ANN LEENAY, Pеtitioner, v. THE SUPERIOR COURT OF SAN BERNARDINO COUNTY, Respondent; LOWE‘S HOME CENTERS, LLC, Real Party in Interest.
E077292
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA, FOURTH APPELLATE DISTRICT, DIVISION TWO
Filed 7/22/22
CERTIFIED FOR PUBLICATION;
ORIGINAL PROCEEDINGS; petition for writ of mandate. David S. Cohn, Judge. Petition granted.
The Graves Firm, Allen Graves and Jacqueline S. Treu for Petitioner.
No appearance for Respondent.
Gibson, Dunn & Crutcher, Katherine V.A. Smith, Michele L. Maryott, Katie M. Magallanes and Bradley J. Hamburger for Real Party in Interest.
OPINION
Section
Ann Leenay brought an action against her former employer, Lowe‘s Home Centers, LLC (Lowe‘s), under the
We conclude that the trial court erred by granting the motion to stay.
BACKGROUND
I. Leenay‘s Complaint
In September 2019, Leenay filed her PAGA complaint against Lowe‘s in Los Angeles County Superior Court. She brought the lawsuit on behalf of current and former commissioned employees of Lowe‘s, alleging that Lowe‘s miscalculated the employees’ premium pay when compensating them for missed meal periods and overtime hours. More specifically, she alleged that (1) Lowe‘s failed to include employees’ sales commissions when calculating their regular rate of compensation for missed meal period premiums, and (2) Lowe‘s used an erroneous formula for calculating the commission component of the overtime premium. Leenay further alleged that the commissioned employees’ wage statements did not disclose information necessary to determine how Lowe‘s was calculating the overtime premium. In addition, she alleged that Lowe‘s failed to provide timely and uninterrupted meal periods for commissioned employees.
II. The Petition for Coordination
In May 2020, the plaintiffs in Ceniceros, et al. v. Lowe‘s Home Centers, LLC (Ceniceros) (San Diego Super. Ct. No. 37-2020-00010047-CU-OE-CTL) submitted a petition for coordination of eight PAGA actions against Lowe‘s. The Ceniceros plaintiffs sought to coordinate their own action, Leenay‘s action, and six other actions pending across the state. They asserted that the eight PAGA actions involved parallel, though not identical, claims regarding the alleged unlawful practices of Lowe‘s, including failure to provide meal or rest periods, failure to pay all wages or overtime wages, failure to provide accurate itemized wage statements, and unlawful deductions from wages. The Ceniceros plaintiffs argued that coordination would prevent costly and duplicative discovery and potentially inconsistent rulings. Leenаy opposed the petition for coordination, arguing that her action was not factually or legally similar to the other actions in the coordination petition.
The petition was assigned to a coordination motion judge in San Bernardino County Superior Court. In August 2020, the court granted the petition in part and denied it in part. The court ruled that six of the eight actions, including Leenay‘s action, should be coordinated.1 The coordinated actions were assigned to the same court that ruled on the petition for coordination.
III. The Motion to Stay the Coordinated Actions
In March 2021, Lowe‘s moved to stay the coordinated PAGA actions pending resolution of over 50 arbitration proceedings against Lowe‘s. The arbitration claimants were current or former employees at vаrious Lowe‘s locations in California, and they brought their claims on an individual basis.
Lowe‘s argued that
Leenay opposed the motion to stay. She argued that
In April 2021, the trial court granted the motion to stay all the coordinated actions. The court acknowledged that the arbitration claimants were not plaintiffs in the coordinated actions. But the court ruled that
The court noted the perpetual stay issue identified by Leenay, describing the issue as “[t]he best argument against a stay.” But the court nevertheless rejected the argument and concluded that the coordinated actions should be stayed pending the outcome of the 50-plus arbitrations. The court reasoned
Leenay petitioned this court for a writ of mandate directing the trial court to vacate its order granting the motion to stay. We issued an order to show cause why the requested relief should not be granted.
STANDARD OF REVIEW
Ordinarily, we review a trial court‘s decision to stay an action pending arbitration for abuse of discretion. (Jarboe v. Hanlees Auto Group (2020) 53 Cal.App.5th 539, 547 (Jarboe).) But when, as here, the court‘s decision rests on the interpretation of a statute and its application to undisputed facts, the case presents a question of law that we review de novo. (Cal-Western Business Services, Inc. v. Corning Capital Group (2013) 221 Cal.App.4th 304, 309.)
DISCUSSION
Leenay argues that the court erred by staying the coordinated actions. We agree. The plaintiffs in the coordinatеd actions are not parties to the arbitrations.
In interpreting
I. The Language of the Statutory Scheme
“Controversy” is a defined term under the CAA. Under
Incorporating the statutory definition of controversy,
The trial court here ruled that
Another section of the CAA,
To summarize, the plain language of
II. Legislative History
Even if
Our state‘s first “modern” arbitration statutes date back to 1927. (Keating v. Superior Court (1982) 31 Cal.3d 584, 601, overruled on other grounds by Southland Corp. v. Keating (1984) 465 U.S. 1, 16-17; Stats. 1927, ch. 225, §§ 1-14, pp. 403-408.) The 1927 act included former section 1282, which authorized a petition to compel arbitration, and former section 1284, which “provide[d] for a stay of suit pending arbitration.” (Sjoberg v. Hastorf (1948) 33 Cal.2d 116, 117; Stats. 1927, ch. 225, §§ 3, 5, pp. 404-405.) The 1927 act did not include a definition of “cоntroversy,” “agreement,” or any other term used in the act. (Stats. 1927, ch. 225, §§ 1-14, pp. 403-408.) But the act repeatedly used “controversy” to describe disputes that arose between parties to an arbitration agreement. (E.g., former § 1280, added by Stats. 1927, ch. 225, § 1, p. 404 [“an agreement in writing to submit an existing controversy to arbitration . . . shall be valid, enforceable, and irrevocable“]; former § 1281, added by Stats. 1927, ch. 225, § 2, p. 404 [“Two or more persons may submit in writing to arbitration any controversy existing between them at the time of the agreement to submit“]; former § 1286, added by Stats. 1927, ch. 225, § 7, p. 406 [“any arbitration had under authority of an arbitration clause in any contract, shall be held within the State of California, unless all parties to such contract, after the controversy arises, agree in writing that the arbitration be held elsewhere“].)
Former section 1284 governed stays pending arbitration until the 1960‘s, when the Legislature revised the arbitration statutes and enacted the CAA. (Stats. 1961, ch. 461, §§ 1-8, pp. 1540-1552; Aguilar v. Lerner (2004) 32 Cal.4th 974, 985.) Before the CAA‘s enactment, the Legislature “authorized the California Law Revision Commission to study and determine whether the statutory аrbitration scheme should be revised.” (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 24; Recommendation and Study Relating to Arbitration (Dec. 1960) 3 Cal. Law Revision Com. Rep. (1961) p. G-1 (Arbitration Study).)
The commission submitted its report to the Legislature in December 1960. (Arbitration Study, supra, 3 Cal. Law Revision Com. Rep. at p. G-1.) The Law Revision Commission drafted
The Law Revision Commission‘s report discussed a number of issues with the then-existing arbitration scheme. One of the commission‘s concerns related to former section 1284. (Arbitration Study, supra, 3 Cal. Law Revision Com. Rep. at p. G-39.) Under the heading, “Enforcement of Arbitration Agreements,” the commission‘s report observed that the statutory scheme “should include remedies designed to frustrate the breach of [arbitration] agreements and to provide relief for the nonbreaching party.” (Id. at p. G-35, boldface and capitalization omitted.) The report characterized the stay authorized by former section 1284 as one of those remedies. (Id. at p. G-36.) The commission observed that, under former section 1284, “[w]hen a party requests a stay in a civil action on the basis of an agreement to arbitrate, he is using that agreement to arbitrate as a defense.” (Id. at p. G-39.) But former section 1284 “provide[d] for a stay of judicial proceedings merely upon a showing that the parties have agreed to arbitrate the matter involved” (id. at p. G-7), and there was no provision compelling the parties to arbitrate even though the action was stayed. (Id. at p. G-39.)
The commission consequently drafted and proposed
The commission also drafted and proposed
to provide expressly” that “[q]uestions of both law and fact are within the arbitration statute“].) It thus proposed to define controversy as “any question arising between parties to an agreement whether such question is one of law or of fact or both.” (Id. at p. G-12.)
As to the definition of agreement, the commission observed that California courts had historically excluded appraisal and valuation proceedings from the
Like
The foregoing legislative history demonstrates three things. First, former section 1284 enforced arbitration agreements by providing a remedy when a party had filed suit оn arbitrable issues and thus breached an arbitration agreement. The statute mandated a stay when the pending lawsuit was “brought upon any issue arising out of an [arbitration] agreement,” and the court was “satisfied” that the issue was “referable to arbitration.” (Stats. 1927, ch. 225, § 5, p. 405.) The Law Revision Commission recognized the remedial purpose of former section 1284, and our Supreme Court has as well. In Charles J. Rounds Co., the court discussed cases in which the defendants had asserted the failure to pursue contractual arbitration as an affirmative defense. (Charles J. Rounds Co., supra, 4 Cal.3d at pp. 894-895.) The trial courts in those cases had entered judgment for the defendants or dismissed the actions on the basis of the arbitration defense. (Ibid.) The high court then characterized former section 1284 as “[a]n alternative remedy for failurе to arbitrate.” (Charles J. Rounds Co., at p. 895.) It noted that the statute “was utilized primarily where plaintiff‘s suit involved some issues that were not covered by or susceptible to arbitration. In such cases the entire case would not be dismissed for failure to arbitrate.” (Ibid.) Instead, under former section 1284, the trial court could stay the case pending arbitration of the arbitrable issues between the parties. (Charles J. Rounds Co., at pp. 895-896.) But former section 1284 was just as applicable when the action involved arbitrable issues only—the defendant could choose to seek a stay rather than assert the failure to arbitrate as an affirmative defense. (Charles J. Rounds Co., at p. 896.) Former section 1284‘s function as a remedy for breach of an arbitration agreement thus was clear.
Third, even before the CAA, the statutory scheme used the term “controversy” to describe disputes between parties to an arbitration agreement. And when the Law Revision Commission proposed the definitions of controversy and agreement, the new definitions were not intended to change that meaning. The commission merely intended (1) to clarify that any type of question, whether legal or factual, was arbitrable and (2) to broaden the range of agreements that would be treated as enforceable arbitration agreements.
Accordingly, the legislative history establishes that
For these reasons, the legislative history of
In this case, the trial court erred by granting the motion to stay under
Moreover, it does not matter whether the arbitration claimants qualify as “‘aggrieved employee[s]‘” in the coordinated PAGA actions. (
The case law on which Lowe‘s relies does not compel a different conclusion. In one of the cases, Franco v. Arakelian Enterprises, Inc. (2015) 234 Cal.App.4th 947, the plaintiff was bound by an arbitration agreement with the sole defendant, her employer. (Id. at p. 952.) The court compelled the parties to аrbitration on most of the claims and stayed the nonarbitrable PAGA claim. (Id. at pp. 965-966.) Lowe‘s contends that Franco is “directly on point,” but the case is materially distinguishable. The Franco stay was based on an arbitration between the plaintiff and the defendant in the pending action. Again, no court has ordered Leenay and the other plaintiffs in the coordinated actions to arbitrate their claims with Lowe‘s, and the plaintiffs have no pending arbitrations with Lowe‘s.
The other cases on which Lowe‘s relies are similarly inapposite. In those cases, the plaintiffs were bound by an arbitration agreement with at least one defendant, but the plaintiffs had combined their arbitrable claims with claims against third parties. The courts compelled the plaintiffs to arbitration on the arbitrable claims and stayed their nonarbitrable claims against the third parties. (Heritage Provider Network, Inc. v. Superior Court (2008) 158 Cal.App.4th 1146, 1148-1149, 1151; Federal Ins. Co. v. Superior Court (1998) 60 Cal.App.4th 1370, 1372, 1375 (
None of those cases assists Lowe‘s. In each of those cases, both of the parties in the underlying arbitration were parties in the judicial proceedings, and they had agreed to arbitrate a question that arose in the judicial proceedings. That is what
Finally, we note that the correct interpretation of
IV. Motion to Dismiss the Writ Petition as Moot
Lowe‘s filed a motion to dismiss Leenay‘s writ petition as moot, after the parties had fully briefed this matter and we issued our tentative opinion. According to Lowe‘s, the trial court has terminated the
Lowe‘s submitted documentation showing that in April 2022, the trial court held a hearing on a motion to lift the stay filed by Lowe‘s. The minute order states: “Motion to Lift Current Stay of Proceedings is granted. See the Court‘s written tentative ruling for specifics.” The minute order further states that the court adopted the tentative ruling. The tentative ruling states: “If all fifty-four arbitrations are completed, the court will lift the stay . . . . If all the arbitrations are not completed, the court will order that the stay will be lifted automatically upon completion of all the arbitrations.”
The reporter‘s transcript of the hearing discloses no express ruling granting the motion or lifting the stay. The court asked whether the parties had read the tentative ruling, and it heard argument. Lowe‘s informed the court that it had fully resolved 12 arbitrations and that the remaining 42 arbitrations were stayed pending finalization of a settlement. The majority of the discussion,
The mootness doctrine permits an appellate court to dismiss proceedings if later events render it impossible for the appellate court to grant effective relief. (Lockaway Storage v. County of Alameda (2013) 216 Cal.App.4th 161, 174-175.) But “[i]f an action involves a matter of continuing public interest and the issue is likely to recur, a court may exercise an inherent discretion to resolve that issue, even though an event occurring during its pendency would normally render the matter moot.” (Morehart v. County of Santa Barbara (1994) 7 Cal.4th 725, 746-747.) The public interest exceptiоn to the mootness doctrine is well-established. (John A. v. San Bernardino City Unified School Dist. (1982) 33 Cal.3d 301, 307.)
Here, Lowe‘s has not shown that the dispute between the parties is moot. The minute order adopts the tentative ruling, and the tentative ruling conditions the lifting of the stay on the completion of all 54 arbitrations. We have no confirmation that all 54 arbitrations have concluded. Consequently, the record before us still does not contain a court order lifting the
Even if we had a court order lifting the stay, we would exercise our discretion to resolve the issues in this proceeding under the public interest exception. The proper interpretation of a statute presents a matter of public interest. (Hamilton v. Town of Los Gatos (1989) 213 Cal.App.3d 1050, 1054; Schraer v. Berkeley Property Owners’ Assn. (1989) 207 Cal.App.3d 719, 728; Darley v. Ward (1982) 136 Cal.App.3d 614, 624.) Moreover, the issues in this case are likely to recur. The record shows that other courts have misinterpreted
The request for judicial notice is granted. The motion to dismiss the petition for writ of mandate is denied. Let a peremptory writ of mandate issue directing the superior court to (1) vacate the order of April 23, 2021, granting the motion to stay the coordinated actions under
Leenay shall prepare the peremptory writ of mandate, have the peremptory writ of mandate issued, serve copies on all of the parties, and file the original with the clerk of this court, together with proof of service on all parties.
CERTIFIED FOR PUBLICATION
MENETREZ J.
We concur:
RAMIREZ P. J.
SLOUGH J.