Wells Fargo Bank v. The Best Service Co.

Opinion

I. INTRODUCTION

Defendant, The Best Service Co., Inc., appeals from a December 20, 2013 order denying its motion to stay the action pending arbitration. Defendant did not concurrently file a petition to compel arbitration. We dismiss the appeal

Defendant asserts its appeal of the order denying a stay is an appeal from an order denying arbitration. This is despite the fact defendant never filed a motion or petition to compel arbitration. Defendant contends the trial court in effect ruled on a motion to compel arbitration by ruling plaintiff’s claims were not arbitrable. At the December 20, 2013 hearing, the trial court expressed its doubts that the complaint’s declaratory and injunctive relief claims were subject to the arbitration provision. But the trial court never ruled plaintiff’s claims were arbitrable. At the outset of the hearing, the trial court stated defendant’s motion was for a stay of the action pending arbitration. Moreover, the December 20, 2013 minute order states, “The [c]curt, having read and considered the documents filed and all oral argument, denies the [m]otion of [defendant to [s]toy [a]ction [p]ending [arbitration.” Neither the trial court’s oral statements nor its written ruling purported to resolve the arbitrability issue.

Defendant contends the order denying a stay pending arbitration is the equivalent of an order refusing to compel arbitration. At the outset, we emphasize there is no pending arbitration nor was any effort made to compel such. In any event, defendant relies on Henry v. Alcove Investment, Inc. (1991) 233 Cal.App.3d 94 , 99-100 [ 284 Cal.Rptr. 255 ] (Henry). In Henry, while an action was pending, the defendant initiated an arbitration before the American Arbitration Association. (Id. at p. 98.) The plaintiff then filed a petition to stay the arbitration. The trial court granted the plaintiff’s motion to stay the arbitration which was pending before the American Arbitration Association. The defendant appealed from the order staying the American Arbitration Association arbitration of the plaintiff’s claims during the pendency of the litigation. (Id. at p. 96.) The plaintiff argued the appeal must be dismissed as it was from a nonappealable order. The Court of Appeal rejected the plaintiff’s argument that the appeal must be dismissed as taken from a nonappealable interlocutory order. (Id. at p. 97.) The Court of Appeal held, “[A]n order staying arbitration is the functional equivalent of an order refusing to compel arbitration.” (Id. at p. 99.) Thus, the Court of Appeal concluded the order staying the pending American Arbitration Association arbitration was appealable under section 1294, subdivision (a). (233 Cal.App.3d at p. 99.)

The Court of Appeal discussed the benefits of arbitration and why there is a right to appeal from an order denying a petition or motion to compel arbitration: “We note the advantages of arbitration include ‘a presumptively

Here, unlike Henry, there is no pending arbitration. Nor did defendant file a motion or petition to compel arbitration. Thus, there is no oral or written order dismissing or denying a petition or motion to compel arbitration. There is no functional equivalent of an order dismissing or denying a petition or motion to compel arbitration. This is because no arbitration is pending nor was any effort made to compel plaintiff to arbitrate its claims. Henry is not controlling authority.

Likewise, this case is distinguishable from MKJA, Inc. v. 123 Fit Franchising, LLC (2011) 191 Cal.App.4th 643 , 653-656 [ 119 Cal.Rptr.3d 634 ] (MKJA, Inc.). In MKJA, Inc., there was a pending arbitration in Colorado. (Id. at pp. 650-651.) The defendants had filed a successful petition to compel arbitration in Colorado. (Id. at p. 655.) As a result, the California lawsuit was stayed. In August 2009, the plaintiffs filed a motion to lift the stay of the California lawsuit because the arbitration provisions were unconscionable. The plaintiffs explicitly requested that the trial court find that the arbitration clause was unconscionable, unenforceable and violative of California public policy. (Id. at p. 651.) In response, the defendants argued that the arbitration provisions were not unconscionable. (Ibid.) The plaintiffs’ reply papers expressly argued that the arbitration provision was unconscionable. (Id. at p. 652.) The trial court’s written ruling detailed why the arbitration

Here, defendant is appealing from the trial court’s refusal to stay the litigation. But, defendant’s stay motion was not made in conjunction with a denial of a petition to compel arbitration or its functional equivalent. In its stay motion, defendant stated, “No previous [p]etition to [c]ompel [arbitration has been made, granted or is under consideration, or is being made concurrently with this motion.” In its reply, defendant asserted the stay motion is not a petition to compel arbitration. As noted, the December 20, 2013 minute order from which defendant appeals stated, “The [c]curt, having read and considered the documents filed and all oral argument, denies the [m]otion of [defendant to [s]toy [ajction [p]ending [a]rbitration.” Sections 1294 and 1294.2 do not provide a basis for appellate jurisdiction under these circumstances.

Finally, the trial court’s order denying the stay of action pending arbitration is not reviewable pursuant to section 1294.2. Section 1294.2 permits an appellate court to review an intermediate ruling or order upon appeal from an order or judgment under section 1294. Because there was no separate appealable order under section 1294, subdivision (a), the trial court’s order denying the stay pending arbitration is a nonappealable interlocutory order. (Valentine Capital Asset Management, Inc. v. Agahi, supra, 174 Cal.App.4th at p. 612, fn. 5; Pacific Inv. Co. v. Townsend (1976) 58 Cal.App.3d 1 , 6, fn. 1 [ 129 Cal.Rptr. 489 ]; Berman v. Renart Sportswear Corp. (1963) 222 Cal.App.2d 385 , 388 [ 35 Cal.Rptr. 218 ] [“the order denying a stay is not appealable itself, since it is interlocutory in nature and not expressly made appealable by any language in section 1294 . . .”].)

he appeal is dismissed. Plaintiff, Wells Fargo Bank, N.A., shall recover its costs incurred on appeal from defendant, The Best Service Co., Inc.

Mosk, J., and Kriegler, J., concurred.

Appellant’s petition for review by the Supreme Court was denied March 25, 2015, S223779.