Court Opinion

ID: 6331078
Source: CourtListenerOpinion
Date Created: 2022-04-13 19:03:12.476111+00
Date Added: 2024-06-11T09:23:09.260818
License: Public Domain

Filed 4/13/22 Sanchez v. Carmax Auto Superstores Cal. CA2/1
        NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been
certified for publication or ordered published for purposes of rule 8.1115.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 ONE

 MICHAEL SANCHEZ,                                                  B308431

           Plaintiff and Respondent,                               (Los Angeles County
                                                                   Super. Ct. No. BC482027)
           v.

 CARMAX AUTO SUPERSTORES
 CALIFORNIA, LLC,

           Defendant and Appellant.

      APPEAL from a judgment and an order of the Superior Court of
Los Angeles County, Lia Martin, Judge. Affirmed.
      Ogletree, Deakins, Nash, Smoak & Stewart, Jack S. Sholkoff and
Jennifer L. Katz for Defendant and Appellant.
      Shegerian & Associates, Carney R. Shegarian and Jill McDonell
for Plaintiff and Respondent.

                                    ________________________
       Michael Sanchez worked for CarMax Auto Superstores California,
LLC as a service manager. When his employment was terminated in
February 2011, he sued CarMax for wrongful termination, alleging
several causes of action. Based on an arbitration agreement signed by
the parties at the time Sanchez was hired, CarMax moved to compel
arbitration. The trial court denied that motion, but on CarMax’s prior
appeal we reversed. (Sanchez v. CarMax Auto Superstores California,
LLC (2014) 224 Cal.App.4th 398 (Sanchez).) The dispute was arbitrated,
Sanchez prevailed, and then filed a motion to confirm the arbitration
award (with a cross-motion to vacate filed by CarMax). Sanchez’ motion
to confirm was granted, CarMax’s motion to vacate was denied, and
CarMax again appeals, this time contending the arbitrator erred. We
reject CarMax’s claims of error and affirm the challenged orders.

                      STATEMENT OF FACTS

       The arbitration agreement was signed in October 2006, at the time
Sanchez applied for employment by CarMax.               (Sanchez, supra,
224 Cal.App.4th at p. 401.) At that time, Sanchez acknowledged receipt
of CarMax’s Dispute Resolution Rules and Procedures (the Rules), and
agreed the Rules would govern any arbitration. (Ibid.) The arbitration
agreement was governed by the Federal Arbitration Act (FAA; 9 U.S.C.
§ 1 et seq.) and the Uniform Arbitration Act of Virginia (Va Code §§ 8.01-
581.01 et seq.). On the prior appeal, we rejected claims that the Rules
were procedurally and substantively unconscionable, and that they
impermissibly limited the parties’ rights to discovery. (Sanchez, supra,
at p. 401.)

       In February 2015, following the issuance of remittitur after the
first appeal, CarMax initiated arbitration by the American Arbitration
Association (AAA), and Hon. Eli Chernow (Ret.) was selected as the
Arbitrator. Without reference to the record, CarMax claims the
Arbitrator said at the outset that he would apply the AAA employment
rules, not the parties’ Rules, and (also without reference to the record)

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CarMax insists the Arbitrator repeatedly refused to apply certain parts
of the Rules. For example, although the Rules require all arbitrations to
be completed as soon as possible, the Arbitrator set the hearing almost a
full year into the future (to accommodate the lawyers’ schedules).1 Days
before the scheduled hearing, Sanchez requested a continuance because
his father had died, and that request was granted. Without reference to
the record, CarMax’s 70-page opening brief is filled with similar claims,
including the Arbitrator’s decision to allow additional briefing (the Rules
permit only one post-hearing brief per party), and the Arbitrator’s delay
in issuing an award.2

     In October 2019, the Arbitrator issued his final award in favor of
Sanchez ($548,929.27 in lost wages, plus $250,000 for emotional distress
damages, plus $11,804.83 for the costs of arbitration, all payable by
CarMax).

       In the trial court, CarMax moved to vacate the arbitration award
and Sanchez moved to confirm it. Following a hearing, the trial court
granted Sanchez’ motion to confirm, and denied CarMax’s motion to
vacate. The trial court found no grounds to vacate the award, rejecting
CarMax’s claim that the Arbitrator disregarded the law, finding that all
the Arbitrator did was to interpret the Rules to fit the circumstances and
this dispute. By way of example, the trial court noted that a continuance
granted because Sanchez’s father died cannot be considered

      1As relevant, Rule 6 provides that the “Parties and the Arbitrator
shall make every effort to ensure that the arbitration is completed, and
an award rendered, as soon as possible. There shall be no extensions of
time or delays of an arbitration hearing except in cases where both
Parties consent to the extension or delay, or where the Arbitrator finds
such a delay or extension necessary to resolve a discovery dispute or
other matter relevant to the arbitration.”
      2  This claim is about post-hearing briefs. Rule 9 (Hearing
Procedure), subdivision (d) (Briefing), provides that each party has the
right to submit one pre-hearing brief and one post-hearing brief.

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unreasonable, and there was no showing of prejudice to CarMax.
Similarly, the Arbitrator found the “one brief” rule to be unfair in this
case, and allowed Sanchez to file a brief characterized by CarMax as a
“reply.” In short, the trial court concluded there was no manifest
disregard of the law, no irrational award, no evidence to support
CarMax’s assertions.

      This appeal is from the order granting Sanchez’s motion to confirm
the award and denying CarMax’s motion to vacate it.

                         LEGAL DISCUSSION

      A.    Standard of review

      The parties agree that our review is de novo, and that the trial
court’s factual findings will be reversed only if clearly erroneous. (Richey
v. AutoNation, Inc. (2015) 60 Cal.4th 909, 918, fn. 1; Brown v. TGS
Management Co., LLC (2020) 57 Cal.App.5th 303, 313; and see Volt Info.
Sciences v. Bd. of Trustees (1989) 489 U.S. 468, 476 [109 S.Ct. 1248, 103
L.Ed.2d 488].)

      B.    The Arbitrator did not exceed his powers

       CarMax contends the Arbitrator exceeded his powers by failing to
follow the Rules. Under the FAA, the parties have a right to an
arbitration according to the terms for which they contracted — and the
FAA requires courts to enforce privately negotiated agreements to
arbitrate in accordance with their terms. (Western Employers Ins. v.
Jefferies & Co. (9th Cir. 1992) 958 F.2d 258, 261 (Jefferies).) Put another
way, an arbitration award will be vacated only when it is based on a
manifest disregard of the law — meaning something more than just an
error in the law or a failure on the part of the arbitrator to understand
or apply the law. To vacate an arbitration award on this ground, it must
be clear from the record that the arbitrator recognized the applicable law

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and then ignored it. (Lagstein v. Certain Underwriters, Lloyd’s, London
(9th Cir. 2010) 607 F.3d 634, 641.) And although our review of an
arbitration award is de novo, that review is limited and highly
deferential, meaning the award may be vacated only if it is completely
irrational or constitutes a manifest disregard of the law. (Comedy Club,
Inc. v. Improv West Associates (9th Cir. 2009) 553 F.3d 1277, 1288.) For
an arbitrator’s award to be viewed as a manifest disregard of the law, it
must be clear from the record that the arbitrator recognized the
applicable law, then ignored it. (Id. at p. 1290; and see Volt Info. Sciences
v. Bd. of Trustees, supra, 489 U.S. at pp. 478-479 [keeping in mind that
arbitration is favored].) CarMax has not made the required showing
here.

       Contrary to CarMax’s claim that the Arbitrator ignored the Rules,
the trial court expressly found that the Arbitrator interpreted the Rules
adopted by the parties; the Arbitrator did not disagree that the Rules
governed this arbitration. This finding, and not CarMax’s exaggerated
claim, is supported by the record.

      The record supports the trial court’s findings that the initial date
for the hearing was justified by competing schedules (the Arbitrator’s as
well as both sides’ attorneys and witnesses) and that the brief
continuance when Sanchez’s father died was necessary and appropriate.
The most that can be said is that the Arbitrator deviated from the Rules
when compliance would have resulted in a gross unfairness to Sanchez.

       Sanchez was permitted to file a second post-hearing brief because
the trial court read the Rules to give the Arbitrator authority to render
a decision “in a manner designed to promote rapid and fair resolution of
disputes.” None of the Arbitrator’s decisions altered the basic premise of
the Rules — to conclude the arbitration as quickly as possible under the
circumstances, and to limit the briefing unless doing so would create an
unfair advantage for one party. The Arbitrator issued his order for final
briefing on April 2, 2019, allowing Sanchez to file the first brief, CarMax

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to file a response, and Sanchez to file a reply. There is no transcript of
the hearing at which this order was made. CarMax later objected
because Sanchez was to have only one post-hearing brief.

       The record before us fails to show the Arbitrator’s reasoning.
Assuming for the sake of discussion that the Arbitrator erred in allowing
two briefs for Sanchez, CarMax has failed to show that it was prejudiced
— other than its assertion that it was supposed to have the last word.
But that isn’t what the Rules provide. With a provision for only one brief
per party, the logical interpretation would be that they should have been
filed simultaneously, in which event neither party would have had the
last word.

       In any event, the point is that CarMax has failed to suggest this
error caused prejudice. In its reply brief, CarMax discusses prejudice —
but only insofar as Sanchez’s “extra” brief was not limited to 20 pages (as
provided in the Rules). CarMax does not explain how it was prejudiced
by a slightly longer brief. CarMax’s reliance on Jefferies, supra, 958 F.2d
at page 261, for the proposition that prejudice need not be shown when
an arbitrator fails to follow the rules adopted by the parties, is misplaced.
Although prejudice is obvious when an arbitrator fails to make detailed
findings of fact and conclusions of law (as agreed by the parties in
Jeffries), it is not at all obvious where, as here, one side is given an
opportunity to file an extra brief. If as CarMax suggests a new issue was
raised in Sanchez’s second brief, CarMax could have, but did not, ask for
a chance to respond. The record does not show that any such request
was made.

      In a separate section of its brief, CarMax insists the Arbitrator
admitted his violations of the Rules. We disagree. The record shows
only that, in the context of discovery, the Arbitrator said he would “follow
as closely as practicable the guidelines set forth” in the arbitration
agreement and the Rules. CarMax’s brief does not include record
references to any “admissions” by the Arbitrator, or to anything more

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egregious than the departures already discussed. CarMax’s assertion
that the Arbitrator “knowingly, intentionally, and willingly” disregarded
the Rules is unsupported by any record reference.

       Our finding on the prior appeal that the Rules were not
procedurally or substantively unconscionable necessarily included an
implied belief that the rules would be fairly applied. Now, CarMax puts
words in the mouths of both the Arbitrator and the trial court, asserting
that the trial court found the Arbitrator’s refusal to enforce portions of
the Rules was a “permissible misinterpretation of the parties’
agreement.” There is no record reference to support this assertion, and
a review of the trial court’s order (and the rest of the record) does not
show any such statement by the Arbitrator. The most that can be said
is that the trial court found it would be “unfair” to Sanchez to enforce the
one-brief limitation.

     For all these reasons, the trial court did not err in granting the
motion to confirm and denying the motion to vacate.

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                            DISPOSITION

      The judgment and order are affirmed. Sanchez shall recover his
costs of appeal.

      NOT TO BE PUBLISHED

                                                VOGEL, J.*

We concur:

             CHANEY, J.

             BENDIX, Acting P. J.

      *  Retired Associate Justice of the Court of Appeal, Second
Appellate District, assigned by the Chief Justice pursuant to article VI,
section 6 of the California Constitution.

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