Filed 3/3/16 Viamontes v. Adriana’s Insurance Services CA2/3

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication 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

SECOND APPELLATE DISTRICT

DIVISION THREE

LISET VIAMONTES et al.,

Plaintiffs and Respondents,

v.

ADRIANA’S INSURANCE SERVICES, 

INC., et al.,

Defendants and Appellants.

B253407

(Los Angeles County

Super. Ct. No. BC502472)

APPEAL from an order of the Superior Court of Los Angeles County,

Elihu M. Berle, Judge. Reversed with directions.

Michelman & Robinson, Mona Z. Hanna, W. Spencer Hammer, III and Robin 

James for Defendants and Appellants.

Matern Law Group, Matthew J. Matern and Rania S. Habib for Plaintiffs and

Respondents.

_____________________
2

INTRODUCTION

Defendants Adriana’s Insurance Services, Inc. (Adriana’s) and Veronica’s 

Insurance Services, Inc. (Veronica’s) appeal from an order denying their petitions to 

arbitrate employment-related claims brought by their employees, Plaintiffs Aldo Alpizar 

and Liset Viamontes, in the Superior Court. Defendants based their petitions on standalone Agreements for Binding Arbitration (the Agreements) that both Plaintiffs 

admittedly signed as a condition of their employment, and a separate Arbitration 

Agreement section of Defendants’ Employee Handbook (the Handbook) that was

purportedly incorporated into the Agreements by reference. Plaintiffs opposed the 

petitions on the principal grounds that there had been no meeting of the minds because 

Plaintiffs never received a copy of the Handbook, and that the Agreements were 

unconscionable because they required only Plaintiffs, but not Defendants, to arbitrate 

their employment-related disputes. The trial court found Defendants’ evidence 

insufficient to establish that Plaintiffs had received the Handbook in connection with 

signing the Agreements and, on that basis, concluded the Agreements, standing alone, 

were unconscionable. The court denied Defendants’ petitions to compel arbitration 

accordingly.

On appeal, Defendants contend the trial court’s finding that Plaintiffs had not 

received the Handbook was an insufficient basis for denying their petitions to arbitrate. 

Defendants also argue the trial court abused its discretion by denying their request for a 

continuance to submit additional evidence proving Plaintiffs had in fact received the 

Handbook. While we agree with Defendants that the signed Agreements were sufficient 

to establish Plaintiffs agreed to arbitrate their employment-related claims, we disagree 

with their contention that the trial court’s finding was insufficient to support its 

unconscionability ruling. Nevertheless, to the extent it was the trial court, at the hearing, 

that first linked unconscionability to the absence of evidence establishing Plaintiffs

received the Handbook, we conclude it was an abuse of discretion to deny Defendants’ 

request for a brief continuance to submit additional evidence on this pivotal factual issue. 

Accordingly, we will reverse the order and direct the trial court to allow Defendants to 
3

submit the additional evidence. Plaintiffs shall have an opportunity to respond to the new 

evidence before the court rules on the petitions.

FACTS AND PROCEDURAL BACKGROUND

Defendants Adriana’s and Veronica’s are companies licensed to sell auto 

insurance policies in California and Texas. Alpizar is a former employee of Adriana’s. 

Viamontes is a former employee of Veronica’s. Plaintiffs allege Adriana’s and 

Veronica’s are affiliated entities, and the individual defendants—the founders and chief 

executive officers of Adriana’s and Veronica’s—are the companies’ alter egos.

Plaintiffs filed a putative class action complaint against Defendants in the superior 

court, wherein they allege Defendants committed various wage and hour violations 

prohibited under the Labor Code. The complaint asserts causes of action for (1) failure to 

provide required meal periods; (2) failure to provide required rest periods; (3) failure to 

pay overtime wages; (4) failure to pay minimum wages; (5) failure to pay all wages due 

to discharged and quitting employees; (6) failure to maintain required records; (7) failure 

to furnish accurate itemized statements; (8) injunctive relief under the Unfair 

Competition Law, Business and Professions Code section 17200 et seq. (UCL); and 

(9) penalties under the Labor Code Private Attorney General Act, Labor Code section 

2698 et seq. (PAGA).

In response to the complaint, Defendants filed substantively identical petitions to 

compel arbitration of each Plaintiff’s individual claims. Defendants supported the

petitions with declarations from each company’s director of human resources. Both 

declarations state in substantive part:
4

“Attached hereto as Exhibits ‘A’ and ‘B’ are true and correct copies of 

the Agreement for Binding Arbitration signed by [Aldo Alpizar/Liset 

Viamontes] and Arbitration Agreement section of the Employee 

Handbook that is referenced in the Agreement for Binding Arbitration 

signed by [Aldo Alpizar/Liset Viamontes]. . . . In my capacity as the 

[human resources director] at [Adriana’s/Veronica’s], I witnessed and 

accepted Plaintiff [Aldo Alpizar’s/Liset Viamontes’] signature on the 

Agreement for Binding Arbitration. My signature appears on the 

document.”

The Agreement for Binding Arbitration signed by Alpizar, and attached as Exhibit 

A to the declaration by Adriana’s human resources director, provides:

I KNOWINGLY AND VOLUNTARILY AGREE TO SUBMIT AND 

SETTLE ANY DISPUTE, CONTROVERSY OR CLAIM ARISING 

OUT OF OR RELATING TO MY EMPLOYMENT RELATIONSHIP 

WITH ADRIANA’S TO ARBITRATION AS DESCRIBED IN THE 

‘ARBITRATION AGREEMENT’ SECTION OF THIS HANDBOOK. 

I AGREE THAT THE ARBITRATION OF SUCH ISSUES, 

INCLUDING THE DETERMINATION OF ANY AMOUNT OF 

DAMAGES SUFFERED, SHALL BE FINAL AND BINDING UPON 

ME AND ADRIANA’S TO THE MAXIMUM EXTENT PERMITTED 

BY LAW. I REALIZE BY AGREEING TO ARBITRATION, I WILL 

HAVE WAIVED MY RIGHT TO TRIAL BY JURY. THIS POLICY 

CANNOT CHANGE EXCEPT BY WRITTEN AGREEMENT 

BETWEEN ADRIANA’S AND ME.
5

The Agreement signed by Viamontes, and attached as Exhibit A to the declaration 

of Veronica’s human resources director, is identical to the foregoing, except in that 

references to “ADRIANA’S” refer to “VERONICA’S”; the first sentence of the clause 

contains the apparent typographical error—“I KNOWINGLY AND VOLUNTARY [sic] 

AGREE”; and the last sentence contains two more typographical errors—“I REALIZE 

BY AGREEING TO ARBITRATION, I WILL HAVE WIVED [sic] MY RIGH [sic] TO 

TRIAL BY JURY; . . . .”1

The Arbitration Agreement section to the Employee Handbook, attached as 

Exhibit B to both declarations, purports to explain what arbitration is and why binding 

arbitration is preferable to a lawsuit in Veronica’s and Adriana’s view. Additionally, the 

Handbook describes the procedures that will govern the arbitration. These procedures 

include, inter alia, (1) “[t]he arbitrations shall be conducted by a retired Judge, or such 

other persons as agreed to, jointly selected by the parties”; (2) “[b]oth parties shall have 

all rights of discovery and remedies as he or she would in a civil action in California”; 

(3) “the determination of any amount of damages suffered, shall be final and binding 

upon the employee and [Adriana’s/Veronica’s] to the maximum extent permitted by 

law”; (4) “[t]he employee and [Adriana’s/Veronica’s] shall each initially bear their own 

costs and attorney’s fees,” “[t]he arbitrator shall award attorneys’ fees and costs to the 

prevailing party as per the law and causes of action adjudicated” and 

 

1

In view of these typographical errors, Viamontes contends there could have been 

no meeting of the minds with respect to the Agreement for Binding Arbitration she 

signed. We disagree. To begin, the clause in which these errors appear is neither a 

material term of the agreement, nor one that Defendants’ petition to compel sought to 

enforce. Rather, the clause simply gives notice of the effect of Viamontes’ plain 

agreement to arbitrate her employment-related claims. In any event, when read in 

context, there can be only one construction given to these words—that they mean to give 

notice that by agreeing to arbitrate, Viamontes will have “waived” her “right” to trial by 

jury. Insofar as California law requires the court to give a reasonable construction to an 

arbitration agreement so as to uphold arbitration where the parties plainly intended it to 

encompass the subject claims, such obvious typographical errors clearly cannot be the 

basis for invalidating an agreement to arbitrate. (See Pacific Inv. Co. v. Townsend (1976) 

58 Cal.App.3d 1, 9 (Pacific Investment).)
6

“[Adriana’s/Veronica’s] shall pay for the arbitrator’s fees”; and (5) “[t]he arbitrator shall 

issue a written decision explaining the reasons for the decision.”

Finally, the Handbook elaborates on which claims are subject to the Agreement 

for Binding Arbitration. It states in relevant part: “[I]f work-related complaints and 

concerns are unable to be informally resolved, then any dispute, controversy or claim 

arising out of or related to the employment relationship, . . . to the extent the law provides 

such claims may be arbitrated, shall at the request of either the employee or 

[Adriana’s/Veronica’s] be submitted to and settled by binding arbitration. . . . Such 

arbitration shall include any claims you have against [Adriana’s/Veronica’s] officers, 

mangers, supervisors, agents, directors or owners.”

Plaintiffs opposed the petitions to arbitrate. In their supporting declarations, each 

Plaintiff admitted to having signed an Agreement for Binding Arbitration, but both

disavowed any knowledge of the terms contained in the Handbook. Without admitting 

that he received the Handbook, Alpizar testified that he “did not receive any training as to 

the arbitration policies of Defendants” and that he “was offered no explanation as to the 

contents of the Employee Handbook, about the dispute resolution policies, and/or the 

arbitration provision specifically.” For her part, Viamontes testified that on the day she 

signed the Agreement for Binding Arbitration she “asked for but did not receive a copy 

of the Employee Handbook.” She, like Alpizar, also said she “was offered no 

explanation as to the contents of the Employee Handbook, about the dispute resolution 

policies, and/or the arbitration provision specifically.” Both Plaintiffs testified they were 

“required to sign” the Agreement for Binding Arbitration as “a condition of 

employment,” despite having no idea what the agreement meant. Based on these 

declarations, Plaintiffs argued there had been no meeting of the minds concerning the 

arbitration of their employment related claims. Alternatively, they argued the purported 

agreements were unconscionable and should be invalidated as such.
7

The trial court held a full hearing on Defendants’ petitions. Though it did not 

issue a tentative ruling, the court made clear during the hearing that it was especially 

troubled by Viamontes’ testimony that she never received the Handbook. Defendants 

conceded this testimony might be evidence of procedural unconscionability, but they 

argued it was irrelevant to whether Viamontes had entered a binding agreement to 

arbitrate. The court disagreed, responding that evidence about whether Viamontes 

received the Handbook “goes to whether there was an agreement” because the Handbook 

purported to define “the terms that Ms. Viamontes agreed to.” When pressed on the 

issue, Defendants’ counsel acknowledged that the declarations submitted in support of 

the petitions did not establish that Viamontes received the Handbook. Counsel 

nevertheless advised the court that Defendants had evidence, signed by Plaintiffs, to 

prove this fact, and he requested leave to provide that evidence “today” if the court 

considered it dispositive. The court did not respond to counsel’s request, but asked if 

there was “[a]nything else Defendant wishes to argue?”

When Defendants’ counsel moved on to the substantive unconscionability issue, 

the court again voiced its concern about the lack of evidence establishing that Viamontes 

received the Handbook, raising for the first time questions about whether Defendants 

could establish a mutual agreement to arbitrate without proving that Plaintiffs received 

the Handbook. “[I]n terms of substantive unconscionability,” the court stressed, “[i]f 

there is no Handbook . . . [t]here is no discussion about mutuality.” Defendants’ counsel 

responded again that Viamontes “did sign off on the Handbook and that we have that 

evidence and we can submit that evidence, so to the extent that we need to do that, we 

respectfully request we be allowed to submit that signature page, if that is material to the 

court’s decision. We can have that submitted promptly.” Again, the court did not 

address the request, but instead asked if there was “[a]nything else.”

Defendants closed by noting that Alpizar had not testified, like Viamontes, that he 

did not receive a copy of the Handbook. Unmoved, the court responded that Alpizar’s 

declaration “[d]oesn’t say he received a copy and Defendant -- does not say that 
8

Defendant gave him a copy.” With that, the parties indicated they had nothing further 

and the court proceeded to deliver its decision.

The trial court denied the petitions to compel arbitration. Focusing on the lack of 

evidence to prove Plaintiffs received copies of the Handbook, the court concluded that 

there had “not [been] a meeting of the minds as to what kind of arbitration agreements the 

parties entered into and that the language that the Plaintiffs signed off on [i.e., the 

Agreement for Binding Arbitration] [was] unconscionable.” With respect to the 

formation of a binding agreement, the court explained that “the terms of the arbitration 

agreement [were] contained in a Handbook,” Viamontes had testified “under oath, that 

she did not receive the Handbook,” and the evidence, therefore, was “only one way; that 

she did not receive the terms of the arbitration agreement.” Under these circumstances, 

the court reasoned, “it cannot be said that [there was a] meeting of the minds as to what 

the terms of an arbitration agreement would be, or that there was, in fact, a complete 

agreement as to arbitration.” The court likewise determined “[t]he same thing could be 

said” with regard to Alpizar, insofar as “Defendant[s] [had] not presented any evidence 

that Mr. Alpizar was presented with a Handbook which contained the terms of the 

arbitration agreement.”

Turning to unconscionability, the court found the evidence that Defendants 

presented the Agreements for Binding Arbitration on a “take-it-or-leave-it basis” 

established procedural unconscionability. As for substantive unconscionability, the court 

focused on the lack of mutuality in the Agreements. The court observed that “the clause 

that has been presented by the Defendants indicates that the Plaintiffs agreed to arbitrate 

their disputes with no competent agreement by the Defendant[s] to arbitrate their 

disputes.” The court concluded this lack of mutuality, coupled with the absence of other 

terms ostensibly provided by the Handbook, established substantive unconscionability,

and, when combined with the procedural unconscionability finding, compelled denial of 

Defendants’ petitions arbitrate. 
9

Defendants responded to the court’s oral ruling by once more requesting leave to 

submit additional evidence proving Plaintiffs received the Handbook. Without offering a 

reason, the court replied, “Request is denied.”

Defendants filed a timely notice of appeal from the order denying their petitions to 

compel arbitration. 

DISCUSSION

1. The Stand Alone Agreement for Binding Arbitration Establishes Only that 

Plaintiffs Agreed to Arbitrate Their Employment Disputes; The Lack of 

Mutuality Renders the Agreement Substantively Unconscionable

“Under ‘both federal and state law, the threshold question presented by a petition 

to compel arbitration is whether there is an agreement to arbitrate.’ ” (Cruise v. Kroger 

Co. (2015) 233 Cal.App.4th 390, 396 (Cruise), italics omitted.) As with any other 

contract, the existence of an agreement to arbitrate requires the mutual consent of the 

parties to the purported agreement. (HM DG, Inc. v. Amini (2013) 219 Cal.App.4th 1100, 

1109.) Where mutual consent is established, the general rule in California is that 

“ ‘ “arbitration should be upheld unless it can be said with assurance that an arbitration 

clause is not susceptible to an interpretation covering the asserted dispute.” ’ ” (Cruise,

at p. 397.)

While general contract formation principles and the scope of the arbitration 

agreement will usually answer the threshold question, courts are regularly called upon to 

address the agreement’s enforceability under the rubric of unconscionability, particularly 

where arbitration is imposed as a condition of employment. (See Armendariz v. 

Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 113-114 (Armendariz); 

Doctor’s Assocs. v. Casarotto (1996) 517 U.S. 681, 687.) As our Supreme Court 

explained in Armendariz, “ ‘unconscionability has both a “procedural” and a 

“substantive” element,’ the former focusing on ‘ “oppression” ’ or ‘ “surprise” ’ due to 

unequal bargaining power, the latter on ‘ “overly harsh” ’ or ‘ “one-sided” ’ results.” 

(Armendariz, at p. 114.) Both procedural and substantive unconscionability must be 

present to render a contract unenforceable, though they need not be present in the same 
10

degree. (Ibid.) Rather, courts invoke a sliding scale under which the more evidence of 

procedural unconscionability is present, the less substantively oppressive the contract 

terms need be to conclude the agreement is unenforceable, and vice versa. (Ibid.) Thus, 

for instance, where an employer presents a mandatory arbitration provision to a 

prospective employee on a take-it-or-leave-it basis, courts have found the agreement 

unconscionable where it requires only the employee, but not the employer, to arbitrate his 

or her employment-related claims. (See, e.g., Nyulassy v. Lockheed Martin Corp. (2004) 

120 Cal.App.4th 1267, 1282 (Nyulassy); O’Hare v. Municipal Resource Consultants

(2003) 107 Cal.App.4th 267, 274; see also Armendariz, at p. 120 [“an arbitration 

agreement imposed in an adhesive context lacks basic fairness and mutuality if it requires 

one contracting party, but not the other, to arbitrate all claims arising out of the same 

transaction or occurrence or series of transactions or occurrences”].)

“The determination of arbitrability is a legal question subject to de novo review.” 

(Nyulassy, supra, 120 Cal.App.4th at p. 1277.) Likewise, where no extrinsic or disputed 

evidence is presented to a trial court, we review questions of enforceability and 

unconscionability de novo. (O’Hare, supra, 107 Cal.App.4th at p. 273.) Where facts are 

disputed, we will uphold the trial court’s resolution of such facts if supported by 

substantial evidence. (Nyulassy, at p. 1277.)

The trial court found that Plaintiffs assented to their respective Agreements for 

Binding Arbitration, which both Plaintiffs signed, but that they did not agree to the 

additional terms contained in the Handbook. Based on this finding, the court identified

two independent grounds for denying Defendants’ petitions to arbitrate. First, the court 

concluded the Agreements were insufficient to establish a “meeting of the minds as to 

what kind of arbitration agreement the parties entered into,” citing the fact that the 

Agreements did not set forth certain mandatory procedural terms, but instead stated these 

terms were contained in the Handbook. Second, the court concluded the Agreements 

were unconscionable and thus unenforceable. In that regard, the court determined the 

Agreements were procedurally unconscionable because Defendants presented them on a 
11

take-or-leave-it-basis, and substantively unconscionable because the Agreements required 

only Plaintiffs, but not Defendants, to submit claims to arbitration.

Defendants contend the trial court’s finding does not support its ruling. They 

argue the signed Agreements establish Plaintiffs agreed to arbitrate their claims, even if 

Plaintiffs did not agree to the procedural terms contained in the Handbook. As for 

unconscionability, Defendants argue the court should have considered the Handbook in 

assessing whether Defendants also agreed to submit their claims to arbitration, 

notwithstanding the finding that Plaintiffs did not receive the Handbook. While we agree 

that the signed Agreements, standing alone, were sufficient to establish the existence of 

an agreement to arbitrate, we disagree with Defendants concerning the unconscionability 

analysis.

Our resolution of both issues is largely compelled by this court’s holding in 

Cruise. In that case, like this one, the defendant employer moved to compel arbitration 

pursuant to an arbitration clause that purported to incorporate by reference a separate 

arbitration policy. (Cruise, supra, 233 Cal.App.4th at p. 392.) The clause stated, in 

pertinent part, “ ‘MANDATORY FINAL & BINDING ARBITRATION: I acknowledge and 

understand that the Company has a Dispute Resolution Program that includes a 

Mediation & Binding Arbitration Policy (the “Policy”) applicable to all employees and 

applicants for employment . . . . I acknowledge, understand and agree that the Policy is 

incorporated into this [document] by this reference as though it is set forth in full, . . . the 

Policy applies to any employment-related disputes that exist or arise between Employees 

and the Company’ ” (Id. at p. 396, underscoring omitted, some italics added.) The trial 

court denied the employer’s motion, ruling the employer failed to prove the existence of 

an arbitration agreement because its proffered evidence was insufficient to establish that 

the arbitration policy attached to its moving papers existed at the time the plaintiff read 

and signed the document containing the arbitration clause. (Id. at p. 392.) This court 

reversed.
12

The Cruise court concluded the arbitration clause, standing alone, was sufficient to 

establish the parties agreed to arbitrate their employment-related claims. (Cruise, supra, 

233 Cal.App.4th at p. 392.) Because the arbitration clause clearly stated that all 

employment-related claims were subject to mandatory arbitration, the court concluded 

there was “no question” that the parties agreed to arbitrate such disputes. (Id. at p. 397.) 

The “only impact” of the employer’s inability to establish the contents of the arbitration 

policy, this court explained, was that the employer had “failed to establish that the parties 

agreed to govern their arbitration by procedures different from those prescribed in the 

[California Arbitration Act],” Code of Civil Procedure section 1280 et seq. (Cruise, at 

p. 399.) Thus, “[w]hile the parties’ agreement to arbitrate [was] enforceable, the 

employer’s inability to establish the contents of its Arbitration Policy preclude[d] the 

employer from enforcing the provisions of said policy.” (Id. at p. 400.) Under these 

circumstances, statutory law dictated that the arbitration proceeding be conducted in 

accordance with the procedures set forth in the California Arbitration Act and applicable 

case law. (Ibid.; see, e.g., Code Civ. Proc., §§ 1281.6, 1282, 1282.2 [generally providing 

that unless the parties agree otherwise, the conduct of an arbitration proceeding is 

controlled by the California Arbitration Act].)

Under Cruise, Defendants are correct that the trial court’s finding regarding the 

Handbook did not support its conclusion that there was no meeting of the minds 

concerning the agreement to arbitrate. Insofar as Plaintiffs signed the Agreements for 

Binding Arbitration, which stated “I knowingly and voluntarily agree to submit and settle 

any dispute, controversy or claim arising out of or relating to my employment 

relationship with [Adriana’s/Veronica’s] to arbitration” (capitalization omitted), there is 

no question that they agreed to arbitrate their employment-related claims. (See Cruise, 

supra, 233 Cal.App.4th at p. 397.) Thus, if we were exclusively concerned with whether 

Plaintiffs agreed to arbitrate, we would hold, consistent with Cruise, that the only impact 

of Defendants’ failure to establish Plaintiffs received the Handbook is to require the 

arbitration to be conducted in accordance with the California Arbitration Act. (See id. at 
13

p. 400.) However, the trial court’s unconscionability ruling adds another layer to our

analysis.

The trial court concluded the Agreements for Binding Arbitration were 

substantively unconscionable because they required only the undersigned Plaintiffs to 

“submit and settle any dispute, controversy or claim arising out of or relating to my 

employment relationship . . . to arbitration.” 2 Citing Cruise, Defendants principally 

contend the trial court should have considered the contents of the Handbook in 

determining whether the Agreements were substantive unconscionability.3 Insofar as the 

Handbook states that “any dispute, controversy or claim arising out of or related to the 

employment relationship, . . . shall at the request of either the employee or 

[Adriana’s/Veronica’s] be submitted to and settled by binding arbitration” (italics 

added), Defendants argue the requisite mutuality is present.

 

2 Defendants do not dispute that the evidence supported the court’s procedural 

unconscionability ruling.

3 At oral argument, Defendants asserted the language in the stand alone Agreements 

was sufficiently mutual to be enforced without the Handbook, citing Roman v. Superior 

Court (2009) 172 Cal.App.4th 1462 as purportedly analogous authority. The language in 

Roman stated in pertinent part: “ ‘I further agree, in the event that I am hired by the 

company, that all disputes that cannot be resolved by informal internal resolution which 

might arise out of my employment with the company, whether during or after that 

employment, will be submitted to binding arbitration.’ ” (Id. at p. 1467, fn. omitted.) 

Focusing on the “ ‘all disputes . . . will be submitted to binding arbitration’ ” language, 

the Roman court found the clause broad enough to encompass both the employee’s and 

the employer’s employment-related claims, particularly “given the public policy favoring 

arbitration.” (Id. at pp. 1471, 1473, italics added.) In contrast to the broad “ ‘will be 

submitted’ ” language in Roman, here, the clause narrowly states that “I”—i.e., the 

undersigned employee—“knowingly and voluntarily agree to submit and settle any 

dispute, controversy or claim arising out of or relating to my employment relationship 

with [Adriana’s/Veronica’s] to arbitration.” (Capitalization omitted, italics added.) 

Unlike the language in Roman, this I-agree-to-submit language is specific to the 

undersigned employee and does not admit of a reasonable interpretation under which it 

could also apply to the employer’s claims.
14

Defendants misread Cruise. In support of their contention that the trial court 

should have considered the Handbook’s contents in analyzing unconscionability, 

Defendants claim the Cruise court “did not consider the separate Arbitration Policy when 

deciding the binding effect of the arbitration agreement . . . but did consider the 

Arbitration Policy when deciding the enforceability of a specific procedure enumerated 

therein.” The Cruise court did no such thing. The pertinent holding in Cruise is just the 

opposite—“the employer’s inability to establish the contents of its Arbitration Policy 

precludes the employer from enforcing the provisions of said policy.” (Cruise, supra,

233 Cal.App.4th at p. 400, italics added.) With regard to unconscionability, this court 

explained in Cruise that the plaintiff’s unconscionability arguments had no merit, because 

the arbitration would be governed by California statutory and case law—not the separate 

arbitration policy. (Ibid.)

More to the point, the plaintiff in Cruise raised a similar substantive 

unconscionability challenge based on a purported lack of mutuality, and this court 

rejected that challenge based on language in the arbitration agreement that was decidedly 

different than the language with which the trial court took issue in this case. The 

language in Cruise stated in pertinent part: “ ‘the Company likewise agrees to mandatory 

final and binding arbitration of any Covered Disputes, whether initiated or participated in 

by me or by the Company, in accordance with the Policy. . . .’ ” (Cruise, supra, 

233 Cal.App.4th at p. 397.) In contrast, the operative language in the Agreements 

contains a unilateral pledge by the undersigned employee that “I knowingly and 

voluntarily agree to submit and settle any dispute, controversy or claim arising out of or 

relating to my employment relationship . . . to arbitration.” (Capitalization omitted.) 

Unlike the pertinent language in Cruise, this language simply is not susceptible of an 

interpretation that requires Defendants to submit their claims against their employees to 

arbitration.
15

Thus, while the trial court erred in concluding the signed Agreements were 

insufficient to establish Plaintiffs agreed to arbitrate their claims, the court was correct in 

ruling that the Agreements, standing alone, were too one-sided to be enforced as a 

condition of Plaintiffs’ employment. That said, we agree with Defendants that the 

language in the Handbook—stating, any employment-related dispute “shall at the request 

of either the employee or [Adriana’s/Veronica’s] be submitted to and settled by binding 

arbitration” (italics added)—cures this lack of mutuality. The trial court refused to 

consider the Handbook because it found Defendants failed to establish Plaintiffs received 

the document. Inasmuch as this finding proved dispositive, it raises the difficult question 

of whether the court erred by denying Defendants’ request for a brief continuance to 

submit additional evidence to prove Plaintiffs received the Handbook. We turn to that 

question now.

2. The Trial Court Abused Its Discretion When It Denied Defendants’ Request 

for a Continuance to Submit Potentially Dispositive Evidence Concerning 

Plaintiffs’ Receipt of the Handbook

The principles that control our review of the court’s ruling denying Defendants’ 

request for a continuance are well settled. The trial court has the “inherent power . . . to 

exercise its discretion and control over all proceedings relating to the litigation before it.” 

(Johnson v. Banducci (1963) 212 Cal.App.2d 254, 260.) This discretionary power 

includes the authority to take evidence necessary for a decision (ibid.), and to continue a 

hearing, unless such postponement is prohibited by law (Curtis v. Underwood (1894) 101 

Cal. 661, 669). Thus, in ruling on a motion, the trial court may allow tardy evidence, 

provided doing so will not result in undue prejudice to opposing parties. (Alvak 

Enterprises v. Phillips (1959) 167 Cal.App.2d 69, 74-75.) It may also continue the 

hearing, or deny a continuance, so long as its decision “is based on a reasoned judgment 

and complies with legal principles and policies appropriate to the case before the court.” 

(Forthmann v. Boyer (2002) 97 Cal.App.4th 977, 984.)
16

“ ‘ “The discretion of a trial judge is not a whimsical, uncontrolled power, but a 

legal discretion, which is subject to the limitations of legal principles governing the

subject of its action, and to reversal on appeal where no reasonable basis for the action is 

shown.” ’ ” (Fasuyi v. Permatex, Inc. (2008) 167 Cal.App.4th 681, 695-696.) In other 

words, judicial discretion must be measured against the governing law, and it must be 

exercised in such a manner as to best effectuate the purposes of such law. (Horsford v. 

Board of Trustees of California State University (2005) 132 Cal.App.4th 359, 393-394

(Horsford).) “Action that transgresses the confines of the applicable principles of law is 

outside the scope of discretion and we call such action an ‘abuse’ of discretion.” (City of 

Sacramento v. Drew (1989) 207 Cal.App.3d 1287, 1297.) 

As discussed, the trial court based its unconscionability ruling entirely upon its 

predicate finding that Plaintiffs had not received the Handbook. At the hearing on the 

petitions, after all briefs had been filed, Defendants’ counsel represented that Defendants 

had evidence to prove that Plaintiffs had in fact received the Handbook, but Defendants 

had failed to submit that evidence with their moving papers. Notwithstanding 

Defendants’ admitted oversight, counsel requested a brief continuance to file the 

evidence “today.” The trial court denied the request without stating a reason for its 

ruling. 

The trial court has discretion to refuse a continuance where good cause is lacking. 

(See County of San Bernardino v. Doria Mining & Engineering Corp. (1977) 

72 Cal.App.3d 776, 781.) “However, ‘[t]he trial judge must exercise his discretion with 

due regard to all interests involved, and the refusal of a continuance which has the 

practical effect of denying the applicant a fair hearing is reversible error. [Citations.]’ ” 

(In re Marriage of Hoffmeister (1984) 161 Cal.App.3d 1163, 1169.) Thus, good cause 

for a continuance exists when a new argument is raised after the time prescribed for 

briefing has passed and the responding party requires a postponement to enable it to meet 

the new issue. (See id. at pp. 1169-1170.)
17

Critically, in the instant case, it was the trial court, at the hearing on the petitions,

that first connected the substantive unconscionability issue with Defendants’ failure to 

present direct evidence proving that Plaintiffs received the Handbook. Though Plaintiffs 

had suggested in their declarations that they did not receive the Handbook, their 

opposition briefs cited this evidence only to argue that there had been no meeting of the 

minds concerning the procedural terms contained in the Handbook. Plaintiffs’ opposition 

briefs did not address the clause in the Handbook requiring any employment-related 

dispute to be submitted to binding arbitration “at the request of either the employee or 

[Adriana’s/Veronica’s],” nor did they argue the clause should not be considered in 

connection with the substantive unconscionability analysis, even though the Agreements 

purported to incorporate the Handbook by reference. Rather, it was the trial court that 

first linked the mutuality issue to the factual question about whether Plaintiffs received 

the Handbook to challenge Defendants’ contention that Plaintiffs had failed to establish 

substantive unconscionability. Because the trial court raised this issue for the first time at 

the hearing on the petitions, we conclude there was good cause to grant a brief 

continuance to enable Defendants to meet the issue with supplemental evidence directly 

addressing the court’s novel concern.

Our conclusion is bolstered by policy considerations that favor resolving questions 

of arbitrability on their merits. As a general policy matter, our Supreme Court has 

cautioned against mechanically applying procedural rules in specific cases at the expense 

of achieving substantial justice. Thus, in Elkins v. Superior Court (2007) 41 Cal.4th 

1337, the high court observed that “ ‘ “[r]igid rule following is not always consistent with 

a court’s function to see that justice is done. Cognizant of the strong policy favoring the 

disposition of cases on their merits [citations], judges usually consider whether to 

exercise their discretion . . . and frequently consider documents which have been 

untimely filed.” ’ ” (Id. at p. 1364.) In that regard, the Elkins court added that, “in the 

absence of a demonstrated history of litigation abuse, ‘[a]n order based upon a curable 

procedural defect . . . , which effectively results in a judgment against a party, is an abuse 

of discretion.’ ” (Ibid.)
18

The record in this short-lived case reveals no demonstrated history of litigation 

abuse. On the contrary, as Defendants have explained, their oversight in bringing the 

omitted evidence to the court’s attention stemmed in part from the fact that Plaintiffs had 

not argued that their supposed non-receipt of the Handbook rendered the Agreements 

unconscionable. Consistent with this explanation, the record shows it was the court that 

first linked unconscionability with Plaintiffs’ claim that they had not received the 

Handbook, at which point Defendants promptly requested a brief continuance to present 

evidence on the issue. While we are sympathetic to the court’s apparent reluctance to 

delay resolution of the petitions after they had been fully briefed, we nevertheless 

conclude the court’s ruling unreasonably elevated procedural considerations over the 

ends the procedural rules are meant to achieve.

Rules of procedure and calendar management are required for a purpose: to 

promote the just resolution of cases on their merits. (Hernandez v. Superior Court (2004) 

115 Cal.App.4th 1242, 1246.) “Accordingly, decisions about whether to grant a 

continuance . . . ‘must be made in an atmosphere of substantial justice. When the two 

policies collide head-on, the strong public policy favoring disposition on the merits 

outweighs the competing policy favoring judicial efficiency.’ ” (Ibid.) That is the case 

here. Defendants’ counsel represented that direct evidence proving Plaintiffs received the 

Handbook could be submitted that very day. Thus, while the trial court was 

understandably troubled by Defendants’ oversight, the cost in regard to timely resolution 

of the petitions would nevertheless have been minimal. More importantly, allowing the 

evidence to be presented would have greatly advanced the ultimate end of resolving the 

petitions on their merits. Given the dispositive finding that resulted from the absence of 

such evidence, the ends of substantial justice compelled a brief continuance to allow 

Defendants to proffer what counsel represented to be highly relevant evidence on this 

critical factual issue.
19

The balance in this case tilts even further in favor of allowing a continuance 

because the request arose in connection with petitions to enforce Agreements for Binding 

Arbitration that Plaintiffs admittedly signed. Under California law, “[a]rbitration is 

highly favored as a method for settling disputes,” and courts must “indulge every 

intendment to give effect to such proceedings.” (Pacific Investment, supra,

58 Cal.App.3d at p. 9; Cruise, supra, 233 Cal.App.4th at p. 397.) In ruling on 

Defendants’ request for a continuance, the trial court was obliged by this context to 

exercise its discretion in such a manner as to best effectuate the purposes of such law. 

(Horsford, supra, 132 Cal.App.4th at p. 394.) The ruling here, even when viewed 

through the lens of Defendants’ failure to present the subject evidence with their moving 

papers, cannot be reconciled with the governing law favoring enforcement of legitimate 

agreements to arbitrate. The court should have allowed the continuance to ensure that its 

assessment of the enforceability of the parties’ agreements to arbitrate was based on all 

relevant evidence.

Finally, the usual elements of prejudice that typically attend the denial of a 

continuance simply are not present here. This is not a case where a party has made an 

unexpected request to continue an impending dispositive motion or trial date under 

circumstances that could thwart months of an opponent’s preparation or further delay 

resolution of a long pending dispute. No, this case stands at its very inception and the 

petitions to compel arbitration represent Defendants’ initial response to the lawsuit. 

Indeed, the very purpose of the petitions was to determine whether the Superior Court 

was the proper forum for adjudicating Plaintiffs’ claims in the first instance. Of course, 

the length of the continuance would need to allow sufficient time for Plaintiffs to prepare 

a response to the new evidence. (See Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 

1537-1538.) But with that due process protection in place, we see no rational basis to 

find any meaningful prejudice to Plaintiffs from allowing a brief pause in the proceedings 

to resolve this important foundational issue on a complete record.
20

The trial court abused its discretion when it denied Defendants’ request for a brief 

continuance to submit evidence concerning Plaintiffs’ receipt of the Handbook. To the 

extent the record demonstrates a different result is probable if this evidence is credited, 

this was reversible error.4 (See Pannu v. Land Rover North America, Inc. (2011)

191 Cal.App.4th 1298, 1317.)

DISPOSITION

The order is reversed and the trial court is directed to allow Defendants to submit 

additional evidence concerning Plaintiffs’ purported receipt of the Handbook. Plaintiff 

shall have an opportunity to respond to the evidence before the court rules on the 

petitions to compel arbitration. In the interest of justice, the parties shall bear their own 

costs.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

JONES, J.*

We concur:

ALDRICH, Acting P. J.

LAVIN, J.

 

4 We express no opinion as to the credibility of the evidence Defendants will 

submit. We likewise express no opinion as to whether Plaintiffs’ responsive evidence 

may be sufficient to support a finding that they did not receive the Handbook 

notwithstanding Defendants’ new evidence. These are factual issues to be resolved by 

the trial court on remand.

*

Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to 

article VI, section 6 of the California Constitution.