Court Opinion

ID: 3177603
Source: CourtListenerOpinion
Date Created: 2016-02-16 20:15:41.931089+00
Date Added: 2024-06-11T09:18:03.232088
License: Public Domain

Filed 2/16/16 Capachi v. Alta Education CA3
                                           NOT TO BE PUBLISHED

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 This opinion has not been certified for publication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
                                      THIRD APPELLATE DISTRICT
                                                     (Sacramento)
                                                            ----

NICKI CAPACHI,                                                                               C071025

                   Plaintiff and Respondent,                                      (Super. Ct. No. 34-2011-
                                                                                  00113652-CU-WT-GDS)
         v.

ALTA EDUCATION, LLC,

                   Defendant and Appellant.

         The superior court denied defendant Alta Education, LLC’s petition to compel
arbitration of plaintiff Nicki Capachi’s employment discrimination claims. The court
determined that the arbitration agreement was procedurally unconscionable because it
incorporated the 1989 Model Employment Arbitration Procedures of the American
Arbitration Association but Alta Education did not provide Capachi with a copy of the
1989 Model Employment Arbitration Procedures. On appeal, we conclude that Capachi
failed to make a factual showing supporting her opposition to the petition to compel

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arbitration. Therefore, we reverse and remand with directions to the superior court to
grant the petition.
                                     BACKGROUND
       After her employment was terminated, Capachi filed a complaint against her
former employer Alta Education alleging causes of action for disability discrimination
and other employment claims.
       In response, Alta Education filed a petition to compel arbitration, presenting the
arbitration agreement as an attachment to a declaration. The agreement, signed in 2008
by both parties, provided that “[t]he arbitrator shall be bound by the provisions and
procedures set forth in the 1989 Model Employment Arbitration Procedures of the
American Arbitration Association.” Alta Education also attached a copy of the 1989
Model Employment Arbitration Procedures to its petition to compel arbitration.
       In opposition to the motion, Capachi provided points and authorities. She also
filed the declaration of her attorney stating that the request for arbitration was denied
because the attorney believed the facts of this case were similar to another superior court
case in which a petition to compel arbitration was denied. She attached the minute order
from the other case. No other facts were proffered.
       In the points and authorities, Capachi alleged that the arbitration agreement was
procedurally unconscionable because she was “forced to sign the agreement and was not
provided a copy of the 1989 Model Employment Arbitration Procedures . . . .” She also
alleged that it was substantively unconscionable because (1) there were no rules
regarding discovery, (2) the agreement and model rules do not require a written decision,
and (3) they impose a risk that she may be required to pay arbitration costs if she does not
prevail.
       The superior court denied the petition to compel arbitration.
       The court held that Alta Education had met its burden to show that there was a
valid agreement to arbitrate the causes of action in the complaint, thus shifting the burden

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to Capachi to show that the agreement cannot be enforced because it is both procedurally
and substantively unconscionable. (Mission Viejo Emergency Medical Associates v. Beta
Healthcare Group (2011) 197 Cal.App.4th 2246, 1158.)
       Concerning procedural unconscionability, the court rejected Capachi’s allegation
that she was forced to sign the agreement – that is, that it was a contract of adhesion –
because she did not submit a declaration establishing that fact. However, the court
concluded the agreement was procedurally unconscionable because Alta Education did
not provide a copy of the 1989 Model Employment Arbitration Procedures, relying on
Trivedi v. Curexo Technology Corp. (2010) 189 Cal.App.4th 387 (Trivedi).
       Concerning substantive unconscionability, the court held that Capachi met her
burden because the agreement does not require a written decision and does not provide
for judicial review.
                                       DISCUSSION
       We begin with text from the Supreme Court’s decision in Armendariz v.
Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83 (Armendariz), in which
the court considered “objections to arbitration that apply more generally to any type of
arbitration imposed on the employee by the employer as a condition of employment,
regardless of the type of claim being arbitrated. These objections fall under the rubric of
unconscionability.” (Id. at p. 113.)
       The Armendariz court explained: “Unconscionability analysis begins with an
inquiry into whether the contract is one of adhesion. [Citation.] ‘The term [contract of
adhesion] signifies a standardized contract, which, imposed and drafted by the party of
superior bargaining strength, relegates to the subscribing party only the opportunity to
adhere to the contract or reject it.’ [Citation.] If the contract is adhesive, the court must
then determine whether ‘other factors are present which, under established legal rules --
legislative or judicial -- operate to render it [unenforceable].’ [Citation.] ‘Generally
speaking, there are two judicially imposed limitations on the enforcement of adhesion

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contracts or provisions thereof. The first is that such a contract or provision which does
not fall within the reasonable expectations of the weaker or “adhering” party will not be
enforced against him. [Citations.] The second -- a principle of equity applicable to all
contracts generally -- is that a contract or provision, even if consistent with the reasonable
expectations of the parties, will be denied enforcement if, considered in its context, it is
unduly oppressive or “unconscionable.” ’ [Citation.] Subsequent cases have referred to
both the ‘reasonable expectations’ and the ‘oppressive’ limitations as being aspects of
unconscionability. [Citation.]” (Armendariz, supra, 24 Cal.4th at p. 113.)
       The Armendariz court continued: “ ‘[U]nconscionability 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. [Citation.] ‘The prevailing view is that [procedural and substantive
unconscionability] must both be present in order for a court to exercise its discretion to
refuse to enforce a contract or clause under the doctrine of unconscionability.’ [Citation.]
But they need not be present in the same degree. ‘Essentially a sliding scale is invoked
which disregards the regularity of the procedural process of the contract formation, that
creates the terms, in proportion to the greater harshness or unreasonableness of the
substantive terms themselves.’ [Citations.] In other words, the more substantively
oppressive the contract term, the less evidence of procedural unconscionability is
required to come to the conclusion that the term is unenforceable, and vice versa.”
(Armendariz, supra, 24 Cal.4th at p. 114, italics omitted.)
       Our review of the superior court’s denial of the petition to compel arbitration is de
novo because the superior court did not resolve any factual dispute. (Murphy v. Check ‘N
Go of California, Inc. (2007) 156 Cal.App.4th 138, 144, abrograted on a different point
as noted in Malone v. Superior Court (2014) 226 Cal.App.4th 1551, 1556.) Capachi
claims that the superior court resolved a factual dispute because it determined that the
agreement between her and Alta Education and the incorporated model rules did not

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provide for a written award. To the contrary, contract interpretation and interpretation of
the model rules, with no disputed extrinsic evidence, presents a matter of law for this
court, which we determine de novo. (Wolf v. Walt Disney Pictures & Television (2008)
162 Cal.App.4th 1107, 1134.)
       Here, Capachi failed to make even the most fundamental showing required to find
the arbitration agreement unenforceable: she failed to show that it was a contract of
adhesion. She made allegations in that regard but did not satisfy her burden of
establishing facts to support those allegations. Thus, she did not show that (1) the
arbitration agreement was a standardized contract, (2) it was drafted by Alta Education,
(3) Alta Education had superior bargaining strength, and (4) the agreement relegated to
her as the subscribing party only the opportunity to adhere to the contract or reject it.
Having failed to show that the arbitration agreement was a contract of adhesion, she
failed utterly to show that the agreement was unconscionable. On this basis alone, the
court should have rejected Capachi’s opposition to the petition to compel arbitration.
       We cannot assume that Alta Education required Capachi to sign the arbitration
agreement in order to be employed. And we cannot make assumptions about the
negotiating process that resulted in Capachi’s employment – whether Capachi was
recruited by Alta Education or whether she made the first inquiry. We also do not know
how long Capachi had to review the arbitration agreement before she signed it or whether
she obtained a copy of the 1989 Model Employment Arbitration Procedures.
       Even if we assume for the purpose of argument that the arbitration agreement was
a contract of adhesion, Capachi failed to establish that it was procedurally
unconscionable. As the superior court noted, the only factor it relied on to find
procedural unconscionability was that Alta Education did not provide to Capachi a copy
of the 1989 Model Employment Arbitration Procedures. While that may have been a
factor contributing to a finding of procedural unconscionability if there had been other
supporting factors, alone it was not enough.

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       The superior court cited Trivedi, supra, 189 Cal.App.4th 387 (First Appellate
District, Division Four, Ruvolo, P. J., with Reardon and Rivera, JJ., concurring). In that
case, the court found that the arbitration agreement was procedurally unconscionable
because there were three factors supporting such a finding: the agreement was prepared
by the employer; it was mandatory; and the employer did not give the employee a copy of
the model rules incorporated into the arbitration agreement. (Id. at p. 393.)
       Since Trivedi, courts have rejected the idea that failure to provide a copy of the
incorporated model rules, by itself, supports a finding of procedural unconscionability.
(Lane v. Francis Capital Management LLC (2014) 224 Cal.App.4th 676, 691-692 (Lane)
(Second Appellate District, Division Four, Manella, J., with Epstein, P. J., and Willhite,
J., concurring); Peng v. First Republic Bank (2013) 219 Cal.App.4th 1462, 1472 (Peng)
(First Appellate District, Division One, Dondero, J., with Margulies, Acting P. J., and
Banke, J., concurring); see also Serafin v. Balco Properties Ltd., LLC (2015) 235
Cal.App.4th 165, 179-180 (First Appellate District, Division Four, Ruvolo, P. J., with
Reardon and Rivera, JJ., concurring).)
       In Peng, the court distinguished Trivedi because there were several factors
supporting a finding of procedural unconscionable in Trivedi. (Peng, supra, 219
Cal.App.4th at pp. 1471-1472.) But in the case before it, the Peng court reasoned that the
failure to attach the incorporated arbitration rules, “standing alone, is insufficient grounds
to support a finding of procedural unconscionability.” (Ibid.)
       In Lane, the court wrote: “[T]he failure to attach a copy of the [arbitration] rules
did not render the agreement procedurally unconscionable.” (Lane, supra, 224
Cal.App.4th at p. 691.)
       We agree with these later cases distinguishing Trivedi. As in the later cases, there
is no factor in this case supporting a finding of procedural unconscionability other than
the failure to provide a copy of the model rules. Consequently, we find no support for the
superior court’s determination that the failure to provide a copy of the 1989 Model

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Employment Arbitration Procedures, without more, was sufficient to establish procedural
unconscionability.
       Having found that, on this record, the arbitration agreement was neither a contract
of adhesion nor procedurally unconscionable, we hold that the agreement is enforceable.
Consequently, we need not consider whether the arbitration agreement is substantively
unconscionable. (Armendariz, supra, 24 Cal.4th at p. 114 [both procedural and
substantive unconscionability must be shown to avoid enforcement of arbitration
agreement].)
                                      DISPOSITION
       The order denying the petition to compel arbitration is reversed, and the matter is
remanded with directions to the superior court to enter an order compelling arbitration.
Alta Education is awarded its costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1).)

                                                       NICHOLSON             , Acting P. J.

We concur:

      HULL                  , J.

      BUTZ                  , J.

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