Court Opinion

ID: 9414841
Source: CourtListenerOpinion
Date Created: 2023-08-02 17:04:10.984948+00
Date Added: 2024-06-11T17:18:38.398812
License: Public Domain

Filed 8/2/23 Cardenas v. Big Star Builders 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                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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

 JOSE CARDENAS et al.,
                                                                                             F084745
           Plaintiffs and Respondents,
                                                                             (Super. Ct. No. CV-21-005567)
                    v.

 BIG STAR BUILDERS, INC.,                                                                 OPINION
           Defendant and Appellant.

         APPEAL from an order of the Superior Court of Stanislaus County. John D.
Freeland, Judge.
         Law Offices of Elvis Tran, Elvis Tran and Jason Hoang for Defendant and
Appellant.
         Golden & Cardona-Loya and Octavio Cardona-Loya II for Plaintiffs and
Respondents.
                                                        -ooOoo-
       Appellant Big Star Builders, Inc. appeals following the trial court’s denial of its
third petition for an order compelling arbitration and staying all proceedings. Appellant
is seeking to force arbitration between itself and respondents Jose Cardenas and Elena
Zarate Carrillo in lieu of the litigation respondents filed against appellant and several
other companies who were involved in the installation of solar panels at respondents’
home. For the reasons set forth below, we affirm.
                  FACTUAL AND PROCEDURAL BACKGROUND
       In 2021, respondents filed an action against appellant and several other companies,
including Greensky, LLC, Equisolar, Inc., American Contractors Indemnity Company,
and Wesco Insurance Company, alleging various causes of action related to what
respondents contend was a botched sale and installation of solar panels at their home.
According to respondents, they were approached by a salesperson, Noel Montoya, who
was acting as an agent for appellant, Equisolar, Inc., and Greensky, LLC. Montoya made
several claims regarding the proposed system, including that it would generate a specific
amount of power, would eliminate respondents’ electricity bill, and that respondents
would be reimbursed for any failure on the part of the system to produce the promised
quantity of electricity.
       Respondents were charged and paid at least $10,000, allegedly before any work
was commenced, yet found that the system installed failed to generate the proper amount
of power and eliminate their electric bill. They did not receive reimbursement for the
underperformance. Respondents alleged the work performed was eventually found to be
substandard, that attempted repairs not only failed to fix the problems but further
damaged their property, and that additional promises not kept by appellant and the other
companies resulted in respondents being told by Greensky, LLC that they would be
required to pay late charges for fees that were supposed to be covered by appellant.

                                              2.
       Respondents further allege that Equisolar, Inc. forged Cardenas’s signature on
permit applications related to the work. And respondents note that while the negotiations
were done in Spanish and appellant’s documents were provided in Spanish, additional
documents provided by Greensky, LLC were in English.
       In response to this litigation, appellant filed a motion to compel arbitration
between itself and respondents. Appellant argued it had entered into a contract with
respondents and that contract included an arbitration clause, which appellant requested be
enforced. Appellant attached a copy of the contract, a translation into English, and a
declaration from one Isaac Hernandez, who claimed to be the operations manager for
appellant and who stated he was “familiar with all aspects of the Contract.” The court
ultimately denied this first motion without prejudice, finding the purported contract was
not properly authenticated, the translation did not meet requirements of the California
Rules of Court, and that the parties should further meet and confer on the issue.
       A short while later, appellant filed a second motion to compel arbitration. In that
motion, appellant sought to correct the translation and authentication issues and noted
that further meet and confer efforts were not successful. Appellant again requested the
court compel arbitration between appellant and respondents. In support of the
authentication claim, appellant submitted a new declaration from Hernandez, stating, “I
executed the contract” and “swear that it is authentic.”1 This time, rather than claiming
to be an employee of appellant, Hernandez claimed he was “Operations Manager of …
Equisolar, Inc.”2

1      Notably, neither Hernandez’s name nor his signature appear on the contract. Rather, the
only name potentially associated with appellant is that of the salesperson, Montoya.
2     When this change was pointed out, appellant submitted a revised declaration stating
Hernandez was “the Operations Manager of both … Equisolar, Inc., and [appellant].”

                                              3.
       Respondents objected to the authentication efforts and the court again denied the
motion to compel, granting their objections and holding the contract had not been
authenticated.
       Several months later, appellant filed a third motion to compel arbitration. This
time, appellant relied on assertions that respondents not only entered into and signed the
contract, but had affirmed the existence of the contract by referencing it in their
complaint, along with another declaration from Hernandez to authenticate the contract.
Appellant conceded that only Carrillo’s signature appeared on the purported contract but
asserted she had signed “on behalf of both” her and Cardenas.
       Hernandez’s declaration was more extensive than his prior ones. First, Hernandez
stated his position was “Operations Manager of … EQUISOLAR[,] INC.” Hernandez
then claimed appellant was the principle and Equisolar, Inc., Greensky, LLC, and
American Contractors Indemnity Company were agents of appellant in the business of
solar panel installation and financing. Hernandez declared the relevant contract, which
was attached in its original Spanish form, was “created by our employees,” in the regular
course of business, at or near the time of the installation agreement. The contract was
“the standard sales agreement used by” appellant and is presented “to all our solar panel
customers.” Hernandez declared his “employee, Noel Montoya, followed all company
protocols and procedures” when presenting the contract to Carrillo, but said nothing of
discussions with Cardenas. Throughout, Hernandez made several statements asserting he
was aware of the normal procedures for creating and presenting this type of contract, had
personal knowledge of the contract generally, and had personal knowledge of the contract
and work done at respondents’ home.
       Respondents again opposed the motion. They raised several arguments. First,
respondents argued the court should not compel arbitration against non-signatories,
identified as all parties other than Carrillo. Respondents alleged there was no evidence
submitted that Carrillo acted as Cardenas’s agent and noted that the agreement could only

                                             4.
cover “disputes between [Carrillo] and [appellant].” Respondents then challenged the
evidence seeking to authenticate the contract, noting that Hernandez lacked personal
knowledge related to the contract because he was not an employee of appellant and
therefore could not authenticate that the agreement the contract proffered was authentic
or otherwise lay proper foundations for the introduction of appellant’s business records.
Coupled with this argument, and submitted separately, were 10 objections to portions of
Hernandez’s declaration. Next, respondents alleged the contract was unconscionable and
thus unenforceable. Finally, respondents asserted enforcement was not proper under
Code of Civil Procedure section 1281.2, subdivision (c),3 based on the risk of conflicting
rulings involving parties not bound by the arbitration agreement.
       The trial court issued a tentative ruling and held a hearing at which the parties
presented brief arguments. The court then denied appellant’s third motion to compel
arbitration. In doing so, the court noted that the “motion remains deficient in that it is not
supported by admissible evidence, as the purported arbitration agreement has not been
properly authenticated.” Relatedly, the court sustained respondents’ objections to
Hernandez’s declaration “on the grounds stated” and explained the “declaration is
insufficient to authenticate the subject agreement.” Finally, the court added that, in
addition to the evidentiary issues, “the Court finds that an order compelling arbitration in
this instance would create the possibility of conflicting rulings on common factual and/or
legal issues” because “the allegedly arbitrable claim arises out of the same transaction(s)
as the non-arbitrable claims.” Thus, citing section 1281.2, subdivision (c) the court
explained that even if an arbitration agreement existed, “the matter is not appropriate for
arbitration under the circumstances.”
       This appeal timely followed.

3      Undesignated statutory references are to the Code of Civil Procedure.

                                              5.
                                        DISCUSSION
Standard of Review and Applicable Law
       “ ‘ “There is no uniform standard of review for evaluating an order denying a
motion to compel arbitration. [Citation.] If the court’s order is based on a decision of
fact, then we adopt a substantial evidence standard. [Citations.] Alternatively, if the
court’s denial rests solely on a decision of law, then a de novo standard of review is
employed.” ’ ” (Chambers v. Crown Asset Management, LLC (2021) 71 Cal.App.5th
583, 591 (Chambers).) “ ‘Trial court rulings on the admissibility of evidence … are
generally reviewed for abuse of discretion.’ ” (Ibid.)
       “California statutes create a ‘summary proceeding’ for resolving petitions or
motions to compel arbitration. [Citation.] ‘The petitioner bears the burden of proving the
existence of a valid arbitration agreement by the preponderance of the evidence, and a
party opposing the petition bears the burden of proving by a preponderance of the
evidence any fact necessary to its defense. [Citation.] In these summary proceedings, the
trial court sits as a trier of fact, weighing all the affidavits, declarations, and other
documentary evidence, as well as oral testimony received at the court’s discretion, to
reach a final determination.’ ” (Chambers, supra, 71 Cal.App.5th at p. 590, first
bracketed insertion added.)
       “ ‘Thus, our Supreme Court has clearly stated that a court, before granting a
petition to compel arbitration, must determine the factual issue of “the existence or
validity of the arbitration agreement.” [Citation.] In this way, a court’s role, though
limited, is critical. “There is indeed a strong policy in favor of enforcing agreements to
arbitrate, but there is no policy compelling persons to accept arbitration of controversies
which they have not agreed to arbitrate and which no statute has made arbitrable.” ’ ”
(Chambers, supra, 71 Cal.App.5th at p. 590.)

                                                6.
Appellant Has Waived Any Challenge to the Exclusion of Hernandez’s Declaration
       The trial court’s first ground asserted for denying appellant’s third motion to
compel arbitration was its conclusion that appellant had failed to properly prove that an
arbitration clause existed in this case. As part of its ruling on that point, the trial court
specifically sustained 10 objections raised by respondents that challenged Hernandez’s
declaration seeking to authenticate the purported contract that contained the alleged
arbitration clause. On appeal, appellant makes no legally relevant mention of this aspect
of the trial court’s ruling, despite directly quoting it in its fact section. Appellant’s
conduct has affirmatively waived any assertion that the trial court wrongly excluded
Hernandez’s declaration. (See Roe v. McDonald’s Corp. (2005) 129 Cal.App.4th 1107,
1114 [“[Appellant’s] brief on appeal fails to identify the court’s evidentiary ruling as a
distinct assignment of error, and there is no separate argument heading or analysis of the
issue. That alone is grounds to deem the argument waived.”].)
       Perhaps aware of this shortcoming, appellant argues from the position that there is
no basis to reject its submission of the proffered arbitration clause because respondents
have alleged the existence of the agreement in their complaint. But this argument proves
nothing. Respondents’ complaint does not reference the arbitration clause nor any
specific terms of the contract, other than to claim that some agreement exists, and
respondents did not attach any documents to their complaint. Accordingly, while there is
an admission that some agreement exists, there is no basis to conclude, based on the
complaint alone, that the documents submitted by appellant are, in fact, representative of
the agreement referenced by respondents in their complaint.
       Appellant therefore needed more than an unsupported claim an arbitration
agreement existed to compel arbitration. “ ‘ “Under ‘both federal and state law, the
threshold question presented by a petition to compel arbitration is whether there is an
agreement to arbitrate.’ ” ’ [Citations.] The threshold question requires a response
because if such an agreement exists, then the court is statutorily required to order the

                                               7.
matter to arbitration” absent a statutory basis not to do so. (Fleming v. Oliphant
Financial, LLC (2023) 88 Cal.App.5th 13, 19.) “ ‘To be sure, before referring a dispute
to an arbitrator, the court determines whether a valid arbitration agreement exists.’ ” (Id.
at p. 20.) When the trial court excluded Hernandez’s declaration and found the proffered
agreement lacked foundation, it did not error; there was no remaining evidence to prove
that the agreement presented to the court was, in fact, the agreement appellant referred to.
Appellant Has Waived Any Challenge Under Section 1281.2, Subdivision (c)
       The trial court’s order in this case rests upon a secondary ground, the court’s
conclusion that even if an arbitration clause exists, the risk of conflicting rulings means
the arbitration clause should not be enforced. Astoundingly, appellant does not mention
this aspect of the court’s ruling in its opening or reply brief, nor does it ever discuss
section 1281.2, the provision relied upon by the trial court. Appellant has therefore
waived any argument on this point. (Save Agoura Cornell Knoll v. City of Agoura Hills
(2020) 46 Cal.App.5th 665, 704, fn. 14.) Moreover, appellant’s complete failure to
dispute one of the two aspects underlying the trial court’s order is fatal to its appeal. (See
Christoff v. Union Pacific Railroad Co. (2005) 134 Cal.App.4th 118, 125–126.)
       Even if not waived, we see no error in the trial court’s ruling. Section 1281.2,
subdivision (c), provides that “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: [¶] … [¶] (c) A party to the arbitration agreement is also
a party to a pending court action … with a third party, arising out of the same transaction
or series of related transactions and there is a possibility of conflicting rulings on a
common issue of law or fact.” The statute further explains that if “the court determines
that a party to the arbitration is also a party to litigation in a pending court action … as set
forth under subdivision (c), the court (1) may refuse to enforce the arbitration agreement
and may order intervention or joinder of all parties in a single action.” (§ 1281.2,
subd. (d).) The statute has long been held to permit a court to refuse to order arbitration,

                                               8.
even when a valid arbitration provision exists and even when proceedings are subject to
the Federal Arbitration Act (9 U.S.C.S. § 1 et seq.). (See Cronus Investments, Inc. v.
Concierge Services (2005) 35 Cal.4th 376, 393 [noting § 1281.2, subd. (c), “is an
evenhanded law that allows the trial court to stay arbitration proceedings while the
concurrent lawsuit proceeds,” which does not conflict with the Federal Arbitration Act].)
       In this case, the arbitration agreement submitted to the court limits arbitration to
“disputes between [Carrillo] and [appellant]” and specifically notes this “means that the
arbitration shall not address disputes that involve other persons with disputes similar to
the [d]isputes between [Carrillo] and [appellant].” Given this language, we see no error
in the trial court’s determination that the existence of multiple subcontractors or related
parties in the installation of a single solar project could result in inconsistent rulings on
issues of fact or law if claims related to that installation were sent to arbitration with
respect to appellant only. Under section 1281.2, the trial court could therefore refuse to
compel arbitration even if it found a sufficient foundation for the arbitration clause and
assumed it was applicable.
                                       DISPOSITION
       The order denying appellant’s third petition for an order compelling arbitration
and staying all proceedings is affirmed. Costs are awarded to respondents.

                                                                                    HILL, P. J.
WE CONCUR:

LEVY, J.

MEEHAN, J.

                                               9.