Court Opinion

ID: 6496082
Source: CourtListenerOpinion
Date Created: 2022-06-28 23:01:34.089601+00
Date Added: 2024-06-11T08:48:32.322573
License: Public Domain

Filed 6/28/22 Mirzoyan v. West Coast Wound and Skin Care CA2/1
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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has not been certified for publication or ordered published for purposes of rule 8.1115.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 ONE

 ANI MIRZOYAN,                                                         B310901

           Plaintiff and Respondent,                                   (Los Angeles County
                                                                       Super. Ct. No. 20BBCV00378)
           v.

 WEST COAST WOUND AND SKIN
 CARE INC., et al.,

           Defendants and Appellants;

 ANTHONY SAIDIANI,

           Defendant.

      APPEAL from an order of the Superior Court of
Los Angeles County, William D. Stewart, Judge. Reversed and
remanded with instructions.
      Clark Hill, Rafael G. Nendel-Flores and Monique A. Eginli
for Defendants and Appellants West Coast Wound and Skin Care
Inc. and Lydia Alsa.
      No appearance for Defendant Anthony Saidiani.
      Lyon Law, Geoffrey C. Lyon and Henry Harmeling IV for
Plaintiff and Respondent.

                  ____________________________

      West Coast Wound and Skin Care Inc. (WCW) hired
Ani Mirzoyan as an administrative employee in November 2019.
Before the commencement of Mirzoyan’s tenure at WCW, she and
a representative of WCW executed an arbitration agreement
covering claims or controversies arising out of her employment.
Mirzoyan alleges WCW wrongfully terminated her in April 2020.
      Mirzoyan filed suit against WCW, Lydia Alsa, and Anthony
Saidiani, alleging a wrongful termination claim and various
causes of action under the California Fair Employment and
Housing Act (FEHA, Gov. Code, § 12900 et seq.) and Labor Code
sections 1102.5 and 1102.6. WCW and Alsa (collectively,
appellants) moved to compel arbitration. The trial court denied
the motion upon finding the arbitration agreement
unconscionable. Although the court found the agreement was
procedurally unconscionable only to a limited degree as an
adhesion contract, the court concluded the agreement was
substantively unconscionable because it requires only Mirzoyan
to arbitrate her employment-related claims. Appellants seek
review of the trial court’s order denying their motion.1
      The trial court did not err in finding that the arbitration
agreement presented a low degree of procedural

      1 Although appellants identified Saidiani as a party to this
appeal in their civil case information statement, Saidiani has not
made an appearance before this court.

                                   2
unconscionability. We, however, disagree with the court’s finding
that the agreement requires only Mirzoyan to arbitrate her
claims. Although the arbitration agreement was inartfully
drafted, the text nonetheless reveals that both Mirzoyan and
WCW agreed to submit their respective claims against each other
to final and binding arbitration.
       As to Mirzoyan’s other claims of substantive
unconscionability, we agree only as to two of them—a one-sided
prearbitration condition requiring the employee but not the
employer informally to attempt to negotiate her claims with the
employer, and an attorney fees and costs provision requiring each
side to bear its own attorney fees and costs incurred in
arbitration. Because, however, these provisions are collateral to
the purpose of the arbitration agreement and can be easily
excised from the agreement, we sever them and otherwise enforce
the arbitration agreement.
       Lastly, we conclude Alsa may enforce the agreement as a
third-party beneficiary, but remand to the trial court to
determine, in the first instance, (a) whether Mirzoyan should be
required to arbitrate her claims against Saidiani; and (b) whether
the proceedings should be stayed pending completion of
arbitration.
       In sum, we reverse the order denying appellants’ motion to
compel and remand the matter for further proceedings consistent
with this opinion.

      FACTUAL AND PROCEDURAL BACKGROUND
     We summarize only those facts that are relevant to this
appeal.

                                   3
1.    Mirzoyan’s complaint
       On June 15, 2020, Mirzoyan filed a complaint against
WCW, Alsa, and Saidiani.2 In the complaint, Mirzoyan alleges
that from approximately November 2019 to her termination on or
about April 17, 2020, she was employed as an “ ‘Intake
Administrative Assistant’ ” at WCW. Mirzoyan avers that Alsa
was a “Scheduler” at WCW who “began to verbally harass
[Mirzoyan] daily based on [Mirzoyan’s] race” from on or about
November 5, 2019 until Alsa was terminated in or around
December 2019. Mirzoyan asserts that Saidiani was the chief
operating officer of WCW, and that he “created an objectively
hostile working environment for [Mirzoyan]” and discriminated
against Mirzoyan because of her pregnancy. Mirzoyan alleges
WCW terminated her on or about April 17, 2020 on account of her
pregnancy and in retaliation for making certain complaints of
unlawful discrimination.
       The complaint levels the following fourteen causes of
action: (1) wrongful termination in violation of public policy
against WCW; (2) gender/pregnancy discrimination under FEHA
against WCW; (3) harassment based on gender/pregnancy under
FEHA against WCW and Saidiani; (4) harassment based on
disability under FEHA against WCW and Saidiani; (5) disability
discrimination under FEHA against WCW; (6) retaliation for
requesting and using accommodations for disabilities under
FEHA against WCW; (7) failure to engage in a timely, good faith,
interactive process to determine reasonable accommodation for

      2  Curiously, appellants did not designate the complaint for
inclusion in the clerk’s transcript. We, sua sponte, take judicial
notice of this pleading. (Evid. Code, §§ 452, subd. (d), 459.)

                                   4
disability under FEHA against WCW; (8) failure to reasonably
accommodate disabilities under FEHA against WCW;
(9) pregnancy disability leave retaliation under FEHA against
WCW; (10) pregnancy disability leave discrimination under
FEHA against WCW; (11) harassment based on race under
FEHA against Alsa; (12) failure to prevent and stop harassment,
discrimination, and retaliation under FEHA against WCW;
(13) retaliation for opposing violations of FEHA against WCW;
and (14) whistleblower retaliation under Labor Code
sections 1102.5 and 1102.6 against WCW.

2.    Appellants’ motion to compel arbitration and filings
      relating thereto
      On December 18, 2020, appellants moved to compel
Mirzoyan to submit her claims to arbitration.3 In support of the
motion, appellants submitted the declaration of Dr. David Kay,
WCW’s chief executive officer. Dr. Kay attested that WCW
provided Mirzoyan with an employment agreement and an
arbitration agreement, both of which Dr. Kay (on behalf of WCW)
and Mirzoyan signed on or about November 4, 2019. These
documents were attached to Dr. Kay’s declaration.
      In Mirzoyan’s opposition, she argued that the arbitration
agreement is unenforceable because it is procedurally and
substantively unconscionable. Mirzoyan did not contest
appellants’ assertions that (a) she and WCW executed the
arbitration agreement, and (b) the agreement covers the claims
alleged in her complaint.

      3  Although Saidiani appeared in the trial court
proceedings, he did not join appellants’ motion to compel
arbitration.

                                   5
     Appellants filed a reply in support of their motion to
compel.

3.    The trial court’s order denying the motion to compel
      arbitration and appellants’ notice of appeal
       On January 22, 2021, the trial court heard and denied
appellants’ motion to compel arbitration. The court found the
arbitration agreement “does reflect some limited degree of
procedural unconscionability” because it is a contract of adhesion.
The court also concluded the arbitration agreement is
substantively unconscionable because it “lacks mutuality
between the parties.” Specifically, the court found there exists
under paragraphs 1 and 2 of the arbitration agreement “an
obligation binding [Mirzoyan] to bring all workplace concerns and
disputes to company attention, and later arbitration, but no
reciprocal obligation binding WCW.” The court declined to sever
these unconscionable provisions from, and enforce the remainder
of, the arbitration agreement on the ground that “an agreement’s
lack of mutuality creates an ‘unconscionable taint’ that
permeates the entire agreement . . . .”
       Appellants timely appealed the trial court’s order denying
their motion.4

                   STANDARDS OF REVIEW
      “ ‘In ruling on a motion to compel arbitration, the trial
court shall order parties to arbitrate “if it determines that an
agreement to arbitrate the controversy exists . . . .” [Citation.]

      4 “The denial of a motion to compel arbitration is an
appealable order.” (Hernandez v. Ross Stores, Inc. (2016)
7 Cal.App.5th 171, 176; Code Civ. Proc., § 1294, subd. (a).)

                                     6
“[T]he party seeking arbitration bears the burden of proving the
existence of an arbitration agreement by a preponderance of the
evidence, and the party opposing arbitration bears the burden of
proving by a preponderance of the evidence any defense . . . .”
[Citation.]’ ” (Western Bagel Co., Inc. v. Superior Court (2021)
66 Cal.App.5th 649, 662 (Western Bagel Co., Inc.).)
       Unconscionability is a defense to enforcement of an
arbitration agreement. (See Lange v. Monster Energy Co. (2020)
46 Cal.App.5th 436, 444–445 (Lange).) “ ‘ “[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. . . . . [T]he 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.’ [Citation.]” (Id.
at p. 445.) “[I]f a trial court concludes that an arbitration
agreement contains unconscionable terms, it then ‘must
determine whether these terms should be severed, or whether
instead the arbitration agreement as a whole should be
invalidated.’ [Citation.]” (Id. at pp. 452–453.)
       “ ‘In evaluating an order denying a motion to compel
arbitration, “ ‘ “we review the arbitration agreement de novo to
determine whether it is legally enforceable, applying general
principles of California contract law.” ’ ” [Citation.]’ ” (Western
Bagel Co., Inc., supra, 66 Cal.App.5th at p. 662.) “We review a

                                    7
trial court’s order declining to sever . . . unconscionable provisions
from an arbitration agreement for abuse of discretion.” (Lange,
supra, 46 Cal.App.5th at p. 453.)

                           DISCUSSION

A.    The Arbitration Agreement Possesses Some Limited
      Degree of Procedural Unconscionability
       The trial court did not err in finding that the arbitration
agreement “does reflect some limited degree of procedural
unconscionability” because it is an adhesion contract. Appellants
do not challenge the trial court’s finding that the arbitration
agreement is an adhesion contract. In addition, Dr. Kay
admitted in his declaration that WCW’s offer of employment to
Mirzoyan “was conditional based on [Mirzoyan] executing” the
“standard stand-alone” arbitration agreement. This evidence
indicates WCW presented the arbitration agreement to Mirzoyan
as a condition of employment without any opportunity to
negotiate its standardized terms.
       Mirzoyan intimates that the trial court minimized the
degree to which the agreement is procedurally unconscionable.
Specifically, she argues the agreement contains an element of
surprise because “the recitals and Par[agraph] 5 are intended to
cause the reader to think the agreement requires all parties to
mutually arbitrate all claims, when . . . only the employee’s
claims ‘shall’ go to arbitration, while the employer’s ‘may.’ ” This
argument fails because, as we explain in Discussion, part B, post,
the arbitration agreement obligates her and WCW to submit
their respective claims against each other to binding arbitration.
       Because the only indicium of procedural unconscionability
presented by the arbitration agreement is its status as a contract

                                     8
of adhesion, the trial court did not err in finding the agreement
presents a low degree of procedural unconscionability.
(See Serpa v. California Surety Investigations, Inc. (2013)
215 Cal.App.4th 695, 704 [“It is well settled that adhesion
contracts in the employment context, that is, those contracts
offered to employees on a take-it-or-leave-it basis, typically
contain some aspects of procedural unconscionability. . . . [¶] . . .
When, as here, there is no other indication of oppression or
surprise, ‘the degree of procedural unconscionability of an
adhesion agreement is low . . . .’ ”].)

B.    The Arbitration Agreement Is Mutually Binding
      The crux of this appeal is whether the trial court erred in
concluding the arbitration agreement obligates Mirzoyan but not
WCW to arbitrate claims. The court’s conclusion in that regard
hinged on its construction of paragraphs 1 and 2 of the
agreement, which provide:
      “1.    Employee is obligated to bring all workplace
concern(s) or dispute(s) (‘Issue’) to the attention of Company
management, in writing, for possible resolution. The writing
should contain a brief description of the issue, the parties
involved, and relevant date(s). Company response, if any, will be
provided to the Employee within thirty (30) days of the date the
issue is brought to Company’s attention.
      “2.    If after thirty (30) days the Employee is not satisfied
with Company response, then the Issue, which includes but is not
limited to, any and all claims or controversies arising out of
Employee’s application or candidacy for employment,
employment, or cessation of employment with the Company, shall
be resolved through final and binding arbitration pursuant to the
National Rules for the Resolution of Employment Disputes of the

                                     9
American Arbitration Association (‘AAA’) in existence as of the
time the dispute arises. A copy of the Rules can be obtained from
the AAA’s website, adr.org/Dispute Resolution
Services/Arbitration/Mediation/Employment Rules, or will be
provided to you upon request. Arbitration may be initiated by
either the Employee or the Company in accordance with the
procedures specified in those Rules. The claims which are subject
to arbitration shall include, but not be limited to, any and all
employment-related claims or controversies, such as breach of
employment agreement, breach of the covenant of good faith and
fair dealing, negligent supervision or hiring, wrongful discharge
in violation of public policy, unpaid wages of overtime under the
state and federal wage payment laws, breach of privacy claims,
intentional or negligent infliction of emotional distress claims,
fraud, defamation, and divulgence of trade secrets.”
       At first blush, paragraph 1 and the first sentence of
paragraph 2 suggest the arbitration contemplated by this
agreement encompasses only claims raised by Mirzoyan after she
had presented them to WCW. The remainder of paragraph 2 and
other text in the arbitration agreement, however, demonstrate
that the parties intended to be mutually bound to arbitrate any
disputes between them relating to Mirzoyan’s employment.5
(See Quantification Settlement Agreement Cases (2011)
201 Cal.App.4th 758, 799 [“ ‘[E]ven if one provision of a contract
is clear and explicit, it does not follow that that portion alone

      5 As we explain in Discussion, part C.1, post, however,
paragraphs 1 and 2 obligate only Mirzoyan to participate in the
prearbitration dispute resolution mechanism before submitting
her claims to arbitration.

                                  10
must govern its interpretation; the whole of the contract must be
taken together so as to give effect to every part.’ ”].)
       First, the provision allowing “[a]rbitration [to] be initiated
by either the Employee or the Company in accordance with the
procedures specified in [the aforementioned AAA] Rules”
supports this conclusion.6 AAA rule 4 indicates that in the
absence of the parties’ “joint request for arbitration,” arbitration
must be initiated by filing a “Demand” that raises a “claim” to
which the other party may respond.7 If WCW’s claims were not
covered by the arbitration agreement, then, if WCW exercised its
contractual right to initiate arbitration by presenting a claim
against Mirzoyan, she could simply refuse to participate in the
arbitration and insist that WCW file a court action. (See Holley
v. Silverado Senior Living Management, Inc. (2020)

      6 We use the shorthand “AAA rules” to refer to these
procedures.
      7  In support of their motion to compel, appellants
requested judicial notice of the AAA rules, a copy of which was
attached to their request. The trial court did not rule on this
request for judicial notice, presumably because its denial of the
underlying motion to compel mooted the request. We take
judicial notice of the AAA rules because Mirzoyan does not
dispute their authenticity on appeal, there is no indication she
did so below, and the AAA rules “are not subject to dispute and
are capable of immediate and accurate determination by resort to
sources of reasonably indisputable accuracy.” (See Evid. Code,
§§ 452, subd. (h), 459; Emerald Aero, LLC v. Kaplan (2017)
9 Cal.App.5th 1125, 1132, fn. 5 [sua sponte taking judicial notice
of arbitration association rules]; San Francisco CDC LLC v.
Webcor Construction L.P. (2021) 62 Cal.App.5th 266, 281, fn. 5
[taking judicial notice of a document in part because its
authenticity had not been challenged].)

                                    11
53 Cal.App.5th 197, 201 [“ ‘[P]arties can only be compelled to
arbitrate when they have agreed to do so. [Citation.]
“Arbitration is a matter of consent, not coercion . . . .” ’ ”].) Thus,
we cannot construe the arbitration agreement as encompassing
only Mirzoyan’s claims without running afoul of our obligation to
“ ‘avoid [an] interpretation[ ] that render[s] any portion
superfluous, void or inexplicable.’ [Citation.]” (See United
Farmers Agents Assn., Inc. v. Farmers Group, Inc. (2019)
32 Cal.App.5th 478, 495 (United Farmers Agents Assn., Inc.).)
       Second, paragraph 2 provides a nonexhaustive list of “[t]he
claims which are subject to arbitration . . . .” Several of the
claims listed are those that an employee would likely assert, such
as “wrongful discharge in violation of public policy” and
“unpaid . . . overtime under the state and federal wage payment
laws.” Nevertheless, the list includes a claim that only an
employer would be expected to raise—i.e., “divulgence of
trade secrets.” (See Mercuro v. Superior Court (2002)
96 Cal.App.4th 167, 171, 176 [identifying claims for “ ‘the use
and/or unauthorized disclosure of trade secrets or confidential
information’ ” as causes of action the employer “is most likely to
bring against its employees”].) Accordingly, this aspect of the
agreement further evinces the parties’ intention to be bound to
arbitrate Mirzoyan’s and WCW’s claims.
       Third, paragraph 5 employs language suggesting the
parties intended that the arbitration agreement be mutually
binding. Paragraph 5 provides: “The parties to this Agreement
intend to arbitrate any disputes between them on an individual
basis only. To the fullest extent permitted by law, the parties
agree that they shall not join or consolidate claims submitted for
arbitration under this Agreement with those of any other

                                     12
persons, and that no form of class, collective, or representative
action shall be maintained without the mutual consent of the
parties.” (Italics added.)
       Paragraph 5 would not have referred to “the parties[’]”
intent to arbitrate “any disputes between them” and barred
either side from joining or consolidating “claims submitted for
arbitration” if only Mirzoyan were obligated to submit her claims
to final and binding arbitration. Moreover, the fact that the
following paragraph states that “Employee will not be disciplined
or retaliated against by the Company if Employee seeks to pursue
claims on a class, collective, or representative basis” further
supports the inference that the agreement is mutually binding,
given that the two provisions differentiate between (1) the rights
and obligations of “the parties” vis-à-vis joinder and (2) those of
just “Employee”—i.e., Mirzoyan. (Italics added.) (Cf. Wolf v.
Walt Disney Pictures & Television (2008) 162 Cal.App.4th 1107,
1111–1112, 1134–1137 [rejecting the plaintiffs’ argument that
the term “Purchaser” in an agreement included a contracting
party’s subsidiaries in part because the agreement’s definition of
“Purchaser” did not include subsidiaries and, “[w]hen the parties
intended to identify ‘subsidiaries[ ]’ [elsewhere in the agreement,]
they knew how to do so”].)
       Mirzoyan contends that “Paragraph No. 5 applies to class,
collective and representative actions” and “[o]nly an employee
would bring a class, collective or representative action, not an
employer against the employee.” Mirzoyan overlooks the text in
paragraph 5 that bars not only class, collective, or representative
actions, but any joinder or consolidation of claims submitted to
arbitration, thus prohibiting WCW from joining claims against
Mirzoyan with claims belonging to persons other than WCW.

                                    13
       Lastly, the arbitration agreement’s recitals confirm our
interpretation of the arbitration agreement as being mutual. One
of the recitals states, “Employee and Company desire to resolve
any and all future disputes between them in the most expeditious
and economical fashion possible” and “Employee and Company
recognize and agree that arbitration of any and all disputes
between them through binding, impartial arbitration is in the
best interests of both parties . . . .” (Italics added.) (See Burch v.
Premier Homes, LLC (2011) 199 Cal.App.4th 730, 744 (Burch)
[indicating that an agreement’s recitals may provide evidence of
the contracting parties’ intent].)
       In sum, when the arbitration agreement’s terms are read
as a whole, it is evident that each side agreed to submit its or her
respective employment-related claims to final and binding
arbitration. The trial court erred in holding that the arbitration
agreement is substantively unconscionable because it lacks
mutuality.

C.    Certain Provisions of the Arbitration Agreement Are
      Substantively Unconscionable

      1.    The prearbitration dispute resolution mechanism is
            substantively unconscionable
      Paragraph 1 of the arbitration agreement requires the
employee to “bring all workplace concern(s) or dispute(s) . . . to
the attention of Company management” “for possible resolution”
in a writing “contain[ing] a brief description of the issue, the
parties involved, and relevant date(s),” and provides that the
“Company[’s] response, if any” will be provided to the employee
within 30 days thereafter. The first sentence of paragraph 2
authorizes the employee to arbitrate the workplace concern or

                                    14
dispute “[i]f after thirty (30) days the Employee is not satisfied
with Company response . . . .” The arbitration agreement does
not contain any language requiring WCW to discuss its claims
with Mirzoyan before resorting to arbitration.
       “While on [their] face, th[ese] provision[s] may present a
laudable mechanism for resolving employment disputes
informally,” their “unilateral nature” “suggests that [WCW]
would receive a ‘free peek’ at [Mirzoyan’s] case, thereby obtaining
an advantage if and when [she] were to later demand
arbitration.” (See Nyulassy v. Lockheed Martin Corp. (2004)
120 Cal.App.4th 1267, 1282–1283 (Nyulassy); see also id. at
p. 1273 & fn. 4 [indicating that the arbitration clause in Nyulassy
required the plaintiff-employee, but not the defendant-employer,
to adhere to the prearbitration dispute resolution procedure].)
Given the unfairly one-sided nature of the arbitration
agreement’s prearbitration dispute resolution mechanism, and
appellants’ failure to offer any justification for it after Mirzoyan
raised the issue in her respondent’s brief, we conclude this
prearbitration dispute resolution mechanism is substantively
unconscionable. (See id. at pp. 1283, 1287–1288 [concluding that
an arbitration clause was substantively unconscionable in part
because of its one-sided prearbitration dispute resolution
mechanism]; Carmona v. Lincoln Millennium Car Wash, Inc.
(2014) 226 Cal.App.4th 74, 78–79, 81, 89–90 [concluding that a
“unilateral ‘free peek’ provision” was one of several
“unconscionable provisions” in an arbitration agreement]; Lange,
supra, 46 Cal.App.5th at p. 447 [“[S]ubstantive unconscionability
‘pertains to the fairness of the agreement’s actual terms.’
[Citation.] . . . ‘ “[U]nconscionability turns not only on a ‘one-

                                    15
sided’ result, but also on an absence of ‘justification’ for
it . . . .” ’ ”].)

      2.     The attorney fees/costs provision is substantively
             unconscionable
       Paragraph 7 of the arbitration agreement provides in
pertinent part: “The parties . . . shall be responsible for their own
attorneys’ fees and costs incurred in presenting their case to the
Arbitrator.” Mirzoyan argues that this provision is substantively
unconscionable because it bars her from invoking her statutory
right to seek attorney fees and costs if she prevails on her claims.
We agree.
       Before reaching Mirzoyan’s challenge to this provision, we
address a related issue. Mirzoyan points out that
paragraph 18(c) of the employment agreement provides: “If either
party employs attorneys to enforce any rights arising out of or
relating to this agreement, the losing party shall reimburse the
prevailing party for its reasonable attorneys’ fees.” The trial
court rejected Mirzoyan’s reliance on paragraph 18(c), reasoning
that (a) she had “fail[ed] to show that either the Arbitration
Agreement or the Employment Agreement contain provisions
providing for any supplantation of the Arbitration Agreement’s
attorney fee provision” found in paragraph 7, and (b) “[t]he
Arbitration Agreement . . . provides in paragraph 12 [that it] . . .
supersede[s] all prior agreements or understandings between the
parties concerning the subject matter of arbitration.” 8

      8  (See also Code Civ. Proc., § 1856, subd. (a) [“Terms set
forth in a writing intended by the parties as a final expression of
their agreement with respect to the terms included therein

                                     16
       Mirzoyan does not contest the trial court’s conclusion that
paragraph 7 of the arbitration agreement supersedes
paragraph 18(c) of the employment agreement. Accordingly,
we proceed on the assumption that paragraph 7—and not
paragraph 18(c)—governs the parties’ rights vis-à-vis attorney
fees and costs. (See Tokio Marine & Fire Ins. Corp. v. Western
Pacific Roofing Corp. (1999) 75 Cal.App.4th 110, 118 [“[T]he
general rule [is] that trial court rulings are presumed correct.”];
In re D.N. (2020) 56 Cal.App.5th 741, 767 [“ ‘[I]t is as much the
duty of the respondent to assist the [appellate] court upon the
appeal as it is to properly present a case in the first instance, in
the court below.’ ”].)
       As previously noted, paragraph 7 requires both parties to
bear their respective attorney fees and costs, regardless of
whether Mirzoyan prevails. Conversely, FEHA provides that
“the court, in its discretion, may award to the prevailing party . . .
reasonable attorney’s fees and costs, including expert witness
fees, except that . . . a prevailing defendant shall not be awarded
fees and costs unless the court finds the action was frivolous,
unreasonable, or groundless when brought, or the plaintiff
continued to litigate after it clearly became so.” (See Gov. Code,
§ 12965, subd. (c)(6).)
       Labor Code section 1102.5 authorizes “[t]he court . . . to
award reasonable attorney’s fees to a plaintiff who brings a
successful action for a violation of” that statute. (See Lab. Code,
§ 1102.5, subd. (j).)

may not be contradicted by evidence of a prior agreement or of a
contemporaneous oral agreement.”].)

                                     17
       Paragraph 7’s attorney fees and costs provision is thus
substantively unconscionable because it abridges Mirzoyan’s
statutory rights to seek attorney fees and costs as a prevailing
party. (See Serafin v. Balco Properties Ltd., LLC (2015)
235 Cal.App.4th 165, 183 (Serafin) [“By requiring both parties to
bear their own attorney fees and costs, the provision before us . . .
runs counter to FEHA which allows a successful plaintiff to
recover attorney fees and costs from the employer (but does not
similarly allow an employer to recover fees and costs from an
employee in most cases). [Citation.] Such a modification of
California law is inappropriate . . . as it has the effect of denying
a plaintiff the rights and remedies he or she would have if he or
she were litigating his or her claims in court.”].)
       Appellants do not dispute the general proposition that a
contractual provision requiring an employee to bear his or her
own attorney fees and costs is substantively unconscionable.
Instead, they assert that the following language from
paragraph 8 empowers the arbitrator to order appellants to pay
Mirzoyan’s attorney fees and costs if she prevails: “The
Arbitrator shall have the power to award all legal relief available
in a court of law, including any and all damages that may be
available for any of the claims asserted.”
       Appellants’ resort to paragraph 8 fails. Although the
American Rule “provides that each party to a lawsuit must
ordinarily pay his or her own attorney fees,” there are several
exceptions to this rule, including when “ ‘fees are specifically
provided for by statute . . . .’ ” (See Tract 19051 Homeowners
Assn. v. Kemp (2015) 60 Cal.4th 1135, 1142 & fn. 2.) In addition,
a prevailing party is typically entitled to costs as a matter of
right. (See Code Civ. Proc., § 1032, subd. (b).) By its terms, the

                                    18
fees/costs clause of paragraph 7 bars Mirzoyan from invoking
exceptions to the American Rule and obtaining a cost award as a
prevailing party via the Code of Civil Procedure and/or FEHA,
given that the contractual provision requires each side to bear its
own attorney fees and costs. If paragraph 8 were interpreted to
allow Mirzoyan to nevertheless seek recovery of attorney fees and
costs, then the fees/costs provision of paragraph 7 becomes
nugatory. We cannot countenance such a construction of the
contract. (See United Farmers Agents Assn., Inc., supra,
32 Cal.App.5th at p. 495.)
       Appellants further maintain that AAA rule 39(d)
safeguards Mirzoyan’s right to seek attorney fees and costs if she
prevails in the arbitration. As pertinent here, that rule provides:
“The arbitrator may grant any remedy or relief that would have
been available to the parties had the matter been heard in court
including awards of attorney’s fees and costs, in accordance with
applicable law.” It appears that appellants are claiming that
rule 39(d) should be treated as a term of the arbitration
agreement. Regardless of whether that premise is valid, it would
not resuscitate the enforceability of the fees/costs provision of
paragraph 7. To hold otherwise would, once again, prevent the
attorney fees/costs provision from serving any purpose.9

      9 AAA rule 1 provides that “[i]f a party establishes that an
adverse material inconsistency exists between the arbitration
agreement and these rules, the arbitrator shall apply these
rules.” Appellants do not contend that AAA rule 1 invalidates the
portion of paragraph 7 that precludes Mirzoyan from obtaining
an award of attorney fees and costs.

                                   19
       For these reasons, we conclude that the portion of
paragraph 7 requiring each side to bear its own attorney fees and
costs is substantively unconscionable.

      3.    The clauses providing that the arbitral award will be
            “final and binding” are not substantively
            unconscionable
       Mirzoyan claims the arbitration agreement’s provisions
requiring the parties to submit to final and binding arbitration
operate as a waiver of her right to vacate an award on the ground
that “ ‘[t]he arbitrators exceeded their powers and the award
cannot be corrected without affecting the merits of the decision
upon the controversy submitted.’ ” Statutory and case law do not
support this contention.
       “[T]he ‘final and binding’ language of [an] arbitration
agreement does not preclude judicial review of an arbitration
award pursuant to Code of Civil Procedure sections 1286.2
and 1286.6.” (See Serafin, supra, 235 Cal.App.4th at p. 184.) In
turn, Code of Civil Procedure section 1286.2, subdivision (a)(4)
authorizes the relief Mirzoyan claims is necessary to safeguard
her rights, i.e., a court shall vacate an award if “[t]he arbitrators
exceeded their powers and the award cannot be corrected without
affecting the merits of the decision upon the controversy
submitted.” (Code Civ. Proc., § 1286.2, subd. (a)(4).)
       Appellants claim the Federal Arbitration Act’s judicial
review provisions found in title 9 United States Code sections 9
and 10 govern any future petition to vacate an arbitral award.
Much like Code of Civil Procedure section 1286.2, title 9 United
States Code section 10 would allow the parties to seek vacation of
an award on the ground that “the arbitrators exceeded their
powers . . . .” (See 9 U.S.C. § 10(a)(4).) Whether this federal

                                    20
procedure would apply to a petition to vacate filed in this matter
is not altogether clear,10 and is an issue we need not decide.
Even if the federal judicial review procedures were applicable,
the parties’ obligation to submit to final and binding arbitration
would not be substantively unconscionable because they could
petition to vacate the award under title 9 United States Code
section 10.

D.    The Prearbitration Dispute Resolution and Attorney
      Fees/Costs Provisions Are Severable from the
      Arbitration Agreement
       Paragraph 11 of the arbitration agreement provides: “If,
for any reason, any provision of this Agreement is determined by
an arbitrator or a court of competent jurisdiction to be illegal or
otherwise invalid, all other provisions of this agreement shall
remain in full force and effect, insofar as they are consistent with
existing law.”
       “Civil Code section 1670.5, subdivision (a) states that ‘[i]f
the court as a matter of law finds the contract or any clause of the
contract to have been unconscionable at the time it was made the
court may refuse to enforce the contract, or it may enforce the
remainder of the contract without the unconscionable clause, or it
may so limit the application of any unconscionable clause as to
avoid any unconscionable result.’ ” (Lange, supra, 46 Cal.App.5th
at p. 452.)

      10 Paragraph 9 of the arbitration agreement provides that
the “Agreement is entered into under the Federal Arbitration
Act, and shall be interpreted and construed in accordance with
the law and procedures developed under that statute.”

                                   21
       In determining whether to sever one or more
unconscionable provisions from a contract, “ ‘[c]ourts are to look
to the various purposes of the contract[.]’ . . . ‘If the central
purpose of the contract is tainted with illegality, then the
contract as a whole cannot be enforced. If the illegality is
collateral to the main purpose of the contract, and the illegal
provision can be extirpated from the contract by means of
severance or restriction, then such severance and restriction are
appropriate.’ [Citation.]” (See Lange, supra, 46 Cal.App.5th at
p. 454.)
       “ ‘[T]he strong legislative and judicial preference is to sever
the offending term and enforce the balance of the agreement:
Although “[Civil Code section 1670.5] appears to give a trial court
some discretion as to whether to sever or restrict the
unconscionable provision or whether to refuse to enforce the
entire agreement[,] . . . it also appears to contemplate the latter
course only when an agreement is ‘permeated’ by
unconscionability.” ’ [Citations.]” (See Lange, supra,
46 Cal.App.5th at p. 453.)
       The trial court concluded that the entire arbitration
agreement was unenforceable because its “lack of mutuality
creates an ‘unconscionable taint’ that permeates the entire
agreement . . . .” The court found that this taint could be purged
only “through augmentation rather than merely severing or
restrict[ing] the agreement: an action that the court is not
authorized to perform.” The trial court did not consider whether
the arbitration agreement would have been enforceable if its only
two substantively unconscionable aspects were the prearbitration
dispute resolution mechanism and the attorney fees/costs
provision addressed in Discussion, parts C.1 & C.2, ante.

                                     22
       We conclude, as a matter of law, that these two features of
the arbitration agreement can be severed from the remainder of
the agreement. (See Lange, supra, 46 Cal.App.5th at p. 453
[holding that although the trial court’s decision whether to sever
offending clauses from an arbitration agreement is reviewed for
abuse of discretion, that discretion is constrained by “ ‘applicable
legal principles’ ”].)
       Although the prearbitration dispute resolution process is
designed to “resolv[e] employment disputes informally” (see
Nyulassy, supra, 120 Cal.App.4th at p. 1282), it is nonetheless
collateral to the main purpose of the arbitration agreement.
Assuming arguendo paragraphs 1 and 2 of the arbitration
agreement would preclude Mirzoyan from initiating arbitration
until she had presented her claims to WCW in accordance with
the procedures delineated in those two paragraphs, the text of
the arbitration agreement nonetheless indicates that compelling
her participation in this prearbitration dispute resolution
mechanism is not the central purpose of the contract.
Specifically, the recitals indicate the principal objective of the
agreement is to enable the parties “to resolve any and all future
disputes between them in the most expeditious and economical
fashion possible,” that is, “through binding, impartial
arbitration.”11 (See Burch, supra, 199 Cal.App.4th at p. 744

      11  In their appellate briefing, neither side addresses
whether Mirzoyan participated in the arbitration agreement’s
prearbitration dispute resolution process before she filed suit.
Additionally, appellants do not claim that any failure on
Mirzoyan’s part to comply with these prearbitration dispute
resolution procedures would bar her from arbitrating her claims
against them.

                                    23
[indicating that an agreement’s recitals may provide evidence of
the contracting parties’ intent].)
       The portion of paragraph 7 that requires each side to bear
its own attorney fees and costs is a collateral provision, given
that “the main purpose of the arbitration agreement [is] not to
regulate costs, but to provide a mechanism to resolve disputes.”
(See Gutierrez v. Autowest, Inc. (2003) 114 Cal.App.4th 77, 92; see
also Serafin, supra, 235 Cal.App.4th at pp. 183–184 [concluding
that a provision requiring each party to bear its own attorney
fees and costs was collateral to the main purpose of an
arbitration agreement].)
       We agree with appellants that “ ‘the illegal provision[s] can
be extirpated from the contract by means of severance . . . .’
[Citation.]” (See Lange, supra, 46 Cal.App.5th at p. 454.) As
appellants demonstrate in their opening brief, the prearbitration
dispute resolution mechanism can be readily excised from the
contract by deleting the entirety of paragraph 1 and the first half
of the introduction sentence of paragraph 2, such that the first
operative provision of the arbitration agreement would begin
with: “[A]ny and all claims or controversies arising out of
Employee’s application or candidacy for employment,
employment, or cessation of employment with the Company, shall
be resolved through final and binding arbitration . . . .” 12 The
attorney fees and costs provision may be removed by simply

      12  In offering these proposed deletions to the arbitration
agreement, appellants were actually attempting to show that any
lack of mutuality could be removed from the agreement.
Nevertheless, the deletions they proposed have the effect of
excising the prearbitration dispute resolution mechanism from
the arbitration agreement.

                                   24
deleting the underlined text from the second sentence of
paragraph 7: “The parties may be represented by their own
attorneys in the arbitration proceeding and shall be responsible
for their own attorneys’ fees and costs incurred in presenting
their case to the Arbitrator.” (Underscoring added.) No text
needs to be added to the arbitration agreement to purge it of
illegality.
       Additionally, we observe that the presence of more than
one unconscionable provision does not, per se, establish that
severance is improper. (See Lange, supra, 46 Cal.App.5th at
pp. 454–455.) Rather, “ ‘the dispositive question is whether “the
central purpose of the contract” is so tainted with illegality that
there is no lawful object of the contract to enforce.’ [Citation.]”
(Id. at p. 455.) As we have explained above, the answer to that
dispositive question is “no.”

E.    Appellants’ Request for an Order Compelling
      Mirzoyan to Arbitrate Her Claims Against Saidiani
      and for a Stay Should Be Addressed by the Trial
      Court Upon Remand
      Appellants ask us to “reverse the Trial Court’s ruling and
remand this case with instructions to enter a new order
compelling [Mirzoyan] to arbitrate her claims against all
Defendants and staying all Trial Court proceedings pending
completion of arbitration.” (Italics added.) Appellants argue that
even though Alsa and Saidiani are not signatories to the
arbitration agreement, those two defendants may compel
Mirzoyan to arbitrate her claims against them.
      We agree that Alsa may enforce the terms of the
arbitration agreement against Mirzoyan. The arbitration
agreement provides that it is “intended to apply to any claim

                                    25
Employee may have against any of the Company’s officers,
directors, employees, agents, or any of its affiliated or related
entities . . . .” In her complaint, Mirzoyan alleges that Alsa was a
“Scheduler” at WCW when she “verbally harass[ed Mirzoyan]
daily based on [Mirzoyan’s] race . . . . ” The pleading indicates
the job title “Scheduler” refers to a position of employment at
WCW. Therefore, Alsa is a third-party beneficiary of the
arbitration agreement.13
       Although appellants asked the trial court for an order
compelling Mirzoyan to arbitrate her claims against all named
defendants, the court did not address whether Mirzoyan’s claims
against Saidiani are subject to arbitration because it denied the
entirety of the motion to compel. For that same reason, the trial
court had no occasion to address appellants’ request to stay the
action pending arbitration.

      13  (See Cargill, Inc. v. Souza (2011) 201 Cal.App.4th 962,
967 [holding that “ ‘ “[t]he test for determining whether a
contract was made for the benefit of a third person is whether an
intent to benefit a third person appears from the terms of the
contract[,]” ’ ” and that a third-party beneficiary “may enforce the
contract”]; Michaelis v. Schori (1993) 20 Cal.App.4th 133, 135,
139 [holding that a nonsignatory employee or associate could
invoke an arbitration agreement against a plaintiff who was a
party thereto because the contract provided that all claims
against the employees and associates of the defendant-signatory
must be arbitrated]; Harris v. Superior Court (1986) 188
Cal.App.3d 475, 477, 478–479 [holding that a doctor-employee of
a professional corporation was a third-party beneficiary of an
arbitration agreement that covered claims against the
professional corporation and its “ ‘employees or other contracting
health professionals’ ”].)

                                    26
       Because appellants do not explain why—despite Saidiani’s
failure to join their motion to compel—Mirzoyan should be
ordered to arbitrate her claims against Saidiani, we decline to
reach this issue. (See Hernandez v. First Student, Inc. (2019)
37 Cal.App.5th 270, 277 [“ ‘We are not bound to develop
appellants’ arguments for them.’ ”].) We leave that matter for the
trial court to decide in the first instance upon remand. Because
the resolution of that issue affects whether a stay of all or only
part of the trial court proceedings may be appropriate,
appellants’ request for a stay is not ripe for our review. (See
Wilson & Wilson v. City Council of Redwood City (2011)
191 Cal.App.4th 1559, 1573 [“ ‘A controversy is “ripe” when it has
reached, but has not passed, the point that the facts have
sufficiently congealed to permit an intelligent and useful decision
to be made.’ ”].) On remand, the trial court may address the
propriety of appellants’ request for a stay in the first instance as
well.

                                    27
                          DISPOSITION
       We reverse the trial court’s order denying the motion to
compel arbitration. Upon remand, the trial court shall:
(a) determine in the first instance whether to compel
Ani Mirzoyan to arbitrate her claims against Anthony Saidiani,
and (b) undertake further proceedings consistent with this
opinion. The parties are to bear their own costs on appeal.
       NOT TO BE PUBLISHED.

                                         BENDIX, J.

We concur:

             ROTHSCHILD, P. J.

             CHANEY, J.

                                  28