Sandquist v. Lebo Auto., Inc.

• Citation: 228 Cal.App.4th 65
• Decision Date: 25 June 2014
• Docket Number: B244412.
• Parties: TIMOTHY SANDQUIST, Plaintiff and Appellant, v. LEBO AUTOMOTIVE, INC., et al., Defendants and Respondents.
• Court: California Court of Appeals

228 Cal.App.4th 65

TIMOTHY SANDQUIST, Plaintiff and Appellant,
v.
LEBO AUTOMOTIVE, INC., et al., Defendants and Respondents.

No. B244412.

Court of Appeals of California, Second District, Division Seven.

June 25, 2014.

Sanford Heisler, Janette Wipper and Felicia Medina for Plaintiff and Appellant.

Fisher & Phillips, James J. McDonald, Jr. , and Grace Y. Horoupian for Defendants and Respondents.

228 Cal.App.4th 69

OPINION

SEGAL, J.^* —

INTRODUCTION

In this class action, plaintiff Timothy Sandquist purports to appeal from the trial court's August 14, 2012 order granting defendants' motion to compel him to arbitrate his individual claims, as well as defendants' motion to dismiss all class claims without prejudice. Although this order is not appealable, we liberally construe Sandquist's notice of appeal to include the trial court's October 5, 2012 order dismissing his class claims with prejudice, which is appealable under the death knell doctrine. Limiting our review to Sandquist's challenges to the order dismissing the class claims, we agree with Sandquist that the trial court erred by deciding the issue whether the parties agreed to class arbitration, and that the court should have submitted the issue to the arbitrator. Therefore, we reverse.

FACTUAL AND PROCEDURAL BACKGROUND

Sandquist began working in sales at Manhattan Beach Toyota in September 2000. Joel Rabe, Sandquist's sales floor manager, provided Sandquist with a large amount of paperwork to fill out but did not discuss any of the documents with him. Rabe simply told Sandquist to complete the paperwork quickly so he could get out onto the sales floor. The paperwork consisted of about 100 pages, including an employee handbook. Sandquist filled out the paperwork as best and as quickly as he could. Due to time constraints Sandquist did not review the documents and did not know he was signing multiple arbitration agreements. He signed the documents because he needed the job.

Among the documents Sandquist signed was a document entitled "APPLICANT'S STATEMENT & AGREEMENT." It provided in pertinent part: "I and the Company both agree that any claim dispute, and/or controversy (including, but not limited to, any claims of discrimination and harassment, whether they be based on the California Fair Employment and Housing Act, as well as all other applicable state or federal laws or regulations) which would otherwise require or allow resort to any court or other governmental dispute resolution forum between myself and the Company (or its owners, directors, officers, managers, employees, agents, and parties affiliated with its employee benefit and health plans) arising from, related to, or having any

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relationship or connection whatsoever with my seeking employment with, employment by, or other association with the Company, whether based on tort, contract, statutory, or equitable law, or otherwise, (with the sole exception of claims arising under the National Labor Relations Act which are brought before the National Labor Relations Board, claims for medical and disability benefits under the California Workers' Compensation Act, and Employment Development Department claims) shall be submitted to and determined exclusively by binding arbitration...."

Sandquist also signed a separate document acknowledging that he was an "at will" employee and agreeing "that any claim, dispute, and/or controversy (including, but not limited to any claims of discrimination and harassment) which would otherwise require or allow resort to any court or other governmental dispute resolution forum, between me and the Company (or its owners, directors, officers, managers, employees agents, and parties affiliated with its employee benefits and health plans) arising from, related to, or having any relationship or connection whatsoever with my seeking employment with, employment by, or other association with, the Company, whether based on tort, contract, statutory, or equitable law, or otherwise, shall be submitted to and determined exclusively by binding arbitration...."

Finally, Sandquist signed a document entitled "EMPLOYEE ACKNOWLEDGMENT AND AGREEMENT." In addition to an acknowledgment of receipt of the dealership's employee handbook, the document contained the following arbitration provision: "I agree that any claim, or dispute, or controversy (including, but not limited to, any and all claims of discrimination and harassment) which would otherwise require or allow resort to any court or other governmental dispute resolution forum between myself and the Company (or its owners, directors, officers, managers, employees, agents, and parties affiliated with its employee benefit and health plans) arising from, related to, or having any relationship or connection whatsoever with my seeking employment with, employment by, or other association with the Company, whether based on tort, contract, statutory, or equitable law, or otherwise, (with the sole exception of claims arising under the National Labor Relations Act which are brought before the National Labor Relations Board, claims for medical and disability benefits under the California Workers Compensation Act, and Employment Development Department claims), shall be submitted to and determine[d] exclusively by binding arbitration...."

All three arbitration provisions further specified that arbitration would be governed by the Federal Arbitration Act (FAA; 9 U.S.C. § 1 et seq.) in conformity with the procedures of the California Arbitration Act (Code Civ. Proc., § 1280 et seq.).

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Sandquist, who is African-American, filed this class action on January 9, 2012 against defendants Lebo Automotive, doing business as John Elway's Manhattan Beach Toyota, John Elway, Mitchell D. Pierce, Jerry L. Williams, and Darrell Sperber, who had purchased the dealership in 2007. On February 1, 2012 Sandquist filed his operative first amended class action complaint alleging violations of the California Fair Employment and Housing Act (FEHA; Gov. Code, § 12940 et seq.) and unfair competition law (Bus. & Prof. Code, § 17200 et seq.), and seeking injunctive and declaratory relief and damages.

Sandquist asserted individual and class claims against the dealership for race, color, national origin, and ancestry discrimination and against all defendants for hostile work environment. Sandquist also alleged an individual claim against the dealership for constructive discharge. He alleged that despite his "enormous success at and loyalty to the dealership, [he] was passed over for promotions, denied salary increases, and harassed on the basis of his race. [He] not only experienced discrimination on a routine basis, but he also witnessed" Elway, Pierce, and Williams "participate in, aid, abet, substantially assist, condone, or ratify discrimination and harassment in the face of widespread complaints that GM Sperber was a `repeat harasser' who freely and openly harassed employees of color. After persevering for four years against the ongoing discrimination and hostile work environment that permeated" the dealership, Sandquist "was forced to resign in 2011."

On March 20, 2012 defendants filed a motion to compel individual arbitration pursuant to Code of Civil Procedure section 1281.2 and to stay or dismiss the proceedings with the trial court retaining jurisdiction to enforce any arbitration award. In support of their motion defendants relied on the three arbitration agreements signed by Sandquist on his first day of work.

On August 14, 2012 the trial court granted the motion. The trial court concluded that the FAA applied and that the agreement was not unconscionable, finding no substantive unconscionability and a "low" level of procedural unconscionability.¹ With regard to the class claims the trial court ruled: "And to clean up any procedural details with regard to ... class allegations, the Court is going to dismiss or strike the class allegations as being irrelevant, false or an improper matter in the complaint under Code of Civil Procedure section 436[²] because there's no basis, contractual basis, to compel [class]

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arbitration. [¶] Since the plaintiff himself is now going to be subject to individual arbitration, there would no longer be any representative in the lawsuit that would be able to adequately represent a class action to pursue the claims that are asserted by plaintiff." The trial court further stated that it would "dismiss the class allegations without prejudice and set a time limit of 60 days for plaintiff to amend. And if plaintiff does not amend to bring forth a class representative that could support this class action to reinstitute the class allegations, then the defendant may request the dismissal of the case with prejudice."

On September 28, 2012 counsel for Sandquist advised the trial court that they had been unable to locate an employee of the dealership who had not signed the arbitration agreements. In the absence of a substitute class representative the trial court stated it would dismiss the class claims with prejudice.

On October 5, 2012 the trial court signed an order dismissing the class claims with prejudice. The court's order noted that Sandquist "was provided up to and including September 18, 2012 to amend his Complaint in order to bring forth a class representative that could support Plaintiff's class action to reinstate the class allegations. Plaintiff having failed to amend his complaint by September 18, 2012, IT IS HEREBY ORDERED that Plaintiff's class claims are dismissed with prejudice." That same day, October 5, 2012, Sandquist filed a notice of appeal from the August 14, 2012 order granting defendants' motion to compel arbitration and dismissing class claims without prejudice, and attached a copy of the August 14 order to his notice of appeal. Sandquist did not include in the notice of appeal the October 5, 2012 order entered that same day.

DISCUSSION

A. Appealability

(1)...