Velasquez v. Northgate Gonzalez Mkts.

1

YADIRA VELASQUEZ, Plaintiff and Respondent, v. NORTHGATE GONZALEZ MARKETS, INC. et al., Defendants and Appellants.

B309831

California Court of Appeals, Second District, Second Division

August 25, 2022

NOT TO BE PUBLISHED

APPEAL from an order of the Superior Court of Los Angeles County Ct. No. 20STCV28061 Michael P. Linfield, Judge. Reversed with directions.

Pearlman Brown &Wax, Corinne D. Spencer, and Antwoin D Wall for Defendants and Appellants.

Employee Justice Legal Group, Kaveh S. Elihu, and Sylvia V. Panosian for Plaintiff and Respondent.

HOFFSTADT J.

Yadira Velasquez (plaintiff) sued her former employer for a variety of employment-related and other claims. The employer moved to compel arbitration of the dispute pursuant to two different arbitration agreements-one plaintiff indisputably signed in 2015 and a second the employer claimed plaintiff signed in 2018. The trial court denied the motion, finding that plaintiff never signed the 2018 agreement and that the employer expressed an intent to "replace" the 2015 agreement with the 2018 agreement. Although the trial court's ruling denying to compel arbitration based on the 2018 agreement is supported by substantial evidence, the court erred in refusing to give effect to the 2015 agreement. Accordingly, we reverse and remand with instructions to order the matter to arbitration.

FACTS AND PROCEDURAL BACKGROUND

I. Facts

A. Hiring, employment, and termination

In July 2015, plaintiff was hired by Northgate Gonzalez Markets, Inc. (Northgate) to work as a "cocina clerk" in its Bell, California grocery store. In December 2018, plaintiff "severely injured" her hand. She was fired the next month.

B. Arbitration agreements

1. The 2015 Agreement

On July 6, 2015, plaintiff was presented with a document called "Mutual Binding Arbitration Agreement" (the 2015 Agreement) as part of her new employee intake. She signed the 2015 Agreement.

With regard to its scope, the 2015 Agreement requires both plaintiff and Northgate to arbitrate "any claim, dispute, and/or controversy . . . arising from, relating to, or having any relationship with or connection whatsoever" to plaintiff's "employment" or "other association" with Northgate.

With regard to procedures during arbitration, the 2015 Agreement provides in pertinent part that (1) the arbitrator "shall be a retired Judge, or otherwise qualified individual to whom the parties mutually agree, and shall be subject to disqualification on the same grounds as would apply to a judge of such court," and (2) the arbitrator "shall have the authority to order such discovery, by way of deposition, interrogatory, document production, or otherwise, as the arbitrator considers necessary to a full and fair exploration of the issues in dispute, consistent with the expedited nature of arbitration."

2. The 2018 Agreement

In early 2018, Northgate circulated a revised arbitration agreement (the 2018 Agreement) on a web-based platform where employees could log in with unique credentials to access documents related to their employment.

Plaintiff and Northgate dispute whether plaintiff electronically acknowledged-and thereby agreed to-the 2018 Agreement. Northgate contends that plaintiff acknowledged the 2018 Agreement on the platform on March 28, 2018. Plaintiff, on the other hand, contends she has no memory of seeing the 2018 Agreement or being instructed on how to access it on the platform.^[1]

II. Procedural Background

In July 2020, plaintiff sued Northgate as well as the director of the store where she worked (collectively, defendants).^[2]In her complaint, plaintiff alleged 11 causes of action^[3]; as relief, she sought compensatory damages, punitive damages, and attorney fees.

Defendants moved to compel arbitration under the 2015 Agreement and the 2018 Agreement.^[4] After receiving additional briefing as well as a mountain of evidentiary objections and a last-minute supplemental declaration from Northgate, the trial court held a hearing on the motion. Following the hearing, the trial court denied the motion to compel. After excluding all of defendants' evidence authenticating plaintiff's electronic acknowledgment of the 2018 Agreement, the trial court ruled that the 2018 Agreement was not a "valid arbitration agreement." However, citing a passage from the declaration of a Northgate human resources employee that "[t]he 2018 . . . Agreement replaced all prior agreements regarding the arbitration of disputes," the trial court ruled that the 2018 Agreement was "the relevant arbitration agreement" and, on that basis, treated the 2015 Agreement as if it were a nullity.

Defendants filed a timely notice of appeal.

DISCUSSION

Defendants appeal the trial court's order denying their motion to compel arbitration under the 2015 Agreement and the 2018 Agreement. We generally review such motions for an abuse of discretion, while reviewing any subsidiary legal questions de novo and any findings of fact based on disputed facts for substantial evidence. (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 166 (Gamboa).)

In denying the motion, the trial court relied on two rationales (1) the 2018 Agreement cannot be the basis for arbitration because plaintiff never signed it, and (2) the 2015 Agreement cannot be the basis for arbitration because a human resources employee indicated that the 2018 Agreement was meant to "replace[]" the 2015 Agreement. As we explain below, the trial court's evidentiary rulings-which defendants largely do not attack on appeal-leave the record in a state that provides substantial evidence supporting the factual finding underlying its first rationale, but the court's second rationale is incorrect under settled principles of contract law, such that the 2015 Agreement remains enforceable. In the interest of judicial economy (and because the parties litigated or had the opportunity to litigate the question), we also decide that the 2015 Agreement is not unconscionable. (See 24 Hour Fitness, Inc. v. Superior Court (1998) 66 Cal.App.4th 1199, 1212 (24 Hour Fitness) [appellate court may decide unconscionability issue, even if not decided by trial court].)

I. Governing Principles

"The validity of an arbitration agreement in California is determined by a . . . motion to compel arbitration." (Juen v. Alain Pinel Realtors, Inc. (2019) 32 Cal.App.5th 972, 977.) Such a motion "'is in essence a suit in equity to compel specific performance of a contract.'" (Spear v. California State Auto. Assn. (1992) 2 Cal.4th 1035, 1040.) Thus, the party seeking to compel arbitration has the "burden of proving the existence of an arbitration agreement." (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236 (Pinnacle).) In assessing whether a valid arbitration agreement exists, courts look to "'[g]eneral principles of contract law.'" (Ibid.)

II. Validity of the 2018 Agreement

As pertinent to this case, a party may manifest her consent to an arbitration agreement (1) expressly, by signing the agreement, or (2) implicitly, by continuing her employment while knowing of the agreement and that it is a condition of her continued employment. (Pinncale, supra, 55 Cal.4th at p. 236; Schacter v. Citigroup, Inc. (2009) 47 Cal.4th 610, 619-620 (Schacter); DiGiacinto v. Ameriko-Omserve Corp. (1997) 59 Cal.App.4th 629, 637 (DiGiacinto); Craig v. Brown &Root, Inc. (2000) 84 Cal.App.4th 416, 422 (Craig).)

The trial court's factual finding that plaintiff did not sign the 2018 Agreement is supported by substantial evidence. Although defendants presented evidence that plaintiff signed the 2018 Agreement using an electronic acknowledgment process, and although such evidence-if credited by the trial court-can support a finding of consent (e.g., Tanis v. Southwest Airlines, Co. (C.D. Cal., Mar. 11, 2019, No. 18-cv-2333-BAS-BGS) 2019 U.S. Dist. Lexis 38876, *11-*16; Hose v. Washington Inventory Servs. (C.D. Cal., Aug. 30, 2016, No. 14cv2869-WQH-WVG) 2016 U.S. Dist. Lexis 188368, *39-*42), the trial court here excluded defendants' evidence regarding plaintiff's electronic acknowledgment. With one exception, defendants do not challenge those evidentiary rulings on appeal. (Toho-Towa Co., Ltd. v. Morgan Creek Productions, Inc. (2013) 217 Cal.App.4th 1096, 1105 [when trial court excludes evidence and that ruling is not attacked on appeal, "it should go without saying that the excluded evidence . . . may not be used by th[e appellate] court to reverse the order of the trial court"].)

The only evidentiary ruling defendants challenge is the trial court's refusal to consider the "clearer" copy of the electronic print out of the computer record showing the time and date that plaintiff allegedly acknowledged the 2018 Agreement; defendants submitted this "clearer" copy on the day before the hearing on their motion and after the trial court issued its tentative ruling. The trial court ruled that this late-filed evidence was untimely, and that ruling was well within its discretion. (People v. Williams (1997) 16 Cal.4th 153, 197 [trial court decision to admit or not admit evidence reviewed for abuse of discretion]; In re Marriage of Hoffmeister (1984) 161 Cal.App.3d 1163, 1171 [trial court has power to exclude evidence belatedly filed]; Carbajal v. CWPSC, Inc. (2016) 245 Cal.App.4th 227, 241 ["Whether to accept new evidence with the reply papers is vested in the trial court's sound discretion, and we may reverse the trial court's decision only for a clear abuse of that discretion."].) Thus, the record is confined to plaintiff's denial of ever electronically acknowledging the 2018 Agreement, which certainly supports the trial court's finding that plaintiff did not consent to that agreement.

Even if we were to...