Miscellaneous: California Mediation And Arbitration Went On Vacation In May
Three Photos From The Blogger's Travels.
My astute readers will have noticed that I slacked off a bit in May. I traveled to Petra in Jordan, to Israel, and to Spain. Here are three photos from my travels.
In front of Petra's Treasury (Al-Khazneh) in Jordan.
View of Baha'i Gardens, Haifa, Israel.
On top of Antonin Gaudi's La Pedrera, Barcelona.
Construction Of Arbitration Agreements/Non-Signatories: Homes Sellers Will Be Required To Arbitrate Disputes With Brokers And Service Providers
Must Reading For Home Sellers, Brokers And Service Providers Who Want To Understand Their Obligations To Arbitrate.
Home sellers sign Residential Listing Agreements (RLAs) with their brokers, and Residential Purchase Agreements (RPAs) with their buyers. Both RLAs and RPAs constantly undergo drafting revisions in California. And both types of standard agreements include arbitration agreements, leading to issues about the seller's obligations to arbitrate with the broker and with any service providers to the broker. Those issues were addressed in Laymon v. J. Rockliff and Hernandez v. Mason-McDuffie Real Estate, Inc., A147464 & A147469 (consolidated appeals) (1/1 6/9/17) (Margulies, Humes, Dondero). Originally unpublished, the case is now certified for publication — thankfully, because it will be useful for home sellers, brokers, and service providers (e.g., providers of title insurance, escrow, natural hazard disclosure reports, and home-warranty contracts).
In this case, home sellers sued their brokers and their brokers' service providers, alleging that the brokers "violated their fiduciary duties by failing to disclose alleged kickbacks paid by the service providers to the brokers in connection with the sales." The home sellers signed an RLA, a 2007 RPA, a 2010 RPA, or some combination thereof. The Court of Appeal held that home sellers who signed any of those agreements were bound to arbitrate with their brokers, as well as with the service providers, who were non-signatories, but able to take advantage of the doctrine of equitable estoppel. This required a liberal reading of the arbitration provisions — a reading that promotes "a strong public policy in favor of arbitration" such that "any doubts regarding the arbitrability of a dispute are resolved in favor of arbitration . . . . " Rice v. Downs, 248 Cal.App.4th 175, 184-186 (2016). This is a good example of a case that plaintiffs want to try to a jury and defendants want to arbitrate!
Appealability: An Order Denying A Renewed Motion To Compel Arbitration Under CCP 1008(b) Is Nonappealable.
Courts Like To Conserve Judicial Resources.
In Chango Coffee, Inc. v. Applied Underwriters, Inc., B267358 (2/3 5/26/17) (Johnson (Michael), Edmon, Aldrich), the trial court denied a renewed motion brought by defendant to compel arbitration of a complaint brought by Chango Coffee, Inc. Defendant appealed the order denying a renewed petition brought under Cal. Code Civ. Proc. section 1008(b) to compel arbitration.
Held: The appeal is dismissed for lack of jurisdiction. An order denying a renewed motion or application under 1008(b) is not appealable. See Tate v. Wilburn, 184 Cal.App.4th 150, 160 (2010).
Pending Cases: Southern Insurance Company v. Workers Compensation Appeals Board Is Now Published
This Case Annulled Workers' Compensation Appeals Board Decision Because Rescission Issue Remained "Factually Open And Unresolved" By Arbitrator.
I posted to this blog about Southern Insurance Company v. Workers' Compensation Appeals Board, et al., B278412 (2/2 5/10/17) (Chavez, Hoffstadt, Goodman) on May 16, 2017, at which time the case was unpublished. I can now report that the case was certified for publication on May 22, 2017.
Arbitration, Federal Arbitration Act: SCOTUS Rules in Kindred Nursing Centers Case That Kentucky’s “Clear-Statement Rule” Violates The FAA By Singling Out Arbitration For Disfavored Treatment
The Decision Was Not A Surprise.
Kindred Nursing Centers L.P v. Clark, No. 16-32 (US S.Ct. 5/15/17) (Kagan, J.) holds that Kentucky's "clear-statement rule" violates the Federal Arbitration Act by singling out arbitration agreements for disfavored treatment. Kentucky's "clear-statement rule" provides that, because the Kentucky constitution declares rights of access to the courts and trial by jury to be "sacred" and "inviolate", an agent can deprive her principal of such rights only if expressly provided in the power of attorney.
Relatives of Joe Wellner and Olive Clark had executed powers of attorney with arbitration clauses on behalf of Joe and Olive before Joe and Olive moved into a nursing home. After Joe and Olive died, their relatives filed suits against the nursing home, alleging substandard care. The issue presented was whether the powers of attorney were invalid because they failed to specifically entitle the representative to enter into the arbitration agreement.
SCOTUS distinguished between the two separate powers of attorney. One was struck down improperly because the Kentucky courts relied on the clear-statement rule to invalidate the arbitration provision, thus colliding with FAA preemption. However, on the facts, it was unclear why the other power of attorney had been invalidated. It is possible that the state courts relied on the clear-statement rule, but it is also possible that the state courts relied on an interpretation that did not implicate the clear-statement rule. Therefore, SCOTUS directed the court on remand dto determine whether it adhered to its prior reading of the second power of attorney in the absence of the clear-statement rule.
As is his wont, Justice Thomas dissented. He has consistently been of the opinion that the FAA does not apply to proceedings in state court.
COMMENT: On February 23, 2017, Professor Ronald Mann of Columbia Law School correctly predicted the outcome. See my February 23, 2017 post.
Arbitration, Equitable Estoppel, Agency, Pending Cases: Garcia v. Pexco, LLC Is Now A Published Opinion
As "Joint Employer", Company To Which An Employee Was Assigned Could Take Advantage Of Arbitration Clause In Employee's Contract With Temporary Staffing Agency That Assigned The Employee To The Company.
I am happy to report that Garcia v. Pexco, LLC, G052872 (4/3 5/16/17), an opinion I posted about on April 26, 2017, when it was still unpublished, has now been published.
Why happy? At the time, I wrote about an interesting aspect of the case:
[W]hile the Court relies on existing case law to apply established rules of equitable estoppel and agency in order to require arbitration, the Court does not rely on any cases involving temporary staffing agencies that assign employees to other companies — probably an increasingly common occurrence in our "gig economy" characterized by a lack of permanent employment. Alas, the case is unpublished as of this date.
Well, now the case is published.