Judge: Maurice A. Leiter, Case: 24STCV23595, Date: 2025-02-21 Tentative Ruling

Case Number: 24STCV23595    Hearing Date: February 21, 2025    Dept: 54

Hearing Date: February 21, 2025

Department 54, Judge Maurice A. Leiter

Motion to Compel Arbitration

Moving Party: Defendant Universal Protection Service, LP

Responding Party: Plaintiff Milan Rokac

T/R:      DEFENDANT’S MOTION TO COMPEL ARBITRATION IS GRANTED.

THE ACTION IS STAYED.

DEFENDANT TO NOTICE.

If the parties wish to submit on the tentative, please email the courtroom at SMCdept54@lacourt.org with notice to opposing counsel (or self-represented party) before 8:00 am on the day of the hearing.

The Court considers the moving papers, opposition, and reply.

BACKGROUND

On September 12, 2024, Plaintiff Milan Rokac filed a complaint against Defendants, asserting eleven causes of action for disability discrimination, retaliation, Labor Code violations and wrongful termination.

ANALYSIS

“On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate a 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….”  (CCP § 1281.2.)  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.   (CCP § 1281.2(a)-(c).)  “The party seeking arbitration bears the burden of proving the existence of an arbitration agreement, and the party opposing arbitration bears the burden of proving any defense, such as unconscionability.”  (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236.)

A. Existence of Arbitration Agreement

Defendant moves to compel arbitration based on the California Arbitration Agreement executed by Plaintiff on November 3, 2023. (Decl. Melkonyan, Exh. A.) The agreement provides, “the Parties mutually agree to the resolution by binding arbitration of all claims or causes of action that the Employee may have against the Company, or the Company against Employee, which could be brought in a court of law . . . .” (Id.)

Defendant has met its burden to establish the existence of an agreement to arbitrate. The burden shifts to Plaintiff to establish any defenses to enforcement.

B. Enforceability

Unconscionability generally includes the absence of meaningful choice on the part of one of the parties together with contract terms that unreasonably favor the other party. (Carboni v. Arrospide (1991) 2 Cal.App.4th 76, 82-83.) As the party asserting unconscionability, Plaintiff has the burden of proving both procedural and substantive unconscionability. (Crippen v. Central Valley RV Outlet. Inc. (2004) 124 Cal.App.4th 1159, 1165). Courts analyze the unconscionability standard in Civil Code section 1670.5 as invoking elements of procedural and substantive unconscionability. (See id. at 1280-81.)

Procedural unconscionability focuses on whether there is ‘oppression’ arising from an inequality of bargaining power or ‘surprise’ arising from buried terms in a complex printed form. (Id.) The substantive element addresses the existence of overly harsh or one-sided terms. (Id.) An agreement to arbitrate is unenforceable only if both the procedural and substantive elements are satisfied. (Stirlen v. Supercuts, Inc. (1997) 51 Cal.App.4th 1519, 1533.) However, Armendariz held, ‘[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, at 114).”  (McManus v. CIBC World Markets Corp. (2003) 109 Cal.App.4th 76, 87 (citations omitted).)

Plaintiff asserts that the arbitration agreement is unenforceable because it is unconscionable. Plaintiff argues that it is procedurally unconscionable because it is a contract of adhesion, was presented to Plaintiff when he was in a vulnerable position, and the agreement is overly long. Plaintiff argues the agreement is substantively unconscionable because it lacks sufficient discovery and requires Plaintiff to pay costs and fees associated with the arbitration.

As there is inherently unequal bargaining power between an employer and employee, there is a low degree of procedural unconscionability in employment arbitration agreements. Here, however, the agreement contains an opt-out provision that Plaintiff did not elect, making the degree of procedural unconscionability very low. As for substantive unconscionability, the agreement suggests a limit on discovery but does not impose it, allowing the parties or arbitrator to expand necessary discovery. Similarly, the agreement states that the parties shall pay their own fees and costs but specifies that the employer will pay costs unique to arbitration and allows for statutory and contractual fee shifting. The agreement is not unconscionable.

Defendant’s motion to compel arbitration is GRANTED. The action is STAYED.