Unconscionable Arb Provision Held Severable

Trabert v. Consumer Portfolio Servs., Inc., No D065556 (D4d1 Mar. 3, 2015)

This case involves a rather poorly drafted arbitration clause in a used car sales contract. In a prior appeal, the court had found that one discrete parts of the clause was unconscionable, but remanded to the trial court to decide whether they were severable. The trial court said no severance, but the court of appeal disagrees. Generally, the rule in California favors severance. Here, the problematic clauses—which dealt with the finality of an arbitral award—could be severed by removing the language that made certain awards non-final.

Reversed.

Update: Review granted, June 10, 2015.