Nixon v. AmeriHome Mortgage Company, LLC

Decision Date16 August 2021
Docket NumberB302754
Citation67 Cal.App.5th 934,282 Cal.Rptr.3d 609
Parties Sylvia NIXON, Plaintiff and Appellant, v. AMERIHOME MORTGAGE COMPANY, LLC, Defendant and Respondent.
CourtCalifornia Court of Appeals Court of Appeals

Justice Law Corporation, Douglas Han, Shunt Tatavos-Gharajeh, Glendale, and Areen Babajanian, Los Angeles, for Plaintiff and Appellant.

Carothers DiSante & Freudenberger, Todd R. Wulffson, Nancy N. Lubrano, Irvine, and Rachel L. Capler for Defendant and Respondent.


Sylvia Nixon sued her former employer, AmeriHome Mortgage Company, LLC, in a putative class action lawsuit for unpaid overtime compensation and unlawful business practices. The superior court granted AmeriHome's motion to compel arbitration, ordered arbitration of Nixon's individual claims and dismissed the class claims.

On appeal Nixon argues AmeriHome's motion should have been denied pursuant to Labor Code section 229,1 which provides, "Actions to enforce the provisions of this article for the collection of due and unpaid wages claimed by an individual may be maintained without regard to the existence of any private agreement to arbitrate." Alternatively, Nixon contends the superior court abused its discretion under Code of Civil Procedure section 1281.2 by ordering her to arbitrate her wage-and-hour claim notwithstanding the pendency of a nonarbitrable lawsuit against AmeriHome by another former employee under the Labor Code Private Attorneys General Act of 2004 (PAGA) ( Lab. Code, § 2698 et seq. ).

In light of the uncertainty of our jurisdiction to consider Nixon's appeal from the order compelling arbitration and the absence of any delay or prejudice our intervention at this stage would cause, we find this an appropriate case in which to exercise our discretion to treat the appeal from that order as a petition for writ of mandate. We deny the petition on the merits and affirm the order dismissing the putative class claims.


Nixon worked at AmeriHome as a loan review analyst or operations support specialist from mid-October 2015 to February 26, 2018. She reviewed loan files for AmeriHome clients who resided in California, as well as those who lived in other states.

1. The Agreement To Arbitrate

As part of her on-boarding process with the company, Nixon executed a seven-page Employment and Confidentiality Agreement. The agreement covered a range of matters directly related to Nixon's position with the company, including her start date, duties, compensation and fringe benefits and her obligation not to disclose or use AmeriHome's confidential information except as required in the performance of her job. The agreement also provided Nixon's employment was on an at-will basis and could be terminated by either party at any time without cause.

Section X of the agreement was titled, "GOVERNING LAW; ARBITRATION; WAIVER OF A JURY TRIAL." That section stated in part: "This Agreement, and all questions relating to its validity, interpretation, performance and enforcement, as well as the legal relations hereby created between the parties hereto, shall be governed and construed under, and interpreted and enforced in accordance with, the laws of the State of California notwithstanding any California or other conflict of law provision to the contrary and any dispute or controversy arising out of or relating to this Agreement or your employment, other than injunctive relief as provided in this Agreement, will be settled exclusively by arbitration, conducted before a single arbitrator in California (applying California law) in accordance with, and pursuant to, the National Rules for the Resolution of Employment Disputes of the American Arbitration Association (‘AAA’).... Any arbitral award may be entered as a judgment or order in any court of competent jurisdiction. Either party may commence litigation in court to obtain injunctive relief in aid of arbitration, to compel arbitration, or to confirm or vacate an award, to the extent authorized by the Federal Arbitration Act or the California Arbitration Act."

2. Nixon's Putative Class Action Complaint

On June 3, 2019 Nixon filed a complaint against AmeriHome, individually and on behalf of a putative class of all current and former hourly paid or nonexempt employees of AmeriHome, for failure to pay minimum wages and required overtime wages pursuant to sections 510, 1194 and 1198. Nixon specifically alleged the first cause of action for unpaid wages was brought pursuant to section 229. Nixon also alleged a second cause of action for unlawful business practices ( Bus. & Prof. Code, § 17200 et seq. ), relying on predicate violations of sections 510, 1194 and 1198.

3. AmeriHome's Motion To Compel Arbitration

AmeriHome moved on June 28, 2019 to compel arbitration of Nixon's individual claims, to dismiss the class claims and to stay judicial proceedings pending completion of the arbitration. AmeriHome submitted a declaration from its human resources director, Shelley Tam, which described how AmeriHome's business and Nixon's work involved interstate commerce. Tam's declaration also attached a copy of Nixon's Employment and Confidentiality Agreement. AmeriHome argued, because interstate commerce was involved, the Federal Arbitration Act (FAA) governed the agreement and preempted section 229 ’s prohibition of arbitration of unpaid wage claims. AmeriHome also relied on language in the arbitration agreement expressly stating arbitration could be compelled "to the extent authorized by the Federal Arbitration Act."

In opposing the motion to compel arbitration, Nixon did not dispute the authenticity of the Employment and Confidentiality Agreement submitted by AmeriHome or contend her employment did not involve interstate commerce. Nonetheless, she argued the FAA did not apply—and Labor Code section 229 was not preempted—because of the agreement's broad choice-of-law provision, which stated it would be "construed[,] ... interpreted and enforced" in accordance with California law. Nixon also contended, whether federal or state arbitration rules applied, the superior court should deny the motion pursuant to Code of Civil Procedure section 1281.2, subdivision (c), in light of the pending PAGA action initiated by Anthony Brooks (Brooks v. AmeriHome Mortgage Company, LLC (Super. Ct. Ventura County, No. 56-2019-00524903-CU-OE-VTA) (Brooks )), seeking civil penalties for wage violations.2 Nixon argued the Brooks action and her lawsuit arose from the same series of transactions, which created the possibility of conflicting rulings on common issues of fact and law.

AmeriHome filed a reply contending the agreement's choice-of-law provision should not be interpreted to mean California law governed enforcement of the arbitration provision because the agreement expressly permitted arbitration to be compelled pursuant to the FAA. AmeriHome also argued the arbitration agreement expressly applied to any dispute relating to Nixon's employment, which included her wage claim, and she should not be allowed to negate the core purpose of the arbitration agreement by invoking Labor Code section 229. Regarding Code of Civil Procedure section 1281.2, subdivision (c), AmeriHome argued the FAA also preempted this provision and, in any event, there was no risk of inconsistent rulings and, therefore, no reason to deny or stay arbitration.

4. The Superior Court's Ruling

After hearing oral argument the superior court concluded, "It is clear the parties intended to arbitrate and that the FAA applies." In its written order the court ruled there existed a valid arbitration agreement that covered the claims alleged by Nixon. The court rejected Nixon's argument that Labor Code section 229 exempted her wage claim from arbitration. While acknowledging the agreement contained a provision that it would be "governed[,] ... construed under[,] ... interpreted and enforced" in accordance with California law, the court found the choice-of-law provision insufficient to negate the parties’ agreement to arbitrate "any dispute or controversy arising out of or relating to this Agreement or your employment." The court declined to exercise its discretion to deny AmeriHome's motion pursuant to Code of Civil Procedure section 1281.2, subdivision (c), because the case did not arise out of the same transaction as Brooks , and compelling arbitration would not necessarily result in conflicting rulings.

The court granted AmeriHome's motion to compel arbitration of Nixon's individual claims, dismissed the class claims and stayed proceedings in the superior court pending resolution of the arbitration. Nixon filed a timely notice of appeal.

1. Appealability

A superior court's order denying class certification or dismissing class claims is appealable pursuant to the death knell doctrine. ( In re Baycol Cases I & II (2011) 51 Cal.4th 751, 757, 122 Cal.Rptr.3d 153, 248 P.3d 681 [when an order "effectively [rings] the death knell for the class claims, [the court] treat[s] it as in essence a final judgment on those claims"].) The death knell doctrine seeks to ensure that an order operating as "the practical equivalent of a final judgment for absent class members" does not evade review entirely because "without the possibility of a group recovery, the plaintiff will lack incentive to pursue claims to final judgment." ( Cortez v. Doty Bros. Equipment Co. (2017) 15 Cal.App.5th 1, 8, 222 Cal.Rptr.3d 649.)

An order compelling arbitration generally is not immediately appealable. ( Ashburn v. AIG Financial Advisors, Inc. (2015) 234 Cal.App.4th 79, 94, 183 Cal.Rptr.3d 679 ["[a]n order granting a petition to compel arbitration is not appealable, but is reviewable on appeal from a subsequent judgment on the award"]; Phillips v. Sprint PCS (2012) 209 Cal.App.4th 758, 766, 147 Cal.Rptr.3d 274 ["[o]rdinarily, no immediate appeal lies from an order compelling arbitration and review of the order must await appeal from a final judgment entered...

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