Court Opinion

ID: 4766138
Source: CourtListenerOpinion
Date Created: 2021-08-16 22:05:59.342059+00
Date Added: 2024-06-11T08:09:14.353325
License: Public Domain

Filed 8/16/21
                CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                SECOND APPELLATE DISTRICT

                        DIVISION SEVEN

SYLVIA NIXON,                       B302754

       Plaintiff and Appellant,     (Los Angeles County
                                    Super. Ct. No.
       v.                           19STCV19029)

AMERIHOME MORTGAGE
COMPANY, LLC,

       Defendant and Respondent.

     APPEAL from an order of the Superior Court of
Los Angeles County, Amy D. Hogue, Judge. Affirmed; appeal
dismissed in part.
     ORIGINAL PROCEEDINGS in mandate. Petition denied.
     Justice Law Corporation, Douglas Han, Shunt Tatavos-
Gharajeh and Areen Babajanian for Plaintiff and Appellant.
     Carothers DiSante & Freudenberger, Todd R. Wulffson,
Nancy N. Lubrano and Rachel L. Capler for Defendant and
Respondent.
                   ______________________
      Sylvia Nixon sued her former employer, AmeriHome
Mortgage Company, LLC, in a putative class action lawsuit for
unpaid overtime compensation and unlawful business practices.
The superior court granted AmeriHome’s motion to compel
arbitration, ordered arbitration of Nixon’s individual claims and
dismissed the class claims.
      On appeal Nixon argues AmeriHome’s motion should have
                                                   1
been denied pursuant to Labor Code section 229, which provides,
“Actions to enforce the provisions of this article for the collection
of due and unpaid wages claimed by an individual may be
maintained without regard to the existence of any private
agreement to arbitrate.” Alternatively, Nixon contends the
superior court abused its discretion under Code of Civil
Procedure section 1281.2 by ordering her to arbitrate her wage-
and-hour claim notwithstanding the pendency of a nonarbitrable
lawsuit against AmeriHome by another former employee under
the Labor Code Private Attorneys General Act of 2004 (PAGA)
(Lab. Code, § 2698 et seq.).
      In light of the uncertainty of our jurisdiction to consider
Nixon’s appeal from the order compelling arbitration and the
absence of any delay or prejudice our intervention at this stage
would cause, we find this an appropriate case in which to exercise
our discretion to treat the appeal from that order as a petition for
writ of mandate. We deny the petition on the merits and affirm
the order dismissing the putative class claims.

1
     Statutory references are to the Labor Code unless
otherwise stated.

                                  2
      FACTUAL AND PROCEDURAL BACKGROUND
      Nixon worked at AmeriHome as a loan review analyst or
operations support specialist from mid-October 2015 to
February 26, 2018. She reviewed loan files for AmeriHome
clients who resided in California, as well as those who lived in
other states.
      1. The Agreement To Arbitrate
       As part of her on-boarding process with the company,
Nixon executed a seven-page Employment and Confidentiality
Agreement. The agreement covered a range of matters directly
related to Nixon’s position with the company, including her start
date, duties, compensation and fringe benefits and her obligation
not to disclose or use AmeriHome’s confidential information
except as required in the performance of her job. The agreement
also provided Nixon’s employment was on an at-will basis and
could be terminated by either party at any time without cause.
       Section X of the agreement was titled, “GOVERNING
LAW; ARBITRATION; WAIVER OF A JURY TRIAL.” That
section stated in part: “This Agreement, and all questions
relating to its validity, interpretation, performance and
enforcement, as well as the legal relations hereby created
between the parties hereto, shall be governed and construed
under, and interpreted and enforced in accordance with, the laws
of the State of California notwithstanding any California or other
conflict of law provision to the contrary and any dispute or
controversy arising out of or relating to this Agreement or your
employment, other than injunctive relief as provided in this
Agreement, will be settled exclusively by arbitration, conducted
before a single arbitrator in California (applying California law)
in accordance with, and pursuant to, the National Rules for the

                                 3
Resolution of Employment Disputes of the American Arbitration
Association (‘AAA’). . . . Any arbitral award may be entered as a
judgment or order in any court of competent jurisdiction. Either
party may commence litigation in court to obtain injunctive relief
in aid of arbitration, to compel arbitration, or to confirm or vacate
an award, to the extent authorized by the Federal Arbitration Act
or the California Arbitration Act.”
      2. Nixon’s Putative Class Action Complaint
      On June 3, 2019 Nixon filed a complaint against
AmeriHome, individually and on behalf of a putative class of all
current and former hourly paid or nonexempt employees of
AmeriHome, for failure to pay minimum wages and required
overtime wages pursuant to sections 510, 1194 and 1198. Nixon
specifically alleged the first cause of action for unpaid wages was
brought pursuant to section 229. Nixon also alleged a second
cause of action for unlawful business practices (Bus. & Prof.
Code, § 17200 et seq.), relying on predicate violations of
sections 510, 1194 and 1198.
      3. AmeriHome’s Motion To Compel Arbitration
      AmeriHome moved on June 28, 2019 to compel arbitration
of Nixon’s individual claims, to dismiss the class claims and to
stay judicial proceedings pending completion of the arbitration.
AmeriHome submitted a declaration from its human resources
director, Shelley Tam, which described how AmeriHome’s
business and Nixon’s work involved interstate commerce. Tam’s
declaration also attached a copy of Nixon’s Employment and
Confidentiality Agreement. AmeriHome argued, because
interstate commerce was involved, the Federal Arbitration Act
(FAA) governed the agreement and preempted section 229’s
prohibition of arbitration of unpaid wage claims. AmeriHome

                                  4
also relied on language in the arbitration agreement expressly
stating arbitration could be compelled “to the extent authorized
by the Federal Arbitration Act.”
      In opposing the motion to compel arbitration, Nixon did not
dispute the authenticity of the Employment and Confidentiality
Agreement submitted by AmeriHome or contend her employment
did not involve interstate commerce. Nonetheless, she argued
the FAA did not apply—and Labor Code section 229 was not
preempted—because of the agreement’s broad choice-of-law
provision, which stated it would be “construed[,] . . . interpreted
and enforced” in accordance with California law. Nixon also
contended, whether federal or state arbitration rules applied, the
superior court should deny the motion pursuant to Code of Civil
Procedure section 1281.2, subdivision (c), in light of the pending
PAGA action initiated by Anthony Brooks (Brooks v. AmeriHome
Mortgage Company, LLC (Super. Ct. Ventura County,
No. 56-2019-00524903-CU-OE-VTA) (Brooks)), seeking civil
                             2
penalties for wage violations. Nixon argued the Brooks action
and her lawsuit arose from the same series of transactions, which
created the possibility of conflicting rulings on common issues of
fact and law.
      AmeriHome filed a reply contending the agreement’s
choice-of-law provision should not be interpreted to mean
California law governed enforcement of the arbitration provision
because the agreement expressly permitted arbitration to be
compelled pursuant to the FAA. AmeriHome also argued the
arbitration agreement expressly applied to any dispute relating

2
      The superior court granted Nixon’s request for judicial
notice of the complaint filed in the Brooks action.

                                 5
to Nixon’s employment, which included her wage claim, and she
should not be allowed to negate the core purpose of the
arbitration agreement by invoking Labor Code section 229.
Regarding Code of Civil Procedure section 1281.2, subdivision (c),
AmeriHome argued the FAA also preempted this provision and,
in any event, there was no risk of inconsistent rulings and,
therefore, no reason to deny or stay arbitration.
      4. The Superior Court’s Ruling
        After hearing oral argument the superior court concluded,
“It is clear the parties intended to arbitrate and that the FAA
applies.” In its written order the court ruled there existed a valid
arbitration agreement that covered the claims alleged by Nixon.
The court rejected Nixon’s argument that Labor Code section 229
exempted her wage claim from arbitration. While acknowledging
the agreement contained a provision that it would be “governed[,]
. . . construed under[,] . . . interpreted and enforced” in
accordance with California law, the court found the choice-of-law
provision insufficient to negate the parties’ agreement to
arbitrate “any dispute or controversy arising out of or relating to
this Agreement or your employment.” The court declined to
exercise its discretion to deny AmeriHome’s motion pursuant to
Code of Civil Procedure section 1281.2, subdivision (c), because
the case did not arise out of the same transaction as Brooks, and
compelling arbitration would not necessarily result in conflicting
rulings.
        The court granted AmeriHome’s motion to compel
arbitration of Nixon’s individual claims, dismissed the class
claims and stayed proceedings in the superior court pending
resolution of the arbitration. Nixon filed a timely notice of
appeal.

                                 6
                          DISCUSSION
      1. Appealability
       A superior court’s order denying class certification or
dismissing class claims is appealable pursuant to the death knell
doctrine. (In re Baycol Cases I & II (2011) 51 Cal.4th 751, 757
[when an order “effectively [rings] the death knell for the class
claims, [the court] treat[s] it as in essence a final judgment on
those claims”].) The death knell doctrine seeks to ensure that an
order operating as “the practical equivalent of a final judgment
for absent class members” does not evade review entirely because
“without the possibility of a group recovery, the plaintiff will lack
incentive to pursue claims to final judgment.” (Cortez v. Doty
Bros. Equipment Co. (2017) 15 Cal.App.5th 1, 8.)
       An order compelling arbitration generally is not
immediately appealable. (Ashburn v. AIG Financial Advisors,
Inc. (2015) 234 Cal.App.4th 79, 94 [“[a]n order granting a petition
to compel arbitration is not appealable, but is reviewable on
appeal from a subsequent judgment on the award”]; Phillips v.
Sprint PCS (2012) 209 Cal.App.4th 758, 766 [“[o]rdinarily, no
immediate appeal lies from an order compelling arbitration and
review of the order must await appeal from a final judgment
entered after arbitration”]; Abramson v. Juniper Networks, Inc.
(2004) 115 Cal.App.4th 638, 648 [“no immediate, direct appeal
lies from an order compelling arbitration”]; see Code Civ. Proc.,
§ 1294 [defining appealable orders in the context of arbitration
proceedings].)
       It is far from certain whether the judicially created death
knell exception to the one final judgment rule for an order
dismissing class claims extends to make appealable an otherwise
nonappealable order compelling arbitration when the two orders

                                  7
are issued simultaneously. (See Cortez v. Doty Bros. Equipment
Co., supra, 15 Cal.App.5th at p. 10.) Because the order
compelling arbitration in this context shares certain
characteristics of an interlocutory or interim order appealable
under Code of Civil Procedure section 906—that is, it “‘involves
the merits or necessarily affects the judgment or order appealed
from or . . . substantially affects the rights of a party’” (see Estate
of Dayan (2016) 5 Cal.App.5th 29, 38-39; Abramson v. Juniper
                                                     3
Networks, Inc., supra, 115 Cal.App.4th at p. 649) —the order
compelling arbitration of Nixon’s individual claims is arguably
appealable as part of Nixon’s appeal of the dismissal of her class
claims. (Cf. Franco v. Athens Disposal Co., Inc. (2009)
171 Cal.App.4th 1277, 1288 [holding appealable an order finding
class arbitration waiver enforceable and compelling arbitration of
individual claims as “the ‘death knell’ of class litigation through
arbitration” without addressing the general nonappealability of
                                       4
an order compelling arbitration].) However, by its terms Code of

3
      The order compelling arbitration unquestionably involves
the merits of the controversy under appeal, that is, Nixon’s right
to pursue a class action for unpaid wages, and necessarily affects
the order being appealed. The class action claim was dismissed
because the motion to compel arbitration was granted; but for
that order, the class action would have survived. And for the
same reason, the order compelling arbitration substantially
affects Nixon’s rights.
4
      Although AmeriHome does not contest Nixon’s right to
appeal the order compelling arbitration, the parties’ consent is
insufficient to create appellate jurisdiction. (See, e.g., Ponce-
Bran v. Trustees of Cal. State University (1996) 48 Cal.App.4th
1656, 1660, fn. 2 [“[a]ppellate jurisdiction cannot be conferred by
consent, stipulation, estoppel, or waiver”].)

                                   8
Civil Procedure section 906 authorizes review of an interim
nonappealable order “[u]pon an appeal pursuant to Section 904.1
or 904.2”— that is, an appeal from a final judgment,
postjudgment orders and certain specific, defined interlocutory
orders. Section 906, therefore, provides, at best, an imperfect
basis for jurisdiction in an appeal pursuant to the judicially
created death knell doctrine. (See Cortez v. Doty Bros.
Equipment Co., supra, 15 Cal.App.5th at p. 10.)
       In light of the uncertainty of Nixon’s right to appeal the
order compelling arbitration as part of her appeal of the dismissal
of the class claims and the significance of the issue she raises
concerning the applicability of section 229 to the scope of the
parties’ agreement to arbitrate, we exercise our discretion to treat
that portion of Nixon’s appeal directed to the order compelling
arbitration as a petition for writ of mandate and consider the
merits of that order. (See Olson v. Cory (1983) 35 Cal.3d 390,
401; Curtis v. Superior Court (2021) 62 Cal.App.5th 453, 465;
Williams v. Impax Laboratories, Inc. (2019) 41 Cal.App.5th 1060,
1071-1072; Nelsen v. Legacy Partners Residential, Inc. (2012)
207 Cal.App.4th 1115, 1123.) Reviewing an order compelling
arbitration by writ should be done sparingly and only in an
appropriate circumstance to avoid defeating the purpose of the
arbitration statute. (Cortez v. Doty Bros. Equipment Co., supra,
15 Cal.App.5th at p. 10; see Young v. RemX, Inc. (2016)
2 Cal.App.5th 630, 635-636.) Here, however, arbitration has
already been significantly delayed, and the issues fully briefed.
Review of the arbitration order, integral to a proper evaluation of
the order dismissing class claims, will not cause any additional
delay or subvert the purpose of the arbitration statute. (See
Nelsen, at p. 1123 [treating appeal from order compelling

                                 9
arbitration as writ petition]; Phillips v. Sprint PCS, supra,
209 Cal.App.4th at p. 767 [same].)
      2. Governing Law
       Section 2 is “the primary substantive provision of the FAA”
(9 U.S.C. § 1 et seq.). (Cronus Investments, Inc. v. Concierge
Services (2005) 35 Cal.4th 376, 384 (Cronus); accord, Judge v.
Nijjar Realty, Inc. (2014) 232 Cal.App.4th 619, 631 [“[s]ection 2 of
the FAA is a substantive rule that applies in both federal and
state courts”].) It provides, “A written provision in any maritime
transaction or a contract evidencing a transaction involving
commerce to settle by arbitration a controversy thereafter arising
out of such contract or transaction . . . shall be valid, irrevocable,
and enforceable, save upon such grounds as exist at law or in
equity for the revocation of any contract.” (9 U.S.C. § 2.)
Section 2 “‘create[s] a body of federal substantive law of
arbitrability, applicable to any arbitration agreement within the
coverage of the Act.’” (Perry v. Thomas (1987) 482 U.S. 483, 489;
see Southland Corp. v. Keating (1984) 465 U.S. 1, 10 [“[i]n
enacting § 2 of the [FAA], Congress declared a national policy
favoring arbitration and withdrew the power of the states to
require a judicial forum for the resolution of claims which the
contracting parties agreed to resolve by arbitration”]; Moses H.
Cone Memorial Hospital v. Mercury Const. Corp. (1983) 460 U.S.
1, 24 [“Section 2 is a congressional declaration of a liberal federal
policy favoring arbitration agreements, notwithstanding any
state substantive or procedural policies to the contrary. The
effect of the section is to create a body of federal substantive law
of arbitrability, applicable to any arbitration agreement within
the coverage of the [FAA]”]; Cronus, at p. 384 [“[t]he policy of

                                  10
enforceability established by section 2 of the FAA is binding on
state courts as well as federal courts”].)
      Section 2, as all other substantive provisions of the FAA,
applies when a contract involves interstate commerce. (Volt Info.
Sciences v. Bd. of Trustees of Leland Stanford Jr. U. (1989)
489 U.S. 468, 476 (Volt); Cronus, supra, 35 Cal.4th at p. 384;
Rosenthal v. Great Western Fin. Securities Corp. (1996)
14 Cal.4th 394, 405 (Rosenthal).) However, the FAA does not
require the parties to arbitrate under any specific set of
procedural rules. (Volt, at pp. 476, 479; Cronus, at p. 385.) “Just
as [the parties] may limit by contract the issues which they will
arbitrate [citation], so too may they specify by contract the rules
under which the arbitration will be conducted.” (Volt, at p. 479.)
“[T]he procedural provisions of the CAA [the California
Arbitration Act] apply in California courts by default. . . . [T]he
parties may ‘expressly designate that any arbitration proceeding
[may] move forward under the FAA’s procedural provisions
rather than under state procedural law.’ [Citation.] Absent such
an express designation, however, the FAA’s procedural provisions
do not apply in state court.” (Valencia v. Smyth (2010)
185 Cal.App.4th 153, 174-175; see Mave Enterprises, Inc. v.
Travelers Indemnity Co. (2013) 219 Cal.App.4th 1408, 1429 [“the
procedural provisions of the CAA” apply in California courts
“absent a choice-of-law provision expressly mandating the
application of the procedural law of another jurisdiction”].)
      Code of Civil Procedure section 1281.2, subdivision (c), is
among the CAA’s procedural provisions that may be enforced by
California courts even with respect to arbitration contracts
subject to the FAA’s substantive rules. (See Volt, supra, 489 U.S.
at pp. 470, 477-479 [application of section 1281.2 to stay

                                11
arbitration would not undermine the goals and policies of, and is
not preempted by, the FAA in a case where the parties have
agreed that their arbitration agreement will be governed by
California law].) Subdivisions (c) and (d), fourth paragraph, of
section 1281.2 authorize the superior court to deny or stay
arbitration if 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.”
      3. Burdens of Proof and Standards of Review
      The party seeking to compel arbitration bears the burden of
proving by a preponderance of the evidence an agreement to
arbitrate exists. (Pinnacle Museum Tower Assn. v. Pinnacle
Market Development (US), LLC (2012) 55 Cal.4th 223, 236;
accord, Rosenthal, supra, 14 Cal.4th at p. 413.) The party
seeking to enforce the arbitration agreement also bears the
burden of establishing the FAA applies and preempts otherwise
governing provisions of state law or the parties’ agreement.
(See Lane v. Francis Capital Management LLC (2014)
224 Cal.App.4th 676, 687 [a petitioner seeking an order to compel
arbitration pursuant to the FAA must show that the subject
matter of the agreement involves interstate commerce]; Woolls v.
Superior Court (2005) 127 Cal.App.4th 197, 211 [same]; see also
Shepard v. Edward Mackay Enterprises, Inc. (2007)
148 Cal.App.4th 1092, 1101 [enforcing party bears the burden of
demonstrating FAA preemption].)
      Once an agreement to arbitrate has been proved, the
burden shifts to the party opposing arbitration to establish a
defense to the enforcement of the agreement, including “the
burden of demonstrating that the exemption [from arbitration]

                                 12
applies.” (Performance Team Freight Systems, Inc. v. Aleman
(2015) 241 Cal.App.4th 1233, 1241; see generally Rosenthal,
supra, 14 Cal.4th at p. 413.)
       We review de novo the superior court’s interpretation of an
arbitration agreement, including whether federal or state law
governing arbitration applies, when the interpretation does not
involve conflicting extrinsic evidence. (See Victrola 89, LLC v.
Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337, 346 [de novo
review to determine whether the arbitration agreement
incorporated the FAA’s procedural provisions “with no extrinsic
evidence”]; Cortez v. Doty Bros. Equipment Co., supra,
15 Cal.App.5th at p. 12 [“de novo review to the superior court’s
interpretation of an arbitration agreement that does not involve
conflicting extrinsic evidence”].) However, “the ultimate
determination [pursuant to Code of Civil Procedure
section 1281.2, subdivision (c),] whether to stay or deny
arbitration based on the possibility of conflicting rulings on
common questions of law or fact is reviewed for an abuse of
discretion.” (Daniels v. Sunrise Senior Living, Inc. (2013)
212 Cal.App.4th 674, 680; accord, Laswell v. AG Seal Beach, LLC
(2010) 189 Cal.App.4th 1399, 1406.)
      4. Section 229 Does Not Exempt Nixon’s Wage Claim from
         Arbitration
       Because, as Nixon concedes, she was not a transportation
worker and her contract with AmeriHome involved interstate
commerce, the parties’ arbitration agreement is covered by the
FAA. As discussed, without an express choice-of-law provision,
such an agreement would be subject to the procedural provisions
of the CAA; but section 2 of the FAA would preempt Labor Code
section 229. (Perry v. Thomas, supra, 482 U.S. at pp. 490-491

                                13
[“clear federal policy places § 2 of the Act in unmistakable conflict
with California’s § 229 requirement that litigants be provided a
judicial forum for resolving wage disputes. Therefore, under the
Supremacy Clause, the state statute must give way”]; see Hoover
v. American Income Life Ins. Co. (2012) 206 Cal.App.4th 1193,
1207 [“[a]n exception” to the exemption set forth in section 229
“occurs when there is federal preemption by the FAA, as applied
to contracts evidencing interstate commerce”]; cf. Garrido v. Air
Liquide Industrial U.S. LP (2015) 241 Cal.App.4th 833, 845
[although the FAA preempts section 229, “when only the CAA
applies” in cases not covered by the FAA, section 229 is properly
enforced].)
       Notwithstanding this general principle of preemption, the
parties could provide in their arbitration agreement that a
dispute regarding unpaid wages—the subject of section 229—is
not arbitrable. (See Volt, supra, 489 U.S. at p. 479 [the parties
may limit by contract the issues they will arbitrate].) The issue
here is whether the general choice-of-law provision in the
Employment and Confidentiality Agreement, which governed all
aspects of Nixon’s relationship with AmeriHome, not simply the
arbitration provision, evidences the parties’ intent to exclude
unpaid wage claims from their otherwise all-inclusive agreement
to arbitrate “any dispute or controversy arising out of or relating
to this Agreement or your employment.”
       The United States Supreme Court addressed a nearly
identical issue in Mastrobuono v. Shearson Lehman Hutton
(1995) 514 U.S. 52 (Mastrobuono), in which the Court considered
whether a New York state law that authorized courts, but not
arbitrators, to award punitive damages precluded an award of
punitive damages in an arbitration pursuant to an agreement

                                 14
subject to the FAA. The Supreme Court explained the parties
could have agreed to waive any claim to punitive damages in
their agreement. (Id. at pp. 56-57 [“if the contract says ‘no
punitive damages,’ that is the end of the matter, for courts are
bound to interpret contracts in accordance with the expressed
intentions of the parties—even if the effect of those intentions is
to limit arbitration”].) But they did not. Rather, although the
broadly worded arbitration clause did not mention (and thus
presumably included the possibility of) punitive damages, the
respondents argued, by providing that their agreement “shall be
governed by the laws of the State of New York,” this choice-of-law
provision “evidences the parties’ express agreement that punitive
damages should not be awarded in the arbitration of any dispute
arising under their contract.” (Id. at pp. 58-59, 56.)
      The Supreme Court rejected that argument and held the
arbitrator was authorized to award punitive damages. The Court
explained, “At most, the choice-of-law clause introduces an
ambiguity into an arbitration agreement that would otherwise
allow punitive damages awards. As we pointed out in Volt, when
a court interprets such provisions in an agreement covered by the
FAA, ‘due regard must be given to the federal policy favoring
arbitration, and ambiguities as to the scope of the arbitration
clause itself resolved in favor of arbitration.’” (Mastrobuono,
supra, 514 U.S. at p. 62.) “[T]he best way to harmonize the
choice-of-law provision with the arbitration provision,” the Court
continued, “is to read ‘the laws of the State of New York’ to
encompass substantive principles that New York courts would
apply, but not to include special rules limiting the authority of
arbitrators. Thus, the choice-of-law provision covers the rights
and duties of the parties, while the arbitration clause covers

                                15
arbitration; neither sentence intrudes upon the other. In
contrast, respondents’ reading sets up the two clauses in conflict
with one another: one foreclosing punitive damages, the other
                                                                  5
allowing them. This interpretation is untenable.” (Id. at p. 64.)
      Applying the principles of Mastrobuono, our colleagues in
Division Eight of this court, in a tightly written opinion, held that
interpreting a general California choice-of-law provision in an
agreement as evidencing the parties’ intent to apply section 229
to an arbitration provision covering all employment claims,
including those relating to wages, “departs from common sense
and makes mischief.” (Bravo v. RADC Enterprises, Inc. (2019)
33 Cal.App.5th 920, 923.) We agree with the analysis in Bravo
(and follow, as we must, Mastrobuono) and conclude the choice-of-
law provision in the Employment and Confidentiality Agreement
signed by Nixon, which covers a wide range of matters including
interpretation of the at-will employment and confidentiality

5
       Expanding its analysis, the Supreme Court stated the
respondents’ choice-of-law argument would be persuasive “only if
‘New York law’ means ‘New York decisional law, including that
State’s allocation of power between courts and arbitrators,
notwithstanding otherwise-applicable federal law.’ But, as we
have demonstrated, the provision need not be read so broadly. It
is not, in itself, an unequivocal exclusion of punitive damages
claims.” (Mastrobuono, supra, 514 U.S. at p. 60.) Similarly, the
Nixon-AmeriHome choice-of-law provision, although including
the phrase “notwithstanding any California or other conflict of
law provision to the contrary,” does not state “California law
applies, including statutory provisions limiting the power of
arbitrators notwithstanding otherwise-applicable federal law”
and, thus, is not, in itself, an unequivocal exclusion of unpaid
wage claims from arbitration.

                                 16
provisions in the parties’ agreement, “becomes consistent with
the parties’ intent to arbitrate all disputes when we read ‘the
laws of the State of California’ to include substantive principles
California courts would apply, but to exclude special rules
limiting the authority of arbitrators.” (Bravo, at p. 923.)
       Nixon attempts to distinguish Bravo by describing the
choice-of-law provision in that case as “narrow” compared to the
“broad and all-encompassing” provision in the case at bar. We
question the accuracy of that characterization: “Governed by and
interpreted in accordance with,” as in Bravo, is fundamentally
the same as “governed by, construed under, interpreted and
enforced in accordance,” the language in Nixon’s agreement. Far
more significant in terms of determining whether the choice-of-
law provision evidences the parties’ agreement to incorporate a
state law that otherwise would be preempted by the FAA is that
the choice-of-law provision in Bravo was contained in the parties’
two-page arbitration agreement, manifesting their intent to apply
California law specifically to arbitration. (Bravo v. RADC
Enterprises, Inc., supra, 33 Cal.App.5th at pp. 921-922.) Here, in
contrast, the choice-of-law provision applied to the entirety of the
parties’ employment agreement, making any purported
agreement to incorporate section 229 even more illusory than it
was in Bravo.
       Nixon’s reliance on Mount Diablo Medical Center v. Health
Net of California, Inc. (2002) 101 Cal.App.4th 711 (Mt. Diablo) to
argue the California choice-of-law provision in the Employment
and Confidentiality Agreement is broad enough to incorporate
Labor Code section 229 is similarly misplaced, if for no other
reason than Mt. Diablo addressed the applicability of Code of
Civil Procedure section 1281.2, subdivision (c), a procedural

                                17
provision, which, as discussed, is not preempted by the FAA
(Volt, supra, 489 U.S. at p. 479), not a substantive provision like
Labor Code section 229, which is preempted by section 2 of the
                                                          6
FAA. (Perry v. Thomas, supra, 482 U.S. at pp. 490-491.)
      Moreover, Nixon misreads Mt. Diablo, which fully supports
the conclusion section 229 is not applicable in this case. The
Mt. Diablo court found the “broad, unqualified and all-
encompassing” choice-of-law provision stating “‘the validity,
construction, interpretation and enforcement of this Agreement’
shall be governed by California law” established the parties’
intent “to incorporate California procedural law governing the
enforcement of their agreement to arbitrate.” (Mt. Diablo, supra,
                                  7
101 Cal.App.4th at pp. 722, 714.) The court explained, under the
analysis in Mastrobuono, supra, 514 U.S. 52, “[i]f the language of
the choice-of-law clause is broad enough to include state law on
the subject of arbitrability, . . . the second step in the court’s
analysis, under Mastrobuono, must be to determine whether the
particular provision of state law in question is one that reflects a
hostility to the enforcement of arbitration agreements that the
FAA was designed to overcome. If so, the choice-of-law clause
should not be construed to incorporate such a provision, at least

6
      Likewise, Mastick v. TD Ameritrade, Inc. (2012)
209 Cal.App.4th 1258, which Nixon also cites, concerned the
applicability of Code of Civil Procedure section 1281.2.
7
      Contrary to Nixon’s assertion in her opening brief, both
Cronus, supra, 35 Cal.4th 376 and Mt. Diablo, involved only the
application of state procedural rules in the context of contracts
that involve interstate commerce and, thus, fall within the
coverage of the FAA. (Cronus, at p. 384; Mt. Diablo, supra,
101 Cal.App.4th at p. 722.)

                                 18
in the absence of unambiguous language in the contract making
the intention to do so unmistakably clear.” (Mt. Diablo, at
p. 724.)
       The court then turned to an analysis of Code of Civil
Procedure section 1281.2, subdivision (c), and concluded the
section was “not a provision designed to limit the rights of parties
who choose to arbitrate or otherwise to discourage the use of
arbitration. Rather, it [was] part of California’s statutory scheme
designed to enforce the parties’ arbitration agreements, as the
FAA requires.” (Mt. Diablo, supra, 101 Cal.App.4th at p. 726.)
Because Code of Civil Procedure section 1281.2, subdivision (c),
was not in conflict with the FAA’s guiding principle of enforcing
arbitration agreements, the FAA did not preempt its application
in a situation where the parties agreed to apply California
procedural law to enforce the arbitration agreement. (Mt. Diablo,
at p. 729.)
       In discussing Mt. Diablo and arguing for application of
Labor Code section 229, Nixon fails to address the second step of
the Mt. Diablo/Mastrobuono analysis. The choice-of-law
provision in the Employment and Confidentiality Agreement
broadly states the agreement will be “governed by, construed
under, and interpreted and enforced in accordance with”
California law; thus, as in Mt. Diablo, the provision may
reasonably be construed “to incorporate California procedural law
governing the enforcement of their agreement to arbitrate”—the
first step. But unlike Code of Civil Procedure section 1281.2,
Labor Code section 229, which exempts wage claims from
arbitration, unquestionably “reflects a hostility to the
enforcement of arbitration agreements that the FAA was
designed to overcome.” And, as discussed, neither the choice-of-

                                 19
law provision nor the arbitration agreement contains
“unambiguous language” making it “unmistakably clear” that the
parties intended to incorporate section 229 while agreeing to
arbitrate “any dispute or controversy arising out of or relating to”
Nixon’s employment at AmeriHome.
      5. The Superior Court Properly Exercised Its Discretion
         Under Code of Civil Procedure Section 1281.2 To Order
         Arbitration of Nixon’s Individual Claims
      Although Labor Code section 229 is not incorporated into
the parties’ agreement to arbitrate, Code of Civil Procedure
section 1281.2 is. (See Cronus, supra, 35 Cal.4th at p. 380 [the
FAA does not preempt application of Code of Civil Procedure
section 1281.2, subdivision (c), where “the parties agreed that
their arbitration agreement would be governed by California
law”]; Williams v. Atria Las Posas (2018) 24 Cal.App.5th 1048,
1054.) Section 1281.2, subdivision (c), provides the court may
decline to enforce an arbitration agreement if a party to the
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.” When subdivision (c) applies,
section 1281.2 “identifies four options from which the trial court
may choose, including denial or stay of arbitration proceedings”
(Williams, at p. 1054), but also a stay of court proceedings and
order to arbitrate—the option chosen here. “These options are
entrusted to the trial court’s discretion.” (Ibid.)
      The superior court did not abuse its discretion by declining
to deny or stay arbitration pursuant to Code of Civil Procedure
section 1281.2. First, the court reasonably concluded the
conditions for invoking the third-party litigation exception did

                                 20
not exist because Nixon’s lawsuit did not arise out of the same
transaction as the Brooks action, and there was no likelihood of
conflicting rulings on a common issue of law or fact. The plaintiff
in Brooks seeks civil penalties in a representative action under
PAGA for Labor Code violations while Nixon will be arbitrating
only her individual wage claim. As the California Supreme Court
recently explained, “[a] PAGA claim is legally and conceptually
different from an employee’s own suit for damages and statutory
penalties.” (Kim v. Reins International California, Inc. (2020)
9 Cal.5th 73, 81; cf. Jarboe v. Hanlees Auto Group (2020)
53 Cal.App.5th 539, 557 [rejecting defendant’s argument a stay of
the PAGA claim was necessary because the plaintiff’s “PAGA
claim and his individual claims arise out of the same nucleus of
facts alleged to violate the Labor Code”; although “there may be
similarities between the claims,” the PAGA claim is conceptually
different from an individual wage claim]; see also Brooks v.
AmeriHome Mortgage Co., LLC (2020) 47 Cal.App.5th 624, 629
[“Brooks alleged a single cause of action under PAGA and did not
allege an individual claim for wage recovery in his complaint. . . .
Because he brought a representative claim, he cannot be
compelled to separately arbitrate whether he was an aggrieved
employee”].)
       Second, even when the third-party litigation exception
applies, the superior court has discretion to “order arbitration
among the parties who have agreed to arbitration.” (Code Civ.
Proc., § 1281.2, subd. (d), 4th par.) The superior court’s decision
to elect this option was appropriate here: Whatever potential
there might otherwise be for conflicting rulings in the Brooks
action, pending in Ventura County Superior Court, and Nixon’s
case, that potential is not diminished—and may even be

                                 21
heightened—by trying her lawsuit in Los Angeles Superior Court,
rather than having it decided by an arbitrator. Under these
circumstances, the superior court acted well within its discretion
in ordering arbitration. (See generally Mercury Ins. Group v.
Superior Court (1998) 19 Cal.4th 332, 351 [“[t]he reasonableness
of an approach that was not selected [under section 1281.2,
subdivision (c),] does not entail the unreasonableness of the one
that was”].)
                             DISPOSITION
       The order dismissing class claims is affirmed. The appeal
of the order compelling arbitration is dismissed. Deeming that
portion of the appeal as a petition for writ of mandate, the
petition is denied. AmeriHome is to recover its costs in this
proceeding.

                                      PERLUSS, P. J.

      We concur:

            FEUER, J.

                         *
            IBARRA, J.

*
      Judge of the Santa Clara Superior Court, assigned by the
Chief Justice pursuant to article VI, section 6 of the California
Constitution.

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