Diaz v. Prof'l Cmty. Mgmt., Inc.

• Citation: 16 Cal.App.5th 1190,225 Cal.Rptr.3d 39
• Decision Date: 17 October 2017
• Docket Number: G053909
• Parties: Francisco DIAZ, Plaintiff and Respondent, v. PROFESSIONAL COMMUNITY MANAGEMENT, INC., Defendant and Appellant.
• Court: California Court of Appeals

16 Cal.App.5th 1190

225 Cal.Rptr.3d 39

Francisco DIAZ, Plaintiff and Respondent,

v.PROFESSIONAL COMMUNITY MANAGEMENT, INC., Defendant and Appellant.

G053909

Court of Appeal, Fourth District, Division 3, California.

Filed October 17, 2017

Hill, Farrer & Burrill, E. Sean McLoughlin and William A. Meyers, Los Angeles, for Defendant and Appellant.

Employee's Legal Advocates, A. Jacob Nalbandyan and Charles L. Shute, Jr., for Plaintiff and Respondent.

OPINION

IKOLA, J.

A "sharp practice" is defined as a "dealing in which advantage is taken or sought unscrupulously." (Webster's 3d New Internat. Dict. (2002) p. 2088.) This is an appeal borne of sharp practices.

Defendant Professional Community Management, Inc. (PCM), unilaterally orchestrated the issuance of an appealable order by: (1) applying ex parte, a mere 11 days before trial, for an order shortening time to hear its motion to compel arbitration; (2) voluntarily submitting a proposed order to the trial court that not only reflected the court's denial of the ex parte application—the only ruling reflected in the trial court's own minute order—but also included a denial of the motion on the merits ; and (3) promptly appealing from that order, which then stayed the scheduled trial.

We conclude PCM engaged in this course of conduct because, as respondent Francisco Diaz argued below, it anticipated the court would deny its motion to compel arbitration in any event, and it sought to obtain an appealable ruling issued before the trial commenced. PCM could then spin that ruling into a vehicle for seeking pretrial appellate review of the analysis underlying the court's order denying its related motion for summary judgment. Thus, PCM carefully tailored the order it proposed the court issue, incorporating what it characterized as the trial court's reasons for rejecting the summary judgment motion , and excluding any mention of issues that might distract from that analysis.

PCM has continued its aggressive strategy on appeal, contending Diaz is precluded from arguing that PCM had waived its right to compel arbitration—the most obvious defense when such a motion is filed on the eve of trial. According to PCM, Diaz cannot make that argument because the trial court's premature denial of the motion to compel (at PCM's request) meant Diaz never argued waiver in an opposition to the motion; and because the order PCM drafted did not reflect the trial court had relied on it as a basis for denying the motion. Instead, PCM claims Diaz is relegated to defending the court's ruling based solely on the analysis PCM crafted in its proposed order, and that we must assess the propriety of that order based solely on that analysis as well.

There are several reasons why PCM cannot succeed in this appeal. But the most significant is the fact PCM invited the trial court's alleged error when it proposed the court issue the very ruling it now challenges on appeal. By doing that, PCM won the battle—it got the court to issue the appealable order it sought, prior to trial—but it lost the war. A party that invites the trial court to commit error is estopped from challenging that error on appeal.

We conclude PCM and its counsel acted in bad faith, generating an appealable order they knew the trial court had not intended to issue at the ex parte hearing, for the purpose of obtaining a delay of trial. Any confusion about the scope of the court's intended ex parte ruling was resolved by the court's own minute order, issued in the wake of the hearing. Further, PCM's claim that it had prepared its proposed order in compliance with California Rules of Court, rule 3.1312, is specious, and we note the format and content of the proposed order appears deliberately designed to obscure its inclusion of the appealable provision.

Alternatively, we conclude the order denying PCM's motion to compel arbitration should also be affirmed on the merits, based on our determination that PCM has waived its right to compel arbitration. We acknowledge that as a result of PCM's machinations, the court made no such express ruling, but we invoke our authority under Code of Civil Procedure section 909 to find that PCM has acted in bad faith in connection with the motion to compel arbitration.¹ And, when we combine that finding with other undisputed procedural facts, we conclude, as a matter of law, that PCM has waived its right to compel arbitration. Our invocation of section 909 is appropriate in the unusual circumstances of this case because we would otherwise feel compelled to remand the case to the trial court for a determination of the waiver issue—and any other defenses to arbitration Diaz might wish to raise—because the premature issuance of the order denying PCM's motion denied him a fair opportunity to do so. As section 909 states, it is intended to be construed liberally for the purpose of ensuring that "where feasible, causes may be finally disposed of by a single appeal and without further proceedings in the trial court ...." That goal of resolving a cause in one appeal is particularly important in a case such as this, where one party has already manipulated the appellate process in a patently unfair manner.

Finally, we also impose monetary sanctions against PCM and its counsel, E. Sean McLoughlin and William A. Meyers, for bringing a frivolous appeal. In accordance with California Rules of Court, rule 8.276, we notified PCM and its counsel that we were considering sanctions, and invited their response to specified concerns. While they did provide a satisfactory explanation for two of the actions we questioned, they also effectively conceded engaging in the conduct we were most disturbed by: i.e., they voluntarily sought an order denying their own motion, with the goal of generating pretrial appellate jurisdiction. We reject counsel's claim that they believed the court actually intended to deny PCM's motion to compel arbitration outright at the ex parte hearing, or that they were confused about the scope of the court's intended ruling. We conclude instead that PCM and its counsel acted in bad faith.

FACTS²

Diaz was employed as a tree trimmer by PCM for many years. He filed his complaint against it in October 2014, stating various causes of action arising out of PCM's alleged failure to reasonably accommodate the workplace restrictions imposed by his doctor, its alleged retaliation, and its alleged wrongful termination of his employment. PCM answered the complaint in December 2014, denying the allegations and pleading 24 affirmative defenses. The 24th affirmative defense alleged that Diaz's complaint "and each cause of action, is barred by [his] failure to exhaust contractual remedies available to him, including, but not limited to, the grievance and arbitration procedure under the collective bargaining agreement between [PCM] and [Diaz's] collective bargaining representative."

A trial date was set for March 21, 2016. But in February 2016, the court granted PCM's ex parte application to continue the trial date, selecting August 15, 2016 as the new trial date. The court's order reflected that the discovery cut off and other trial-related deadlines were established in accordance with the August 15 trial date.

In April 2016—a year and a half after the case was filed, and one month after the original trial date—PCM moved for summary judgment. It argued it was entitled to judgment as a matter of law based on the grievance and arbitration procedure contained in the Collective Bargaining Agreement (CBA) it had entered into with Diaz's union. According to PCM, that grievance and arbitration procedure—alleged as the basis of its 24th affirmative defense—was the mandatory and exclusive remedy for addressing the claims alleged in Diaz's complaint, and Diaz's failure to exhaust that remedy prevented him from proceeding on those claims in court. PCM also argued that any attempt by Diaz to challenge the validity of the CBA provisions would be preempted by Federal labor law. Diaz opposed the motion for summary judgment, and, after hearing argument, the court took it under submission.

On August 2, 2016, the court denied the motion for summary judgment. Although the court's analysis was lengthy, it summarized its grounds for denying summary judgment as "1) there is a question of fact whether [the CBA's] arbitration proceedings are fair and 2) [PCM] has not shown that ... any ... term of the [C]BA has to be interpreted in order to deal with [Diaz's] FEHA claim. Therefore, [Federal labor law] pre-emption has not occurred."

On August 3, the day after the court issued its summary judgment ruling, PCM filed a motion to compel arbitration pursuant to the terms of the CBA. The earliest date regularly available for a hearing on that motion was September 1, 2016, approximately two weeks after the August 15 trial date. Consequently, PCM also gave notice that it would apply to the court, ex parte, for an order either shortening time to hear the motion prior to trial, or continuing the trial to a date after the motion was heard and decided on regular notice. In its ex parte application, PCM represented that the facts and law supporting its motion to compel arbitration "are identical to those raised in connection with [its] Motion for Summary Judgment."

Diaz filed written opposition to the ex parte application, characterizing it as "nothing short of a desperate ploy to delay [the trial]." He contended PCM had not shown good cause for an order shortening time, as it could have reserved a court date for a motion to compel arbitration much earlier, if it had any genuine interest in arbitrating. Diaz also asserted that PCM knew its last-minute motion to compel arbitration would be denied on the merits, and thus the ex parte application was merely an effort to obtain that appealable order before the trial commenced.

Diaz argued that not only should PCM's motion to compel arbitration be denied for the same reasons the trial court had just denied its motion for summary...