Filed 8/25/26 Franco v. Prime Healthcare Huntington Beach CA4/3
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION THREE
ALEJANDRO ARGUELLES
FRANCO,
Plaintiff and Respondent, G065595
v. (Super. Ct. No. 30-2020-
01169203)
PRIME HEALTHCARE
HUNTINGTON BEACH, LLC, OPINION
Defendant and Appellant.
Appeal from an order of the Superior Court of Orange County,
Robert S. Nelson, Judge. Dismissed.
Littler Mendelson, Stacey F. Blank and Sara Zimmerman for
Defendant and Appellant.
Law Offices of Gavril T. Gabriel, Gavril T. Gabriel and Nikolaos
Kefallonitis for Plaintiff and Respondent.
After Alejandro Arguelles Franco’s claims against his former
employer Prime Healthcare Huntington Beach, LLC were compelled to
arbitration, Prime Healthcare filed a motion for summary judgment, or
alternatively, for summary adjudication. The arbitrator issued a tentative
decision granting summary adjudication of 11 of Franco’s claims and
otherwise denying summary adjudication, but the arbitrator later issued a
final ruling and award (final decision) granting the motion for summary
judgment in its entirety.
Franco filed a motion to vacate the final decision with respect to
five of his claims, including those of which the arbitrator had tentatively
denied summary adjudication. The trial court granted the motion to vacate
with respect to four of the five claims because the final decision did not state
the essential findings and conclusions underlying the decision. The trial court
also remanded the matter to the arbitrator to clarify the final decision with
respect to the four claims, so the court could evaluate Franco’s arguments,
and otherwise denied the motion to vacate.
Prime Healthcare purports to appeal from the trial court’s May 5,
2025 order granting in part and denying in part the motion to vacate the final
decision (the minute order). While an order vacating an arbitration award is
appealable, such an order is not appealable if “a rehearing in arbitration is
ordered.” (Code Civ. Proc., § 1294, subd. (c).)1 Here, the court ordered a
rehearing in arbitration within the meaning of section 1294, subdivision (c)
by remanding the matter to the arbitrator to clarify the basis of the final
decision. As the minute order was not a final appealable order, we dismiss
this appeal for lack of jurisdiction.
1 All further statutory references are to the Code of Civil
Procedure unless otherwise specified.
2
BACKGROUND
I.
THE COMPLAINT
Franco filed a complaint asserting claims against Prime
Healthcare for failure to provide rest breaks (first cause of action); failure to
provide meal breaks (second cause of action); failure to pay wages (third
cause of action); failure to pay overtime compensation (fourth cause of action);
waiting time penalties (fifth cause of action); failure to provide accurate
itemized wage statements (sixth cause of action); racial discrimination
(seventh cause of action); harassment based on race (eighth cause of action);
retaliation based on race (ninth cause of action); retaliation in violation of
Labor Code section 1102.5 (tenth cause of action); failure to prevent
harassment, discrimination, and retaliation (eleventh cause of action);
negligent hiring, supervision, or retention of employee (twelfth cause of
action); unfair and unlawful business practices (thirteenth cause of action);
and wrongful termination (fourteenth cause of action).2
II.
FRANCO’S CLAIMS ARE COMPELLED TO ARBITRATION
Prime Healthcare filed a motion to compel all of Franco’s claims
to binding arbitration pursuant to the parties’ arbitration agreement. In that
agreement, the parties agreed, inter alia, they would submit certain claims to
arbitration and the agreement is governed by the Federal Arbitration Act
(9 U.S.C. § 1 et seq.; FAA). The trial court granted the motion as to all but
the third and fourth causes of action. Prime Healthcare appealed from the
2 Franco named several other defendants in his complaint, but
the clerk entered the dismissal of those defendants without prejudice
pursuant to Franco’s request.
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court’s order denying its motion to compel as to those claims. A panel of this
court reversed and remanded with instructions to grant Prime Healthcare’s
motion to compel as to all causes of action. (Franco v. Prime Healthcare
Huntington Beach, LLC (Apr. 8, 2022, G060181) [nonpub. opn.].) In its
opinion, the panel confirmed the parties agreed to adopt “‘all of’” the FAA to
govern their arbitration. (Ibid.)
III.
THE ARBITRATOR GRANTS PRIME HEALTHCARE’S
MOTION FOR SUMMARY JUDGMENT
Prime Healthcare later filed a motion for summary judgment, or
in the alternative, for summary adjudication. The arbitrator issued a
tentative ruling granting summary adjudication as to Franco’s first through
tenth and thirteenth causes of action but denying it as to the eleventh,
twelfth, and fourteen causes of action.
After issuing its tentative decision, the arbitrator heard
argument and took the matter under submission. The arbitrator thereafter
changed the tentative decision with respect to the denial of summary
adjudication as to the eleventh, twelfth, and fourteenth causes of action and
instead issued the final decision granting Prime Healthcare’s motion for
summary judgment in its entirety. The final decision, however, did not add
any statement regarding the arbitrator’s findings or conclusions supporting
his reversal of the tentative decision to deny summary adjudication of those
causes of action. The arbitrator thereafter dismissed the arbitration
proceedings.
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IV.
THE TRIAL COURT VACATES THE AWARD IN PART AND REMANDS TO THE
ARBITRATOR TO CLARIFY THE BASES FOR HIS FINAL DECISION
Franco filed a motion to vacate the arbitration award with
respect to the ninth through twelfth and fourteenth causes of action.3 In the
minute order, the trial court denied the motion to vacate with respect to the
tenth cause of action, granted the motion as to the remaining causes of action
that were at issue, and remanded the matter back to the arbitrator with
directions. The court explained: “Here, given that the arbitration involved an
employment dispute, which requires a reasoned decision, the court finds that
the arbitrator’s award as it relates to the ninth, eleventh, twelfth, and
fourteenth causes of action was insufficient to provide [Franco] and the court
with sufficient detail as to the legal and factual basis for the arbitrator’s
decision. As such, as the court explains further below, the court finds that
vacating the award and remanding to the arbitrator to provide for further
clarification is appropriate.”
With respect to the ninth cause of action, the trial court further
explained: “Here, the arbitrator’s award on this action simply states:
‘Claimant’s claims for harassment based on race and retaliation based on
race are derivative of his claim for discrimination based on race. Since
claimant’s claim for discrimination based on race failed, so too do his claims
for harassment based on race and retaliation based on race and
discrimination based on race. [Prime Healthcare’s] dispositive motion as to
claims 8 [and] 9 are granted.’ [Citation.] The decision, however, is unclear as
3 As the prior panel concluded the FAA applied to the parties’
arbitration agreement (Franco v. Prime Healthcare Huntington Beach, LLC,
supra, G060181), Franco’s motion to vacate the arbitration award was filed
pursuant to section 10(a)(4) of title 9 of the United States Code, accordingly.
5
to what actual basis or element of [Franco’s] retaliation claim the arbitrator
found was insufficient. To the extent that it is based on [Franco’s] subjective
belief, there is no finding as to whether or not that belief was reasonable,
even if [Prime Healthcare’s] conduct did not violate [the Fair Employment
and Housing Act]. To the extent that the arbitrator found that there was no
retaliatory intent by [Prime Healthcare] or that [Franco] did not engage in
any protected activity, that is not stated in the award. [¶] As such, the court
finds that the arbitrator’s decision on this cause of action did not provide ‘the
essential findings and conclusions on which the award is based.’[4] [¶] This
cause of action is remanded for the arbitrator to provide a more detailed
written decision on the ninth cause of action that reveals the legal and
factual basis for the arbitrator’s decision.” (Capitalization omitted.)
And with respect to the eleventh, twelfth, and fourteenth causes
of action, the minute order stated: “In the final award by the arbitrator, the
arbitrator provided the arbitrator’s tentative ruling, which set forth the
reasons why the arbitrator was inclined to deny [Prime Healthcare’s] motion
for summary judgment as to the eleventh, twelfth, and fourteenth causes of
action. [Citation.] However, the award then states that the [a]rbitrator
reverses his tentative ruling as to [Franco’s] claims and grants [Prime
Healthcare’s] motion as to the eleventh, twelfth, and fourteenth causes of
action. The arbitrator fails to provide any factual or legal basis for reversing
the tentative ruling. As it stands, the tentative ruling only provides the
essential findings and conclusions to deny [Prime Healthcare’s] motion for
summary judgment as to these causes of action, but does not provide any
4 The parties’ arbitration agreement required “[t]he decision of
the arbitrator shall be in writing and shall provide the essential findings and
conclusions for the arbitrator’s award.” (Italics added.)
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basis for granting the motion. As such, the court finds that the award fails to
provide ‘the essential findings and conclusions on which the award is based’
and, therefore, fails to comply with Armendariz [v. Foundation Health
Psychcare Services, Inc. (2000) 24 Cal.4th 83]. [¶] The eleventh, twelfth, and
fourteenth causes of action are remanded for the arbitrator to provide a more
detailed written decision that reveals the legal and factual basis for the
arbitrator’s decision on these causes of action. [¶] [Franco] to provide notice to
arbitrator and reinstate proceedings for remand.” (Italics added.) The minute
order further stated: “The ADR [r]eview [h]earing is continued to August 28,
2025, at 9:00 a.m. in this department.”
Prime Healthcare filed a notice of appeal from the minute order.
DISCUSSION
I.
GOVERNING LEGAL PRINCIPLES AND STANDARD OF REVIEW
For this court to have jurisdiction to consider an appeal, a party
must timely appeal from an appealable judgment or order. (Griset v. Fair
Political Practices Com. (2001) 25 Cal.4th 688, 696.) “‘The existence of an
appealable [order or] judgment,’” therefore, is a “‘jurisdictional prerequisite to
an appeal.’” (Walker v. Los Angeles County Metropolitan Transportation
Authority (2005) 35 Cal.4th 15, 21.)
Whereas here, the parties may agree to be governed by the
procedural terms of the FAA, they cannot create appellate jurisdiction in
California through such an agreement. (Vivid Video, Inc. v. Playboy
Entertainment Group, Inc. (2007) 147 Cal.App.4th 434, 440–441 (Vivid
Video); see Muao v. Grosvenor Properties, Ltd. (2002) 99 Cal.App.4th 1085,
1090 [Section 16 of the FAA does not govern the appealability of an
arbitration order in California state court].)
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In California state courts, section 1294 governs appeals in
arbitration matters, providing: “An aggrieved party may appeal from: [¶]
(a) An order dismissing or denying a petition to compel arbitration. [¶] (b) An
order dismissing a petition to confirm, correct or vacate an award. [¶] (c) An
order vacating an award unless a rehearing in arbitration is ordered. [¶] (d) A
judgment entered pursuant to this title. [¶] (e) A special order after final
judgment.” (Italics added; see Kirk v. Ratner (2022) 74 Cal.App.5th 1052,
1059–1060 (Kirk) [“Our jurisdiction to review superior court orders in
arbitration matters is defined by section 1294”].)
Although neither party in their respective appellate briefs
questioned the appealability of the minute order granting in part the motion
to vacate portions of the arbitration award and remanding to the arbitrator
with directions to clarify the award, “we must raise the issue on our own
initiative whenever a doubt exists as to whether the superior court has
entered an appealable judgment or order: ‘[W]e have an independent
obligation in this as in every matter to confirm whether jurisdiction exists.’”
(Kirk, supra, 74 Cal.App.5th at p. 1060.)5
“We independently review questions regarding our own
jurisdiction. [Citation.] In addition, we review questions of statutory
construction de novo.” (Kirk, supra, 74 Cal.App.5th at p. 1060.)
5 We invited the parties to file supplemental briefs addressing
why this appeal should not be dismissed for lack of an appealable order. Each
party submitted a supplemental brief accordingly.
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II.
THE FAA PERMITS VACATUR OF AN ARBITRATION AWARD WHEN IT FAILS TO
COMPLY WITH TERMS OF THE PARTIES’ ARBITRATION AGREEMENT AND THUS
EXCEEDS THE ARBITRATOR’S POWERS
Here, the trial court partially granted the motion to vacate the
arbitrator’s award on the ground the final decision failed to state the
“essential findings and conclusions” of the award with respect to the
resolution of the subject causes of action, as required by the parties’
arbitration agreement. Under the FAA, “a court ‘must’ confirm an arbitration
award ‘unless’ it is vacated, modified, or corrected ‘as prescribed’ in [sections]
10 and 11 [of title 9 of the United States Code].” (Hall Street Associates,
L.L.C., v. Mattel, Inc. (2008) 552 U.S. 576, 582.) An arbitrator’s award may be
vacated “where the arbitrators exceeded their powers.” (9 U.S.C. § 10(a)(4).)
Arbitration is “a creature of contract.” (Cat Charter, LLC v.
Schurtenberger (11th Cir. 2011) 646 F.3d 836, 843.) Consequently,
“arbitrators may exceed their power within the meaning of [title 9 of the
United States Code section] 10(a)(4) if they fail to comply with mutually
agreed-upon contractual provisions in an agreement to arbitrate.” (Ibid.; see
Oxford Health Plans LLC v. Sutter (2013) 569 U.S. 564, 569 [9 U.S.C.
§ 10(a)(4) applies “[o]nly if ‘the arbitrator act[s] outside the scope of his
contractually delegated authority’”].)
In Western Employers Ins. Co. v. Jefferies & Co., Inc. (9th Cir.
1992) 958 F.2d 258, the Ninth Circuit Court of Appeals concluded an
arbitration award should be vacated because it failed to include a statement
of findings of fact and conclusions of law. The Ninth Circuit held the parties
had “a right to arbitration according to the terms for which it contracted.” (Id.
at p. 261.)
9
More recently, in Advantage Veterans Services v. United Steel
(4th Cir. 2023) 70 F.4th 751, 758, the Fourth Circuit Court of Appeals stated
the Western Employers Inc. court’s reasoning “makes sense,” explaining: “Our
deferential standard for determining whether an arbitrator erred
substantively is rooted in the contractual nature of arbitration. If the parties
agree to resolve disputes by arbitration, we defer to the determinations made
in the process the parties agreed to.”
Prime Healthcare argues “the trial court vacated the award for
the purpose of obtaining additional information so that it could perform a
merits review,” which is prohibited by the FAA. But in the minute order, the
court acknowledged: “[C]ourts generally may not review arbitration awards
for errors of fact or law, ‘even when those errors appear on the face of the
award or cause substantial injustice to the parties.’” The court explained: “By
this order, this court is not undermining or rejecting the arbitrator’s decision.
The court makes no finding as to any substantive error in the arbitration
award. Rather, the court is remanding and asking for clarification as to the
legal and factual basis for the arbitrator’s decision as it relates to certain
causes of action.”
III.
THE MINUTE ORDER IS NOT APPEALABLE BECAUSE THE TRIAL COURT
REMANDED TO THE ARBITRATOR FOR CLARIFICATION
As discussed ante, even when the FAA otherwise applies, section
1294, subdivision (c), governs whether an order vacating an arbitration
agreement is appealable. Such an order is appealable “unless a rehearing in
arbitration is ordered.” (§ 1294, subd. (c).)
Here, the trial court vacated the arbitration award with respect
to the ninth, eleventh, twelfth, and fourteenth causes of action because the
10
award did not state the arbitrator’s essential findings and conclusions with
respect to those claims as required by the parties’ arbitration agreement. Had
the court stopped there, the order would clearly be an appealable order under
section 1294, subdivision (c). But the court did not stop there. In its order, it
remanded the matter to the arbitrator to correct the award’s omission of the
arbitrator’s essential findings and conclusions with respect to the subject
causes of action. The issue presented then is whether the court’s remand
order directs a “rehearing” within the meaning of section 1294, subdivision
(c). We conclude it does, rendering the order not appealable.
“Under section 1294, appealable arbitration orders require
finality. . . . ‘It is quite obvious that the Legislature’s philosophy and intent in
drafting section 1294 was that there should be no appellate consideration of
intermediate rulings in arbitration disputes if the superior court was of the
view that there should be initial or further proceedings in arbitration.” (Vivid
Video, supra, 147 Cal.App.4th at p. 442.) Furthermore, “[a]n intermediate
ruling in an arbitration dispute that contemplates further proceedings in
arbitration is not appealable. [Citations.] Requiring finality in appealable
arbitration orders is consistent both with the language of section 1294 and
the general prohibition of appeals from interlocutory nonfinal judgments in
section 904.1, subdivision (a).” (Id. at p. 442.)
Here, the minute order reinstated arbitration proceedings by
remanding to the arbitrator with directions to clarify the award. Such action
does not indicate finality, rather “contemplates further proceedings in
arbitration.” (Vivid Video, supra, 147 Cal.App.4th at p. 442.) Therefore,
although the trial court does not use the word “rehearing” in its minute order,
11
for the reasons we have explained, we conclude the minute order constituted
a remand for rehearing within the meaning of section 1294, subdivision (c).6
In its supplemental brief, Prime Healthcare argues, “In the
alternative, exceptional circumstances warrant treating the appeal as a
petition for writ of mandate.” (Boldface and capitalization omitted.) “We may
treat an improper appeal as a petition for a writ of mandate in unusual
circumstances. [Citation.] It is appropriate to treat an appeal from a
nonappealable judgment as a petition for extraordinary writ when requiring
the parties to wait for entry of final judgment might lead to unnecessary trial
proceedings, the briefs and the record include the necessary elements for a
writ of mandate, there is no indication the trial court would appear as a party
in the writ proceeding, the appealability of the order was not clear, and all
parties urge the court to decide the issue rather than dismiss the appeal.”
(Turman v. Superior Court (2017) 17 Cal.App.5th 969, 979.)
This case does not present unusual circumstances warranting our
treating this appeal as a petition for writ of mandate because, inter alia,
there is no indication the trial court’s remand to the arbitrator to clarify the
final decision would lead to unnecessary trial proceedings and Franco does
not join Prime Healthcare in urging us to decide the issue rather than
6 We reject Prime Healthcare’s argument in its supplemental
brief and at oral argument that the trial court did not order a remand for
rehearing within the meaning of section 1294, subdivision (c) because the
order did not reference section 1287. Section 1287 permits the court to order
a rehearing before new arbitrators. In addition, it provides that in the event
the court vacated an award based on section 1286.2, subdivision (a)(4) and (5)
of the California Arbitration Act (§ 1280 et seq.), with the parties’ consent,
the court may order rehearing before the original arbitrator. (§ 1287.) Here,
as discussed ante, the FAA governed the parties’ agreement. Hence the
vacatur of the award was based on the FAA and not the California
Arbitration Act.
12
dismiss the appeal. We therefore decline to treat this appeal as a petition for
a writ of mandate.
DISPOSITION
The appeal is dismissed. Respondent to recover costs on appeal.
MOTOIKE, P. J.
WE CONCUR:
MOORE, J.
DELANEY, J.
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