Romo v. Y-3 Holdings

• Decision Date: 20 March 2001
• Docket Number: Y-3
• Citation: 87 Cal.App.4th 1153,105 Cal.Rptr.2d 208
• Court: California Court of Appeals Court of Appeals
• Parties: (Cal.App. 2 Dist. 2001) LUPE S. ROMO, Plaintiff and Respondent, v.HOLDINGS, INC., et al., Defendants and Appellants. B136617 Filed

105 Cal.Rptr.2d 208 (Cal.App. 2 Dist. 2001)

LUPE S. ROMO, Plaintiff and Respondent, v. Y-3 HOLDINGS, INC., et al., Defendants and Appellants.

B136617

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION FOUR

Filed 3/20/01

APPEAL from a judgment of the Superior Court of Los Angeles County, Rose Hom, Judge. Affirmed.

(Super. Ct. No. TC012328)

Lewis, D'Amato, Brisbois & Bisgaard, Daniel Parker Jett and John L. Barber for Defendants and Appellants.

Gail C. Kaplan for Plaintiff and Respondent.

CERTIFIED FOR PUBLICATION

HASTINGS, J.

Appellants Y-3 Holdings, Inc. and Merv York appeal from an order denying arbitration of a lawsuit filed by respondent, ex-employee Lupe S. Romo, arising from termination of her employment. We conclude that the trial court did not err in concluding no agreement to arbitrate existed between the parties and we affirm.

STATEMENT OF FACTS

Respondent was continuously employed by appellants from April 3, 1980, through her firing on May 15, 1998.

On May 13, 1999, respondent filed a complaint alleging the following causes of action: breach of implied-in-fact contract; violation of California Constitution, article I, section 1 and article I, section 3; wrongful termination in violation of public policy; fraud; and breach of the covenant of good faith and fair dealing. A first amended complaint alleging the same basic claims was filed on June 3, 1999.

On July 27, 1999, appellants filed a "Notice of Motion and Motion . . . to Dismiss or Stay Action and Compel Arbitration." The motion alleged an agreement to arbitrate contained within an employee handbook distributed to respondent in January 1998. A copy of the 44-page employee handbook was attached as an exhibit to the motion.

The handbook is divided into nine sections headed by Roman Numerals. Section numbered VIII is contained at pages 39-41 and is titled "MUTUAL AGREEMENT TO ARBITRATE CLAIMS." At page 39, under the subheading "Agreement to Arbitrate," the following is contained: "Except as otherwise provided in this Agreement [not relevant to our discussion], the company and the employee hereby consent to the resolution by arbitration of all claims or controversies for which a court otherwise would be authorized by law to grant relief, in any way arising out of, relating to or associated with the employee's employment with the company, or its termination ('claims'), that the company may have against the employee or that the employee may have against the company or against its officers, directors, employees or agents in their capacity as such or otherwise. The claims covered by this Agreement include, but are not limited to, claims for wages or other compensation due; claims for breach of any contract or covenant, express or implied; tort claims; claims for discrimination, including but not limited to discrimination based on race, sex, religion, national origin, age, marital status, handicap, disability or medical condition; claims for benefits, except as excluded in the following paragraph [not relevant]; and claims for violation of any federal, state or other governmental constitution, statute, ordinance or regulation."

The final page of Section VIII, page 41, contains lines for dates and signatures of the employee and the employer, neither of which is signed or dated.

At pages 43-44, after section IX of the employee handbook, titled "ARBITRATION PROCEDURE," is an unnumbered heading titled "EMPLOYEE ACKNOWLEDGMENT" which has a place for date and signature by the employee. Page 44 contains the date "3-30-98" and is signed by respondent. The acknowledgment states as follows:

"I acknowledge receipt of my copy of the handbook entitled 'Y-3 Holdings, Inc. Employee Handbook.' I have read and understood its contents, including company policies and rules governing my conduct, wages and working conditions as an employee. I understand that this Handbook supersedes and replaces any prior company Handbook. I agree to abide by these policies and rules during my employment, and understand the consequences if I do not.

"I hereby acknowledge that my employment is 'at-will,' that because I may resign at any time for any reason, the company may terminate my employment at any time with or without cause; I understand that no employee or other representative of the company can modify this policy in any manner or enter into any agreement that is contrary to this policy unless it is in writing and signed by the President of the company.

"I understand that any and all benefits, policies and procedures set forth herein are statements of general company policy and shall, in no manner, be construed to imply a contract or a guarantee of continuing employment with the company or employment for any specific length of time.

"I understand that the company reserves the right to eliminate, modify and improve any an[d] all of its wages, hours and working conditions, including the benefits, policies and rules explained herein at any time with or without notice.

"I understand that all representations by any manager or other employee of the company that conflict in any respect with any matter set forth in this handbook are invalid unless specifically acknowledged in writing by the President of the company."

Appellants' motion was set for hearing on September 14, 1999.

On August 6, 1999, in response to service of appellants' motion, counsel for respondent filed an ex parte application to shorten time to file a motion for relief to file a second amended complaint. In support of the application, counsel for respondent advised the court that she was unaware of the arbitration agreement contained within the Employee Handbook and desired to file a second amended complaint adding a claim for fraud in connection with respondent's signature at the end of the handbook. The application was granted, respondent filed the motion for leave to file a second amended complaint which was granted, and a second amended complaint was deemed filed on September 2, 1999. The second amended complaint added a cause of action alleging that respondent's signature obtained by appellants after the heading titled "EMPLOYEE ACKNOWLEDGMENT" was obtained by fraud.

Respondent filed opposition to appellants' motion to compel arbitration raising a number of arguments. First, she argued that respondent and appellants never entered into the arbitration agreement contained within the Employer Handbook. "The arbitration provision in the Employee Handbook is unenforceable because no contract was formed. [Respondent] did not intend to arbitrate her disputes with [appellants] and did not physically sign an arbitration agreement. She, however, did sign an ambiguous document drafted by [appellants] which does not include the arbitration provision." Alternatively, she argued: "Even if a contract is found to have been formed, it is void because it was fraudulently executed and because it is both procedurally and subjectively unconscionable."

Respondent's declaration was filed in support of her opposition. She declared that she did not date and sign that portion of the Employee Handbook providing for arbitration, Section VIII, but that she did sign that portion of the handbook titled "EMPLOYEE ACKNOWLEDGMENT" after being told it would not trigger the arbitration provisions of Section VIII.

Appellants filed a reply in which they did not contest respondent's declaration that she did not sign under Section VIII. Instead, they argued that respondent's signature of the "EMPLOYEE ACKNOWLEDGMENT" at the end of the Employee Agreement bound her to "all matters included within the employee handbook." They also contested her position that her signature was obtained by fraud and argued any evidence offered by her on the issue was barred by the parol evidence doctrine.

The trial court denied the motion in a minute order: "Motion is denied with prejudice. The Court finds that since the Second Amended Complaint alleges that plaintiff was fraudulently induced into signing the Employee Handbook acknowledgment (pages 44 and 44A of the Employee Handbook), and that the acknowledgment which immediately follows the section enti...