Court Opinion

ID: 9365715
Source: CourtListenerOpinion
Date Created: 2023-01-24 19:02:46.695192+00
Date Added: 2024-06-11T17:15:47.240146
License: Public Domain

Filed 1/24/23 Herlitz v. Capital Senior Living 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                                           NOT TO BE PUBLISHED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 This opinion has not been certified for publication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)
                                                            ----

 BETTY HERLITZ,                                                                                C097245

                    Plaintiff and Respondent,                                       (Super. Ct. No. 34-2021-
                                                                                    00310867-CU-BC-GDS)
           v.

 CAPITAL SENIOR LIVING, INC.,

                    Defendant and Appellant;

 PACIFICA SENIOR LIVING MANAGEMENT,
 LLC,

                    Defendant and Respondent.

         Plaintiff Betty Herlitz brought an elder abuse action against defendants Capital
Senior Living, Inc. (Capital) and Pacifica Senior Living Management, LLC (collectively
defendants), both of which are involved in the operation of The Crest at Citrus Heights
(Crest), an independent senior living facility where plaintiff lived. After plaintiff filed

                                                             1
her action, defendants filed a petition to compel binding arbitration and stay proceedings.
The trial court denied the petition, finding the arbitration agreement between plaintiff and
defendants was unconscionable and severance was infeasible because the
unconscionability permeated the arbitration agreement. Capital appeals; we affirm.
                   FACTUAL AND PROCEDURAL BACKGROUND1
       “Plaintiff’s claims arise from the allegedly neglectful care she received while a
resident at Crest. Before [p]laintiff moved into Crest, [p]laintiff’s son . . . met with an
executive director at Crest who represented that Crest employees would check on
residents at least twice per day. [Citation.] However, on March 31, 2021, [p]laintiff,
who had a history of falls and ambulated with a walker, fell while making lunch in her
residence. [Citation.] Plaintiff was not able to get up and was left lying on the floor until
she was finally discovered on April 2, 2021. [Citation.] No one from Crest checked on
[p]laintiff during this time.”
       Following the filing of plaintiff’s complaint, defendants filed a petition to compel
arbitration and stay proceedings. As it pertains to the arbitration agreement between the
parties, the following facts were revealed through the petitioning process: “On May 26,
2020, [p]laintiff’s son met with Crest’s executive director Dawn Kraft and signed the
admission packet as a responsible party of a resident. [Citation.] The following day,
[p]laintiff also met with Ms. Kraft and signed the packet. [Citation.] The admission
packet included the subject arbitration agreement, which both [p]laintiff and [her son]
signed separately from the rest of the packet. [Citation.] According to Ms. Kraft, she
explained the arbitration provision to [p]laintiff before [p]laintiff signed, and [p]laintiff

1      While Capital disputes the admissibility of plaintiff’s son’s declaration, the parties
do not dispute the accuracy of the trial court’s recitation of the evidence submitted to it.
Thus, we adopt the trial court’s recitation of facts, with minor additions supplied by the
record.

                                               2
verbally acknowledged the provision. [Citation.] According to [p]laintiff’s son, Ms.
[Kraft] did not explain the arbitration provision or any other aspect of the admission
packet to him or to [p]laintiff, and [p]laintiff has no knowledge of the arbitration
provision.[2] [Citation.]
       “[T]he arbitration agreement is included as part of the admission packet . . . . The
entire packet totals approximately 55 pages, which includes the 25-page residence and
service agreement, 10 attachments labeled A[ through ]J, a five-page signature section, an
addendum that operates as an amendment, and a payment authorization form. The
arbitration agreement is included as Attachment I, which totals five pages and is found at
approximately pages 42[ through ]46 of the admission packet. The arbitration agreement
is also referenced in the residence and service agreement at page 22 of 25, under
paragraph H, and is titled in bold, capitalized font, ‘BINDING ARBITRATION
AGREEMENT.’ [Citation.] The paragraph then states, ‘All disputes arising out of or
relating in any way to this Agreement or to any of the Resident’s stay at the Community
SHALL BE RESOLVED BY BINDING ARBITRATION AND NOT BY A JUDGE OR
JURY as more fully detailed in Attachment I (Binding Arbitration Agreement), except
as set forth therein.’ [Citation.] All of the other paragraph titles in the residence and
service agreement are also typed in all caps and bold font that is the same size as the title
for paragraph H, and the font type and size of the paragraph itself is no different than any
other paragraph. In addition to the signatures for the entire admission packet and the
arbitration agreement, [p]laintiff and her son signed the amendment and the payment
authorization form, and [plaintiff’s son] also signed Attachment G, which is titled
‘RESPONSIBLE PARTY AGREEMENT.’ [Citation.]

2      Plaintiff relied exclusively on the declaration of her son, while Capital relied
exclusively on the declaration of Kraft.

                                              3
       “The relevant terms of the arbitration agreement are as follows. The first page
includes the agreement to arbitrate, which reads as follows:
       ‘1.    BINDING AGREEMENT TO ARBITRATE. Except as provided below,
the Parties agree that any action, dispute, claim, or controversy of any kind, whether in
contract or in tort, statutory or common law, legal or equitable or otherwise, arising out of
the provision of goods, services, or items provided under the terms of this or any other
agreement between the Parties, or any other dispute involving acts or omissions that
cause damage or injury to either Party shall be resolved exclusively by binding arbitration
(“the ‘Arbitration’ [”]) in accordance with the [Federal Arbitration Act] (defined below)
and not by lawsuit or the judicial process. To the fullest extent permitted by law, this
Section shall apply to third parties who are not signatories to this Arbitration Agreement,
including any spouse, heirs, or persons claiming through the Resident. Any claims or
grievances against the Community’s direct or indirect corporate parent, subsidiaries,
affiliates, employees, officers, or directors shall also be subject to and resolved by
arbitration in accordance with this Section.’
       “[Citation.]
       “Thus, the arbitration agreement is broad in scope in that it applies to ‘any action,
dispute, claim, or controversy of any kind’ arising out of the residence and service
agreement, but this breadth is qualified by the opening phrase, ‘Except as provided
below, . . . .’ The exceptions are listed in the following paragraph, which states[,] ‘The
parties agree that the following matters are expressly excluded from the Arbitration
Agreement and shall be litigated in court, unless the parties expressly agree otherwise in
writing after a dispute has arisen: (a) matters involving eviction, (b) matters relating to
Monthly Rental payments and related fees, (c) matters falling below the jurisdictional
limit of small claims court, . . . .’ [Citation.] The agreement also exempts two other
types of claims not applicable to California residents and thus not relevant here.

                                                4
       “The arbitration agreement is governed by the [Federal Arbitration Act].
[Citation.] The arbitration proceedings may be conducted by an agreed upon arbitration
association or individual arbitrator, and shall be governed by the Federal Rules of
Evidence and Procedure. [Citation.] Further, with respect to attorney’s fees and costs,
‘The Parties shall bear their own attorneys’ fees and costs and hereby expressly waive
any right to recover attorney fees or costs, actual or statutory, unless otherwise provided
by law.’ [Citation.] The arbitrator’s fees are split 50-50 between plaintiff(s) and
defendant(s). [Citation.]
       “Two additional important clauses are contained on the third and fourth pages of
the arbitration agreement, which constitute the last two pages of the terms of the
agreement, since the fifth page serves as a signature page. The first clause emphasizes
the waiver of a jury trial, and states, ‘9. WAIVER OF CONSTITUTIONAL RIGHTS.
THE PARTIES UNDERSTAND AND AGREE THAT BY ENTERING INTO THIS
ARBITRATION AGREEMENT THEY ARE GIVING UP AND WAIVING THEIR
CONSTITUTIONAL RIGHT TO HAVE ANY CLAIM OR DISPUTE DECIDED
IN A COURT OF LAW OR EQUITY BEFORE A JUDGE AND/OR JURY.’
[Citation.] The next clause is found at paragraph 12, the second to last paragraph of the
terms of the agreement, and states, ‘12. LIMITATION OF COMMUNITY’S
LIABILITY. If the Resident alleges that the Community harmed the Resident in some
way, the Resident is entitled to seek recovery against the Community in Arbitration for
the Resident’s out-of-pocket costs actually incurred, plus up to $100,000 for other forms
of damages (such as compensatory, consequential, incidental or punitive) suffered by the
Resident. THE RESIDENT ACKNOWLEDGES AND AGREES THAT WITH
REGARD TO ANY DISPUTE OR CLAIM WHETHER IN BINDING
ARBITRATION OR OTHERWISE, THE RESIDENT HEREBY WAIVES ANY
CLAIM OR AWARD AGAINST THE COMMUNITY, ITS OWNERS, PARENTS,
SUBSIDIARIES, AFFILIATES, DIRECTORS, OFFICERS, MANAGERS,

                                             5
AGENTS, SUCCESSORS OR ASSIGNEES, FOR ANY AMOUNT OF DAMAGES
(INCLUDING WITHOUT LIMITATION, COMPENSATORY,
CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES) TO WHICH
THE RESIDENT, ITS AGENT OR RESPONSIBLE PARTY, HEIRS,
EXECUTORS OR ADMINISTRATORS MAY OTHERWISE BE ENTITLED OR
WHICH MAY BE AWARDED, OTHER THAN (A) ACTUAL MEDICAL OUT-
OF-POCKET COSTS ACTUALLY INCURRED PLUS (B) AN AMOUNT NOT TO
EXCEED $100,000.00. THIS SECTION IS SUBJECT TO ANY AGREEMENT BY
THE RESIDENT TO RELEASE THE COMMUNITY FROM ANY AND ALL
LIABILITY. THIS SECTION 13 SHALL BE VOID IF EXPRESSLY
PROHIBITED BY STATE LAW.’ [Citation.]
       “Finally, the arbitration agreement includes a severability clause that allows any
term found to be invalid to be severed from the rest of the agreement to thus maintain the
enforceability of the remainder of the agreement.”
       The trial court denied defendants’ petition to compel arbitration, finding the
agreement between the parties was procedurally and substantively unconscionable. The
trial court also found the arbitration agreement was permeated by unconscionability, and
thus the entire agreement was unenforceable and no portion could be severed. In doing
so, the trial court refused to consider defendants’ evidentiary objections to the admission
of plaintiff’s son’s declaration because the objection was not timely raised.
       Capital appeals.3

3      Pacifica Senior Living Management, LLC is designated as a respondent in this
appeal. It did not file briefing or otherwise participate in the appellate process.

                                             6
                                        DISCUSSION
                                                I
           Capital Forfeited Its Argument The Arbitration Agreement Required
          An Arbitrator To Decide Issues Of Arbitrability And Unconscionability
       Capital contends a provision in the arbitration agreement requires issues of
arbitrability and unconscionability to be decided by the arbitrator and not a trial court.
Consequently, Capital argues, it was error for the trial court to decide these threshold
issues, and the matter should be remanded with direction to arbitrate the issues. Capital
failed to raise this issue in the trial court and instead asserted that it had an enforceable
arbitration agreement that was not unconscionable. Indeed, at no point did Capital rely
on paragraph 3 of the arbitration agreement, which purports to delegate issues of
arbitrability to an arbitrator, to prevail on its petition to compel arbitration. As a result,
this issue is forfeited. “ ‘ “ ‘[I]t is fundamental that a reviewing court will ordinarily not
consider claims made for the first time on appeal which could have been but were not
presented to the trial court.’ Thus, ‘we ignore arguments, authority, and facts not
presented and litigated in the trial court. Generally, issues raised for the first time on
appeal which were not litigated in the trial court are [forfeited]. [Citations.]’ ” [Citation.]
“Appellate courts are loath to reverse a judgment on grounds that the opposing party did
not have an opportunity to argue and the trial court did not have an opportunity to
consider.” ’ ” (Premier Medical Management Systems, Inc. v. California Ins. Guarantee
Assn. (2008) 163 Cal.App.4th 550, 564.)
       Still, in its reply brief Capital raises an exception to the forfeiture rule, in that the
arbitrability of threshold issues is a question of law and dispositive to the case, i.e.,
important. We disagree. Appellate courts have relaxed the forfeiture rule and have
permitted a party to raise belatedly “ ‘a pure question of law which is presented on
undisputed facts’ ” when “ ‘important issues of public policy are at issue.’ ” (Sea & Sage
Audubon Society, Inc. v. Planning Com. (1983) 34 Cal.3d 412, 417; accord In re S.B.

                                                7
(2004) 32 Cal.4th 1287, 1293 [“appellate court’s discretion to excuse forfeiture should be
exercised rarely and only in cases presenting an important legal issue”], superseded by
statute on other grounds as stated in In re S.J. (2008) 167 Cal.App.4th 953, 962.) Capital
has failed to proffer a compelling public policy reason for us to reach the issue of
arbitrability it forfeited by failing to assert it in the trial court. Because of Capital’s
failure to assert a claim it argues is dispositive, the trial court already addressed the issue
it wants an arbitrator to address. Absent a compelling public policy reason to do so, we
decline to exercise our discretion to decide this forfeited claim.
                                                II
                 The Trial Court Did Not Abuse Its Discretion By Refusing
               To Consider Capital’s Belatedly Filed Evidentiary Objections
       Capital argues the trial court abused its discretion by failing to consider its
objections to plaintiff’s son’s declaration. We disagree.
                                                A
                                          Background
       “During its oral argument, [d]efendant Capital made reference to its objections to
the Declaration of [plaintiff’s son]. However, the [trial c]ourt pointed out that no such
objections were timely filed or otherwise appear[ed] in the register of actions. In
response to [d]efendant Capital’s request, the [trial c]ourt ordered that by no later than
September 21, 2022, [d]efendant Capital m[ight] submit a filing, attaching as an exhibit,
a file-endorsed copy of said objections indicating that it was timely filed and served on
[p]laintiff. If no such filing [was] made, the [trial c]ourt w[ould] rely upon the register of
actions as accurate. The matter w[ould] be deemed submitted on September 21, 2022.
Plaintiff indicated that it had no objection to this procedure for purposes of addressing
whether [d]efendant Capital’s objections were timely filed and served and whether they
m[ight] thereby be considered by the [trial c]ourt.”

                                                8
       “In response to the [trial c]ourt’s directive, [d]efendant Capital instead filed a
declaration and supplemental briefing confirming that [d]efendant Capital did not file any
objections in a timely manner, or at all, in advance of the hearing. [Citation.] Defendant
Capital submit[ted] additional unsolicited argument that its unfiled objections should
nonetheless be allowed to be filed . . . and considered on the merits in the [trial c]ourt’s
decision on this matter which [was] already under submission. The [trial c]ourt
decline[d] to do so. Briefing ha[d] been closed on this matter. The [trial c]ourt ha[d]
already issued its tentative ruling. The [trial c]ourt ha[d] also considered oral argument.
The [trial c]ourt’s prior order was only to allow submission of proof that [d]efendant
Capital’s objections were in fact filed despite their absence in the Register of Actions.
They were not. At this point, [d]efendant Capital’s proposed evidentiary objections
[were] significantly untimely and the [trial c]ourt decline[d] to allow such late filing and
consideration. In any event, for purposes of the record on appeal, the [trial c]ourt note[d]
that had [d]efendant Capital’s proposed Objections to the Declaration of [plaintiff’s son]
[citation] been timely filed, they would not have altered the [trial c]ourt’s decision.
Defendant Capital’s proposed objections, which principally assert[ed] lack of personal
knowledge, hearsay and irrelevance, would have been overruled.”
       The additional argument the trial court referred to in its order was Capital’s
contention that it believed its objections had been lodged with the trial court because it
had delivered them to a filing service for filing and had also served plaintiff with the
objections. The filing service, however, inadvertently failed to file the objections on
Capital’s behalf.
                                              B
                            There Was No Abuse Of Discretion
       “We review the trial court’s rulings regarding the admissibility of the evidence for
an abuse of discretion.” (People v. Mataele (2022) 13 Cal.5th 372, 413-414.) Under this
standard, “[a] trial court’s decision to admit or exclude evidence ‘ “ ‘will not be disturbed

                                              9
unless there is a showing that the trial court acted in an arbitrary, capricious, or absurd
manner resulting in a miscarriage of justice.’ ” ’ [Citations.] ‘This standard of review
affords considerable deference to the trial court provided that the court acted in
accordance with the governing rules of law. We presume that the court properly applied
the law and acted within its discretion unless the appellant affirmatively shows
otherwise.’ ” (Ibid.)
       Capital contends the trial court abused its discretion by not considering Capital’s
untimely objections to plaintiff’s son’s declaration because the untimeliness of the
objections was inadvertent, the objections were served on plaintiff, and Capital took
corrective action as soon as it realized the filing service failed to file the objections. It
argues the error was prejudicial because the trial court’s denial of its petition to compel
arbitration relied heavily on plaintiff’s son’s inadmissible establishment of key facts.
       Capital filed its reply brief on September 8, 2022, and attempted to file its
objections at that time by providing them to their filing service. The hearing on the
petition to compel arbitration occurred a week later, on September 15, 2022. Capital
provides no reason for why it did not discover its filing service’s failure to file the
objections before the hearing, at which time the trial court had already researched the
issues raised and had drafted a tentative ruling. While the late filing may have occurred
through inadvertence, Capital was the only party (including the court) that had any
control over the filing of the objections. Capital delegated the filing to a third party and
did not check on it or otherwise ensure its objections were filed with the court until an
adverse ruling had been presented to the parties. Given the stage of the proceedings
when Capital attempted to remedy its failure to timely file its evidentiary objections, the
trial court was within its discretion to refuse to consider the late filed objections.
       In any event, the trial court did not consider plaintiff’s son’s declaration to
establish facts outside his personal knowledge or facts that contradicted Kraft’s
declaration as Capital argues. The trial court considered plaintiff’s son’s declaration to

                                               10
establish that plaintiff signed the arbitration agreement while she was outside of her son’s
presence and that the arbitration agreement, at least to plaintiff’s son, was an adhesion
contract in the sense that he felt he had to sign the agreement or plaintiff would not have
been permitted to live at Crest. These were facts within plaintiff’s son’s personal
knowledge and relevant to the process Capital employed when eliciting agreement from
plaintiff and her designated responsible party. For this reason, Capital cannot
demonstrate it was prejudiced by the trial court’s refusal to consider its evidentiary
objections to plaintiff’s son’s declaration because it cannot demonstrate a more favorable
outcome was reasonably probable had the evidentiary objections been considered. (See
Cal. Const., art. VI, § 13 [“No judgment shall be set aside . . . in any cause . . . for any
error as to any matter of procedure, unless, after an examination of the entire cause,
including the evidence, the court shall be of the opinion that the error complained of has
resulted in a miscarriage of justice”]; People v. Watson (1956) 46 Cal.2d 818, 836 [“a
‘miscarriage of justice’ should be declared only when the court, ‘after an examination of
the entire cause, including the evidence,’ is of the ‘opinion’ that it is reasonably probable
that a result more favorable to the appealing party would have been reached in the
absence of the error”].)
                                              III
                     The Arbitration Agreement Was Unconscionable
       Capital contends the trial court erred by determining the arbitration agreement was
procedurally and substantively unconscionable. We disagree.
                                               A
                                       Applicable Law
       “ ‘ “If the court’s order is based on a decision of fact, then we adopt a substantial
evidence standard. [Citations.] Alternatively, if the court’s denial rests solely on a
decision of law, then a de novo standard of review is employed.” ’ ” (Chambers v.
Crown Asset Management, LLC (2021) 71 Cal.App.5th 583, 591.) “Where . . . the

                                              11
evidence is not in conflict, we review the trial court’s denial of arbitration de novo.”
(Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012)
55 Cal.4th 223, 236.) Whether the trial court erred in declining to sever portions of the
arbitration provision is reviewed for abuse of discretion. (Carmona v. Lincoln
Millennium Car Wash, Inc. (2014) 226 Cal.App.4th 74, 83.)
       “We use general principles of California contract law to determine the
enforceability of [an] arbitration agreement.” (Mission Viejo Emergency Medical
Associates v. Beta Healthcare Group (2011) 197 Cal.App.4th 1146, 1153.) “ ‘The party
seeking to compel arbitration bears the burden of proving the existence of an arbitration
agreement, while the party opposing the petition bears the burden of establishing a
defense to the agreement’s enforcement.’ ” (Sandoval-Ryan v. Oleander Holdings LLC
(2020) 58 Cal.App.5th 217, 222.) “[A]greements to arbitrate [may] be invalidated by
‘generally applicable contract defenses, such as fraud, duress, or unconscionability.’ ”
(AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333, 339.)
       Plaintiff does not contest that an agreement to arbitrate existed and argues instead
the agreement was unconscionable. “ ‘[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

                                             12
conclusion that the term is unenforceable, and vice versa.” (Armendariz v. Foundation
Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114, italics omitted (Armendariz).)
                                               B
                                Procedural Unconscionability
          “[T]he initial question regarding procedural unconscionability is whether the
contract was one of adhesion, namely, 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.” ’ ” (Dougherty v. Roseville
Heritage Partners (2020) 47 Cal.App.5th 93, 103.) “ ‘Procedural unconscionability’
concerns the manner in which the contract was negotiated and the circumstances of the
parties at that time. [Citation.] It focuses on factors of oppression and surprise.
[Citation.] The oppression component arises from an inequality of bargaining power of
the parties to the contract and an absence of real negotiation or a meaningful choice on
the part of the weaker party.” (Kinney v. United HealthCare Services, Inc. (1999)
70 Cal.App.4th 1322, 1329.) “The second component of procedural unconscionability
encompasses an aspect of surprise, with the terms to which the party supposedly agreed
being hidden in a prolix printed form drafted by the party seeking to enforce them.”
(Ibid.)
          Like the trial court, we conclude there was a high degree of procedural
unconscionability because of the adhesive nature of the agreement, the unequal
bargaining power of the parties, and the agreement’s placement within the larger
admission packet. Capital disagrees with these conclusions.4

4       Capital spends a significant portion of its opening brief arguing that plaintiff’s
son’s declaration fails to establish Capital did not explain the arbitration agreement to
plaintiff or that she lacked capacity to read and understand it herself. We agree, as did
the trial court. Indeed, the trial court did not find that plaintiff lacked capacity or that
Kraft failed to explain the arbitration agreement to plaintiff. The trial court found that

                                              13
       As to the adhesive nature of the arbitration agreement, Capital argues plaintiff
failed to submit evidence demonstrating she was prohibited from negotiating the terms of
the contract. While plaintiff did not submit a declaration describing her own
understanding of her ability to negotiate terms of the agreement, the circumstances of the
signing indicate negotiation was discouraged and likely infeasible. While Kraft discussed
the arbitration agreement with plaintiff, the agreement was presented as part of a 55-page
admission packet providing the terms of and rules applicable to plaintiff’s residency at
Crest. This included a statement at the beginning of the residence and service agreement
providing: “You are encouraged to consult with trusted family members and
friends, health care providers and/or legal counsel about whether signing this
Agreement and becoming a resident and remaining a resident at the Community is
appropriate for You.” The admission packet then contained the 25-page residence and
service agreement of terms and conditions related to plaintiff’s living space, common
areas, fees and rent, services provided and not provided by Crest, and termination of the
agreement. The admission packet also contained 30 pages of attachments, which
included multiple Crest policies, as well as the arbitration agreement and payment
authorization.
       The way the arbitration agreement was presented to plaintiff discouraged
negotiation. It was contained in a large and preprinted admission packet that
communicated a wide variety of subjects and requirements of residency. In the midst of
going through these voluminous requirements, prospective tenants can hardly be
expected to negotiate regarding terms presented as Crest’s established practices and
conditions of residency. This is especially true given the initial bolded paragraph
informing prospective residents that if they disagreed with the contents of the admission

regardless of plaintiff’s capacity and opportunity to read the arbitration agreement,
however, the agreement was procedurally unconscionable given the other circumstances
of its formation. We agree with this conclusion.

                                            14
packet, Crest was not a good fit for them, i.e., they should find other living
accommodations.
       Further, and contrary to Capital’s assertions, the agreement’s terms did not
communicate that the arbitration “agreement was purely voluntary and not a precondition
to [plaintiff]’s residency at the Crest.” The provisions cited by Capital tell plaintiff only
that she must voluntarily enter the agreement and can ask any questions or consult with
an attorney “before choosing to sign and accept the terms and conditions of th[e]
arbitration agreement.” (Capitalization omitted.) Indeed, similar language is included in
the residence and service agreement as attesting to plaintiff’s capacity to sign, and not
plaintiff’s ability to voluntarily pick and choose the terms with which she must comply.
Ultimately, the language attesting to the voluntariness of the arbitration agreement does
not communicate to plaintiff that she may reside at Crest without signing an arbitration
agreement or that she can negotiate the terms of the agreement. Consequently, upon a
reasonable reading of the admission packet, plaintiff was presented with a “take it or
leave it” decision indicative of a contract of adhesion. (See Armendariz, supra,
24 Cal.4th at p. 113 [a contract adhesion is 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’ ”]; Gentry v. Superior Court
(2007) 42 Cal.4th 443, 469 [“Ordinary contracts of adhesion, although they are
indispensable facts of modern life that are generally enforced [citation], contain a degree
of procedural unconscionability even without any notable surprises, and ‘bear within
them the clear danger of oppression and overreaching’ ”].)
       Moreover, “an inference of voluntary assent can be indulged only so far and must
yield in the face of undisputed facts that undermine it.” (OTO, L.L.C. v. Kho (2019)
8 Cal.5th 111, 129.) Here, plaintiff has demonstrated such facts pertaining to the unequal
bargaining power between the parties. Capital argues plaintiff has not established she
lacked capacity to understand the agreement and negotiate changes if she had wanted to

                                              15
do so. Capital points to the fact that plaintiff’s son does not hold a durable power of
attorney for plaintiff and plaintiff brought this suit on her own behalf to show plaintiff
was capable of knowing, understanding, and negotiating the agreement.
       We are not persuaded. Kraft knew that plaintiff’s son was assisting her in finding
a home that met her changing mobility needs. Kraft secured plaintiff’s son’s consent to
the arbitration agreement and other contract provisions as a “responsible party” and then
presented the same signature page her son signed to plaintiff for her signature. Plaintiff is
in her eighties, has mobility concerns, and was trying to find a new home to better fit her
changing lifestyle. The incentive she had to independently understand and negotiate (or
opt out of) the arbitration agreement was diminished by Kraft’s presentation of plaintiff’s
son’s consent to plaintiff when asking for plaintiff’s consent to the arbitration agreement.
In essence, Kraft informed plaintiff her son had already reviewed the admission packet,
including the arbitration agreement, and agreed to the terms, and thus encouraged
plaintiff to agree based on her son’s assent. The fact the arbitration agreement was never
explained or pointed out to plaintiff’s son before his signature supports the inference that
Capital induced plaintiff’s agreement without ensuring she, or the person from whom she
sought guidance, understood the agreement.
       As to surprise, Capital points to Kraft’s declaration, in which she declared she
explained the arbitration agreement to plaintiff and that plaintiff verbally acknowledged
the agreement before signing it. Capital further points to the arbitration agreement’s
utilization of bolded and capitalized font to inform plaintiff of key terms. Like the trial
court, we find these facts are outweighed by the placement of the arbitration agreement
and the key provisions within it. The arbitration agreement was first referred to on page
22 of 25 of the residence and service agreement. The reference was a sentence with some
capitalized words informing plaintiff of the agreement’s existence at the end of the
contract. The arbitration agreement was located on page 42 of 55 of the admission packet
and consisted of three and one-half pages of text. The only bolded and capitalized

                                             16
provisions of the arbitration agreement appear on page three and the top of page four.
The placement of the arbitration agreement and its key provisions at the end of a
voluminous amount of text served to hide the agreement and minimize its importance.
Thus, while the agreement included bolded and capitalized text, it was presented in a way
such that those safeguards were likely to be unnoticed. (See Bruni v. Didion (2008)
160 Cal.App.4th 1272, 1288 [“ ‘ “ ‘Surprise’ involves the extent to which the supposedly
agreed-upon terms of the bargain are hidden in a prolix printed form drafted by the party
seeking to enforce the disputed terms” ’ ”].) Moreover, surprise is not a necessary
element of procedural unconscionability in the presence of an adhesion contract.
(Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1244.)
       In sum, Capital points to several circumstances of the contract as not being
procedurally unconscionable, but several elements of procedural unconscionability
outweigh Capital’s contentions. The form of the contract discouraged negotiation and
obscured key terms among voluminous text. Further, presenting the contract to plaintiff
to sign after her “responsible party” son signed the contract gave plaintiff a sense of
security that the contract was fair and encouraged her to agree with or rely on her son’s
execution of the contract without independently assessing the contract’s reasonableness
for herself. These factors demonstrate a high degree of procedural unconscionability,
warranting a review of the arbitration provision for substantive unconscionability. Where
there is “substantial procedural unconscionability . . . , even a relatively low degree of
substantive unconscionability may suffice to render the agreement unenforceable.”
(OTO, L.L.C. v. Kho, supra, 8 Cal.5th at p. 130.)
                                              C
                               Substantive Unconscionability
       “The substantive element of the unconscionability analysis ‘looks to the actual
terms of the parties’ agreement to “ensure[] that contracts, particularly contracts of
adhesion, do not impose terms that have been variously described as ‘ “ ‘overly harsh’ ” ’

                                             17
[citation], ‘ “unduly oppressive” ’ [citation], ‘ “so one-sided as to ‘shock the
conscience’ ” ’ [citation], or ‘unfairly one-sided.’ ” [Citation.] These formulations “all
mean the same thing.” [Citation.] Substantive unconscionability “ ‘is concerned not with
“a simple old-fashioned bad bargain” [citation], but with terms that are “unreasonably
favorable to the more powerful party.” ’ ” [Citation.] “The substantive component of
unconscionability looks to whether the contract allocates the risks of the bargain in an
objectively unreasonable or unexpected manner.” [Citation.] While private arbitration
may resolve disputes faster and cheaper than judicial proceedings, it “ ‘may also become
an instrument of injustice imposed on a “take it or leave it” basis.’ ” [Citation.] “ ‘The
courts must distinguish the former from the latter, to ensure that private arbitration
systems resolve disputes not only with speed and economy but also with fairness.’ ” ’ ”
(Bakersfield College v. California Community College Athletic Assn. (2019)
41 Cal.App.5th 753, 765.)
       Here, the trial court found a high degree of substantive unconscionability based on
three provisions in the arbitration agreement. The trial court addressed the first two
provisions in tandem, which were the fee limiting and liability limiting provisions. The
fee limiting provision required plaintiff to pay her own attorney fees and costs, while the
liability limiting provision limited recovery to plaintiff for her actual medical out-of-
pocket costs plus $100,000 and required plaintiff to waive actual or statutory damages.
Capital argues these provisions were not substantively unconscionable, despite the
provisions’ violation of public policy (Bickel v. Sunrise Assisted Living (2012)
206 Cal.App.4th 1, 12-13 [waiver in residency agreement of the plaintiff’s statutory
remedies under the Elder Abuse Act unenforceable as contrary to public policy]), because
both provisions included carve out clauses making the provisions void if they violate
state law. We, however, determine whether a contract provision was “ ‘ “unconscionable
at the time it was made.” ’ ” (Sonic-Calabasas A, Inc. v. Moreno (2013) 57 Cal.4th 1109,
1134.) Although the contractual terms included a general carve out when invalid under

                                             18
state law, the provisions put the burden on plaintiff to allege and prove that fact. Under
these circumstances, the arbitration provisions that violate public policy qualify as an
overly harsh or one-sided result. (See Armendariz, supra, 24 Cal.4th at pp. 110-111.)
       For the same reasons, we reject Capital’s assertion the attorney fees and costs
provision was not unconscionable because its language was reciprocal and complied with
the American system of requiring parties to bear their own attorney fees and costs. In the
area of elder abuse, however, the Legislature has determined these claims to be an
exception to the American form of reciprocal attorney fees and costs. (Bickel v. Sunrise
Assisted Living, supra, 206 Cal.App.4th at pp. 12-13.) The fact that the demographic of
victims of elder abuse are the same demographic at the center of all Capital’s contracts
involving Crest indicates Capital’s intention to subvert public policy in this area.
Accordingly, these provisions are substantively unconscionable.
       The third provision the trial court found substantively unconscionable was the
term limiting the arbitrable claims to those most likely to be brought by plaintiff, while
the claims Capital would most likely raise were permitted to be brought in court. Capital
argues this determination was error because the law only prohibits treating parties
differently, not treating types of claims differently. We disagree with Capital’s broad
interpretation. In Armendariz, our Supreme Court explained mutuality as follows: “[It]
is not to say that an arbitration clause must mandate the arbitration of all claims between
employer and employee in order to avoid invalidation on grounds of unconscionability.
Indeed, as the employer points out, the present arbitration agreement does not require
arbitration of all conceivable claims that an employee might have against an employer,
only wrongful termination claims. But 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 arbitration agreement in this case lacks mutuality in this
sense because it requires the arbitration of employee--but not employer--claims arising

                                             19
out of a wrongful termination. An employee terminated for stealing trade secrets, for
example, must arbitrate his or her wrongful termination claim under the agreement while
the employer has no corresponding obligation to arbitrate its trade secrets claim against
the employee.” (Armendariz, supra, 24 Cal.4th at p. 120.)
       Here, the agreement exempted from arbitration “matters involving eviction” and
“matters relating to Monthly Rental payments and related fees,” as well as claims falling
below the jurisdictional limit of small claims court. The trial court found that Capital
would be the party most likely to bring claims involving eviction and the payment of rent
and fees. We agree with this assessment and reject Capital’s assertions to the contrary.
The basis of the relationship between plaintiff and Capital is that plaintiff pays Capital
rent and fees for living accommodations and services, and Capital has the power to evict
plaintiff for failing to pay those rents and fees or for any violation of the residence and
service agreement. But plaintiff does not have the right to bring a court action for breach
of contract for Capital’s failure to provide services pursuant to the residence and service
agreement until it is the basis of her withholding rent or being evicted. On this level, the
provision lacks mutuality in that it does not permit both parties to bring a court
proceeding for “all claims arising out of the same transaction or occurrence or series of
transactions or occurrences.” (Armendariz, supra, 24 Cal.4th at p. 120.) In its reply
brief, Capital argues statutory provisions exist to allow plaintiff to sue under
circumstances pertaining to the uninhabitability of her living space before it rises to the
degree of her withholding rent payments or monthly fees. Again, however, the
arbitration agreement does not explicitly provide for this exception and instead places the
burden on plaintiff to raise and prove that her claim falls within the statutory exception
not articulated in the arbitration agreement.
       “ ‘[T]he paramount consideration in assessing [substantive] [un]conscionability is
mutuality.’ ” (Nyulassy v. Lockheed Martin Corp. (2004) 120 Cal.App.4th 1267, 1281.)
An arbitration agreement requires a “ ‘modicum of bilaterality,’ ” meaning the drafter

                                                20
cannot require another to submit a claim to arbitration but not accept the same limitation
when it would act as the plaintiff “without at least some reasonable justification for such
one-sidedness based on ‘business realities.’ ” (Armendariz, supra, 24 Cal.4th at p. 117.)
“When only the weaker party’s claims are subject to arbitration, and there is no
reasonable justification for that lack of symmetry, the agreement lacks the requisite
degree of mutuality.” (Abramson v. Juniper Networks, Inc. (2004) 115 Cal.App.4th 638,
657.) Capital has provided no business justification for the lack of mutuality in the
arbitration agreement, and thus the term is substantively unconscionable.
       Accordingly, the arbitration agreement is unconscionable.
                                              D
                    The Unconscionable Provisions Cannot Be Severed
       Capital argues, that even if certain provisions were unconscionable, the
unconscionable provisions should have been severed from the arbitration agreement. We
disagree.
       “ ‘In deciding whether to sever terms rather than to preclude enforcement of the
provision altogether, the overarching inquiry is whether the interests of justice would be
furthered by severance; the strong preference is to sever unless the agreement is
“permeated” by unconscionability.’ [Citation.]
       “ ‘An agreement to arbitrate is considered “permeated” by unconscionability
where it contains more than one unconscionable provision. [Citation.] “Such multiple
defects indicate a systematic effort to impose arbitration on [the nondrafting party] not
simply as an alternative to litigation, but as an inferior forum that works to the [drafting
party’s] advantage.” [Citation.] An arbitration agreement is also deemed “permeated” by
unconscionability if “there is no single provision a court can strike or restrict in order to
remove the unconscionable taint from the agreement.” [Citation.] If “the court would
have to, in effect, reform the contract, not through severance or restriction, but by
augmenting it with additional terms,” the court must void the entire agreement.’ ”

                                              21
(Bakersfield College v. California Community College Athletic Assn., supra,
41 Cal.App.5th at pp. 769-770, italics omitted.)
       As discussed, the arbitration agreement contains several serious defects⸺most
significantly the disparity in bargaining power and the lack of mutuality. The procedural
unconscionability coupled with the substantive unconscionability renders the arbitration
agreement so “ ‘permeated’ by unconscionability [it] could only be saved, if at all, by a
reformation beyond our authority.” (Mercuro v. Superior Court (2002) 96 Cal.App.4th
167, 182.) The arbitration agreement is therefore unenforceable.
                                      DISPOSITION
       The trial court’s order is affirmed. Capital shall pay costs on appeal. (Cal. Rules
of Court, rule 8.278(a)(1), (2).)

                                                   /s/
                                                   Robie, P. J.

We concur:

/s/
Duarte, J.

/s/
Earl, J.

                                            22