66 Cal.App.5th 649
Cal. Ct. App.2021Background
- Calderon, a Spanish-preferring employee, signed a Spanish "Mutual Agreement to Arbitrate Claims" (MAAC) translated from an original English MAAC supplied by Western Bagel; Western Bagel used a third-party translator.
- Multiple provisions in both versions (introductory text, paragraph 1, paragraph 3, paragraph 7(c), and other language) indicate the parties agreed to binding arbitration and waiver of jury trials.
- The Spanish MAAC’s paragraph 10 (severability clause) states that if a provision (other than paragraph 4) is unenforceable, the remainder will be carried out via "neutral, non-binding arbitration;" the English MAAC’s paragraph 10 conversely provides for reformation to ensure "neutral, binding arbitration." The Spanish MAAC also included a disclaimer that the English version governs and any ambiguity will be resolved by the English version.
- Calderon filed a putative class action for meal and rest period violations. Western Bagel moved to compel arbitration; Calderon opposed, citing the Spanish text’s reference to nonbinding arbitration and unconscionability.
- The trial court found FAA governed, determined an ambiguity existed between the two versions, applied contra proferentem against Western Bagel (the drafter) and ordered nonbinding arbitration. Western Bagel sought appellate/writ relief.
- The Court of Appeal treated the appeal as a writ petition, held Lamps Plus controls, concluded the FAA preempts use of contra proferentem to defeat fundamental attributes of arbitration, and directed the trial court to compel binding arbitration.
Issues
| Issue | Calderon (Plaintiff) | Western Bagel (Defendant/Petitioner) | Held |
|---|---|---|---|
| Whether the trial court could apply the contra proferentem (construe ambiguity against the drafter) to interpret the MAAC as requiring nonbinding arbitration when the FAA applies | The Spanish MAAC’s severability clause shows nonbinding arbitration; ambiguity should be resolved against Western Bagel, so arbitration is nonbinding | The Spanish clause’s "nonbinding" phrase was a translator’s typo; other provisions (and the English MAAC) show intent for binding arbitration; contra proferentem should not defeat FAA policy | Contra proferentem cannot be used to infer consent to a form of arbitration that undermines core FAA attributes; Lamps Plus preempts that use, so trial court erred |
| If an ambiguity exists regarding binding vs nonbinding arbitration, which rule controls interpretation | Ambiguity favors the nonbinding reading (contra proferentem) and so Calderon should not be compelled to binding arbitration | Ambiguity must be resolved under the FAA’s default rule favoring arbitration as envisioned by the FAA (i.e., binding arbitration) | Any ambiguity about scope/form should be resolved in favor of arbitration as contemplated by the FAA; binding arbitration compelled |
Key Cases Cited
- Lamps Plus, Inc. v. Varela, 139 S. Ct. 1407 (2019) (FAA preempts using contra proferentem to infer consent to arbitration procedures that undermine fundamental attributes of arbitration)
- Prima Donna Dev. Corp. v. Wells Fargo Bank, N.A., 42 Cal. App. 5th 22 (2020) (discusses binding arbitral awards as a central attribute of FAA-governed arbitration)
- Juarez v. Wash Depot Holdings, Inc., 24 Cal. App. 5th 1197 (2018) (construed conflicting English/Spanish severability clauses under state contract law against employer drafter)
- Nielsen Contracting, Inc. v. Applied Underwriters, Inc., 22 Cal. App. 5th 1096 (2018) (standards for reviewing orders on motions to compel arbitration)