97 Cal.App.5th 1280
Cal. Ct. App.2023Background
- Plaintiff Haydon, a 74-year-old with dementia, briefly resided at Elegance at Dublin, a residential care facility for the elderly.
- Prior to her stay, Haydon signed a lengthy agreement containing an embedded arbitration clause, allegedly without explanation and under time and financial pressure.
- Haydon later sued the facility and related entities for elder abuse, negligence, assault, and battery after an alleged sexual assault by a caregiver during her stay.
- Defendants moved to compel arbitration based on the signed agreement; the trial court denied the motion, finding the arbitration provision unconscionable both procedurally and substantively.
- Defendants appealed, arguing the agreement should be enforced or at least have unconscionable terms severed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Delegation provision | Issue not preserved by defendants; trial court should decide unconscionability. | Arbitrator, not the court, should decide unconscionability due to delegation clause. | Argument forfeited; court properly decided issue. |
| Procedural unconscionability | Extreme pressure, lack of explanation, confusing documents. | No oppression or surprise; clause was not adhesive and had opt-out/disclaimer. | High procedural unconscionability supported by record. |
| Substantive unconscionability | Clause unfair: confidentiality, limits on discovery, cost-shifting. | Terms not egregious; cost-sharing and discovery limits reasonable per rules. | Multiple terms highly unconscionable. |
| Severability | Unconscionability permeates agreement; not severable. | Unconscionable terms should be severed—enforce rest of agreement. | Court did not abuse discretion refusing severance. |
Key Cases Cited
- Armendariz v. Foundation Health Psychcare Servs., Inc., 24 Cal.4th 83 (minimum requirements for arbitration agreements affecting statutory rights; sliding scale for unconscionability)
- OTO, L.L.C. v. Kho, 8 Cal.5th 111 (framework for procedural and substantive unconscionability)
- Dougherty v. Roseville Heritage Partners, 47 Cal.App.5th 93 (oppressive arbitration provisions in elder care facility admissions agreements)
- Sanchez v. Valencia Holding Co., LLC, 61 Cal.4th 899 (unconscionability of arbitration fee/cost provisions)