Ruiz v. Sysco Food Services

• Decision Date: 08 September 2004
• Docket Number: No. D041833.,D041833.
• Citation: 122 Cal.App.4th 520,18 Cal.Rptr.3d 700
• Court: California Court of Appeals Court of Appeals
• Parties: Ernie RUIZ, Plaintiff and Respondent, v. SYSCO FOOD SERVICES, Defendant and Appellant.

18 Cal.Rptr.3d 700

122 Cal.App.4th 520

Ernie RUIZ, Plaintiff and Respondent, v. SYSCO FOOD SERVICES, Defendant and Appellant.

No. D041833.

Court of Appeal, Fourth District, Division 1.

September 8, 2004.

Review Denied January 19, 2005.

Mark T. Bennett, Merrill, Schultz & Wolds, San Diego, CA, for Defendant and Appellant.

Reza Keramati, Western Legal Group, APC, San Diego, CA, for Plaintiff and Respondent.

HUFFMAN, Acting P.J.

Ernie Ruiz brought a complaint against his employer, defendant and appellant Sysco Food Services of San Diego (Sysco), seeking damages for defamation and related tort theories. Previously, Ruiz, a driver by trade, had been terminated from Sysco's employment, but was reinstated after he prevailed in a grievance proceeding under the collective bargaining agreement applicable to union employees of Sysco.

In response to the filing of this tort action, Sysco brought a petition to compel arbitration, asserting that the collective bargaining agreement (CBA) again applied and required arbitration of these tort claims, as inextricably intertwined with the termination, grievance, and reinstatement proceedings. (Code Civ. Proc., § 1281.2; all further statutory references are to the Code of Civil Procedure unless otherwise noted.) The trial court denied the petition, ruling that the arbitration provision in the subject CBA did not mandate resolution of this type of claim by arbitration. Sysco appeals the order, as well as a related order denying Sysco's request for monetary sanctions. (§ 473, subd. (b).)

Insofar as the order on review denied the requested monetary sanctions, it was an appropriate application of the statute and is affirmed. However, the balance of the order, denying the petition to compel arbitration, is erroneous as a matter of law and must be reversed with directions to grant the petition to compel arbitration under California law. Requiring arbitration under California law is within the scope of the CBA arbitration provision and the scope of the original petition to compel arbitration as pled, and is consistent with general Federal Arbitration Act (FAA) policy in favor of arbitration (FAA; 9 U.S.C. § 1 et seq.).

FACTUAL AND PROCEDURAL BACKGROUND

As alleged in the complaint, Ruiz started working for Sysco as a driver in 1989. Ruiz had a Sysco work jacket that had a rodeo patch which he had won sewed onto it. In 1998, Ruiz lent this jacket to a newly hired employee, Albert Gamez, when Gamez was told not to wear a different logo jacket on the job. Gamez did not return the jacket despite several requests by Ruiz.

By April 2001, Gamez had become Ruiz's supervisor, and Ruiz was the union shop steward. When Ruiz again asked Gamez to return the jacket, he first said it had been thrown away as a filthy rag. Then, on April 10, 2001, at the workplace, Gamez tossed the jacket onto a counter beside Ruiz, made a comment about it not stinking anymore, and left the room. According to Ruiz's declaration filed during a removal and remand proceeding from federal court, he responded by removing a patch from the jacket with a knife, cutting two rips in the jacket, and then putting the knife and patch away in his briefcase. When Gamez returned, he told him that he did not like or respect him and only had to work for him. He says he then tore the jacket with his hands and threw it in the trash, while the knife remained put away.

According to Gamez, Ruiz cut up the jacket in front of him in a threatening manner. As alleged in the Ruiz complaint, Gamez falsely stated to his supervisor, William Robinson, that Ruiz had brandished a knife at him and had cut the jacket with a knife in a slashing manner only a few feet away from him. Gamez inquired of Robinson whether immediate action was needed under the CBA for him to make a complaint. A meeting was immediately held between Gamez, Ruiz, and the supervisor of Robinson Mr. Richter. Gamez repeated the brandishing allegations. Ruiz returned to work and then went home. He was then contacted by Richter and told he was suspended pending an investigation.

The complaint further alleges that after Ruiz had gone home, Sysco employees called the police and Gamez repeated the brandishing and slashing allegations. The next day, Ruiz was terminated from his position for alleged violent and threatening conduct.

Through his union, Ruiz filed a grievance, alleging that the discharge was made without "just cause" within the meaning of the CBA. Effective September 2001, the arbitrator determined the investigation resulting in plaintiff's termination had not been fair and complete under the standards of the CBA so as to support the termination of employment. The arbitrator noted that the knife was never recovered and there was a dispute about how big it was and where and how it was used. Ruiz was reinstated.

On April 4, 2002, Ruiz filed his complaint for damages on theories of defamation, false light, public disclosure of private facts, and intentional and negligent infliction of emotional distress, all arising out of the investigation and its aftermath. Sysco removed this action to federal court and then vigorously, although unsuccessfully, opposed Ruiz's motion to remand. The record includes a declaration filed by Ruiz in support of remand, giving details of the entire jacket incident, including the office discussions and rumors about it (e.g., the jacket was hung on an office wall like a trophy), and attached a copy of a sheriff's office investigative report filed after Sysco reported the incident. The district court remanded the matter, ruling that the defamation and related claims did not arise under or require the interpretation of the CBA, and hence there was no basis for jurisdiction in federal court. The district court's rulings addressed both the investigation of the knife incident and also the allegation of Sysco's filing of a false police report on the incident.

Back in state court, on January 15, 2003, Sysco filed its petition to compel arbitration under the CBA, as its first responsive pleading, in lieu of filing a formal answer. (§ 1281.2.) Opposition was filed, one day late, and the matter went to hearing. Sysco objected that the Ruiz response should be stricken as untimely, and Ruiz's counsel explained that he was unable to attend to filing the response in a more timely manner because he was unforeseeably delayed by other business, and contended that no prejudice had ensued.

On March 4, 2003, the trial court issued its telephonic ruling denying the petition to compel arbitration, on the basis that "(1) the CBA contains no language that compels arbitration of Plaintiff's claims, (2) the CBA does not contemplate resolution of such claims, and (3) these claims arise from allegations outside the investigation conducted by Defendant. Thus, there is no valid agreement to arbitrate the instant matters. [Citation.] The Court also finds Plaintiff's claims are not subject to the Federal Arbitration Act." (FAA; 9 U.S.C § 1 et seq.) The trial court prepared an extensive statement of decision explaining these findings as follows.

First, the court quoted from the CBA, article 14, as follows: "[a] grievance shall include any difference of opinion or dispute between the Employer and the Union or any employee covered by this Agreement regarding the interpretation of this Agreement. It shall also include any disputed layoff, suspension, dismissal or discharge of any employee who is entitled to contest such action." Article 14 then sets forth a three-step process to resolve a grievance, beginning: "[I]f a representative of the Employer and the Union cannot settle a grievance as outlined above, the matter may be referred to arbitration...."

From that language, the trial court concluded that the arbitration provision in the CBA did not mandate resolution of Ruiz's claims by arbitration, because these claims were of a different nature than the grievance about the termination and discharge. Specifically, the trial court noted:

"Here the gravamen of the complaint does not concern conduct contemplated by the CBA. Further, a critical distinction exists in the instant matter because Plaintiff alleges, and Defendant does not dispute, statements regarding Plaintiff were made to the police and employees outside Defendant's investigation. Because these statements were unnecessary to perform the investigation they are reasonably characterized as falling outside Defendant's right to conduct an investigation in the resolution of a grievance. As such, Plaintiff's instant claims are not inextricably intertwined with consideration of the terms of the CBA, and said claims are not contemplated by the CBA."

In its ruling, the trial court made two further findings on issues not raised by the parties. It observed that no grievance had been filed by Ruiz to invoke any arbitration proceedings on these particular claims. Further, the court questioned whether Sysco had waived any right to compel arbitration by its actions in originally removing this action to federal court and then vigorously, although unsuccessfully, opposing Ruiz's motion to remand. (§ 1281.2, subd. (a).)

Finally, in its ruling, the trial court also denied the request by Sysco to strike the response to its petition, and to award it $1,350 for attorney fees, made on the grounds that Ruiz's responsive papers were not properly before the court because they were unverified and served one day late. (§ 473, subd. (b).) The ruling states, "The Court is similarly not inclined to impose Defendant's requested sanction for filing Plaintiff's response one day late. There is no prejudice to Defendant, and the Court is unwilling to effectuate such a measure."

Sysco appeals the orders of denial of its petition to compel and the monetary sanctions request. This court issued its original opinion to reverse and compel further proceedings on certain jurisdictional issues, but then granted the Sysco petition for rehearing in ...