The following is our summary of the Supreme Court’s actions on petitions for review in civil cases from the Court’s conference on November 29, 2017. The summary includes those civil cases in which (1) review has been granted, (2) review has been denied but one or more justices has voted for review, or (3) the Court has ordered depublished an opinion of the Court of Appeal.

Review Granted

Montrose Chemical Corporation of California v. Superior Court, S244737 – Review Granted – November 29, 2017

In a published decision, Montrose Chemical Corporation of California v. Superior Court (2017) 14 Cal.App.5th 1306, the Court of Appeal, Second District, Division Three, granted in part and denied in part a petition for peremptory writ of mandate.  The trial court had granted a declaratory judgment that an insured corporation could not “electively stack” excess insurance policies—in other words, access any excess policy issued in any policy year as long as the lower-lying policies for the same policy year had been exhausted—but it could “horizontally stack” the policies—thus accessing higher-level excess policies only when lower-level policies had been exhausted for all policy years.  While the Court of Appeal agreed that elective stacking was inconsistent with the policies of at least some of the excess policies at issue and not compelled by California Supreme Court authority, it decided that the insured corporation need not horizontally exhaust the lower-lying policies at each coverage level and for each year before higher-level policies could be accessed.  Rather, the court determined that the sequence in which the policies could be accessed must be decided on a policy-by-policy basis, taking into account the relevant provisions of each policy.

This case presents the following issue: When continuous property damage occurs during several periods for which an insured purchased multiple layers of excess insurance, does the rule of “horizontal exhaustion” require the insured to exhaust excess insurance at lower levels for all periods before obtaining coverage from higher level excess insurance in any period?

OTO, L.L.C. v. Kho, S244630 – Review Granted – November 29, 2017

In a published decision, OTO, L.L.C. v. Kho (017) 14 Cal.App.5th 691, the Court of Appeal, First District, Division One, reversed the trial court’s denial of an employer’s petition to compel arbitration of an employee’s claim for unpaid wages, concluding that the arbitration proceeding outlined by the arbitration agreement satisfied the requirements of affordability and accessibility under Sonic-Calabasas A, Inc. v. Moreno (2013) 57 Cal.4th 1109 (Sonic II) because the employer would pay the costs of arbitration and the proceeding would resemble civil litigation. Thus, although the employer’s arbitration agreement waived the various advantageous provisions of the Labor Code governing the litigation of a wage claim—specifically, a Berman hearing pursuant to Labor Code section 98— the agreement was not substantively unconscionable and was enforceable.

The questions presented are: (1) Was the arbitration remedy at issue in this case sufficiently “affordable and accessible” within the meaning of Sonic II to require the company’s employees to forego the right to an administrative Berman hearing on wage claims? (2) Did the employer waive its right to bypass the Berman hearing by waiting until the morning of that hearing, serving a demand for arbitration, and refusing to participate in the hearing?

Stoetzl v. State of California, S244751 – Review Granted – November 29, 2017

In a published decision, Stoetzl v. State (2017) 14 Cal.App.5th 1256, the Court of Appeal, First District, Division Four, affirmed in part a judgment that the federal standard for determining what constituted compensable “hours worked” governed a coordinated class action by current and former employees.  The Court of Appeal affirmed the judgment as to the subclass of represented employees because the parties had agreed to a memorandum of understanding (MOU) unambiguously providing that employees were working under the federal Fair Labor Standards Act (FLSA) and the Legislature approved and enacted the MOU into law.  However, the court reversed with regard to the subclass of unrepresented employees, holding that California law applied because the employees’ pay scale manual, which contained language from the FLSA, was not a legislative enactment and was superseded by the California Industrial Wage Commission’s Wage Order No. 4.

This case includes the following issue: Does the definition of “hours worked” found in the Industrial Wage Commission’s Wage Order No. 4, as opposed to the definition of that term found in the federal FLSA, constitute the controlling legal standard for determining the compensability of time that correctional employees spend after signing in for duty and before signing out, but before they arrive at and after they leave their actual work posts within a correctional facility?

Review Denied (with dissenting justices)

None.

Depublished

None.