Filed 1/16/20 Richard v. Logomark, Inc. CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

TERRI RICHARD,

Plaintiff and Appellant,

v.

LOGOMARK, INC.,

Defendant and Respondent.

G056662

(Super. Ct. No. 30-2018-00982065)

O P I N I O N

Appeal from an order of the Superior Court of Orange County, Randall J. Sherman, Judge. Affirmed.

Protection Law Group, Heather Davis, Amir Nayebdadash and Priscilla Gamino for Plaintiff and Appellant.

Sheppard, Mullin, Richter & Hampton, Jason A. Weiss and Jason M. Guyser for Defendant and Respondent.

* * *

Plaintiff Terri Richard filed a lawsuit as a putative class action against her former employer, Logomark, Inc., primarily for alleged wage and hour violations. The trial court concluded Richard was bound by an arbitration agreement which included a class action waiver, dismissed the class claims without prejudice, and ordered the case stayed pending arbitration. Richard filed the instant appeal, arguing the case was appealable under the “death knell” doctrine and asserting that she never consented to arbitration, and any agreement was unconscionable.

We conclude the case is appealable, but find that Richard’s substantive claims are without merit. Although two separate documents pertained to arbitration, one which she signed and one she did not, there was substantial evidence that she received both of them. As to her claims of unconscionability, Richard neglected to offer any argument at all about why any arbitration agreement was procedurally unconscionable, and therefore we find no unconscionability as a whole. Accordingly, we affirm the trial court’s order.

I

FACTS

Logomark manufactures and sells promotional products. Richard was briefly employed at Logomark as a customer care representative from June 10, 2014 to September 23, 2014. On or about the date of her hire, Richard received and signed a document entitled “Agreement to Be Bound by Alternative Dispute Resolution Policy” (the Agreement). In essence, this document stated that she consented to arbitrate in the event of any employment disputes between herself and Logomark. The Agreement expressly includes wage and hour claims.

Logomark’s Director of Human Resources, Soledad Margarita Arciniega, was present when she signed the Agreement. Arciniega’s declaration states that in addition to the two-page Agreement, Richard was also provided with the three-page “Alternative Dispute Resolution Policy” (the Policy) which expands upon the Agreement and explains arbitration in somewhat plainer language. Both the Policy and the Agreement include class action waivers.

On the date of her hire, Richard also signed an Employee Acknowledgement (the Checklist), which includes a list of documents that she received and categorized them as either to sign and return, or maintain for the employee’s records. The sign and return category included a document entitled “Alternative Dispute Resolution Acknowledgment,” which was apparently meant to refer to the Agreement. The list of documents to maintain for the employee’s records included the Policy, under the same name.

In short: Richard signed the Agreement and the Checklist. She did not sign the Policy, which she claims she did not receive, although she never submitted a declaration under oath so stating.

Some three years after Richard ended her brief tenure at Logomark, she filed the instant action as a putative class action, alleging Logomark violated: 1) Labor Code sections 510 and 1198 by failing to pay overtime; 2) Labor Code sections 226.7 and 512(a) by failing to provide meal periods; 3) Labor Code section 226.7 by failing to provide rest periods; 4) Labor Code sections 1194, 1197 and 1197.1 by failing to pay minimum wages; 5) Labor Code section 2802 by failing to reimburse expenses, and (6) Business and Professions Code section 17200 by committing the enumerated Labor Code violations.

Logomark filed a motion to compel arbitration. In sum, she admitted signing the Agreement but denied receiving the Policy. Among other things, she contended the Agreement, when considered alone, was unconscionable. After briefing and argument, the trial court granted the motion to compel arbitration, dismissed the class claims without prejudice, and ordered the matter stayed pending completion of arbitration. The court stated that “there exists a valid agreement to arbitrate the claims asserted by plaintiff and that no grounds exist to bar enforcement of the agreement. [Code of Civil Procedure section] 1281.2. Plaintiff’s claims of unconscionability are unsupported by the language of the arbitration agreement and the law, and defendants did not waive their right to arbitrate. Plaintiff has failed to meet her burden of proving the facts of any defense to enforceability.”

Richard now appeals.

II

DISCUSSION

Appealable Order

Logomark argues, both in its respondents’ brief and in a motion to dismiss the appeal, that the order granting its motion to compel is not appealable. Richard, as appellant, bears the burden of establishing appealability. (See Cal. Rules of Court, rule 8.204(a)(2)(B).) She contends the order is appealable under the death knell doctrine.

“The death knell doctrine is a ‘“tightly defined and narrow”’exception to the one-final-judgment rule, which generally precludes piecemeal litigation through appeals from orders that dispose of less than an entire action. [Citation.] Under this exception, an order is appealable when ‘it effectively terminates the entire action as to [a] class, in legal effect being “tantamount to a dismissal of the action as to all members of the class other than plaintiff.”’ [Citations.] Thus, an order determining that a plaintiff cannot ‘maintain his [or her] claims as a class action but [can] seek individual relief’ is immediately appealable.” (Williams v. Impax Laboratories, Inc. (2019) 41 Cal.App.5th 1060, 1066-1067.)

“To qualify as appealable under the death knell doctrine, an order must ‘(1) amount[] to a de facto final judgment for absent plaintiffs, under circumstances where (2) the persistence of viable but perhaps de minimis individual plaintiff claims creates a risk no formal final judgment will ever be entered.’ [Citation.] Among the orders that generally qualify are ‘[a] trial court’s decision to sustain a demurrer to class allegations without leave to amend, deny a motion for class certification, or grant a motion to decertify a class.’ [Citation.] What ultimately matters, however, is ‘not the form of the order or judgment but its impact.’” (Williams v. Impax Laboratories, Inc., supra, 41 Cal.App.5th at p. 1067; see In re Baycol Cases I & II (2011) 51 Cal.4th 751, 760.)

We find the requirements to be satisfied here. The trial court’s decision to send Richard’s individual claims to arbitration effectively terminates the class claims forever, and there was uncontroverted evidence that the individual claims are too small to pursue separately. Logomark argues that for the death knell doctrine to apply, the court must order the class claims terminated with prejudice.

In support of that point, Logomark cites Marenco v. DirecTV LLC (2015) 233 Cal.App.4th 1409, apparently the only published decision addressing this issue in the context of a motion to compel arbitration. That case stated: “[T]his case does not fall within the death knell doctrine’s procedural requirements as discussed in Sandquist v. Lebo Automotive, Inc. (2014) 228 Cal.App.4th 65, 72-75 . . . , review granted November 12, 2014, S220812. The doctrine applies only if there is a final order dismissing the class claims with prejudice. In this case, our record does not indicate the status of the class claims, which were not mentioned in the order granting the motion to compel arbitration; presumably, they were stayed.” (Marenco, at pp. 1415-1416.) The comment regarding the requirement of a dismissal with prejudice does not include a citation, and the only case citation refers to a case already pending before the California Supreme Court. To the extent Marenco is good law on this point, we choose not to follow it.

Logomark also refers to cases regarding class action certifications denied (Aleman v. AirTouch Cellular (2012) 209 Cal.App.4th 556, 586), and demurrers sustained (Farwell v. Sunset Mesa Property Owners Assn., Inc. (2008) 163 Cal.App.4th

1545, 1550-1551) without prejudice, but we find those factual situations fundamentally different. The distinction between a motion to compel arbitration and a demurrer sustained with leave to amend are, hopefully, obvious. And while a motion to certify a class can be renewed after, for example, additional discovery on the issue, there is no such opportunity after a case has been sent to arbitration.

Thus, we find this case meets the two requirements for the death knell doctrine to apply. It “(1) amounts to a de facto final judgment for absent plaintiffs, under circumstances where (2) the persistence of viable but perhaps de minimis individual plaintiff claims creates a risk no formal final judgment will ever be entered.” (In re Baycol Cases I & II, supra, 51 Cal.4th at p. 759.) Logomark’s motion to dismiss the appeal, accordingly, is denied.

Standard of Review

“We use general principles of California contract law to determine the enforceability of an arbitration agreement.” (Mission Viejo Emergency Medical Associates v. Beta Healthcare Group (2011) 197 Cal.App.4th 1146, 1153.) “Where the trial court’s decision on arbitrability is based upon resolution of disputed facts,” the appellate court “review[s] the decision for substantial evidence.” (NORCAL Mutual Ins. Co. v. Newton (2000) 84 Cal.App.4th 64, 71.) “‘[I]f the court’s denial rests solely on a decision of law, then a de novo standard of review is employed.’” (Avery v. Integrated Healthcare Holdings, Inc. (2013) 218 Cal.App.4th 50, 60.) When there is no conflicting evidence regarding the meaning of the agreement, its interpretation is a question of law. (Ibid.) The parties appear to agree that whether Richard consented to arbitration is a disputed question of fact that we review for substantial evidence, while whether the agreement was enforceable is a question of law reviewed under the de novo standard.

Consent to Arbitration

Code of Civil Procedure section 1281.2 requires a court to order arbitration “if it determines that an agreement to arbitrate . . . exists . . . .” California has a strong public policy in favor of arbitration as an expeditious and cost-effective way of resolving disputes. (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 9.) Even so, parties can only be compelled to arbitrate when they have agreed to do so. (Westra v. Marcus & Millichap Real Estate Investment Brokerage Co., Inc. (2005) 129 Cal.App.4th 759, 763.)

“‘“[W]hen presented with a petition to compel arbitration the trial court’s first task is to determine whether the parties have in fact agreed to arbitrate the dispute. [¶] . . .” [Citation.]’ [Citations.] ‘A party seeking to compel arbitration has the burden of proving the existence of a valid agreement to arbitrate. [Citations.] Once that burden is satisfied, the party opposing arbitration must prove by a preponderance of the evidence any defense to the petition.’” (Avery v. Integrated Healthcare Holdings, Inc., supra, 218 Cal.App.4th at p. 59; see Lacayo v. Catalina Restaurant Group Inc. (2019) 38 Cal.App.5th 244, 257.)

On appeal, as mentioned above, we review this issue to determine whether substantial evidence exists to support the trial court’s determination that an agreement to arbitrate existed between the parties. “We view the evidence most favorably to the prevailing party, giving it the benefit of every reasonable inference and resolving all conflicts in its favor. [Citation.] Substantial evidence is evidence of ponderable legal significance, reasonable, credible and of solid value. [Citation.] However, ‘[s]ubstantial evidence . . . is not synonymous with “any” evidence.’ [Citation.] Instead, the evidence must be ‘“substantial” proof of the essentials which the law requires.’” (Oregel v. American Isuzu Motors, Inc. (2001) 90 Cal.App.4th 1094, 1100.) If the record contains such evidence, we will affirm the trial court’s decision even if conflicting evidence exists. (Ibid.)

Richard’s essential point here is that because there were two separate documents (the Policy and the Agreement), and “nothing in the record to establish” that Richard accepted the unsigned Policy, she never consented to arbitration. She argues that because Logomark did not provide the Policy when it produced her personnel file, the two documents contain contrary language, and the Policy was not authenticated in Logomark’s moving papers, there was no consent to arbitration.

These arguments are unavailing. There is no reason why any employer would put an unsigned portion of its handbook into every employee’s file, and the Policy was, in addition to being provided separately, part of the handbook. In any event, Arciniega’s declaration asserts both that the Policy was included in her file and that she provided it to counsel on two occasions.

As to the “contrary language” the only such language Richard points to is that the Agreement refers to the Policy “attached hereto” when the Policy was, in fact, not “attached” to the Agreement. While this is a discrepancy, it is such a minor and nonsubstantive one that we do not find it created a contradiction between the two documents. With respect to Richard’s claim that the Policy was not authenticated, this is untrue. Arciniega’s declaration authenticated the handbook, which included the Policy.

Most importantly, Richard ignores that she also signed the Checklist, which included two arbitration-related documents: the Alternative Dispute Resolution Acknowledgment and the Alternative Dispute Resolution Policy. Richard makes much of the fact that the Alternative Dispute Resolution Acknowledgment had a different name than the signed Agreement (the “Agreement to Be Bound by Alternative Dispute Resolution Policy), but this is much ado about nothing. Richard signed the Agreement – the only question is whether she received the Policy, and the Checklist provides substantial evidence that she did. Further, Richard has never submitted evidence, including a declaration, that she did not receive the Policy.

Taken together, we find substantial evidence that Richard consented to arbitration.

Unconscionability

Civil Code section 1670.5, subdivision (a), codifies unconscionability as a reason for refusing a contract’s enforcement. It states: “If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.” (Civ. Code, § 1670.5, subd. (a).) This provision applies to arbitration agreements. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114), abrogated in part on another ground in AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333, 340.)

“‘[U]nconscionability has both a “procedural” and a “substantive” element,’ the former focusing on ‘“oppression”’ or ‘“surprise”’ due to unequal bargaining power, the latter on ‘“overly harsh”’ or ‘“one-sided”’ results. [Citation.] ‘The prevailing view is that [procedural and substantive unconscionability] must both be present in order for a court to exercise its discretion to refuse to enforce a contract or clause under the doctrine of unconscionability.’ [Citation.] But they need not be present in the same degree. . . . [T]he more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.” (Armendariz v. Foundation Health Psychcare Services, Inc., supra, 24 Cal.4th at p. 114.) We discuss each of these in turn.

“‘“Procedural unconscionability” concerns the manner in which the contract was negotiated and the circumstances of the parties at that time. [Citation.] It focuses on factors of oppression and surprise.’” (Morris v. Redwood Empire Bancorp (2005) 128 Cal.App.4th 1305, 1319.)

Richard acknowledges that “both [procedural and substantive unconscionability] must be present” to invalidate an arbitration agreement, but neither of her briefs provide any argument about procedural unconscionability other than acknowledging the requirement exists. “An appellate court is not required to examine undeveloped claims, nor to make arguments for parties.” (Paterno v. State of California (1999) 74 Cal.App.4th 68, 106; see City of Riverside v. Horspool (2014) 223 Cal.App.4th 670, 679, fn.8.) Accordingly, without any argument supporting procedural unconscionability, we cannot find the Policy and/or the Agreement as a whole was unconscionable.

III

DISPOSITION

The order is affirmed. Logomark is entitled to its costs on appeal.

MOORE, ACTING P. J.

WE CONCUR:

IKOLA, J.

GOETHALS, J.