California Court of Appeals, Fourth District, First Division
[REVIEW GRANTED BY CAL. SUPREME COURT]
APPEAL from an order of the Superior Court of San Diego County, No. 37-2010-00096763- CU-BT-CTL Ronald L. Styn, Judge.
[Copyrighted Material Omitted]
Sheppard, Mullin, Richter & Hampton, Robert J. Stumpf, Jr., Peter S. Hecker, Anna S. McLean and Shannon Z. Peterson, for Defendant and Appellant.
Michael E. Lindsey; The Hanson Law Firm and John W. Hanson, for Plaintiff and Respondent.
HALLER, Acting P. J.
This is the second time this court has considered an appeal in this case involving an automobile purchaser who brought consumer claims against the creditor-assignee of the parties' sales contract. The first appeal involved the enforceability of an arbitration agreement in the contract. (Trabert v. Consumer Portfolio Services, Inc. (Apr. 8, 2013, D060491) [nonpub. opn.] (Trabert I).) In Trabert I, we held the arbitration agreement contained certain unconscionable provisions, and remanded for the court to determine whether these provisions could be severed from the remaining agreement. On remand, the trial court declined to sever the provisions and denied the creditor-assignee's motion to compel arbitration. The creditor-assignee, Consumer Portfolio Services, Inc. (Portfolio), challenges this order in this second appeal.
We conclude the trial court erred in denying Portfolio's motion. The unconscionable provisions concern only exceptions to the finality of the arbitration award, and can be deleted without affecting the core purpose and intent of the arbitration agreement. The deletion of these exceptions creates a binding arbitration award and promotes the fundamental attributes of arbitration, including speed, efficiency, and lower costs. We reverse and remand
with directions for the court to sever the unconscionable provisions from the arbitration agreement and grant Portfolio's motion to compel arbitration.
FACTUAL AND PROCEDURAL BACKGROUND
Shaun Trabert purchased a used vehicle from an automobile dealer under a preprinted industry-drafted installment sales contract. The dealer then assigned the contract to Portfolio. Portfolio later repossessed Trabert's vehicle, and Trabert filed a class action complaint alleging Portfolio's repossession/default notices were defective under consumer statutes. (See Civ. Code, § 1750 et seq.; Bus. & Prof. Code, § 17200.)
Portfolio moved to compel arbitration under a lengthy arbitration provision in the parties' sales contract. In opposition, Trabert argued the arbitration
agreement was unenforceable because it contained two sets of unconscionable provisions: (1) provisions creating exceptions to the finality of the arbitrator's decision; and (2) provisions allowing the parties to seek relief outside the arbitration process through self-help remedies or small claims court. (These challenged provisions are italicized in the quoted arbitration agreement contained in footnote 1). The trial court (Superior Court Judge John ...