Court Opinion

ID: 4681123
Source: CourtListenerOpinion
Date Created: 2021-04-26 20:05:17.171905+00
Date Added: 2024-06-11T08:03:59.452357
License: Public Domain

Filed 4/26/21 Lopez v. Charter Communications CA5

                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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
                                     FIFTH APPELLATE DISTRICT

    LORENZO LOPEZ,
                                                                                    F080633 & F081435
           Plaintiff and Respondent,
                                                                            (Super. Ct. No. BCV-19-102631)
                    v.

    CHARTER COMMUNICATIONS, INC.,                                                         OPINION
           Defendant and Appellant.

                                                   THE COURT*
         APPEAL from a judgment of the Superior Court of Kern County. Stephen D.
Schuett, Judge.
         Morgan Lewis & Bockius, Kathryn T. McGuigan, Thomas M. Peterson and Joel
M. Purles Defendant and Appellant.
           Alan J. Reinach and Jonathon S. Cherne for Plaintiff and Respondent.

                                                        -ooOoo-
         Appellant Charter Communications, Inc. (Charter) contends the trial court
erroneously denied its motion to compel arbitration of this employment discrimination
dispute. The court sustained objections to Charter’s evidence addressing the formation of

*        Before Poochigian, Acting P.J., Franson, J. and Snauffer, J.
the arbitration agreement and then determined Charter failed to prove the parties agreed
to arbitration. Charter contends the court’s failure to consider its evidence violated the
interpretation of Code of Civil Procedure section 1281.2 and California Rules of Court,
rule 3.13301 adopted in Espejo v. Southern California Permanente Medical Group (2016)
246 Cal.App.4th 1047, 1060 (Espejo). We agree.
       In Espejo, the appellate court concluded a party seeking to compel arbitration may
meet its initial burden of showing an agreement to arbitrate simply by attaching a copy of
the purported agreement to its motion. Here, Charter satisfied that initial burden by
attaching a copy of the purported agreement to a declaration submitted with its motion to
compel arbitration. Only after plaintiff Lorenzo Lopez challenged the validity of the
agreement was Charter required to prove by a preponderance of the evidence that a
contract to arbitrate had been formed. Because Charter was not required to authenticate
the arbitration agreement until it was challenged, the deadline set by section 1005,
subdivision (b) does not apply to the supplemental declaration filed by Charter to
establish Lopez accepted the arbitration agreement while completing an online job
application. (See Espejo, supra, 246 Cal.App.4th at p. 1060 [error in striking
supplemental declaration as untimely under § 1005].) Therefore, as in Espejo, the trial
court prejudicially abused its discretion when it failed to read or consider the
supplemental declaration because it was not included in the moving papers.
       We therefore reverse the order denying the motion to compel arbitration and
remand for further proceedings.
                             FACTS AND PROCEEDINGS
       Lopez resides in Kern County and, as a member of the Seventh Day Adventist
Church, observes the Sabbath (Friday sundown to Saturday sundown) as a day of rest and

1      All unlabeled statutory references are to the Code of Civil Procedure. All
references to a numbered “Rule” are to the California Rules of Court.

                                             2.
worship. In December 2017, Lopez went to Charter’s website and searched for jobs near
his residence. Lopez found a technician job and filled out an online application for the
position. Lopez interviewed for the position but was not hired. Lopez alleges that during
the interview he was asked if there were days he could not work, and he stated he could
not work from sundown Friday through sundown Saturday due to his religion. Lopez
further alleges that about a week after the interview, he was called by a recruiter and told
(1) the interview went well except for him being unable to work on Saturdays and (2) he
should search for another position that did not require Saturday work.
       Lopez filed an administrative complaint with the Department of Fair Employment
and Housing. In May 2019, he received a right-to-sue letter from the department, thus
exhausting his administrative remedies.
       In September 2019, Lopez filed a complaint seeking damages and injunctive
relief. He alleged two types of religious discrimination in violation of California’s Fair
Employment and Housing Act (Gov. Code, § 12940 et seq.)—disparate treatment under
Government Code section 12940, subdivision (a) and a failure to accommodate under
Government Code section 12940, subdivision (l). In October 2019, Charter responded to
the complaint by filing a motion to compel arbitration and dismiss or stay the judicial
proceedings.
       Charter supported its motion with a declaration from John Fries, Vice President,
HR Technology. Part of Fries’s responsibilities include managing Charter’s job
application system, which is called BrassRing. Fries’s declaration stated:

       “6. External applicants (‘Applicants’) apply for positions within Charter,
       and submit documents and information in support of their application
       through BrassRing. The application website can be found at
       jobs.spectrum.com, and Applicants are linked to BrassRing through the
       following URL: ….

       “7. During the application process in BrassRing, Applicants are presented
       with Charter’s Solution Channel webpage. A true and accurate copy of the
       Solution Channel webpage content is attached as Exhibit A.”

                                             3.
       Fries’s declaration asserted the Solution Channel webpage (1) provides
information about Charter’s requirement that applicants agree to arbitration, (2) states
that submitting an application is agreeing to be bound by the agreement to arbitrate, and
(3) includes references and links to Charter’s Mutual Arbitration Agreement and
Solutions Channel’s Program Guidelines. Fries’s declaration also stated “Applicants are
required to agree to be bound by the Program in order to proceed with their application.
Applicants agree to the Program by selecting the ‘I agree’ radio button on the Solution
Channel webpage and selecting the button ‘Save and continue.’ ” Applicants who select
the “I do not agree” radio button are informed (1) their application has not been
submitted because they did not agree to the arbitration program and (2) they may submit
a new application and agree to participate in the arbitration program. In paragraph 16 of
his declaration, Fries stated:

       “I have access to and reviewed the list of Applicants who have submitted
       applications through BrassRing who have agreed to participate in the
       Program, and I have confirmed that Plaintiff Lorenzo Lopez agreed to
       participate in the Program on December 18, 2017. A true and accurate
       copy of Lorenzo Lopez’s application, which demonstrates that he agreed to
       participate in the Program, is attached as Exhibit D.”
       Lopez filed papers opposing Charter’s motion to compel arbitration, claiming he
did not consent to arbitration. His declaration asserted that (1) during the application
process, he entered his name, address, phone number, e-mail, educational background,
work experience, and answers to some other questions; (2) he does not recall (a)
Charter’s application including an arbitration agreement or (b) selecting “I agree” to
arbitration; (3) there was no link to an arbitration agreement or instructions on where to
obtain an arbitration agreement; (4) when submitting the application to Charter, he never
signed the application and never entered an electronic signature on the application or on
any other document; and (5) he first became aware that Charter has an arbitration
agreement after he filed this lawsuit.

                                             4.
       Lopez also filed evidentiary objections to Fries’s declaration and attached exhibits.
Lopez objected to Exhibit D, the purported agreement to participate in the arbitration
program, by asserting a lack of foundation and Fries’s lack of personal knowledge.
Citing Evidence Code sections 1400 and 1401, Lopez argued the document had not been
properly authenticated. Lopez also objected to paragraph 16 of Fries’s declaration based
on a lack of foundation, a lack of personal knowledge, hearsay, and the secondary
evidence rule. Lopez objected to Exhibit A based on its irrelevance and a lack of
foundation.
       Charter timely filed a reply to Lopez’s opposition along with supplemental
declarations from Fries and its counsel. Fries’s supplemental declaration provided
additional information about (1) his responsibilities and experience in managing
BrassRing, Charter’s online job application system; (2) how the system operates; and (3)
Lopez’s use of the system to submit a job application. Charter did not request an
evidentiary hearing with live testimony and did not request a continuance of the hearing
to conduct discovery.
       Lopez filed written objections to the supplemental declarations. Lopez argued
Fries’s supplemental declaration was new evidence that had not been presented with
Charter’s moving papers and, as a result, Charter had failed to comply with section 1005,
subdivision (b). That provision states in part: “Unless otherwise ordered or specifically
provided by law, all moving and supporting papers shall be served and filed at least 16
court days before the hearing.” (§ 1005, subd. (b).) Lopez also argued the exhibit
attached to Fries’s supplemental declaration should have been submitted with the moving
papers in accordance with section 1005.
       On December 3, 2019, the trial court held a hearing on the motion to compel
arbitration. After the appearances were entered, the court announced its tentative ruling
by stating:

                                             5.
          “The Court is going to deny the motion. [¶] The Court first would rule on
          the objections to the John Fries’ declaration and would sustain the
          evidentiary objections that have been submitted by the plaintiff. The Court
          did not read or consider the supplemental declaration that was submitted by
          Mr. Fries, as it was not included with the original moving papers. And
          based on the lack of authentication of the arbitration agreement or
          establishing that Mr. Lopez entered into an arbitration agreement, the
          Court’s tentative again is to deny.”
          After hearing argument from counsel, the court adopted its tentative ruling and
denied Charter’s motion to compel arbitration. Charter’s counsel stated he would provide
notice.
          Ten days later, Charter filed a post-hearing submission that included two proposed
statements of decision—one that resolved the motion by granting it (which Charter’s
counsel believed was the correct resolution) and one that resolved the motion in
accordance with the trial court’s oral ruling and subsequent minute order. On December
24, 2019, the court filed an unsigned minute order stating the court denied Charter’s
request for a statement of decision based on the general rule that a trial court need not
issue a statement of decision after ruling on a motion. In January 2020, Charter filed a
notice of appeal.
          In February 2020, the trial court signed and filed an order (1) denying Charter’s
motion to compel and (2) sustaining Lopez’s evidentiary objections to paragraph 16 of
Fries’s first declaration and exhibits A and D attached to that declaration. In July 2020,
Charter filed a notice of appeal from the February 2020 order. Four days later, this court
entered an order granting its own motion to consolidate the two appeals.
          After Lopez’s respondent’s brief was filed and neither party had addressed the
finding-compelled-as-a-matter-of-law standard of appellate review applied in Juen v.
Alain Pinel Realtors, Inc. (2019) 32 Cal.App.5th 972, 981, to a motion to compel
arbitration, this court sent a letter directing Charter’s appellant’s reply brief to address
specified issues relating to the standard of review and the trial court’s obligation to issue
a statement of decision. (See Gov. Code, § 68081.) The letter also stated we would

                                               6.
determine whether to afford respondent an opportunity to file a sur-reply brief after the
appellant’s reply brief was filed. Subsequently, we allowed Lopez to file a sur-reply
brief, which he did on February 3, 2021. Accordingly, the case is fully briefed and has
been given calendar preference pursuant to Lopez’s motion and section 1291.2. (See
Rule 8.240.)
                                      DISCUSSION
       Charter contends the trial court erred in denying its motion to compel arbitration
by (1) failing to consider Charter’s evidence demonstrating the parties agreed to
arbitration and (2) refusing to provide the requested statement of decision as required by
section 1291. Based on Espejo, supra, 246 Cal.App.4th 1047 and Condee v. Longwood
Managment Corp. (2001) 88 Cal.App.4th 215 (Condee), we agree with the first claim of
error. Thus, we reverse and remand with directions for the trial court to conduct further
proceedings addressing the evidentiary issues and the formation of an enforceable
agreement to arbitrate.
I.     PROCEDURES FOR SHOWING AN ARBITRATION AGREEMENT EXISTS
       A.      Legal Principles
       When a party to an arbitration agreement refuses to submit to arbitration, the other
party may petition the court to compel arbitration and stay any pending lawsuit. (Condee,
supra, 88 Cal.App.4th at p. 218; §§ 1281.2, 1281.4.) The proceeding to compel
arbitration is in essence a suit in equity to compel specific performance of the arbitration
agreement. (Ibid.) Section 1281.2 provides:

       “On petition of a party to an arbitration agreement alleging the existence of
       a written agreement to arbitrate a controversy and that a party to the
       agreement refuses to arbitrate that 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, unless it determines
       that [an exception applies].”

                                             7.
       This statutory text was addressed by our Supreme Court in Rosenthal v. Great
Western Fin. Securities Corp. (1996) 14 Cal.4th 394 (Rosenthal), when it concluded a
party opposing arbitration did not have the right to a jury trial of the existence or validity
of the arbitration agreement. (Id. at p. 413.) The court stated:

       “Instead, when a petition to compel arbitration is filed and accompanied by
       prima facie evidence of a written agreement to arbitrate the controversy, the
       court itself must determine whether the agreement exists and, if any defense
       to its enforcement is raised, whether it is enforceable. Because the
       existence of the agreement is a statutory prerequisite to granting the
       petition, the petitioner bears the burden of proving its existence by a
       preponderance of the evidence.” (Ibid.)
       The court did not define what it meant by the phrase “accompanied by prima facie
evidence of a written agreement” and the facts of that case did not require it to address
the sufficiency of the initial petition to compel arbitration. (Rosenthal, supra, 14 Cal.4th
at p. 413, italics added.) After determining a jury trial was not required, the Supreme
Court addressed the type of hearing the trial court was to conduct before making its
findings of fact relevant to the enforcement of the arbitration agreement. (Ibid.) The
court rejected the argument that an evidentiary hearing with the presentation of live
testimony was always required, but noted when the parties presented sharply conflicting
factual accounts, the better course normally would be to hear oral testimony and allow
cross-examination. (Id. at p. 414.)
       The question of the sufficiency of the initial petition to compel arbitration was
addressed in more detail in Condee, supra, 88 Cal.App.4th 215. The court stated section
1281.2 required the party seeking arbitration to allege the existence of an agreement to
arbitrate and quoted a rule of court requiring a copy of the arbitration provisions to be
attached to the petition or, alternatively, the provisions to be set forth verbatim in the
petition. (Condee, supra, at p. 218.) Currently, Rule 3.1330 addresses the contents of the
requesting party’s initial papers:

                                              8.
       “A petition to compel arbitration or to stay proceedings pursuant to Code of
       Civil Procedure sections 1281.2 and 1281.4 must state, in addition to other
       required allegations, the provisions of the written agreement and the
       paragraph that provides for arbitration. The provisions must be stated
       verbatim or a copy must be physically or electronically attached to the
       petition and incorporated by reference.”
       The court in Condee determined the parties seeking arbitration had properly
alleged the existence of an arbitration agreement and supported the allegation as provided
in the predecessor of Rule 3.1330. (Condee, supra, 88 Cal.App.4th at p. 219.) It also
concluded the parties seeking arbitration were not required to follow the normal
procedures of document authentication and noted that section 1281.2 “does not require
the petitioner to introduce the agreement into evidence.” (Condee, supra, at pp. 218,
219.) Furthermore, the court determined the trial court erred in denying the petitions to
compel arbitration for failure to authenticate the arbitration agreement when the
authenticity of the signature on the document was never challenged. (Ibid.)
       Subsequent cases have considered Condee and analyzed in more detail the initial
burden section 1281.2 places on the party seeking arbitration. For example, in Ruiz v.
Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836 (Ruiz), the court stated:
“Properly understood, Condee holds that a petitioner is not required to authenticate an
opposing party’s signature on an arbitration agreement as a preliminary matter in moving
for arbitration or in the event the authenticity of the signature is not challenged.” (Id. at
p. 846.)2 However, once the authenticity was challenged, the party seeking arbitration
“had the burden of proving by a preponderance of the evidence that the electronic
signature was authentic (Evid. Code, § 1401).” (Ibid.)

2      This statement about signatures must be understood in context of the principles
defining the formation and enforceability of an arbitration agreement, particularly the
principle that the written arbitration agreement does not necessarily need to be signed
because “a party’s acceptance may be implied in fact [citation] or be effectuated by
delegated consent [citation].” (Pinnacle Museum Tower Assn. v. Pinnacle Market
Development (US), LLC (2012) 55 Cal.4th 223, 236 (Pinnacle).)

                                              9.
       In Espejo, supra, 246 Cal.App.4th 1047, the court relied on Condee and concluded
“that defendants here met their initial burden [to show an agreement to arbitrate] by
attaching to their petition a copy of the purported arbitration agreement bearing Espejo’s
electronic signature.” (Id. at p. 1060.) Because Dr. Espejo “challenged the validity of
that signature in his opposition, defendants were then required to establish by a
preponderance of the evidence that the signature was authentic.” (Ibid.) In Espejo, the
defendants filed a supplemental declaration to authenticate Dr. Espejo’s signature on the
arbitration agreement before the plaintiff filed his opposition. (Ibid.) The trial court
struck the supplemental declaration, finding it was untimely under section 1005.
       The appellate court concluded the trial court had abused its discretion in striking
the supplemental declaration because that declaration did not need to be filed within the
timeframe established by section 1005, subdivision (b). The appellate court then
examined the contents of the supplemental declaration and determined the factual details
established the electronic signature was the act of Dr. Espejo. (Espejo, supra, at p. 1060.)
The court did not reach Dr. Espejo’s claims that the arbitration agreement was
unenforceable due to (1) the lack of mutual assent or (2) unconscionability. Instead, it
remanded the matter so the trial court could address those issues. (Id. at p. 1062–1063.)
       B.     Application of Legal Principles
       First, based on the interpretation of section 1281.2 and Rule 3.1330 adopted in
Espejo, we conclude Charter met its initial burden of (1) alleging an agreement to
arbitrate existed and (2) supporting that allegation by attaching a copy of the purported
agreement to Fries’s declaration. (See § 1281.2.) The agreement did not need to be
authenticated at that point in the proceedings. In reaching this conclusion, we reject
Lopez’s interpretation of the trial court’s decision, which asserts the court found that
Charter failed to meet its initial burden—that is, the petition was not “accompanied by
prima facie evidence of a written agreement to arbitrate the controversy” as stated in

                                             10.
Rosenthal, supra, 14 Cal.4th at page 413.3 Instead, we interpret the court’s statement that
Charter did not establish “Lopez entered into an arbitration agreement” to mean the court
determined Charter had not proven by a preponderance of the admissible evidence that
Lopez gave his consent to the agreement, which consent is an essential element to the
formation of an enforceable contract under California law. (Civ. Code, §§ 1550, 1565.)
       Second, we address the meaning of the trial court’s statements that (1) it would
sustain the evidentiary objections submitted by Lopez and (2) it did not read or consider
Fries’s supplemental declaration because it was not included with the original moving
papers. Lopez’s objection to the supplemental declaration on the ground Charter had
failed to comply with section 1005, subdivision (b) was, in our view, sustained by the
trial court. This evidentiary ruling was an abuse of discretion because the supplemental
declaration should have been admitted into evidence and weighed by the trial court. In
practical effect, the court committed the same evidentiary error as the trial court in Espejo
when it struck the supplemental declaration as untimely under section 1005. (See Espejo,
supra, 246 Cal.App.4th at p. 1060.) Lopez’s technical argument that Espejo is
distinguishable from this case because that court struck the supplemental declaration and
Fries’s supplemental declaration was not struck is not convincing because the substance
of the evidentiary rulings is more important than technical or formal characterizations.
(See Civ. Code, § 3528 [“The law respects form less than substance”].)
       Third, we conclude there is a reasonable probability that the trial court’s erroneous
decision not to read or consider Fries’s supplemental declaration affected its decision to
sustain Lopez’s evidentiary objections to paragraph 16, exhibit A, and exhibit D of
Fries’s first declaration and to strike those items. In other words, if the court had

3      In our view, the party seeking arbitration meets its initial burden—that is, presents
prima facie evidence of a written agreement to arbitrate—by complying with the
requirements of Rule 3.1330.

                                             11.
weighed the evidence contained in the supplemental declaration, it might have overruled
some or all of the objections.
       Fourth, we conclude the court’s order sustaining Lopez’s objections and striking
paragraph 16 of Fries’s first declaration and the two exhibits was prejudicial because
there is a reasonable probability that a result more favorable to the appealing party would
have been reached if those evidentiary rulings had not been tainted by the error involving
the application of section 1005 to Fries’s supplemental declaration. (Soule v. General
Motors Corp. (1994) 8 Cal.4th 548, 574.)
II.    APPELLATE RELIEF
       Charter’s opening brief argued “[t]he order denying arbitration should be reversed
with directions that the parties proceed to arbitration.” During oral argument, Charter’s
counsel stated that remand for further proceedings would be an acceptable way to deal
with the evidentiary errors and their consequences.
       Exercising the discretionary authority granted to California appellate courts by
sections 43 and 906, we conclude the appropriate relief is the reversal of the order and a
remand for further proceedings. Further proceedings are appropriate to resolve the
evidentiary issues and address the disputes about the credibility of the persons who
provided declarations and other factual issues. Stated another way, we will not resolve
the evidentiary issues and then assume the role of a trier of fact by making credibility
determinations and resolving other factual issues. Our role as a court of review ends once
we have determined that the current record does not allow us to decide, as a matter of
law, that Charter proved (or failed to prove) an agreement to arbitrate was formed by the
parties. Consequently, the trial court, in its role as the trier of fact, must resolve the
ultimate factual questions of whether an enforceable contract was formed and whether
that contract included arbitration provisions encompassing this dispute.

                                              12.
       When conducting the further proceedings on remand, the trial court shall apply
state law principles governing the formation and enforceability of contracts. (Pinnacle,
supra, 55 Cal.4th at p. 236; Avery v. Integrated Healthcare Holdings, Inc. (2013) 218
Cal.App.4th 50, 59; Bolter v. Superior Court (2001) 87 Cal.App.4th 900, 906.) To prove
an arbitration agreement was formed under California law, Charter must establish the
essential elements of a contract—specifically, (1) parties capable of contracting, (2) the
consent of those parties, (3) a lawful object, and (4) adequate consideration. (Civ. Code,
§ 1550.) The consent of the parties must be (1) free, (2) mutual, and (3) communicated
by each to the other. (Civ. Code, § 1565.) Charter, as the party seeking to compel
arbitration, bears the burden of proving by a preponderance of the evidence that a valid
arbitration agreement was formed. (Engalla v. Permanente Medical Group, Inc. (1997)
15 Cal.4th 951, 972; Fabian v. Renovate America, Inc. (2019) 42 Cal.App.5th 1062, 1068
[defendant failed to prove plaintiff electronically signed the contract containing the
arbitration provision]; Ruiz, supra, 232 Cal.App.4th at p. 846 [defendant did not meet
evidentiary burden relating to electronic signature].)
       In addition, the trial court shall consider the evidence contained in the
supplemental declarations submitted by Charter and decide Lopez’s remaining
evidentiary objections based on the entirety of the papers filed by the parties. In other
words, the evidentiary objections (other than those based on § 1005) are “at large” on
remand and the trial court’s earlier evidentiary rulings addressing Fries’s first declaration
and the supplemental declarations have no effect.
III.   STATEMENT OF DECISION
       Section 1291 provides: “A statement of decision shall be made by the court, if
requested pursuant to Section 632, whenever an order or judgment, except a special order
after final judgment, is made that is appealable under this title.” This provision, along
with section 632 and Rule 3.1590, define the circumstances in which a trial court must

                                             13.
issue a statement of decision when it denies a motion to compel arbitration. Thus, we
note the trial court’s stated reason for not providing a written statement of decision was
contrary to these statutes and Rule 3.1590. In any event, because the order denying the
motion is reversed on other grounds, we do not address (1) whether Charter made a
request that complies with the applicable timing and content requirements and, thus,
triggered the court’s obligation to issue a statement of decision or (2) whether the oral
statements made by the court during the hearing fulfilled that obligation (see Rule
3.1590(n)).
       To remove uncertainty for the parties and the trial court in the conduct of the
further proceedings on remand, nothing in this opinion prohibits either party from
requesting a statement of decision after the issuance of remittitur.
                                        DISPOSITION
       The order denying the motion to compel arbitration and sustaining three
evidentiary objections is reversed. The matter is remanded to the trial court for further
proceedings consistent with this opinion. Appellant shall recover its costs on appeal.
(Cal. Rules of Court, rule 8.278(a).)

                                             14.