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Hill v. Insurance Company of the West

April 26, 2010

TOBIN HILL, PLAINTIFF,
v.
INSURANCE COMPANY OF THE WEST, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Honorable Barry Ted Moskowitz United States District Judge

ORDER GRANTING MOTION TO COMPEL ARBITRATION AND STAY THIS ACTION

Defendant Insurance Company of the West ("ICW") has filed a Motion to Compel Arbitration and Stay or Dismiss this Action [Doc. 4]. For the following reasons, the Court GRANTS the Motion.

I. BACKGROUND

This is an employment dispute. Although Plaintiff alleges several claims, the primary one is that ICW failed to pay him overtime wages. But the substance of his claims are not before the Court on this Motion. Instead, the Motion addresses the arbitration agreement between the parties and whether the Court should enforce it.

The parties agree that there is a valid arbitration agreement. They disagree, however, about two issues. The first issue is about whether ICW waived its right to arbitrate. Plaintiff claims ICW waived arbitration by refusing Plaintiff's request to arbitrate. ICW disagrees, arguing that it has consistently expressed its intention to arbitrate. The second issue is that Plaintiff has asserted a California Private Attorney General Act ("PAGA") claim in his Complaint. And according to Plaintiff, the Court cannot compel arbitration of this claim without California's consent. Before resolving these two issues, the Court sets forth the facts relevant to whether ICW waived its right to arbitrate.

In mid-October 2009, Plaintiff's attorney sent ICW a demand letter, asking for unpaid overtime, wage records, and for Plaintiff's personnel file, among other things. Plaintiff threatened suit if ICW did not respond, and added "[i]f you have an arbitration agreement... you must send my office a copy or waive any right to arbitrate."

ICW's general counsel responded by letter on November 2, 2009. The general counsel wrote that she could not release any information to Plaintiff's counsel until ICW received a representation letter with Plaintiff's original signature: "Without that I have no way of verifying that you in fact represent him." She concluded the letter by noting that Plaintiff signed an arbitration agreement when he was hired, and that she would forward a copy to Plaintiff's counsel once she received the signed representation letter.

Plaintiff's counsel never sent the signed representation letter. Instead, on December 2, 2009, he sent a "final demand for arbitration," stating that ICW "refused to produce any arbitration agreement and refused to agree to arbitrate these claims." He repeatedly wrote that if ICW did not promptly agree to arbitrate and send all the information he requested, ICW's right to arbitrate would be waived. He finished the letter by writing that ICW's "requests for frivolous information to which you are not entitled will not be honored."

Defendant's outside counsel responded on January 5, 2010, and again stated that "[d]ue to privacy obligations, in the absence of an authorization from Mr. Hill, we are unable to produce" Plaintiff's personnel records and the arbitration agreement. Defendant, for the second time, raised the issue of the arbitration agreement, stating that Plaintiff was "required to adhere to the formal demand procedure outlined in the arbitration agreement."

It appears there was no further communication between the parties before Plaintiff filed this suit on January 11, 2010.

II. DISCUSSION

A. Defendant Did Not Waive Its Right to Arbitrate

Plaintiff agrees that he signed an arbitration agreement and that it covers all of Plaintiff's claims, except the PAGA claim. But the parties disagree about whether Defendant waived its right to arbitrate.

Waiver of the right to arbitrate is not favored. Shinto Shipping Co., Ltd. v. Fibrex & Shipping Co., Inc., 572 F.2d 1328, 1330 (9th Cir. 1978). "Any examination of whether the right to compel arbitration has been waived must be conducted in light of the strong federal policy favoring enforcement of arbitration agreements." Fisher v. A.G. Becker Paribas Inc., 791 F.2d 691, 694 (9th Cir. 1986). Thus, "any party arguing waiver of arbitration bears a heavy ...


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