimum wage; failure to pay wages upon termination; unlawful business practices; class 

action for civil penalties; and a Labor Code section 2698 et seq. representative action for 

civil penalties. 

B. Motion To Compel Arbitration, Opposition And Reply

On August 9, 2012, defendant filed its motion seeking: to compel arbitration of 

plaintiff‟s individual claims; dismissal without prejudice of the class claims; and 

dismissal of the action as to plaintiff‟s individual claims or in the alternative immediate 
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stay of the proceedings. Defendant relied on an arbitration agreement between plaintiff 

and defendant signed August 28, 2006. The arbitration agreement provides, “In the event 

of any dispute, claim or controversy between Employee and Company, its directors, 

officers, employees or agents, both parties agree to submit such dispute, claim or 

controversy to final and binding arbitration, including, but not limited to, claims for 

breach of contract, civil torts and employment discrimination . . . .” The arbitration 

agreement contains no class action waiver. Defendant argued the agreement was part of 

a contract involving interstate commerce and is valid under principles of contract law. 

Defendant asserted the Federal Arbitration Act governed the agreement. 

On August 31, 2012, plaintiff filed his opposition. Plaintiff argued the arbitration 

agreement in question was modified on August 31, 2007 and he did not sign the 

document. Plaintiff contended class action claims should proceed pursuant to Gentry v. 

Superior Court (2007) 42 Cal.4th 443, 453-454. In Gentry, our Supreme Court 

prohibited class arbitration waivers in employment agreements under specified 

circumstances. (Ibid.) On September 7, 2012, defendant filed its reply. 

C. Hearing And Order

On September 14, 2012, the trial court continued the hearing to provide plaintiff 

an opportunity to file a surreply. On October 15, 2012, plaintiff filed his surreply. The 

surreply is accompanied by plaintiff‟s declaration which indicates he was provided the 

arbitration agreement on a take it or leave it basis. The surreply also contains evidence 

pertinent to the issue of whether any waiver of the right to pursue a class action is 

unconscionable. On October 22, 2012, the trial court heard further argument and took the 

matter under submission. 

On October 26, 2012, the trial court issued its order. The trial court concluded 

plaintiff had agreed to and signed an updated arbitration agreement. The trial court found 

the arbitration agreement enforceable under the Federal Arbitration Act because 
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defendant demonstrated it engaged in interstate commerce. The trial court determined 

Gentry was implicitly overruled by AT&T Mobility LLC v. Concepcion (2011) 563 ___, 

___ [131 S.Ct. 1740, 1750-1751] (AT&T). The trial court: granted defendant‟s motion to 

compel arbitration; stayed the action pending outcome of the arbitration; and dismissed 

the class claims. Plaintiff subsequently appealed the order.

III. DISCUSSION

First, there is no merit to defendant‟s argument the present order dismissing class 

claims is not appealable. The class claims were dismissed. Thus, the order dismissing 

the class claims is appealable. (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 699; 

Franco v. Athens Disposal Co., Inc. (2009) 171 Cal.App.4th 1277, 1288.) Defendant‟s 

argument that title 9 United States Code section 16 applies to state court appeals has no 

merit. The limited procedural effect of the Federal Arbitration Act does not extend to 

state procedural rules. (Cronus Investments, Inc. v. Concierge Services (2005) 35 Cal.4th 

376, 388-390; see Cable Connection, Inc. v. DIRECTV, Inc. (2008) 44 Cal.4th 1334, 

1351.) 

There is no merit to the argument allowing an appeal of the class claims dismissal 

order while the action is stayed interferes with any purpose of the Federal Arbitration 

Act. (AT&T, supra, 563 U.S. at p. __ [131 S.Ct. at pp. 1749-1750]; Preston v. Ferrer

(2008) 552 U.S. 346, 357-358.) This case is a preference matter and no extensions of 

time were granted. The parties were free to arbitrate plaintiff‟s individual claims while 

the appeal was pending. Under defendant‟s theory, the matters we resolve today would 

have to await entry of a judgment confirming an award at some unknown future date 

before they could be heard. California‟s rule which allows for expedited appeals under 

these circumstances accelerates and enforces the arbitral process. 

Second, defendant is correct, there is substantial evidence plaintiff signed the 

relevant arbitration agreement even though he was not required to do so. We review a 
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trial court‟s factual findings for substantial evidence. (Bowers v. Raymond J. Lucia 

Companies, Inc. (2012) 206 Cal.App.4th 724, 733; Hotels Nevada, LLC v. L.A. Pacific 

Center, Inc. (2012) 203 Cal.App.4th 336, 348.) The declarations of Rick Tate, Martha 

Trujillo and Jose Guerrero establish: defendant operates in interstate commerce; 

employees are not obligated to sign the arbitration agreement; plaintiff was required to 

read the arbitration agreement; and plaintiff signed the 2006 version of the arbitration 

agreement. 

Third, defendant is correct this dispute arises in interstate commerce and is subject 

to the Federal Arbitration Act. (9 U.S.C. § 2 [“transaction involving commerce”]; AlliedBruce Terminix Companies, Inc. v. Dobson (1995) 513 U.S. 265, 277 [“word „involving,‟ 

like „affecting,‟ signals an intent to exercise Congress‟ commerce power to the full”].) 

Mr. Tate‟s declaration delineates in detail the interstate nature of defendant‟s business 

operations. 

Fourth, there is no merit to defendant‟s argument that AT&T, supra, 563 U.S. at p. 

__ [131 S.Ct. at pp. 1749-1750] permitted dismissal of the class claims. The issue in 

AT&T, supra, was whether a class action waiver was enforceable. (Kilgore v. KeyBank, 

N.A. (9th Cir. 2013) 718 F.3d 1052, 1058; Phillips v. Sprint PCS (2012) 209 Cal.App.4th 

758, 769.) Likewise, Gentry and its progeny are irrelevant to this case. Thus, the proper 

course of action was not to dismiss the class claims but to: direct the filing of a 

responsive pleading; schedule a case management conference; and, at the conference, 

exercise discretion as to whether to await the outcome of the arbitration on plaintiff‟s 

individual causes of action before proceeding further on his class claims.
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IV. DISPOSITION

The order dismissing the class claims is reversed. Upon remittitur issuance, the 

trial court is to reinstate the class claims and proceed as discussed in the body of the 

opinion. Plaintiff, Clarence B. Johnson, shall recover his costs incurred on appeal from 

defendant, Servicon Systems, Incorporated.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

TURNER, P. J.

I concur:

KRIEGLER, J.
MOSK, J., Concurring and dissenting,

I do not believe that a Labor Code section 2698 et seq. (Private Attorney General 

Act of 2004—PAGA) claim is arbitrable, (see Brown v. Ralphs Grocery Co. (2011) 197 

Cal.App.4th 489) [decided by this division]. That issue is pending before the California 

Supreme Court (Iskanian v. CLS Transportation Los Angeles, LLC, S204032; see also 

Sonic-Calabasas A, Inc. v. Frank Moreno (2013) ___ Cal. 4th ___ [S174475 filed Oct. 

17, 2013] [unconscionability not preempted, but Berman hearings can be arbitrable]). 

I concur in the remainder of the disposition.

MOSK, J.