Dissenting Justice Would Have Waited For Further Guidance From Supreme Court On Pending Cases

     Nine plaintiffs sued their mortgage foreclosure consultant and others for fraud, breach of contract, and other claims, alleging they were duped into signing their agreements and lost money when they paid for services that were never rendered.  Defendants successfully petitioned to compel arbitration in the trial court, and plaintiffs appealed.  Sabia v. Orange County Metro Realty, Inc., No. B243141 (2nd Dist. Div. 8 June 18, 2014) (published). 

     Justice Rubin, who penned the Court of Appeal decision, concluded:

“[T]he Home Defender contract is unfairly one-sided in two significant respects:  by allowing only Home Defender unfettered access to the courts for any claims it might have against its clients, and by limiting plaintiffs’ access to the courts to only small claims actions, thus cutting off civil actions involving substantial damage claims.  We believe this places it somewhere beyond the middle of the sliding scale.

     The level of procedural unconscionability sits somewhere below the middle of that scale, but not toward the bottom.  Plaintiffs were effectively steered away from examining the contracts and other documents and were not given Spanish language versions even though the negotiations were conducted in Spanish.  Plaintiffs were also in economic distress at the time.”

     Thus, the scales tipped in favor of finding unconscionability, leading to reversal.  Justice Bigelow concurred.

     “I am unable to set aside my doubts,” wrote Justice Grimes, dissenting.  “I would have preferred to stay this case to obtain the benefits of the opinions in cases now pending decision in our Supreme Court . . . “ 

     Stay tuned to hear what the California Supreme Court will say in pending cases addressing enforcement of arbitration, such as Sanchez v. Valencia Holding Co. (review granted March 21, 2012, S199119).