Filed 11/26/19 Luna v. Ware Disposal, 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

SALVADOR LUNA,

Plaintiff and Respondent,

v.

WARE DISPOSAL, INC.,

Defendant and Appellant.

G056420

(Super. Ct. No. 30-2016-00861007)

O P I N I O N

Appeal from an order of the Superior Court of Orange County, Ronald L. Bauer, Judge. Reversed and remanded.

Law Office of J. Felix McNulty and J. Felix McNulty for Plaintiff and Respondent.

Manning & Kass, Ellrod, Ramirez, Trester, John M. Cowden, Steven J. Renick and Jordon R. Ferguson for Defendant and Appellant.

* * *

Salvador Luna sued Ware Disposal, Inc. alleging age discrimination and wrongful termination. The trial court granted Ware’s motion to compel arbitration. However, the arbitrator concluded he lacked jurisdiction to decide the claim and sent the case back to the trial court. Ware then “renewed” its motion to compel arbitration, asking the court to order the matter back to arbitration before a different arbitrator. The court denied Ware’s renewed motion.

Ware appeals, contending the order must be reversed because (1) the court was required by statute to appoint a new arbitrator after the first one failed to act; (2) the arbitrator exceeded his powers by concluding he lacked jurisdiction; (3) the arbitrator’s rationale for concluding he lacked jurisdiction was flawed; and (4) the trial court had no authority to reconsider its prior order granting the motion to arbitrate.

None of these contentions is persuasive. The first arbitrator did act, albeit not in the manner Ware hoped for. And while the arbitrator’s view of the arbitrability issue was not binding on the trial court, it provided an opportunity for the trial court to reconsider its prior order compelling arbitration, which it was entitled to do. However, the court’s reconsideration and reversal of its prior order compelling arbitration came in response to Ware’s motion to confirm the prior order, and the court failed to give advance notice to the parties that it intended to reconsider its earlier ruling. As we discuss, that was error. As Luna has made no argument that the error was harmless, we must therefore reverse the new order. On remand, the trial court remains free to give the parties notice, and then to reconsider its order compelling arbitration.

FACTS

Luna filed a complaint against Ware in June 2016, alleging several causes of action arising out of the termination of his employment. The gist of Luna’s complaint is that Ware violated “his civil right to be free from discrimination on the basis of his age,” citing Government Code section 1290.40, subdivision (a).

Ware answered the complaint and promptly moved to compel arbitration, citing a collective bargaining agreement (CBA), negotiated between Ware and the Package and General Utility Drivers, Local Union 396 (the Union). The CBA includes provisions governing various working conditions including safety and health, holidays, vacations, pensions, wage classifications, the prohibition of strikes and lockouts, and procedures for discharge of employees.

The CBA also includes a provision establishing “Expedited Grievance and Arbitration Procedures.” The provision states that a “controversy, dispute or disagreement shall be adjusted in the following manner,” and describes a process in which a “grievance” is first discussed with the employee’s immediate supervisor. If the grievance is not resolved at the meeting, it must then be submitted in writing through the Union to Ware. If the parties cannot settle their differences, an arbitrator will be mutually selected who will render a binding decision. The CBA specifies: “The arbitrator shall have no power to alter, amend, change, add to or subtract from any of the terms of this Agreement, but shall determine only whether or not there has been a violation of the Agreement in respect of alleged grievance and remedy.” (Italics added.)

Over Luna’s opposition, the court granted Ware’s motion to compel arbitration in November 2016. Luna moved for reconsideration of the order, but the motion was denied.

The arbitrator assigned to the case later determined he did not have jurisdiction because the arbitration provision in the CBA bound only the Union and Ware, but not Luna individually, and if strictly construed, would deny Luna any forum at all. The arbitrator further concluded that enforcement of the arbitration provision against Luna individually would violate the rule established in Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83. He consequently issued an order dismissing the arbitration due to lack of jurisdiction.

In March 2018, the court held an arbitration review hearing, and set the case for trial. In response, Ware filed a “renewed” motion to compel arbitration, arguing “the assigned arbitrator for the dispute issued a ruling outside the bounds of his authority by dismissing the arbitration for lack of jurisdiction. Moreover, despite ordering the matter to arbitration, this Court has set a trial and case management schedule that directly contradicts its prior order.”

In his opposition to Ware’s renewed request for arbitration, and relying on Vasserman v. Henry Mayo Newhall Memorial Hospital (2017) 8 Cal.App.5th 236, 245 246 (Vasserman)—decided after the court’s order compelling arbitration—Luna argued that statutory discrimination claims are not covered by the arbitration clause in a CBA unless explicitly included.

The court denied Ware’s motion, relying on both Vasserman and Volpei v. County of Ventura (2013) 221 Cal.App.4th 391 (Volpei), for the proposition that “an agreement for arbitration in circumstances akin to this situation has to be reasonably explicit in indicating that statutory claims . . . will go to arbitration.”

DISCUSSION

1. Propriety of Ware’s “Renewed” Motion

Ware first addresses the propriety of its “renewed” motion to compel arbitration, arguing it qualifies in substance as either a motion to vacate the arbitrator’s “award” under Code of Civil Procedure section 1285, or a motion to appoint a different arbitrator under section 1281.6 on the ground the arbitrator “fail[ed] to act.”

Although Luna challenged the propriety of the motion in the trial court, he does not repeat that challenge on appeal. In any event, we find no impropriety. There is no requirement that a motion be explicitly authorized by statute. The court has “broad inherent power ‘not confined by or dependent on statute,’” which “includes ‘fundamental inherent equity, supervisory, and administrative powers, as well as inherent power to control litigation.’” (Stephen Slesinger, Inc. v. Walt Disney Co. (2007) 155 Cal.App.4th 736, 758.)

Where, as here, a party has successfully moved to compel arbitration, and the arbitrator thereafter issues a ruling that, in effect, countermanded the trial court’s order and returned the case to the court’s docket, the court has inherent authority to consider a properly noticed motion seeking relief in response to that ruling.

2. Propriety of the Trial Court’s Ruling

Ware contends the trial court’s denial of its renewed motion to compel arbitration was erroneous for various reasons. First, it contends the trial court was required to treat its motion as “the equivalent of a motion under . . . section 1281.6 to appoint a replacement for the originally appointed arbitrator.” When treated that way, Ware argues, the court was obligated to appoint a new arbitrator. We disagree.

Ware did not cite section 1281.6 in its motion; nor did it argue for relief based upon that statute. Under those circumstances, the court cannot be faulted for failing to grant such relief. Ware also cites no authority for the proposition that an arbitrator’s properly noticed and reasoned decision, concluding he lacked jurisdiction, would qualify as a “fail[ure] to act” under section 1281.6. In fact, the arbitrator did act, just not in a manner hoped for by Ware.

Alternatively, Ware contends his motion should be construed by this court as the equivalent of a motion to vacate the arbitrator’s “award” under section 1285. When so construed, Ware asserts it was error for the trial court to deny the motion—and thus to effectively confirm the arbitrator’s award—because the arbitrator exceeded his contractual authority by reexamining the issue of arbitrability. Ware points out that “the CBA explicitly limited the authority of an arbitrator appointed pursuant to its provisions. ‘The arbitrator shall have no power to alter, amend, change, add to or subtract from any of the terms of this Agreement, but shall determine only whether or not there has been a violation of the Agreement in respect of alleged grievance and remedy.’ The arbitrator’s decision that he lacked jurisdiction to decide the dispute between the parties was not a determination ‘whether or not there has been a violation of the Agreement in respect of alleged grievance and remedy.’”

But Ware did not file a motion to vacate the arbitrator’s award. Moreover, section 1285 was not cited in support of the motion Ware did file. Contrary to Ware’s suggestion, the trial court did not “essentially adopt[] the arbitrator’s decision” in the manner of a court confirming an arbitration award. Instead, as Ware recognizes, the trial court employed a different theory than that relied on by the arbitrator to conclude that Luna’s case was not governed by the CBA arbitration provision. As Ware acknowledges, the court’s decision “appears to stem from its conclusion that the four FEHA causes of action were not subject to arbitration pursuant to the holding in [Vasserman] and [Volpei]. But neither of those cases was even mentioned by the arbitrator in his ruling, and he did not in any way base his decision on a suggestion that the plaintiff’s FEHA claims were somehow not subject to arbitration.”

Consequently, we agree with Ware’s final characterization of the motion, as we conclude that it was exactly what it purported to be: a non-statutory “renewal” of Ware’s motion to compel arbitration. The court viewed the motion as an opportunity to reconsider and reverse its prior ruling. And that is exactly what the court did. We disagree with Ware’s assertion that, because the reconsideration was not authorized under section 1008, the court lacks jurisdiction to do so.

As explained in Le Francois v. Goel (2005) 35 Cal.4th 1094 (Le Francois) , the Legislature’s enactment of section 1008, which placed restrictions on the parties’ ability to move for reconsideration of court orders, did not deprive the court of its inherent power to reconsider interim rulings on its own motion. “[W]e see no hint that the Legislature wanted to hinder the courts’ ability to act rather than merely protect them from repetitive motions.” (Id. at p. 1106.) Thus, “[w]e hold that sections 437c and 1008 limit the parties’ ability to file repetitive motions but do not limit the court’s ability, on its own motion, to reconsider its prior interim orders so it may correct its own errors.” (Id. at p. 1107.)

Since the court’s order compelling arbitration was an interim order rather than a final ruling, the court retained inherent authority to reconsider its ruling on its own motion prior to final judgment. However, as also explained in Le Francois, the court cannot reconsider its interim rulings on its own motion unless it first gives the parties notice and an opportunity to respond. Here, while Luna cited Vasserman in his opposition to Ware’s renewed motion to compel arbitration, the court failed to give the parties notice that it might reconsider its earlier order compelling arbitration on its own motion.

In circumstances similar to these, the Supreme Court reversed a summary judgment in Le Francois, explaining that although the defective notice might qualify as harmless error, “defendants have made no such harmless error argument, and thus plaintiffs have had no chance to argue against it. Moreover, the trial court did not inform the parties that it might change its previous ruling on its own motion and give them an opportunity to be heard, as it should have done. We do not know what would have occurred if it had done so. Under the circumstances, we think it best to remand the matter for the court and parties to follow proper procedure.” (Le Francois, supra, 35 Cal.4th at p. 1109, fn. 6.)

But the Supreme Court also made clear that the trial court on remand was free to give the parties the appropriate notice, and then to again reverse its initial ruling: “Plaintiffs argue that this circumstance means that we must order that the case go to trial. We disagree. We merely hold that the court erred in granting an impermissible motion. On remand, nothing prohibits the court from reconsidering its previous ruling on its own motion, a point on which we express no opinion.” ((Le Francois, supra, 35 Cal.4th at p. 1109.)

DISPOSITION

The order is reversed, and the case is remanded to the trial court. On remand, the trial court is free to reconsider the order compelling arbitration on its own motion. The parties are to bear their own costs on appeal.

GOETHALS, J.

WE CONCUR:

BEDSWORTH, ACTING P. J.

ARONSON, J.