Opinion
G062985
09-13-2024
CARL CYRUS, Plaintiff and Respondent, v. AMERICOR FUNDING, LLC, Defendant and Appellant.
CDF Labor Law, Todd R. Wulffson, Denisha P. McKenzie and Ashley N. Lopeztello for Defendant and Appellant. Aegis Law Firm, Samuel A. Wong, Jessica L. Campbell and Ali S. Carlsen for Plaintiff and Respondent.
NOT TO BE PUBLISHED
Appeal from a judgment of the Superior Court of Orange County No. 30-202201282080, Peter J. Wilson, Judge. Affirmed.
CDF Labor Law, Todd R. Wulffson, Denisha P. McKenzie and Ashley N. Lopeztello for Defendant and Appellant.
Aegis Law Firm, Samuel A. Wong, Jessica L. Campbell and Ali S. Carlsen for Plaintiff and Respondent.
OPINION
GOODING, J.
When defendant Americor Funding, LLC (Americor) onboarded their now-former employee, plaintiff Carl Cyrus, it presented him with three separate documents to sign electronically. Cyrus signed each of them. He signed the first one, titled "Mutual Agreement to Arbitrate Claims" (the Arbitration Agreement), on April 23, 2020. He signed the second one, titled "Applicant's Statement and Agreement" (the Employment Application), three days later on April 26, 2020. The third, titled "Employment Agreement" (the Employment Agreement), was signed on April 23, 2020, but by its terms, it did not become effective until April 27, 2020. Each of the three agreements included a different alternative dispute resolution (ADR) provision. Significantly for our purposes, the latter two agreements both included an integration clause.
After separating from his employment with Americor, Cyrus filed suit against Americor, asserting wage and hour claims, both individually and as a class and PAGA representative. Americor moved to compel arbitration of Cyrus's individual claims and to dismiss the class and representative PAGA claims. Americor's motion relied solely on the first agreement-the Arbitration Agreement-although it attached all three agreements to a declaration filed in support of the motion.
The Labor Code Private Attorneys General Act of 2004, Labor Code section 2698 et seq.
Even after Cyrus opposed the motion on the ground the Employment Application and Employment Agreement were fully integrated and superseded the Arbitration Agreement, Americor continued to insist in its reply that the Arbitration Agreement controlled and that it compelled arbitration. The trial court denied the motion, and Americor appealed.
We affirm. Americor failed to meet its burden to show the Arbitration Agreement survived the two subsequent, fully integrated agreements signed by Cyrus, and Americor forfeited any argument the Employment Agreement nevertheless mandates arbitration by failing to raise such an argument in the trial court.
FACTS
I.
THE ARBITRATION AGREEMENT
Cyrus signed the Arbitration Agreement on April 23, 2020. In it, Cyrus and Americor agreed to submit to binding arbitration before JAMS "any and all claims, controversies, or disputes between [them] relating in any manner to [Cyrus's] employment or termination of employment." The Arbitration Agreement provided Cyrus could only bring individual claims in arbitration, not class or representative claims. It also provided that "disputes over the arbitrator's jurisdiction, including any objections to the existence, scope, or validity of this Arbitration Agreement, will be resolved by the arbitrator." It contained a California choice of law provision as to the substantive law of California to the extent it has not been preempted by the Federal Arbitration Act. As to arbitration costs, the Arbitration Agreement provided Cyrus would be "required to pay an arbitration fee to initiate arbitration equal to what [Cyrus] would be charged as a first appearance fee in court" and "[t]he Company will pay the remaining fees and costs of the arbitrator."
II.
THE EMPLOYMENT APPLICATION
Cyrus signed the Employment Application on April 26, 2020. It includes the following ADR provision: "I and the company to which I am submitting my application for employment ("the Company") agree to utilize binding individual arbitration to resolve all disputes that might arise out of or be related in any way to my application for employment or employment by the Company.... I and the Company each specifically waive our respective rights to bring such claims against the other in a court of law and to have a trial by jury."
Contrary to the terms of the earlier Arbitration Agreement, the Employment Application provides "[a]ny dispute regarding the validity, scope or enforceability of this agreement . . . shall be resolved by a court, not by the arbitrator." The Employment Application also contained a class and representative action waiver. And it included the following integration clause: "This Agreement is the entire agreement between the Company and me regarding dispute resolution, the length of my employment if hired, and the reasons for termination of employment, and this Agreement supersedes any and all prior agreements regarding these issues." (Italics added.) The Employment Application provided the "Company will pay the arbitrator's fees and other costs relating to the arbitration forum."
Specifically, the Employment Application provided: "I agree to waive any substantive or procedural rights that I may have to bring or participate in an action brought on a class or collective basis. If under applicable law a representative claim under [PAGA] is found to be unwaivable and such an action is pursued in court, I and the Company agree that any such PAGA claim will be severed and stayed pending resolution of claims that are arbitrable."
III.
THE EMPLOYMENT AGREEMENT
The third agreement is the Employment Agreement, which was signed April 23, 2020, but had an effective date of April 27, 2020. It addresses a number of aspects of Cyrus's employment with Americor, including his start date, probationary period, title, compensation, and benefits. It also includes terms regarding confidentiality, conflicts of interest, and termination of employment. The Employment Agreement allows Americor to seek a permanent injunction for violations of the confidentiality provisions and provides that, in the event "a court of competent jurisdiction" determines any of its provisions are too broad to be enforceable, the court may reduce that provision in scope to render it enforceable. It further states "this Agreement . . . and all suits and special proceedings under this Agreement" are governed by California law.
The Employment Agreement also contains the following ADR provision: "Disputes: If a dispute arises, the parties will try in good faith to settle it through mediation conducted by a mediator to be selected mutually.... If the dispute is not resolved within 30 days, after it is referred to the mediator, it will be arbitrated by the arbitrator to be mutually selected. A Judgment on the arbitration award may be entered in any court that has jurisdiction over the matter." The Employment Agreement contemplated a court, not an arbitrator, would determine whether any provision of the agreement is invalid or unenforceable. As to arbitration costs, the Employment Agreement provided, "[t]he cost of arbitration, including attorney's fees, will be allocated by the arbitrator."
Finally, the Employment Agreement contained the following integration clause: "This Agreement constitutes the entire agreement between the parties and there are no further items or provisions, either oral or written. As of the effective date of this Agreement, this Agreement supersedes all other agreements between the parties. The parties to this Agreement stipulate that neither of them has made any representations with respect to the subject matter of this Agreement except such representations as are specifically set forth in this Agreement. Each of the parties acknowledges that it has relied on its own judgment in entering into this Agreement." (Italics added.)
PROCEDURAL HISTORY
Cyrus filed a wage and hour class action against Americor, individually and on behalf of all others similarly situated, in September 2022 and amended the complaint to add a PAGA claim in November 2022. Americor answered the first amended complaint in January 2023.
In May 2023, Americor filed a motion to compel arbitration of Cyrus's individual claims and to dismiss the PAGA and class claims pursuant to the Arbitration Agreement. Americor's motion was supported by a declaration from its director of human resources detailing, among other things, the process by which Cyrus electronically signed the Arbitration Agreement and other employment documents that had been presented to him for execution. The declaration attached four exhibits. The exhibits included the Arbitration Agreement (exhibit A), the JAMS employment arbitration rules and procedures (exhibit B), an electronic signature consent form (exhibit C), and other employment records relating to Cyrus (exhibit D). Among other things, exhibit D included both the Employment Application and the Employment Agreement.
Cyrus opposed the motion on the ground Americor had failed to establish the existence of an agreement to arbitrate because the agreement on which Americor's motion relied-the Arbitration Agreement-had been superseded by the subsequent agreements. After hearing argument, the trial court denied Americor's motion to compel arbitration. This appeal followed.
DISCUSSION
I.
LEGAL PRINCIPLES AND STANDARD OF REVIEW
On a motion to compel arbitration, the "threshold question . . . is whether an agreement to arbitrate exists." (Trinity v. Life Ins. Co. of North America (2022) 78 Cal.App.5th 1111, 1120; see Code Civ. Proc., § 1281.2.) As the moving party, Americor bore the burden of proving by a preponderance of the evidence the existence of an agreement to arbitrate. (Trinity v. Life Ins. Co. of North America, supra, 78 Cal.App.5th at p. 1120.) "To carry this burden of persuasion the moving party must first produce 'prima facie evidence of a written agreement to arbitrate the controversy.' [Citation.] 'If the moving party meets its initial prima facie burden and the opposing party disputes the agreement, then . . . the opposing party bears the burden of producing evidence to challenge the authenticity of the agreement.' [Citations.] If the opposing party produces such evidence, then 'the moving party must establish with admissible evidence a valid arbitration agreement between the parties.' [Citation.] Despite the shifting burden of production, '[t]he burden of proving the agreement by a preponderance of the evidence remains with the moving party.'" (Ibid.)
"In determining the rights of parties to enforce an arbitration agreement within the FAA's scope, courts apply state contract law while giving due regard to the federal policy favoring arbitration." (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236.) "When deciding whether the parties agreed to arbitrate a certain matter (including arbitrability), courts generally . . . should apply ordinary state-law principles that govern the formation of contracts." (First Options of Chicago, Inc. v. Kaplan (1995) 514 U.S. 938, 944.)
"'"There is no uniform standard of review for evaluating an order denying a motion to compel arbitration. [Citation.] If the court's order is based on a decision of fact, then we adopt a substantial evidence standard. [Citations.] Alternatively, if the court's denial rests solely on a decision of law, then a de novo standard of review is employed."'" (Franco v. Greystone Ridge Condominium (2019) 39 Cal.App.5th 221, 227.)
"Where the decision 'is based on the court's finding that [the party seeking arbitration] failed to carry its burden of proof, the question for the reviewing court is whether that finding is erroneous as a matter of law.'" (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 166; see Fabian v. Renovate America, Inc. (2019) 42 Cal.App.5th 1062, 1066-1067.) In so deciding, courts may consider "'"'whether appellant's evidence was (1) "uncontradicted and unimpeached" and (2) "of such a character and weight as to leave no room for a judicial determination that it was insufficient to support a finding."'"'" (Gamboa v. Northeast Community Clinic, supra, 72 Cal.App.5th at p. 166.)
II.
ANALYSIS
The issue on appeal is whether Americor met its burden on the motion to compel arbitration to establish by a preponderance of the evidence the existence of an agreement to arbitrate Cyrus's individual claims. We conclude it did not and the trial court did not err in denying the motion.
Our review of the various arbitration agreements signed by Cyrus is de novo because the parties did not offer extrinsic evidence. (Trinity v. Life Ins. Co. of North America, supra, 78 Cal.App.5th at pp. 1120-1121.) "Terms set forth in a writing intended by the parties as a final expression of their agreement with respect to the terms included therein may not be contradicted by evidence of a prior agreement or of a contemporaneous oral agreement." (Code Civ. Proc., § 1856, subd. (a).) "The terms set forth in a writing described in subdivision (a) may be explained or supplemented by evidence of consistent additional terms unless the writing is intended also as a complete and exclusive statement of the terms of the agreement." (Id., § 1856, subd. (b).) Put another way, "if the parties intended the writing to be a complete and exclusive statement of the terms of the agreement, its terms cannot be explained or supplemented by evidence of consistent additional terms." (Burch v. Premier Homes, LLC (2011) 199 Cal.App.4th 730, 741.)
There is no dispute that, by its terms, Cyrus's Employment Agreement did not become effective until April 27, 2020-several days after the Arbitration Agreement was executed. There also is no dispute the Employment Agreement includes a broad integration clause stating it constitutes "the entire agreement between the parties and there are no further items or provisions, either oral or written" and it "supersedes all other agreements between the parties." The Employment Agreement was not silent as to dispute resolution, but rather included a section entitled "Disputes," which specified how a dispute was to be handled. The provision required mediation and, if unsuccessful, provided the dispute "will be arbitrated by the arbitrator to be mutually selected" and "[a] Judgment on the arbitration award may be entered in any court that has jurisdiction over the matter." Although the Employment Agreement contained an ADR provision that applied on its face broadly to "a dispute [that] arises," it did not specifically mention the prior Arbitration Agreement, which also governed "all disputes" between the parties. (Italics and boldface omitted.)
Grey v. American Management Services (2012) 204 Cal.App.4th 803 (Grey), cited by the trial court and Cyrus, is instructive. It addressed whether an arbitration clause in an earlier agreement was superseded by a later agreement containing an arbitration clause narrower in scope than that in the earlier agreement (applying only to claims arising from a breach of the contract, not all claims the employee may assert against the employer), and which contained an integration clause. (Id. at pp. 805-806, 809.) The Grey court held the subsequent contract was "the final expression of the parties' agreement with respect to Grey's employment" and it superseded the earlier agreement. (Id. at p. 809.)
The facts here are analogous. Here, the last of the three agreements-the April 27, 2020 Employment Agreement-included both an ADR provision that differed from the prior two arbitration clauses and a broad integration clause. The fact that each of the two agreements that followed the Arbitration Agreement included both a new and different arbitration clause and an integration clause is further compelling support for the conclusion that the Employment Agreement supersedes the earlier agreements and their arbitration provisions.
The Disputes provision in the Employment Agreement differs from the ADR provisions in the Arbitration Agreement and the Employment Application in several material respects. For instance, the Arbitration Agreement required "final and binding" arbitration (italics added) and included a waiver by the parties of "their rights to bring in court any claim or dispute covered by or in any way related to the employment relationship between the parties." The Employment Application also required "binding individual arbitration." In contrast, the Employment Agreement does not state arbitration will be binding, and does not include a waiver of the parties' right to pursue a legal action in court. In fact, the Employment Agreement contemplates a court action in several places, including a possible challenge to the legality and scope of the agreement, and in the choice of law provision, in which it refers to "suits and special proceedings." Regarding costs of arbitration, the Arbitration Agreement provides the employee is required to pay a fee to initiate arbitration equal to what the employee's first appearance fee would be in court. The Employment Agreement states the arbitrator will allocate costs of arbitration.
Americor does not address, much less attempt to distinguish, Grey. Instead, Americor points to Cione v. Foresters Equity Services, Inc. (1997) 58 Cal.App.4th 625 (Cione) as support for its argument that a later-executed agreement with an integration clause does not supersede an earlier agreement that provided for arbitration. In that case, a securities industry employee (Cione) entered into an agreement with the National Association of Securities Dealers, Inc. (NASD) in which he agreed to arbitrate any disputes with his employer, among others. (Cione, supra, at p. 630.) Three years later, he and his employer (FESCO) entered into a written employment agreement. That agreement included an integration clause that did not specifically reference the arbitration agreement. (Id. at pp. 630-631.)
The appellate court in Cione held that even assuming the employment agreement with FESCO was wholly integrated, it did not supersede the earlier NASD arbitration clause because the FESCO agreement did not address arbitration. The court explained: "Evidence would be properly admissible '"to prove the existence of a separate . . . agreement as to any matter on which the document is silent and is not inconsistent with its terms" . . . even though the instrument appeared to state a complete agreement. [Citations.]' [Citation.] Since the written employment agreement was silent on the forum for dispute resolution, Cione's . . . arbitration agreement with NASD was probative and admissible as not inconsistent with the terms of such employment agreement." (Cione, supra, 58 Cal.App.4th at p. 639, quoting Masterson v. Sine (1968) 68 Cal.2d 222, 226.)
Cione is distinguishable. In Cione, the integration clause in the employment agreement was limited: it provided that the employment agreement constituted "'the entire understanding of the parties'" only "'with respect to the subject matter contained herein.'" (Cione, supra, 58 Cal.App.4th at p. 631, italics added.) Because the later agreement contained no ADR provision, the court concluded arbitration was not part of the "subject matter" addressed by that agreement and the arbitration provision contained in the earlier agreement therefore was not affected by the later integration clause. Those are not our facts. Here, the Employment Agreement that Cyrus executed after the Arbitration Agreement did include an ADR provision. Thus, Americor cannot credibly argue the Arbitration Agreement's ADR provision survives the integrated Employment Agreement because the latter did not address the subject of ADR. Moreover, the integration clause in Cyrus's Employment Agreement has no limiting "subject matter" qualifier. To the contrary, it states in the broadest possible terms that it "constitutes the entire agreement between the parties," that "there are no further items or provisions, either oral or written," and that "[a]s of the effective date of this Agreement, this Agreement supersedes all other agreements between the parties." There is nothing limited or qualified about that language.
For the first time on appeal, Americor argues that even if the Employment Agreement did supersede the Arbitration Agreement, Cyrus is still contractually obligated to arbitrate his individual claims pursuant to the arbitration provision set forth in the Employment Agreement. But Americor never raised this argument in the trial court, even after Cyrus argued in opposition to Americor's motion to compel that his claims could not be compelled to arbitration pursuant to the Employment Agreement. Although Americor had the burden of persuasion on its motion to show the existence of an agreement to arbitrate (Gamboa v. Northeast Community Clinic, supra, 72 Cal.App.5th at p. 165), it opted to rely exclusively on the validity of the Arbitration Agreement and did not attempt to argue the action must be arbitrated pursuant to the Employment Agreement. To the contrary, it insisted in its briefing before the trial court that the Employment Agreement was "an irrelevant agreement."
It has long been the law that "'"contentions not raised in the trial court will not be considered on appeal."'" (Martinez v. Vaziri (2016) 246 Cal.App.4th 373, 383.) Americor has forfeited this argument. (See City of Rocklin v. Legacy Family Adventures-Rocklin, LLC (2022) 86 Cal.App.5th 713, 735 [party forfeited argument by failing to raise it in the trial court].
DISPOSITION
We affirm the trial court's order. Respondent shall recover costs on appeal.
WE CONCUR: O'LEARY, P. J., SANCHEZ, J.