16 Cal. App. 5th 1190
Cal. Ct. App. 5th2017Background
- Diaz sued PCM for FEHA and related employment claims; PCM pleaded an affirmative defense invoking a collective bargaining agreement (CBA) grievance/arbitration procedure.
- PCM moved for summary judgment (arguing mandatory arbitration/exhaustion and federal preemption); the trial court denied that motion on August 2, 2016.
- PCM filed a motion to compel arbitration on August 3, 2016, with the earliest regular hearing after the scheduled trial; PCM sought ex parte relief on August 4 to shorten time or continue the trial.
- The court denied PCM’s ex parte application (minute order) but did not rule on the motion to compel; PCM’s counsel then submitted a proposed order that also purported to deny the motion to compel on the merits.
- The trial court signed PCM’s proposed order; PCM immediately appealed, which stayed the trial. Diaz argued the proposed order was a sham to obtain interlocutory appellate review and that PCM had waived arbitration.
- The Court of Appeal affirmed denial of the motion to compel based on (1) invited error/consent (PCM proposed and sought the very order it appealed) and (2) waiver of arbitration (PCM acted in bad faith and delayed asserting arbitration). The court also imposed sanctions on PCM and its counsel for a frivolous appeal.
Issues
| Issue | Diaz's Argument | PCM's Argument | Held |
|---|---|---|---|
| Whether PCM invited the ruling it now appeals | PCM procured and proposed the signed order denying its motion to compel to generate an appeal; thus it may not challenge that order | The court in substance denied the motion at the ex parte hearing; PCM merely formalized the court’s ruling | Court: invited error/estoppel applies — PCM induced the ruling and cannot appeal it |
| Whether PCM was "aggrieved" by the ex parte order | PCM consented to and promoted the order it proposed, so it was not aggrieved | PCM contends it was aggrieved because the order denied its right to arbitrate and reflected the court's ruling | Court: PCM consented; a party that requests/consents to an order cannot appeal it |
| Whether PCM waived the right to compel arbitration | Diaz: PCM unreasonably delayed, litigated in court (discovery, summary judgment), and acted in bad faith — waiver as matter of law | PCM: waiver cannot be considered because the trial court never made a factual waiver finding in the signed order; appellate court should not be first factfinder | Court: exercising Code Civ. Proc. §909, finds bad faith and as a matter of law PCM waived arbitration; affirms denial on merits |
| Whether sanctions are appropriate for the appeal | Diaz: appeal was frivolous and taken for delay; sanctions warranted for costs and delay | PCM: appeal was justified; argued procedural defenses and compliance with rules | Court: appeal frivolous and taken for delay; imposes monetary sanctions against PCM and counsel (amounts to be determined for attorneys’ fees; $8,500 to court) |
Key Cases Cited
- Mary M. v. City of Los Angeles, 54 Cal.3d 202 (doctrine of invited error; party who induces error cannot claim it on appeal)
- Norgart v. Upjohn Co., 21 Cal.4th 383 (invited error as application of estoppel principle)
- Martinez v. Scott Specialty Gases, Inc., 83 Cal.App.4th 1236 (waiver of arbitration where defendant delayed and litigated in court)
- St. Agnes Medical Center v. PacifiCare of California, 31 Cal.4th 1187 (bad faith and waiver can justify refusal to compel arbitration)
- In re Marriage of Flaherty, 31 Cal.3d 637 (definition of frivolous appeal and sanctions standard)