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Fischer v. Families For Children

2/4/2002

position of personnel director of Families for Children. Van Pham was subsequently hired as the new personnel director. Shortly thereafter, DeVere ordered plaintiff to turn over some of his accounting work to Van Pham. Plaintiff soon thereafter informed DeVere he believed her sexual and financial relationship with Van Pham was in conflict with the business and financial interests of Families for Children. Plaintiff alleges DeVere and Van Pham retaliated against him for these remarks by harassing him and, ultimately, by terminating him on March 9, 1999. Plaintiff also alleges DeVere continuously engaged in sexually harassing and verbally assaultive conduct against plaintiff and other employees because of their male gender, causing plaintiff to feel humiliated, intimidated, and offended.


Plaintiff filed a complaint on January 28, 2000, alleging five causes of action: intentional infliction of emotional distress, unlawful employment practices, termination in violation of public policy, breach of covenant of good faith and fair dealing, and breach of covenant not to terminate other than for good cause. When the complaint was served, defendants notified plaintiff, in a letter dated March 16, 2000, of the arbitration agreement and asked plaintiff to dismiss his civil action and submit his claims to arbitration. The letter (1) specified that, because of intervening legal decisions, both the limitation of damages provision and the allocation of costs provision were no longer a part of the agreement and (2) asked counsel for plaintiff to notify counsel for defendant if any other provision of the arbitration agreement was subject to deletion. Plaintiff did not respond to the letter, and defendants filed a timely answer to the complaint.


On May 9, 2000, defendants again asked plaintiff to submit his claims to arbitration. Plaintiff refused. Defendants moved for and were granted summary judgment, followed by a final judgment on September 6, 2000, based on plaintiff's failure to comply with the arbitration agreement. On September 19, 2000, plaintiff filed a motion seeking an order to vacate the judgment in light of the recent California Supreme Court decision in Armendariz. The trial court granted the motion to vacate on October 31, 2000. Defendants appeal.


DISCUSSION


California policy favors arbitration agreements. (Stirlen v. Supercuts, Inc. (1997) 51 Cal.App.4th 1519, 1544 (Stirlen).) Arbitration is a legislatively endorsed and judicially favored means to achieve an economic and efficient alternative to traditional litigation. (Ibid.) Courts will "`indulge every intendment to give effect to such proceedings.'" (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 9.) Code of Civil Procedure section 1281 provides a "written agreement to submit to arbitrate an existing controversy or controversy thereafter arising is valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract."


A court may invalidate an unconscionable contract. Civil Code section 1670.5, subdivision (a) states: "If the court as a matter of law finds the contract or any clause of the contract to be 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."


Unconscionability has both a procedural and a substantive element. (Stirlen, supra, 51 Cal.App.4th at p. 1531.) Both elements must be present for a contract or a clause therein to be invalidated, but they need not be present in the same degree. (Armendariz, supra, 24 Cal.4th at p. 114; S

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