Judge: Kevin C. Brazile, Case: 24STCV31918, Date: 2025-03-04 Tentative Ruling

Hearing Date: March 4, 2025

Case Name: Harrigan v. Arakelian Enterprises, Inc., et al.

Case No.: 24STCV27552 

Matter: Motion to Compel Arbitration 

Moving Party: Defendant Arakelian Enterprises, Inc.

Responding Party: Plaintiff Sean Harrigan

Notice: OK

Ruling: The Motion to Compel Arbitration is granted.

Moving party to give notice.

The Court encourages all parties to appear remotely via LA CourtConnect.  If submitting on the Court's tentative ruling, please follow the instructions provided above.

This is an employment  dispute.  

Defendant Arakelian Enterprises, Inc. seeks to compel arbitration of this matter based on an arbitration agreement signed as component of Plaintiff Sean Harrigan’s employment. 

“[O]n petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate that controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists.”  (Code Civ. Proc. § 1281.2; see also EFund Capital Partners v. Pless (2007) 150 Cal.App.4th 1311, 1320 [the language in section 1281.2 compelling arbitration is mandatory].)  The right to compel arbitration exists unless the court finds that the right has been waived by a party’s conduct, other grounds exist for revocation of the agreement, or where a pending court action arising out of the same transaction creates the possibility of conflicting rulings on a common issue of law or fact.  (Code Civ. Proc. § 1281.2(a)-(c).)

“On a petition to compel arbitration, the trial court must first determine whether an agreement to arbitrate the controversy exists. Because the existence of the agreement is a statutory prerequisite to granting the petition, the petitioner bears the burden of proving its existence by a preponderance of the evidence. The party seeking arbitration can meet its initial burden by attaching to the petition a copy of the arbitration agreement purporting to bear the respondent's signature.”  (Bannister v. Marinidence Opco, LLC (2021) 64 Cal.App.5th 541.)  The party seeking to compel arbitration must also “plead and prove a prior demand for arbitration and a refusal to arbitrate under the agreement.”  (Mansouri v. Superior Court (2010) 181 Cal.App.4th 633, 640-641.)

Plaintiff opposes the Motion on the ground of unconscionability.

“ ‘[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.”  (Armendariz v. Found. Health Psychcare Servs., Inc. (2000) 24 Cal.4th 83, 114.)

As to substantive unconscionability, Plaintiff argues that insufficient discovery is allotted.

Here, the subject agreement indicates that discovery will take place pursuant to ADR rules, and this is sufficient to comply with the requirements of Armendariz.  (See Roman v. Superior Ct. (2009) 172 Cal.App.4th 1462, 1476.)  Arbitration proceedings need not provide for the “full panoply” of discovery available under the Code of Civil Procedure.  (Armendariz v. Found. Health Psychcare Servs., Inc. (2000) 24 Cal.4th 83, 105.)  The ADR rules provide for depositions “as deemed necessary to a full and fair exploration of the issues in dispute.”  Unlike in Fitz v. NCR Corp. (2004) 118 Cal.App.4th 702118 Cal.App.4th 702, 709 in which sufficient discovery was not found, here the arbitrator need not find that “a fair hearing is impossible without [the requested] additional discovery.”  Indeed, requiring a showing of a “sufficient cause” does not render an arbitration agreement “substantively unconscionable.”  (Abeyrama v. J.P. Morgan Chase Bank (2012 C.D. Cal.) 2012 WL 2393063 at *4.) 

Plaintiff also argues that the agreement requires him to shoulder impermissible fees due to a provision stating that “For arbitrations involving non-statutory claims, each Party shall equally bear the Arbitrator's fees and expenses.”

This lacks merit.  The only reasonable interpretation of this provision is that Defendant does not have to pay fees when the plaintiff asserts non-statutory claims untethered to fundamental matters like the FEHA.  While Plaintiff’s specific situation is irrelevant given that unconscionability is examined at the time of contracting—here, Plaintiff’s wrongful termination claim is merely an extension of the FEHA claims.  So Plaintiff would pay no fees unique to arbitration.   

Because there is no substantive unconscionability, Plaintiff’s unconscionability defense fails.  (Armendariz, supra, 24 Cal.4th 83, 114 [defense of unconscionability requires both procedural and substantive unconscionability].) 

Because Defendant has established the existence of a valid arbitration agreement encompassing Plaintiff’s causes of action, the Motion to Compel Arbitration is granted.  This action is stayed pending the resolution of arbitration.  (CCP § 1281.4.) 

Moving party to give notice.