Higgins v. Superior Court Of Los Angeles County

Facts

Charles, Michael, Charis, Joshua, and Jeremiah Higgins (Ps) are siblings. They executed an agreement with D whose arbitration provision is at issue. Ps were 21, 19, 17, 16, and 14 years old, respectively. Ps' parents died in 2004. The eldest sibling, Charles, became the guardian for the then three minor children. Ps moved in with church acquaintances, Firipeli and Lokilani Leomiti, a couple with three children of their own. The Leomitis are defendants in the litigation but are not involved in the present writ proceeding. Charles was advised by members of his church that producers of Extreme Makeover had contacted the church and had asked to speak to him about the production of a show based on the loss of Ps' parents and that Ps were now living with the Leomitis. Charles called and spoke with an associate producer of Lock and Key about the program and Ps' living situation. After repeated contacts, by early 2005, Ps and the Leomitis were chosen to participate in the program in which the Leomitis' home would be completely renovated. Lock and Key sent an 'Agreement and Release' for their signatures. It contained 24 single-spaced pages and 72 numbered paragraphs. Attached to it were several pages of exhibits, including an authorization for release of medical information, an emergency medical release, and, as exhibit C, a one-page document entitled 'Release.' At the top of the first page of the Agreement, the following appears in large and underlined print: 'NOTE: DO NOT SIGN THIS UNTIL YOU HAVE READ IT COMPLETELY.' The second-to-last numbered paragraph also states in pertinent part: 'I have been given ample opportunity to read, and I have carefully read, this entire agreement. ... I certify that I have made such an investigation of the facts pertinent to this Agreement and of all the matters pertaining thereto as I have deemed necessary ... . I represent and warrant that I have reviewed this document with my own legal counsel prior to signing (or, IN THE ALTERNATIVE, although I have been given a reasonable opportunity to discuss this Agreement with counsel of my choice, I have voluntarily declined such opportunity).' Paragraph 69 contains the following arbitration provision: '69. I agree that any and all disputes or controversies arising under this Agreement or any of its terms, any effort by any party to enforce, interpret, construe, rescind, terminate or annul this Agreement, or any provision thereof, and any and all disputes or controversies relating to my appearance or participation in the Program, shall be resolved by binding arbitration in accordance with the following procedure ... . All arbitration proceedings shall be conducted under the auspices of the American Arbitration Association ... . I agree that the arbitrator's ruling, or arbitrators' ruling, as applicable, shall be final and binding and not subject to appeal or challenge. ... The parties hereto agree that, notwithstanding the provisions of this paragraph, Producer shall have a right to injunctive or other equitable relief as provided for in California Code of Civil Procedure [section] 1281.8 or other relevant laws.' There is nothing in the Agreement that brings the reader's attention to the arbitration provision. The Agreement also contains a provision limiting Ps' remedies for breach of the Agreement to money damages. The one-page Release is typed in a smaller font than the Agreement. It consists of four, single-spaced paragraphs, the middle of which contains the following arbitration clause: 'I agree that any and all disputes or controversies arising under this Release or any of its terms, any effort by any party to enforce, interpret, construe, rescind, terminate or annul this Release, or any provision thereof, shall be resolved exclusively by binding arbitration before a single, neutral arbitrator, who shall be a retired judge of a state or federal court. All arbitration proceedings shall be conducted under the auspices of the American Arbitration Association, under its Commercial Arbitration Rules, through its Los Angeles, California office. I agree that the arbitration proceedings, testimony, discovery and documents filed in the course of such proceedings, including the fact that the arbitration is being conducted, will be treated as confidential ... .' There is no evidence that any discussions took place between Ps and any representative of Ds regarding either the Agreement or the Release, or that any of the Ds directly imposed any deadline by which Ps were required to execute the documents. Ds met with Leomitis. Ps were not there. Leomitis emerged with a packet of documents, which they handed to Ps. Mrs. Leomiti instructed petitioners to 'flip through the pages and sign and initial the document where it contained a signature line or box.' Charles stated that from the time Mrs. Leomiti 'handed the document to us and the time we signed it, approximately five to ten minutes passed.' The document contained complex legal terms that he did not understand. Ps did not know what an arbitration agreement was and did not understand its significance or the legal consequences that could flow from signing it. He did not specifically state whether or not he saw the arbitration provisions contained either in paragraph 69 or the Release before he signed the documents. Representatives from the show appeared and started to reconstruct the Leomitis' home. When the new home was completed, it had nine bedrooms, including one for each of the five petitioners. The existing mortgage was also paid off. The program was broadcast on Easter Sunday, 2005. After the show was first broadcast, the Leomitis informed Ps that the home was theirs (the Leomitis'), and the Leomitis ultimately forced petitioners to leave. Charles contacted Lock and Key's field producer and asked for help. The producer responded that he could not assist Ps. Sometime thereafter, the Extreme Makeover episode was rebroadcast. Ps sued Ds. The complaint includes claims for, among other things, intentional and negligent misrepresentation, breach of contract, unfair competition (Bus. & Prof. Code, § 17200 et seq.), and false advertising (Bus. & Prof. Code, § 17500 et seq.). As to the television Ds, the complaint appears to allege that those Ds breached promises to provide petitioners with a home, exploited petitioners, and portrayed petitioners in a false light (by rebroadcasting the episode when they knew the episode no longer reflected petitioners' living situation). The television Ds petitioned to compel arbitration pursuant to the Federal Arbitration Act (FAA) Ps claim that the arbitration provision was procedurally unconscionable because the parties had unequal bargaining power, the arbitration provision was 'buried' in the Agreement, Ps were given only five to 10 minutes before they were asked to sign the Agreement, none of the television Ds explained the Agreement to them, and copies of the executed documents were 'withheld' from them. To Ps, the Agreement was substantively unconscionable because its terms were so one-sided as to shock the conscience. They claimed the Agreement requires only them and not the television Ds to arbitrate, limits petitioners' remedies to damages (while the television Ds' remedies are not so limited), precludes only petitioners from appealing, provides that the arbitration will be in accordance with the rules of the American Arbitration Association (which unfairly requires arbitration costs to be borne equally by the parties), and allows the television defendants to change the terms of the Agreement at any time. The trial court issued an order granting the petition in most respects, conditioned on the television Ds paying all arbitration costs. Ps appealed.

Issues

Rule of Law

Holding and Decision

Legal Analysis

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