Torrecillas v. Fitness Int'l, LLC

Citation266 Cal.Rptr.3d 181,52 Cal.App.5th 485
Decision Date21 July 2020
Docket NumberB296194
CourtCalifornia Court of Appeals
Parties Jose TORRECILLAS, Plaintiff and Respondent, v. FITNESS INTERNATIONAL, LLC, Defendant and Appellant.

52 Cal.App.5th 485
266 Cal.Rptr.3d 181

Jose TORRECILLAS, Plaintiff and Respondent,
v.
FITNESS INTERNATIONAL, LLC, Defendant and Appellant.

B296194

Court of Appeal, Second District, Division 8, California.

Filed July 21, 2020


Littler Mendelson, Fermin H. Llaguno and Oliver B. Dreger, Irvine, for Defendant and Appellant.

Bononi Law Group, Michael J. Bononi, Christy W. Granieri, Pasadena, and Rebecca L. Claudet for Plaintiff and Respondent.

WILEY, J.

52 Cal.App.5th 488

Jose Torrecillas agreed with his employer, Fitness International, to arbitrate

266 Cal.Rptr.3d 183

claims. Instead Torrecillas sued in court. When Fitness moved to compel arbitration, the trial court deemed the agreement unconscionable. But there was little or no unconscionability of any sort. Fitness encouraged Torrecillas to consult a lawyer and their agreement included a

52 Cal.App.5th 489

term allowing amendments if both parties agreed. Torrecillas had the opportunity to bargain and had meaningful bargaining power. The agreement's terms are standard, not shocking. Torrecillas separately argues a different employee's case against Fitness preclusively dictates a conclusion of unconscionability, but that case had different facts and a different holding. We reverse.

I

Torrecillas had a lengthy and successful career at Fitness, according to his verified complaint.

In 1998, Torrecillas began as a sales associate at Fitness. Fitness promoted him to general manager after only three months. Torrecillas became Fitness's highest paid general manager nationwide from 2001 to 2006, partly due to performance bonuses. Torrecillas set many all-time sales records. Fitness awarded him recognition for Top Performing Presale and Most Successful Grand Opening. Torrecillas's records still stood in 2017.

Torrecillas resigned from Fitness in 2007 but returned in 2008 as a sales manager. Fitness promoted him to general manager of the Irvine club within only two months because he was the highest performing sales manager in California. In October 2008, Fitness promoted Torrecillas to general manager of the Pico Rivera club, and then to general manager of the Downey club in August 2011. In October 2011, Fitness asked Torrecillas to take over as general manager of the Upland club because it was the lowest-performing club in California and Torrecillas was one of Fitness's most successful general managers. In only 30 days, Torrecillas transformed the Upland club into Fitness's highest California performer.

Torrecillas's excellent performance prompted Fitness to promote him to District Vice President in November 2011. Torrecillas was Fitness's highest earning District Vice President in the nation for several consecutive months. He was the only Vice President nationwide to hit the full $10,000 possible in performance bonuses.

In early 2013, Fitness promoted Torrecillas to Vice President of Marketing and Sales. In this new position, Torrecillas became accustomed to making well over $100,000 a year from salary, bonuses, and commissions.

In September 2014, Fitness again promoted Torrecillas, now to Vice President of Personal Training. A Fitness owner said Torrecillas was the "first round draft pick" for this position.

52 Cal.App.5th 490

As Vice President of Marketing and Sales and again as Vice President of Personal Training, Torrecillas hired employees for Fitness. Torrecillas oversaw 12 club locations.

Fitness fired Torrecillas on April 20, 2017. Torrecillas sued Fitness on August 15, 2018. Fitness moved to compel arbitration.

We recount the arbitration agreements between Torrecillas and Fitness. There were two: one in 2008, and another in 2013.

In 2008, Torrecillas signed an arbitration agreement when Fitness rehired him as a sales manager. The agreement is two pages long. It incorporates a 10-page document called "Dispute Resolution Rules and Procedures" (Rules).

The second agreement to arbitrate was in 2013, after Fitness promoted Torrecillas

266 Cal.Rptr.3d 184

to Vice President of Sales and Marketing. The evidence about the second agreement is as follows.

To accompany its motion to compel arbitration, Fitness supplied a declaration of its Vice President for Human Resources, Mindy Stokesberry. According to Stokesberry, Fitness promoted Torrecillas to Vice President of Sales and Marketing in or around February 2013. At the same time he started in the new position, Torrecillas and Fitness negotiated and executed this second agreement, which Torrecillas signed in March 2013. During the time he was entering this agreement, Torrecillas easily could access the Rules via Fitness's intranet. Stokesberry signed her declaration on January 8, 2019.

Torrecillas submitted a one-page declaration, signed January 17, 2019, in opposition to Fitness's motion to compel arbitration. Regarding his 2013 agreement, Torrecillas declared Fitness promoted him to Vice President of Marketing and Sales in or around January 2013. After working in this new position for several months, Fitness presented Torrecillas with an employment agreement and told him he must sign it to remain in the position. Torrecillas declared he signed the agreement "because I needed to in order to keep my job."

Torrecillas's declaration omitted all information about the opportunity for and extent of contract negotiation with Fitness.

Torrecillas's declaration thus is not inconsistent with Stokesberry's assertion that Fitness and Torrecillas, during the process of promoting Torrecillas to Vice President of Marketing and Sales, "negotiated and executed" this second employment agreement, which Torrecillas signed in March 2013.

52 Cal.App.5th 491

Torrecillas signed the second agreement, a seven-page employment agreement, on March 10, 2013. The first paragraph of this individualized document stated in printed font that it was an agreement "between Jose Torrecillas" and Fitness. The document then recited Fitness currently employed Torrecillas as Vice President of Sales and Marketing and that Torrecillas wished to continue to be employed by Fitness.

The 2013 agreement covered a range of standard topics: conflict of interest rules; reimbursement policies; benefits; proprietary information rules; unfair competition; and so on. One topic was compensation. Torrecillas would earn a base salary of $100,000 a year plus the possibility of bonus compensation. Another topic, one introduced with an underlined heading, was "Dispute Resolution."

The 2013 agreement superseded earlier agreements. At the same time, it partially incorporated the 2008 arbitration agreement and the Rules as we now quote. The paragraph of the 2013 agreement titled "Dispute Resolution" says, with our italics, "Except for claims for equitable relief ... and except where the law specifically forbids the use of arbitration as a final and binding remedy, all disputes between Employee and [Fitness] arising under this Agreement or relating to Employee's employment with [Fitness], including but not limited to the termination of that relationship, any allegations of unfair or discriminatory treatment arising under state or federal law, and claims for compensation and benefits, shall be resolved exclusively by final and binding arbitration in accordance with the [2008 arbitration agreement] and the [Rules], the provisions of which are incorporated herein."

The 2013 agreement stated it had been "negotiated by and between the parties ...." The agreement also stated Fitness advised Torrecillas to seek legal advice before signing. On the same page—which

266 Cal.Rptr.3d 185

was the page Torrecillas signed—a provision allowed written amendments to the agreement.

The trial court denied Fitness's motion to compel arbitration because the agreement to arbitrate was unconscionable. The trial court's minute order was as follows: "Non-negotiable contracts of adhesion are procedurally unconscionable. In two places the agreement states that if plaintiff refuses to sign, he will not be considered for employment. ¶ Limits on discovery is substantively unconscionable. The agreement limits depositions to 5, unless a motion is made to the arbitrator. ¶ Both types of unconscionability are present. ¶ The Motion to Compel Arbitration filed by Fitness International, LLC on 01/09/2019 is Denied."

52 Cal.App.5th 492

II

Our review is independent. ( 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 ( Pinnacle ).)

Torrecillas has the burden of proving unconscionability. ( OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 126, 251 Cal.Rptr.3d 714, 447 P.3d 680 ( Kho ) [party asserting unconscionability must prove it].)

The Federal Arbitration Act ( 9 U.S.C. § 1 et seq. ) ("the Act") applies, as Torrecillas agreed at oral argument. Torrecillas had to concede this point:...

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2 books & journal articles
  • Annual Update of Alternative Dispute Resolution Cases and Legislation
    • United States
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    • Invalid date
    ...(2012).7. This decision was issued in 2021, but too late to be included in the 2021 annual issue.8. Torrecillas v. Fitness Int'l LLC, 52 Cal. App. 5th 485 (2020).9. Sanchez v. Carmax Auto Superstores Cal. LLC, 224 Cal. App. 4th 398 (2014).10. Id. at 404.11. Poublon v. C.H. Robinson, 846 F. ......
  • Annual Update of Alternative Dispute Resolution Cases and Legislation
    • United States
    • California Lawyers Association Business Law News (CLA) No. 2021-1, 2021
    • Invalid date
    ...and they should only be used in commercial matters where a large amount of money is at stake.Torrecillas v. Fitness International LLC, 52 Cal. App. 5th 485 (2020) Plaintiff sued his former employer for claims arising out of his termination. The employer moved to compel arbitration. The arbi......

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