The Harker School (Harker) and one of its teachers, Peter Itokazu, appeal from an order denying their petition to compel arbitration of contract and tort claims brought by plaintiff Shivani Bigler, a student at the school.
Shivani was enrolled at Harker from 1999 until April 27, 2011. Each year her parents were presented with an enrollment contract for the following school year. In January 2010, the head of school enclosed a letter along with the proposed contract for the 2010-2011 school year. In the letter sent to the Biglers, he asked them to return the contract with their deposit by February 10, 2010, in order to ensure that space was reserved for Shivani in the 11th grade.
On May 13, 2011, Shivani, represented by the Biglers as her guardians ad litem, filed a complaint against Harker and one of its teachers, Peter Itokazu. Shivani claimed that she was "mistakenly or wrongfully accused of an honor
Shivani's complaint further related an incident in March of that year, in which Itokazu sarcastically belittled and humiliated her in front of other students. Shivani had participated in an academic competition sponsored by the Rotary Club. After her team finished second, Shivani went to his classroom after school to "share the news of her accomplishment" with Itokazu. Itokazu, however, "displayed a lack of interest that confused and hurt Shivani. She mentioned to him that she thought he would be happier for her. With several students in the classroom watching, Mr. Itokazu began jumping around a desk at the front of the classroom in a sarcastic `dance,' sarcastically saying words to the effect that he was so happy with her second-place finish." He then "hopped up to Shivani and wrapped his arms around her while facing her, pinning her arms to her sides. He held Shivani tightly against him so she couldn't move or get free of his grip, then began hopping up and down with her, repeating words of similar sarcastic import as before." After several seconds of this "dancing" in front of the other students, Itokazu "released her with sufficient force to cause Shivani to fall backward onto the classroom floor, backpack and all."
Shivani asserted eight causes of action in her complaint. Against only Harker she alleged breach of contract and breach of the covenant of good faith and fair dealing, as a third-party beneficiary of the enrollment agreement signed by her parents; defamation occurring at the student assembly; and negligent hiring, retention, and/or supervision of Itokazu. She further alleged battery, defamation, and negligent infliction of emotional distress against both Harker and Itokazu arising out of Itokazu's conduct, and interference with prospective economic advantage against only Itokazu.
The same day they filed the complaint on Shivani's behalf, the Biglers initiated contractual arbitration in their own names, alleging breach of contract, breach of the covenant of good faith and fair dealing, and negligent hiring, retention, and/or supervision against Harker. Based on the same facts that were alleged in Shivani's complaint, the Biglers generally asserted that Harker violated their rights under the enrollment agreement and the
Thus, in the Biglers' first and second arbitration claims, Harker was alleged to have made an "arbitrary and capricious decision to discipline Shivani," in violation of the "rules, policies, procedures, and standards contained in the Handbook and/or any other source of rights and obligations controlling the contractual relationship between Mr. and Mrs. Bigler and Harker." In the third claim they alleged a duty by Harker, acting in loco parentis, to use reasonable care in hiring, supervising, and retaining faculty. Harker failed to use such care; it knew or should have known that Itokazu was an "unfit and/or incompetent" teacher who posed a "substantial and unreasonable risk of harm to Harker students, including Shivani."
Defendants demanded arbitration of Shivani's claims, but the Biglers refused, citing defects in the demand. On June 10, 2011, defendants petitioned the superior court for an order to compel the Biglers to arbitrate Shivani's claims. They relied on the following paragraph in the enrollment contract the Biglers had signed for the 2010-2011 school year: "
The Biglers opposed the petition on the ground that enforcement of the arbitration provision against Shivani would be procedurally and substantively unconscionable. The provision was procedurally unconscionable, they argued, because (1) the enrollment contract was a "take-it-or-leave-it, adhesory" contract imposed on them by a stronger party, (2) application of the provision would be oppressive in view of the "nature of the harm Shivani suffered and the inadequacy of the arbitral forum to make her whole," (3) the contract contained an "illegal fee-shifting provision," (4) Harker failed to provide them with a copy of the American Arbitration Association (AAA) commercial rules, and (5) the provision was presented "in the same typeface and point size as all other provisions."
Substantive unconscionability was also evident, according to the Biglers, because of "an `overly harsh' and `one-sided' effect that undermines Shivani's ability to obtain complete relief for the lifelong consequences of the damage Harker School and Mr. Itokazu inflicted on her, without requiring any corresponding sacrifice on their part." The Biglers offered a detailed picture of this damage, which meant the loss of "the use of the entire history of her enrollment at Harker School, which she needs to have access to the `top-tier' colleges and universities and increased opportunities for rewarding and remunerative career choices Harker promised her.... Without the opportunity to complete her education at Harker, all of her previous years of effort are wasted. She also lost her identity as a member of the Harker Community, together with access to her peer group and the many enriching alumni contacts Harker promised her."
Finally, the Biglers contended that the intentional torts Shivani was alleging — namely, battery, emotional distress,
In support of the Biglers' unconscionability position, Robert Bigler submitted a declaration stating, "Each year, including the 2010-2011 academic year, the enrollment contract was presented to my wife and I [sic] by Harker School on a `take-it-or-leave-it' basis.... [¶] At no time ... did Harker School ever provide my wife and I [sic] with a copy of the [AAA] Rules referenced in the enrollment contract." Harker's business manager, however, stated in his declaration that Harker had not presented the contract on a "`take-it-or-leave-it'" basis, nor had it ever communicated any unwillingness to negotiate or discuss modification of the terms. Furthermore, the Biglers had never asked whether the arbitration provision was negotiable, had never expressed a wish to modify any of the terms, and had never proposed any modification.
At the hearing on July 7, 2011, the trial court rejected the Biglers' depiction of the enrollment contract as having been presented on a "take-it-or-leave-it" basis, since nothing indicated a refusal or unwillingness by Harker to discuss or negotiate the terms, and the issue apparently had never been discussed between the parties. Instead, the court's focus was on the comprehensiveness of the arbitration provision, as it covered "any dispute." The court was further concerned with the provision for attorney fees and with the "carve-out" for tuition. Defense counsel, however, acknowledged that the attorney fee provision was inconsistent with current law and AAA procedures, and he urged the court to sever that clause entirely. As to the "carve-out" for tuition disputes, defendants pointed out that the arbitration exception was mutual, not one-sided; moreover, the most likely scenario would have been a tuition-related claim by the parents against the school (e.g., for a refund), since every academic year began with the school's having already received full payment.
On August 15, 2011, the superior court filed its order denying defendants' petition. The court agreed with the Biglers that the enrollment contract was unconscionable; that the objection to arbitration of Shivani's claims was not waived by her parents' own demand for arbitration; that because the whole agreement was unconscionable, severance was not appropriate; and that it was "highly unlikely" that the Biglers had agreed to the arbitration provision with the expectation that tort claims would be included in the process. This appeal followed.
The primary issue raised by defendants' appeal is whether Shivani's claims are subject to arbitration in accordance with the enrollment contract her parents signed. She implicitly acknowledges that she was bound by that contract to the extent that its provisions are valid.
Shivani relies on the statutory exception for unconscionability in challenging the validity of the arbitration clause in the enrollment contract. If this clause is indeed unconscionable, then all of her allegations may be pursued in a judicial forum. If, however, the provision is enforceable, then we must decide whether the tort claims are outside its scope. As the party opposing arbitration, it was Shivani who had the burden of proving the defense of unconscionability. (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236 [145 Cal.Rptr.3d 514, 282 P.3d 1217].)
Civil Code section 1670.5 indicates that unconscionability is ultimately a question of law for the court. (Flores v. Transamerica HomeFirst, Inc. (2001) 93 Cal.App.4th 846, 851 [113 Cal.Rptr.2d 376]; Gatton v. T-Mobile USA, Inc. (2007) 152 Cal.App.4th 571, 579 [61 Cal.Rptr.3d 344].) To the extent that questions of fact were presented to the trial court, we accept that court's findings if they are supported by substantial evidence. If the evidence was undisputed, however, we independently determine whether the agreement is unconscionable. (Parada v. Superior Court (2009) 176 Cal.App.4th 1554, 1567 [98 Cal.Rptr.3d 743]; Flores v. Transamerica HomeFirst, Inc., supra, 93 Cal.App.4th at p. 851, quoting Marin Storage & Trucking, Inc. v. Benco Contracting & Engineering, Inc. (2001) 89 Cal.App.4th 1042, 1055 [107 Cal.Rptr.2d 645].)
In this case the superior court first determined that the contract was adhesive, an indication of procedural unconscionability. As noted earlier, the court did not base its determination on Robert Bigler's declaration that the contract was presented on a "take-it-or-leave-it" basis. The court recognized that the evidence was conflicting on that point, and it concluded that the subject most likely "never came up." Instead, the court found that the parties to the enrollment contract had unequal bargaining positions.
We agree that the absence of the AAA rules is of minor significance to our analysis. We are, however, less convinced than the superior court that the other circumstances indicate procedural unconscionability. The arbitration clause was located at the top of the second page in a two-page document with the heading "Arbitration" in boldfaced font. The Biglers did not offer any evidence that the provision was new in 2010, nor that they had never seen it over the many years they had signed the same document for their three children. They did not complain to the Harker administration that the arbitration provision was unfair or attempt to negotiate its deletion from the terms. As in D.C. v. Harvard-Westlake School (2009) 176 Cal.App.4th 836, 868 [98 Cal.Rptr.3d 300], "[w]e cannot say, in the context of an enrollment contract with a private school, that, as a matter of law, a student's parents are unable to [persuade] the school to remove a provision they dislike." Thus, we find neither of the procedural unconscionability elements of oppression and surprise in the inclusion of an arbitration provision.
We likewise perceive insufficient indications of substantive unconscionability. Shivani represents the arbitration provision as one-sided because it states, "I understand and agree that any dispute involving the School, except with respect to my obligation to pay tuition or fees, shall be resolved by arbitration." In her view, only the parents agree to arbitration; Harker "did not
We also are not as troubled by the tuition exclusion as was the superior court. As Harker pointed out at the hearing, the "carve-out" for tuition disputes allowed either party to resolve those disputes in court — and in Harker's view, it was more likely that it would be parents bringing such actions because Harker always had their full tuition payment long before the school year began. As for the provision for attorney fees to the prevailing party, that term could easily have been severed from the contract pursuant to Civil Code section 1670.5, as Harker's counsel requested. (See Armendariz, supra, 24 Cal.4th at pp. 123-124 [explaining benefits of severance rather than voiding entire agreement].) Thus, we do not find such overly harsh or one-sided results as to "shock the conscience" in this case.
Having concluded that the arbitration clause is valid, we next address Shivani's assertion that her tort claims are outside the scope of the provision. Civil Code section 1648 states, "However broad may be the terms of a contract, it extends only to those things concerning which it appears that the parties intended to contract."
In light of California's strong public policy in favor of arbitration, "broad contractual provisions for arbitration are to be liberally construed." (United Transportation Union v. Southern Cal. Rapid Transit Dist. (1992) 7 Cal.App.4th 804, 809 [9 Cal.Rptr.2d 702].) "Doubts as to whether an arbitration clause applies to a particular dispute are to be resolved in favor of sending the parties to arbitration. The court should order them to arbitrate unless it is clear that the arbitration clause cannot be interpreted to cover the dispute." (Id. at p. 808; see Weeks v. Crow (1980) 113 Cal.App.3d 350, 352 [169 Cal.Rptr. 830].)
In RN Solution, Inc. v. Catholic Healthcare West, supra, 165 Cal.App.4th 1511, Tanya Woo, the chief executive officer (CEO) of the plaintiff recruiting
Shivani's argument, in addition to being circular, would extend to any physical contact by a teacher without a student's consent. Our inquiry, however, requires examination of the conduct and the circumstances alleged, not merely the label of the cause of action. Itokazu's act of wrapping his arms around Shivani and hopping up and down to mock her clearly was offensive and humiliating, but it occurred within the course and scope of his role as her teacher, in his classroom on a school day, concerning an academic performance she had brought to his attention. If, as the Biglers themselves asserted in their arbitration claim, Itokazu's behavior reflected his "unfitness and incompetence" as a teacher, the allegations of battery are arbitrable as coming within the relationship of the school to its student.
Shivani's eighth cause of action for negligent hiring, retention, and/or supervision must follow the other tort claims to arbitration. Her justification for withholding this claim from the disputed provision is attached to her argument regarding battery; that is, because Itokazu's conduct was "unwelcome, deeply offensive and caused [sic] severe emotional harm," it did not bear a reasonable relationship to the enrollment contract. This argument disregards the gravamen of the claim, which was primarily based on Itokazu's unfair accusation of cheating and his "belittling" of her academic performance.
We thus conclude that California's "`strong public policy in favor of arbitration'" and the circumstances alleged in Shivani's complaint call for arbitration in this case. (Moncharsh v. Heily & Blase, supra, 3 Cal.4th at p. 9.) Harker may well be found liable under the parties' contract, on a tort theory, or both, but it is the arbitrator who must resolve the questions presented in Shivani's complaint.
The order is reversed.
Rushing, P. J., and Premo, J., concurred.