Court Opinion

ID: 2656324
Source: CourtListenerOpinion
Date Created: 2014-03-11 22:07:49.025089+00
Date Added: 2024-06-11T12:35:48.891078
License: Public Domain

Filed 3/11/14 Hyundai of Roseville v. Peebles CA3
                                           NOT TO BE PUBLISHED
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 This opinion has not been certified for publication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
                                      THIRD APPELLATE DISTRICT
                                                        (Placer)
                                                            ----

HYUNDAI OF ROSEVILLE, LLC,                                                                   C073167

                   Plaintiff and Appellant,                                    (Super. Ct. No. SCV0031659)

         v.

DARRELL LEE PEEBLES,

                   Defendant and Respondent.

         This proceeding arises out of a wage claim defendant Darrell Lee Peebles filed
with the labor commissioner under Labor Code section 98 et seq. against plaintiff
Hyundai of Roseville, LLC (Hyundai). In this proceeding, Hyundai petitioned the
superior court to compel Peebles to arbitrate the wage claim pursuant to an arbitration
provision in his employment application. Hyundai also sought an order dismissing or
staying the administrative proceeding “until the arbitration is had.”
         By the time Hyundai obtained a ruling on its petition to compel arbitration,
however, the labor commissioner had already ruled in favor of Peebles. Interpreting the

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arbitration provision on which Hyundai relied, the superior court concluded that Peebles
was entitled to complete the administrative process before any arbitration under the
agreement, and the administrative process was not yet over because jurisdiction of the
matter was still vested in the labor commissioner and would be until Hyundai filed a
notice of appeal from the commissioner’s decision, seeking a trial de novo of the wage
claim in superior court. Based on the conclusion that it lacked jurisdiction, the superior
court denied Hyundai’s petition to compel arbitration but advised Hyundai that Hyundai
could renew the petition if and when Hyundai appealed the commissioner’s decision,
which would allow the matter to be arbitrated rather than tried de novo in the superior
court.
         Subsequently, Hyundai did request a trial de novo of Peebles’s wage claim, and
the parties ultimately agreed that trial would take place in front of an arbitrator pursuant
to the arbitration provisions that Hyundai originally sought to enforce in this proceeding.
As we explain hereafter, in this trial de novo, the commissioner’s decision will be entitled
to no weight whatsoever.
         Under these circumstances, we conclude that Hyundai’s appeal -- by which
Hyundai seeks an “order . . . to arbitration pursuant to the terms of the[] arbitration
agreement, without first having to exhaust the administrative remedies provided by Labor
Code section 98 et seq.” -- is moot. Accordingly, we will dismiss the appeal.
                    FACTUAL AND PROCEDURAL BACKGROUND
         In August 2011, in connection with an application for employment with Hyundai,
Peebles signed a preprinted form that provided for binding arbitration of any dispute
between the parties. The agreement contained the following proviso: “I understand and
agree that nothing in this agreement shall be construed so as to preclude me from filing
any administrative charge with, or from participating in any investigation of a charge
conducted by, any government agency such as the Department of Fair Employment and
Housing and/or the Equal Employment Opportunity Commission; however, after I

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exhaust such administrative process/investigation, I understand and agree that I must
pursue any such claims through this binding arbitration procedure.”
       In March 2012, Peebles filed a complaint with the labor commissioner alleging
that he had worked for Hyundai from August 4 through August 23, 2011, but had not
been paid. The complaint sought the payment of $2,708.33 in wages and penalties of
$230.77 per day (not to exceed 30 days).
       On August 17, 2012, the labor commissioner served Hyundai’s attorney with
notice that a hearing would be held on Peebles’s complaint on September 7.
       On August 27, Hyundai commenced this proceeding by filing a petition to compel
arbitration of the wage dispute, asking for dismissal or stay of the proceeding in front of
the labor commissioner “until the arbitration is had.” Neither in its petition nor in its
memorandum of points and authorities did Hyundai specifically mention the provision in
the arbitration agreement regarding administrative charges, but Hyundai did append a
copy of the arbitration agreement to its petition.
       The hearing on Hyundai’s petition was originally set for October 2 but was later
reset to November 13 and then to December 18, purportedly because of problems with
serving Peebles with the petition. As for the hearing on the administrative claim,
according to Hyundai the labor commissioner took the hearing off calendar upon
receiving notice of the petition to compel arbitration of the wage dispute. On November
28, however, with the hearing on the petition to compel arbitration set for December 18,
the labor commissioner rescheduled the administrative hearing for December 14.
       In response to the petition to compel arbitration, Peebles argued (among other
things) that the wage claim he filed with the labor commissioner qualified as an
administrative charge within the meaning of the provision set forth above. Peebles
contended “the Labor Commissioner[’s] process should be allowed to go to fruition,
because it is the obvious exemption [sic] to the mandatory arbitration provision.”

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       In reply, Hyundai argued that the provision in question “preserves an employee’s
right to make administrative charges that are a prerequisite to filing suit,” “[f]or example,
filing a complaint with the Department of Fair Employment and Housing,” and since
“there is no statutory administrative filing prerequisite for wage claims as there is for
FEHA Claims,” the provision did not apply to the wage dispute.
       On December 14, a hearing officer designated by the labor commissioner heard
Peebles’s administrative wage claim and issued an order that Peebles recover a total of
$10,144.77 from Hyundai.1
       In advance of the December 18 hearing on the petition to compel arbitration, the
trial court issued a tentative ruling denying the petition on the ground that Hyundai could
not compel arbitration because the administrative proceeding before the labor
commissioner fell within the “administrative charge” provision in the arbitration
agreement and the administrative process was not yet exhausted. At the hearing, Peebles
provided the court with a copy of the labor commissioner’s decision and asked Hyundai
whether the ruling “essentially mooted” “the issue before the Court.” Hyundai argued
that accepting the reasoning of the court’s tentative ruling, arbitration should now be
compelled because the administrative process was complete. Peebles responded that the
“arbitration request [wa]s bogus” and with the labor commissioner’s decision issued if
Hyundai “want[ed] to go do something they ha[d] to file a court action to seek to have a
trial de novo” under Labor Code section 98.2. The court expressed the opinion that
Hyundai had the right to arbitration “following the administrative procedure that’s been
had before the Labor Commissioner” and asked whether Hyundai’s “trial de novo is the

1      The decision noted that Hyundai “failed to appear and did not submit a written
answer to the complaint.” For its part, Hyundai claims it filed “written objections to the
proceedings with the labor commissioner based on the filing of the Petition to Compel
Arbitration,” but the labor commissioner conducted the hearing over those objections.

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arbitration.” Peebles argued that the petition to compel arbitration “was to stop the
administrative agency proceeding” and because the administrative process was now
complete “[t]his case is done, over, finished.” Peebles contended that if Hyundai wanted
to challenge the administrative decision, Hyundai had to “separately request and file a
Superior Court action under [section] 98.2.”
       After taking the matter under submission, the court issued an order after hearing
on December 20. The court essentially affirmed its tentative ruling that arbitration could
not be compelled until the administrative process was complete but further concluded that
unless and until Hyundai filed a timely notice of appeal from the labor commissioner’s
order under Labor Code section 98.2, the court lacked jurisdiction because jurisdiction
properly remained with the commissioner. The court concluded that “[i]f and when
[Hyundai] files a Sec. 98.2 Notice of Appeal, then it may renew its application that the
matter be arbitrated in lieu of the trial de novo in the Superior Court contemplated by the
statutory scheme.”
       Hyundai filed a notice of appeal from the labor commissioner’s order on
December 28, 2012.2 Thereafter, in February 2013, the parties stipulated to arbitration of
the trial de novo “pursuant to the arbitration provisions contained in [the] agreement
signed by PEEBLES in relation to his application for employment with [Hyundai].”
       Meanwhile, on February 11, 2013, Hyundai timely appealed the order denying its
petition to compel arbitration.
       On March 26, 2013, while this appeal was pending, the trial court voided
Peebles’s response to the petition to compel arbitration because the check for his filing
fee was returned as unpayable and Peebles failed to make payment within 20 days of the

2    Peebles’s appendix contains a copy of an unfiled notice of appeal from the labor
commissioner’s order that was signed on December 21, 2012, but the parties agree that
Hyundai filed the notice of appeal on December 28, 2012.

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notice the court sent on January 16 ordering payment. Peebles contends he subsequently
cured that default; however, the only evidence of that cure, other than the unsworn
statement in Peebles’s brief, is the copy of his response contained in his appendix, which
shows that it was filed on April 10, 2013.
                                       DISCUSSION
       On appeal, Hyundai primarily contends that the Federal Arbitration Act (9 U.S.C.
§ 2, et seq.) preempts the labor commissioner’s primary jurisdiction over a wage claim
like Peebles’s and therefore the superior court erred in requiring the parties to exhaust the
administrative process in front of the commissioner before compelling arbitration. As
relief, Hyundai asks us to “order the parties to arbitration pursuant to the terms of their
arbitration agreement, without first having to exhaust the administrative remedies
provided by Labor Code section 98 et seq.”
       The procedural posture of this case, as described above, combined with Hyundai’s
request for relief, raises the issue of mootness.3 As we have noted, the administrative
process before the labor commissioner on Peebles’s wage claim has been completed.
Moreover, Hyundai’s filing of a notice of appeal in the superior court from the
commissioner’s decision has forestalled that decision, terminated the commissioner’s
jurisdiction, and vested jurisdiction to conduct a hearing de novo in the superior court.
(See Post v. Palo/Haklar & Associates (2000) 23 Cal.4th 942, 947.) In the hearing de
novo, “[t]he decision of the commissioner is ‘entitled to no weight whatsoever, and the
proceedings are truly “a trial anew in the fullest sense.” ’ ” (Id. at p. 948.) Here, the
parties have stipulated to have the trial de novo in front of an arbitrator pursuant to their
arbitration agreement. Thus, they will now have the arbitration that Hyundai sought to

3      We solicited and obtained supplemental letter briefs from the parties on the
subject.

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compel in the first place -- an arbitration of Peebles’s wage claim unaffected by Peebles’s
invocation of the administrative process under Labor Code section 98 et seq.
       Given this procedural posture, we conclude the present appeal is moot. “A case is
considered moot when ‘the question addressed was at one time a live issue in the case,’
but has been deprived of life ‘because of events occurring after the judicial process was
initiated.’ [Citation] . . . . ‘ “ . . . [W]hen . . . an event occurs which renders it impossible
for [the] court, if it should decide the case in favor of plaintiff, to grant him any effectual
relief whatever, the court will not proceed to formal judgment. . . .” ’ ” (Wilson & Wilson
v. City Council of Redwood City (2011) 191 Cal.App.4th 1559, 1574.) “Thus,
‘ “[m]ootness has been described as ‘ “the doctrine of standing set in a time frame: The
requisite personal interest that must exist at the commencement of the litigation
(standing) must continue throughout its existence (mootness).” ’ [Citations.]” ’
[Citation.] When events render a case moot, the court, whether trial or appellate, should
generally dismiss it.” (Ibid.)
       Here, we cannot grant Hyundai any effectual relief because what Hyundai sought
was to avoid the administrative process in front of the labor commissioner and proceed
directly to arbitration of Peebles’s wage claim. As we have explained, however, the
administrative process has been completed, Peebles’s wage claim now is in arbitration,
and the labor commissioner’s decision will have no effect whatsoever on that arbitration.
A decision in favor of Hyundai here, based on the conclusion that Peebles did not have
the right to invoke the administrative process before arbitrating the wage claim, would
serve no practical purpose and accomplish nothing for Hyundai.
       In its supplemental letter brief, Hyundai contends a decision in its favor would
provide “extremely effectual relief -- relief from the entire [administrative] hearing
process and all that flows from it,” but that is just not so. We cannot undo the
administrative process; it is already complete. Moreover, as we have explained, the labor
commissioner’s decision will have no bearing whatsoever in the arbitration of Peebles’s

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wage claim to which the parties have now agreed. Thus, to that extent, it is as though the
administrative proceeding never occurred.
       Even in its letter brief, Hyundai concedes that what it is seeking here is to
“effectuate [its] rights . . . to have the arbitration agreement enforced . . . without the
imposition of the [administrative] hearing process and its de novo appeal procedures.”
But that is relief that cannot be provided at this time. The administrative hearing process
is over, and the de novo appeal procedures have been invoked. By agreement, Peebles’s
wage claim is poised for arbitration pursuant to the terms of the arbitration provision in
Peebles’s employment application. (We assume that arbitration has been stayed pending
the outcome of this appeal.) Granting Hyundai relief on appeal would do nothing but put
the parties in exactly the same place they are in now.
       There are two possible caveats to the foregoing conclusion, but we ultimately
reject them both. First, pursuant to the trial de novo procedures, Hyundai has apparently
posted an undertaking in the amount of the labor commissioner’s award to Peebles. (See
Lab. Code, § 98.2, subd. (b).) Hyundai points out that if Peebles’s wage claim had gone
directly to arbitration, without the administrative hearing process, no such undertaking
would have been required. While that may be true, it is also true that we have no
jurisdiction over Hyundai’s undertaking. Any undertaking Hyundai posted was posted as
a condition to Hyundai’s filing of the notice of appeal from the labor commissioner’s
decision, which instituted a proceeding in the superior court that is separate and apart
from the proceeding that is before us. The only proceeding we have any power over here
is Hyundai’s petition to compel arbitration, and the only relief we can grant here is the
relief Hyundai sought in that proceeding. We have no power to affect in any manner the
disposition of the separate superior court proceeding instituted by Hyundai’s notice of
appeal from the commissioner’s decision and no power to relieve Hyundai from the
undertaking it had to post to institute that proceeding.
       Second, in its letter brief Hyundai mentions generally “the scale-tipping statutory

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financial and procedural requirements attached to the appeal of the [commissioner’s
decision].” To the extent Hyundai intends to suggest that the arbitration now pending,
following Hyundai’s appeal from the labor commissioner’s decision, may involve
financial or procedural consequences that would not have been involved had Peebles’s
wage claim proceeded to arbitration without the prior invocation of the administrative
process, and that granting Hyundai relief in this appeal would allow Hyundai to proceed
to arbitration without those consequences, there is some suggestion of practical relief that
could be provided in this appeal.
       Two considerations, however, prevent us from concluding that this suggestion
materially affects our mootness analysis. First, Hyundai has made no attempt to specify
what these “scale-tipping statutory financial and procedural requirements” are, and
therefore we have no basis for comparing the arbitration Hyundai is now facing with the
arbitration it would have faced had arbitration been ordered before the administrative
process was complete. Second, as we have noted, we have no power over the entirely
separate superior court proceeding instituted by Hyundai’s notice of appeal from the
labor commissioner’s decision, and the parties have agreed to submit that proceeding to
binding arbitration pursuant to the arbitration provision in Peebles’s employment
application. Hyundai fails to explain how any relief we could grant in this case -- which
would be limited to ordering the superior court to grant Hyundai’s petition to compel
arbitration of Peebles’s wage claim -- would relieve Hyundai from the consequences of
its agreement to arbitrate the trial de novo of Peebles’s wage claim on appeal from the
labor commissioner’s decision. Under these circumstances, we conclude that Hyundai
has failed to show any effectual relief that we could grant in this appeal.
       For all of the foregoing reasons, Hyundai’s appeal is moot and therefore we will
dismiss it.

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                                     DISPOSITION
       The appeal is dismissed. Peebles shall recover his costs on appeal. (Cal. Rules of
Court, rule 8.276(a).)

                                                      ROBIE                 , J.

We concur:

      BLEASE               , Acting P. J.

      BUTZ                 , J.

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