Opinion
B324342
09-20-2024
KEVIN GAMEZ, Plaintiff and Respondent, v. GLENN E. THOMAS COMPANY, INC., dba GLENN E. THOMAS DODGE CHRYSLER JEEP, Defendant and Appellant.
Fine, Boggs &Perkins, John P. Boggs, David J. Reese and William D. Wheelock for Defendant and Appellant. GrahamHollis, Graham S.P. Hollis, Nathan J. Reese and Dawn M. Berry for Plaintiff and Respondent.
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County No. 21STCV27298, Holly J. Fujie, Judge. Affirmed.
Fine, Boggs &Perkins, John P. Boggs, David J. Reese and William D. Wheelock for Defendant and Appellant.
GrahamHollis, Graham S.P. Hollis, Nathan J. Reese and Dawn M. Berry for Plaintiff and Respondent.
ZUKIN, J.
INTRODUCTION
Appellant Glenn E. Thomas Company, Inc. (Thomas) appeals from an order denying its motion to compel arbitration. Thomas argues that the trial court incorrectly interpreted the arbitration agreement. We affirm the trial court's order.
FACTUAL AND PROCEDURAL BACKGROUND
In July 2021, respondent Kevin Gamez (Gamez) filed a complaint for civil penalties pursuant to the Private Attorneys General Act (PAGA) against appellant Glenn E. Thomas Company, Inc. (Thomas). In September 2021, Thomas filed an answer asserting an arbitration agreement as an affirmative defense. Thomas made no other effort to enforce the agreement at that time.
The agreement, which Gamez signed in February 2021, contained a provision which reads as follows: "10. I agree that the arbitrator only has the authority to hear and adjudicate my individual claims and that the arbitrator does not have the authority to make the arbitration proceeding a class or collective action, or to award monetary relief to a group of employees in one proceeding.... Under current applicable law, an employee's right to bring a representative claim pursuant to the California Private Attorneys General Act ('PAGA') is unwaivable, and notwithstanding anything else in this agreement, this agreement does not purport to create any waiver of such right. Both the Company and I agree that any arbitration proceeding must move forward under the FAA (9 U.S.C. §§ 3-4) even though the claims brought in court or otherwise may name, involve and/or relate to persons/entities who are not parties to the arbitration agreement and/or claims that are not subject to arbitration (such as PAGA). Thus, the court may not refuse to enforce this arbitration agreement and may not stay the arbitration proceeding despite the provisions of the Code of Civil Procedure § 1281.2(c), and shall instead sever and stay the nonarbitrable claims pending the final adjudication of the arbitrable claims."
In July 2022, Thomas filed a petition to compel arbitration, arguing that the recent decision by the United States Supreme Court in Viking River Cruises, Inc. v. Moriana (2022) 596 U.S. 639 (Viking River) had rendered Gamez's claims arbitrable. Gamez opposed the petition on the grounds that PAGA claims were expressly excluded from the arbitration agreement pursuant to the provision quoted above.
The petition was heard in October 2022. The trial court agreed with Gamez and denied the petition. Thomas timely appealed.
DISCUSSION
The standard of review for an order denying a petition to compel arbitration depends on the basis for the denial. (Remedial Construction Services, LP v. AECOM, Inc. (2021) 65 Cal.App.5th 658, 662.) Here, the question is whether the agreement Gamez signed includes PAGA claims-an issue of contract interpretation that we review de novo. (Ibid.)
Whether the parties agreed to arbitrate the present case depends on the specific language of the arbitration agreement. (Duran v. EmployBridge Holding Company (2023) 92 Cal.App.5th 59, 65 (Duran).) We employ the ordinary rules of contract interpretation in construing that language. (Ibid.)
Thomas leans heavily on case law which creates an arbitration-specific exception to these rules, requiring that ambiguities in the agreement must be resolved in favor of arbitration. However, we need not address that exception because we conclude, for the reasons given below, that the agreement is not ambiguous.
The agreement here does not require arbitration of PAGA claims. Section 10, quoted above, provides that "notwithstanding anything else in this agreement, this agreement does not purport to create any waiver" of Gamez's right to bring a PAGA claim. In the very next sentence, it uses PAGA as an example of "claims that are not subject to arbitration." These words are not ambiguous.
Thomas offers no reasonable alternative interpretation. It argues that this language merely preserves Gamez's right to file a PAGA claim in arbitration. Thomas contends that because after Viking River PAGA claims can be divided into individual and representative components, Gamez must divide his claims and file in arbitration. This overlooks section 10's reference to PAGA claims as "not subject to arbitration." It also fails to account for the fact that Viking River, and its holding regarding the division of PAGA claims into individual and representative components, was decided after the contract was executed.
Thomas argues that the language of this agreement is unlike the language of agreements in other cases. However, Thomas cites to no case which interprets a similar agreement in the manner it proposes.
"Our goal is to give effect to the mutual intention of the parties at the time the contract was formed." (Duran, supra, 92 Cal.App.5th at p. 65.) This contract was formed prior to Viking River, and there is no basis to suppose that either Gamez or Thomas intended this clause to respond to changes in the law which had not yet occurred. In its reply brief, Thomas argues that we should interpret the contract to account for Viking River because judicial decisions have retroactive effect. But while judicial decisions may have retroactive effect on the law, they cannot have retroactive effect on the facts. (See Newman v. Emerson Radio Corp. (1989) 48 Cal.3d 973, 981.) A judicial decision may retroactively change the legal consequences of a contractual provision, but no authority suggests it may retroactively change the provision's meaning. (See Claxton v. Waters (2004) 34 Cal.4th 367, 378-379.)
Thomas argues that other provisions in the agreement require the arbitration of PAGA claims: section 5 calls for the arbitration of "any and all claims which arise out of the employment context," and section 6 contains a narrow list of "sole exceptions" which does not include PAGA claims. Thomas contends that applying section 10 to exclude PAGA claims from arbitration renders surplusage the word "sole" in section 6. This argument ignores the language of section 10, which excludes PAGA claims from arbitration "notwithstanding anything else in this agreement." That phrase clearly demonstrates an intent to create a rule specific to PAGA claims. To the extent a general contract provision conflicts with a specific one, the specific provision controls. (Code Civ. Proc., § 1859; Iqbal v. Ziadeh (2017) 10 Cal.App.5th 1, 12.)
DISPOSITION
The order of the trial court is affirmed. Gamez shall recover costs on appeal.
We concur: CURREY, P. J. COLLINS, J.