1 Filed 7/24/14 Baillie v. Assenzio CA1/3 NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION THREE

AMY LYNNE BAILLIE et al., Plaintiffs and Respondents,

v. THOMAS ASSENZIO, Defendant and Appellant. A139144
(Alameda County Super. Ct. No. JCCP004688)

ORDER MODIFYING OPINION AND DENYING REHEARING; NO CHANGE IN JUDGMENT

THE COURT: It is ordered that the opinion filed herein on June 30, 2014 be modified as follows:
1. In footnote 9, at pages 9 and 10, th e date “December 4, 2014” should be “December 4, 2013”. 2. In footnote 11, at page 13, the wo rd “appellant” should be changed to “respondent” so that the sentence now reads: “As explained above, we fail to understand and respondent fails to explain why a substitute arbitrator could not apply the NAF Code in the sa me straightforward manner as a NAF arbitrator.”

There is no change in the judgment. Re spondents’ petition for rehearing is denied.

Date: ____________ ____

_____________________ ___Acting P.J.1 Filed 6/30/14 (unmodified version) NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION THREE

THOMAS ASSENZIO, Defendant and Appellant,

v. AMY LYNNE BAILLIE et al., Plaintiffs and Respondents. A139144
(Alameda County Super. Ct. No. JCCP004688)

This is an appeal from a trial court or der denying appellant Thomas Assenzio’s motion to compel arbitration and to stay th e proceedings. This motion was brought in response to a lawsuit filed against appella nt (and others) by respondents Amy Lynne Baillie and Kathrine Rosas based on the allege dly illegal lending prac tices of a number of corporations under appellant’s direct owners hip, management or control. Appellant moved to compel arbitration and to stay th e action. The trial court denied the motion after finding that an integral part of the pa rties’ agreement to arbitrate – to wit, its designation of the National Arbitration Foru m (NAF) as arbitrator and its Code of Procedure as the governing ru les – could not be enforced given NAF’s una vailability to arbitrate consumer disputes, with the result th at arbitration under th e agreement could not be compelled. For reasons discussed belo w, we reverse the trial court’s decision.
FACTUAL AND PROCED URAL BACKGROUND This is a class action lawsuit brought by respondents Baillie and Rosas on behalf of “All persons . . . who . . . entered into Instant Cash Agreem ents with Defendant2 Lenders” via the “same standard form ag reement.” Among other things, respondents
seek on behalf of themselves and all othe r similarly situated persons, damages and injunctive relief based on defendants’ a llegedly “unfair, unlawful and deceptive schemes,” including their charging and colle cting of “usurious/unconscionable interest”
from class members. Defendants, mainly consis ting of several corporate entities including Accounts Receivable Management of Florida Inc., Processing Solutions, LLC, MTE Financial Services, Inc., and Instant Cash USA, an d Rio Resources, are involved in marketing short-term loans over the internet, processing loan applications and/or servicing these
loans. 1 Respondent Baillie obtained a $300 loan from “USFastCash” on or about July 2, 2006, as evidenced by a Note identifying as the lender defendant MTE Financial Services, Inc. dba Instant Cash USA. Respond ent Rosas, in turn, ob tained a $300 loan

from defendant Rio Resources on or about Ju ne 19, 2006, as well as a $300 loan from
Instant Cash USA on or ab out November 3, 2006. The original complaint, filed by re spondent Baillie on May 22, 2007, also
identified numerous “Doe” defendants. In the third amended complaint, filed on November 3, 2010, appellant was first adde d as one of these “Doe” defendants, and respondent Rosas was added as a plaintiff/ class representative. The third amended complaint alleged that appellant “owned, controlled, managed, and/or directed defendants Processing Solutions, LLC, First East Inc., MTE Financial Services, Inc., Instantcashloantillpayday.com, Instant Cash USA, and Rio Resources.” Claims were thus raised against appellant based upon a theory of “piercing the corporate veil.” Appellant initially contested the court’s pe rsonal jurisdiction over him based on his Florida residency. This jurisdictional ch allenge was ultimately unsuccessful, and the
matter moved forward.

1 Defendant Processing Solu tions, LLC is a Delaware company that acts as a servicing company for defendant MTE Financial Services, doing business as Instant Cash USA (MTE). Processing Solutions assists MTE in marketing loans over the internet and processes loan applications submitte d electronically to MTE online.3 Before appellant was named as a de fendant, however, defendants Processing Solutions, LLC, First East Inc., and Instant Ca sh USA moved to compel arbitration and to stay the proceedings. This motion was based on the arbitration agre ement included in the standard form agreement allegedly entered into by the plainti ff class members entitled Agreement to Arbitrate All Disputes (hereinafter, Arbitration Agreement). 2 Among other

2 The Arbitration Agreement, in its entirety, provides: “AGREEMENT TO ARBITRATE ALL DISPUTES: By signing be low and to induce us, MTE Financial Services dba Instant Cash US A, to process your applica tion for a loan, you and we agree that any and all claims, disputes or controversies th at we or our servicers or agents have against you or y ou have against us, our serv icers, agents, directors, officers and employees, that ar ise out of your application for one or more loans, the Loan Agreements that govern your repaymen t obligations, the loan for which you are applying or any other loan we previously made or later ma ke to you, this Agreement to Arbitrate All Disputes, collection of the loan or loans, or alleging fraud or misrepresentation, whether under the comm on law or pursuant to federal or state statute or regulation, or ot herwise, including disputes as to the matter subject to arbitration, shall be resolv ed by binding individual (and no t class) arbitration by and under the Code of Procedure of the National Arbitration Forum (‘NAF ’) in effect at the time the claim is filed. THEREFORE, THE ARBITRATOR SHALL NOT CONDUCT CLASS ARBITRATION; TH AT IS, THE ARBITRATOR SHALL NOT ALLOW YOU TO SERVE AS A REPRESENTATIVE, AS A PRIVATE ATTORNEY GENERAL, OR IN ANY OTHER REPR ESENTATIVE CAPACITY FOR OTHERS IN THE ARBITRATION. This Agreement to Arbitrat e All Disputes shall apply no matter by whom or against whom the claim is filed. Rules and forms of the NAF may be obtained and all claims shall be file d at any NAF office, on the World Wide Web at www.arbforum.com, or at ‘National Arbitration Fo rum, P.O. Box 50191, Minneapolis, Minnesota 55405.’ If you are unab le to pay the costs of arbitrati on, your arbitration fees may be waived by the NAF. Th e cost of a participatory hearing, if one is held at your or our request, will be paid for sole ly by us if the amount of th e claim is $15,000 or less. Unless otherwise ordered by the arbitrator, you and we agree to eq ually share the costs of a participatory hearing if the claim is for more than $15,000 or less than $75,000. Any participatory hear ing will take place at a location near your residence. This arbitration agreement is made pursuant to a transaction involving interstate commerce. It shall be governed by the Fe deral Arbitration Act, 9 U.S. C. [§§] 1-16. Judgment upon the award may be entered by any party in any court having jurisdictio n. This Agreement To Arbitrate All Disputes is an independent ag reement and shall survive the closing, funding, repayment and/or default of the lo an for which you are applying. NOTICE: YOU AND WE WOULD HAVE HAD A RIGH T OR OPPORTUNITY TO LITIGATE DISPUTES THROUGH A COURT AND HAVE A JUDGE OR A JURY DECIDE THE4 things, the Arbitration Agr eement provided that arbitration among the parties was required to be individual and binding, and would be held by and under the NAF Code of Procedure in effect at the time the claim(s) wa s filed, and that any cl aim should be filed at the NAF office or on its website. Further, with respect to covered claims, such as those raised in this lawsuit, the Arbitration Ag reement set forth the fo llowing notice: “YOU
AND WE WOULD HAVE HAD A RIGHT OR OPPORTUNITY TO LITIGATE
DISPUTES THROUGH A COURT AND HAVE A JUDGE OR A JURY DECIDE THE
DISPUTES BUT HAVE AGREED INSTEAD TO RESOLVE DISPUTES THROUGH BINDING ARBITRATION.” Finally, the Arbitration Agreement prohibited the arbitrator from conducting class or ot herwise representative arbitrations. For legal reasons wholly distinct from t hose implicated in this appeal, the trial
court denied the other defendants’ motion to co mpel and to stay proceedings. This court thereafter affirmed the trial court’s decision ( Baillie v. Processing Solutions, LLC , No. A125167 (May 27, 2010)), and the California Supreme Court denied defendants’ petition for review (S184194, Aug. 11, 2010). 3 Thereafter, on March 25, 2013, appellant filed the motion to compel arbitration and to stay court proceedings at issue in th is appeal, also based on the above-described Arbitration Agreement. 4 In his motion, appellant, am ong other things, called upon the

DISPUTES BUT HAVE AGREED INSTEAD TO RESOLVE DISPUTES THROUGH BINDING ARBITRATION.”

3 These defendants thereafter filed a renewe d motion to compel arbitration based on a subsequently-decided United States Supreme Court case, AT&T Mobility LLC v. Concepcion (2011) 563 U.S. __, 131 S.Ct. 1740, 179 L.Ed.2d 742. However, this motion was denied on procedural grounds. In add ition, on September 28, 2012, this case was removed to federal court, at which time th e defendants again moved to compel, arguing the federal court was authorized to revisit ea rlier state court orders. However, the case was ultimately remanded to state court, with the federal court deny ing the motion without prejudice to refiling in state court “to th e extent otherwise permissible.” (See Rosas v. USFastCash (N.D. Cal. 2012) 2012 U.S. Dist . LEXIS 173453 at *2-*3, fn. 1.)

4 Appellant filed separate such motions against respondent Ba illie and respondent Rosas that were in all material regards identical. The trial c ourt treated them collectively, as do we.5 trial court to appoint a substitute arbitrator gi ven that NAF, the arbitr ator identified in the Arbitration Agreement, was no longer accepting consumer disputes such as the dispute in
this case. Appellant’s motion was heard on June 7, 2013. The trial court preliminarily found that appellant had standing to enforce the Arbitration Agreement because he was alleged to be the agent or alter ego of a signatory , and that he was not bound by orders denying other defendants’ motions to compel arbitrat ion because they were made prior to his presence in this litigation. In addition, the trial court found that, under the Arbitration Agreement, issues of arbitrability were to be decided by the c ourt rather than the
arbitrator. The trial court th en found the Arbitration Agreement was not enforceable for the following reasons. First, the court foun d the parties’ designation of NAF, which no longer arbitrates consumer disputes, was an “i ntegral” part of the Arbitration Agreement. In so finding, the trial court found of “particular significance” the fact that the Arbitration Agreement not only identified NAF as the ar bitral forum, it also designated the NAF Code of Procedure as the applicable rules. The trial court then concluded that, because NAF is integral to the parties’ agreemen t and is unavailable to arbitrate consumer disputes, “to appoint a substitute arbitrator would constitute a wholesale revision of the [Arbitration Agreement],” which the court declin ed to undertake. As such, the trial court denied appellant’s motion to compel arbitrati on, prompting this appe al pursuant to Code
of Civil Procedure section 1294, subdivision (a).
DISCUSSION Appellant challenges the or der denying his petition to co mpel arbitration on the ground that the trial court erroneously refu sed to appoint a substitute arbitrator as required by Section 5 of the Federal Arbitration Act, 9 U.S.C. section 1 et seq. (hereinafter, FAA). As stated above, the tria l court reasoned that the parties’ designation of NAF as arbitrator was an integral part of the Arbitration Agreement and, thus, that NAF’s unavailability to arbitrate the parties’ consumer dispute prec luded its enforcement of the Arbitrator Agreement. According to appellant, the tr ial court’s order and reasoning was a misapplication of law. The following lega l principles govern appellant’s challenge.6 I. Standard of Review. In the trial court, a motion to compel arbitration is subj ect to the following rules. “[Code of Civil Procedure] s ections 1281.2 and 12 90.2 create a summa ry proceeding for resolving these petitions. [Citation.] The pe titioner bears the burde n of proving the existence of a valid arbitration agreement by the preponderance of the evidence, and a party opposing the petition bears the burden of proving by a preponderance of the evidence any fact necessary to its defense. [Citation.] In these summary proceedings, the trial court sits as a trier of fact, weighi ng all the affidavits, declarations, and other documentary evidence, as well as oral testimony received at the court’s discretion, to reach a final determination. [Citation.]” ( Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972.) On appeal, where no material facts are in dispute, we review the enforceability of the arbitration clause de novo. ( NORCAL Mutual Ins. Co. v. Newton (2000) 84 Cal.App.4th 64, 71; Mercuro v. Superior Court (2002) 96 Cal.App.4th 167, 174.) Here, the relevant material facts, most of which relate to specific terms of the Arbitration Agreement, are undisputed, triggering just such de novo review. And because, like other written agreements, the Arbitration Agreemen t is a matter of contract, California substantive law governs. ( Mitsubishi Motors Corp. v. So ler Chrysler-Plymouth, Inc. (1985) 473 U.S. 614, 626 [ Mitsubishi Motors Corp. ].) However, the parties also agree that, pursuant to one specific term of the Arbitration Agreement, the FA A governs its enforceability. 5 As such, we must also look to federal case law for guidance in in terpreting and applying the FAA.
II. The FAA and Relevant Caselaw. As the United States Supreme Court inst ructs: “While the interpretation of an arbitration agreement is generally a matter of state law, [citations], the FAA imposes
certain rules of fundamenta l importance . . . .” ( Stolt-Nielsen S.A. v. AnimalFeeds Int’l

5 The Arbitration Agreement provides: “This arbitration agreement is made pursuant to a transaction invol ving interstate commerce. It shall be governed by the Federal Arbitration Act, 9 U.S.C. Sections 1-16.”7 Corp . (2010) 559 U.S. 662, 681.) Of signifi cance here are two such fundamentally important rules – first, “the basic precept th at arbitration ‘is a matter of consent, not coercion,’ Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior Univ., 489 U.S. 468, 479, 10 9 S. Ct. 1248, 103 L. Ed. 2d 488 (1989) [ Volt Info .]” ( StoltNielsen S.A. v. AnimalFeeds Int’l Corp

. , supra, 559 U.S. at p. 681), and second, the strong federal policy favoring arbitration that requires all doubts and ambiguities regarding the scope of arbitration agreements to be resolved in favor of the party moving to compel arbitration ( Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp . (1983) 460 U.S. 1, 24- 25 [“questions of arbitrability must be addressed with a healthy regard for the federal policy favoring ar bitration”]). Indeed, “the policy of enforceability established by section 2 of the FAA is binding on state cour ts as well as federal courts.” ( Cronus Investments, Inc. v. Concierge Services (2005) 35 Cal.4th 376, 380, 383-384; see also Code of Civ. Proc., § 1280 et seq. [California Arbitration Act].) Here, in applying these guiding principles, we must determine whether the provision in the Arbitration Agreement desi gnating NAF as arbitrator of the parties’ disputes, and its Code of Procedure as governing rules, precludes the court from appointing a substitute arbitrator in light of the undisputed fact that NAF is no longer
available to serve as arbitrator of commercial disputes such as the one involved in this case. Relying on Section 5 of the FAA (herei nafter, Section 5), appellant argues the trial court indeed has authority to appoint a substitute arbitrator under these circumstances. As appellant notes, Section 5 sets forth a mechanism for naming a substitute arbitrator when the agreement’s designa ted arbitrator is not ava ilable to hear the dispute. 6

6 Section 5 provides in relevant part as follows: “If in the ag reement provision be made for a method of naming or appointing an ar bitrator or arbitrators or an umpire, such method shall be followed; but if no method be provided therein, or if a method be provided and any party thereto shall fail to avail himself of such method, or if for any other reason there shall be a lapse in the nami ng of an arbitrator or arbitrators or umpire, or in filling a vacancy, then upon the application of eith er party to the controversy the court shall designate and appoint an arbitrator or arbitrators or umpire, as the case may require, who shall act under the said agreement w ith the same force and effect as if he or8 However, respondents, like the trial cour t, dispute the court’s authority under Section 5 to appoint a substitute arbitrat or, reasoning that appointing a substitute arbitrator in this case would run contrary to the parties’ mutual intent under the Arbitration Agreement to designate NAF as exclusive arbitrator. In so arguing, respondents, like the trial court, rely on an exception to Section 5 rooted in federal case law where arbitrating parties’ designation of a particular arb itrator or arbitral forum is deemed “integral” to their ag reement to arbitrate. To determine which legal position should be adopted for purposes of this case, we take a closer look at this case law. 7 The Third Circuit Court of Appeals ha s succinctly described the so-called “integral” test as follows: “I n determining the applicability of Section 5 of the FAA when an arbitrator is unavailable, courts ha ve focused on whether the designation of the arbitrator was ‘integral’ to the arbitra tion provision or was merely an ancillary
consideration. See, e.g., Reddam v. KPMG LLP , 457 F.3d 1054, 1061 (9th Cir. 2006) [ Reddam ], abrogated on other grounds by Atlantic Nat’l Trust LL C v. Mt. Hawley Ins.
Co. , 621 F.3d 931 (9th Cir. 2010); Brown [v. ITT Consumer Fin. Corp . (11th Cir. 2000) 211 F.3d 1217], at 1222. As the Eleventh Circ uit has articulated the standard: ‘[o]nly if the choice of forum is an integral part of the agreement to arbitr ate, rather than an “ancillary logistical concern,” will the failure of the chosen forum preclude arbitration.’
Id . In other words, a court will decline to appoint a substitute arbitrator, as provided in the FAA, only if the parties’ choice of foru m is ‘so central to the arbitration agreement that the unavailability of that arbitrator [brings] the agreement to an end.’ Reddam , 457 F.3d at 1061. In this light , the parties must have unambi guously expressed their intent

they had been specifica lly named therein; and unless othe rwise provided in the agreement the arbitration shall be by a single arbitrator.” (9 U.S.C.S. § 5.)

7 Neither party challenges the genera l proposition that Section 5 permits the appointment of a substitute arb itrator where, as here, the ar bitrator or arbitral forum designated in the underlying arbitration agreem ent is unavailable to hear the dispute. (See, e.g., Khan v. Dell Inc. (3d Cir. 2012) 669 F.3d 350, 356-358 [concluding “the unavailability of NAF to hear the disputes between Khan and Dell constitutes a ‘lapse’ within the meaning of Section 5”].)9 not to arbitrate their disput es in the event that the de signated arbitral forum is unavailable.” ( Khan v. Dell Inc . (3d Cir. 2012) 669 F.3d 350, 354.) Thus, applying this standard to the case at hand, we must determine whether the Arbitration Agreement and, mo re specifically, its references to NAF, are an “integral” part of the parties’ agreement such that appellant cannot comp el arbitration in the face of NAF’s unavailability. 8 The trial court found the “integra l” standard met due primarily to two facts. First, as noted above, the Arbitr ation Agreement identifie s NAF as the arbitral forum. Second, the Arbitra tion Agreement provides that the NAF Code of Procedure “shall” govern any arbitr ation among the parties. 9 The precise language of the

8 We reject appellant’s suggestion that we should decline to appl y the “integral” test on the ground that it conflicts with Section 5, which, he says “always requires a court to appoint an arbitrator” when the designated arbitrator is unavailable. Despite language questioning the wisdom of the judicially-craft ed “integral” exception to appointment of an arbitrator under Section 5 found in appellant’s authority, Green v. U.S. Cash Advance Illinois, LLC (7th Cir. 2013) 724 F.3d 787, 790-793, numerous courts across the United States have recognized and applied this lega l standard when deciding whether Section 5 provides a basis, under a particular arbitratio n agreement, to appoint an arbitrator other than the one identified in the agreement. (E.g., Reddam, supra, 457 F.3d at p. 1061; Brown, supra, 211 F.3d at p. 1222; Khan v. Dell Inc., supra, 669 F.3d at p. 356.) In doing so, these courts have found the “integra l” or “ancillary concer n” test consistent with well-established state principles of cont ract law requiring courts to effectuate the intent of the parties when deciding whether to enforce all or part of an arbitration agreement. (Eg., Rivera v. Am. Gen. Fin. Servs . (2011 N.M.) 259 P.3d 803, 812 [“[the integral test] . . . best comp lies with the admonition of th e United States Supreme Court that a fundamental purpose of the FAA is to require that courts enforce arbitration agreements ‘according to their terms.’ Volt Info ., 489 U.S. 479.”]; Khan v. Dell Inc., supra, 669 F.3d at p. 354 [“the FAA respects the ‘fundamental principle that arbitration is a matter of contract,’ [citation], and that ‘arbitration “is a matter of consent, not coercion” ’ ”].) We agree w ith these decisions. (Compare Green v. U.S. Cash Advance Illinois, supra, 724 F.3d at p. 791 [“When a court decl ares that one or another part of an arbitration clause is ‘integral’ and that the cl ause is therefore unenforceable as a matter of federal common law, it is eff ectively disagreeing with Congre ss, which provided that a judge can appoint an arbitrator when for ‘any’ reason something has gone wrong”].)

9 We grant appellant’s motion for judicial notice, dated October 2, 2013, of the NAF Code of Procedure, which, as noted above, is designated under the Arbitration Agreement to govern any arbitration proceedings arising under the agreement. ( Boghos v. Certain Underwriters at Lloyd’s of London (2005) 36 Cal.4th 495, 50 5 fn. 6, citing Evid. Code10 Arbitration Agreement that rela tes to these facts reads as fo llows: “[Disputes] shall be resolved by binding individual . . . arbitra tion by and under the Code of Procedure of [NAF] in effect at the time the claim filed. . . . Rules and forms of the NAF may be
obtained and all claims shall be filed at any NAF office, on the World Wide Web at www.arb-forum.com, or at ‘National Arbitr ation Forum, P.O. Box 50191, Minneapolis,
Minnesota 55405.’ ” In add ition, aside from the Arbitration Agreement itself, the parties also accept the relevance (albeit for different reasons) of one specific part of the NAF Code of Procedure, Rule 1.A, which provides in relevant part: “Parties who contract for or agree to arbitration by [NAF] or this Code of Procedure agree that this Code governs their arbitration proceedings, un less the Parties agree to other procedures. . . . This Code shall be administered only by [NAF] or by any entity or i ndividual providing administrative services by agreement with [NAF].” We have carefully reviewed this releva nt language within the legal framework prescribed by federal law. Having done so, we disagree with the trial court that this language is so clear as to establish the par ties’ intent that NAF, and only NAF, must arbitrate all disputes arising out of the Arb itration Agreement and, that, in the event of NAF’s unavailability, the agreement itself should be deemed void. In particular, having considered the Arbitration Agre ement, as we must, in light of the federal mandate to
resolve any ambiguities in favor of the party seeking to compel arbitration, we identify several circumstances weighing against a conclusion that the NAF designation in this case is integral to the pa rties’ agreement. (See Mitsubishi Motors Corp., supra , 473 U.S. at p. 626 (“[A]s with any other contract, the parties’ intentions control, but those intentions are generously cons trued as to issues of arbitr ability”].) For ex ample, we, like respondents, note that the Agreement’s designation of NAF doe s not include any language of exclusivity, which other courts have deemed significant. (Cf. Carideo v.

§ 452, subd. (h) [authorizing judicial notice of “ Facts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy”].) Appellant’s request to file a reply in support of his motion for judicial notice, filed D ecember 4, 2014, is therefore moot.11 Dell, Inc . (W.D. Wash. 2009) 2009 U.S. Dist . LEXIS 104600, at *5 [finding the language, “SHALL BE RESOLVED EX CLUSIVELY AND FINALLY BY BINDING
ARBITRATION ADMINISTERED BY [NAF],” indicative that the NAF designation was integral to the par ties’ agreement]; compare Adler v. Dell (E.D. Mich. 2009) 2009 U.S. Dist. LEXIS 112204 at *2 [finding the NAF designation was not integral to the parties’ agreement despite language in the contract that disputes “SHALL BE
RESOLVED EXCLUSIVELY AND FINA LLY BY BINDING ARBITRATION
ADMINISTERED BY THE NATIONAL A RBITRATION FORUM (NAF) under its Code of Procedure then in effect”].) Al so absent from the Arb itration Agreement is language stating, or even suggesting, that the parties harbored an intent to forego arbitration completely if NAF were unavailabl e. Quite to the contrary, the Arbitration Agreement states that “any and all claims, disputes or controversies . . . including disputes as to the subject matter of arbitra tion, shall be resolved by binding individual (and not class) arbitration . . . .” This lang uage requiring all claims to be resolved by binding arbitration rather than by a court of law is, we conclude, more clear than the language identifying NAF as the arbitral forum and its Code of Procedure as the applicable law. We also agree with appellant there is no readily apparent reason why a substitute arbitrator could not apply the NAF Code of Procedure to the dispute. As other courts have recognized, the NAF Code consists of “common proced ural rules” often employed in legal proceedings. While respondents ar e correct that Rule 1.A of the NAF Code requires it to be “administered only by [N AF] or any entity or individual providing administrative services by agreement with [N AF]”, other courts have not viewed this language as a bar to appointment of a substitute arbitrator under Section 5. In fact, the
Seventh Circuit Court of Appeals just recently acknowledge d that “the possibility [exists]
of arbitration outside the Fo rum’s auspices, but using its rules of procedure.” ( Green v. U.S. Cash Advance Illinois, LLC (7th Cir. 2013) 724 F.3d 787, 789. See also Wright v. GGNSC Holdings, LLC (S.D. 2011) 808 N.W.2d 114, 120 [“although a substitute arbitrator may not administer the NAF Code, a competent substitute arbitrator can apply12 the NAF’s rules of procedure that public codes cover. See Carr [ v. Gateway, Inc. (2011) 241 Ill. 2d 15] at 31, 944 N. E.2d at 335 (‘[I]t is possible in some cases for a substitute arbitrator to use the rules specified in an ar bitration agreement and where that is so, the mere designation of particular rules to gove rn an arbitration will not prevent the naming of a substitute arbitrator under [S]ection 5.’ (citing Reddam, 457 F.3d at 1060; Brown, 211 F.3d at 1222; Zechman [ v. Merrill Lynch, Pierce, Fenner & Smith, Inc . (N.D. Ill. 1990) 742 F. Supp. 1359] at 1365; see also Adler v. Dell Inc., No. 08-CV-13170, 2009 U.S. Dist. LEXIS 112204, 2009 WL 4580739, at *5 (E.D. Mich. Dec. 3, 2009) (‘The court instructs the parties to confer and agr ee on an alternative arbitrator who will apply
the rules of NAF under its Code of Procedure, if possible.’); Levy v. Cain, Watters & Assocs., P.L.L.C., No. 2:09-CV-723, 2010 U.S. Dist . LEXIS 9537, 2010 WL 271300, at *11 (S.D. Ohio Jan. 15, 2010) (ordering same) [fn. omitted]”].) 10

The Ninth Circuit has reached a similar re sult in a case involving designation of the parties’ use of the procedural rules of the National Association of Securities Dealers (NASD), but not the NASD foru m itself. In concluding such designation was not integral to the parties’ arbitration agreemen t, the Ninth Circuit reasoned: “ The provision in the [arbitration agreement] does select the rules of the NASD, but does not state that the arbitration is to take place before the NASD itself. Had the latte r been intended, the parties could easily have said so. In fact, a more recent version of [the arbitration agreement] reads: ‘I agree to arbitrate with you any controversies . . . only before the New York Stock Exchange or the National Association of Securities Dealers Regulation, Inc. at my election.’ The absence of similar la nguage militates in favor of a decision that the provision in question here do es not select a forum at all. ” ( Reddam, supra, 457 F.3d at p. 1059.) We find this reasoning persuasi ve, and relevant to the case at hand.

10 The South Dakota court appears to dis tinguish the verbs “administer” and “apply,” noting that “review of the NAF Code reflects that NAF administration involve[s] what is commonly provided by many arbitration serv ices available today,” including other general arbitration administrators such as the American Arbitration Association (AAA) and the Judicial Arbitration and Mediation Services (JAMS). ( Wright v. GGNSC Holdings, LLC, supra, 808 N.W.2d at p. 120.)13 Moreover, we also find significant the fact that Rule 1.A expressly permits the parties to opt out of the NAF Code of Proced ure and to “agree to other procedures.” In light of this provision, we disagree with the trial court’s conclu sion, or at least the significance of its conclusion, that “there are simply no NAF rules curre ntly in effect for [consumer] arbitrations” given NAF’s decisi on to no longer arbitrate such disputes. 11 If anything, we find this provision adds to th e ambiguity surrounding the parties’ intent
when confronted with the unavailability of NAF. 12

11 For the same reasons just stated, we disagree with the similar reasoning of respondent’s authority, Sunbridge Retirement Care Associates LLC v. Smith (Ga.Ct.App., Mar. 26, 2014, A13A2129) 2014 Ga. App. LEXIS 232, page *9, which was produced for the first time at oral argument. Specifically , the Georgia Court of Appeals held: “Even if a non-NAF arbitrator were appointed, the NA F Code would still appl y under the terms of the parties’ agreem ent. And because the NAF Code has in effect been canceled , Rule 48 of the Code authorizes the parties to pursue other remedies.” ( Ibid , italics added.) As explained above, we fail to understand and ap pellant fails to expl ain why a substitute arbitrator could not apply the NAF Code in the same straightforward manner as a NAF arbitrator. Moreover, even asid e from the procedural rules se t forth in the NAF Code of Procedure, we note that any arbitrator h earing the parties’ dispute, whether a NAF arbitrator or a substitute arb itrator, would nonetheless be ca lled upon to apply the same substantive law with respect to the parties’ claims. ( Wright v. GGNSC Holdings, LLC, supra, 808 N.W.2d at p. 120 [not ing that the NAF Code simply requires the arbitrator to apply the “applicable substan tive law”].) Accordingly, it is far from clear that the appointment of a substitute arb itrator would have any effect on the actual outcome of the parties’ arbitration.

12 Appellant points to another part of th e NAF Code, Rule 48.D, which he contends could be relied upon as a basis for severing the Rule 1.A requirement that NAF or its affiliate administer the NAF Code. Responde nts, in turn, contend that a court cannot sever any term or condition of an otherwise va lid contract unless it first determines that the contract is by “its nature and purpos e . . . susceptible of division” without undermining the parties’ mutual intent. (See Filet Menu, Inc. v. C.C.L. & G., Inc . (2000) 79 Cal.App.4th 852, 860.) Here, the trial cour t made no such finding; nor was it asked to. We agree with appellant this severance provisi on, if anything, weighs against finding the NAF designation integral to the Arbitration Agreement. While we accept respondents’ recitation of the general rules governing severa nce of a contract, we nonetheless conclude the incorporation of Rule 48.D into the Arbitration Agreement, without more, is probative of the broader issue of whether the pa rties mutually intended to arbitrate in the event of NAF’s un availability. (See Jones v. GGNSC Pierre LLC (D. S.D. 2010) 68414 Thus, based on our reading of the Arbitr ation Agreement as a whole, including the provisions relied upon by both parties, we conclude th e language identifying NAF as
arbitrator and its Code of Procedure as the a pplicable procedural law is at best ambiguous as to whether the parties intended to forego their express agreement that all disputes “shall be resolved by binding individual arbitration” due to NAF’s unavailability. In other words, whether the parties’ designati on of NAF was an integral or ancillary component of their agreement to arbitrate cannot be defin itively determined on this record. (See Brown, supra, 211 F.3d at p. 1222; Khan v. Dell Inc., supra, 669 F.3d at p. 356.) And, under such circumstances, the United States Suprem e Court mandates that we resolve this contractual ambiguity in fa vor of arbitration, not against it. (E.g., Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., supra, 460 U.S. at pp. 24-25.) As respondents’ own authority counsel s: “[T]he mere fact parties name an arbitral service to handle arbitrations and specify rules to be applied does not, standing alone, make that designation integral to the ag reement. If this were so, section 5 of the Arbitration Act would not apply in any case where the parties specify an arbitrator that later becomes unwilling or unable to handle the arbitra tion. Such a construction would encourage parties to be as vague as possible in drafting their arbitration agreem ents to guard against a court refusing to apply section 5 of the Act in the event the chosen arbitral forum
became unavailable. Section 5 anticipates that a named arbitral forum may become unavailable and it provides a mechanism to appoint a substitute.” (Cf. Carr v. Gateway,

Inc

. , supra, [241 Ill. 2d 15] 944 N.E.2d 327, 3 35 [concluding the designation of NAF as

F.Supp.2d 1161, 1166-1 167 [“The severance provision i ndicates that the intention was not to make the NAF integral, but rather to have a dispute resolution process through arbitration”]; Selby v. Deutsche Bank Trust Co. Ams . (S.D. Cal. 2013) 2013 U.S.Dist. LEXIS 46101, at p. *38 [“th e severability provision contained in the Agreement permits the references to NAF and the NAF Code to be removed without invalidating related provisions providing for the arbitration of all cl aims”].) This is partic ularly true when the NAF Code’s severance provision is consider ed together with, one, the Arbitration Agreement’s incorporation of Section 5 and its straightforward mechanism for naming a substitute arbitrator and, two, the federal ma ndate to resolve ambiguities in favor of the party compelling arbitration.15 the arbitral forum was integral to the arbitration agreement where, in addition to provisions designating NAF as the forum and its Code of Procedure as the governing
rules , a provision within the agreement expre ssly “penalizes any party for bringing a dispute in any forum other than the NAF”]. See also Khan v. Dell Inc., supra, 669 F.3d at p. 356 [noting “that the arbitration provis ion in the [arbitration agreement] specifically incorporated the FAA, 9 U.S.C. §§1-16, su ggesting that, in the event of the NAF’s unavailability, the FAA’s procedures for ad dressing such a problem should apply”].) Accordingly, we hold that, under Secti on 5, which the parties have specifically incorporated into the Arbitr ation Agreement, the trial co urt must appoint a substitute arbitrator in light of NAF’s unavailability to condu ct the arbitration under the NAF Code
of Procedure in effect at the time the claim was filed unless, pursuant to Rule 1.A of that Code, “the parties agree to other procedures.” The trial court’s contrary conclusion thus requires us to reverse the subject order an d remand for further proceedings consistent with our opinion.
DISPOSITION The order denying appellant’s petition to compel arbitration is reversed, and the matter is remanded for further proceedings consistent with the conclusions reached
herein.

_ ____________ ____________ Jenkins, J.

We concur:

_____________ ____________ Pollak, Acting P. J.

_____________ ____________ Siggins, J.