Filed 8/3/17 SuperShuttle Los Angeles v. Kaunang CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FOURTH APPELLATE DISTRICT

DIVISION TWO



SUPERSHUTTLE LOS ANGELES, INC.,

Plaintiff and Appellant,

v.

JOHANNES KAUNANG,

Defendant and Respondent.


E065068

(Super.Ct.No. CIVDS1510697)

OPINION


APPEAL from the Superior Court of San Bernardino County. David Cohn, Judge. Reversed with directions.
Marron Lawyers, Paul Marron, Steven C. Rice and Mainak D’Attaray for Plaintiff and Appellant.
Law Offices of Angie M. Kwik and Angie M. Kwik for Defendant and Respondent.
Defendant and respondent Johannes Kaunang filed a complaint against plaintiff and appellant SuperShuttle Los Angeles, Inc. (Company). The complaint was filed with the California Labor Commissioner and alleged Labor Code violations. Company petitioned the trial court for an order compelling arbitration. The trial court denied the petition. Company contends the trial court erred. We reverse the order with directions.
FACTUAL AND PROCEDURAL HISTORY
A. FRANCHISE AGREEMENT
In November 2013, Kaunang entered into a unit franchise agreement (the Agreement) with Company. The recitals portion of the Agreement provided, “[Kaunang] is operating a business independent of and distinct from those of SuperShuttle [Franchise Corporation] and [Company].” The recitals further provided, “FRANCHISEE IS NOT AN EMPLOYEE OF EITHER SUPERSHUTTLE [FRANCHISE CORPORATION] OR [COMPANY].” The recitals continued, “Persons who do not wish to be franchisees and independent business people, but who prefer a more traditional employment relationship, should not become SuperShuttle franchisees.”
In the contractual stipulations portion of the Agreement, Company granted Kaunang “use [of] the Marks and the System in the operation of one (1) van.” In exchange, Kaunang paid a franchise fee and other fees to Company. The other fees/payments included (1) 25 percent of all gross revenue; (2) a weekly system fee; (3) a fee for a vehicle decal; (4) reimbursing Company for all airport loop fees and airport concession fees; (5) reimbursing Company for vehicle insurance costs; and (6) reimbursing Company for any costs Company incurs on behalf of Kaunang, such as pager costs, toll fees, and inspection fees.
The contractual stipulations further provided, “Nothing herein contained shall be deemed or construed to create the relationship of . . . employment . . . and [Kaunang] shall not hold [himself] out as an . . . employee of [Company] . . . . With respect to all matters pertaining to the operation of the business conducted hereunder, [Kaunang] is, and shall be, an independent contractor.” The contractual stipulations also provided, “It is acknowledged that [Kaunang] is the independent owner of [his] business, shall be in full control thereof, shall control the manner and means through which the business is carried out, and shall conduct such business in accordance with [his] own judgment and discretion, subject only to the provisions of this Agreement.”
Further, the Agreement provided, “IT IS ACKNOWLEDGED THAT [KAUNANG] IS THE INDEPENDENT OWNER OF [HIS] BUSINESS AND THAT [KAUNANG] AND DRIVERS ARE NOT ENTITLED TO WORKERS’ COMPENSATION UNEMPLOYMENT INSURANCE, DISABILITY OR ANY OTHER BENEFITS FROM [COMPANY] OR SUPERSHUTTLE AND THAT THE FRANCHISEE IS OBLIGATED TO PAY FEDERAL AND STATE INCOME TAX ON ANY MONIES EARNED PURSUANT TO THIS AGREEMENT.”
An arbitration provision in the Agreement reads, in part, “Except as provided in the Arbitration Agreement, any dispute, claim, complaint, or controversy arising out of this Agreement, or relating in any way to this Agreement or the relationship between the parties to this Agreement, shall be submitted to the American Arbitration Association (‘AAA’) at its offices nearest the offices of [Company], for final and binding arbitration in accordance with its commercial rules and procedures that are in effect at the time the arbitration is filed . . . . The words dispute, controversy, claim and complaint, as used in this Section are to be interpreted broadly to include all claims, controversies, disputes and/or administrative actions of any kind and nature whatsoever, whether based in law or equity (including claims based entirely on one or more state or federal statutes), to the greatest extent permitted by law, as more fully set forth in the Arbitration Agreement.”
The Arbitration Agreement (Arbitration Exhibit) was attached as an exhibit to the Agreement. The Arbitration Exhibit provided, “[Kaunang] and [Company] agree to arbitrate . . . any and all existing or future disputes, claims, complaints and controversies between [Kaunang] and [Company], including any that arise out of or relate in any way to: (1) any Unit Franchise Agreement . . . including . . . the [Agreement] dated 11/20/2013; and (2) [Kaunang’s] relationship with [Company]. . . . For example, these arbitration provisions shall apply to . . . claims arising out of, or relating to, any aspect of the relationship[ ] between [Kaunang] and . . . [Company], including any claims that [Kaunang] has been underpaid, has been improperly charged, and/or has been treated in any improper manner in connection with any [Unit Franchise Agreement], or in any business dealings between the Parties . . . .”
The Arbitration Exhibit set forth claims that were subject to arbitration, the list included “claims for non-payment or incorrect payment of wages, compensation, commissions, bonuses, . . . overtime, expenses and the like, whether such claims arise under any express or implied contract, in equity, or under any federal, state, or local statutes, regulations, rules, or ordinances or common law, including, but not limited to under the Fair Labor Standards Act.”
The Arbitration Exhibit set forth claims that were exempt from arbitration. The exemption included “claims for workers’ compensation benefits, unemployment insurance, or state or federal disability insurance.” The Arbitration Exhibit further provided, “Nothing in this Agreement should be interpreted as restricting or prohibiting [Kaunang] from filing a charge or complaint with any federal, state, or local administrative agency charged with investigating and/or prosecuting complaints under any applicable federal, state or municipal law or regulation.”
B. LABOR COMPLAINT
In June 2015, Kaunang filed a complaint with the California Labor Commissioner. In the complaint, Kaunang sought (1) vacation wages; (2) reimbursable business expenses; (3) piece-rate pay for 1,232 trips; and (4) maintenance costs.
C. PETITION TO COMPEL ARBITRATION
In July 2015, Company filed a petition to compel arbitration in the trial court. Company asserted Kaunang’s complaint sought to recharacterize the parties’ relationship from franchisee/franchisor to employee/employer. Company asserted the arbitration provision and Arbitration Exhibit were broad and included Kaunang’s Labor Code claims.
D. OPPOSITION
Kaunang opposed Company’s petition to compel arbitration. Kaunang asserted he was an employee of Company, and therefore law related to employment arbitration agreements was applicable. Kaunang asserted the arbitration provision and Arbitration Exhibit (collectively, the Arbitration Contract) were unconscionable. Kaunang asserted the Arbitration Contract was procedurally unconscionable because he was not permitted to review the Agreement, including the Arbitration Contract, which meant he did not have an opportunity to negotiate the terms. Kaunang asserted the Arbitration Contract was substantively unconscionable because (1) it required unreasonable cost sharing; (2) it limited remedies; (3) it lacked mutuality; and (4) it denied an award of attorney’s fees.
Alternatively, Kaunang asserted his claim fell within the exception to the Arbitration Contract that permitted Kaunang to file a complaint with any state administrative agency “charged with investigating and/or prosecuting complaints under any . . . state . . . law or regulation.”
E. REPLY
Company replied to Kaunang’s opposition. First, Company asserted collateral estoppel barred Kaunang’s opposition because in a case involving SuperShuttle International, Inc. the court required the parties to arbitrate. Second, Company asserted the Arbitration Contract was not unconscionable.
F. RELATED CASE
Related to the instant matter is appellate court case No. E065070, SuperShuttle Los Angeles v. Danker. Danker signed a Unit Franchise Agreement (UFA) with Company in July 2009—approximately four years before Kaunang. The UFA reflected Danker “shall not hold [himself] out as an . . . employee of [Company].” It also provided, “It is acknowledged that [Danker] is the independent owner of [his] business . . . .” The UFA included an arbitration provision that required arbitration of “any controversy arising out of this Agreement.”
Danker filed a complaint with the California Labor Commissioner. In the complaint, Danker sought: (1) vacation wages earned; (2) commissions earned; (3) reimbursement for unauthorized wage deductions; (4) reimbursable business expenses for fuel; (5) meal period premiums; (6) piece-rate pay for 4,368 trips; and (7) maintenance costs.
Company filed a petition to compel arbitration in the trial court. Company asserted Danker’s complaint sought to recharacterize the parties’ relationship from franchisee/franchisor to employee/employer. Company asserted the UFA reflected Danker was “a franchisee and an independent contractor.” Company contended the issues raised by Danker arose out of the UFA and therefore was subject to arbitration.
Danker opposed Company’s petition to compel arbitration. First, Danker asserted he was seeking to enforce employee rights arising under the Labor Code—he was not seeking to enforce rights under the UFA—and therefore, the arbitration provision did not apply. Second, Danker contended he was an employee of Company, and therefore, law related to employment arbitration agreements was applicable. Third, Danker asserted the arbitration provision should not be enforced because it was unconscionable.
G. HEARING
The trial court held a combined hearing on Company’s petitions to compel arbitration—the petition in the instant case and the petition in Danker’s case. The trial court said it called the cases together because it believed “the issues are the same.” Kaunang and Danker were represented by the same attorney. After their attorney introduced herself, the trial court said, “[I]f there are any differences in the two cases, please point them out. Otherwise, I think the issues are the same.” Kaunang and Danker’s attorney responded, “Okay”; however, she did not point out the differences in the two cases. Company also did not point out the differences between the two cases.
The trial court said, “[P]age 31 of the agreement . . . calls for arbitration of any controversy, quote, ‘arising out of this agreement,’ end of quote. [¶] The lawsuits filed by the respondents here don’t arise out of that agreement. They are saying ‘We are not franchisees. We are employees, and the lawsuits are brought under the Labor Code.’”
The trial court found Elijahjuan v. Superior Court (2012) 210 Cal.App.4th 15 (Elijahjuan) controlled. The trial court explained Elijahjuan as follows: The plaintiffs had signed independent contractor agreements with arbitration provisions. The plaintiffs asserted they were employees. The plaintiffs argued that their allegations concerning Labor Code violations did not arise from the independent contractor agreements because they were suing under the Labor Code. Therefore, the plaintiffs reasoned, their suit was not subject to arbitration. The appellate court agreed with the plaintiffs.
Company argued that the arbitration provision in Elijahjuan was “completely different” because the Elijahjuan arbitration provision was much narrower. The trial court asked Company to explain how alleged Labor Code violations arise out of the UFA. Company asserted, “[T]he entire relationship that the parties have with each other comes from that agreement. That’s the only relationship they have.” The trial court explained, “That’s not their position. Their position is they are employees, not franchisees. Now, they may be wrong about that, but that’s the nature of the claim.”
Company asserted, “[T]he only reason that the parties have a relationship at all is by virtue of the fact that they signed these agreements . . . .” Company continued, “[T]he only reason they are allowed to be subjected to the type of conduct that they are alleging in their [complaint] is through that fact that they signed these unit franchise agreements.”
Kaunang and Danker’s attorney asserted, “[T]hese arbitration agreements do not cover, do not envision, any disputes regarding whether or not they are employees or whether or not they have Labor Code claims. It’s just not covered by the arbitration agreements.” The trial court concluded, “I do think the Elijahjuan case controls this. I’m going to deny [Company’s] petitions to compel the arbitration.” The trial court entered an order denying Company’s petition.
DISCUSSION
A. DIFFERENCES
We set forth the material differences between Kaunang’s case and Danker’s case:
First, in Kaunang’s case, the arbitration provision required arbitration of “any dispute, claim, complaint, or controversy arising out of this Agreement, or relating in any way to this Agreement or the relationship between the parties to this Agreement.” Additionally, the Arbitration Exhibit set forth an exception to the arbitration requirement for administrative complaints filed with investigative and/or prosecuting agencies. In Danker’s case, the arbitration provision required arbitration of “any controversy arising out of this Agreement.”
Second, in Kaunang’s case, Kaunang opposed the petition to compel arbitration on the bases that (A) the Arbitration Contract was unconscionable, and (B) his complaint fell within the investigating administrative agency exception of the Arbitration Contract. In Danker’s case, Danker opposed the petition to compel arbitration on the bases that (A) he was seeking to enforce employee rights arising under the Labor Code—he was not seeking to enforce rights under the UFA—and therefore, his claims did not arise from the UFA and were not subject to arbitration; and (B) the arbitration provision in the UFA was unconscionable.
B. TRIAL COURT’S REASONING
The trial court asked the parties to point out the differences in the two cases. Neither party aided the trial court in response to its request. The trial court said, “There is a purported franchise agreement that contains within it an arbitration provision . . . page 31 of the agreement says that calls for arbitration of any controversy, quote ‘arising out of this agreement,’ end of quote.” The trial court denied both petitions to compel arbitration, concluding Kaunang and Danker were asserting statutory rights as employees, and therefore, their complaints did not arise from the franchise agreements.
Page 31 of Kaunang’s Agreement does not include an arbitration provision; rather, it concerns Kaunang’s right to transfer his interest in the Agreement. Page 31 of Danker’s Agreement included an arbitration provision. The trial court’s reasoning relates to an argument that was raised in Danker’s opposition, but was not raised in Kaunang’s opposition, i.e., Danker was seeking to enforce employee rights arising under the Labor Code—he was not seeking to enforce rights under the UFA—and therefore, his claims did not arise from the UFA and were not subject to arbitration.
Thus, (1) the trial court’s decision was not based on the facts of Kaunang’s case because (a) the Arbitration Contract in Kaunang’s case was materially different than the arbitration provision in Danker’s case, and (b) the trial court only referred to the UFA in Danker’s case—it did not discuss the Agreement in Kaunang’s case; and (2) the trial court’s decision is not based on the arguments that were raised in Kaunang’s case because Kaunang did not make the argument that his claims were not subject to arbitration because they were statutory and therefore did not arise from the franchise agreement—only Danker made that argument.
C. CONTENTION
Company contends the trial court erred by finding Kaunang’s claims fall beyond the scope of the Arbitration Contract. Company repeats the arguments that it made in its appellant’s opening brief for Danker’s case. For example, Company contends the trial court erred in the instant case by applying Elijahjuan. Specifically, Company asserts the arbitration provision in Elijahjuan is distinguishable from the Arbitration Contract.
As explained ante, the trial court’s ruling was not based on the facts or argument raised in this case. Company’s contention concerns the substance of the trial court’s ruling. Company does not assert the trial court failed to address the facts and arguments of Kaunang’s case.
D. INVITED ERROR
In Kaunang’s respondent’s brief, he acknowledges that the trial court only referred to the arbitration provision in Danker’s UFA. Kaunang notes the trial court asked for counsel to point out the differences in the two cases. Kaunang faults Company for failing to describe the differences to the trial court. Kaunang asserts Company invited the trial court’s error by failing to describe the differences, and therefore, the order should be affirmed.
“The invited error doctrine is an application of the estoppel principle that where a party by his or her conduct induces the commission of error, he or she is estopped from asserting it as a ground for reversal on appeal. [Citation.] [‘T]he invited error doctrine requires affirmative conduct demonstrating a deliberate tactical choice on the part of the challenging party.’” (Pioneer Const., Inc. v. Global Inv. Corp. (2011) 202 Cal.App.4th 161, 169.) For example, the appellant must actively mislead the trial court and then assert on appeal that the trial court erred when it was appellant who was responsible for the trial court’s error. (Saxena v. Goffney (2008) 159 Cal.App.4th 316, 329.)
At the hearing, the trial court said, “[I]f there are differences in the two cases, please point them out.” Kaunang and Danker’s attorney replied, “Okay.” Company said nothing in response to the trial court’s request. Company failed to point out the differences between the two cases, but Company did not actively mislead the trial court. For example, Company did not affirmatively state that the two cases are identical. Accordingly, we conclude the invited error doctrine does not apply.
E. DUE PROCESS
“‘In a contested proceeding, no court may render judgment without conforming to the constitutional guarantees which afford due process of law. [Citation.] Due process requires that all parties be notified of the facts and issues in dispute, that each party be afforded a fair opportunity to present evidence in open court, and that judgment be rendered based on an evaluation of the evidence on each side, findings of fact and conclusions of law.’” (Carr v. Kamins (2007) 151 Cal.App.4th 929, 936.)
The order issued in this case was not based on the evidence in this case nor the arguments presented in the petition and opposition. Therefore, we conclude the court did not afford the parties due process. Because the order was issued without due process, we conclude the trial court erred. We will reverse the order. We note Kaunang concedes the matter should be remanded to the trial court for further proceedings.
DISPOSITION
The order is reversed. The trial court is directed to (1) conduct further proceedings as may be necessary to determine if arbitration is required, and (2) issue a responsive order to the petition to compel arbitration. The parties are to bear their own costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS

MILLER
Acting P. J.


We concur:


SLOUGH
J.

FIELDS
J.