Penaloza vs. OC Dough, Inc.

104 Penaloza vs. OC Dough, Inc.

2020-01122070 1. Petition to Confirm Arbitration Award 2. Case Management Conference 3.Order to Show Cause re: Monetary Sanctions 4.Order to Show Cause re: Monetary Sanctions

1. Petition to Confirm Arbitration Award

Defendant OC Dough, Inc. moves to confirm the arbitration award. Plaintiff Efrain Penaloza opposes the petition on a “limited” basis. For the reasons below, defendant’s petition is GRANTED.

Legal Standard

“Any party to an arbitration in which an award has been made may petition the court to confirm, correct or vacate the award.” Code Civ. Proc., § 1285. “A petition under this chapter shall: (a) Set forth the substance of or have attached a copy of the agreement to arbitrate unless the petitioner denies the existence of such an agreement. (b) Set forth the names of the arbitrators. (c) Set forth or have attached a copy of the award and the written opinion of the arbitrators, if any.” Code Civ. Proc. § 1285.4.

“If a petition or response under this chapter is duly served and filed, the court shall confirm the award as made, whether rendered in this state or another state, unless in accordance with this chapter it corrects the award and confirms it as corrected, vacates the award or dismisses the proceeding.” Code Civ. Proc. § 1286.

“Accordingly, once a petition to confirm that meets the statutory requirements has been served, “ ‘the burden is on the party attacking the award to affirmatively establish the existence of error.’ ” Valencia v. Mendoza (2024) 103 Cal.App.5th 427, 442, review denied (Oct. 16, 2024).

The Court shall vacate the award if the court determines any of the following:

(1) The award was procured by corruption, fraud or other undue means.

(2) There was corruption in any of the arbitrators.

(3) The rights of the party were substantially prejudiced by misconduct of a neutral arbitrator.

(4) The arbitrators exceeded their powers and the award cannot be corrected without affecting the merits of the decision upon the controversy submitted.

(5) The rights of the party were substantially prejudiced by the refusal of the arbitrators to postpone the hearing upon sufficient cause being shown therefor or by the refusal of the arbitrators to hear evidence material to the controversy or by other conduct of the arbitrators contrary to the provisions of this title.

(6) An arbitrator making the award either: (A) failed to disclose within the time required for disclosure a ground for disqualification of which the arbitrator was then aware; or (B) was subject to disqualification upon grounds specified in Section 1281.91 but failed upon receipt of timely demand to disqualify himself or herself as required by that provision. However, this subdivision does not apply to arbitration proceedings conducted under a collective bargaining agreement between employers and employees or between their respective representatives.”

Code Civ. Proc. § 1286.2(a).

Significantly, “an arbitrator’s decision is not generally reviewable for errors of fact or law, whether or not such error appears on the face of the award and causes substantial injustice to the parties.” Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 6. In fact, ““it is within the power of the arbitrator to make a mistake either legally or factually.” Id. at 12. This is because “[w]hen parties opt for the forum of arbitration they agree to be bound by the decision of that forum knowing that arbitrators, like judges, are fallible.” Id.

“The arbitrator’s decision should be the end, not the beginning, of the dispute.” Moncharsh, supra, 3 Cal.4th at 10. “Because the decision to arbitrate grievances evinces the parties’ intent to bypass the judicial system and thus avoid potential delays at the trial and appellate levels, arbitral finality is a core component of the parties’ agreement to submit to arbitration.” Id. “Thus, an arbitration decision is final and conclusive because the parties have agreed that it be so.” Id. “By ensuring that an arbitrator’s decision is final and binding, courts simply assure that the parties receive the benefit of their bargain.” Id. “Expanding the availability of judicial review of such decisions would tend to deprive the parties to the arbitration agreement of the very advantages the process is intended to produce.” Id.

Merits

As an initial matter, the court finds that defendant’s petition to confirm the arbitration award complies with Code of Civil Procedure sections 1285 et seq.

Plaintiff’s “limited” opposition does not seek to vacate the award or correct it, but asks that in confirming it, the court “expressly carve out the issues of Aggrieved Employee status and Plaintiff’s ability to represent the other Aggrieved Employees in this pre-2024 PAGA action.” ROA 219. As he previously argued in the motion to vacate the arbitration award, which the court denied (ROA 193), plaintiff argues the PAGA claim was not adjudicated by the arbitrator and his PAGA standing was conclusively established by the Labor Commission’s 2021 order. ROA 166.

The court expressly adopts and incorporates herein its June 18, 2026 minute order denying plaintiff’s motion to vacate the arbitration award. ROA 193.

The settled law in California is that an arbitrator in California does not have to follow the law. Moncharsh, supra, 3 Cal.4th at 33 (even “an error of law apparent on the face of the award that causes substantial injustice does not provide grounds for judicial review”). "Arbitrators are not required to find facts and give reasons for their awards. [Citation]. Parties who agree to arbitration may expect not only to reap the advantages that flow from the use of that nontechnical, summary procedure, but also to find themselves bound by an award reached by paths neither marked nor traceable and not subject to judicial review."

Krautner v. Johnson (1961) 189 Cal. App. 2d 717, 719. Arbitrators “may base their decision upon broad principles of justice and equity, and in doing so may expressly or impliedly reject a claim that a party might successfully have asserted in a judicial action." Wagner Constr. Co. v. Pac. Mech. Corp. (2007) 41 Cal. 4th 19, 28.

Here, the arbitrator granted summary judgment as to each of the seven claims plaintiff alleged in arbitration. ROA 199 (Decision and Order) at 8:15-22 (“It is undisputed that Claimant's employment ended on November 30, 2019, and his complaint under the demand for arbitration was filed on February 8, 2023. This is more than 3 years after the employment ended, and Claimant’s 1st through 6th Claims for Relief are barred by the Statute of Limitations. Respondent is entitled to Summary Judgment on these claims. The claims at issue are hereby dismissed. Because Claimant’s 7th Claim is dependent upon his ability to prevail upon one of the claims in Claims 1-6, which are being dismissed, Claim #7 is also dismissed.”).

Plaintiff’s reference to the California Supreme Court’s pending decision in Leeper v. Shipt, Inc. suggests that, to the extent headless PAGA claims are permitted, plaintiff intends to pursue only the representative portion of his PAGA claim, which was stayed pursuant to the order granting the motion to compel arbitration of plaintiff’s individual claims (including the individual portion of the PAGA claim). ROA 130. Notably, plaintiff did not allege a headless PAGA claim. ROA 8 (FAC) ¶ 109 (expressly alleging PAGA claim as “a claim for penalties on behalf of himself and all other aggrieved employees under PAGA”).

Regardless, this issue is not presently before the Court in the instant petition to confirm. The award is confirmed.

The Court sets an OSC hearing for January 21, 2027 at 2PM regarding whether or not Plaintiff’s case can or should proceed as a “headless” PAGA case. Briefing addressing the issue shall proceed as per the Code applicable to law and motion. The CMC is likewise continued to this date.

2. OSC re: Monetary Sanctions

The court will discharge the order to show cause for plaintiff’s failure to appear at the August 6, 2026 Case Management Conference.

3. OSC re: Monetary Sanctions

The court will discharge the order to show cause for the parties’ failure to file a Joint Case Management Statement in advance of the August 6, 2026 Case Management Conference. 105 Lundin vs. Goldman

2022-01290254 Motion for Discovery Sanctions

Defendants David Goldman, Melanie Goldman, and Elevate Retail Group’s Motion is GRANTED IN PART AND DENIED IN PART.

Contempt

“Defendants request that Plaintiffs be found in contempt of the Stipulated Protective Order and fine each Plaintiff $1,000. See Code Civ. Proc., § 1218.” ROA 1453 at 15-16. For contempt sanctions, there must be a finding of willful disobedience, not merely the failure to obey (i.e. noncompliance with the court’s order). See Code Civ. Proc. § 2023.030(e).

Further, contempt proceedings have special rules. As explained in Koshak v. Malek (2011) 200 Cal. App. 4th 1540, 1548–49, an indirect contempt proceeding is commenced by the presentation of an affidavit setting forth the alleged contemptuous acts. Indirect contempt means that acts constituting contempt were not committed in the presence and view of the court. Reliable Enterprises, Inc. v. Superior Court (1984) 158 Cal.App.3d 604. The affidavit is in effect a complaint, frames the issues before the court and is a jurisdictional prerequisite to the court’s power to punish. Without a sufficient affidavit, any contempt order is void. In re Koehler (2010) 181 Cal.App.4th 1153, 1169.

“The substantive issues involved in a contempt proceeding are (1) the rendition of a valid order, (2) actual knowledge of the order, (3) ability to comply, and (4) willful disobedience. Conn v. Superior Court (1987) 196 Cal. App. 3d 774, 784. A contempt proceeding is commenced by the filing of an affidavit showing the facts satisfying these four requirements (the “charging allegations”). Code Civ. Proc. § 1211. To establish willful disobedience, the affidavit should show that the alleged contemnor had personal notice of the contents of the order. The order that was disobeyed must have been sufficiently specific to make it demonstrable beyond a reasonable doubt that it was disobeyed. See Board of Supervisors v. Superior Court (1995) 33 Cal.App.4th 1724, 1737.