Ramirez v. 99 Cents Only Store CA2/2 ( 2024 )

Filed 1/30/24 Ramirez v. 99 Cents Only Store CA2/2
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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has not been certified for publication or ordered published for purposes of rule 8.1115.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
SECOND APPELLATE DISTRICT
DIVISION TWO
DESIRE RAMIREZ, B318308
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No. 21STCV02626)
v.
99 CENTS ONLY STORE LLC et al.,
Defendants and Appellants.
APPEAL from an order of the Superior Court of
Los Angeles County. Stephen I. Goorvitch, Judge. Affirmed.
Buchalter; Akerman, Michael L. Gallion; Seyfarth Shaw,
David Van Pelt, Thomas J. Piskorski, and Jules A. Levenson for
Defendants and Appellants.
Shegerian & Associates, Carney R. Shegerian and Jill
McDonell for Plaintiff and Respondent.
______________________________
Plaintiff and respondent Desire Ramirez (Ramirez) filed
this action against defendants and appellants 99 Cents Only
Store LLC (the Store) and Michael Rivera (Rivera) alleging
employment-related claims. Defendants moved to compel
arbitration pursuant to an alleged agreement to arbitrate. The
trial court denied defendants’ motion on the grounds that they
had waived their right to compel arbitration, and defendants
appeal.1
We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Ramirez’s employment with the Store
Ramirez began working for the Store in 2008. According to
defendants, at the time she was onboarded, Ramirez was
required to sign an arbitration agreement. Ramirez disputes that
she ever signed an arbitration agreement. Rivera allegedly was
Ramirez’s supervisor.
According to the complaint, Ramirez’s employment was
terminated on May 4, 2020.
Ramirez requests a copy of her personnel file
After her termination but prior to filing the instant lawsuit,
Ramirez requested a copy of her personnel file from the Store
pursuant to Labor Code sections 1198.5 and 432. In response, on
October 30, 2020, the Store provided an affidavit signed by the
Store’s human resources generalist advising that it had no
personnel file for her.
1
Both defendants purport to appeal from the trial court’s
order. But, Rivera is not mentioned in the opening brief. In light
of our conclusion that the trial court did not err, we need not
decide whether Rivera sufficiently presented any arguments on
appeal.
2
Ramirez’s complaint; the Store’s answer
On January 22, 2021, Ramirez initiated this lawsuit
against defendants. The Store answered the complaint on
March 1, 2021, alleging arbitration as an affirmative defense.
Parties meet and confer
On or around March 12, 2021, the parties met and
conferred about attending mediation in this and three other
matters in which Ramirez’s counsel represented former
employees of the Store. In each matter, except the instant one,
“the parties agreed to limited discovery in advance of arbitration
and signed a stipulation memorializing that agreement.” Such a
stipulation was not signed in this case because, according to
Ramirez, “this matter was not subject to arbitration.” When
Ramirez’s counsel pointed this out to defense counsel, she did not
refute Ramirez’s contention.
Case management statement and conference
On May 24, 2021, the Store filed its case management
statement with the trial court, requesting a nonjury trial. While
the form indicates that the parties were scheduled to participate
in mediation, the form is silent regarding “Binding private
arbitration.” In fact, the Store did not indicate any intent to file a
motion to compel arbitration, even though the form expressly
indicates the Store’s intent to file other motions.
At the case management conference, the matter was set for
a jury trial.
Discovery prior to mediation yields no arbitration agreement
The parties proceeded with discovery, consisting of
interrogatories, three sets of requests for production of
documents, and four depositions, including Ramirez’s deposition.
On July 6, 2021, defendants provided verified responses to
3
Ramirez’s requests for production of documents, attesting that no
personnel file for Ramirez was in their possession, custody, or
control. Subsequently, on July 8 and 22, 2021, defendants
produced what purports to be Ramirez’s personnel file; neither
production contained the alleged arbitration agreement.
Mediation
In September 2021, the parties participated in mediation in
this action as well as the three other actions filed by former
employees. While those three actions settled, this matter, which
was negotiated separately, did not.
Defendants purportedly discover Ramirez’s arbitration agreement
When the matter did not settle, Ramirez served a
settlement offer pursuant to Code of Civil Procedure section 9982
on defendants. In response, on October 4, 2021, defense counsel
notified Ramirez that they had become aware that Ramirez had
signed an enforceable arbitration agreement with the Store.
Apparently at some point in September, defendants “undertook
an even more aggressive effort to locate Plaintiff’s personnel file,
including re-visiting and searching the many retail locations
Plaintiff had worked in. . . . [¶] . . . The team eventually found
Plaintiff’s personnel file, which had been incorrectly filed.”
Within that file was a copy of the arbitration agreement that the
Store contends Ramirez signed.
Motion to compel arbitration
On November 15, 2021, defendants filed a motion to compel
arbitration of Ramirez’s claims.
2
All further statutory references are to the Code of Civil
Procedure unless otherwise indicated.
4
Ramirez opposed the motion. She argued, inter alia, that
she never signed an arbitration agreement and that defendants
waived any right to enforce the alleged arbitration agreement.
Trial court order
After taking the matter under submission, the trial court
denied defendants’ motion. In so doing it “assume[d] without
deciding that Plaintiff signed the arbitration agreement.”
Nevertheless, it denied the motion on the ground that defendants
waived any right to compel arbitration. After all, defendants
provided a declaration to Ramirez’s attorneys before the instant
action was filed attesting that there were “no employment
records for Plaintiff, i.e., there was no arbitration agreement.”
Defendants also filed a case management statement “that did not
reference its intention to compel arbitration or suggest that the
case was subject to arbitration.” Only after discovery had
occurred and the parties participated in an unsuccessful
mediation did the Store undertake “‘aggressive efforts’” to locate
Ramirez’s personnel file, which it did.
The trial court was “troubled by the delay in this case,”
particularly the Store’s “inexcusable neglect.” The Store’s
“employees should have undertaken [their aggressive efforts to
locate Ramirez’s personnel file] at the outset, and not only when
it became clear the case would not settle. [The Store] cannot rely
on the inexcusable negligence of its employees to excuse its
failure to file this motion in a timely manner. [The Store] must
exercise greater care over its personnel documents if it wishes to
proceed by way of arbitration.”
Appeal
This timely appeal ensued.
5
DISCUSSION
I. Relevant law
A court may deny a petition to compel arbitration on the
ground that “[t]he right to compel arbitration has been waived by
the petitioner.” (§ 1281.2, subd. (a).) A party may waive the
right to compel arbitration by failing to demand arbitration
within a reasonable time. (Wagner Construction Co. v. Pacific
Mechanical Corp. (2007) 41 Cal.4th 19, 30.) “This rule is an
application of the general principle of contract law articulated in
Civil Code section 1657, to the effect that, ‘[i]f no time is specified
for the performance of an act required to be performed, a
reasonable time is allowed.’ [Citation.] ‘[W]hat constitutes a
reasonable time is a question of fact, depending upon the
situation of the parties, the nature of the transaction, and the
facts of the particular case.’” (Wagner, supra, at p. 30.)
Although there is no uniform or single test for determining
whether a party’s conduct amounts to a waiver of the right to
arbitrate, the courts have formulated a list of factors that are
relevant in making that determination. These include
“‘“(1) whether the party’s actions are inconsistent with the right
to arbitrate; (2) whether ‘the litigation machinery has been
substantially invoked’ and the parties ‘were well into preparation
of a lawsuit’ before the party notified the opposing party of an
intent to arbitrate; (3) whether a party either requested
arbitration enforcement close to the trial date or delayed for a
long period before seeking a stay; (4) whether a defendant
seeking arbitration filed a counterclaim without asking for a stay
of the proceedings; (5) ‘whether important intervening steps [e.g.,
taking advantage of judicial discovery procedures not available in
arbitration] had taken place’; and (6) whether the delay ‘affected,
6
misled, or prejudiced’ the opposing party.”’ [Citation.]”
(St. Agnes Medical Center v. PacifiCare of California (2003)
31 Cal.4th 1187, 1196 (St. Agnes); see also Simms v. NPCK
Enterprises, Inc. (2003) 109 Cal.App.4th 233, 240.)
“No one of these factors predominates and each case must
be examined in context.” (Lewis v. Fletcher Jones Motor Cars,
Inc. (2012) 205 Cal.App.4th 436, 444.) The question of prejudice,
however, “is critical in waiver determinations.” (St. Agnes, supra,31 Cal.4th at p. 1203.)
“Relatedly, a party that wishes to pursue arbitration must
take ‘“active and decided steps to secure that right”’ because an
arbitration agreement ‘“is not . . . self-executing.”’ [Citation.]
‘Mere announcement of the right to compel arbitration is not
enough. To properly invoke the right to arbitrate, a party must
(1) timely raise the defense and take affirmative steps to
implement the process, and (2) participate in conduct consistent
with the intent to arbitrate the dispute. Both of these actions
must be taken to secure for the participants the benefits of
arbitration. [Citations.]” (Fleming Distribution Co. v. Younan
(2020) 49 Cal.App.5th 73, 80–81 (Fleming).)
II. Standard of review
The party asserting waiver “‘bears the burden of producing
evidence of, and proving by a preponderance of the evidence, any
fact necessary to the defense.’ [Citation.]” (Hotels Nevada v. L.A.
Pacific Center, Inc. (2006) 144 Cal.App.4th 754, 761.)
“Generally, the determination of waiver is a question of
fact, and the trial court’s finding, if supported by sufficient
evidence, is binding on the appellate court. [Citations.] ‘When,
however, the facts are undisputed and only one inference may
reasonably be drawn, the issue is one of law and the reviewing
7
court is not bound by the trial court’s ruling.’ [Citation.]”
(St. Agnes, supra, 31 Cal.4th at p. 1196.)
“Here, the essential facts may not be in dispute, in the
sense that no one doubts that party X did or did not do act Y on
date Z. Nevertheless, even if there is no difference in opinion on
such events or nonoccurrences, the inferences to be drawn from
the essential facts are conflicting. And where conflicting
inferences may be drawn, the issue is reduced to whether the
trial court’s finding of waiver is supported by substantial
evidence. [Citations.] In conducting that standard of review,
‘[w]e infer all necessary findings supported by substantial
evidence [citations] and “construe any reasonable inference in the
manner most favorable to the [ruling], resolving all ambiguities
to support an affirmance” [citation].’ [Citation.]” (Davis v.
Shiekh Shoes, LLC (2022) 84 Cal.App.5th 956, 962–963; Davis v.
Continental Airlines, Inc. (1997) 59 Cal.App.4th 205, 211 [“If
more than one reasonable inference may be drawn from
undisputed facts, the substantial evidence rule requires
indulging the inferences favorable to the trial court’s judgment”].)
“Reversal is not justified simply because the trial court
could have potentially reached a different conclusion on the
question of waiver; ‘rather, we may reverse the trial court’s
waiver finding only if the record establishes a lack of waiver as a
matter of law.’ [Citation.]” (Fleming, supra, 49 Cal.App.5th at
p. 81.)
III. The trial court properly denied defendants’ motion
Applying these legal principles, we conclude that the trial
court did not err in denying defendants’ motion to compel
arbitration. Substantial evidence supports the trial court’s
8
determination that defendants waived their right3 to arbitrate
this dispute.
Defendants did not timely seek arbitration, and their
conduct was inconsistent with a right to arbitrate. Defendants
purportedly knew they had a right to arbitrate Ramirez’s claims
before they were served with the summons and complaint. After
all, according to the Store’s employee relations manager, since
before 2008, the Store “has required every employee to enter into
an arbitration agreement as a condition of employment.” And, as
defendants argued below, they “would have been able to compel
arbitration even if the agreement ha[d] not been located.”
Despite this knowledge, they waited over a year before filing
their motion to compel. (Garcia v. Haralambos Beverage Co.
(2021) 59 Cal.App.5th 534, 542 [unreasonable for a defendant to
delay in requesting arbitration until it locates the executed
document when it knows that the parties have an agreement to
arbitrate].) In the meantime, (1) Ramirez posted jury fees, (2) the
Store filed a case management statement requesting a nonjury
trial with a time estimate and left the boxes concerning
arbitration intentionally blank, and (3) the parties participated in
extensive discovery.
Urging us to conclude otherwise, defendants direct us to
certain documents that purportedly demonstrate their intent to
seek arbitration promptly. For example, they direct us to the
Store’s answer, which included arbitration as an affirmative
defense. But that affirmative defense is just one of 24 boilerplate
3
For ease, we refer to defendants’ “right” to arbitrate this
dispute, but we offer no opinion on whether the contract was
enforceable.
9
affirmative defenses, not to mention the generic catch-all of
additional undiscovered affirmative defenses. In any event,
raising arbitration as an affirmative defense does not preclude a
finding that defendants’ subsequent conduct waived a right to
compel arbitration. (Davis v. Continental Airlines, Inc., supra,
59 Cal.App.4th at pp. 215–216.) Also, according to defendants,
their service of a proposed stipulation agreeing to limit discovery
in advance of arbitration demonstrates their intent to proceed
with arbitration.4 But, as set forth above, the fact that there may
be evidence to support defendants’ narrative does not compel
reversal. (Pope v. Babick (2014) 229 Cal.App.4th 1238, 1245 [“We
do not review the evidence to see if there is substantial evidence
to support the losing party’s version of events, but only to see if
substantial evidence exists to support the verdict in favor of the
prevailing party”].)
Defendants further argue that their pursuit of settlement
in mediation did not compromise their right to arbitrate.
(Zamora v. Lehman (2010) 186 Cal.App.4th 1, 20.) While we
agree that attempts to settle may “not [be] inconsistent with the
right to arbitrate” (Zamora, supra, at p. 20), that was not the
driving force behind defendants’ delay in filing their motion to
compel. Rather, as set forth above, defendants’ own dilatory
conduct is what led to the delay.
The cases cited in defendants’ appellate briefs are
inapplicable. Quevedo v. Macy’s, Inc. (C.D. Cal. 2011)
798 F.Supp.2d 1122 (Quevedo) and Cornoyer v. AT&T Mobility
Services, LLC (D.N.M. Oct. 5, 2016) 2016 U.S.Dist.LEXIS 140109
4
Ramirez refused to sign the proposed stipulation because
“there [was] no binding arbitration agreement in this action.”
10
(Cornoyer) are nonbinding federal trial court orders. (John’s
Grill, Inc. v. The Hartford Financial Services Group, Inc. (2022)
86 Cal.App.5th 1195, 1225, review granted Mar. 29, 2023,
S278481.)
And, they are distinguishable. In Quevedo, when the
lawsuit was filed, the defendant reasonably concluded under
applicable law that it could not enforce the parties’ arbitration
agreement. (Quevedo, supra, 798 F.Supp.2d at p. 1130.) Thus, it
took no steps to compel arbitration of the plaintiff’s claims. (Id.
at p. 1129.) However, while the action was pending, the law
changed, prompting the defendant to immediately seek
arbitration. (Id. at p. 1131.) Under these circumstances, the
defendant’s actions prior to filing its motion could not be deemed
inconsistent with an intent to arbitrate. (Ibid.)
Here, in contrast, there was no legal authority that led
defendants to believe a timely request to compel arbitration
would have been denied. Rather, we can reasonably infer that
defendants delayed in seeking arbitration because they could not
locate the signed arbitration agreement, even though they
believed at all times that Ramirez was obligated to arbitrate her
claims.
In Cornoyer, both parties “should have been aware of the
arbitration agreement” and both were “equally responsible for
their ignorance.” (Cornoyer, supra, 2016 U.S.Dist.LEXIS 140109,
at pp. *38–*39.) Furthermore, “the delay in discovering the
arbitration agreement appear[ed] to be attributable to
bureaucratic inefficiencies, as opposed to trial strategy.” (Id. at
p. *39.) Here, Ramirez expressly denies the existence of an
arbitration agreement. Moreover, the Store had a duty to
maintain and produce Ramirez’s personnel file. (See, e.g., Gov.
11
Code, § 12946, subd. (a); Lab. Code, § 1198.5, subd. (a).) Its
failure to do so for approximately one year does not amount to a
bureaucratic inefficiency.
Furthermore, like the trial court, we are troubled by
defendants’ delay in locating and producing the arbitration
agreement. They did not locate or produce it when Ramirez first
requested her personnel file (before any litigation commenced),
allowing for a civil action to be pursued. They also failed to
produce it in response to Ramirez’s discovery requests. Only
when this dispute did not settle in mediation did defendants
finally take the necessary steps to locate and produce the alleged
arbitration agreement.
Finally, substantial evidence supports the trial court’s
implied finding of prejudice. (Groom v. Health Net (2000)
82 Cal.App.4th 1189, 1195.) Admittedly, the specific showing of
prejudice here was relatively minimal in the context of the entire
case—no motions had been litigated and the case had not yet
been pending for one year when defendants filed their motion.
But, because of defendants’ conduct, Ramirez was unable to take
advantage of the benefits and efficiencies of arbitration, such as a
speedy resolution of her claims. (St. Agnes, supra, 31 Cal.4th at
p. 1204.) Furthermore, Ramirez offers undisputed evidence that
“the parties ha[d] undertaken significant discovery . . . including
. . . Plaintiff’s deposition.”5 We can reasonably infer from this
evidence that defendants “used the judicial discovery processes to
5
While the arbitration agreement allows for discovery
pursuant to section 1283.05, we cannot ignore subdivision (e) of
that statute, which provides: “Depositions for discovery shall not
be taken unless leave to do so is first granted by the arbitrator or
arbitrators.”
12
gain information about the other side’s case that could not have
been gained in arbitration.” (St. Agnes, supra, at p. 1204; Davis
v. Continental Airlines, Inc., supra, 59 Cal.App.4th at p. 215.)
DISPOSITION
The order is affirmed. Ramirez is entitled to costs on
appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
_____________________, J.
ASHMANN-GERST
We concur:
________________________, P. J.
LUI
________________________, J.
HOFFSTADT
13