Filed 11/13/19

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT

PRIMA DONNA DEVELOPMENT 

CORPORATION,

Plaintiff and Appellant,

v.

WELLS FARGO BANK, N.A.,

Defendant and Respondent.

 H045379

 (Santa Clara County

 Super. Ct. No. 1-15-CV-276708)

Plaintiff and appellant Prima Donna Development Corporation appeals from a 

judgment confirming an arbitration award in favor of defendant Wells Fargo Bank, N.A. 

Prima Donna challenges both the order compelling arbitration and the denial of its 

motion to vacate the arbitration award. We conclude the trial court properly ordered the 

matter to arbitration and confirmed the arbitration award. Accordingly, we affirm the 

judgment.

I. FACTS AND PROCEDURAL BACKGROUND1

Appellant Prima Donna Development Corporation (Prima Donna) is a California 

corporation that develops, builds, and manages hotel properties in California and Oregon. 

1 We take these facts primarily from the arbitration award and the parties’ filings 

submitted in the trial court in conjunction with Wells Fargo’s motion to compel 

arbitration. Although Prima Donna’s briefing in this court makes clear that it does not 

agree with all of the factual determinations made by the arbitrator, Prima Donna does not 

contest them on appeal.
2

Michael Chiu is Prima Donna’s president. In March 2007, Chiu opened several 

commercial bank accounts on behalf of Prima Donna at respondent Wells Fargo Bank, 

N.A. (Wells Fargo).

As part of the paperwork for opening the accounts, Chiu either signed or agreed to 

be bound by a number of agreements. One of these agreements, the commercial account 

agreement, contained an arbitration agreement, which stated, “Except as stated in ‘No 

Waiver of Self-Help or Provisional Remedies’ below,[2] Company and Bank agree, at 

Company’s or Bank’s request, to submit to binding arbitration all claims, disputes and 

controversies, between or among Company and Bank . . . whether in tort, contract or 

otherwise arising out of or relating in any way to Company’s Account(s) and/or 

Service(s) and their negotiation, execution, administration, modification, substitution, 

formation, inducement, enforcement, default or termination.” 

Under a section entitled “Governing Rules,” the arbitration agreement stated “Any 

arbitration proceeding will (i) proceed in a location selected by the American Arbitration 

Association (‘AAA’) in the state whose laws govern Company’s Account; (ii) be 

governed by the Federal Arbitration Act (Title 9 of the United States Code),

notwithstanding any conflicting choice of law provision in any of the documents between 

Company and Bank; and (iii) be conducted by the AAA, or such other administrator as 

Company and Bank shall mutually agree upon, in accordance with the AAA’s 

commercial dispute resolution procedures.” 

The arbitration agreement also provided that “[t]he arbitrator[] shall resolve all 

Disputes in accordance with the substantive law of the state whose laws govern 

2 This provision states “This arbitration requirement does not limit the right of 

either party to (i) exercise self-help remedies including setoff or (ii) obtain provisional or 

ancillary remedies such as injunctive relief or attachment, before, during or after the 

pendency of any arbitration proceeding. This exclusion does not constitute a waiver of 

the right or obligation of either party to submit any Dispute to arbitration or reference 

hereunder, including those arising from the exercise of the actions detailed in (i) and (ii) 

of this subsection.” 
3

Company’s Account and may grant any remedy or relief that a court of such state could 

order or grant within the scope hereof and such ancillary relief as is necessary to make 

effective any award.” 

In opening the commercial bank accounts for Prima Donna at Wells Fargo, Chiu 

also signed a wire transfer services security procedures agreement (wire transfer 

agreement) for each account he opened. In each wire transfer agreement, Prima Donna 

“agree[d] that it is bound by any Order, whether or not authorized, issued in its name and 

accepted by Bank in compliance with the security procedure selected by Company.”3 

The wire transfer agreement specified security procedures for transfers initiated by 

“voice-initiated transfers” (presumably by phone) and security procedures applicable to 

transfers initiated through the Internet. 

For voice-initiated wire transfers, the wire transfer agreement provided that Wells 

Fargo would call Chiu by telephone to verify the order and, if Wells Fargo was unable to 

reach Chiu, it would not process the wire transfer. Wells Fargo also allowed for wire 

transfers initiated through the Internet, using Wells Fargo’s “commercial electronic office 

portal” (CEO). In the case of an Internet transfer, a “company administrator” selected by 

Prima Donna could initiate a wire transfer through CEO. The wires at issue in this appeal 

were initiated through Wells Fargo’s CEO portal.

As described in the arbitration award, for wire transfer orders placed through

CEO, “[t]he Bank gives each Company Administrator a token card and a PIN. The token 

card generates a random security code every minute, which combines with the PIN to 

create a unique Passcode. This Passcode is used by the Bank to authenticate the identity 

of the Company and/or person initiating the request. The purpose of all this is to verify 

that the person initiating the transfer is authorized by the Company to do so. Unlike the 

3 The wire transfer agreement defined “Orders” as “any instructions to transfer 

funds by wire from accounts Company maintain[s]” at Wells Fargo. 
4

procedure for transfer initiated by phone, this procedure does not require that the specific 

transfer be confirmed by a phone call to Chiu.” 

The arbitrator found “[t]he procedure for voice-initiated transfers also protects 

[Prima Donna] against a Company Administrator who initiates such transfers against 

Chiu’s wishes because Chiu would have to approve the transfer. Because the CEO 

procedure only verifies the identity of the Company Administrator, it does not protect 

Chiu against a Company Administrator who initiates transfers without Chiu’s permission. 

However, the Bank also allows for ‘Dual Control.’ If the customer elects Dual Control, 

then the Company must name two Administrators, and any transaction initiated by one 

must be approved by the other before it goes through. Had Chiu elected to use Dual 

Control with himself as one of the Company Administrators, he would presumably have 

been notified before the transfers and would have declined to approve them. Prima 

Donna elected not to have Dual Control.” 

In January 2014, at the time of the disputed wire transfers, Prima Donna’s 

financial controller, Thuy Tran, served as a company administrator for Prima Donna

under the wire transfer agreement. In January 2014, while Chiu was out of the country, 

his Yahoo e-mail account was apparently hacked. On January 23, 27, and 28, Tran 

received a series of e-mails from a person whom she believed was Chiu, instructing her to 

wire funds from Prima Donna’s Wells Fargo bank accounts to bank accounts overseas. 

Pursuant to these e-mails, Tran requested (through the CEO portal) that Wells Fargo 

make a number of wire transfers from Prima Donna’s Wells Fargo bank accounts. When 

Chiu returned to work on January 29, he told Tran that he had not requested that she 

transfer this money. Although Prima Donna called Wells Fargo to report the fraud, most

of the money had already been transferred and could not be recovered. Prima Donna did 

not recover $638,400 that had been wired from its Wells Fargo accounts. 
5

Prima Donna filed suit in the Santa Clara County Superior Court (trial court) 

against Wells Fargo alleging two claims under Commercial Code section 112024titled 

“Breach of Statutory Duty.” In the first cause of action, Prima Donna alleged that Wells 

Fargo failed to follow the security procedures set out in the wire transfer agreement. 

(§ 11202, subd. (b)(i)-(ii).) Therefore, the wire transfers were “ineffective and/or 

unenforceable” under section 11202, and Wells Fargo had the obligation of returning the 

amount of the wire transfers to Prima Donna pursuant to section 11204. In the second 

cause of action, Prima Donna alleged that “Wells Fargo did not employ ‘reasonable 

commercial standards of fair dealing’ in its acceptance and processing” of the wire 

transfers within the meaning of section 11202. (§ 11202, subd. (c).) Therefore, Wells 

Fargo had the obligation of returning the amount of the wire transfers to Prima Donna 

pursuant to section 11204. 

Wells Fargo filed a motion to compel arbitration pursuant to the arbitration 

agreement contained in the commercial account agreement. Wells Fargo stated that in 

the arbitration agreement the parties agreed to arbitrate all “disputes arising between 

them.” In its motion, Wells Fargo asserted that, “[b]y its terms” the arbitration agreement 

is governed by the Federal Arbitration Act (FAA). Wells Fargo argued that the trial court 

should order arbitration because Prima Donna and Wells Fargo had entered into an 

enforceable arbitration agreement, Prima Donna’s claims fell within the scope of the 

arbitration agreement, and public policy favors arbitration. In addition to requesting that 

the trial court order the parties to arbitration, Wells Fargo also requested that the trial

court stay the civil action pending arbitration. 

Prima Donna filed an opposition to Wells Fargo’s motion to compel arbitration. 

Prima Donna did not dispute the applicability of the arbitration agreement but argued that

“fraudulent wire transfers involving financial institutions in California are strictly 

4 Unspecified statutory references are to the Commercial Code.
6

controlled by [the] California Uniform Commercial Code (‘CUCC’) section 11101 et seq. 

In interpreting [CUCC] 11101 et seq., the California Supreme Court has been 

unequivocal about the exclusive nature of the statutory scheme controlling the 

procedures, rights, obligations and remedies available to the parties. (Zengen, Inc. v.

Comerica Bank (2007) 41 Cal.4th 239.) Common law causes of action such as 

negligence or breach of contract or the attempt to try and enforce a single contractual 

provision between the parties such as an arbitration clause are specifically inapplicable 

under CUCC section 11101 et seq.” 

Prima Donna asserted that, because the Commercial Code and the California 

Supreme Court’s decision in Zengen require that fraudulent wire transfers be addressed 

only through the statutory provisions of Commercial Code section 11101 et seq., the 

arbitration agreement was not enforceable as to Prima Donna’s claims against Wells 

Fargo. 

In its opposition to the motion to compel arbitration, Prima Donna did not argue 

that the arbitration agreement was unconscionable. Nor did Prima Donna reference the 

formation of the arbitration agreement, except to note in passing that Chiu had not 

separately signed or “acknowledged” the arbitration clause. Prima Donna did not argue 

in the trial court that the court should not enforce the arbitration agreement because of the 

circumstances under which the parties entered into it.

The trial court conducted a hearing on Wells Fargo’s motion to compel arbitration

and granted the motion. In its written order, the trial court stated “There is no reason 

given as to why an arbitrator cannot adjudicate a UCC claim. The fact that UCC 

provisions displace common law provisions and provide the law under which claims are 

analyzed (as Zengen v. Comerica Bank (2007) 41 Cal.4th 239 makes clear) is wholly 

unrelated to what type of fact finder can apply that law to this dispute.” The trial court 

concluded, “There is no legitimate reason why this dispute must be heard by a Superior 

Court Judge in civil court rather than an arbitrator through binding arbitration. This 
7

matter is to be arbitrated, and the pending civil action, including all discovery, shall be 

stayed until the conclusion of arbitration.” 

Prima Donna filed in this court a petition for writ of mandate challenging the order 

compelling arbitration, which this court summarily denied. 

Wells Fargo and Prima Donna proceeded to an arbitration conducted through the 

AAA. The parties engaged in prehearing discovery. In the course of communications 

between the parties and the appointed arbitrator, Prima Donna’s counsel wrote to the 

arbitrator expressing concern about conduct by Wells Fargo’s counsel relating to 

discovery and stating that Chiu was “very concerned whether these proceedings have 

now been so contaminated by Wells Fargo’s inappropriate conduct that he and [Prima 

Donna] ma[y] not be treated fairly and objectively in this arbitration before you.” 

The following day, the assigned arbitrator recused himself and resigned from the 

arbitration. The arbitrator wrote to counsel and stated, “A party to an arbitration should 

have complete confidence in the fairness and objectivity of the process and the arbitrator, 

in the overall integrity of the process, and confidence that each party will be treated fairly 

and objectively. In this case it appears that [Prima Donna] does not have that confidence. 

I do not reach or discuss the basis for and/or validity of [Prima Donna’s] concerns, but, 

rather, accept that it has concerns. I deem those concerns sufficient to justify my 

recusal.” 

The AAA appointed retired Justice Christopher Cottle to conduct the arbitration. 

The parties continued to engage in discovery, including a contested proceeding after 

which the arbitrator granted Prima Donna’s motion to compel production of documents, 

broadening the relevant discovery to discovery relating “to the relationship between 

Wells Fargo and Prima Donna, going back to the beginning of their relationship in 2007.” 

The arbitrator subsequently conducted a three-day arbitration hearing, in which he heard 

testimony from seven witnesses and received a number of written exhibits into evidence. 
8

The arbitrator issued an eight-page written award finding in favor of Wells Fargo 

and concluding under the principles set out in sections 11201 et seq. that Wells Fargo was 

not liable for Prima Donna’s loss from the January 2014 wire transfers. In the award, the 

arbitrator described the background of the dispute and made a number of factual findings. 

The arbitrator found that, at the time of the wire transfers, Tran had the authority to 

initiate wire transfers for Prima Donna’s Wells Fargo bank accounts, either by phone or 

through Wells Fargo’s Internet portal, CEO. The arbitrator also found that Tran had 

made the wire transfers pursuant to Wells Fargo’s CEO portal, although Tran had called 

the phone number for CEO’s customer service for assistance. 

Turning to Prima Donna’s claims against Wells Fargo, the arbitrator considered 

Prima Donna’s contention (alleged in the first cause of action in its original complaint

filed in the trial court) that Wells Fargo’s security procedures were inadequate under 

section 11202, subdivision (b) (hereafter section 11202(b)). Examining the definition of 

“security procedure” under section 11201, the arbitrator observed that “[t]he term does 

not include a procedure for establishing that the customer is not being defrauded by a 

third party into making the transfer.”5

Turning to Prima Donna’s claims under section 11202(b), the arbitrator reviewed 

the statutory language.6 The arbitrator summarized section 11202(b) as providing that, 

5 Section 11201 provides, “ ‘Security procedure’ means a procedure established by 

agreement of a customer and a receiving bank for the purpose of (i) verifying that a 

payment order or communication amending or canceling a payment order is that of the 

customer, or (ii) detecting error in the transmission or the content of the payment order or 

communication. A security procedure may require the use of algorithms or other codes, 

identifying words or numbers, encryption, callback procedures, or similar security 

devices. Comparison of a signature on a payment order or communication with an 

authorized specimen signature of the customer is not by itself a security procedure.”

6 Section 11202(b) states, “If a bank and its customer have agreed that the 

authenticity of payment orders issued to the bank in the name of the customer as sender 

will be verified pursuant to a security procedure, a payment order received by the 

receiving bank is effective as the order of the customer, whether or not authorized, if (i) 

the security procedure is a commercially reasonable method of providing security against 
9

even if a wire transfer order “is not actually authorized, the customer will be bound by it 

if the bank operated according to a security procedure and (1) the customer agreed to the 

procedure; (2) the procedure is commercially reasonable; and (3) the bank accepted the 

order in good faith and in compliance with the security procedure.” 

The arbitrator rejected Prima Donna’s contention that Wells Fargo’s method of 

processing wire transfer orders placed through the Internet was not commercially

reasonable within the meaning of section 11202(b). “[T]he security procedure is not 

required to be a commercially reasonable method of protecting the customer against 

being fraudulently induced into making a wire transfer to a third party. It is to be a 

commercially reasonable method of ‘providing security against unauthorized payment 

orders.’ The procedure here is a commercially reasonable method of ensuring that the 

payment order is actually coming from the customer. Whether it is a commercially 

reasonable method of ensuring that the customer is not being defrauded by a third party is 

irrelevant because the bank is not required to protect the customer from third parties who 

might fraudulently induce the customer to transfer money to them.” 

The arbitrator also rejected Prima Donna’s argument (advanced in the second 

cause of action in its original complaint filed in the trial court) that Wells Fargo’s Internet 

wire transfer order system through CEO was not commercially reasonable within the 

meaning of section 11202, subdivision (c) (hereafter section 11202(c)) because it did not 

ensure that the requested wire transfers were authorized by Chiu, Prima Donna’s 

president. The arbitrator noted that Chiu had declined to adopt available security

procedures, including the “Dual Control” procedure for transfers initiated through CEO. 

unauthorized payment orders, and (ii) the bank proves that it accepted the payment order 

in good faith and in compliance with the security procedure and any written agreement or 

instruction of the customer restricting acceptance of payment orders issued in the name of 

the customer. The bank is not required to follow an instruction that violates a written 

agreement with the customer or notice of which is not received at a time and in a manner 

affording the bank a reasonable opportunity to act on it before the payment order is 

accepted.”
10

Had Chiu elected to set up the dual control feature and named himself as one of the 

company administrators, any transaction initiated by Tran would have had to be approved 

by Chiu before Wells Fargo fulfilled the wire order. Therefore, the arbitrator reasoned, 

Wells Fargo complied with section 11202(c).

7

The arbitrator concluded, “Because Prima Donna initiated the [wire] transfers, and 

Wells Fargo followed the agreed procedures to ensure that the transfer was actually 

initiated by Prima Donna, Wells Fargo is not liable for the loss.” The arbitration award 

stated “Prima Donna is awarded nothing against Wells Fargo. [¶] The Administrative 

fees and expenses of the AAA and the Compensation and expenses of the Arbitrator are 

to be borne as incurred by the parties. [¶] This award determines all issues submitted by 

the parties in this arbitration, and any claim or contention not expressly decided, is 

denied.” 

The arbitrator simultaneously issued a four-page written order deciding certain 

factual issues, which Prima Donna had contended the arbitrator should decide in its favor 

because of Wells Fargo’s failure (in Prima Donna’s view) to produce certain items in 

discovery. The arbitrator rejected Prima Donna’s requests. 

A few weeks after the arbitrator issued his order and award, Prima Donna 

submitted a letter to the arbitrator. In the letter, Prima Donna’s counsel stated, “[i]n 

agreeing to have you preside as arbitrator, Prima Donna . . . understood and expected 

that you would be applying the current law applicable to California Commercial Code 

(CCC) 11202 et seq.” Prima Donna’s counsel asserted that the arbitrator omitted any 

analysis under section 11202(b) “whether the security procedure was followed in ‘good 

7

“A security procedure is deemed to be commercially reasonable if (i) the security 

procedure was chosen by the customer after the bank offered, and the customer refused, a 

security procedure that was commercially reasonable for that customer, and (ii) the 

customer expressly agreed in writing to be bound by any payment order, whether or not 

authorized, issued in its name and accepted by the bank in compliance with the security 

procedure chosen by the customer.” (§ 11202(c).)
11

faith.’ ” Prima Donna noted “[t]hat element was disputed primarily because of Wells 

Fargo’s failure to respond appropriately when it had actual notice of the potentially 

fraudulent nature of the first wire transfer payment order” through the “ ‘risk’ score” that 

Wells Fargo assigned the transaction. 

Prima Donna stated, “[a]lthough we have no expectations that you will change 

your decision, we do expect you to fulfill your obligation for which you were retained in 

this matter. Given this, it is respectfully requested that you complete the legal analysis 

required by statute . . . and supplement your decision with a complete analysis of ‘good 

faith’ as stated in CCC [section] 11202(b).” Wells Fargo opposed Prima Donna’s 

request, arguing that any analysis of “ ‘ “good faith” ’ ” was unnecessary under the facts 

of the case and the applicable law. 

The arbitrator subsequently issued an order referencing this letter and making the 

following determinations: “The Award was a Final Award. Furthermore, the legal 

analysis in the Award, as it relates to the facts and circumstances of this case, was 

sufficient. [Prima Donna’s] request is denied.” 

Prima Donna filed in the trial court a petition to vacate the arbitration award under 

Code of Civil Procedure section 1286.2, subdivision (a)(4), on the ground that the 

arbitrator exceeded his powers. Prima Donna argued that the arbitrator did not have the 

authority to decide the dispute because section 11101 et seq. do not permit arbitration of 

disputes concerning electronic wire transfers. Prima Donna also contended that the 

arbitrator did not determine all the questions presented to him and, therefore, the award 

should be vacated under Code of Civil Procedure section 1286.2, subdivision (a)(5). In 

particular, Prima Donna cited the arbitrator’s failure to “determine whether Wells Fargo 

processed the unauthorize[d] payment orders in good faith.” Wells Fargo opposed Prima 

Donna’s petition to vacate the arbitration award. 

The trial court held a hearing on Prima Donna’s petition to vacate and, following 

the hearing, issued a written order denying it. In its order, the trial court noted that,
12

although Prima Donna’s arguments in the petition with respect to the arbitrator’s 

jurisdiction “don’t completely mirror the arguments they made in opposing the 2015 

Motion to Compel [Arbitration], there is significant overlap and the issue has already 

been adjudicated. [Prima Donna]’s current argument that the matter should not have 

proceeded to arbitration appears to be tantamount to a motion for reconsideration of a 

ruling made in 2015. This is not a proper basis for granting the relief sought in the 

present motion.” 

In addition, the trial court rejected Prima Donna’s argument that the arbitrator did 

not determine all the questions presented to him. “Justice Cottle’s award is thorough and 

detailed and [Prima Donna] has not met its burden in showing that Justice Cottle failed to 

address any of the issues to be determined in the arbitration.” The trial court denied 

Prima Donna’s petition to vacate the arbitration award, and it confirmed the arbitration 

award. The trial court subsequently issued a judgment confirming the arbitration award 

and ordered that Prima Donna “recover nothing” from Wells Fargo. Prima Donna timely 

appealed the trial court’s judgment confirming the arbitration award and the trial court’s 

2015 order compelling arbitration. 

II. DISCUSSION

In its challenge to the order compelling arbitration, Prima Donna acknowledges 

that the FAA governs the arbitration agreement at issue here but argues that the 

agreement is unconscionable and therefore unenforceable under the FAA’s “ ‘savings

clause.’ ” Prima Donna’s unconscionability argument with respect to the order 

compelling arbitration rests primarily on two grounds. First, Prima Donna argues that the 

arbitration agreement violates public policy because it denies Prima Donna the statutory 

protections of the Commercial Code provisions applicable to wire transfers. In particular, 

Prima Donna cites the arbitrator’s authority to decide the matter according to general 

principles of law and equity and, consequently, to disregard the relevant statutory 

provisions. Prima Donna also asserts the arbitration agreement is unconscionable
13

because it requires that Prima Donna waive the “right to trial by jury,” which Prima 

Donna contends section 11202 guarantees.

Turning to the trial court’s order denying the petition to vacate the arbitration 

award, Prima Donna argues that the arbitrator exceeded his powers by failing to address 

its claims that Wells Fargo did not act in good faith, as required by section 11202(b).

Wells Fargo, in turn, asserts that Prima Donna forfeited any claim of

unconscionability by failing to raise it in the trial court. Wells Fargo also contends that 

Prima Donna’s arguments cannot be reconciled with the FAA and case law construing 

the doctrine of unconscionability under California law. As to Prima Donna’s arguments 

with respect to the trial court’s order denying its petition to vacate the arbitration award, 

Wells Fargo maintains that Prima Donna forfeited this argument by failing to raise it in 

the trial court and, in any event, the arbitrator’s award did not contravene a statutory 

command sufficient to justify judicial review of the award. 

We first examine Prima Donna’s contention that the trial court erred in granting 

Wells Fargo’s motion to compel arbitration. We then consider Prima Donna’s challenge 

to the trial court’s order denying its petition to vacate the arbitration award. 

This appeal turns on the law applicable to arbitration (and particularly on the

FAA), the general contract defense of unconscionability, and California statutes

governing wire transfers. We first discuss these principles before examining the merits of 

Prima Donna’s claims.

A. Background Legal Principles

1. Arbitration

Both California and federal law strongly favor arbitration. (OTO, L.L.C. v. Kho

(2019) 8 Cal.5th 111, 125 (OTO); Moses H. Cone Memorial Hosp. v. Mercury Constr. 

Corp. (1983) 460 U.S. 1, 24.) Two features of arbitration bear particular relevance to this 

appeal. First and most obviously, arbitration involves a waiver of the right to a jury trial. 

(Madden v. Kaiser Foundation Hospitals (1976) 17 Cal.3d 699, 714.) Second, parties 
14

who agree to arbitrate generally also accept, as a feature of arbitration itself, strict limits 

on the scope of judicial review. (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 9–10

(Moncharsh).)

The parties do not dispute that the FAA governs the arbitration agreement at issue 

in this appeal.

8

 By its terms, the arbitration agreement provided that “[a]ny arbitration 

proceeding will . . . be governed by the Federal Arbitration Act (Title 9 of the United 

States Code).” The FAA requires that courts enforce arbitration agreements according to 

their terms. (Volt Info. Sciences v. Leland Stanford Jr. U. (1989) 489 U.S. 468, 478 

(Volt).) No other provision in the arbitration agreement suggests the parties intended to 

incorporate any other body of arbitration law, and therefore the FAA controls our 

interpretation of the agreement. (See Rodriguez v. American Technologies, Inc. (2006) 

136 Cal.App.4th 1110, 1121–1122.)

2. The Federal Arbitration Act

“The FAA was enacted in 1925 in response to widespread judicial hostility to 

arbitration agreements.” (AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333, 339

(Concepcion).) Under the FAA, courts must “place arbitration agreements on an equal 

footing with other contracts.” (Ibid.) The FAA “pre-empts state laws which ‘require a 

judicial forum for the resolution of claims which the contracting parties agreed to resolve 

by arbitration.’ ” (Volt, supra, 489 U.S. at p. 478.)

Therefore, under the FAA states may not “prohibit[] outright” the arbitration of a 

particular type of claim. (Concepcion, supra, 563 U.S. at p. 341.) In addition, the FAA 

prevents states “from mandating or promoting procedures incompatible with arbitration.” 

(Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 366

8 Although Wells Fargo did not argue in the trial court that the FAA preempted 

California law, it did assert in the trial court that the arbitration agreement is governed by 

the FAA. We therefore conclude that Wells Fargo did not forfeit its arguments based 

upon the applicability of the FAA.
15

(Iskanian).) The FAA precludes states from “requir[ing] a procedure that interferes with 

fundamental attributes of arbitration, ‘even if it is desirable for unrelated reasons.’ ” 

(Sanchez v. Valencia Holding Co., LLC (2015) 61 Cal.4th 899, 923 (Sanchez).) This rule 

“applies equally to requirements imposed by statute or judicial rule.” (Id. at p. 924.) 

A party does not waive statutory rights by agreeing to arbitrate them. “By 

agreeing to arbitrate a statutory claim, a party does not forgo the substantive rights 

afforded by the statute; it only submits to their resolution in an arbitral, rather than a 

judicial, forum. It trades the procedures and opportunity for review of the courtroom for 

the simplicity, informality, and expedition of arbitration.” (Mitsubishi Motors v. Soler 

Chrysler-Plymouth (1985) 473 U.S. 614, 628.) Therefore, claims for statutory damages 

are “fully arbitrable,” even if the claim “incidentally vindicates important public 

interests.” (Broughton v. Cigna Healthplans of California (1999) 21 Cal.4th 1066, 1084; 

Shearson/American Express, Inc. v. McMahon (1987) 482 U.S. 220, 232.) Arbitrators, 

like courts, are empowered to interpret statutes. (California Correctional Peace Officers 

Assn. v. State of California (2006) 142 Cal.App.4th 198, 210.)

However, the FAA “does not require enforcement of a provision in an arbitration 

agreement that ‘forbid[s] the assertion of certain statutory rights’ or that 

‘eliminates . . . [the] right to pursue [a] statutory remedy.’ ” (McGill v. Citibank, N.A.

(2017) 2 Cal.5th 945, 963, quoting American Express Co. v. Italian Colors Restaurant

(2013) 570 U.S. 228, 236 (Italian Colors).) In addition, the FAA contains a “saving 

clause,” which “permits agreements to arbitrate to be invalidated by ‘generally applicable 

contract defenses, such as fraud, duress, or unconscionability.’ ” (Concepcion, supra, 

563 U.S. at p. 339.) However, “defenses that apply only to arbitration or that derive their 

meaning from the fact that an agreement to arbitrate is at issue,” do not fall within the 

FAA’s saving clause and thus do not serve to invalidate an arbitration agreement. (Ibid.) 

Under the FAA, a generally applicable contract defense such as unconscionability 

may invalidate an arbitration agreement if the defense is enforced evenhandedly and does 
16

not interfere “with fundamental attributes of arbitration.” (Concepcion, supra, 563 U.S. 

at p. 344; Sanchez, supra, 61 Cal.4th at p. 906.) “Courts may not, however, invalidate 

arbitration agreements under state laws applicable only to arbitration provisions.” 

(Doctor’s Associates, Inc. v. Casarotto (1996) 517 U.S. 681, 687.) “[A] court may not 

‘rely on the uniqueness of an agreement to arbitrate as a basis for a state-law holding that 

enforcement would be unconscionable, for this would enable the court to effect 

what . . . the state legislature cannot.’ ” (Concepcion, at p. 341.) The FAA preempts a 

state rule “not only when it facially discriminates against arbitration but also when it 

disfavors arbitration as applied.” (Sanchez, at p. 924.)

3. Unconscionability

“The general principles of unconscionability are well established. A contract is 

unconscionable if one of the parties lacked a meaningful choice in deciding whether to 

agree and the contract contains terms that are unreasonably favorable to the other party.” 

(OTO, supra, 8 Cal.5th at p. 125.) Under the FAA, the “doctrine’s application to 

arbitration agreements must rely on the same principles that govern all contracts.” (Ibid.) 

The defense of unconscionability is “inherently fact-specific.” (OTO, supra, 8 

Cal.5th at p. 138.) The party asserting the defense of unconscionability bears the burden 

of proving its applicability. (Id. at p. 126.) Under the FAA, unconscionability claims 

must be resolved by the trial court before enforcing an arbitration agreement. (Id. at 

p. 138.) In resolving a claim of unconscionability, a court’s inquiry is whether the 

contract provision was unconscionable at the time it was made. (Sonic-Calabasas A, Inc. 

v. Moreno (2013) 57 Cal.4th 1109, 1133–1134 (Sonic).)

The doctrine of unconscionability consists of procedural and substantive 

components. “ ‘The procedural element addresses the circumstances of contract 

negotiation and formation, focusing on oppression or surprise due to unequal bargaining 

power. [Citations.] Substantive unconscionability pertains to the fairness of an 

agreement’s actual terms and to assessments of whether they are overly harsh or 
17

one-sided.’ [Citation.] [¶] Both procedural and substantive unconscionability must be 

shown for the defense to be established, but ‘they need not be present in the same 

degree.’ ” (OTO, supra, 8 Cal.5th at p. 125.) 

For procedural unconscionability, the “pertinent question” is “whether 

circumstances of the contract’s formation created such oppression or surprise that closer 

scrutiny of its overall fairness is required.” (OTO, supra, 8 Cal.5th at p. 126.) The 

buyer’s sophistication is a relevant factor in this analysis. (Dean Witter Reynolds, Inc. v. 

Superior Court (1989) 211 Cal.App.3d 758, 767–768.) Furthermore, a claim of 

procedural unconscionability based on “ ‘oppression’ may be defeated if the complaining 

party had reasonably available alternative sources of supply from which to obtain the 

desired goods or services free of the terms claimed to be unconscionable.” (Id. at p. 768.)

“Substantive unconscionability examines the fairness of a contract’s terms. This 

analysis ‘ensures that contracts, particularly contracts of adhesion, do not impose terms 

that have been variously described as “ ‘ “overly harsh” ’ ” [citation], “ ‘unduly 

oppressive’ ” [citation], “ ‘so one-sided as to “shock the conscience” ’ ” [citation], or 

“unfairly one-sided” [citation]. All of these formulations point to the central idea that the 

unconscionability doctrine is concerned not with “a simple old-fashioned bad bargain”

[citation], but with terms that are “unreasonably favorable to the more powerful 

party.” ’ ” (OTO, supra, 8 Cal.5th at pp. 129–130.) A provision is not “unfairly 

one-sided merely because one side is, as a practical matter, more likely to make use of 

it.” (Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1248, fn. 4.) 

4. Wire Transfers

The California Supreme Court’s leading decision on the law in California 

governing wire transfers is Zengen Inc. v. Comerica Bank, supra, 41 Cal. 4th 239

(Zengen). Prima Donna’s arguments in this appeal rely primarily on the principles 

articulated in Zengen. As described by the California Supreme Court in that case, “ ‘The 

1990 Legislature enacted Article 4A of the Uniform Commercial Code as Division 11 of 
18

the California Uniform Commercial Code (U.C.C. 11101 et seq.), entitled “Funds 

Transfers.” ’ (4 Witkin, Summary of Cal. Law (10th ed. 2005) Negotiable Instruments, 

§ 132, p. 505.)” (Zengen, at p. 247.) 

“ ‘A typical funds transfer involves a large amount of money, multimillion-dollar 

transactions being common. Most transactions are completed in a single day; thus, funds 

transfers are efficient substitutes for payments made by delivery of paper instruments. 

An additional feature is low cost, in that transfers involving millions of dollars can be 

made for a few dollars. However, in the event a problem arises, risk of loss to banks may 

be high. Thus, “a major policy issue in the drafting of Article 4A is that of determining 

how risk of loss is to be allocated given the price structure in the industry.” ’ ” (Zengen, 

supra, 41 Cal.4th at p. 253, italics omitted.) 

Article 4A (codified as sections 11101 et seq.) allocates this risk of loss. “Under 

section 11202, subdivision (b), if a bank accepts an unauthorized payment order in good 

faith, it is not liable if a commercially reasonable security procedure was in place, and the 

bank followed it and any other applicable written agreement or instruction of the 

customer.” (Zengen, supra, 41 Cal.4th at p. 250.) 

If a bank fails to comply with sections 11202 or 11203,9section 11204 provides 

that the bank must refund money sent by the non-compliant payment orders. “Section 

9 Section 11203 states “(a) If an accepted payment order is not, under subdivision 

(a) of Section 11202, an authorized order of a customer identified as sender, but is 

effective as an order of the customer pursuant to subdivision (b) of Section 11202, the 

following rules apply: [¶] (1) By express written agreement, the receiving bank may 

limit the extent to which it is entitled to enforce or retain payment of the payment order. 

[¶] (2) The receiving bank is not entitled to enforce or retain payment of the payment 

order if the customer proves that the order was not caused, directly or indirectly, by a 

person (i) entrusted at any time with duties to act for the customer with respect to 

payment orders or the security procedure, or (ii) who obtained access to transmitting 

facilities of the customer or who obtained, from a source controlled by the customer and 

without authority of the receiving bank, information facilitating breach of the security 

procedure, regardless of how the information was obtained or whether the customer was 

at fault. Information includes any access device, computer software, or the like. [¶] (b) 
19

11204, subdivision (a), provides: ‘If a receiving bank accepts a payment order issued in 

the name of its customer as sender which is (i) not authorized and not effective as the 

order of the customer under Section 11202, or (ii) not enforceable, in whole or in part, 

against the customer under Section 11203, the bank shall refund any payment of the 

payment order received from the customer to the extent the bank is not entitled to enforce 

payment.’ ” (Zengen, supra, 41 Cal.4th at p. 250, fn. omitted.)

In Zengen, the California Supreme Court confronted the question whether these 

statutory provisions displace common law remedies, such as breach of contract. (Zengen, 

supra, 41 Cal.4th at p. 251.) In answering this question, the California Supreme Court 

cited with approval commentary to the Uniform Commercial Code: “ ‘Funds transfers 

involve competing interests—those of the banks that provide funds transfer services and 

the commercial and financial organizations that use the services, as well as the public 

interest. These competing interests were represented in the drafting process and they 

were thoroughly considered. The rules that emerged represent a careful and delicate 

balancing of those interests and are intended to be the exclusive means of determining the 

rights, duties and liabilities of the affected parties in any situation covered by particular 

provisions of the Article. Consequently, resort to principles of law or equity outside of 

Article 4A is not appropriate to create rights, duties and liabilities inconsistent with those 

stated in this Article.’ ” (Id. at p. 252, italics omitted.) 

The California Supreme Court concluded in Zengen that these provisions preempt 

certain common law state claims. “ ‘[D]ivision 11 provides that common law causes of 

action based on allegedly unauthorized funds transfers are preempted in two specific 

areas: (1) where the common law claims would create rights, duties, or liabilities 

inconsistent with division 11; and (2) where the circumstances giving rise to the common 

This section applies to amendments of payment orders to the same extent it applies to 

payment orders.”
20

law claims are specifically covered by the provisions of division 11.’ ” (Zengen, supra, 

41 Cal.4th at p. 253.) 

The court summarized the plaintiff’s common law claims in Zengen as “[t]he Bank 

should not have accepted and executed the fraudulent payment orders” (Zengen, supra, 

41 Cal.4th at p. 254) and concluded they were preempted. “ ‘This case is about 

unauthorized wire funds transfers. Zengen’s non-California Uniform Commercial Code 

causes of action are based solely on the analysis prescribed by division 11—that the Bank 

processed unauthorized payment orders. Because the California Uniform Commercial 

Code provides a remedy to Zengen under these circumstances, it preempts the common 

law causes of action alleged in the Zengen’s complaint.’ ” (Id. at p. 255.) Zengen did not 

address the application of division 11 in the context of an arbitration agreement.

Before addressing Prima Donna’s challenge to the arbitrator’s award, we turn first 

to Prima Donna’s challenge to the trial court’s order compelling arbitration.

B. The Order Compelling Arbitration

The parties did not raise any issues of disputed facts in their filings related to 

Wells Fargo’s motion to compel arbitration. Therefore, we apply de novo review to the 

trial court’s order. (Hartnell Community College Dist. v. Superior Court (2004) 124 

Cal.App.4th 1443, 1448–1449.)

“A petition to compel arbitration based on a written arbitration agreement must be 

granted unless grounds exist to revoke the agreement. (Code Civ. Proc., §§ 1281, 1281.2, 

subd. (b).) An agreement to arbitrate, like any other contract, is subject to revocation if 

the agreement is unconscionable.”10 (Carmona v. Lincoln Millennium Car Wash, Inc.

10 Although Prima Donna contends that courts may refuse to enforce arbitration 

agreements based on “equitable principles,” this broad statement is not supported by the 

relevant statutes or case law. “[U]nder both federal and California law, arbitration 

agreements are valid, irrevocable, and enforceable, save upon such grounds as exist at 

law or in equity for the revocation of any contract. (9 U.S.C. § 2; see also, Code Civ. 

Proc., § 1281.) In other words, under California law, as under federal law, an arbitration 
21

(2014) 226 Cal.App.4th 74, 83 (Carmona).) Prima Donna contends the trial court should 

not have granted Wells Fargo’s motion to compel arbitration, because the arbitration 

agreement here was unconscionable and therefore unenforceable.

According to Prima Donna, the arbitration agreement is substantively 

unconscionable because arbitration is “incompatible” with the principles of Zengen and 

section 11202. Prima Donna argues that, pursuant to Zengen, division 11 is the 

“ ‘exclusive means’ ” for determining liability for electronic funds transfers. Prima 

Donna asserts “It is fundamentally inequitable to permit a bank to specifically enforce the 

arbitration provision in a contract of adhesion when, under Zengen, its customer is unable 

to bring an action for breach of that contract or the bank’s failure to meet its duty of care 

in performing it. Since doing so requires the customer to waive its statutory rights, the 

bank contract’s arbitration provision, as applied to funds transfers, is unconscionable and 

thus violates public policy.” 

In addition to Zengen, Prima Donna relies on section 11202, subdivision (f) 

(hereafter section 11202(f)), which states, “[e]xcept as provided in this section and in 

paragraph (1) of subdivision (a) of Section 11203,[11]rights and obligations arising under 

this section or Section 11203 may not be varied by agreement.” Prima Donna also cites 

to section 11202, subdivision (c) (hereafter section 11202(c)), which provides the

“[c]ommercial reasonableness of a security procedure is a question of law.” 

Relying on these statutory provisions, Prima Donna argues that its arbitration 

agreement with Wells Fargo is substantively unconscionable because it is incompatible 

with this statutory scheme in that the arbitrator was not required to apply division 11 to 

resolve the dispute. Prima Donna also maintains the arbitration agreement is 

unconscionable because it required the waiver of Prima Donna’s right to jury trial, which 

agreement may only be invalidated for the same reasons as other contracts.” (Armendariz 

v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 98, fn. omitted.)

11 See footnote 9, ante.
22

Prima Donna asserts is non-waivable under section 11202. In making this argument, 

Prima Donna relies on the reference in section 11202(c) to a “question of law,” which it 

contends necessarily implies that the remaining elements of section 11202 are factual 

questions to be decided by a jury. 

With respect to procedural unconscionability, Prima Donna asserts that “there can 

be no real dispute that the Commercial Account Agreements were adhesion contracts in 

the sense that they were standard contracts imposed by the party with superior bargaining 

strength.” Prima Donna also maintains that it “had no opportunity” to negotiate the 

agreement containing the arbitration provision. Prima Donna states on appeal, “[n]or 

does Wells Fargo contend that [Prima Donna] could have opted out of the arbitration 

agreement or that Mr. Chiu could have negotiated an account agreement without an 

arbitration agreement.” 

Wells Fargo asserts that Prima Donna forfeited these unconscionability arguments 

by failing to raise them in the trial court. Wells Fargo notes, for example, that had Prima 

Donna raised the unconscionability arguments in the trial court, Wells Fargo could have 

presented evidence of Prima Donna’s “sophistication and bargaining power” and the 

alternative banking options Prima Donna could have chosen “had it found [Wells 

Fargo’s] Arbitration Agreement unpalatable.” Prima Donna counters that, in the absence 

of a material factual dispute, unconscionability is a question of law that may be raised for 

the first time on appeal. 

With respect to Prima Donna’s claim of procedural unconscionability, we agree 

with Wells Fargo that, by failing to raise the issue in the trial court, Prima Donna has 

forfeited it as a defense to the arbitration agreement. Procedural unconscionability is 

“inherently fact-specific.” (OTO, supra, 8 Cal.5th at p. 138.) Contrary to Prima Donna’s 

contention, the parties here dispute the relevant facts, including Chiu’s sophistication and 

Prima Donna’s option of selecting a different bank if it objected to the terms of the 

arbitration agreement. 
23

Prima Donna—not Wells Fargo—bore the burden of asserting and proving the

unconscionability defense in its opposition to Wells Fargo’s motion to compel arbitration. 

(OTO, supra, 8 Cal.5th at p. 126.) By failing to do so in the trial court when the court 

was considering whether to enforce the arbitration agreement, Prima Donna has forfeited 

any claim of procedural unconscionability, including any claim that arbitration was 

“impos[ed]” on it, it was “surprise[d]” by the arbitration provision, or it “involuntarily 

forfeited” its statutory rights.

Turning to substantive unconscionability, we do not agree that Prima Donna has 

forfeited this contention. We agree with Prima Donna that the arguments that underlie its 

claim that the arbitration agreement was substantively unconscionable are in essence the 

same as those it asserted in the trial court in its opposition to the motion to compel 

arbitration. In addition, these arguments rely on pure issues of law that we may address 

for the first time on appeal. (Carmona, supra, 226 Cal.App.4th at p. 89, fn. 6.)

Prima Donna asserts that the arbitration agreement is substantively unconscionable 

because the arbitrator was not constrained to apply the statutory provisions in division 11, 

which the California Supreme Court has agreed are “intended to be the exclusive means 

of determining the rights, duties and liabilities of the affected parties in any situation 

covered by particular provisions of the Article.” (Zengen, supra, 41 Cal.4th at p. 252, 

italics omitted.) However, the premise of Prima Donna’s challenge—that the arbitrator 

would not apply these provisions in reaching his decision—is inconsistent with the text of 

the arbitration agreement itself.

The choice of law provision in the arbitration agreement provided that the 

arbitrator “shall resolve all Disputes in accordance with the substantive law of the state 

whose laws govern Company’s Account and may grant any remedy or relief that a court 

of such state could order or grant within the scope hereof and such ancillary relief as is 

necessary to make effective any award.” There is no dispute that the governing state law 

here was the law of California, and the arbitrator’s award, as discussed above, makes 
24

clear that he applied division 11, including sections 11202 and 11203, to resolve the 

dispute. 

Therefore, we reject Prima Donna’s argument that the arbitration agreement was 

substantively unconscionable because the arbitrator would not necessarily decide the 

dispute by applying California law. We also disagree with Prima Donna’s contention, to 

the extent Prima Donna makes it, that the arbitration agreement prevented Prima Donna

from asserting its statutory rights or eliminated its right to pursue a statutory remedy. 

(See Italian Colors, supra, 570 U.S. at p. 236.) 

Prima Donna’s argument that the arbitration agreement was substantively

unconscionable because it denied Prima Donna its “right to trial by jury” of claims under 

section 11202 is equally unavailing. It is far from clear that section 11202—in and of 

itself—guarantees a right to trial by jury in its single reference to a “question of law.” 

(§ 11202(c).) However, even if we were to interpret the statute in this way, this provision

would itself be preempted by the FAA, which prevents states from prohibiting the 

arbitration of certain claims or “from mandating or promoting procedures incompatible 

with arbitration.” (Iskanian, supra, 59 Cal.4th at p. 366; Concepcion, supra, 563 U.S. at 

p. 341.) Requiring that a claim be resolved by a jury (and, therefore, rejecting the 

possibility that it could be decided by an arbitrator) is plainly incompatible with 

arbitration. 

To the extent that Prima Donna asserts that the arbitration agreement was 

substantively unconscionable because of the limited nature of judicial review of 

arbitration decisions, this argument, too, is preempted by the FAA. The limited nature of 

judicial review of arbitration agreements stems from the expectation “that the arbitrator’s 

decision will be both binding and final.” (Moncharsh, supra, 3 Cal.4th at p. 9.) The 

FAA precludes courts from “impos[ing] unconscionability rules that interfere with 

arbitral efficiency.” (Sonic, supra, 57 Cal.4th at p. 1141.) Therefore any 
25

unconscionability doctrine based on the limited scope of judicial review would not 

invalidate an arbitration agreement to which the FAA applies.

For these reasons, we conclude the trial court did not err in its order compelling 

arbitration of Prima Donna’s claims against Wells Fargo.

C. The Order Denying the Petition to Vacate the Arbitration Award

Prima Donna asserts that the trial court erred when it denied Prima Donna’s 

petition to vacate the arbitration award under Code of Civil Procedure section 1286.2, 

subdivision (a)(4), on the ground that the arbitrator exceeded his powers.

12

 Prima Donna 

asserts that the arbitrator exceeded his powers by failing to address Prima Donna’s 

contention that Wells Fargo did not act in “good faith” within the meaning of section 

11202(b) when the bank accepted Tran’s orders for wire transfers, even though Wells 

Fargo’s own internal risk assessment scores raised concerns about the orders. 

Prima Donna acknowledges that courts do not normally review arbitrators’ 

decisions for legal error. However, Prima Donna contends that its claims fall within the 

“narrow exception” announced in Moncharsh, supra, 3 Cal.4th at page 32, which permits

judicial review where “granting finality to an arbitrator’s decision would be inconsistent 

with the protection of a party’s statutory rights.” (Ibid.)13

We review de novo whether the arbitrator exceeded his powers such that the 

arbitration award should have been vacated. (Ahdout v. Hekmatjah (2013) 213 

Cal.App.4th 21, 33.) “ ‘[E]valuating a challenge to an arbitration award is a two-step 

process—first the court must determine whether the award is reviewable, and only if

12 Code of Civil Procedure section 1286.2, subdivision (a)(4), provides, “Subject 

to Section 1286.4, the court shall vacate the award if the court determines any of the 

following [¶] . . . The arbitrators exceeded their powers and the award cannot be 

corrected without affecting the merits of the decision upon the controversy submitted.”

13 We agree with Prima Donna that its argument on appeal with respect to the trial 

court’s order denying its petition to vacate is substantially similar (although not identical) 

to those it made in the trial court. Moreover, it raises a pure question of law, and 

therefore we decline to deem the argument forfeited. 
26

review is appropriate does the court consider whether the award should be upheld.’ ” 

(Branches Neighborhood Corp. v. CalAtlantic Group, Inc. (2018) 26 Cal.App.5th 743, 

751 (Branches Neighborhood).)

“Generally, courts cannot 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. [Citation.] This is true even where, as here, an arbitration agreement requires an 

arbitrator to rule on the basis of relevant law, rather than on principles of equity and 

justice.” (Richey v. AutoNation, Inc. (2015) 60 Cal.4th 909, 916 (Richey).) Furthermore, 

“ ‘[a]rbitrators do not ordinarily exceed their contractually created powers simply by 

reaching an erroneous conclusion on a contested issue of law or fact, and arbitral awards 

may not ordinarily be vacated because of such error.’ ” (Id. at p. 917.)

However, “[a]rbitrators may exceed their powers by issuing an award that violates 

a party’s unwaivable statutory rights or that contravenes an explicit legislative expression 

of public policy.” (Richey, supra, 60 Cal.4th at p. 916.) “This departure from the general 

rule applies only in ‘limited and exceptional circumstances.’ (Moncharsh, supra, 3 

Cal.4th at p. 32.)” (Branches Neighborhood, supra, 26 Cal.App.5th at p. 751.) These 

circumstances are limited to situations “where an arbitrator’s decision has the effect of 

violating a party’s statutory rights or well-defined public policies—particularly those 

rights and policies governing the conduct of the arbitration itself.” (Sargon Enterprises, 

Inc. v. Browne George Ross LLP (2017) 15 Cal.App.5th 749, 765.)

We conclude that Prima Donna’s attack on the arbitrator’s failure to explicitly 

address its contention that Wells Fargo did not act in “good faith” does not encompass

such an exceptional circumstance. “The exceptions to the limits on review of awards 

protect against error that is so egregious as to constitute misconduct or so profound as to 

render the process unfair.” (Heimlich v. Shivji (2019) 7 Cal.5th 350, 368.) No such error 

appears here.
27

Prima Donna was allowed to bring its claims against Wells Fargo and was not 

prevented “from receiving a review on the merits.” (See Richey, supra, 60 Cal.4th at 

p. 918.) The arbitration process allowed for discovery (including motions to compel 

discovery), an arbitrator who voluntarily recused himself after Prima Donna expressed 

concern about his impartiality, a multi-day arbitration hearing, written discovery,

evidentiary rulings, and a reasoned, written award that applied the relevant principles of 

California law, including sections 11202 and 11203. In our view, Prima Donna’s claim 

about the arbitrator’s failure to address “good faith” amounts only to a contention that the 

arbitrator made a legal error—a question not subject to judicial review. (Moncharsh, 

supra, 3 Cal.4th at p. 33.) In light of this conclusion, we do not further address the merits 

of Prima Donna’s contention.

For these reasons, the trial court did not err in denying Prima Donna’s petition to 

vacate the arbitration award. 

III. DISPOSITION

The order compelling arbitration and judgment confirming the arbitration award 

are affirmed. Respondent is entitled to its costs on appeal.
______________________________________

DANNER, J.

WE CONCUR:

____________________________________

GREENWOOD, P.J.

____________________________________

GROVER, J.

H045379

Prima Donna Development Corporation v. Wells Fargo Bank, N.A.
Trial Court: Santa Clara County Superior Court

Superior Court No. 1-15-CV-276708

Trial Judge: Hon. Maureen A. Folan 

Counsel for Plaintiff/Appellant 

Prima Donna Development 

Corporation

Dincel Law Group

Kim Omer Dincel

Counsel for Defendant/Respondent 

Wells Fargo Bank, N.A.

Severson & Werson

Jan T. Chilton

Marquis I. Wraight 

H045379

Prima Donna Development Corporation v. Wells Fargo Bank, N.A.