APPEAL from a judgment of the Superior Court of Los Angeles County, Victor H. Person and Ernest M. Hiroshige, Judges. Reversed with directions. (Los Angeles County Super. Ct. No. BC332406).
The opinion of the court was delivered by: Mallano, P. J.
CERTIFIED FOR PUBLICATION
A student and his parents filed this action against his school, alleging it was liable under the state's hate crimes laws (Civ. Code, §§ 51.7, 52.1) for death threats he received from classmates who misperceived his sexual orientation. The trial court ordered that all of the claims - the statutory hate crimes claim and several common law claims - be arbitrated in accordance with the school's enrollment contract, which contained not only an arbitration provision but also a provision entitling the ―prevailing party‖ to attorney fees. The arbitrator found in favor of the school on all claims and awarded it over $521,000 in arbitral expenses and attorney fees.
The primary question on appeal is whether the arbitrator could impose a type of expense on plaintiffs they would not have been required to bear if the dispute had been heard in court. We conclude that because the hate crimes laws constitute unwaivable statutory rights comparable to antidiscrimination laws, such expenses are prohibited. Otherwise, the filing of hate crimes claims would be deterred. (See Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 110--113 (Armendariz).)
In postarbitration proceedings, plaintiffs argued they were not liable for any type of arbitral expense they would not have had to pay in a court case. They also asserted that because the hate crimes laws authorize an award of attorney fees only to a prevailing plaintiff (see Civ. Code, §§ 52, subd. (b)(3), 52.1, subd. (h)), the arbitrator could not award attorney fees against them. We determine that although the trial court should have decided whether the arbitrator awarded such expenses and fees, the court failed to do so and found only that plaintiffs' claims were properly submitted to arbitration. Thus, the judgment shall be reversed, and, on remand, the trial court shall take the necessary steps to ensure that plaintiffs do not pay any inappropriate expenses or fees.
The following allegations and facts are taken from the pleadings and the papers submitted in the trial court concerning the arbitration of the case.
D.C. was a student at Harvard-Westlake School (Harvard-Westlake), a private educational institution with a middle and an upper school in Los Angeles. D.C. filed this action against Harvard-Westlake and others through a guardian ad litem, his father. D.C.'s father and mother also pleaded claims in their own right. (We will refer to D.C. and his parents collectively as plaintiffs.)
A. The Original Complaint
On April 25, 2005, plaintiffs filed this action against Harvard-Westlake, the board of directors, certain officers and administrators, and a faculty member (collectively School), alleging as follows.
While a student, D.C. was also a singer and an actor. He had a record album with a planned release date, had broadcast a song worldwide via satellite radio, and had played the leading role in a feature film presented at an internationally acclaimed film festival. He attended Harvard-Westlake's upper school.
D.C. maintained a Web site to promote his career in entertainment. The site allowed any member of the public to post comments in a ―guestbook.‖ Several students at Harvard-Westlake, using its computers, went to the Web site and posted death threats against D.C. and made derogatory comments about him. One post read, ―I'm going to pound your head in with an ice pick.‖ Another said, ―Faggot, I'm going to kill you.‖ A third stated, ―You are an oversized faggot. . . . I just want to hit you in the neck - hard. . . . [G]o to the 405 [freeway] bridge and jump.‖ A fourth read, ―I hate fags. . . . You need to be stopped.‖ One student wrote, ―I am looking forward to your death.‖ Another commented, ―Not only are you a massive fagmo, but must absolutely quit showing your face at my school. You are now officially wanted dead or alive.‖ One post read, ―I want to rip out your fucking heart and feed it to you.‖ Several other posts couched threats with references to D.C.'s misperceived sexual orientation as a homosexual.
The students who posted the threats sought to destroy D.C.'s life, threatened to murder him, and wanted to drive him out of Harvard-Westlake and the community in which he lived. The Harvard-Westlake student newspaper, The Chronicle, ran more than one article on the matter.
When D.C.'s father read the threats at the Web site, he immediately informed Harvard-Westlake of the problem, believing that some of its students were responsible. The father also contacted the Los Angeles Police Department, which, in turn, notified the Federal Bureau of Investigation.
On the advice of the police, D.C. withdrew from Harvard-Westlake. He and his family moved to another part of California, where he went to a different educational institution.
The Chronicle ran an article disclosing D.C.'s new residential location and the name of the school he was attending. The article also disclosed that postings at the Web site had referred to D.C. as a ―faggot.‖ The faculty advisor to the staff of The Chronicle approved the article before publication. Harvard-Westlake did not suspend or expel any of the students who admitted posting the threats.
The original complaint contained 11 causes of action: negligence; assault upon another with death threats and hate crimes; conspiracy to assault another with death threats and hate crimes; invasion of privacy; conspiracy to invade the privacy of another; defamation; conspiracy to defame another; intentional infliction of emotional distress; conspiracy to inflict emotional distress on another; negligent infliction of emotional distress; and fraud in the inducement of a contract. A statutory hate crimes claim was not pleaded.
The cause of action for negligence alleged that the School had failed to provide a safe school environment (see former Ed. Code, §§ 35294.20--35294.21, added by Stats. 2002, ch. 506, § 3). The cause of action for assault upon another with death threats and hate crimes sought to impose liability on the School for permitting students to use its computers to make the threats. The related conspiracy claim accused the School of protecting the students who posted the threats in order to preserve their academic standings, to prevent colleges and universities from learning about their misconduct, and to protect the School's reputation; in addition, the School exposed plaintiffs to further harm by publishing an article in The Chronicle disclosing their new residential location and the name of D.C.'s new educational institution. The privacy and defamation claims alleged that defendants had published in a public forum false and derogatory comments about D.C.'s misperceived sexuality. The intentional and negligent infliction of emotional distress claims were premised on the preceding allegations. The last cause of action, for fraudulent inducement, alleged that D.C.'s parents enrolled him in Harvard-Westlake and paid a ―substantial sum of money‖ in exchange for the school's promise to provide an environment free of verbal abuse and harassment. At the end of the complaint, plaintiffs prayed for an unspecified amount of general damages, special damages, and attorney fees on each cause of action. The complaint did not include as defendants either the students who had posted the death threats or their parents as guardians ad litem.
In the body of the complaint, the privacy and defamation claims each alleged that D.C.'s reputation had been damaged in an amount exceeding $10 million.
The case was assigned to Judge Victor H. Person.
B. The Petition to Compel Arbitration
On May 27, 2005, the School filed a petition to compel arbitration of all claims and to stay the civil action pending the outcome of arbitration. The petition was based on the contents of Harvard-Westlake's ―Enrollment Contract,‖ signed by D.C.'s father.
The Enrollment Contract consisted of five pages. The heading ―PERMISSION TO ENROLL‖ appeared at the top of the first page, followed by the recitation, ―I have read, initialed and agree to the enclosed Terms & Conditions . . . . I accept this offer of enrollment, certify that I am the legal custodial parent and hereby enroll my child at Harvard-Westlake.‖ The fourth page was captioned ―TERMS AND CONDITIONS.‖ It stated at the top: ―My signature on the Enrollment Agreement and initials below affirm that I have read this statement and have accepted all of its provisions.‖ (Third italics added.)
Under ―TERMS AND CONDITIONS,‖ the contract contained an arbitration provision, stating: ―I understand that any legal and actionable controversy or claim arising out of or relating to this Agreement (including but not limited to the determination of the scope and applicability of this Agreement to arbitrate), the student's enrollment in/departure from Harvard-Westlake or the student's educational experience at Harvard-Westlake (including, but not limited to academic matters and extracurricular activities and community service) shall be submitted to final and binding arbitration to be held in Los Angeles County, California, before a single, neutral arbitrator in accordance with [Judicial Arbitration and Mediation Services, Inc.'s (JAMS)] Comprehensive Arbitration Rules and Procedures. This arbitration agreement applies during the term of this enrollment agreement and survives after the termination of the enrollment agreement.‖
JAMS rules, though not set forth in the contract, provided: ―Each Party shall pay its pro-rata share of JAMS fees and expenses . . . , unless the Parties agree on a different allocation of fees and expenses.‖ The contract did not establish a different allocation.
Also under ―TERMS AND CONDITIONS‖ was an attorney fees provision, as follows: ―In the event of any arbitration or litigation between the parties arising out of this agreement, or which relates in any way to the enrollment of the student at Harvard-Westlake, the prevailing party therein shall be allowed all reasonable attorneys' fees expended or incurred in such arbitration or litigation, to be recovered as part of the costs therein.‖
The next paragraph began, ―I recognize that alteration of any wording in this Agreement will nullify this offer of enrollment.‖ (Italics added.)
The end of the contract stated that tuition for the upcoming academic year was $21,400. In its petition, the School argued that, based on the California Arbitration Act (Code Civ. Proc., §§ 1280--1294.2), plaintiffs' claims were subject to arbitration, and the civil action should be stayed until the arbitration was completed. The petition was scheduled to be heard on July 12, 2005.
On June 8, 2005, plaintiffs filed a first amended complaint. The School defendants remained substantially the same.*fn1 Some new defendants were added: The students who had allegedly posted the death threats on the Web site were sued through their parents as guardians ad litem (collectively Students).
The causes of action also underwent some changes. Nine, not 11, causes of action were alleged. The negligence claim (see former Ed. Code, §§ 35294.20--35294.21) was abandoned. The previous claims for assault and conspiracy to commit assault with death threats and hate crimes were combined into a single cause of action that alleged violations of both the Ralph Civil Rights Act (Civ. Code, § 51.7) and the Tom Bane Civil Rights Act (id., § 52.1). In general, those acts provide a civil remedy for hate crimes. D.C.'s parents, together with D.C., were plaintiffs on the hate crimes claim, alleging they had suffered emotional harm and economic damages, including moving expenses, caused by the threats. The privacy claim was replaced by a cause of action entitled ―public disclosure of private facts.‖ The defamation claim remained the same. A new cause of action for ―false light‖ alleged that the School and the Students had falsely portrayed D.C. as a homosexual. The two emotional distress claims were realleged without change. A new cause of action sought to impose liability on the parents of the Students based on Civil Code section 1714.1, subdivision (a), which makes a parent liable, up to specified limits, for an injury or death caused by the willful misconduct of a minor child within the parent's custody and control. Another new cause of action, entitled ―negligent supervision of students,‖ alleged that the School had failed to prevent threats of violence, offensive language, and harassment. The ninth and last cause of action realleged the fraudulent inducement claim.
As before, the prayer for relief sought unspecified general and special damages and attorney fees and costs. The new cause of action for violation of the hate crimes laws sought injunctive relief. In the body of the first amended complaint, plaintiffs alleged that D.C.'s reputation had been damaged in an amount exceeding $10 million.
On June 28, 2005, plaintiffs filed opposition to the petition to compel arbitration. They argued: (1) D.C. was not bound by the Enrollment Contract or its arbitration provision because, as a minor, he had disaffirmed the contract; (2) the arbitrator lacked the authority to issue injunctive relief; (3) arbitration was improper as to the School because other parties (the Students) were not bound by the arbitration provision (see Code Civ. Proc., § 1281.2, subd. (c)); and (4) the arbitration provision was unenforceable on the ground that plaintiffs ―would not be able to vindicate [their] statutory rights . . . in the province of arbitration,‖ citing Armendariz, supra, 24 Cal.4th 83.
In the reply, the School argued that, after it filed the petition, plaintiffs could not amend their complaint - adding new causes of action, requests for relief, or defendants - in an effort to avoid arbitration. The School also asserted Armendariz did not preclude the arbitration of plaintiffs' claims because that decision did not apply to the hate crimes laws.
On July 8, 2005, one of the defendants filed a peremptory challenge (Code Civ. Proc., § 170.6), seeking to disqualify Judge Person. The challenge, which bore the wrong case number, was not filed in Judge Person's courtroom. (See id., § 170.6, subd. (a)(2).) At the time of the hearing on the petition, Judge Person had not seen the challenge.
On July 12, 2005, the day of the hearing, Judge Person provided the parties with a tentative ruling granting the petition - compelling arbitration as to the School and staying the action as to the Students. The parties presented argument. Judge Person took the matter under submission.
By minute order dated July 28, 2005, Judge Person adopted the tentative as his final ruling, concluding that the arbitration provision in the Enrollment Contract encompassed plaintiffs' claims. The order also stated: ―The Plaintiffs have tried (improperly) to amend their claims, adding claims against the parents of the students who made the allegedly offensive Web site postings. However, Plaintiffs cannot escape their obligation to arbitrate their claims against the school and school personnel simply by adding other claims and defendants. Were this the rule, arbitration agreements would be illusory. Instead the Court must simply stay those claims pending completion of the arbitration against the Harvard-Westlake Defendants.‖
With respect to the peremptory challenge, Judge Person wrote: ―At the commencement of the hearing on the petition, counsel inquired as to whether the Court had been made aware of a peremptory challenge pursuant to [Code of Civil Procedure] Section 170.6. It was not aware of such a challenge as no record of the filing of a challenge in this particular case was established. If such a challenge is brought, of course, it limits the Court's power to move forward until it has ruled on the legal sufficiency and timeliness of such a challenge. At that time the Court's official records reflected that no such peremptory challenge had been filed in this case. Since the Court had nothing, officially, before it to rule upon, it was impossible for the Court to determine the legal sufficiency or timeliness of the alleged challenge. Under those circumstances, even though Plaintiff represented it had a service copy, the Court went forward with the hearing.
―Subsequent to taking the matter under submission in order to review the authority on the procedural issues contested by the Plaintiff during the hearing, Plaintiff's counsel apparently returned later the same morning of the hearing with a copy of a peremptory challenge that purported to be for this matter but contained the wrong case number (BC322406 instead of BC332406). The document had apparently been filed on July 8, 2005, but was not recorded anywhere except in the record of whatever case BC322406 represents. Since the error on the face of the peremptory challenge prevented the Court from reviewing the matter prior to the commencement of the hearing on the petition, the Court finds it to be untimely as to that hearing. [¶] . . . .
―As to ruling on the peremptory challenge, the Court having reviewed the challenge finds it to be timely filed as to all further proceedings and legally sufficient. . . . The Court accepts the challenge at this time. The case file is ordered to be delivered to [the master calendar department] forthwith for the purpose of being reassigned to another [courtroom].‖
On August 11, 2005, plaintiffs filed a petition for a writ of mandate with this court, challenging Judge Person's refusal to disqualify himself before ruling on the petition to compel arbitration. Plaintiffs argued that Judge Person's order compelling arbitration was void and should be set aside. The School filed a preliminary opposition. By order dated August 23, 2005, we summarily denied the writ petition (B185040).
In November 2005, the arbitration commenced, the Honorable Judith M. Ryan serving as the arbitrator. The parties engaged in document productions, took 14 depositions, and retained a total of eight expert witnesses.
In May 2006, the School moved for ―summary disposition‖ of all of plaintiffs' claims. Plaintiffs then filed a second amended complaint, adding three causes of action: (1) breach of contract, alleging the existence and breach of a contract consisting of the Enrollment Contract, the student honor code, and the student-parent handbook; (2) ―intentionally tortious conduct‖; and (3) negligence. The second and third of those claims were based on the investigation of the incident.
In August 2006, the School moved for summary disposition as to all of the claims in the second amended complaint. Plaintiffs filed opposition. In October 2006, ...