Floccini v. Barkley Seed, Inc.

A written provision in ... a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, ... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.

(9 U.S.C. § 2.)

Burden

In ruling on a motion to compel arbitration, the court must first address whether there was an agreement to arbitrate and whether the agreement covers the dispute. (Omar v. Ralphs Grocery Co. (2004) 118 Cal.App.4th 955, 960.) The moving party must first allege existence of an agreement to arbitrate. (Condee v. Longwood Management 7

Corp. (2001) 88 Cal.App.4th 215, 218.) Where the moving party has alleged the existence of an arbitration agreement, the burden shifts to the opposing party to prove the falsity of the purported agreement. (Id. at p. 219.) The third step would be relevant where the opposing party has met its burden, then the burden shifts back to the moving party to “establish with admissible evidence a valid arbitration agreement between the parties.” (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165-166.)

Here, defendant filed its moving papers, which did establish prima facie evidence of an agreement to arbitrate. Plaintiff has not challenged the authenticity of the agreement, but asserts that the agreement is unenforceable as unconscionable.

Judicial Estoppel

Defendant asserts that plaintiff is prohibited from challenging the enforceability of the agreement based on judicial estoppel. Plaintiff has previously stipulated to arbitration in Fresno Superior Court Case Number 25CECG02538 pursuant to the same arbitration agreement at issue here. (Barefield Decl., Exh. C.) Judicial estoppel acts to prevent a party from asserting a different position in a legal proceeding than taken in a prior proceeding. (Jackson v. County of Los Angeles (1997) 60 Cal.App.4th 171, 181.)

The “gravamen of judicial estoppel is not privity, reliance, or prejudice ... it is the intentional assertion of an inconsistent position...” (Id. at p. 183.) It applies where “(1) the same party has taken two positions; (2) the positions were taken in judicial or quasi-judicial administrative proceedings; (3) the party was successful in asserting the first position (i.e., the tribunal adopted the position or accepted it as true; (4) the two positions are totally inconsistent; and (5) the first position was not taken as a result of ignorance, fraud, or mistake.” (Ibid.)

Here, the same party has taken two positions because plaintiff is the party at issue. The position was in judicial proceedings in the related matter as described above. Plaintiff was successful in asserting the position as the court adopted the stipulation regarding the effect of the arbitration agreement there. The positions are inconsistent. There is no information regarding whether there was an issue of ignorance, fraud, or mistake. As plaintiff’s assertions here are inconsistent with his position in the related case, the court finds that he is judicially estopped from asserting such.

Unconscionability

However, even if the court were not to find that judicial estoppel prevents plaintiff from asserting that the arbitration agreement is unenforceable, plaintiff’s assertions regarding unconscionability lack merit. The doctrine of unconscionability 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." (Armendariz v. Foundation Health Psychcare Services (2000) 24 Cal.4th 83, 114.) To invalidate an arbitration agreement, the court must find both procedural and substantive unconscionability. (Id. at p. 122; Stirlen v. Supercuts, Inc. (1997) 51 Cal.App.4th 1519, 1533; Mercuro v. Superior Court (2002) 96 Cal.App.4th 167, 174.)

“Because unconscionability is a reason for refusing to enforce contracts generally, it is also a valid reason for refusing to enforce an arbitration agreement under Code of Civil Procedure section 1281, which, as noted, provides that arbitration agreements are ‘valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract.’ The United States Supreme Court, in interpreting the same language found in section 2 of the FAA (9 U.S.C. § 2), recognized that ‘generally applicable contract defenses, such as fraud, duress, or unconscionability, may be applied to invalidate arbitration agreements ....’” (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114, internal citation omitted, italics in original.)

“The party resisting arbitration bears the burden of proving unconscionability. 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.”’ ‘[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.’” (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 247, internal citations omitted.)

Plaintiff contends that the arbitration provision is procedurally unconscionable as a contract of adhesion. A contract of adhesion is oppressive as a matter of law. (Madden v. Kaiser Foundation Hospitals (1976) 17 Cal.3d 699, 711.) Plaintiff has not presented any declaration regarding the circumstances surrounding the receipt or signing of the arbitration agreement. The agreement itself purports to be voluntary in its introductory paragraphs. (Herndon Decl., Exh. A.) It also provides information about who to contact for any questions about the agreement and notes that the employee may wish to consult an attorney. (Ibid.) Plaintiff has not demonstrated procedural unconscionability.

Here, plaintiff argues the agreement is substantively unconscionable because it has an attorney’s fees shifting provision that contradicts the Labor Code. The relevant section of the agreement states, “The arbitrator may award any remedy or relief available under applicable law, including any remedy or relief that would be available in a court of law. The arbitrator shall have the authority to provide for an award of attorneys’ fees and costs if applicable law authorizes such an award.” (Herndon Decl., Exh. A, Section 4.) As such, the provision addressing remedies does not contradict the Labor Code. Plaintiff has not demonstrated substantive unconscionability.

Defendant has met its burden in showing an agreement exists and plaintiff has not shown that the agreement is otherwise unenforceable.

Pursuant to California Rules of Court, rule 3.1312(a), and Code of Civil Procedure section 1019.5, subdivision (a), no further written order is necessary. The minute order adopting this tentative ruling will serve as the order of the court and service by the clerk will constitute notice of the order.

Tentative Ruling

Issued By: lmg on 5-26-26. (Judge’s initials) (Date)

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