The standard of review on appeal regarding enforceability of arbitration clauses

questions-1As I’ve mentioned before, the standard of review is not always clear. One sometimes has to “drill down” past the obvious, and the “abuse of discretion” standard is full of nuance. The parties’ briefs may even fight over which is the correct standard of review to apply, or the cases may be split on the issue. Sometimes, where the standard is in dispute, it doesn’t matter, because the outcome is the same under either standard.

There is no question as to what standard of review applies in yesterday’s decision in Carlson v. Home Team Pest Defense, Inc., case no. A142219 (1st Dist., August 17, 2015), but the case nonetheless has a lesson in careful application of the standard of review. The appeal was from an order denying a motion to compel arbitration. The court begins its discussion of the standard of review by announcing “There is no uniform standard of review for evaluating an order denying a motion to compel arbitration.”

Well, if there is no uniform standard, how do you decide what standard applies to your case? It’s hard to answer that question any more succinctly than the court, so I’ll let the court do it:

If the court’s order is based on a decision of fact, then we adopt a substantial evidence standard. [Citations.] Alternatively, if the court’s denial rests solely on a decision of law, then a de novo standard of review is employed.

In this case the trial court made factual findings based on at least some material disputed evidence. From those findings, the trial court concluded that Home’s Agreement was both procedurally and substantively unconscionable and should not be enforced. Accordingly, [t]o the extent there are material facts in dispute, we accept the trial court’s resolution of disputed facts when supported by substantial evidence; we presume the court found every fact and drew every permissible inference necessary to support its judgment.

(Citations and internal quotation marks omitted.)

Some easy examples are cited in one of the cases cited in Carlson. In Robertson v. Health Net of California, Inc. (2005) 132 Cal.App.4th 1419, the order denying the motion to compel arbitration was based on the trial court’s conclusion that the arbitration agreement violated a statute. Since this presented a purely legal question of statutory interpretation, review was de novo. Robertson cited Craig v. Brown & Root, Inc. (2000) 84 Cal.App.4th 416 as an example where review for substantial evidence was appropriate, because the order in that case was based on the trial court’s factual finding that the parties never reached agreement on arbitration.

Craig suggests that this analysis is apparently required whenever the validity of an arbitration clause is at issue on appeal, not just on appeals from orders denying a motion to compel arbitration. Craig was an appeal from a final judgment confirming an arbitration award after a motion to compel arbitration had been granted. Yet, Robertson cited to it as an example of how to apply the standard of review.

A break for some shipmates and a lesson on drilling down on the standard of review

As a graduate of the “Boat School” (or “Canoe U”), I went on alert as soon as I spotted a case in yesterday’s advance sheets regarding whether some local county employees’ time as U.S. Naval Academy Midshipmen (don’t call them “middies”) could enhance their county retirement credits. My shipmates came out on the winning end of things, and the opinion offers a lesson on appellate procedure.

The issue in Lanquist v. Ventura County Employees’ Retirement Association (case no. B251179, 2d. Dist., March 16, 2015) is succinctly stated in the first paragraph of the opinion:

Ventura County Employees’ Retirement Association (VCERA) permits employees to purchase retirement service credit for time spent in military service. It excludes time spent as a midshipman at the United States Naval Academy (Academy).Our interpretation of a Ventura County Board of Supervisors’ resolution, adopting the County Employees Retirement Law (CERL), leads us to the opposite conclusion.”Military service” includes service as a midshipman.
The journey for the plaintiff employees started with their applications to purchase credits for their time at the Academy, then wound through assorted administrative proceedings that denied their applications. The plaintiffs filed a petition for writ of mandate in the superior court, which denied the petition.

On the ensuing appeal, the trial court’s decision is reviewed de novo. That does not mean, of course, that the underlying administrative decision is likewise reviewed de novo. De novo review of the trial court’s decision means that the appellate court has to put itself in the shoes of the trial court and review the administrative decision under the standard of review that the trial court was required to apply. Normally, review of such a quasi-legislative administrative body’s decision is limited to whether the decision  was “arbitrary, capricious, lacking in evidentiary support, or contrary to procedures provided by law.” (Citations omitted.) But here, the plaintiffs got a break from the fact that the administrative body had construed a statute rather than exercise discretionary rule-making power. Thus, the ruling was subject to heightened review: “We tak[e] ultimate responsibility for the construction of the statute, [but] accord[] great weight and respect to the administrative construction.” (Citation and internal quotation marks omitted.) Under that level of scrutiny, the administrative body’s interpretation of the statute did not hold up, and the plaintiffs’ time as midshipmen was held to be subject to the retirement service credit purchase scheme.

That’s a welcome surprise, given that time for service at the Academy is not counted toward time in service for purposes of calculating military retirement pay for retiring officers. Presumably, the federal statutes cited by the court in its analysis apply with equal force to graduates of other service academies and thus former Zoomies, Woops, and Coasties working for Ventura County are likewise eligible for this program.***

The larger lesson to be drawn is that one should not be automatically discouraged by the default standard of review. Take a careful look at the case to see if a more favorable standard of review can be invoked. And kudos to these plaintiffs, both of whom were self-represented but only one of whom is an attorney.

***Believe me, use of these nicknames is all in good fun — there is a healthy respect for each other among the academies, but the good-natured rivalries among them can make it look otherwise. Stanford-Cal, Alabama-Auburn, and other college rivalries have got nothing on Army-Navy. Go Navy! Beat Army!

Attorney fee review standard isn’t always abuse of discretion

Appealing from an attorney fee award is usually a tough slog. Unless you are arguing a pure issue of law, such as whether any attorney fee-shifting statute applies to the case at all, the Court of Appeal usually reviews only for abuse of discretion. However, an important exception is noted in the recent case of Samantha C. v. State Department of Developmental Services, case no. B232649 (2d Dist., Div. 1, June 21, 2012).

In Samantha C., attorney fees were sought under the “private attorney general statute,” Code of Civil Procedure section 1021.5, in which plaintiffs who enforce an “an important right affecting the public interest” can recover attorney fees under certain conditions, namely:

(a) a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons, (b) the necessity and financial burden of private enforcement, or of enforcement by one public entity against another public entity, are such as to make the award appropriate, and (c) such fees should not in the interest of justice be paid out of the recovery, if any.

Plaintiff had originally lost her Xarelto Class Action Lawsuit seeking state services, but appealed the judgment. The Court of Appeal reversed in a published decision that construed certain statutory and regulatory language governing eligibility for services. Nonetheless, on remand, the trial court declined to award private attorney general attorney fees, finding that the benefits of the lawsuit were limited to the plaintiff.

Are you wondering, How can that be, when the published decision involved the interpretation of statutory language that applies to all such cases? If so, give yourself a gold star. The Court of Appeal finds that the precedent set by the statutory and regulatory construction in its first decision necessarily extend beyond plaintiff to all applicants, and that the actual size of that class of persons need not be proven:

Although our underlying decision was phrased in terms of substantial evidence, it rested on determinations of statutory and regulatory construction that were not specific only to Samantha.


Although the record does not reflect the number of individuals that might be directly benefited by our decision in Samantha C., nevertheless, by defining the class of benefited persons to include those in Samantha‘s position, the Legislature has demonstrated its determination that such a need exists, in a quantity that is of sufficient size to require its legislative protection.  In light of the Legislature‘s statement of purpose, we cannot justifiably conclude that such a group of potential claimants is nonexistent, or even minimal.

The point of this post, however, is not just the court’s decision, but how the Court of Appeal got there. Instead of deferring to the court’s discretion on the applicability of section 1021.5 in this case, the Court of Appeal found itself well situated to review applicability of section 1021.5 de novo, i.e., without any deference afforded to the trial court’s decision:

“A trial court‘s decision whether to award attorney fees under section 1021.5 is generally reviewed for abuse of discretion.” [Citation.] But where, as here, our published opinion provides the basis upon which attorney fees are sought, de novo or independent review is appropriate because we are in at least as good a position as the trial court to determine whether section 1021.5 fees should be awarded. [Citations.]

Not many appellants will be able to take advantage of this reasoning to obtain de novo review of their entitlement to fees.

There is one curious point to the decision. Although the Court of Appeal did not strongly emphasize it, implicit in its conclusion that the first appeal resulted in a benefit for a large class of persons is that its prior decision was a published one. Odd that its original opinion on the fee issue was not published.

By the way, if you’ve stumbled across this post looking for answers on attorney fees that are not addressed in this post, poke around at the California Attorney’s Fees blog, where they’re all attorney fees, all the time!

Who Says CRC 8.108(f)(1) is for Cross-Appeals Only?

Certainly not Division Three of the Fourth District Court of Appeal.  In The Termo Co. v. Luther, case no. G038435 (Dec. 17, 2008), the court holds that the rule of court allowing the 20-day window for “any other party to appeal from the same judgment or order,” triggered by the clerk’s mailing of the notice of the filing of an appeal, means just what it says, notwithstanding its “Cross-appeal” heading.

Termo and Angus Development Corporation were co-petitioners in the administrative writ proceedings.  The trial court denied the writ.  Termo filed its notice of appeal from the judgment on the 59th day following service of notice of entry of judgment — just one day prior to the jurisdictional deadline of 60 days following mailing of notice of entry of judgment.  (See rule 8.104(a)(2), Cal. Rules of Court)  Angus filed its notice of appeal from the same judgment two days later — 61 days following mailing of notice of entry of judgment.  Respondent Hunt Petroleum (AEC), Inc., joined by respondent Director of Conservation Bridgett Luther, moved to dismiss Angus’s appeal on the basis that it was untimely filed.

The applicable rule** states: “If an appellant timely appeals from a judgment or appealable order, the time for any other party to appeal from the same judgment or order is extended until 20 days after the superior court clerk mails notification of the first appeal.” (** The court decided the case on the basis of former rule 8.104(e)(1) as in effect at the time the appeals were taken, but the wording of current rule 8.108(f)(1) is identical, as is the “Cross-appeal” heading noted by the court, and thus the result should be the same under the current rule.)

Respondents contended the rule applies only to cross-appeals and to parties adverse to the first appellant, but simple statutory definitions allowed the court to make short shrift of those arguments:

Hunt contends that California Rules of Court, rule 8.108(e)(1) is inapplicable, for two reasons. First, Hunt says the rule applies only to cross-appeals and Angus did not file a cross-appeal. Second, Hunt asserts that the rule applies only when the party seeking to utilize the 20-day extension period is adverse to the first party to file an appeal. We disagree.

Although the topic heading to California Rules of Court, rule 8.108(e) reads “Cross-appeal,” as Angus points out, “[b]y definition, a cross-appeal is any appeal filed after the first appeal [citation], and [the] rule . . . does not differentiate between cross-appeals which are protective and those which are independent.” (Life v. County of Los Angeles (1990) 218 Cal.App.3d 1287, 1297- 1298, fn. omitted.) Moreover, “[t]he usual rules of statutory construction are applicable to the interpretation of the California Rules of Court. [Citation.]” (Id. at p. 1296.) “‘“When statutory language is . . . clear and unambiguous there is no need for construction, and courts should not indulge in it.” [Citation.]’ [Citation.] Under the guise of construction, the court will not rewrite a law and will not give the words an effect different from the plain and direct import of the terms used. [Citation.]” (Ibid.) Here, the text of rule 8.108(e)(1) contains no limitation of the type asserted by Hunt. It requires neither that an appeal be denominated a “cross-appeal” nor that the second party to file an appeal be adverse to the first party to do so, in order for the 20-day extension period to apply.

In this case, Termo filed a timely appeal from a judgment and an order and, two days thereafter, Angus filed an appeal from the same judgment and order. The appeal of Angus is timely filed under California Rules of Court, rule 8.108(e)(1). The motion to dismiss is denied.

Appellate practitioners already know not to turn away a client just because more than 60 days have elapsed since the notice of entry of judgment was mailed and the client has not yet appealed, because post-trial motions can extend the time to appeal.  (See rule 8.208(b)-(e).)  Make sure you don’t overlook this interpretation of rule 8.108(f)(1), either.

My thanks to Long Beach business litigator Charles Hokanson, who alerted me to this important case, knowing that I was on hiatus when it was published.  Nice to know at least one of you guys is looking out for me!

What Constitutes Extrinsic Evidence that Changes the Standard of Review?

Well-established, seemingly clear principles like contract interpretation being a matter of law (absent ambiguity requiring extrinsic evidence to resolve), and de novo review of legal questions aren’t always so clear in practice. California National Bank v. Woodbridge Plaza, LLC, case no. G038623 (4th Dist. May 30, 2008, ordered published June 20, 2008) is a case in point.

At issue was the meaning of a lease provision that determined the maximum rent for the extended term. The landlord, who prevailed at the bench trial, contended that the court’s interpretation of the lease was governed by substantial evidence review because there was conflicting opinion testimony on the meaning of the lease provision.

Sound disingenuous to you? Me, too, and the court isn’t buying it, either:

We review a trial court’s construction of a lease de novo as long as there was no conflicting extrinsic evidence admitted to assist in determining the meaning of the language. [Citation.] If a lease provision is ambiguous, parol evidence may be admitted as to the parties’ intentions if the language is reasonably susceptible to a suggested interpretation. [Citation.] If there is conflicting evidence necessitating a determination of credibility, we use the substantial evidence test. [Citation.]

Here, not only was there no conflicting extrinsic evidence, there was no extrinsic evidence at all as to the intent of the parties about paragraph 3. Defendant points to testimony of the parties’ “differing interpretations of the lease.” But an interpretation of the lease is not the same as evidence of intent when negotiating or executing the lease, and there was no evidence of the latter. Thus, we construe the meaning of the lease de novo.

But the court does buy the trial court’s interpretation of the lease, so the landlord wins anyway.

(Yes, this case is old . . . by blogging standards, anyway. I turned up this post in my drafts queue.)

Court has No Duty During Recommitment Proceedings to Consider Suitability for Outpatient Treatment

In People v. Rish, case no. B198727 (2d Dist. June 16, 2008), Rish appealed from from an order recommitting him to the California Department of Mental Health for treatment as a mentally disordered offender pursuant to Penal Code section 2972.  He claimed that the trial court erred by failing to consider whether he was suitable for outpatient treatment, even though he did not raise this alternative in the trial court.

The Court of Appeal determines that Rish waived the issue by failing to raise it.  As a matter of statutory construction, Section 2972, subdivision (d) does not impose a duty on the court to evaluate suitability for outpatient treatment sua sponte.

The court reached the issue even though it had been mooted by the trial court’s entry of a subsequent order extending Rish’s commitment for an additional one-year term and setting a hearing to address his suitability for outpatient treatment.  It found the issue “capable of repetition, yet evading review” because commitment petitions must be filed on an annual basis, making it likely the trial court would decide a new petition prior to appellate review of the prior sustained petition.

Review of “Private Attorney General” Fee Awards

Kimberly Kralowec at The Appellate Practitioner points out a case from earlier this month, Roybal v. Governing Board of the Salinas City Elementary School District, case no. H030596 (Jan. 11, 2008, ordered published Feb. 6, 2008), in which the Court of Appeal neatly summarizes the proper standards of review to apply when reviewing attorney fee awards made pursuant to California’s “private attorney general” statute, Code of Civil Procedure section 1021.5. The case recognizes the Supreme Court’s 2006 departure from the one-size-fits-all “abuse of discretion” standard in recognition that some awards may be due more deferential review in light of their fact-intensive nature, while those revolving around legal issues like statutory interpretation should be closely scrutinized. See her post for the money quote from the case.

State Law in a Federal Court

In Ryman v. Sears, Roebuck and Co., case no. 06-35630 (9th Cir. Oct. 12, 2007), the Ninth Circuit reiterates some very basic rules for a federal court to interpret state law. The district court refused to apply state law precedent to a matter of state law because (1) the precedent was from the state’s intermediate appellate court rather than the state’s highest court, and (2) the intermediate court’s opinion had been criticized by other federal courts.

The Ninth reminds us that neither reason justifies ignoring relevant precedent from a state’s intermediate appellate court. In the absence of a relevant decision from the state’s highest court on a matter of state law, a federal court must follow the decisions of the state’s intermediate appellate court unless “the federal court finds convincing evidence that the state’s supreme court likely would not follow it.”

If you’re new to the blog, you may have missed a few earlier posts regarding related questions on federal court determinations of state law, both of them with links to related articles or blog posts by Howard Bashman at How Appealing.

In A Conundrum on Federal Court Determinations of State Law Issues, I examined the question of whether a federal district court is required to follow circuit court of appeals precedent on state law issues or instead is not bound by the earlier decision if state law developments since the circuit decision have changed the result under state law.

In Follow-Up to “A Conundrum on Federal Court Determinations of State Law Issues,” I noted the disagreement between Bashman and me on the question posed in the earlier post and weighed in on a related question posed by Bashman: whether a circuit court of appeals may revisit a determination of state law without en banc review.

Hearsay Admissibility Conditions Blend Into Each Other

A hearsay statement regarding the infliction or threat of physical injury upon the declarant is admissible if it meets the conditions of Evidence Code section 1370, subdivision (a), which include that the statement was made “at or near the time” of the infliction or threat and that the statement was made under circumstances that would indicate its trustworthiness. In People v. Quitiquit, case no. D050385 (4th Dist. Sept. 12, 2007), the Court of Appeal says that a declarant’s statements that the defendant had caused her neck injury seven weeks earlier were not made “at or near” the time of infliction. Thus, the statements were improperly admitted, and Quitiquit’s conviction for voluntary manslaughter of the declarant is reversed.

The normal rules of statutory construction don’t seem to help much with the construction of “at or near.” Nonetheless, the court finds that “[t]he plain meaning of the phrase ‘at or near’ denotes a time close to the infliction of the injury – which in most circumstances will be within hours or days, rather than weeks or months.”

The court finds that the legislature intended the “at or near” requirement

to provide some assurance that the statements would relate to facts fresh in the declarant’s mind and reduce the risk that the statements resulted from the declarant’s prevarication or coaching by third parties.

I think this line of reasoning essentially makes the “at or near” requirement a subset of another requirement: that the statement be made under “circumstances that would indicate its trustworthiness.” The court finds that the declarant’s opportunity to reflect and deliberate, especially considering that she met with her children — at least one of whom was angry with the defendant — is evidence of both temporal distance and lack of trustworthiness. In other words, the “at or near” requirement implicates not just accuracy, but also honesty.

Justice Haller concurs in the reversal on alternate grounds but disagrees with the majority’s hearsay analysis. She relies on People v. Martinez (2000) 22 Cal. 4th 106, a case regarding the public records hearsay exception of Evidence Code section 1280, which likewise requires that the public records to have been made “at or near the time of the act, condition or event” recorded therein. The Martinez court held that “a computer generated printout of the defendant’s criminal history” could be admitted “for purposes of proving the criminal history,” despite that there may have been a 30-to 90-day delay in recording the relevant information.

Drawing from Martinez, Justice Haller contends that “at or near” cannot be measured only temporally, but rather must also be measured by practical considerations, such as the “nature of the information recorded” and the “immutable reliability of the sources from which the information was drawn.” Justice Haller would essentially impose only a “lapse of memory” test that would find a statement made “at or near” the time of the occurrence so long as there were indicia that the declarant is relating reliable information.

Does Justice Haller’s approach — using “at or near” to evaluate accuracy rather than truthfulness — come closer to the intent of the statute? Perhaps. Honesty is probably covered by the factors to be considered in determining trustworthiness, set forth in Evidence Code section 1370, subdivision (b):

[C]ircumstances relevant to the issue of trustworthiness include, but are not limited to, the following:(1) Whether the statement was made in contemplation of pending or anticipated litigation in which the declarant was interested.

(2) Whether the declarant has a bias or motive for fabricating the statement, and the extent of any bias or motive.

(3) Whether the statement is corroborated by evidence other than statements that are admissible only pursuant to this section.

Perhaps the way to evaluate this issue is first to consider whether the “at or near” factor suggests that the declarant could make an accurate statement and, if so, figure the “at or near” requirement into the calculus of whether the declarant honestly did so.

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The Dictionary’s Role in Statutory Interpretation

Remember the response you got every time you asked your teacher how to spell a word? “Look it up on the dictionary.”  To which we all mumbled under our breath, “How am I supposed to look it up if I don’t know how to spell it?”

Well, there may be another question that gets the same answer to “look it up in the dictionary.”  That question is, “How do I interpret this statute?”

Honest.  Check out University of Louisville’s law school Library Director Kurt X. Metzmeier’s paper at SSRN (Social Science Research Network) entitled “You Can Look it Up: The Use of Dictionaries in Interpreting Statutes.”  No mumbling, now.

Here’s the abstract:

Justice Antonin Scalia’s well-known preference for using dictionaries rather than legislative history to interpret statutes is the jumping off point for an examination of the tools of textual analysis. The brief article offers common-sense rules for scientifically selecting dictionaries to interpret statutory language. First, the author describes the most respected unabridged dictionaries and their history. Next, there is a discussion of the principle that the dictionary selected should be relatively contemporaneous with the text interpreted. Finally, the use of specialized dictionaries to interpret the unique terminology of a trade or profession is detailed.

Your reward for downloading the paper (besides the content itself) is a great color photo of a Justice Scalia “bobblehead” figure.

Thanks to Legal Writing Prof Blog for the link.

California Court Upholds Deadly Weapon Sentencing Enhancement for Animal Cruelty Conviction

Division Four of the Second District Court of Appeal has just upheld a deadly weapon sentencing enhancement under Penal Code section 12022(b)(1) for a conviction of animal cruelty under Penal Code section 597(a). The court rejected the defendant’s contention that a deadly weapon enhancement could only apply to crimes against humans. Animal cruelty under section 597(a) is a felony, and section 12022(b)(1) only requires that the deadly or dangerous weapon have been used “in the commission of a felony or attempted felony.” In this matter of statutory construction, the court stated that “If we were to follow appellant’s interpretation, we would be required to insert the words ‘against a person’ into the statute,” effectively re-writing the statute. People v. Smith, 2nd Dist. case no. B189383 (April 24, 2007).