Frank Sabia and eight other people filed a class action complaint against The Home Defender Center (Home Defender), a mortgage foreclosure consultant.  The claim alleged fraud, breach of contract, as well other violations, alleging they were tricked into signing their agreements and lost money paying for services that were never rendered.  Home Defender brought a petition to compel arbitration based on a clause in the written agreements with Sabia and the others.

Sabia opposed the motion to compel arbitration on the grounds that the clause was not enforceable because it was vague, ambiguous, and unconscionable.  Sabia said the plaintiffs' native language was Spanish and that Home Defender's employee, Victoria Viveros, explained to them in Spanish that Home Defender would try to obtain a home loan modification for them.  Viveros gave them the documents to sign in English, but told them the documents stated what she had explained in Spanish.  She did not say the documents contained an arbitration clause. Sabia alleges that Viveros told him to hurry and sign the documents immediately because she had to leave.

The arbitration provision did not include as attachments the Business and Professions Code rules referenced, and the requirement to arbitrate applied only to the plaintiffs, not to Home Defender.  Home Defender argued that the lack of mutuality was not grounds for invalidating the agreement under current California and federal law.  Home Defenders also claimed Sabia and the others did understand English, and that they signed forms in Spanish stating they had read the documents.  The trial court agreed with Home Defenders and Sabia appealed.

Generally an order to compel arbitration is not appealable, but here, where the order effectively terminates any class claims, the court can review the decision.  This action was brought by Sabia and the others as a class action, and by compelling arbitration of individual claims, the court removed the possibility of the class claim.

Sabia contends the arbitration provision is unenforceable because it is ambiguous in that: (1) it calls for arbitration pursuant to "rules" of the Business and Professions Code, (2) it refers to courts and venue, which could imply litigation actions, and (3) it gives Home Defender the right to stay court action, but not compel arbitration.  The court found the provision was not hopelessly ambiguous.

Sabia next argued the provision was unconscionable because it was one-sided.  Only Sabia was required to arbitrate his claims.  Home Defender was allowed to pursue litigation if it so desired.  The court ruled this lack of mutuality was in fact substantively unconscionable.   Home Defenders argued that according to the Supreme Court case AT&T Mobility LLC v. Concepcion (2011) 131 S.Ct. 1740, the rule about mutuality is no longer good law.  The court here explained that despite the Concepcion decision, courts may still void an arbitration provision that applies only to the party with the weaker bargaining strength, or is oppressively one-sided. The California Supreme Court has affirmed, after Concepcion, that the doctrine regarding mutuality was still valid.

The court also held that the arbitration provision was procedurally unconscionable.  While the provision itself was not hidden or inconspicuous, it was presented to Sabia and the others at the same time as several other documents.  Furthermore, the way Viveros presented the documents, by quickly stating they said exactly what she explained in English and then encouraging them to sign immediately, adds to the unconscionability.  The acknowledgment form was presented in Spanish, indicating Home Defenders knew Sabia was more comfortable receiving information in Spanish.  The combined force of the substantive and procedural unconscionability led the court to rule that he arbitration provision should not be enforced.