Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_09-cv-01788/USCOURTS-azd-2_09-cv-01788-1/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 42:2000e Job Discrimination (Employment)

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WO

NOT FOR PUBLICATION

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Maxwell Monsanto, 

Plaintiff, 

vs.

DWW Partners, LLLP, an Arizona limited

liability partnership, d/b/a Right Honda;

DWW AZ, Inc., an Arizona corporation,

d/b/a Right Honda; David Wilson

Automotive Group, a California

corporation, d/b/a Right Honda, 

Defendants. 

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No. CV-09-01788-PHX-FJM

ORDER

Plaintiff Maxwell Monsanto brings this employment discrimination, retaliation, and

constructive discharge action under Title VII of the Civil Rights Act of 1964 and 42 U.S.C.

§ 1981 against defendant DWW AZ, Inc., doing business as Right Honda. The court has

before it defendant’s motion to compel arbitration and stay proceedings (doc. 11), plaintiff’s

response (doc. 16), defendant’s reply (doc. 19), and plaintiff’s supplemental response (doc.

24).

I.

In 2008, plaintiff applied for and began employment at Right Honda, an Arizona car

dealership. Defendant alleges that plaintiff signed an employment application containing an

agreement to arbitrate employment-related disputes on September 29, 2008 (“September

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agreement”). On October 1, 2008, plaintiff’s first day of work, defendant alleges that he

signed two additional documents containing identical arbitration clauses which differed from

the September agreement and purported to supersede any prior arbitration agreement

(“October agreements”). The October agreements were entitled “Employee

Acknowledgment and Agreement” and “Comprehensive Agreement Employment At-will and

Arbitration.” While the September agreement called for a retired California judge to serve

as the arbitrator, California procedural rules, and an appellate process with a second

arbitrator, the October agreements contained Arizona-specific terms without an opportunity

for arbitral appellate review.

After plaintiff filed this action, defendant moved to compel arbitration under the

October agreements (doc. 11). Plaintiff responded by challenging the authenticity of the

signatures on the agreements and requesting a jury trial on the issue (doc. 16). He averred

that he did not agree to arbitrate any employment dispute with Right Honda. He also offered

an examiner’s opinion that the signatures were probably not genuine based on a comparison

with eight unidentified documents. In its reply, defendant raised the September agreement

as an additional reason to compel arbitration and claimed that plaintiff’s affidavits were

insufficient (doc. 19). It also submitted an examiner’s opinion referencing thirty-five

attached documents apparently signed by plaintiff, including eighteen documents dated

October 1, 2008. The examiner claimed to have identified the signatures on the September

agreement and one of the October agreements as plaintiff’s. He also said that there was a

strong probability that plaintiff signed the other October agreement.

In an order granting plaintiff an opportunity to respond to defendant’s new evidence,

we noted that plaintiff neither averred that he did not sign the October agreements nor

identified the documents his examiner reviewed (doc. 23). We invited plaintiff to submit

appropriate and specific affidavits. He did not do so. In a supplemental response, he instead

conceded that he signed the September agreement and claimed that all three arbitration

agreements were unenforceable for a variety of reasons (doc. 24). Although plaintiff failed

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to raise these concerns in his original response with respect to the October agreements, we

will address them on their merits.

II.

Defendant moves to compel arbitration on the basis of either the September agreement

or the October agreements. Under the Federal Arbitration Act (“FAA”), we must give effect

to valid and enforceable arbitration agreements. 9 U.S.C. § 4. Such agreements “shall be

valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for

the revocation of any contract.” Id. § 2. Plaintiff opposes arbitration. He contends that the

September agreement does not cover his statutory claims, fraudulently misrepresents the

costs and efficiency of arbitration, and is unconscionable due to the cost of using Californiaspecific terms with a right to appeal to a second arbitrator. He contends that the October

agreements are forgeries. With respect to all three agreements, he claims that arbitration

costs would prevent him from effectively vindicating his federal rights. Plaintiff also claims

that these prohibitive costs and a privileged-communications term render the agreements

unconscionable. Moreover, he asserts that they lack of formation and contain conflicting

terms. Because either October agreement superceded the September agreement if found

valid and enforceable, we will consider the October agreements first.

Plaintiff’s primary objection to the October agreements is that his apparent signature

on the documents is not genuine. Under the FAA, a party who places the validity of an

arbitration agreement in issue is entitled to a jury trial. Id. § 4. The validity of an arbitration

agreement may be placed in issue with an unequivocal denial that an agreement has been

made and some evidence to substantiate the denial. Chastain v. Robinson-Humphrey Co.,

957 F.2d 851, 854 (11th Cir. 1992) (citation omitted). In a similar case involving an

employment-related arbitration agreement, a court found an employee’s forgery claim

colorable where she submitted an affidavit “stating that she did not sign the arbitration

agreement, that it does not contain her signature, and that she believes her purported

signature is fraudulent and her initials fabricated.” Brooks v. Robert Larson Auto. Group,

No. C09-5016, 2009 WL 2853452, at *4 (W.D. Wash. Sept. 1, 2009). Here, in contrast,

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plaintiff relies on a general averment that he did not agree to arbitrate employment-related

disputes and an examiner’s opinion based on unidentified documents. When prompted, he

failed to respond with specific and appropriate affidavits. And he now concedes that he

signed at least one employment-related arbitration agreement despite his general averment.

In support of the agreements’ validity, defendant offers an examiner’s opinion based on over

a dozen documents plaintiff apparently signed contemporaneously with the October

agreements. Under the circumstances, we conclude that the validity of the October

agreements is not genuinely in issue.

Next, plaintiff contends that the October agreements are unenforceable because the

expense of arbitrating would preclude the vindication of his federal statutory rights.

Agreements to arbitrate federal claims are not unenforceable merely because they are silent

with respect to arbitration costs. Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 91,

121 S. Ct. 513, 522 (2000). Instead, parties who seek to avoid arbitration on the basis of

prohibitive costs bear the burden of showing the likelihood of incurring such costs. Id. at 92,

121 S. Ct. at 522. Plaintiff has not met his burden. The October agreements are silent on

costs and call for a retired Arizona Superior Court judge to serve as the arbitrator with the

ability to extend certain deadlines. Plaintiff claims that the use of a retired judge and the

potential for delay would render arbitration under the agreements too expensive. Plaintiff’s

counsel avers that she contacted fourteen Arizona arbitrators who charge $350 per hour on

average, including at least two retired Superior Court judges who charge $375 and $475 per

hour. She also avers that plaintiff has “reportedly suffered financial difficulties.” Baker

Affidavit at 2. This evidence is too speculative to show that plaintiff would likely bear

prohibitive arbitration costs.

Plaintiff also contends that the October agreements are unenforceable because they

are both procedurally and substantively unconscionable. Under Arizona law, procedural

unconscionability targets “unfair surprise, fine print clauses, mistakes or ignorance of

important facts or other things that mean bargaining did not proceed as it should.” Maxwell

v. Fid. Fin. Servs., Inc., 184 Ariz. 82, 88-89, 907 P.2d 51, 57-58 (1995) (citation omitted).

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The arbitration language in the October agreements is clear and conspicuous. There is no

evidence of procedural unconscionability. Plaintiff maintains that he was required to enter

the agreements to gain employment and he lacked an ability to negotiate their terms.

However, these factors merely point to the agreements being contracts of adhesion, which

are fully enforceable unless contrary to reasonable expectations or otherwise unconscionable.

See Broemmer v. Abortion Servs. of Phoenix, Ltd., 173 Ariz. 148, 151, 840 P.2d 1013, 1016

(1992) (citation omitted). Plaintiff does not contend, nor is there any indication, that

defendant had any reason to believe that he would not accept the agreements’ terms had he

known about them. Thus, the inquiry depends on substantive unconscionability.

Substantive unconscionability is concerned with actual terms that are so one-sided as

to oppress or unfairly surprise an innocent party. Harrington v. Pulte Home Corp., 211 Ariz.

241, 252, 119 P.3d 1044, 1055 (Ct. App. 2005). Plaintiff again points to the October

agreements’ terms calling for a retired judge with the ability to extend deadlines as imposing

undue costs. Arizona’s unconscionability doctrine follows Green Tree Financial on this issue

and the result is the same as above: plaintiff’s evidence of prohibitive costs is insufficient.

See id. at 253, 119 P.3d at 1056. Plaintiff also contends that a term providing for

communications in connection with arbitration proceedings to be privileged is

unconscionable. This basic confidentiality provision is neither overly broad nor unfairly onesided. It is not substantively unconscionable. We conclude that the October agreements are

not unconscionable.

Finally, plaintiff challenges the agreements on formation grounds by contending that

they lack essential terms concerning arbitration costs and the selection of an arbitrator.

However, a term establishing the payment of arbitration costs is not essential to an arbitration

agreement. See id. at 252, 119 P.3d at 1055. And the October agreements provide for a

retired Arizona Superior Court judge to serve as the arbitrator using Arizona Superior Court

rules for disqualification. The agreements do not fail for lack of formation.

The October agreements are valid and fully enforceable. Therefore, the September

agreement was superceded and we need not consider it. We note for plaintiff’s benefit that

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his contention that the scope of the September agreement does not cover Title VII claims is

based on a misreading of the agreement. The agreement provides a box, which is unchecked,

allowing potential employees to opt out of arbitrating Title VII claims, not to opt in. Because

the September agreement was superceded, it is obviously not in conflict with the October

agreements.

Accordingly, IT IS ORDERED GRANTING defendant’s motion to compel

arbitration and stay proceedings (doc. 11). The parties shall submit this matter to arbitration

pursuant to the terms of the arbitration clause found in both October agreements. This action

is stayed until June 1, 2010.

DATED this 15th day of January, 2010.

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