Villareal v. LAD-T, LLC, B313681

CourtCalifornia Court of Appeals
Writing for the CourtFEUER, J.
Citation84 Cal.App.5th 446,300 Cal.Rptr.3d 415
Parties Albert VILLAREAL, Plaintiff and Respondent, v. LAD-T, LLC et al., Defendants and Appellants.
Docket NumberB313681
Decision Date20 October 2022

84 Cal.App.5th 446
300 Cal.Rptr.3d 415

Albert VILLAREAL, Plaintiff and Respondent,
LAD-T, LLC et al., Defendants and Appellants.


Court of Appeal, Second District, Division 7, California.

Filed October 20, 2022
As Modified November 2, 2022

Fine, Boggs & Perkins and Michael K. Perkins, Half Moon Bay, for Defendants and Appellants.

Employee Justice Legal Group, Kaveh S. Elihu and Matias N. Castro, Los Angeles, for Plaintiff and Respondent.


84 Cal.App.5th 451

LAD-T, LLC, dba Toyota of Downtown Los Angeles (LAD-T), and its parent company Lithia Motors Inc. (Lithia; collectively, defendants) appeal from an order denying their motion to compel arbitration of Albert Villareal's claims brought under the California Fair Employment and Housing Act (FEHA; Gov. Code, § 12900 et seq. ). Defendants contend the trial court erred in finding Business and Professions Code 1

300 Cal.Rptr.3d 420

section 17918 barred them from enforcing an arbitration agreement made in the name of an unregistered fictitious business, DT Los Angeles Toyota. The trial court did not err. Section 17918 bars a party that regularly transacts business in California for profit under a fictitious business name from maintaining an action on a contract until a fictitious business name statement is filed. Substantial evidence supports the trial court's finding LAD-T was transacting business as DT Los Angeles Toyota. Although section 17918 is most commonly applied to prevent a plaintiff from maintaining an action on a contract in the name of the fictitious business, we conclude it also applies to bar a party from maintaining a motion to compel arbitration because the motion is in essence a suit in equity to compel performance of a contract—the arbitration agreement.

Further, contrary to defendants’ contention, Villareal timely asserted his defense to the motion to compel arbitration by raising it in his opposition to the motion. In addition, the Federal Arbitration Act (FAA; 9 U.S.C. § 1 et seq. ) does not preempt section 17918 because the requirement that a party file a fictitious business name statement applies to all actions on a contract, not just arbitration agreements.

During the pendency of this appeal and nearly one year after the trial court denied the motion to compel arbitration, defendants registered the name DT Los Angeles Toyota. They now contend we should reverse the trial court's order as moot because there is no longer a bar to their maintaining their motion to compel arbitration. Villareal responds that we should dismiss the appeal as moot, leaving the trial court order in place. Neither position is quite correct. The appeal is not moot because if we were to decide the appeal in defendants’ favor, we could provide them immediate relief by directing the trial court to grant the motion to compel arbitration. We therefore reach the merits of the appeal. However, because the failure to file a fictitious business

84 Cal.App.5th 452

name statement does not invalidate the agreement in the name of the business, instead only abating the proceeding until there is compliance, we vacate the trial court's order and remand for the court to consider whether defendants’ motion to compel arbitration should now be granted. Villareal cannot on remand relitigate issues already decided (for example, unconscionability), but he should be afforded an opportunity in the trial court to raise waiver as a defense to enforcement of the arbitration agreement based on defendants’ delayed filing of the fictitious business name statement.


A. The Complaint

As alleged in the complaint, Villareal began working for defendants as a car salesman in 2015, and his job performance was satisfactory or better. On February 1, 2018 Villareal injured his knee and back and was unable to walk without difficulty. He was diagnosed with a torn meniscus, and on February 13 he was given an injection for pain. He returned to work on March 1. Villareal worked up until June 4, 2018, when he took leave due to recurring pain. He underwent knee surgery in August 2018. Following the surgery, Villareal was placed on two months’ medical leave. On October 30, 2018 Villareal informed defendants his medical provider had extended his medical leave for another three months. Defendants terminated Villareal's employment the following day.

Villareal filed this action on August 24, 2020, asserting claims under FEHA for discrimination, retaliation, failure to prevent discrimination, failure to provide reasonable

300 Cal.Rptr.3d 421

accommodation, and failure to engage in a good faith interactive process. The complaint also asserted claims for retaliation in violation of the California Family Rights Act (CFRA; Gov. Code, § 12945.2 ), wrongful termination in violation of public policy, declaratory judgment, and (against LAD-T only) refusal to permit inspection of personnel and payroll records in violation of the Labor Code.

B. Motion To Compel Arbitration

On October 14, 2020 defendants filed a motion to compel arbitration.2 The motion and supporting memorandum stated Villareal commenced employment with LAD-T in June 2017, and at that time he electronically signed an

84 Cal.App.5th 453

agreement to resolve employment disputes through binding arbitration. The declaration of Lithia's recruiting director attached a document dated June 23, 2017 with two sections titled "At Will Employment Agreement" and "Binding Arbitration Agreement" (collectively, the agreement). A header on the first page of the agreement stated it was "[b]etween DT Los Angeles Toyota and Albert Villar[ ]eal."

In his opposition Villareal argued defendants failed to meet their burden to establish the existence of a valid arbitration agreement because DT Los Angeles Toyota was neither a legal entity nor a fictitious business name. Rather, the vehicle dealership where Villareal worked, at the corner of Figueroa Street and Washington Boulevard in downtown Los Angeles, operated under the name Toyota of Downtown LA or Toyota of Downtown Los Angeles. Villareal argued that DT Los Angeles Toyota, as a nonentity, lacked the capacity to contract or consent to the agreement. Moreover, under section 17900 et seq., defendants could not maintain an action to enforce an agreement made in the name DT Los Angeles Toyota because they had not filed a fictitious business name statement with the Los Angeles County Registrar-Recorder/County Clerk (Registrar-Recorder). Villareal also argued defendants lacked authority to enter into an arbitration agreement in June 2017 because Lithia had not yet acquired the dealership from the previous owner, the Shammas Group (Shammas). Thus, Villareal was still an employee of Shammas. Further, the arbitration agreement was procedurally and substantively unconscionable.

Villareal's attorney submitted a declaration attaching copies of public records showing that Lithia incorporated LAD-T with the California Secretary of State between March and May 2017, and, according to a disclosure filed with the United States Securities and Exchange Commission, in August 2017 Lithia finalized its acquisition of several automobile dealerships in downtown Los Angeles, including Toyota of Downtown LA. The attachments included a printout of the results of a fictitious business name search on the Registrar-Recorder's website indicating a

300 Cal.Rptr.3d 422

search for "DT Los Angeles Toyota" returned no matching registrations.

In their reply memorandum and supporting declarations, defendants asserted that in the course of their acquisition of eight Los Angeles vehicle dealerships from Shammas, they executed employment and arbitration agreements with hundreds of Shammas employees (including Villareal) before the deal closed in order to ensure seamless operation of the dealerships throughout the change in ownership. Defendants admitted "the legal entity ‘DT Los

84 Cal.App.5th 454

Angeles Toyota’ was never an entity in existence." Lithia's payroll manager stated in her declaration that DT Los Angeles Toyota was an "internal DBA" used in Lithia's human resources computer systems to populate employment-related documents. She added that the name "may not be the same as the DBA on the company registration." Rather, the name was "an internal way for [Lithia] to determine which of the 8 Shammas dealerships which [Lithia] acquired a given worker was employed with." Defendants argued that "minor variations in the name of the employer" do not invalidate an arbitration agreement, and Villareal was not confused about "the entity that provided him electronic access to his onboarding paperwork," especially because he continued to work for LAD-T at the Toyota of Downtown Los Angeles dealership for more than a year after signing the agreement. Defendants also argued the agreement was not procedurally or substantively unconscionable.

C. The Trial Court Ruling

After a hearing, on June 1, 2021 the trial court denied...

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1 practice notes
  • People v. Schell, 2d Crim. No. B313694
    • United States
    • California Court of Appeals
    • October 20, 2022
    ...court from finding guilt of second degree murder on a theory that was not presented at trial.2 This claim was not raised below and 300 Cal.Rptr.3d 415 is thus forfeited. Also, the jury in appellant's case was instructed on both implied malice and aiding and abetting and the prosecutor's the......
1 cases
  • People v. Schell, 2d Crim. No. B313694
    • United States
    • California Court of Appeals
    • October 20, 2022
    ...court from finding guilt of second degree murder on a theory that was not presented at trial.2 This claim was not raised below and 300 Cal.Rptr.3d 415 is thus forfeited. Also, the jury in appellant's case was instructed on both implied malice and aiding and abetting and the prosecutor's the......

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