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Chango Coffee, Inc. v. Applied Underwriters, Inc.

California Court of Appeals, Second District, Third Division

May 26, 2017

CHANGO COFFEE, INC., Plaintiff and Respondent,
v.
APPLIED UNDERWRITERS, INC., Defendant and Appellant.

         APPEAL from an order of the Superior Court of Los Angeles County, No. BC591586 David Sotelo, Judge. Appeal Dismissed.

          Fine, Boggs & Perkins, Michael K. Perkins, Cory J. King and William D. Wheelock for Defendant and Appellant.

          Law Office of Thomas M. Hall and Thomas Montague Hall for Plaintiff and Respondent.

          JOHNSON (MICHAEL), J. [*]

         INTRODUCTION

         Defendant Applied Underwriters, Inc. (Applied) purports to appeal from the trial court's order denying its renewed petition to compel arbitration filed pursuant to Code of Civil Procedure section 1008, subdivision (b).[1] Because an order denying a renewed motion or application under section 1008, subdivision (b) is not appealable (see Tate v. Wilburn (2010) 184 Cal.App.4th 150, 160 (Tate)), we dismiss the appeal.

         FACTS AND PROCEDURAL BACKGROUND

         On January 2, 2014, plaintiff Chango Coffee, Inc. (Chango) filed a three count complaint against Applied for breach of contract, conversion and fraud. The complaint alleges the parties entered a written agreement under which Chango granted Applied access to its checking account for the purpose of providing payroll processing and payment services, and Applied improperly withdrew funds from Chango's account “without permission[, ]... justification or purpose under the contract.”

         On April 23, 2014, Applied filed a petition to compel arbitration pursuant to a written agreement to arbitrate.[2] In a supporting declaration, Applied's accounts settlement manager, Ed Karmazin, declared that, in July 2004, Applied and Chango “entered into a written agreement, ” under which Applied agreed to provide Chango “payroll processing, human resource support, training, workers' compensation insurance, and employment-related insurance from authorized insurance companies.” The purported agreement had “two parts, ” which Karmazin described as follows: “First, the customer completes a document entitled, ‘SolutionOne Application and Agreement for Services.' [sic]... After reviewing the application document to ensure the customer qualifies for participation in the SolutionOne program, [Applied] will accept the customer into the SolutionOne program and the Agreement is formed. When [Applied] accepts the customer's SolutionOne Application and Agreement, [Applied] delivers to the customer a document entitled, ‘SolutionOne Services Agreement.' ”[3]

         Karmazin declared that Chango's corporate secretary, Tad Yenawine, signed the application on July 14, 2004. The signed document, entitled “SolutionOne Application and Agreement for Service, ” contains provisions relating to Applied's services, payroll processing, billing and payment, and authorization to access Chango's banking account. The document concludes with the clause, “I (we) accept [Applied's] standard Service Agreement Terms and Conditions.”

         According to Karmazin, after receiving Chango's signed SolutionOne Application and Agreement for Service, Applied delivered to Chango a document entitled “SolutionOne Services Agreement.” The SolutionOne Services Agreement contains the subject arbitration clause. Additionally, Karmazin declared that, as part of the SolutionOne program, Chango periodically submitted documents entitled “Weekly Reporting Form, ” which contained the following clause: “Each submission of payroll sent to us for processing is ratification and confirmation of your acceptance of all the terms and conditions of the current Solution One Service Agreement.” (Italics omitted.)

         In its petition for arbitration, Applied argued the signed SolutionOne Application and Agreement for Service incorporated the terms of the SolutionOne Services Agreement, including the latter document's arbitration provision. Applied further argued that Chango ratified the terms of the SolutionOne Services Agreement when it signed and submitted its Weekly Reporting Forms, commencing in April 2004.

         Chango opposed the petition to compel arbitration. In a supporting declaration, Chango's corporate secretary, Yenawine, acknowledged signing the SolutionOne Application and Agreement for Service. However, Yenawine declared that, apart from the SolutionOne Application and Agreement for Service, Chango was “not asked to agree to any additional terms.” He specifically denied agreeing to arbitrate disputes on behalf of Chango.

         On November 18, 2014, the trial court denied Applied's petition to compel arbitration. In a written order, the court concluded that the critical final clause in the signed SolutionOne Application and Agreement for Service referred to the terms contained in the signed document itself, and not to the terms of the separate SolutionOne Services Agreement. The court observed that Applied had offered three documents in support of its petition to compel arbitration: (1) the “ ‘Solution Application And Agreement For Service' (‘service' is singular)”; (2) the “ ‘SolutionOne Services Agreement' (‘services' is plural)”; and (3) the “ ‘Weekly Payroll Form' ” [which] refers to ‘the current SolutionOne Service Agreement' ” (service is singular). The critical clause, the court explained, provided for Chango to be bound by the “ ‘ServiceAgreement Terms and Conditions, ' ” with the word “service” in the singular, as in the signed “ ‘SolutionOne Application and Agreement for Service.' ” Thus, the court reasoned the signed document did not incorporate the terms of the “ ‘SolutionOne Services Agreement, ' ” ...


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