Opinion
G054106
09-28-2017
BRYAN BLAIN, Plaintiff and Respondent, v. PRESBIBIO, LLC, Defendant and Appellant.
Greenberg, Glusker, Fields, Claman & Machtinger, Karina B. Sterman and Kelly M. Raney for Defendant and Appellant. Blain Morrison and Rebecca Blain Morrison for Plaintiff and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 30-2016-00853995) OPINION Appeal from an order of the Superior Court of Orange County, Gregory H. Lewis, Judge. Reversed and remanded. Greenberg, Glusker, Fields, Claman & Machtinger, Karina B. Sterman and Kelly M. Raney for Defendant and Appellant. Blain Morrison and Rebecca Blain Morrison for Plaintiff and Respondent.
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Plaintiff and respondent Bryan Blain sued defendant and appellant PresbiBio, LLC for wrongful termination. Defendant made a motion to compel plaintiff to arbitrate the case based on an arbitration agreement plaintiff signed as a condition of his employment. The court denied the motion, finding defendant had not provided sufficient evidence to show the existence of an employment or an arbitration agreement between plaintiff and defendant.
Defendant argues it was included as an "affiliate" of the entity that signed an arbitration agreement in connection with plaintiff's employment, and thus was a third party beneficiary of the agreement and entitled to enforce it. Defendant also contends equitable estoppel compels enforcement of the arbitration agreement. We agree with the latter argument, and reverse and remand on that basis alone.
FACTS AND PROCEDURAL HISTORY
In September 2014 defendant, a medical device manufacturer, made a written offer of employment to plaintiff, a mechanical engineer. One condition of employment required plaintiff to sign an arbitration agreement (Arbitration Agreement). The Arbitration Agreement stated in part: "Presbia Cooperatief/PresbiTech [not defendant PresbiBio, LLC] and I further agree, as a necessary and material condition of my employment by LP Presbia Cooperatief/PresbiTech, that any issue between myself and Presbia Cooperatief/PresbiTech or any of its employees, agents, officers, directors or affiliates, which relates to my employment with Presbia Cooperatief/PresbiTech including, but not limited to any claims of discrimination, harassment, retaliation, statutory claims, tort claims or contract claims, must be resolved exclusively through binding arbitration." The Arbitration Agreement included signature lines for plaintiff and Presbia Cooperatief/PresbiTech (Cooperatief). Plaintiff executed the Arbitration Agreement; no one signed on behalf of Cooperatief. There was no signature line for defendant. Plaintiff also signed the offer letter accepting the position.
Eight months later defendant terminated plaintiff's employment. Thereafter, plaintiff filed a complaint against defendant for wrongful termination. Defendant then filed a motion to compel arbitration. Supporting the motion was the declaration of defendant's human resources administrator. She stated she had prepared the offer letter and also sent the Arbitration Agreement to plaintiff.
Plaintiff opposed the motion, arguing defendant was not a party to the Arbitration Agreement and defendant had not met its burden to show a valid, operative arbitration agreement. He maintained Cooperatief and defendant were not related and defendant did not act as an agent for Cooperatief in connection with any of the allegations in the complaint. He also asserted defendant was not an intended third party beneficiary of the Arbitration Agreement. Finally, he claimed the Arbitration Agreement was not enforceable because no one had signed it.
Plaintiff's attorney, Rebecca Morrison, filed a declaration (Morrison Declaration) stating on information and belief evidence would show defendant is a California limited liability company; Cooperatief is a Netherlands corporation; defendant is not a subsidiary, affiliate, or successor in interest of Cooperatief, which did not own any shares of defendant; defendant and Cooperatief, are incorporated separately and managed independently.
In reply, defendant filed objections to the Morrison Declaration. Defendant also filed a declaration of Jarett Fenton (Fenton Declaration) who had been defendant's chief financial officer since June 2016. He stated he was familiar with defendant's corporate structure and its relationships with affiliated companies. He also stated defendant was affiliated with Cooperatief; both were subsidiaries of Presbia Ireland, Limited, which is wholly owned by Presbia PLC. Finally he explained the information was in an annual Form 10-K.
At the hearing, the court sustained all of defendant's objections to the Morrison Declaration. It also denied the motion, finding defendant had "failed to offer sufficient evidence or law establishing there was an employment contract between the named defendant and the plaintiff, as well as an Arbitration Agreement."
DISCUSSION
The thrust of the dispute centers around the fact the Arbitration Agreement states it is between plaintiff and Cooperatief. Defendant contends it is an affiliate of Cooperatief and thus falls within the scope of coverage of the Arbitration Agreement terms as a third party beneficiary. It also claims equitable estoppel compels arbitration.
Plaintiff argues defendant cannot enforce the Arbitration Agreement because defendant did not sign it. He also maintains defendant did not prove it was an affiliate of Cooperatief, challenging the sufficiency of the evidence in the Fenton Declaration. He further asserts equitable estoppel does not apply.
Arbitration is a matter of contract and a party cannot be forced to arbitrate unless he has agreed to do so. (Rebolledo v. Tilly's, Inc. (2014) 228 Cal.App.4th 900, 912.) The party moving to compel arbitration has the burden to show the existence of a valid arbitration agreement by a preponderance of the evidence. (Mission Viejo Emergency Medical Associates v. Beta Healthcare Group (2011) 197 Cal.App.4th 1146, 1153.)
Here, it is undisputed plaintiff agreed to arbitrate his employment disputes. A condition of his employment was execution of the Arbitration Agreement. And plaintiff executed both the employment offer and the Arbitration Agreement and went to work for defendant.
It is true the Arbitration Agreement did not name defendant as a party. But standing alone, the Arbitration Agreement between plaintiff and Cooperatief makes no sense. Plaintiff had no relationship with Cooperatief and there is no reason plaintiff would have signed the Arbitration Agreement if not in connection with his employment by defendant. In construing the meaning of the Arbitration Agreement our primary focus is to give effect to the intent of the parties at the time of its making. (Civ. Code, § 1636.) "A contract may be explained by reference to the circumstances under which it was made, and the matter to which it relates." (Civ. Code, § 1647.)
Under the circumstances, the only reasonable course is to read the Arbitration Agreement in conjunction with the offer of employment and construe them together. "'The general principle of joint consideration of several instruments as one agreement is applicable whether they expressly refer to each other [citations], or it appears from extrinsic evidence that they were executed as a part of one transaction.'" (Holguin v. DISH Network LLC (2014) 229 Cal.App.4th 1310, 1320; Reigelsperger v. Siller (2007) 40 Cal.4th 574, 580 [informed consent agreement and arbitration form signed at same time construed together]; Mayers v. Loew's, Inc. (1950) 35 Cal.2d 822, 827 ["'Where two or more written instruments are executed contemporaneously, with reference to the other, for the purpose of attaining a preconceived object, they must all be construed together, and effect given if possible to the purpose to be accomplished'"]; Fillpoint, LLC v. Maas (2012) 208 Cal.App.4th 1170, 1178 [purchase agreement and employment agreement entered at roughly the same time as part of a single transaction must be construed together].)
This is the only way to make sense of the Arbitration Agreement. Otherwise it would be surplusage, which we strive to avoid. (Hot Rods, LLC v. Northrop Grumman Systems Corp. (2015) 242 Cal.App.4th 1166, 1181.)
Given those circumstances, equitable estoppel requires plaintiff be compelled to arbitrate the claims in his complaint. "The existence of equitable estoppel generally is a factual question for the trier of fact to decide, unless the facts are undisputed and can support only one reasonable conclusion as a matter of law." (Schafer v. City of Los Angeles (2015) 237 Cal.App.4th 1250, 1263.) Here, "the record contains undisputed facts sufficient to inform our determination regarding the applicability of equitable estoppel." (City of Oakland v. Oakland Police & Fire Retirement System (2014) 224 Cal.App.4th 210, 240.)
Boucher v. Alliance Title Co., Inc. (2005) 127 Cal.App.4th 262 (Boucher) is particularly instructive. In that case the plaintiff sued Alliance Title Company, Inc. (Alliance) and Financial Title Company (Financial) claiming breach of his employment contract with Financial. Both the defendants moved to compel arbitration pursuant to a provision in the contract. The trial court denied the motion as to Alliance because it had not signed the contract. The Court of Appeal reversed, stating, "By relying on contract terms in a claim against a nonsignatory defendant, even if not exclusively, a plaintiff may be equitably estopped from repudiating the arbitration clause contained in that agreement." (Id. at p. 272.) In Boucher, estoppel was appropriate because the causes of action against Alliance were "'intimately founded in and intertwined' with the underlying contract obligations." (Id. at p. 271.)
Such is the case here. Plaintiff is seeking the benefit of the employment relationship with defendant. The complaint includes a cause of action for breach of the employment contract. And the other causes of action are all premised on his employment relationship with defendant. It makes no difference those claims are based on torts and statutory violations. (Boucher, supra, 127 Cal.App.4th at p. 272.) It would be inequitable to allow plaintiff to rely on the employment contract to the extent it benefits him but reject the related Arbitration Agreement because it burdens him.
Those causes of action are for wrongful discharge in violation of public policy, violation of Labor Code section 1102.5, breach of the implied covenant of good faith and fair dealing, and violation of Business and Professions Code section 17200 et seq.
Plaintiff argues Boucher does not apply to the extent it was decided under the Federal Arbitration Act (9 U.S.C. § 1 et seq.) because the California Arbitration Act (Code Civ. Proc., § 12080 et seq.) governs the dispute before us. He claims the "'strong federal policy in favor of arbitration agreements'" does not apply here because California's Arbitration Act is based in contract. We disagree.
The same argument was made and rejected in Rowe v. Exline (2007) 153 Cal.App.4th 1276: "Merely because a legal concept emanates from federal jurisprudence does not necessarily make it unreasonable, inapplicable, or unpersuasive in a California case. The equitable estoppel theory espoused in Boucher . . . did not arise from a federal statute or case law that conflicts with California's arbitration law. Indeed, both federal and California arbitration law favor the arbitration of disputes. Furthermore, the notion of estoppel is familiar to California law, and California's concern for equity is just as strong as that of federal law." (Id. at p. 1288.)
We also reject plaintiff's argument Boucher does not apply because the evidence in that case showed a relationship between the two defendants. As shown above, the circumstances surrounding execution of the Arbitration Agreement and the intent of the parties support application of equitable estoppel, and we have no need to rely on a relationship between the parties.
Because we decide the case on the basis of equitable estoppel, we need not consider defendant's arguments based on a claim of its affiliation with Cooperatief on a third party beneficiary theory.
DISPOSITION
The order is reversed and the case is remanded for the court to enter a new order granting defendant's motion to compel arbitration. Defendant is entitled to costs on appeal.
THOMPSON, J. WE CONCUR: MOORE, ACTING P. J. IKOLA, J.