IN THE

ARIZONA COURT OF APPEALS

DIVISION ONE

SALLY SCHNEIDER DUNCAN, et al., Plaintiffs/Appellees, 

v.

PUBLIC STORAGE, INC., Defendant/Appellant. 

________________________________________ 

KEVEN BROWN, Plaintiff/Appellee,

v.

PUBLIC STORAGE, INC., Defendant/Appellant.

________________________________________ 

TIFFANY ROBERTS, Plaintiff/Appellee,

v.

PUBLIC STORAGE, INC., Defendant/Appellant.

No. 1 CA-CV 21-0283 

Appeal from the Superior Court in Maricopa County

Nos. CV2020-010440, CV2020-010510, CV2020-010493 

The Honorable Stephen F. McCarville, Judge

VACATED AND REMANDED

FILED 3-8-2022
2

COUNSEL

Lewis Brisbois Bisgaard & Smith LLP, Phoenix

By Sean P. Healy, Robert C. Ashley

Counsel for Defendant/Appellant Public Storage, Inc.

Hagens Berman Sobol Shapiro LLP, Phoenix

By Robert B. Carey, John M. DeStefano, E. Tory Beardsley

Counsel for Plaintiff/Appellee Tiffany Roberts

Osborn Maledon P.A., Phoenix

By Geoffrey M.T. Sturr

Counsel for Plaintiffs/Appellees Duncan

Guidant Law, PLC, Tempe

By Samuel Saks

Counsel for Plaintiff/Appellee Keven Brown

OPINION

Vice Chief Judge David B. Gass delivered the opinion of the court, in which 

Presiding Judge Paul J. McMurdie and Judge Angela K. Paton joined.

G A S S, Vice Chief Judge:

¶1 Public Storage, Inc., a self-storage facility, appeals the 

superior court’s denial of its motion to compel arbitration. Because the 

superior court failed to apply the separability doctrine, we vacate the order 

and remand for further proceedings consistent with this decision.

FACTUAL AND PROCEDURAL HISTORY

¶2 At different times between 2016 and 2018, Public Storage 

contracted with three unrelated renters—Keven Brown (2016), Sally 

Schneider Duncan (together with her husband, David Duncan) (2018), and 

Tiffany Roberts (2018). The Duncan and Roberts rental contracts were 

identical. The Brown rental contract was not identical but included some of 

the same terms.

¶3 To begin, each rental contract contained an arbitration clause

stating the parties agreed to “arbitrate any and all disputes or claims . . . 

relating to . . . the relationship between” the renter and Public Storage. The 
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Opinion of the Court

3

arbitration clauses specifically included consumer fraud and negligence 

claims. Each rental contract required the renter to acknowledge the 

arbitration clause by initialing it. And each told the renter the arbitration 

clause was optional and explained how to reject it.

¶4 Each rental contract also included an entirety clause, which 

(1) told the renter the written contract was the entire agreement, (2) 

disavowed any prior statements, and (3) explained subsequent changes 

would need to be in writing. Each rental contract required the renter to 

provide, at the renter’s expense, a lock the renter deemed sufficient to 

secure the unit. And each said the renter would not give Public Storage or 

any of its employees a key or combination to the lock.

¶5 In their complaints, the renters alleged Public Storage’s 

website stated prospective renters would “keep the only key to [their] unit.” 

The Duncans further alleged a Public Storage representative repeated the 

only-key promise to them while standing outside their rental unit. The 

Duncans’ complaint, however, does not make it clear whether that 

conversation occurred before or after the Duncans signed their rental 

contract. 

¶6 The rental contracts differed in some respects. The Duncan 

and Roberts rental contracts said Public Storage would “not have 

possession, care, custody, or control over [their] stored property.” Brown’s 

rental contract did not.

¶7 In September 2018, a thief accessed the three units. The 

complaints alleged the thief used a “generic auctioneer code” to enter the 

gate outside Public Storage’s facilities. The thief then unlocked the rear 

doors to each rental unit and removed the renters’ possessions, including 

furniture, family heirlooms, historic gifts, photo albums, and other 

property. The thief entered the units using Public Storage’s master key or 

keys obtained through the internet.

¶8 The renters separately sued Public Storage, alleging consumer 

fraud and negligence. Public Storage moved to dismiss each case and 

compel arbitration. The superior court consolidated the three cases for oral 

argument. After argument, the superior court denied Public Storage’s 

motion, finding the rental contracts void because Public Storage 

fraudulently induced the renters to enter them. Public Storage timely 

appealed. This court has jurisdiction under article VI, section 9, of the 

Arizona Constitution, and A.R.S. §§ 12-120.21.A.1 and 12-2101.01.A.1.
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Opinion of the Court

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ANALYSIS

¶9 Public Storage argues the superior court erred by denying its 

motion to compel arbitration because (1) it misconstrued the separability 

doctrine, and (2) the renters did not show the arbitration clause was 

fraudulently induced or unconscionable. The renters maintain (1) Public 

Storage fraudulently induced them into agreeing to arbitrate disputes and 

(2) the contracts are so unconscionable that no meeting of the minds 

occurred. 

¶10 On review, this court treats a motion to compel arbitration 

like a motion for summary judgment. Gullett v. Kindred Nursing Ctrs. W., 

L.L.C., 241 Ariz. 532, 540, ¶ 27 (App. 2017) (citing Ruesga v. Kindred Nursing 

Ctrs. W., L.L.C., 215 Ariz. 589, 596, ¶ 23 (App. 2007)). This court reviews de 

novo a denial of a motion to compel arbitration. Allstate Prop. & Cas. Ins. Co. 

v. Watts Water Tech., Inc., 244 Ariz. 253, 256, ¶ 9 (App. 2018). But this court

defers to any findings of fact the superior court made in ruling on the 

motion unless they are “clearly erroneous or unsupported by any credible 

evidence.” See Federoff v. Pioneer Title & Tr. Co. of Ariz., 166 Ariz. 383, 388 

(1990).

¶11 Here, no party asked for an evidentiary hearing, and the 

superior court did not hold one. This court, therefore, assumes the superior 

court summarily determined any relevant disputed fact issues. See Ruesga, 

215 Ariz. at 596, ¶ 24 (discussing A.R.S. § 12-1502.A). If the superior court 

rules on an incorrect ground involving disputed fact issues and the correct 

ground involves different disputed fact issues, this court remands the case 

to the superior court to consider the relevant factual issues. Miller v. Bd. of 

Supervisors of Pinal Cnty., 175 Ariz. 296, 301 (1993) (declining to adjudicate 

the issue on appeal not addressed in the superior court findings because a 

“final decision without findings was impossible without transforming this 

court into a factfinder resolving disputed issues of fact”); Aida Rental Tr. v.

Ariz. Dep’t of Revenue, 197 Ariz. 222, 233, ¶ 29 (App. 2000) (as corrected).

I. The Separability Doctrine

¶12 All parties agree the “separability doctrine” governs 

arbitration clauses but disagree about how to apply that doctrine. To begin, 

we need not resolve whether state or federal law controls because “the same 

analysis is mandated by both sets of statutes.” See WB, The Bldg. Co. v. El 

Destino, LP, 227 Ariz. 302, 306, ¶ 10 (App. 2011); see also Hamblen v. Hatch, 

242 Ariz. 483, 487–88, ¶¶ 16–17 (2017); 9 U.S.C. § 2; A.R.S. § 12-3006.
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Opinion of the Court

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¶13 Under the separability doctrine, an “arbitration clause is 

considered to be an agreement independent and separate from the principal 

contract.” U.S. Insulation, Inc. v. Hilro Constr. Co., 146 Ariz. 250, 253 (App. 

1985). “[C]ourts must place arbitration agreements on equal footing with 

other contracts . . . and enforce them according to their terms.” AT&T 

Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011) (internal citation 

omitted). Accordingly, a challenge to “the contract as a whole, either on a

ground that directly affects the entire agreement (e.g., the agreement was 

fraudulently induced), or on the ground that the illegality of one of the 

contract’s provisions renders the whole contract invalid” is insufficient to 

render the arbitration clause unenforceable. Rent-A-Center, W., Inc. v. 

Jackson, 561 U.S. 63, 70 (2010) (quoting Buckeye Check Cashing, Inc. v. 

Cardegna, 546 U.S. 440, 444 (2006) (emphasis in original)). “[A] court may 

only stay arbitration if there is a challenge to the arbitration clause itself.” 

WB, 227 Ariz. at 306, ¶ 11. Nevertheless, “the same grounds may be used to 

challenge both an arbitration agreement and the underlying contract so 

long as an arbitration agreement itself is separately and distinctly 

challenged on those grounds.” Id. at 307, ¶ 13. 

¶14 In their responses to Public Storage’s motions to compel 

arbitration, the renters did not raise a defense consistent with the 

separability doctrine. Except for a few different factual allegations, the 

renters’ responses were nearly identical. The Duncans alone hinted at, but 

never developed, an arbitration-specific defense, saying: “The very [rental 

contract] itself and all of its terms including the arbitration [clause] are void 

because they were procured by due process violations and induced by the 

lie [Public Storage] told [the renters].” Beyond that, the renters’ responses 

did not suggest the arbitration clauses were distinctly induced by fraud or 

unconscionable. Instead, they argued the entire rental contracts were

substantively unconscionable because of terms outside the arbitration 

clauses.

¶15 Then, at oral argument, the Duncans briefly developed an

arbitration-specific theory premised on fraudulent inducement, and the 

other renters adopted those arguments by reference. Though the renters did 

not adequately raise the appropriate theory in their responses, we exercise 

our discretion to address the merits because the renters advanced a theory

consistent with the separability doctrine both during oral argument in the 

superior court and on appeal. See State v. Aleman, 210 Ariz. 232, 240, ¶ 24 

(App. 2005) (waiver is a procedural concept this court does not “rigidly 

employ in mechanical fashion”).
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Opinion of the Court

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II. The Enforceability of the Arbitration Clauses

¶16 An arbitration clause “is valid, enforceable and irrevocable 

except on a ground that exists at law or in equity for the revocation of a 

contract.” A.R.S. § 12-3006.A; see also WB, 227 Ariz. at 308, ¶ 14; 9 U.S.C. § 2.

Those grounds include “generally applicable contract defenses, such as 

fraud, duress, or unconscionability.” Rent-A-Center, 561 U.S. at 68 (quoting 

Dr.’s Assocs., Inc. v. Casarotto, 517 U.S. 681, 687 (1996)); see also WB, 227 Ariz. 

at 308, ¶ 14 (defenses to arbitration include “lack of mutual consent, 

consideration or capacity[,] fraud, duress, lack of capacity, mistake, or 

violation of a public purpose” (quoting Hilro, 146 Ariz. at 253)). We address 

the renters’ fraudulent inducement defense before turning to their 

unconscionability argument.

A. Fraudulent Inducement

¶17 The renters argue “Public Storage induced the making of the 

arbitration [clause] itself by fraudulently representing the very essence of 

the security it was supposed to provide.” Public Storage counters by 

arguing the renters failed to show it fraudulently induced them to agree to 

the arbitration clauses.

¶18 In the superior court, a party seeking to compel arbitration 

must demonstrate the existence of an arbitration agreement. A.R.S. 

§ 12-3007.A. The superior court next “determines whether material issues 

of fact are disputed, and, if such factual disputes exist, then conducts an

expedited discovery hearing to resolve the dispute.” Ruesga, 215 Ariz. at 

596, ¶ 24 (quoting Haynes v. Kuder, 591 A.2d 1286, 1290 (D.C. 1991)). On a 

motion to compel arbitration, the “burden of proving a generally applicable 

contract defense lies with the party challenging” the arbitration clause. 

Gullett, 241 Ariz. at 541, ¶ 31 (citing Guidotti v. Legal Helpers Debt Resol., 

L.L.C., 716 F.3d 764, 774 n.5 (3d Cir. 2013) (quoting Lloyd v. HOVENSA, LLC, 

369 F.3d 263, 274 (3d Cir. 2004))).

¶19 Public Storage met its initial burden by providing the parties’ 

signed arbitration clauses. The renters then bore the burden to bring forth 

evidence establishing a genuine dispute of material fact as to the arbitration 

clauses’ enforceability. See Ruesga, 215 Ariz. at 596, ¶ 24.

¶20 Here, the renters claimed Public Storage fraudulently 

induced them to enter the rental contracts. Fraud requires proof of the 

following elements: 
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(1) a representation; (2) its falsity; (3) its materiality; (4) the 

speaker’s knowledge of its falsity or ignorance of its truth; (5) 

the speaker’s intent that it be acted upon by the recipient in 

the manner reasonably contemplated; (6) the hearer’s 

ignorance of its falsity; (7) the hearer’s reliance on its truth; (8) 

the hearer’s right to rely on it; [and] (9) the hearer’s 

consequent and proximate injury.

Comerica Bank v. Mahmoodi, 224 Ariz. 289, 291–92, ¶ 14 (App. 2010). Because 

a defense to a motion to compel arbitration seeks rescission, not damages,

“a defrauded party does not have to show pecuniary damages in order to 

defeat a [motion] to compel arbitration.” Engalla v. Permanente Med. Grp., 15 

Cal. 4th 951, 980 (Cal. 1997); see also Lehnhardt v. City of Phoenix, 105 Ariz. 

142, 144 (1969) (damages are not an essential element of a rescission claim 

based on misrepresentation).

¶21 On appeal, the renters contend Public Storage induced them 

to agree to arbitrate any dispute by falsely promising they would each have 

the only key to their respective storage facilities. To be clear, the rental 

contracts say the renter shall provide a lock for the unit and shall not 

provide a key or combination to Public Storage. The Duncan and Roberts 

rental contracts also say Public Storage will not have “possession, care, 

custody, or control over [the renters’] stored property.” No rental contract 

states Public Storage will not keep a master key. Nevertheless, the renters

argue they were fraudulently induced by statements made outside the 

express contractual terms. The renters’ evidence, however, was limited to 

the rental contracts, a hyperlink to Public Storage’s website containing its 

only-key promise, and a reference to the criminal case number in the thief’s 

criminal matter. The Duncans also alleged a Public Storage employee 

repeated the only-key promise while standing outside their unit. But 

neither the Duncans nor the otherrenters filed an affidavit or testified about

why they agreed to arbitration.

¶22 The superior court denied Public Storage’s motion because it 

found the entire rental contract was fraudulently induced. The superior 

court’s ruling is inconsistent with the separability doctrine. See supra at ¶ 13. 

Under that doctrine, the only issue before the superior court was whether 

the arbitration clauses—not the rental contracts as a whole—were

fraudulently induced. See Rent-A-Center, 561 U.S. at 70 (“a party’s challenge 

to another provision of the contract, or to the contract as a whole, does not 

prevent a court from enforcing a specific agreement to arbitrate”). In short, 

on a motion to compel arbitration, the doctrine of separability squarely 
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Opinion of the Court

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requires the superior court to consider whether the arbitration clause—not 

the overall contract—is enforceable. See id.

¶23 Though this court defers to the superior court’s factual 

findings absent clear error, the superior court here made no findings as to 

what induced the renters to agree to arbitration. The superior court did find

“a Master Key that opened the back of each unit was in fact stored in the 

Manager’s Office of Public Storage, as well as an auctioneer code which 

allowed access to the property and individual storage units.” Though the 

renters did not present direct evidence of a master key, they did reference 

a criminal case they said included those facts. Nothing in the record 

suggests the superior court looked at or took judicial notice of that criminal 

case. See In re Sabino R., 198 Ariz. 424, 425, ¶ 4 (App. 2000) (A court may 

“take judicial notice of its own records or those of another action tried in 

the same court.”).

¶24 The parties dispute why the renters agreed to arbitration, and 

the superior court must resolve that dispute. Cf. WB, 227 Ariz. at 308, ¶ 15 

(holding arbitration clause void because undisputed relevant facts 

supported the defense to arbitration). The renters preserved this argument,

but only by the thinnest of margins. The better practice is to submit

evidence or to request an evidentiary hearing. See Ruesga, 215 Ariz. at 596, 

¶ 24 (“[T]he party claiming that there is a dispute of fact regarding 

arbitrability has the burden of requesting an evidentiary hearing.”). We 

remand this matter to the superior court to determine whether, in making

an “only-key promise,” Public Storage necessarily represented it would not 

have a master key, and such representation fraudulently induced each of 

the renters to agree to arbitration. See Engalla, 15 Cal. 4th at 973–81 

(remanding, in part, because plaintiffs presented sufficient evidence to 

establish material factual disputes regarding their fraudulent inducement 

challenge to an arbitration clause); see also State v. Cid, 181 Ariz. 496, 500 

(App. 1995) (the “finder-of-fact, not the appellate court, weighs the 

evidence” and determines credibility).

¶25 As discussed above, the superior court must determine on 

remand whether Public Storage fraudulently induced the renters to agree 

to arbitration. See supra at ¶¶ 13, 24. What induced the renters into entering 

the entire rental contract is irrelevant to that determination. See supra at 

¶ 13.
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Opinion of the Court

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B. Unconscionability

¶26 We address whether the arbitration clauses are 

unconscionable because the issue may otherwise recur on remand. Under 

the separability doctrine, we decline to address whether the entire rental 

contracts are unconscionable. See supra at ¶ 13.

¶27 Public Storage maintains the renters “never claimed the 

Arbitration [Clause] itself was unconscionable.” In response, the renters 

assert that “the contract is so contrary to the provision of storage services 

. . . it did not reflect any meeting of the minds as to arbitration,” meaning 

the scope of arbitration was left “undefined.” We agree with Public Storage.

¶28 To begin, the rental contracts did not leave the scope of 

arbitration undefined. The arbitration clause in each rental contract

mandated arbitration would be the forum to resolve “any and all disputes” 

between the parties. And each arbitration clause specifically covered both 

negligence and consumer protection claims—the exact claims each renter 

brought.

¶29 The renters identify nine contractual terms outside the 

arbitration clause they contend rendered the entire rental contract

unconscionable. As support, the renters compare those terms to similar 

contractual terms in Gonzalez v. A-1 Self Storage, Inc., 795 A.2d 885 (N.J. 

2000). The renters’ reliance on Gonzalez is unavailing because that case—

though it addressed unconscionability at storage facilities—did not involve 

an arbitration clause. See generally id. As stated above, regardless of whether 

a challenge to arbitrability is based on fraud or on unconscionability, under 

the doctrine of separability, the only issue is whether the arbitration clause

is enforceable, not whether the remainder of the contract might be 

enforceable. See Rent-A-Center, 561 U.S. at 70 (“a party’s challenge to 

another provision of the contract, or to the contract as a whole, does not 

prevent a court from enforcing a specific agreement to arbitrate”).

¶30 “Substantive unconscionability concerns the actual terms of 

the contract,” and because separability governs arbitration, the terms of the 

arbitration clause—standing alone—govern its substantive 

unconscionability. See Maxwell v. Fid. Fin. Servs., Inc., 184 Ariz. 82, 89 (1995);

see also Hilro, 146 Ariz. at 253. Indeed, this court has recognized substantive 

unconscionability challenges to arbitration only when grounded on the 

terms of the arbitration clause itself. See, e.g., Harrington v. Pulte Home Corp., 

211 Ariz. 241, 252–53, ¶¶ 42–49 (App. 2005); Clark v. Renaissance W., LLC, 

232 Ariz. 510, 512–13, ¶¶ 8–13 (App. 2013); Gullett, 241 Ariz. at 535–40, 
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Opinion of the Court

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¶¶ 7–25; Falcone Bros. & Assocs., Inc. v. City of Tucson, 240 Ariz. 482, 490, ¶ 21 

(App. 2016).

¶31 In the arbitration context, substantive unconscionability 

focuses on whether parties can “effectively vindicate [their] rights in the 

arbitral forum.” Rizzio v. Surpass Senior Living LLC, 251 Ariz. 413, 417, ¶ 10 

(2021); see also Clark, 232 Ariz. at 512, ¶ 9 (arbitration agreements may be 

substantively unconscionable if, for example, “the fees and costs to arbitrate 

are so excessive as to ‘deny a potential litigant the opportunity to vindicate 

his or her rights’” (quoting Harrington, 211 Ariz. at 252, ¶ 43)). The renters 

have not argued the terms of the arbitration clauses are unconscionable or 

the arbitral forum will prejudice their claims. The renters, therefore, have 

not shown the arbitration clauses are substantively unconscionable.

CONCLUSION

¶32 We vacate the superior court’s denial of Public Storage’s 

motion to compel arbitration and remand to the superior court to 

determine, consistent with this decision, whether Public Storage 

fraudulently induced the renters to agree to the arbitration clauses.