$/24/24: The court’s ruling is downloadable (PDF) and is a great primer on arbitration clauses in consumer contracts. Need to find McGill and some of the other cases cited.
California Court of Appeal, certified for publication 1/29/21
https://law.justia.com/cases/california/court-of-appeal/2021/c089576.html
Primary Holding The Court of Appeal upheld a trial court’s determination an arbitration clause was unconscionable, and thus unenforceable.
Opinion:
Justia Daniel and Indiana Cabatit entered into a solar power lease agreement (the agreement) with Sunnova Energy Corporation.
After a solar power system was installed on the Cabatits’ residence, the Cabatits sued Sunnova, alleging damage to their roof.
Sunnova moved to compel arbitration based on an arbitration clause in the agreement, but the trial court found the arbitration clause unconscionable and denied the motion.
On appeal, Sunnova contended: (1) the arbitration clause required the Cabatits to submit to an arbitrator the question whether the clause was enforceable; (2) the trial court erred in finding the arbitration clause unconscionable, and (3) despite the trial court’s conclusion to the contrary, the rule announced in McGill v. Citibank, N.A. 2 Cal.5th 945 (2017), did not apply to the circumstances of this case.
The Court of Appeal determined: (1) Sunnova did not raise at trial the issue of whether the arbitration clause was itself had to be decided by an arbitration, thus not addressed on appeal; (2) the arbitration clause was procedurally and substantively unconscionable and therefore unenforceable, and (3) the Court did not consider whether the McGill rule applied here because general considerations of unconscionability, independent of the McGill rule, supported the trial court’s determination.
Thus, the Court affirmed the trial court’s denial of Sunnova’s motion to compel arbitration.
