BMW/Mini Arbitration Contract Permeated By Unconscionability.

A retail sales installment contract used to purchase an automobile that was one page, 8.5” wide and 26” long. There were numerous and extensive provisions on both sides. Plaintiffs were asked to sign, or initial, 12 places on the front side, but, no places on the back side. An arbitration clause was on the back side toward the bottom. Shortly after purchasing the car, plaintiffs experienced problems with it, including an intermittently inoperable window, inoperable headlamps, a repeatedly illuminated “check engine light,” sluggish acceleration, poor gas mileage, and a “knocking noise.” Plaintiffs took the car to a BMW dealership to be repaired, but the dealer did not correct the problems. One of the many provisions within the arbitration provision stated: “The arbitrator’s award shall be final and binding on all parties, except that in the event the arbitrator’s award for a party is $0 or against a party is in excess of $100,000, or includes an award of injunctive relief against a party, that party may request a new arbitration under the rules of the  arbitration organization by a three-arbitrator panel.” Another provision stated: “If any part of this Arbitration Clause, other than waivers of class action rights, is deemed or found to be unenforceable for any reason, the remainder shall remain enforceable. If a waiver of class action rights is deemed or found to be unenforceable for any reason in a case in which class action allegations have been made, the remainder of this Arbitration Clause shall be unenforceable.” The trial court granted the motion to compel arbitration, and the appellate court reversed, finding the “sale contract does not require the arbitration of disputes between a purchaser and a car dealer because it is permeated by unconscionability.” Vargas v. SAI Monrovia B, Inc.  (Cal. App. Second Dist., Div. 1; June 4, 2013) 216 Cal.App.4th 1269.