Filed 9/1/26 Maldonado v. Sully III AVH CA2/2
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion
has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION TWO
MADELINE MALDONADO, B346464
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No.
v. 24STCV28516)
SULLY III AVH LLC, ORDER MODIFYING
OPINION AND
Defendant and Respondent. DENYING PETITION
FOR REHEARING
NO CHANGE IN THE
JUDGMENT
THE COURT:
It is ordered that the opinion filed herein on August 6,
2026, be modified as follows:
1. On page 6, in the sentence beginning “(H.D. Arnaiz, Ltd. v.
County of San Joaquin” in the paragraph starting on
page 5 beginning “We need not resolve,” insert “(H.D.
Arnaiz)” after “1366–1367,” so that the full sentence reads:
(H.D. Arnaiz, Ltd. v. County of San Joaquin (2002)
96 Cal.App.4th 1357, 1366–1367 (H.D. Arnaiz).)
2. On page 6, in the sentence beginning “(See Vela v. Harbor
Rail Services” in the first full paragraph, change “Nixon,
supra, 67 Cal.App.5th at p. 944.)” to “H.D. Arnaiz, supra,
96 Cal.App.4th at p. 1367 [finding that the standard has
been satisfied when circumstances are sufficiently
compelling to indicate that the petition for writ of mandate
would have been proper in the first place].),” so that the full
sentence reads:
(See Vela v. Harbor Rail Services of California, Inc. (2026)
120 Cal.App.5th 353, 362 [treating appeal from order
compelling arbitration as a petition for writ of mandate
where “[r]eview of the order . . . [wa]s based on the same
grounds as the order dismissing and striking the class
claims, [and] w[ould] not cause any additional delay or
subvert the purpose of the arbitration statute”]; H.D.
Arnaiz, supra, 96 Cal.App.4th at p. 1367 [finding that the
standard has been satisfied when circumstances are
sufficiently compelling to indicate that the petition for writ
of mandate would have been proper in the first place].)
3. On page 6, after the paragraph beginning “We find that
Maldonado,” insert the following paragraph:
2
We have considered Sully’s arguments on this issue but
none is persuasive. Simply, it would be an undue waste of
time and expense to hold an arbitration pursuant to an
agreement that is clearly unconscionable.
4. On page 7, in the sentence beginning “This means, for
example,” in the paragraph beginning “We find that a high
degree,” change “that after her employment ceased,
Maldonado could purchase a vehicle from Sully and would
be compelled to arbitrate any lemon law claim stemming
from the condition of the vehicle or any slip-and-fall claim
stemming from her visit” to “Maldonado could have
purchased a vehicle from Sully and would have been
compelled to arbitrate any lemon law claim stemming from
the condition of the vehicle or any slip-and-fall claim
stemming from her personal visit,” so that the full sentence
reads:
This means, for example, Maldonado could have purchased
a vehicle from Sully and would have been compelled to
arbitrate any lemon law claim stemming from the condition
of the vehicle or any slip-and-fall claim stemming from her
personal visit to the dealership.
5. On page 7, at the end of the paragraph starting “Second,
the agreement is of,” insert footnote 2 as follows:
2 At oral argument, respondent’s counsel argued that
Sully sold the car dealership in August 2024, which means
the arbitration agreement was not of unlimited duration.
3
Sully forfeited this argument by failing to raise it in its
brief. (See People v. Carrasco (2014) 59 Cal.4th 924, 990.)
Regardless, this does not change our analysis of the
arbitration agreement in this case. (See Ramirez v. Charter
Communications, Inc. (2024) 16 Cal.5th 478, 493
[“ ‘[W]hether a contract is fair or works unconscionable
hardship is determined with reference to the time when the
contract was made and cannot be resolved by hindsight by
considering circumstances of which the contracting parties
were unaware’ ”].)
6. On page 9, in the sentence beginning “The FAA does not
preclude” in the paragraph beginning “The FAA preempts
state,” insert “under these circumstances” after “is
unconscionable,” so that the full sentence reads:
The FAA does not preclude the court from finding that an
arbitration agreement is unconscionable under these
circumstances.
7. On page 9, in the paragraph beginning “The FAA preempts
state,” delete “Essentially, Sully argues that no arbitration
agreement governed by the FAA could ever be found
unconscionable. We reject this proposition as meritless on
its face.”
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* * *
There is no change in the judgment.
Respondent’s petition for rehearing is denied.
____________________________________________________________
LUI, P. J. RICHARDSON, J. GOORVITCH, J.
5
Filed 8/6/26 Maldonado v. Sully III AVH CA2/2 (unmodified opinion)
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion
has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION TWO
MADELINE MALDONADO, B346464
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No.
v. 24STCV28516)
SULLY III AVH LLC,
Defendant and Respondent.
APPEAL from an order of the Superior Court of
Los Angeles County, William F. Highberger, Judge. Appeal
dismissed.
ORIGINAL PROCEEDING in mandate. Petition granted.
Wilshire Law Firm, John G. Yslas, William M. Pao,
Edward E. Kim and Matthew R. Baker for Plaintiff and
Appellant.
Callahan, Thompson, Sherman & Caudill, Robert W.
Thompson and Tina Hopper for Defendant and Respondent.
______________________________
Madeline Maldonado (Maldonado) filed a wage and hour
action against her employer, Sully III AVH LLC (Sully), asserting
both class and individual claims. The trial court granted Sully’s
motion to compel arbitration of Maldonado’s individual claims.
The court also dismissed Maldonado’s class claims without
prejudice and stayed the action. Maldonado appeals from the
court’s order.
We exercise our discretion to treat this appeal as a petition
for writ of mandate. We find that the arbitration agreement is
unconscionable, and that the trial court erred in granting the
motion to compel arbitration. We order the court to vacate its
order of April 21, 2025, and issue a new order denying the
motion.
BACKGROUND
I. The Arbitration Agreement
Maldonado was a non-exempt employee of Sully, a car
dealership doing business as Honda Lancaster, from
approximately June 2021 to August 2024. As part of her
onboarding process, Maldonado signed an arbitration agreement
(agreement). She “agree[d] to pursue any claims [she] might
have against the Company that currently exist or that may arise
in the future exclusively through binding arbitration[,]” including
“any and all claims which arise out of the employment context or
2
any other interaction/relationship we had, have or may have in
the future.”
The agreement has no expiration. Instead, the agreement
states: “It is further agreed and understood that any agreement
contrary to the foregoing must be entered into, in writing, by both
the Owner(s) and/or President of the Company and [Maldonado].
Oral promises shall not serve to modify and/or cancel this
agreement.”
Finally, the agreement requires Maldonado to arbitrate “all
claims [she] bring[s] against the Company (and any third-party
beneficiaries) . . . .” “Third-party beneficiaries” are broadly
defined as including “the Company’s owners, directors, officers,
managers, employees, agents, partners, attorneys, sister-
companies, subsidiaries, parent companies, joint-venturers,
affiliated persons/entities, independent contractors, and parties
affiliated with its employee benefit and health plans.”
II. Motion to Compel Arbitration
Maldonado filed a wage and hour class action complaint
against Sully in October 2024. Sully moved to compel arbitration
based upon the agreement, dismiss the class claims, and stay the
action (motion to compel arbitration or motion). Maldonado
opposed the motion, arguing that the agreement was both
procedurally and substantively unconscionable and could not be
saved by severing the unconscionable provisions. Among other
things, Maldonado argued that there was substantive
unconscionability because the agreement included all claims,
regardless of whether they originated from her employment, and
was of infinite duration.
Following a hearing, the trial court granted the motion to
compel arbitration on April 21, 2025. The court also dismissed
3
the class claims without prejudice and stayed the action pending
arbitration.
III. Appeal
Maldonado filed a notice of appeal in May 2025. Then, in
July 2025, she filed a representative action under the Private
Attorneys General Act of 2004 (PAGA) (Lab. Code, § 2698 et
seq.).
DISCUSSION
I. Legal Standard
“A written agreement to submit a controversy to arbitration
is valid and enforceable, absent a reason under state law, such as
unconscionability, that would render any contract revocable.
[Citations.]” (Cook v. University of Southern California (2024)
102 Cal.App.5th 312, 319–320 (Cook).)
“ ‘[U]nconscionability has both a “procedural” and a
“substantive” element,’ the former focusing on ‘oppression’ or
‘surprise’ due to unequal bargaining power, the latter on ‘overly
harsh’ or ‘one-sided’ results. [Citation.] ‘The prevailing view is
that [procedural and substantive unconscionability] must both be
present in order for a court to exercise its discretion to refuse to
enforce a contract or clause under the doctrine of
unconscionability.’ [Citation.] But they need not be present in
the same degree. ‘Essentially a sliding scale is invoked which
disregards the regularity of the procedural process of the contract
formation, that creates the terms, in proportion to the greater
harshness or unreasonableness of the substantive terms
themselves.’ [Citations.] In other words, the more substantively
oppressive the contract term, the less evidence of procedural
unconscionability is required to come to the conclusion that the
4
term is unenforceable, and vice versa.” (Armendariz v.
Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83,
114 (Armendariz).)
II. Appealability
As an initial matter, the parties dispute whether this is an
appealable order. An order granting a motion to compel
arbitration “generally is not immediately appealable.
[Citations.]” (Nixon v. AmeriHome Mortgage Co., LLC (2021)
67 Cal.App.5th 934, 943 (Nixon).) However, Maldonado argues
that because the trial court dismissed the class action claims,
there is an exception under the “death knell” doctrine. The
doctrine provides that an order dismissing a class action suit is
immediately appealable, because it amounts to a de facto final
judgment for the absent class members. (Young v. RemX, Inc.
(2016) 2 Cal.App.5th 630, 634.)
Sully argues that the doctrine does not apply because the
claims were dismissed without prejudice, though the case Sully
cites—Aleman v. Airtouch Cellular (2012) 209 Cal.App.4th 556,
585–586—is distinguishable. That case involved an order
denying a motion for class certification, and as a different panel
of this division noted, “the remaining plaintiffs [we]re free to
move for class certification again.” (Id. at p. 586.) Sully also
argues that the “death knell” doctrine does not apply because
Maldonado filed a representative PAGA action.
We need not resolve this dispute because we exercise our
discretion to dismiss the appeal and treat it as a petition for writ
of mandate.1 “An appellate court has discretion to treat a
1 Concurrent with its respondent’s brief, Sully filed a motion
to dismiss Maldonado’s appeal. In light of our treatment of the
appeal, we deny Sully’s motion to dismiss as moot.
5
purported appeal from a nonappealable order as a petition for
writ of mandate, but that power should be exercised only in
unusual circumstances. [Citation.]” (H.D. Arnaiz, Ltd. v. County
of San Joaquin (2002) 96 Cal.App.4th 1357, 1366–1367.) “[W]rit
review of orders compelling arbitration is proper . . . (1) if the
matters ordered arbitrated fall clearly outside the scope of the
arbitration agreement or (2) if the arbitration would appear to be
unduly time consuming or expensive. [Citations.]” (Zembsch v.
Superior Court (2006) 146 Cal.App.4th 153, 160 (Zembsch).)
We find that Maldonado has satisfied this standard and
that writ review is warranted. (See Vela v. Harbor Rail Services
of California, Inc. (2026) 120 Cal.App.5th 353, 362 [treating
appeal from order compelling arbitration as a petition for writ of
mandate where “[r]eview of the order . . . [wa]s based on the same
grounds as the order dismissing and striking the class claims,
[and] w[ould] not cause any additional delay or subvert the
purpose of the arbitration statute”]; Nixon, supra, 67 Cal.App.5th
at p. 944.)
III. Waiver
Sully also argues that Maldonado waived her appeal
because she participated in the court-ordered arbitration. We
disagree. In this context, waiver is a voluntary relinquishment of
a known right. (See Desert Regional Medical Center, Inc. v.
Miller (2022) 87 Cal.App.5th 295, 315.) Maldonado did not
consent to arbitration, so there has been no waiver.
IV. Unconscionability
“In a mandate proceeding challenging an order compelling
arbitration, we decide the issue of enforceability of the arbitration
clause de novo. [Citation.]” (Zembsch, supra, 146 Cal.App.4th at
p. 162; see also Ramirez v. Charter Communications, Inc. (2024)
6
16 Cal.5th 478, 493 (Ramirez) [“Appellate review of an order
regarding an arbitration agreement’s validity is de novo if the
evidence is not in conflict and the ruling is based entirely on an
interpretation of law”].)
We agree with Maldonado and our sister courts that an
arbitration agreement like this one is unconscionable. (See Phan
v. Knight Sacramento SU Inc. (2026) 121 Cal.App.5th 641, 653–
659 (Phan); Stoker v. Blue Origin, LLC (2026) 120 Cal.App.5th
91, 105–111 (Stoker); Cook, supra, 102 Cal.App.5th at pp. 321–
328.) There is procedural unconscionability because the trial
court found that the agreement was “a condition of
employment[.]” An adhesion contract, like the agreement here, is
“subject to scrutiny because [it is] ‘not the result of freedom or
equality of bargaining.’ [Citation.] However, [it] remain[s] valid
and enforceable unless the resisting party can also show that one
or more of the contract’s terms is substantively unconscionable or
otherwise invalid.” (Ramirez, supra, 16 Cal.5th at pp. 492–493.)
We find that a high degree of substantive unconscionability
exists here for three reasons. First, the scope of the agreement is
broad. It covers “any and all claims which arise out of the
employment context or any other interaction/relationship we had,
have or may have in the future.” This means, for example, that
after her employment ceased, Maldonado could purchase a
vehicle from Sully and would be compelled to arbitrate any lemon
law claim stemming from the condition of the vehicle or any slip-
and-fall claim stemming from her visit to the dealership.
Second, the agreement is of infinite duration. The
agreement applies to claims the parties “may have in the future,”
and survives in perpetuity unless Sully agrees to cancel the
agreement in writing.
7
Finally, there is a lack of mutuality in claims covered by
the agreement. It requires Maldonado to arbitrate any and all
claims she may have against Sully and “third-party
beneficiaries,” which includes not only Sully’s owners, officers,
and employees, but also outsiders like “joint-venturers, affiliated
persons/entities, independent contractors, and parties affiliated
with [Sully’s] employee benefit and health plans.” At the same
time, the agreement does not require any of these third-party
beneficiaries to arbitrate their claims against Maldonado.
The combined effect of the procedural unconscionability
and substantive unconscionability satisfies “the overall test of
unconscionability.” (Pinela v. Neiman Marcus Group, Inc. (2015)
238 Cal.App.4th 227, 250; see also Phan, supra, 121 Cal.App.5th
at pp. 653–659; Stoker, supra, 120 Cal.App.5th at pp. 104–112;
Cook, supra, 102 Cal.App.5th at pp. 321–328.)
V. Severance
“ ‘An unconscionable contractual term may be severed and
the resulting agreement enforced, unless the agreement is
permeated by an unlawful purpose, or severance would require a
court to augment the agreement with additional terms.
[Citation.]’ Severance may be properly denied when the
agreement contains more than one unconscionable provision, and
‘ “there is no single provision a court can strike or restrict in
order to remove the unconscionable taint from the agreement.”
[Citation.]’ [Citation.]” (Cook, supra, 102 Cal.App.5th at
pp. 328–329.)
Here, we cannot sever the offending provisions. Rather, we
would have to substantively rewrite the arbitration agreement to
contradict its plain language and add an expiration date or event.
“[T]he central purpose of the Agreement was to require
8
[Maldonado] to arbitrate all [past, present, and future] claims
against [Sully] and its third parties, whether related to
employment or not.” (Phan, supra, 121 Cal.App.5th at p. 659.)
Because the unconscionability permeates the entire agreement,
severance is not an option. (See Ramirez, supra, 16 Cal.5th at
p. 516; Cook, supra, 102 Cal.App.5th at p. 330.)
V. The Federal Arbitration Act
Finally, Sully argues that the Federal Arbitration Act
(FAA) (9 U.S.C. § 1 et seq.) “applies and preempts the state law
decision in Cook as it is hostile to arbitration and in
contravention of generally applicable contract principles.”
The FAA preempts state legislation that would restrict the
enforcement of arbitration agreements. (Armendariz, supra,
24 Cal.4th at p. 98.) The FAA does not preclude the court from
finding that an arbitration agreement is unconscionable. (Id. at
pp. 98–99.) Essentially, Sully argues that no arbitration
agreement governed by the FAA could ever be found
unconscionable. We reject this proposition as meritless on its
face.
DISPOSITION
The appeal is dismissed. Deeming the appeal a petition for
writ of mandate, the petition is granted. The trial court is
directed to (1) vacate its order of April 21, 2025, and (2) enter a
new order denying Sully’s motion to compel arbitration. Each
9
side is to bear its own costs on appeal and in connection with this
writ proceeding.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
GOORVITCH, J.
We concur:
LUI, P. J.
RICHARDSON, J.
10