Serafin v. Balco Properties Ltd., LLC

In Serafin v. Balco Properties Ltd., LLC (2015) 235 Cal.App.4th 165, the Court addressed this very issue, noting that a provision in an arbitration agreement requiring both parties to bear their own attorney fees and costs was substantively unconscionable (but severable in the circumstances of that case) because it "runs counter to the California Fair Employment and Housing Act (FEHA; Gov. Code, 12900 et seq.) which allows a successful plaintiff to recover attorney fees and costs from the employer (but does not similarly allow an employer to recover fees and costs from an employee in most cases)." ( Serafin, supra, 235 Cal.App.4th at p. 183.) We stated: "Such a modification of California law is inappropriate under Armendariz as it has the effect of denying a plaintiff the rights and remedies he or she would have if he or she were litigating his or her claims in court." (Serafin, supra, 235 Cal.App.4th at p. 183.) In Serafin, supra, 235 Cal.App.4th 165, because the plaintiff showed a minimal degree of procedural unconscionability arising from the adhesive nature of the arbitration agreement at issue, under the sliding-scale approach she had the burden of making a strong showing of substantive unconscionability. (Id. at pp. 180-181, 185.) She was unable to demonstrate any one-sidedness or lack of mutuality. (Id. at p. 182.) And she pointed to only one clause that we found to be substantively unconscionable, a provision apportioning attorney fees and costs. (Id. at pp. 183-184.) After determining the fees and costs apportionment provision to be severable (id. at pp. 183-184), we found that no substantive unconscionability remained and affirmed the trial court's order compelling arbitration (id. at p. 185).