Court Opinion

ID: 1086215
Source: CourtListenerOpinion
Date Created: 2013-10-21 19:47:59.713521+00
Date Added: 2024-06-11T12:51:25.591284
License: Public Domain

Filed 10/21/13 Johnson v. Servicon Systems CA2/5
                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.

              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     SECOND APPELLATE DISTRICT

                                                  DIVISION FIVE

CLARENCE B. JOHNSON,                                                 B245201

         Plaintiff and Appellant,                                    (Los Angeles County
                                                                     Super. Ct. No. BC477835)
         v.

SERVICON SYSTEMS, INC.,

         Defendant and Respondent.

         APPEAL from an order of the Superior Court of Los Angeles County, Joanne
O‟Donnell, Judge. Reversed with directions.
         Rastegar Law Group, Farzad Rastegar and Thomas S. Campbell for Plaintiff and
Appellant.
         Jackson Lewis, Mindy S. Novick, Sherry L. Swieca, Sandra J. McMullan and
Adam Y. Siegel for Defendant and Respondent.
                                   I. INTRODUCTION

       Plaintiff, Clarence B. Johnson, appeals from an order compelling arbitration and
dismissing all class claims. Plaintiff filed an original and first amended complaint against
defendant, Servicon Systems, Incorporated. Defendant filed a petition to compel
arbitration of plaintiff‟s individual claims only. The petition sought dismissal of all class
claims. On October 26, 2012, the trial court dismissed the purported class claims. But
the court granted defendant‟s petition to compel arbitration of plaintiff‟s individual
claims. We conclude the trial court should not have dismissed the class claims.

                                   II. BACKGROUND

                                       A. Complaint

       On January 26, 2012, plaintiff filed a complaint against defendant on behalf of all
similarly situated current and former employees. On April 12, 2012, plaintiff filed a first
amended complaint. Plaintiff alleges against defendant: failure to provide required rest
periods; failure to provide required meal periods; failure to pay overtime compensation;
failure to provide accurate statements and to maintain required records; failure to pay
minimum wage; failure to pay wages upon termination; unlawful business practices; class
action for civil penalties; and a Labor Code section 2698 et seq. representative action for
civil penalties.

                   B. Motion To Compel Arbitration, Opposition And Reply

       On August 9, 2012, defendant filed its motion seeking: to compel arbitration of
plaintiff‟s individual claims; dismissal without prejudice of the class claims; and
dismissal of the action as to plaintiff‟s individual claims or in the alternative immediate

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stay of the proceedings. Defendant relied on an arbitration agreement between plaintiff
and defendant signed August 28, 2006. The arbitration agreement provides, “In the event
of any dispute, claim or controversy between Employee and Company, its directors,
officers, employees or agents, both parties agree to submit such dispute, claim or
controversy to final and binding arbitration, including, but not limited to, claims for
breach of contract, civil torts and employment discrimination . . . .” The arbitration
agreement contains no class action waiver. Defendant argued the agreement was part of
a contract involving interstate commerce and is valid under principles of contract law.
Defendant asserted the Federal Arbitration Act governed the agreement.
       On August 31, 2012, plaintiff filed his opposition. Plaintiff argued the arbitration
agreement in question was modified on August 31, 2007 and he did not sign the
document. Plaintiff contended class action claims should proceed pursuant to Gentry v.
Superior Court (2007) 42 Cal.4th 443, 453-454. In Gentry, our Supreme Court
prohibited class arbitration waivers in employment agreements under specified
circumstances. (Ibid.) On September 7, 2012, defendant filed its reply.

                                  C. Hearing And Order

       On September 14, 2012, the trial court continued the hearing to provide plaintiff
an opportunity to file a surreply. On October 15, 2012, plaintiff filed his surreply. The
surreply is accompanied by plaintiff‟s declaration which indicates he was provided the
arbitration agreement on a take it or leave it basis. The surreply also contains evidence
pertinent to the issue of whether any waiver of the right to pursue a class action is
unconscionable. On October 22, 2012, the trial court heard further argument and took the
matter under submission.
       On October 26, 2012, the trial court issued its order. The trial court concluded
plaintiff had agreed to and signed an updated arbitration agreement. The trial court found
the arbitration agreement enforceable under the Federal Arbitration Act because

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defendant demonstrated it engaged in interstate commerce. The trial court determined
Gentry was implicitly overruled by AT&T Mobility LLC v. Concepcion (2011) 563 ___,
___ [131 S.Ct. 1740, 1750-1751] (AT&T). The trial court: granted defendant‟s motion to
compel arbitration; stayed the action pending outcome of the arbitration; and dismissed
the class claims. Plaintiff subsequently appealed the order.

                                      III. DISCUSSION

         First, there is no merit to defendant‟s argument the present order dismissing class
claims is not appealable. The class claims were dismissed. Thus, the order dismissing
the class claims is appealable. (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 699;
Franco v. Athens Disposal Co., Inc. (2009) 171 Cal.App.4th 1277, 1288.) Defendant‟s
argument that title 9 United States Code section 16 applies to state court appeals has no
merit. The limited procedural effect of the Federal Arbitration Act does not extend to
state procedural rules. (Cronus Investments, Inc. v. Concierge Services (2005) 35 Cal.4th
376, 388-390; see Cable Connection, Inc. v. DIRECTV, Inc. (2008) 44 Cal.4th 1334,
1351.)
         There is no merit to the argument allowing an appeal of the class claims dismissal
order while the action is stayed interferes with any purpose of the Federal Arbitration
Act. (AT&T, supra, 563 U.S. at p. __ [131 S.Ct. at pp. 1749-1750]; Preston v. Ferrer
(2008) 552 U.S. 346, 357-358.) This case is a preference matter and no extensions of
time were granted. The parties were free to arbitrate plaintiff‟s individual claims while
the appeal was pending. Under defendant‟s theory, the matters we resolve today would
have to await entry of a judgment confirming an award at some unknown future date
before they could be heard. California‟s rule which allows for expedited appeals under
these circumstances accelerates and enforces the arbitral process.
         Second, defendant is correct, there is substantial evidence plaintiff signed the
relevant arbitration agreement even though he was not required to do so. We review a

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trial court‟s factual findings for substantial evidence. (Bowers v. Raymond J. Lucia
Companies, Inc. (2012) 206 Cal.App.4th 724, 733; Hotels Nevada, LLC v. L.A. Pacific
Center, Inc. (2012) 203 Cal.App.4th 336, 348.) The declarations of Rick Tate, Martha
Trujillo and Jose Guerrero establish: defendant operates in interstate commerce;
employees are not obligated to sign the arbitration agreement; plaintiff was required to
read the arbitration agreement; and plaintiff signed the 2006 version of the arbitration
agreement.
       Third, defendant is correct this dispute arises in interstate commerce and is subject
to the Federal Arbitration Act. (9 U.S.C. § 2 [“transaction involving commerce”]; Allied-
Bruce Terminix Companies, Inc. v. Dobson (1995) 513 U.S. 265, 277 [“word „involving,‟
like „affecting,‟ signals an intent to exercise Congress‟ commerce power to the full”].)
Mr. Tate‟s declaration delineates in detail the interstate nature of defendant‟s business
operations.
       Fourth, there is no merit to defendant‟s argument that AT&T, supra, 563 U.S. at p.
__ [131 S.Ct. at pp. 1749-1750] permitted dismissal of the class claims. The issue in
AT&T, supra, was whether a class action waiver was enforceable. (Kilgore v. KeyBank,
N.A. (9th Cir. 2013) 718 F.3d 1052, 1058; Phillips v. Sprint PCS (2012) 209 Cal.App.4th
758, 769.) Likewise, Gentry and its progeny are irrelevant to this case. Thus, the proper
course of action was not to dismiss the class claims but to: direct the filing of a
responsive pleading; schedule a case management conference; and, at the conference,
exercise discretion as to whether to await the outcome of the arbitration on plaintiff‟s
individual causes of action before proceeding further on his class claims.

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                                    IV. DISPOSITION

       The order dismissing the class claims is reversed. Upon remittitur issuance, the
trial court is to reinstate the class claims and proceed as discussed in the body of the
opinion. Plaintiff, Clarence B. Johnson, shall recover his costs incurred on appeal from
defendant, Servicon Systems, Incorporated.
                             NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

                             TURNER, P. J.

I concur:

       KRIEGLER, J.

                                              6
MOSK, J., Concurring and dissenting,

      I do not believe that a Labor Code section 2698 et seq. (Private Attorney General
Act of 2004—PAGA) claim is arbitrable, (see Brown v. Ralphs Grocery Co. (2011) 197
Cal.App.4th 489) [decided by this division]. That issue is pending before the California
Supreme Court (Iskanian v. CLS Transportation Los Angeles, LLC, S204032; see also
Sonic-Calabasas A, Inc. v. Frank Moreno (2013) ___ Cal. 4th ___ [S174475 filed Oct.
17, 2013] [unconscionability not preempted, but Berman hearings can be arbitrable]).
      I concur in the remainder of the disposition.

                                         MOSK, J.