Diaz v. Professional Community Management, Inc.
G053909
| Cal. Ct. App. | Nov 8, 2017Background
- Diaz sued PCM for workplace discrimination/retaliation and wrongful termination; PCM answered and pled a CBA grievance/arbitration defense. Trial was set for August 15, 2016.
- PCM moved for summary judgment in April 2016 arguing the CBA’s grievance/arbitration process barred court litigation; the court denied summary judgment on August 2, 2016.
- PCM filed a motion to compel arbitration on August 3, 2016; the earliest available hearing was after the scheduled trial date, so PCM sought ex parte relief on August 4 to shorten time or continue trial.
- The court’s minute order from the August 4 ex parte hearing denied PCM’s request to shorten time or continue trial and did not rule on the motion to compel; PCM’s counsel nevertheless submitted a proposed order that (contrary to the minute order) also denied the motion on the merits.
- The trial court signed PCM’s proposed order; PCM appealed the signed order the day before trial, which stayed the trial. Diaz argued PCM manipulated the process to create an appeal and that PCM had waived arbitration.
- The Court of Appeal held PCM invited error, found PCM acted in bad faith, alternatively held PCM waived the right to arbitrate, and imposed monetary sanctions against PCM and its counsel.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether trial court’s denial of ex parte application (to shorten time/continue trial) was proper | Diaz: ex parte was a delay tactic; court properly denied shortening time/continuance | PCM: denial of ex parte was erroneous; sought order confirming court’s apparent in-substance denial of motion to compel | Court: denial of ex parte was proper; PCM’s later-proposed order created invited error and cannot be used to attack the ruling |
| Whether PCM’s proposed order denying the motion to compel was invited error | Diaz: PCM manufactured an appealable order and is estopped from challenging it | PCM: counsel believed court had denied the motion in substance at hearing; proposed order simply memorialized the ruling | Court: PCM invited the error by drafting/submitting that proposed order; estoppel applies and PCM cannot attack it on appeal |
| Whether PCM waived the right to compel arbitration | Diaz: PCM waited too long, litigated in court (discovery, summary judgment), and acted in bad faith — waiver and prejudice result | PCM: Diaz had previously raised waiver so cannot rely on it now; court did not expressly rule on waiver so appellate court may not first consider it | Court: alternatively finds on the merits PCM waived arbitration as matter of law (bad faith, delay, litigation conduct) and invokes CCP § 909 to make factual findings on appeal |
| Whether the appeal was frivolous and sanctions are warranted | Diaz: appeal was sham, taken for delay — seek sanctions | PCM: appeal had legal basis; complied with rule 3.1312; not frivolous | Court: appeal was frivolous/for delay; sanctions imposed jointly and severally on PCM and counsel (award to Diaz for fees to be determined; $8,500 to clerk) |
Key Cases Cited
- Mary M. v. City of Los Angeles, 54 Cal.3d 202 (doctrine of invited error; acquiescence vs. objection)
- Norgart v. Upjohn Co., 21 Cal.4th 383 (invited error as application of estoppel; a party cannot induce error then appeal)
- Geffcken v. D’Andrea, 137 Cal.App.4th 1298 (invited error prevents appellate relief where party invited adverse ruling)
- Rosenthal v. Great Western Fin. Securities Corp., 14 Cal.4th 394 (petition to compel arbitration is equitable proceeding; no jury right)
- St. Agnes Medical Center v. PacifiCare of California, 31 Cal.4th 1187 (bases for waiver of arbitration: inconsistent litigation conduct, delay, bad faith)
- In re Marriage of Flaherty, 31 Cal.3d 637 (standard for finding an appeal frivolous and for imposing sanctions)