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A California appellate court rejected an unconscionability challenge to an arbitration agreement finding that there was no lack of meaningful choice shown; no surprise when the arbitration agreement was included three times within the contract and initialed; and the remedies sought would not have been available regardless of which rules were applied.
In Watts v. Pacific Window Products, Inc., No. B191162, 2007 WL 987872 (Cal. Ct. App. Apr. 04, 2007), George and Dorothy Watts (the Watts), entered into a contract with Pacific to build an additional room onto their home. After problems arose, the Watts brought suit against Pacific and Pacific moved to compel arbitration.
An arbitration panel found in favor of Pacific. After Pacific moved to confirm the award, the Watts moved to appeal the order compelling arbitration. Despite noting that the order compelling arbitration was non-appealable, the Court proceeded to review it.
The Court rejected the Watts' unconscionability challenge, finding that the Watts had not met their burden of proving the agreement was unconscionable. The agreement was not an adhesion contract. Though the Watts were in their 80's, there was no evidence to indicate they were incapable of negotiating a contract, nor was there information indicating the Watts were unable to read the contract.
Further, the Watts did not lack "meaningful choice." No evidence existed to indicate there was not another alternative available. The Watts were not surprised by the inclusion of the arbitration agreement. The agreement was mentioned when the contract was signed by the Watts. It was located within the contract in three different places; one of which had the heading capitalized and one of which was initialed by the Watts. The Better Business Bureau (BBB) rules, made applicable by the agreement, were readily available on the Internet.
Finally, the remedies available through the BBB, though limited, did not result in "harsh or one-sided results." The panel found in favor of Pacific, so the Watts were not entitled to any of the remedies sought. This extinguished The Watts' remedy-based arguments and the Court confirmed the award.
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