Court Opinion

ID: 3219190
Source: CourtListenerOpinion
Date Created: 2016-06-30 22:02:47.231816+00
Date Added: 2024-06-11T09:19:43.560187
License: Public Domain

Filed 6/30/16 Landy v. Midway Rent a Car CA2/4
                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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 FOUR

EVAN LANDY,                                                             B264640

         Plaintiff and Appellant,                                       (Los Angeles County
                                                                        Super. Ct. No. BC503795)
         v.

MIDWAY RENT A CAR, INC.,

         Defendant and Respondent.

         APPEAL from an order of the Superior Court of Los Angeles County,
Elihu M. Berle, Judge. Dismissed.
         Law Offices of Jennifer Hart, Jennifer L. Hart for Plaintiff and Appellant.
         Molino & Berardino and Michelle Cooper for Defendant and Respondent.
                                      ____________________________
       In this employment action, plaintiff Evan Landy filed a notice of appeal from an
order compelling arbitration of all causes of action except the PAGA claims1 (Lab. Code,
§ 2699 et seq.), which remain to be litigated after the arbitration is completed. Defendant
Midway Rent a Car, Inc. argues the appeal must be dismissed for lack of an appealable
order. We agree, and dismiss the appeal.

                 FACTUAL AND PROCEDURAL BACKGROUND
       Landy is employed by Midway as a limousine driver. He filed a putative class
action complaint against Midway on his own behalf and for 100 similarly situated
employees in March 2013. According to the complaint, Landy and his fellow employees
are required to perform work-related duties without benefit of statutory meal and rest
periods, compensation in accordance with straight-time and overtime pay rates, or
itemized wage statements.
       In addition to six causes of action for Labor Code violations2 and a seventh cause
of action for unlawful business practices (Bus. & Prof. Code, § 17200), the operative

       1 PAGA is the acronym for Private Attorney General Act. Subdivision (a) of
Labor Code section 2699 provides: “Notwithstanding any other provision of law, any
provision of this code that provides for a civil penalty to be assessed and collected by the
Labor and Workforce Development Agency or any of its departments, divisions,
commissions, boards, agencies, or employees, for a violation of this code, may, as an
alternative, be recovered through a civil action brought by an aggrieved employee on
behalf of himself or herself and other current or former employees pursuant to the
procedures specified in Section 2699.3.”
       “If, at the time of the alleged violation, the person employs one or more
employees, the civil penal is one hundred dollars ($100) for each aggrieved employee per
pay period for the initial violation and two hundred dollars ($200) for each aggrieved
employee per pay period for each subsequent violation.” (Lab. Code, § 2699,
subd. (f)(2).) The prevailing employee is “entitled to an award of reasonable attorney’s
fees and costs.” (Id. at subd. (g)(1).)

       2The complaint alleged claims for failure to pay minimum wages (Lab. Code,
§ 1197; first cause of action); failure to pay overtime compensation (id. at §§ 510, 1194,
1198; second cause of action); failure to pay overtime compensation at lawful premium

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pleading (first amended complaint) contains an eighth cause of action for civil penalties
under the PAGA. Midway answered the operative complaint in September 2013, and the
parties commenced class action discovery.
         Eighteen months later, Midway sought to enforce an arbitration agreement
contained in Landy’s employment application. Landy refused to arbitrate his claims on
an individual basis. Midway filed a petition to compel arbitration of the first amended
complaint “on an individual basis, with the exception of the PAGA claims.” Landy
denied the existence of an agreement to arbitrate, and argued that any such agreement
was unenforceable based on theories of waiver, collateral estoppel, and unreasonable
delay.
         In its April 20, 2015 order, the trial court granted the petition to compel arbitration
of the first amended complaint on an individual basis, with the exception of the PAGA
claims. The PAGA claims were severed and stayed pending completion of arbitration.
         Landy filed a notice of appeal from the April 20, 2015 order, citing the “death
knell” doctrine.3 He does not mention the death knell doctrine in his opening brief. In its
respondent’s brief, Midway argues to dismiss the appeal, claiming an order compelling
arbitration is not directly appealable, and, in light of the pending PAGA claims, does not
constitute a death knell of the representative claims. (Citing Munoz v. Chipotle Mexican
Grill, Inc. (2015) 238 Cal.App.4th 291, 294 (Munoz) [order denying class certification
did not constitute death knell of representative claims in light of pending PAGA claims].)
Landy did not file a reply brief. We set the matter for oral argument in May 2016, which
was continued to the June calendar at the request of counsel, and, on May 24, 2016, sent

rate of pay (id. at §§ 510, 1198; third cause of action); failure to provide meal breaks (id.
at § 226.7; fourth cause of action); denial of lawful rest breaks (id. at § 226.7; fifth cause
of action); and failure to provide accurate itemized wage statements (id. at § 226; sixth
cause of action).

         The term “death knell” refers an order that effectively terminates all class claims,
         3
such as an order denying class certification or decertifying a class. (See Phillips v. Sprint
PCS (2012) 209 Cal.App.4th 758, 766 (Phillips).)

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a letter informing the parties of our concern that the appeal, which was taken from a
nonappealable order, must be dismissed. We invited the parties to submit additional
letter briefs on that issue. We received a letter brief from Midway, arguing the appeal
should be dismissed, but received no response from Landy.

                                       DISCUSSION
       The issue whether a direct appeal lies from an order compelling arbitration is
jurisdictional. (Vivid Video, Inc. v. Playboy Entertainment Group, Inc. (2007) 147
Cal.App.4th 434, 440–441.) If the order compelling arbitration is not appealable, the
appeal must be dismissed; the law is settled that appellate jurisdiction may not be created
by consent, waiver, or estoppel. (Ibid.)
       The right to appeal is statutory, and as to matters of arbitration, is governed by
section 1294 of the Code of Civil Procedure. (Porter v. United Services Automobile
Assn. (2001) 90 Cal.App.4th 837, 839–840.) That provision allows a direct appeal to be
brought from an “order dismissing or denying a petition to compel arbitration” (Code
Civ. Proc., § 1294, subd. (a)), but is silent as to orders compelling arbitration.
       California courts have consistently held that no direct appeal may be taken from
an order compelling arbitration, although the order is reviewable by writ or on appeal
from a judgment entered after the arbitration is completed. (See, e.g., Garcia v. Superior
Court (2015) 236 Cal.App.4th 1138, 1149; Marenco v. Direct TV LLC (2015) 233
Cal.App.4th 1409, 1415; Kinecta Alternative Financial Solutions, Inc. v. Superior Court
(2012) 205 Cal.App.4th 506, 513; Muao v. Grosvenor Properties (2002) 99 Cal.App.4th
1085, 1088–1089; Reyes v. Macy’s, Inc. (2011) 202 Cal.App.4th 1119, 1122;
International Film Investors v. Arbitration Tribunal of Directors Guild (1984) 152
Cal.App.3d 699, 703; Laufman v. Hall-Mack (1963) 215 Cal.App.2d 87, 88–89.)
       The death knell doctrine permits a direct appeal to be taken from orders that
amount to a de facto final judgment, or “that effectively terminate class claims, such as
orders denying class certification or decertifying a class, while allowing individual claims
to persist. [Citations.]” (Phillips, supra, 209 Cal.App.4th at p. 766.) The concern is that

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denial of class certification may amount to a de facto final judgment for absent plaintiffs
if the individual claims are so de minimis they are not likely to be reduced to judgment,
thereby “foreclosing any possible appellate review of class issues.” (Marenco v. Direct
TV LLC, supra, 233 Cal.App.4th at p. 1415; Munoz, supra, 238 Cal.App.4th at pp. 311–
312.)
        In Munoz, supra, 238 Cal.App.4th 291, the plaintiff appealed from an order
denying class certification under the death-knell doctrine. But the appellate court
dismissed the appeal, concluding the potential PAGA penalties incentivized the plaintiff
to continue with the litigation, thus eliminating any death-knell effect. (Id. at pp. 294,
309.)
        The same rationale applies to this case. The PAGA claims were brought by Landy
on behalf of 100 similarly situated employees, and, if successful, may result in penalties
of $100 per employee per pay period for an initial violation, and $200 per employee per
pay period for each subsequent violation, plus attorney fees and costs. (Lab. Code,
§ 2699, subds. (f)(2), (g)(1); see Munoz, supra, 238 Cal.App.4th at p. 309.) The potential
PAGA penalties are not de minimis, and thus provide sufficient incentive to continue
with the litigation, erasing any death knell effect of the order compelling arbitration. (See
Munoz, supra, 238 Cal.App.4th at pp. 311–312; Eisenberg et al., Cal. Practice Guide:
Civil Appeals & Writs (The Rutter Group 2015) ¶ 2:39:3, p. 2–29 [order denying class
certification has no death knell effect if PAGA claims, “which are asserted on behalf of
similarly aggrieved employees, remain to be decided”].) Because the death knell doctrine
is inapplicable, the appeal taken from the interlocutory order compelling arbitration must
be dismissed. (Muao v. Grosvenor Properties, supra, 99 Cal.App.4th at pp. 1088–1089
(Muao).)4

        We express no opinion as to the merits of plaintiff’s substantive challenges to the
        4
order compelling arbitration. (See Muao, supra, at p. 1092.)

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                                  DISPOSITION
     The appeal is dismissed. Midway is entitled to costs on appeal.
     NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

                                              EPSTEIN, P. J.
We concur:

     WILLHITE, J.

     MANELLA, J.

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