Opinion
NOT TO BE PUBLISHED
Sonoma County Super. Ct. No. SCV-244320.
RUVOLO, P. J.
I.
INTRODUCTION
Plaintiff Norman Runyan (Runyan) filed a petition to compel arbitration of a grievance concerning the termination of his employment at River Rock Casino (River Rock), pursuant to an arbitration clause in his employment contract. River Rock refused to proceed with the arbitration because it had paid Runyan over $200,000 in order to settle all claims, terminate his employment agreement, and to avoid future adversarial proceedings. Runyan appeals from an order dismissing his petition to compel arbitration based on the court’s conclusion that Runyan had waived any right to arbitration he might have previously had by settling and releasing all claims arising under the employment agreement. Runyan contends the court’s erred because he “was improperly precluded from asserting illegality, duress or undue influence.” We affirm.
Defendant River Rock is a tribal governmental economic development project wholly owned and operated by the Dry Creek Rancheria Band of Pomo Indians (the Tribe), a federally recognized Indian tribe, on the Tribe’s reservation. River Rock Entertainment Authority, which was also a named defendant in Runyan’s petition to arbitrate, is a tribal government instrumentality and agency created by the Tribe under tribal law to exercise the Tribe’s management and supervision of River Rock. The third named defendant is tribal chairman Harvey Hopkins, a tribal member who is an elected tribal official. For ease of reference, we will collectively refer to these entities and individuals as River Rock, unless otherwise noted.
II.
FACTS AND PROCEDURAL HISTORY
The pertinent facts in this case are not in dispute. Runyan was employed as River Rock’s chief operations officer from October 2002 to November 2007. After his employment commenced, the parties entered into a written employment agreement. Among other provisions, the employment agreement contained an arbitration clause, providing that “[a]ny controversy that arises” regarding the parties’ “rights, duties or liabilities” under the employment agreement “shall be settled by binding arbitration....”
In November 2007, Runyan resigned from his position with River Rock. Shortly thereafter, River Rock and Runyan executed a “Severance Agreement and General Release” (the Release). In the Release, River Rock agreed to pay Runyan a total sum of $206,063. In exchange, Runyan agreed “that any Employment Agreement between River Rock and [Runyan] is now terminated.” Additionally, Runyan released River Rock “from each and every obligation, monetary or otherwise, owed to [him] now and in the future.” The Release further provides: “Runyan understands that he is releasing Claims that he may not know about. That is his knowing and voluntary intent, even though he recognizes that someday he might learn that some or all of the facts he currently believe [sic] to be true are untrue and even though he might then regret having signed this Release. Nevertheless, he is assuming that risk and agrees that this Release shall remain effective in all respects in any such case.”
In March 2008, approximately four months after he executed the Release, Runyan filed his first lawsuit against River Rock in the Sonoma County Superior Court. (Norman Runyan v. River Rock Entertainment Authority et al., No. SCV-242491 (Runyan I).) Runyan I has been finally adjudicated and is not the subject of this appeal. The complaint in Runyan I sought general and punitive damages based on causes of action alleging breach of contract, wrongful termination, intentional interference with contract, and intentional infliction of emotional distress.
The court dismissed Runyan I with prejudice on December 3, 2008. Citing Big Valley Band of Pomo Indians v. Superior Court (2005) 133 Cal.App.4th 1185, the court held that Runyan could not rely on the employment agreement’s arbitration clause to argue that the Tribe waived its sovereign immunity with respect to a complaint for breach of contract and tort damages. The court noted that the “Big Valley opinion specifically found that the inclusion of an arbitration clause in an employment contract only waived the sovereign immunity of an Indian Tribe to the filing of a petition to compel arbitration or an action to enforce an arbitration award, not a breach of contract action as presented here.... [¶] Therefore, defendants herein have not waived their sovereign immunity to expose it to a breach of contract suit such as that brought by plaintiff.”
After Runyan I was dismissed, Runyan filed a “Petition for Order Compelling Arbitration” on January 14, 2009, which is the subject of this appeal. In this petition, Runyan sought to arbitrate the claims that he had previously attempted to assert under contractual and tort theories in Runyan I. In seeking arbitration, Runyan quoted the arbitration clause found in the employment agreement. Significantly, Runyan’s petition contains no mention of the Release or its provision indicating “that any Employment Agreement between River Rock and [Runyan] is now terminated.” River Rock specially appeared and moved for an order quashing the summons and dismissing Runyan’s petition to compel arbitration. River Rock put the terms of the Release before the court, along with the undisputed facts that Runyan received over $200,000 under the Release, which he had never attempted to return. River Rock argued that Runyan’s petition should be dismissed and the summons quashed based on a lack of subject matter and personal jurisdiction, because (1) the arbitration clause upon which Runyan relied no longer existed because, by executing the Release, Runyan terminated the employment agreement in which it was contained; and (2) River Rock and its related entities are tribal governmental instrumentalities of the Tribe. Consequently, they are entitled to tribal sovereign immunity from a state court’s exercise of jurisdiction unless sovereign immunity is expressly waived; and there is no evidence of waiver here.
After Runyan filed his “Petition for Order Compelling Arbitration” on January 14, 2009, he filed a “Motion for Order Compelling Arbitration” on January 30, 2009, that essentially repeated his previously filed petition. When the court below issued its order, it ruled on both Runyan’s petition and motion, using the terms “Petition” and “Motion” interchangeably when referring to Runyan’s filings. Thus, in this opinion we will use “petition” to refer to both Runyan’s “Petition for Order Compelling Arbitration” filed on January 14, 2009, and to his “Motion for Order Compelling Arbitration” filed on January 30, 2009.
In response, Runyan never denied that he executed the Release, nor did he deny that he received over $200,000 for doing so. He candidly admitted that “the money he received was quickly evaporated, ” and, in papers filed below, he acknowledged “[t]his is not an action for rescission.” Instead, Runyan claimed the Release was procured through undue influence and economic duress. He explained that “[w]hen I signed that document, I did so under economic duress, in order to preserve whatever financial assets I had at that time to make ends meet. I was told if I did not sign the Severance Agreement, I would ‘get nothing.’ Having no real or voluntary choice to do anything but sign the Agreement, I did so.” In arguing that he was unduly influenced to sign the Release, Runyan claimed River Rock’s representative “applied excessive pressure to induce the [sic] Mr. Runyan to sign the release; and the [sic] Mr. Runyan was unduly susceptible to such extraordinary persuasion.” (Original italics.) According to Runyan, the matter should not be decided without giving him a chance to further develop the facts in order to prove River Rock acted coercively in getting him to sign the Release.
On June 1, 2009, the court dismissed Runyan’s arbitration petition and quashed the service of summons because the court lacked jurisdiction over the Tribe. The court’s jurisdictional finding was based on the fact that Runyan had “terminated and extinguished the purported employment agreement in which the arbitration clause was contained and waived any right to arbitration he might have had by settling and releasing all claims arising thereunder.” Runyan filed this appeal.
III.
DISCUSSION
The lower court’s dismissal of Runyan’s arbitration petition and quashing the summons was based on a series of relevant facts which remain undisputed. These facts are that: (1) the Tribe granted a limited waiver of its sovereign immunity by entering into the employment agreement with Runyan agreeing to arbitrate any employment-related claims; (2) by executing the Release, Runyan terminated the employment agreement waiving all claims thereunder, and agreeing not to file any action based on the released claims or the terminated employment agreement; (3) Runyan received over $200,000 under the Release; and (4) Runyan has not made any attempt to rescind the Release or return any of the money River Rock paid in consideration for the Release. On appeal, we agree with the parties that in a case such as this, where the evidence of jurisdictional facts is not conflicting, we review the court’s decision de novo. (See Thomson v. Anderson (2003) 113 Cal.App.4th 258, 266; Pennsylvania Health & Life Ins. Guaranty Assn. v. Superior Court (1994) 22 Cal.App.4th 477, 480.)
Runyan never indicated before the trial court that he desired a right to rescind the Release. However, in his reply brief filed in this appeal, Runyan argues that his pleadings in Runyan I “indicated his intention to treat the contract as ended. Whether specifically designated as ‘rescission, ’ or not, that much was clear.” However, Runyan’s newly minted rescission theory is being advanced for the first time on appeal. Runyan’s failure promptly and properly to advise the parties and the trial court of his desire to rescind amounts to a waiver. (See Estrada v. Alvarez (1952) 38 Cal.2d 386, 391; Doctor v. Lakeridge Const. Co. (1967) 252 Cal.App.2d 715, 720-721.)
We first consider what we believe to be the crux of this appeal––Runyan’s argument that the court erred “in dismissing the action on jurisdictional grounds, by finding the Release was valid and enforceable as a matter of law, despite [Runyan’s] assertions that the Release was illegal, and procured through duress and undue influence[.]” (Original italics.) He goes on to argue that “[t]he question of the legal validity of the Release should not be tested at the jurisdictional level, on a motion to dismiss, but through a factual and evidentiary hearing....”
In response, River Rock counters that “Runyan is barred, as a matter of law, from challenging the Release’s validity by alleging that he signed it under duress.” River Rock claims that by failing to seek rescission of the Release and by failing to tender back the over $200,000 it paid to Runyan in exchange for executing the Release, Runyan is precluded from claiming that the Release was procured by undue influence and economic duress.
River Rock’s argument receives substantial support from Myerchin v. Family Benefits, Inc. (2008) 162 Cal.App.4th 1526 (Myerchin). In Myerchin, the parties entered into a settlement agreement under which defendant agreed to pay plaintiff a total of approximately $75,000; and plaintiff agreed to dismiss his lawsuit within 10 days. (Id. at p. 1530.) The defendant paid the required amount; however, the plaintiff failed, as required under the agreement, to dismiss his lawsuit. (Ibid.) The defendant then filed a motion for summary judgment, asserting that the settlement agreement constituted a complete defense to plaintiff’s complaint. (Ibid.) Plaintiff argued that the defendant could not rely on the settlement agreement because, among other things, it was unconscionable, the product of fraud and duress, and it was rendered void and unenforceable as a matter of public policy. (Id. at p. 1531.)
The Myerchin court rejected the plaintiff’s arguments and noted that in California, “when a plaintiff seeks to rescind a settlement agreement, he must effectuate that rescission before he is free to pursue the released claim.” (Myerchin, supra, 162 Cal.App.4th at p. 1535, original italics.) The court explained that the rescinding party “ ‘must restore what he has received in settlement of the disputed claim before suing upon it. He cannot retain the benefits of the release and sue, for to sue would violate the terms of his bargain. To hold otherwise would frustrate the very purpose of the release and destroy its effectiveness as a favored device for eliminating litigation....’ [Citation.]” (Id. at pp. 1535-1536, original italics.) The court held that the plaintiff’s failure to “make any effort to actually rescind the agreement, specifically including any offer to refund the money he received in consideration of the settlement, precludes his assertion that the agreement could not be relied upon to defeat his claim.” (Id. at pp. 1529-1530.) Therefore, “[a]bsent an actual, rather than merely a contemplated, rescission, the settlement agreement remained in effect. Consequently, [the defendant] was entitled to rely upon that agreement as a basis for summary judgment––without regard to whether [plaintiff] might have been able to prove sufficient grounds for rescission.” (Id. at p. 1537.)
Like the plaintiff in Myerchin, Runyan cannot have it both ways by being “allowed to keep the settlement money, while continuing to litigate the very claim he was paid to dismiss.” (Myerchin, supra, 162 Cal.App.4th at pp. 1534-1535.) Having failed to rescind (or even attempt to rescind) the Release and return its benefits, Runyan cannot, as a matter of law, ask the court to ignore the Release’s legal effect. Here, the sole purpose of the Release was to resolve contested issues regarding the termination of Runyan’s employment and allow River Rock to avoid the uncertainty and expense of arbitration, as recognized by the binding recitals in the settlement agreement. The Release also terminated the employment agreement upon which Runyan now relies in this action to compel arbitration. The result obtained in Myerchin applies here and Runyan’s “attempt to simply preserve rescission as an option to be adjudicated by the court at some later date, while simultaneously pursuing the merits of the claim he had agreed to dismiss, was improper as a matter of law. (Fn. omitted.)” (Id. at p. 1536.)
Because of our resolution of this issue, we find it unnecessary to address River Rock’s additional argument that the Tribe has not waived its sovereign immunity with respect to any action seeking to invalidate the Release.
We also reject Runyan’s argument, which is presented as his first argument in his opening brief, that his right to arbitrate his claims under the employment agreement has already been ruled on and adjudicated in his favor by the court in Runyan I. Consequently, he claims River Rock is barred by principles of “res judicata and/or collateral estoppel” from relitigating the issue in this appeal. (Original italics.)
“[I]n its collateral estoppel aspect, the [res judicata] doctrine may [] preclude a party to prior litigation from redisputing issues therein decided against him, even when those issues bear on different claims raised in a later case.” (Smith v. ExxonMobil Oil Corp. (2007) 153 Cal.App.4th 1407, 1414.) “Like res judicata, collateral estoppel ‘has the dual purpose of protecting litigants from the burden of relitigating an identical issue with the same party or his privy and of promoting judicial economy by preventing needless litigation.’ [Citation.]” (Ibid.)
The collateral estoppels doctrine cannot be invoked in this case because the issue of whether Runyan can compel River Rock to arbitrate his employment grievances without rescinding the Release and returning the settlement money was not before the court in Runyan I. The court in Runyan I focused solely on whether Runyan could maintain his lawsuit against River Rock for tort and contractual damages. In finding that Runyan’s action should be dismissed, the court in Runyan I correctly found that the arbitration provision in Runyan’s employment agreement did not waive the Tribe’s sovereign immunity with respect to a lawsuit for tort and contractual damages. Accordingly, we reject Runyan’s attempt to reframe the issue decided in Runyan I and find that Runyan’s right to arbitrate his employment grievances has not been conclusively adjudicated in the prior action. (Interinsurance Exchange of the Auto. Club v. Superior Court (1989) 209 Cal.App.3d 177, 181 [“ ‘former judgment is not a collateral estoppel on issues which might have been raised but were not....’ [Citation.]”]
IV.
DISPOSITION
The judgment is affirmed. Costs on appeal are awarded to River Rock.
We concur: REARDON, J., SEPULVEDA, J.