MICHAEL VALENZIANO vs DCH (OXNARD) INC., et al.

2026CUWT066301: MICHAEL VALENZIANO vs DCH (OXNARD) INC., et al. 07/23/2026 in Department 43 Motion to Compel Binding Arbitration

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Motion: Defendants Motion to Compel Arbitration.

Tentative Ruling: Defendants Motion to Compel Arbitration.is GRANTED.

The claims are ordered to binding arbitration pursuant to the terms of the agreement.

The Court stays the action and schedules a status conference for June 29, 2027 at 8:30 a.m. to monitor the progress of the arbitration proceeding.

DISCUSSION

Defendants DCH (Oxnard) Inc and Lithia Motors, Inc. move to compel arbitration pursuant to an arbitration agreement. Plaintiff opposes the motion based on a contention that the agreement is not valid because Plaintiff did not consent, as well as alleged procedural and substantive unconscionability.

2026CUWT066301: MICHAEL VALENZIANO vs DCH (OXNARD) INC., et al.

I. Objections Plaintiff asserts objections to the initial declaration of Michelle Rummer. The bases for these objections were resolved by the supplemental declaration of Michelle Rummer, so these objections are overruled.

Plaintiff asserts additional objections to the supplemental declaration of asserts objections to the initial declaration of Michelle Rummer. These objections are also overruled. The declaration establishes a sufficient foundation for the statements.

II.

Legal Standard

A written agreement to submit to arbitration, a controversy thereafter arising is valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract. (Code Civ. Proc., § 1281.)"

On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and where a party thereto refuses to arbitrate such controversy, the court shall order the petitioner and the respondent to arbitrate if it’determines’an agreement to arbitrate the controversy exists. (Code Civ. Proc., § 1281.2;"Gorlach’v. Sports Club Co."(2012) 209 Cal. App.4th 1497, 1505 [noting that “when presented with a petition to compel arbitration, the trial court's first task is to determine whether the parties have in fact agreed to arbitrate the dispute”].)" " In deciding a petition to compel arbitration, trial courts must first decide whether an enforceable arbitration agreement exists between the’parties, and’then’determine’the second gateway issue of whether the claims are covered within the scope of the agreement. (Omar v.

Ralphs Grocer Co. (2004) 118 Cal.App.4th 955, 961.) The’initial’burden is on the party petitioning to compel arbitration to prove the existence of the agreement by a preponderance of that evidence. (Villacreses v. Molinari"(2005) 132 Cal.App.4th 1223, 1230.)""

Once petitioners allege that an arbitration agreement exists, the burden shifts to respondents to prove the falsity of the’purported agreement, and no evidence or authentication is’required’to find the arbitration agreement exists. (Condee v. Longwood Mgt. Corp."(2001) 88 Cal.App.4th 215, 219.) " Unconscionable arbitration agreements are not enforceable. (Armendariz v. Foundation Health’Psychcare’Services"(2000) 24 Cal.4th 83, 99.)"Unconscionability requires that the agreement be both procedurally and substantively unconscionable. (Stirlen’v.

Supercuts"(1997) 51 Cal.App.4th 1519, 1533.) Procedural and substantive unconscionability are evaluated on a sliding scale; when more of one is present, less of the other is needed to establish unconscionability. (Armendariz v. Foundation Health’Psychcare’Services, supra,"24 Cal. 4th at p."114.) Procedural unconscionability focuses on oppression or surprise due to unequal bargaining power,"whereas’substantive unconscionability focuses on overly harsh or one-sided results. (Ibid.)"

III. Application

2026CUWT066301: MICHAEL VALENZIANO vs DCH (OXNARD) INC., et al.

Plaintiff has not met his burden to demonstrate that the agreement is procedurally or substantively unconscionable.

Defendant presented an arbitration agreement purportedly signed electronically by the Plaintiff that includes Plaintiff’s claims in this matter. (Rummer Decl., ¶ 6, Exh. 1.) The scope of the arbitration agreement includes all claims arising from Plaintiff’s employment. Defendant has thus met its initial burden. (Gamboa, supra, 72 Cal.App.5th at p. 165.) The burden shifts to Plaintiff to demonstrate the falsity of the agreement. (Condee v. Longwood Mgt. Corp., supra,"88 Cal.App.4th at p. 219.)""

“If the moving party meets its initial prima facie burden and the opposing party disputes the agreement, then in the second step, the opposing party bears the burden of producing evidence to challenge the authenticity of the agreement.” (Gamboa, supra, 72 Cal.App.5th at p. 165.) “The opposing party can do this in several ways. For example, the opposing party may testify under oath or declare under penalty of perjury that the party never saw or does not remember seeing the agreement, or that the party never signed or does not remember signing the agreement.” (Ibid.)

If the movant bears its initial burden, the burden shifts to the party opposing arbitration to identify a factual dispute as to the agreement's existence—in this instance, by disputing the authenticity of their signatures. To bear this burden, the arbitration opponent must offer admissible evidence creating a factual dispute as to the authenticity of their signatures. The opponent need not prove that his or her purported signature is not authentic, but must submit sufficient evidence to create a factual dispute and shift the burden back to the arbitration proponent, who retains the ultimate burden of proving, by a preponderance of the evidence, the authenticity of the signature.

(Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747, 755.)

Here, as the party raising a defense to enforcement of the agreement, Plaintiff bears the burden of proving by a preponderance of the evidence a factual dispute as to the authenticity of his signature on the arbitration agreement. (Id. at p. 754.) However, Plaintiff need not prove that the signature is not authentic. (Id. at p. 755.) If Plaintiff proves there is a factual dispute as to the authenticity of his signature, then the burden shifts back to Defendant to prove the signature is authentic. (Ibid.)

Here, Plaintiff submits his own declaration in opposition, in which he does not contest the fact that the arbitration agreement is a true and correct copy of the operative documentation. Nor does he unequivocally state that he did not sign it. Instead, he states that he does not recall signing (Valenziano Decl., ¶ 3), being told that signing the agreement was voluntary (Valenziano Decl., ¶ 6), being told that he could take time to review the document and consult with an attorney (Valenziano Decl., ¶ 7). He does not believe he was given a copy of the agreement (Valenziano Decl., ¶ 8). While equivocal, this evidence is arguably sufficient to shift the burden back to Defendant to establish the existence of a valid agreement.

2026CUWT066301: MICHAEL VALENZIANO vs DCH (OXNARD) INC., et al.

New evidence was then presented in a reply accompanied by a supplemental declaration of asserts objections to the initial declaration of Michelle Rummer. Because the existence of a valid agreement was raised in Plaintiff’s opposition, the Court will consider the supplemental declaration in evaluating the validity of the arbitration agreement.

"In sum, once Gamboa produced evidence challenging the authenticity of the purported arbitration agreement, the Clinic was required to rebut the challenge by establishing by a preponderance of the evidence that the agreement was valid. The Clinic did not have to authenticate Gamboa's signature on the arbitration agreement. The Clinic could have met its burden in other ways, including a declaration from the Clinic's custodian of records. But proferring no admissible evidence was insufficient." (Gamboa v. Northeast Community Clinic (2021) 72 Cal. App. 5th 158, 171.)

The Court therefore considers the supplemental declaration to rebut Plaintiff’s declaration.

The supplemental declaration of Michelle Rummer lays a sufficient foundation for the Court to find that Plaintiff did electronically sign the arbitration agreement. The declaration recites Rummer’s background and qualifications, and states that she was “involved in the original design and configuration of recruiting and onboarding for Workday, the platform used by prospective employees for applying and signing, onboarding documents, including arbitration agreements” (Rummer supp. Decl. ¶ 4) and she has “personal knowledge of the entire applicant and new-hire onboarding process through my experience working in onboarding and system management and my direct role in the original design and configuration of Workday (Rummer supp.

Decl. ¶ 8). She explains her knowledge of the communication with new hires and the onboarding process and the establishment of an account for job candidates in Workday (Rummer supp. Decl. ¶ 9, 10). She describes how access requires a unique login by the candidate and that the arbitration agreement is a standalone document that requires the candidate to access it with their unique login credentials (Rummer supp. Decl. ¶ 12). Finally, she states that the audit trail attached to her initial declaration demonstrates that the arbitration agreement was sent to Plaintiffs email address as part of the hiring process, he accessed the employment documents including the arbitration agreement using his unique login, added his name to the signature line and electronically signed it.

In Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, the court denied enforcement of an arbitration agreement purportedly signed electronically by Ruiz, an employee. Ruiz declared that he “did not recall signing any arbitration agreement,” and if he had been given such an agreement, he would not have signed it. (Id. at p. 840.) The employer offered a declaration that explained how it disseminated the agreement and how employees electronically executed it, yet “did not indicate whether or if so how [the employer] ascertained that Ruiz electronically signed, or was the person who electronically signed, ... the 2011 agreement.” (Id. at p. 841.)

Applying the Uniform Electronic Transactions Act (Civ. Code, § 1633.1 et seq.), the Fourth Appellate District held that the employer had not borne its burden of proving that the electronic signature was “the act of” the employee. (Ruiz, supra, 232 Cal.App.4th at p. 842, citing Civ. Code, § 1633.9, subd. (a); see Ruiz, at pp. 842–845.)

2026CUWT066301: MICHAEL VALENZIANO vs DCH (OXNARD) INC., et al.

This case is distinguishable from Ruiz, because Defendant has sufficiently established that the electronic signature was “the act of” Plaintiff. Accordingly, the evidence establishes the existence of a valid arbitration agreement.

IV. Enforceability under Armendariz

Armendariz applies where a plaintiff alleges any claim for enforcement of rights under a statute enacted for a public reason. (Mercuro v. Superior Court (2002) 96 Cal.App.4th 167, 180 [holding Armendariz is not limited to FEHA claims, stating “[U]nder the Supreme Court’s analysis, such scrutiny should apply to the enforcement of rights under any statute enacted ‘for a public reason.’ ”]; but cf. Giuliano v. Inland Empire Personnel, Inc. (2007) 149 Cal.App.4th 1276 [holding Armendariz did not apply in suit for nonpayment of bonus and severance payment due under contract, breach of contract, and declaratory relief “because it is not based on the FEHA or a fundamental public policy that is tied to a constitutional or statutory provision”] and Parker v.

McCaw (2007) 125 Cal.App.4th 1494, 1507 [stating, “The unconscionability rules of Armendariz have no application here” in claims arising out of breach of employment agreement and stock incentive agreement].) The Labor Code statutes at issue in Plaintiff’s lawsuit reflect a public policy of protecting employees’ rights to full and prompt payment of wages owed. Such rights are unwaivable. (Crab Addison, Inc. v. Superior Court (2008) 169 Cal.App.4th 958, 970; see also Verdugo v. Alliantgroup, L.P. (2015) 237 Cal.App.4th 141, 156 [“The Labor Code provisions underlying all of Verdugo’s claims further California's fundamental public policy of requiring California employers to fully and promptly pay all wages due their employees.”].)

Thus, it is appropriate to apply an Armendariz analysis to the agreement at issue.

“Under Armendariz, an arbitration agreement is lawful if it: (1) provides for neutral arbitrators, (2) provides for more than minimal discovery, (3) requires a written award, (4) provides for all of the types of relief that would otherwise be available in court, and (5) does not require employees to pay either unreasonable costs or any arbitrators’ fees or expenses as a condition of access to the arbitration forum.” (Nguyen v. Applied Medical Resources Corp. (2016) 4 Cal.App.5th 232, 256, quoting Armendariz, supra, 24 Cal.4th at p. 102.)

As requested by Plaintiff, the Court takes judicial notice of the CPR Administered Employment Arbitration Rules from 2021 which by their terms are deemed to be incorporated into the arbitration agreement.

Turning to the first of the five factors, the agreement provides for arbitration by a single neutral arbitrator. This factor complies with Armendariz.

Next, the agreement is silent on discovery. CPR Administered Employment Arbitration Rules pertaining to discovery provide as follows:

11.1 The parties shall cooperate in the voluntary exchange of such documents and information as are relevant to the claims made and defenses at issue in the arbitration. Within twenty-one (21) calendar days after all pleadings or notice of claims have been received, or as otherwise agreed by the parties or ordered by the arbitrator, each party, without awaiting a discovery request, shall provide to the other parties: (i) the name and, if known, the contact information of

2026CUWT066301: MICHAEL VALENZIANO vs DCH (OXNARD) INC., et al.

each individual likely to have discoverable information—along with the subjects of that information—that the disclosing party may use to support its claims or defenses, unless the use would be solely for impeachment; (ii) a copy—or a description by category and location—of all documents, electronically stored information, and tangible things that the disclosing party has in its possession, custody or control and may use to support its claims or defenses, unless the use would be solely for impeachment; (iii) a computation of each category of damages claimed by the disclosing party; and (iv) for inspection and copying any insurance agreement under which an insurance business may be liable to satisfy all or part of a possible judgment in the action or to indemnify or reimburse for payments made to satisfy the judgment.

11.2 The parties shall meet and confer in an effort to agree on: (a) the scope of discovery, including the production of documents and the appropriateness of interrogatories or other discovery devices as the needs of the case may require; and (b) the schedule for the exchange of agreed-upon discovery. Absent agreement of the parties, the arbitrator will authorize such discovery as reasonably necessary for each party to prepare for, present, and respond to the parties’ respective claims or defenses with the goals of making the discovery process fair, just, expeditious and cost-effective in mind.

In determining the scope of discovery, the arbitrator shall consider: (a) the nature and scope of the claims and defenses; (b) the respective access of the parties to documents and information related to the pending claims and defenses; (c) the amount in controversy and the relative cost of obtaining the requested discovery; and (d) the parties’ respective burdens of proof.

The Court finds that this language can reasonably be interpreted as entitling Plaintiff to more than minimal discovery. This factor is consistent with Armendariz.

Both the agreement and the Rules provide for a written award. (Id., § 15.2.) This factor thus complies with Armendariz.

As to the fourth factor, the Rules provide that “The arbitrator shall have the authority to award all legal and equitable relief that would be available in court under applicable law, including, but not limited to, attorney’s fees and arbitration fees and costs.” (Id., § 10.1.). The Court therefore finds that this factor is consistent with Armendariz.

Finally, the arbitration agreement expressly provides that “The Company will pay for any administrative or hearing fees charges of the arbitration proceeding, and all arbitrator’s fees, except that I shall pay any filing fees associated with any arbitration that I initiate, but only so much of the filing fee as I would have instead paid had I filed the complaint in a court of law. The Court finds that this factor is also consistent with Armendariz.

In sum, the provisions of the arbitration agreement are wholly consistent with Armendariz. Accordingly, the Court finds the agreement to be enforceable.

V. Defense to Arbitration: Unconscionability

“Once an agreement to arbitrate has been proved, the burden shifts to the party opposing arbitration to establish a defense to the enforcement of the agreement, including the burden of

2026CUWT066301: MICHAEL VALENZIANO vs DCH (OXNARD) INC., et al.

demonstrating that the exemption [from arbitration] applies.” (Nixon v. AmeriHome Mortgage Co., LLC, supra, 67 Cal.App.5th at p. 946 [internal quotation marks and citation omitted].) “Unconscionability in a contract is one reason a court may decline enforcement.” (Lange v. Monster Energy Co. (2020) 46 Cal.App.5th 436, 445.) “If 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.” (Civ.

Code, § 1670.5, subd. (a); see also Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5th 478, 505]“[A]n unconscionability assessment focuses on circumstances known at the time the agreement was made.”].)

“The general principles of unconscionability are well established. A contract is unconscionable if one of the parties lacked a meaningful choice in deciding whether to agree and the contract contains terms that are unreasonably favorable to the other party.” (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 125.)

“Unconscionability consists of both procedural and substantive elements. The procedural element addresses the circumstances of contract negotiation and formation, focusing on oppression or surprise due to unequal bargaining power.” (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 246.) “Both procedural unconscionability and substantive unconscionability must be shown, but they need not be present in the same degree and are evaluated on a sliding scale.” (Id. at p. 247, quoting Armendariz, supra, 24 Cal.4th at p. 114 (internal quotation marks omitted)].) “In other words, the 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, supra, at p. 114.)

“The party resisting arbitration bears the burden of proving unconscionability.” (Pinnacle Museum Tower, supra, at p. 247.)

VI. Procedural Unconscionability

“Unconscionability analysis begins with an inquiry into whether the contract is one of adhesion.” (Armendariz, supra, 24 Cal.4th at p. 113.) “An adhesive contract is standardized, generally on a preprinted form, and offered by the party with superior bargaining power ‘on a take-it-or-leave-it basis.’” (OTO, L.L.C. v. Kho, supra, 8 Cal.5th at p. 126, quoting Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1245.)

“Oppression occurs where a contract involves lack of negotiation and meaningful choice, surprise where the allegedly unconscionable provision is hidden within a prolix printed form.” (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 247.) “The circumstances relevant to establishing oppression include, but are not limited to (1) the amount of time the party is given to consider the proposed contract; (2) the amount and type of pressure exerted on the party to sign the proposed contract; (3) the length of the proposed contract and the length and complexity of the challenged provision; (4) the education and experience of the party; and (5) whether the party's review of the proposed contract was aided by

2026CUWT066301: MICHAEL VALENZIANO vs DCH (OXNARD) INC., et al.

an attorney.” (Grand Prospect Partners, L.P. v. Ross Dress for Less, Inc. (2015) 232 Cal.App.4th 1332, 1348, as modified on denial of reh’g (Feb. 9, 2015).)

Plaintiff states in his declaration that He does not recall knowingly signing an arbitration agreement, no one went over the paperwork for the onboarding process. He was told to sign a “bundle of electronic documents” if he wanted the job. No one informed him that any of the documents included an arbitration agreement. No one told him that by signing any document I would be giving up my right to file a lawsuit in court or have a jury trial. Arbitration was not explained to him. He does not recall being told that signing any arbitration agreement was voluntary.

His “understanding” was that signing the documents being presented was required in order to obtain employment with DCH (Oxnard) Inc. He does not state where that understanding came from. He was not told that he had the right to opt out of arbitration. He does not recall being told that he could take additional time to review the documents or consult with an attorney before signing them. He does not believe he was provided with a copy of any arbitration agreement for his records. He does not have a copy of any such agreement, and does not recall receiving one. (Valenziano Decl., ¶¶ 3-8.)

Conversely, Defendant’s evidence is that the agreement was emailed to employees, and they are asked to complete the documents before their first day of work. The documents were emailed to Plaintiff on January 8, 2025, and his first day of work was January 15, 2025. Plaintiff therefore had a week to review the documents. (Rummer Decl., ¶ 9, 13.)

Although the agreement is a dense, single-paragraph form containing multiple waivers and limitations, it was still a separate document that conspicuously stated “LITHIA & DRIVEWAY BINDING ARBITRATION AGREEMENT” in all capital letters. It clearly states in bold, “Mandatory Arbitration” at the beginning and also in bold at the end directly above the signature line, “I understand and agree that by entering into this Arbitration agreement, I and the Company are voluntarily waiving our respective right to bring such claims to state or federal court, including any right to a jury trial. I understand that I may consult with an attorney concerning the terms of this Arbitration Agreement, and by entering into this Agreement, I agree that I have had an adequate opportunity to do so, and that I enter into this Agreement freely, knowingly and voluntarily.”

Plaintiff does have a high school education, as opposed to an elementary school education, and does not assert that he does not speak or understand English.

Considering all the evidence and reasonable inferences drawn therefrom, the Court finds that Plaintiff understood the agreement, had an opportunity to review and consider the agreement and consult with an attorney and entered into the agreement voluntarily. Although Plaintiff contends that he believed the signing of the agreement to be a condition of employment, the Court finds that Plaintiff had adequate time to review the agreement, understood the agreement, entered into it voluntarily and has not carried his burden to demonstrate procedural unconscionability

VII. Substantive Unconscionability

2026CUWT066301: MICHAEL VALENZIANO vs DCH (OXNARD) INC., et al.

“A court should consider substantive unconscionability only after procedural unconscionability has been established. A ‘conclusion that a contract contains no element of procedural unconscionability is tantamount to saying that, no matter how one-sided the contract terms, a court will not disturb the contract because of its confidence that the contract was negotiated or chosen freely, that the party subject to a seemingly one-sided term is presumed to have obtained some advantage from conceding the term or that, if one party negotiated poorly, it is not the court's place to rectify these kinds of errors or asymmetries.’” (Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5th 478, 494, quoting Gentry v. Superior Court (2007) 42 Cal.4th 443, 470.)

Because the Court does not find procedural unconscionability, the Court need not address the issue of substantive unconscionability.

Considering the agreement as a whole, the Court finds no procedural unconscionability making the agreement enforceable. (Stoker v. Blue Origin, LLC (2026) 120 Cal.App.5th 91, 112-115.

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