City of Oakland v. Superior Court

Filed 11/5/07 City of Oakland v. Superior Court CA1/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION ONE

By petition for writ of mandate, the City of Oakland (City) challenges an order of the County of Alameda Superior Court specifying a procedure to select an arbitrator to hear and resolve the challenge by former City of Oakland police officers (Officers)^[1]to their dismissals.^[2] City contends that the order is contrary to the provisions of its Memorandum of Understanding (MOU) with the Oakland Police Officers Association (Union), and that it violates Code of Civil Procedure section 1281.6.^[3] Officers respond that (1) the City invited the superior courts intervention by filing a petition seeking broad relief; (2) section 1281.6 authorized the superior court to deviate from the MOU where, as here, the method specified in the MOU could not be followed; and (3) section 1281.6 specified the precise method of arbitrator selection set forth in the superior courts order. We agree with Officers in part and, accordingly, deny the petition.^[4]

BACKGROUND

Officers were terminated on December 1, 2001. They were represented by Union, and the terms of their employment were covered by the MOU in place from July 1, 1998 to June 30, 2001. On June 2, 2006, the superior court granted Officers petition to compel arbitration, and on November 6, 2006, granted Officers motion to consolidate the individual arbitrations into a single arbitration. ( 1281.3.)

In the interim, following the provisions of the MOU, the parties made attempts to mutually agree among themselves on an arbitrator.^[5] When they were unable to agree, City filed a document entitled Verified Petition for Order Requiring Respondents to Select an Arbitrator Pursuant to Arbitration Agreement (Cal. Civ. Proc. Code  1281.6). In that document, City requested an order compelling Officers to follow the method for selection of an arbitrator specified in the MOU. Significantly, City also requested an order [f]or such other and further relief that the Court deems just and proper. Similarly, in their answer to that petition, Officers prayed for [a]ny other relief which this Court deems just and proper.

When the parties are unable to agree on an arbitrator, the MOU provides that the selection be made according to the procedures set forth in Appendix B, Section 2 with regard to named individuals. The Appendix states that Hearing Officers shall be selected from the pool of qualified candidates listed below [specifying the same names], and establishes an ordered list of the names according to random selection by the Director of Personnel Resources Management of City of Oakland (Director), with cases to be assigned to [Hearing] Officers in order on the list.

Following a hearing on February 21, 2007, the superior court entered its order requiring the Director to establish the ordered list of Hearing Officers for presentation to the parties by March 9, 2007. The court continued the case until March 23, 2007 for confirmation of compliance and required the parties to file a joint status report by March 19, 2007 informing the court of the name of the person selected as the arbitrator. The February 21, 2007 order also specified: If the parties have not been able to select an arbitrator by the time the status report is due, each side of the case shall submit, instead of a joint status report, a list of ten qualified arbitrators along with their separate status reports so that the Court may use those lists to develop a list of arbitrator nominees. No appellate challenge was made to this order by either party, nor did the parties amend the petition or answer to modify their prayers for broad relief.

The Director timely established the ordered list. The parties, however, were unable to agree on implementation of the list, taking opposing positions on interpretation of the MOUs provisions concerning the number and timeliness of peremptory challenges to the names on the list, as well as other issues. Each side filed March 19, 2007 status reports, reciting their extensive communications since March 2, 2007. City took the position that Officers had failed to exercise a peremptory challenge to the first name on the randomly ordered list, thereby waiving a challenge to that person. City also was of the view that Officers only had one peremptory challenge under the terms of the MOU. Alternatively, City asked for a continuance to brief the issues raised by Officers.

Officers argued that the MOU did not provide guidance on certain questions relevant to the selection of an arbitrator. The questions concerned (1) the number of peremptory challenges [i.e., whether each officer had a challenge or whether Officers collectively had only one challenge]; (2) which side was required to exercise the first challenge; (3) the manner in which a challenge is waived; and (4) whether the list, in the 2004 MOU document, must be pre-screened for present availability. Officers alleged that City had refused to discuss these questions, and so provided a list of proposed arbitrators pursuant to the courts February 21, 2007 order.

In a tentative ruling, the court set forth a process for the selection from the Directors list, including pre-screening and the manner and number of peremptory challenges. When the matter came on for hearing on March 23, 2007, Officers objected to the tentative order as being beyond the scope of section 1281.6, in that the tentative order appeared to attempt to interpret the MOU. Officers contended that the MOUs remedy for a dispute about its meaning was the initiation of a grievance. Later in the hearing, however, Officers argued that if the court determined that the MOU process had failed, then it should invoke the process specified in section 1281.6 to appoint an arbitrator.

City reiterated its position that the MOU only allowed one peremptory challenge under the circumstances. In response to an inquiry regarding the boundaries of the courts authority, City argued that the MOU selection process had not failed, and that the court was required to enforce the MOU as interpreted by City. At the close of the hearing, however, City noted that it can live with [the tentative ruling] if the court did not adopt its argument concerning the number of peremptory challenges.

The trial court took the matter under submission, thereafter issuing the order challenged here. In particular, the court found that the method for appointment of an arbitrator stated in the parties agreement requiring arbitration cannot be followed. This is due to the conflicting positions of the parties relating to aspects of the selection process in the agreement that are not ambiguous. The court went on to specify the method for selection of an arbitrator delineated in section 1281.6.

RELEVANT PROVISIONS OF THE MOU

The MOU defines a grievance as any dispute which involves the interpretation or application of this Agreement, or disciplinary action taken against an employee, or the application of the Personnel Rules, or the application of Departmental rules or orders. It provides that [c]oncurrent grievances alleging violations of the same provisions shall be consolidated for the purpose of this procedure as a single grievance. The MOU allows an employee to elect to appeal disciplinary action either through the grievance process or directly to the Civil Service Board. In the event that the employee elects the grievance procedure, either the employee or the Association representative may submit the grievance up through the several levels of the grievance procedure; however, only the City or the Association may . . . submit the grievance to an impartial arbitrator.

The MOU, as noted above, contains provisions for the ordering of a list of named potential arbitrators, and then provides: Both the appellant and the City shall have one peremptory challenge. In the event that such challenges are made, the case will move to the Hearing Officer next in order on the panel list. [] If a designated Hearing Officer is not available during the sixty (60) days after the case is assigned, the case will be reassigned to the panelist next in order. No additional peremptory challenges beyond a partys first one will be allowed. The MOU contains no provisions concerning the number of peremptory challenges in the case of consolidated employee grievances.

DISCUSSION

As relevant here, section 1281.6 provides: If the arbitration agreement provides a method of appointing an arbitrator, that method shall be followed. If the arbitration agreement does not provide a method for appointing an arbitrator, the parties to the agreement who seek arbitration and against whom arbitration is sought may agree on a method of appointing an arbitrator and that method shall be followed. In the absence of an agreed method, or if the agreed method fails or for any reason cannot be followed, or when an arbitrator appointed fails to act and his or her successor has not been appointed, the court, on petition of a party to the arbitration agreement, shall appoint the arbitrator.

Officers contend that the superior court had the authority to appoint an arbitrator reading the term agreed method in section 1281.6 to be the method set forth in the MOU. We disagree. If the MOU provides a method for the selection of an arbitrator, the superior court may not deviate from it. In Atlas Plastering, Inc. v. Superior Court (1977) 72 Cal.App.3d 63, Division Three of this court interpreted the agreed method set forth in the third sentence of [section 1281.6] to refer to the method agreed to between the parties, should there be no method provided for in the arbitration clause. (Id. at p. 71.) The court explained that to read the third sentence to apply to the first sentence, would give the court power to appoint the arbitrator whenever a party refused to arbitrate, even in the face of any method specified in the arbitration clause. This construction would render the first sentence surplusage. (Ibid.)

But Atlas Plastering does not resolve this case. Atlas Plastering concerned a challenge to a trial court order consolidating separate cases with distinct contractual arbitration provisions, and in addition, fashioning a method for arbitrator selection in light of the consolidation. The courts interpretation of section 1281.6 was in the context of its holding that the trial court erred by consolidating the cases in the first place. And there was no question that each arbitration agreement at issue specified a method for the selection of an arbitrator. Here, the superior courts order essentially found that the MOU failed to provide a method for the selection of an arbitrator.

The record before us amply supports that conclusion. The MOU does not provide a method for the selection of an arbitrator under the unique circumstances of this casethe consolidation of individual employee grievances over disciplinary dismissals. While it is true that the allegations concerning Officers were originally initiated by the Oakland Police Department in a single internal complaint, and that the individual cases involve overlapping, duplicative charges and evidence, these are nonetheless distinct grievances involving discipline taken against individual employees. The MOU provisions governing selection of an arbitrator provide no guidance on the number and exercise of peremptory challenges in this circumstance. Officers reasonably argue here, as below, that they are each entitled to a peremptory challenge. City was adamant that Officers have one collective peremptory challenge, because the MOU treats certain consolidated grievances as one grievance, and because it is Union, not the individual employee, that submits a grievance to arbitration. But the argument simply highlights the lack of clarity in application of the selection provisions here. Moreover, as Officers correctly argue, the MOUs definition of a grievance includes a dispute which involves the interpretation of the agreement, and requires such a dispute to be submitted to the grievance process, not the court.

Alternatively, relying on Martinez v. Master Protection Corp. (2004) 118 Cal.App.4th 107, City argues that the superior court should have refused to appoint an arbitrator and allowed the matter to proceed in court. In Martinez, supra, the agreed venue for arbitration in the parties agreement was the American Arbitration Association (AAA). But AAA refused to hear the arbitration. The court held that this circumstance was not a failure of the agreed method within the meaning of section 1281.6 because the issue concerned the selection of a forum for arbitration, not the method for appointing an arbitrator. (Id. at pp. 120121; and see Alan v. Superior Court (2003) 111 Cal.App.4th 217, 227228.) Here, in the distinctive circumstances of this case, it is the failure of the MOU to specify a method for the selection of an arbitrator from the named forum, not the lack of a specified forum, that is at issue. Under this circumstance, section 1281.6 governs the superior courts discretion, requiring the selection of an arbitrator according to the provisions of the statute.

The superior courts order was well within its authority for yet another reason. Citys petition to the superior court expressly requested the court to enter [a]ny other relief which this Court deems just and proper. It was, therefore, a petition . . . made to the [superior] court to appoint a neutral arbitrator. ( 1281.6.) City never amended its petition, and therefore consented to the superior courts jurisdiction to fashion a just resolution to the parties dispute over the manner of arbitration selection. It may not now complain.^[6]

CONCLUSION AND DISPOSITION

In the unique circumstances of this case, the superior court correctly concluded that the MOU fails to provide a method for the selection of an arbitrator. Therefore, the parties were required by section 1281.6 and by the courts February 21, 2007 order, to attempt to agree on a method for the selection of one. On this record, that attempt failed as well. The superior court properly implemented the default section procedures specified in section 1281.6, a procedure to which the parties consented in the petition and answer.

The alternative writ, having served its purpose, is recalled and discharged. The petition for writ of mandate is denied. The stay previously imposed shall be dissolved automatically when this opinion is final as to this court. Real parties in interest shall recover their costs.

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^[1]When the petition was filed, the named real party officers were Matthew Hornung, Clarence Mabanag and Jude Siapno. Hornung subsequently settled with the City and is no longer a real party to this proceeding.

^[2]We originally summarily denied the petition. Thereafter, the California Supreme Court granted Citys petition for review and remanded the matter to us with directions to issue an alternative writ of mandate. We complied, and also issued a stay of the superior courts order.

^[3]Further statutory references are to this Code.

^[4]In doing so, we decline to address Officers argument that City is guilty of unclean hands. We also do not consider evidence presented by both parties that was not presented to the superior court. (Peterson v. Superior Court (1995) 10 Cal.4th 1185, 1200, fn. 9.)

^[5]The MOU initially requires that an impartial arbitrator shall be selected by mutual agreement . . . .

^[6]At oral argument, for the first time in the proceeding in this court and contrary to the argument in its petition, City stated that it would accept an interpretation of the MOU calling for one peremptory challenge for each officer and appeared to urge us to direct the trial court to adopt its original tentative ruling. We decline to do so.