# Fuentes v. Empire Nissan

> California Supreme Court · February 2, 2026

URL: https://www.frixlaw.com/law-library/cases/11249461

## Case

- **Court:** California Supreme Court
- **Decided:** February 2, 2026
- **Precedential status:** Published
- **Opinion:** Opinion
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

IN THE SUPREME COURT OF
CALIFORNIA

EVANGELINA YANEZ FUENTES,
Plaintiff and Respondent,
v.
EMPIRE NISSAN, INC., et al.,
Defendants and Appellants.

S280256

Second Appellate District, Division Eight
B314490

Los Angeles County Superior Court
20STCV35350

February 2, 2026

Justice Groban authored the opinion of the Court, in which
Justices Corrigan, Liu, Kruger, Evans, and Stewart* concurred.

Chief Justice Guerrero filed a dissenting opinion.

*
Presiding Justice of the Court of Appeal, First Appellate
District, Division Two, assigned by the Chief Justice pursuant
to article VI, section 6 of the California Constitution.
FUENTES v. EMPIRE NISSAN, INC.
S280256

Opinion of the Court by Groban, J.

To establish that a contract is unenforceable because it is
unconscionable, the party opposing enforcement must show
unfairness both in the procedure by which the contract was
formed and the substance of its terms. Here, we consider how
to account for illegibility in this analysis. The trial court relied
on Davis v. TWC Dealer Group, Inc. (2019) 41 Cal.App.5th 662,
674 (Davis) to conclude that small, difficult-to-read print
supports a finding of substantive unconscionability as well as
procedural unconscionability. Disagreeing with Davis, the
Court of Appeal held that “tiny and unreadable print” is a
problem of procedural unconscionability only and should not be
double counted as a problem of substantive unconscionability.
(Fuentes v. Empire Nissan, Inc. (2023) 90 Cal.App.5th 919, 930
(Fuentes).) We granted review to resolve this conflict. We hold
that a contract’s format generally is irrelevant to the
substantive unconscionability analysis, which focuses on the
fairness of the contract’s terms, but that courts must closely
scrutinize the terms of difficult-to-read contracts for unfairness
or one-sidedness. We remand for further consideration in light
of our clarification of the law.

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Opinion of the Court by Groban, J.

I. FACTUAL AND PROCEDURAL BACKGROUND
When applying to work at Empire Nissan,1 Evangelina
Yanez Fuentes signed a document titled “Applicant Statement
and Agreement.” The document contains a provision mandating
arbitration of “all disputes which may arise out of the
employment context.” The document also provides that any
future modification of its terms must be “in writing and signed
by the President of the Company.”
The document is printed in a very small font and its text
is so blurry and broken up that it is nearly unreadable. Its
arbitration provision is a lengthy, densely printed paragraph
consisting of complex sentences filled with legal jargon and
statutory references. The trial court — quoting our description
of a similarly formatted agreement in OTO, L.L.C. v. Kho (2019)
8 Cal.5th 111, 128 (Kho) — described the document as “ ‘visually
impenetrable’ ” to the point that it “ ‘challenge[s] the limits of
legibility.’ ”
The document was part of an employment application
packet that Empire Nissan gave Fuentes only five minutes to
review. Fuentes spent most of this time filling out the
employment application form. She was told that the documents
in the packet had to do with her employment application,
contacting her references, and a drug testing requirement, that
she had to complete the documents to work for Empire Nissan,
and that she should hurry because the drug testing facility was

1
We refer to appellants Empire Nissan, Inc., Romero
Motors Corporation, and Oremor Management & Investment
Company collectively as “Empire Nissan.”

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about to close. She was not offered an opportunity to ask
questions. She did not receive a copy.
Fuentes later signed — at Empire Nissan’s request — two
confidentiality agreements that are substantially identical to
each other. The documents provide that Fuentes will not
“usurp, for personal gain, any opportunities in the Dealership’s
line of business.” They also prohibit her from using or disclosing
confidential information and trade secrets. Each document
provides that it “supersedes any and all prior agreements” on
the covered subjects. If Fuentes breaches the agreements, they
authorize Empire Nissan to seek “any proper injunction” in
addition to “any other remedies available . . . at law or in
equity.” If “legal action is taken to enforce” the agreements, the
prevailing party is entitled to attorney fees and costs. There is
no signature from Empire Nissan’s president on the copy of
either of the two confidentiality agreements that appears in the
record.
When Fuentes had been working for Empire Nissan for
about two and a half years, she went on medical leave for cancer
treatment. A year later, Fuentes requested a brief extension of
her leave before returning to work. Empire Nissan terminated
her employment, and Fuentes filed a complaint in court alleging
wrongful discharge and related claims.
Empire Nissan responded with a motion to compel
arbitration, which Fuentes opposed. She argued, first, that
Empire Nissan had not proved that there was a valid agreement
to arbitrate because enforcing the agreement would be contrary
to public policy due to the agreement’s illegibility and the fact
that Empire Nissan gave her so little time to review it. Second,

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Fuentes argued that even if there was a valid arbitration
agreement, it was unenforceable because it was unconscionable.
The trial court denied Empire Nissan’s motion, concluding
that the arbitration agreement was unconscionable; it did not
reach Fuentes’s argument that Empire Nissan had not proved
that the arbitration agreement was valid. The court found that
the agreement’s text was barely legible, it was difficult to
understand, and Empire Nissan had not provided Fuentes a
meaningful opportunity to review it or negotiate its terms.
Based on these findings, the court ruled that Fuentes had
established “a very high degree of procedural
unconscionability.”
The court further ruled that Fuentes had established “a
low to moderate degree of substantive unconscionability.”
Citing our decision in Kho, supra, 8 Cal.5th 111 and the Court
of Appeal’s decision in Davis, supra, 41 Cal.App.5th at page 674,
it concluded that the agreement’s “ ‘fine-print terms’ ” were
indicative of substantive unconscionability. The court found
further indication of substantive unconscionability in the
confidentiality agreements’ apparent carveout from the
arbitration agreement of unfair competition, trade secret, and
confidentiality claims — claims that Empire Nissan, not
Fuentes, would bring.
Empire Nissan appealed and the Court of Appeal reversed
in a divided opinion. The majority concluded that arguments
about illegibility go exclusively to procedural
unconscionability — not to substantive unconscionability, as the
trial court had concluded. (Fuentes, supra, 90 Cal.App.5th at
p. 929.) In reaching this holding, the court criticized and
declined to follow Davis, supra, 41 Cal.App.5th at page 662,

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Opinion of the Court by Groban, J.

which held that a similarly formatted arbitration agreement
was substantively unconscionable. The Davis court based this
holding in part on its understanding of Kho’s reference to “ ‘fine-
print terms’ ” as meaning terms “ ‘so small as to challenge the
limits of legibility.’ ” (See Davis, at p. 674.) Relying on the
principle that “federal and California law strongly favor
arbitration,” the majority interpreted the confidentiality
agreements as requiring arbitration of claims brought under
them. (Fuentes, at p. 931.) Based on this interpretation, it held
that “there is no substantive unconscionability.” (Id. at p. 936.)
Having so held, the court stated, “we need not and do not
address procedural unconscionability.” (Ibid.)
The dissent would have held that Fuentes had shown the
“low degree of substantive unconscionability” required given the
high degree of procedural unconscionability involved in the
agreement’s formation. (Fuentes, supra, 90 Cal.App.5th at
p. 938 (dis. opn. of Stratton, P. J.).) The dissenting justice noted
that in Kho, we “appeared to endorse the idea that ‘fine-print
terms’ would support a finding of substantive, as well as
procedural, unconscionability.” (Fuentes, at pp. 938–939 (dis.
opn. of Stratton, P. J.).) She observed that if fine print can
indicate substantive unconscionability, “then the fine print
here, which is so small as to challenge the limits of legibility,
qualifies.” (Id. at p. 939 (dis. opn. of Stratton, P. J.).)
We granted review.
II. DISCUSSION
Fuentes argues that the arbitration agreement is
unenforceable because it is unconscionable and, alternatively,
that no valid agreement to arbitrate exists because the
agreement’s almost illegible format and the way it was

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presented to her precluded her assent to its terms. We consider
each of these arguments in turn. Because the parties do not
dispute the trial court’s factual findings, our review is de novo.
(Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5th
478, 493 (Ramirez).)
A. Unconscionability
“The general principles of unconscionability are well
established. A contract is unconscionable if one of the parties
lacked a meaningful choice in deciding whether to agree and the
contract contains terms that are unreasonably favorable to the
other party.” (Kho, supra, 8 Cal.5th at p. 125.) We have referred
to these two aspects of unconscionability as its “procedural and
substantive elements.” (Pinnacle Museum Tower Assn. v.
Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223,
246 (Pinnacle).) The procedural element concerns “the
circumstances of contract negotiation and formation,”
particularly “oppression or surprise due to unequal bargaining
power.” (Ibid.) The substantive element, by contrast, concerns
“the fairness of an agreement’s actual terms,” i.e., whether those
terms “are overly harsh or one-sided.” (Ibid.)
“Both procedural and substantive elements must be
present to conclude a term is unconscionable, but these required
elements need not be present to the same degree.” (Ramirez,
supra, 16 Cal.5th at p. 493.) Courts “apply a sliding scale
analysis under which ‘the more substantively oppressive [a]
term, the less evidence of procedural unconscionability is
required to come to the conclusion that the term is
unenforceable, and vice versa.’ ” (Ibid.)
When there is substantial procedural unconscionability,
“even a relatively low degree of substantive unconscionability

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may suffice to render the agreement unenforceable.” (Kho,
supra, 8 Cal.5th at p. 130.) “Substantive terms that, in the
abstract, might not support an unconscionability finding take on
greater weight when imposed by a procedure that is
demonstrably oppressive. Although procedural
unconscionability alone does not invalidate a contract, its
existence requires courts to closely scrutinize the substantive
terms ‘to ensure they are not manifestly unfair or one-sided.’ ”
(Ibid.) “The ultimate issue in every case is whether the terms of
the contract are sufficiently unfair, in view of all relevant
circumstances, that a court should withhold enforcement.”
(Sanchez v. Valencia Holding Co., LLC (2015) 61 Cal.4th 899,
912 (Sanchez).)
1. The Arbitration Agreement Was Imposed with a High
Degree of Procedural Unconscionability
The parties debate the degree of procedural
unconscionability present here.
Some procedural unconscionability is present whenever
an agreement “is a contract of adhesion, i.e., a ‘standardized
contract which, imposed and drafted by the party of superior
bargaining strength, relegates to the subscribing party only the
opportunity to adhere to the contract or reject it.’ ” (Ramirez,
supra, 16 Cal.5th at p. 492.) Although ordinary contracts of
adhesion “ ‘ “are indispensable facts of modern life that are
generally enforced,” ’ ” they pose a “ ‘ “ ‘clear danger of
oppression and overreaching.’ ” ’ ” (Id. at p. 494.) Because
contracts of adhesion are “ ‘not the result of freedom or equality
of bargaining,’ ” we examine them carefully. (Id. at p. 492.)
Empire Nissan acknowledges that the agreement here is
a contract of adhesion and concedes, as it must, that Fuentes

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has proved at least some procedural unconscionability. The
question then becomes one of the degree of procedural
unconscionability, and by extension, the degree of scrutiny with
which we search the substance of the agreement’s terms for
unfairness and one-sidedness. (Kho, supra, 8 Cal.5th at p. 126.)
A greater degree of procedural unconscionability is present
when the circumstances of a contract’s formation evince
“oppression” or “surprise” beyond that usually present in a
contract of adhesion. (Ibid.)
“ ‘ “Oppression occurs where a contract involves lack of
negotiation and meaningful choice.” ’ ” (Pinnacle, supra,
55 Cal.4th at p. 247.) “Courts ‘must be “particularly attuned” to
this danger in the employment setting, where “economic
pressure exerted by employers on all but the most sought-after
employees may be particularly acute.” ’ ” (Ramirez, supra,
16 Cal.5th at p. 494.)
Where, as here, a prospective employer directs an
applicant to sign an arbitration agreement as part of the
employment application process, the economic pressure on the
applicant to sign the agreement is particularly high. Empire
Nissan did not provide Fuentes a meaningful opportunity to
review the agreement or ask questions about it, much less to
negotiate its terms. When presented with the application
packet, Fuentes was told she should hurry because the drug
testing facility was about to close. The company gave her only
five minutes to complete the packet. It did not verbally inform
her that the packet included an arbitration agreement or
provide her a copy of the form after she signed it. These
circumstances constitute significant oppression. (Kho, supra,
8 Cal.5th at pp. 127–128.)

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“[S]urprise” is present when an agreement’s meaning is
difficult to ascertain, such as when “ ‘ “the allegedly
unconscionable provision is hidden within a prolix printed
form.” ’ ” (Pinnacle, supra, 55 Cal.4th at p. 247.) Small font size
and illegibility can also support a finding of surprise. (Kho,
supra, 8 Cal.5th at p. 128.)
The formation of Fuentes’s agreement involved an
unusually high degree of surprise. The agreement is printed in
a tiny, blurry font, making it very difficult to read. Once the text
is deciphered, the agreement’s language presents a further
barrier to understanding: The reader is confronted with a
collection of complex sentences replete with legal jargon and
statutory references. As the Court of Appeal observed, the
arbitration agreement consists of a “mammoth” paragraph
consisting of “something like 900 words,” with 35 lines squeezed
into “about three vertical inches” of text. (Fuentes, supra,
90 Cal.App.5th at p. 923.) One sentence, by itself, is 214 words
long. The paragraph refers to six different statutes by name, in
addition to referring generally to “other applicable state or
federal laws or regulations.” (Ibid.) The paragraph also refers
to various government agencies and cites, without explanation,
several sections of the California code. (See Kho, supra,
8 Cal.5th at p. 128 [citing similar phrasing as evidence of
surprise].) Taken together, the agreement’s difficult-to-read
text and prolix language present a substantial barrier to
understanding its terms. Indeed, it is hard to understand why
an employer would present an important legal agreement to its

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Opinion of the Court by Groban, J.

employees in such a form.2 In relation to a similarly presented
arbitration agreement, we observed in Kho: “A layperson trying
to navigate this block text, printed in tiny font, would not have
an easy journey.” (Kho, at p. 128.)
Our policy favoring the enforcement of arbitration
agreements is rooted in “respect for the parties’ mutual and
voluntary agreement to resolve disputes by this alternative
means.” (Kho, supra, 8 Cal.5th at p. 129.) Here, the significant
oppression and unusually high degree of surprise involved in the
agreement’s formation undermine the policies that normally
favor enforcement. The agreement’s formatting and the way
Empire Nissan presented it to Fuentes “did not promote
voluntary or informed agreement to its terms.” (Ibid.) Indeed,
even after she signed it, discerning its substance would have
involved an investment of effort and expense — obtaining a
copy, deciphering its almost illegible print, and hiring a
lawyer — that an employee would be unlikely to make until a
serious employment dispute arose.
Because the circumstances under which Fuentes signed
the agreement involved such a high degree of procedural
unconscionability, even a low degree of substantive

2
Issues around the formatting of employment contracts do
not appear to be confined to this case. (See e.g., Kho, supra,
8 Cal.5th at p. 128; Davis, supra, 41 Cal.App.5th at pp. 672–
673; Yeomans v. World Financial Group Insurance Agency, Inc.
(N.D.Cal. 2020) 485 F.Supp.3d 1168, 1185.) The Legislature
may wish to consider specifying requirements for employment
contracts that promote legibility and comprehensibility, as it
has with other types of contracts. (See, e.g., Code Civ. Proc., §
1295; Bus. & Prof. Code, § 7159, subd. (c); Ins. Code, § 12820,
subd. (b)(4); Civ. Code, § 1630.)

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Opinion of the Court by Groban, J.

unconscionability may render the agreement unenforceable.
(Kho, supra, 8 Cal.5th at p. 130.)
2. The Court of Appeal Erred in Its Evaluation of
Substantive Unconscionability
Fuentes argues that the arbitration agreement’s terms are
unfairly one-sided, particularly when viewed through the prism
of the high degree of procedural unconscionability present here.
Empire Nissan contends that Fuentes has not shown any
substantive unconscionability.
The substantive unconscionability analysis “examines the
fairness of a contract’s terms. This analysis ‘ensures that
contracts, particularly contracts of adhesion, do not impose
terms that have been variously described as “ ‘ “overly harsh” ’ ”
(Stirlen v. Supercuts, Inc. (1997) 51 Cal.App.4th 1519, 1532),
“ ‘unduly oppressive’ ” (Perdue v. Crocker National Bank (1985)
38 Cal.3d 913, 925), “ ‘so one-sided as to “shock the
conscience” ’ ” (Pinnacle[, supra,] 55 Cal.4th [at p.] 246), or
“unfairly one-sided” (Little [v. Auto Stiegler, Inc. (2003)]
29 Cal.4th [1064].) All of these formulations point to the central
idea that the unconscionability doctrine is concerned not with “a
simple old-fashioned bad bargain” [citation], but with terms that
are “unreasonably favorable to the more powerful party.” ’ ”
(Kho, supra, 8 Cal.5th at pp. 129–130.) “[W]here, as here, the
written agreement has been prepared entirely by the employer,
it is a ‘well established rule of construction’ that any ambiguities
must be construed against the drafting employer and in favor of
the nondrafting employee. (Sandquist v. Lebo Automotive, Inc.
(2016) 1 Cal.5th 233, 248 (Sandquist).) “Ultimately, the
question is whether [the nondrafting employee], through

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oppression and surprise, was coerced or misled into making an
unfair bargain.” (Kho, at p. 136.)
a. “Fine-print Terms”
Fuentes first argues that the agreement’s tiny print and
almost illegible format rendered it substantively
unconscionable. In support of this argument, Fuentes relies on
Kho, supra, 8 Cal.5th at page 130, where we included “fine-print
terms” in a list of categories of terms that may be substantively
unconscionable because they “ ‘ “impair the integrity of the
bargaining process or otherwise contravene the public interest
or public policy” ’ or attempt to impermissibly alter fundamental
legal duties.” (Ibid.) She notes that in Davis, 41 Cal.App.5th at
page 674, the Court of Appeal cited this passage from Kho to
support its conclusion that print “ ‘so small as to challenge the
limits of legibility’ ” indicated substantive unconscionability.
Empire Nissan counters that our reference to “fine-print
terms” in Kho, 8 Cal.5th at page 130, is not merely a reference
to font size, as the Davis court seems to have understood it. That
is correct. The expression “fine-print terms” refers to
substantively unfair or one-sided terms hidden in a legal
document. Such terms may be hidden in a variety of ways,
including by printing them in text that is smaller than the
surrounding text, burying them in a large block of text, or
placing them in a part of the document likely to be overlooked.
(See, e.g., Fisher v. MoneyGram Intern., Inc. (2021) 66
Cal.App.5th 1084, 1103 [back of document]; Murrey v. Superior
Court (2023) 87 Cal.App.5th 1223, 1238 [click boxes for
electronic signature of lengthy documents].) The common theme
is that the terms are both hidden and unfavorable to the
nondrafting party. In Kho, we cited our decision in Sonic-

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Calabasas A, Inc. v. Moreno (2013) 57 Cal.4th 1109, 1145
(Sonic), in which we observed that the substantive
unconscionability analysis is concerned with terms that are
“ ‘unreasonably favorable to the more powerful party.’ ” Quoting
from Williston on Contracts, we provided a list of examples of
such terms that included “ ‘fine-print terms.’ ” The Williston
treatise observes that contract terms “whether in fine print or
legal ‘gobbledygook’ would hardly be of concern unless they were
substantively harmful to the nondrafting party as well.” (8
Williston, Contracts (4th ed. 2010) § 18:10.) This context makes
clear that we did not mean by our reference to “fine-print terms”
in Kho that a contractual term could be substantively
unconscionable merely because it was printed in a small font.
As to the arbitration agreement at issue here, we agree
with Empire Nissan that its tiny print and almost illegible
format do not indicate substantive unconscionability. An
otherwise fair and mutual term is not made substantively
unconscionable by printing it in a manner that makes it difficult
to read; the fact that a term is printed in tiny, blurry font does
not alone make it harsh, one-sided, or otherwise unreasonably
unfair. (See Kho, supra, 8 Cal.5th at pp. 129–130.) As we have
explained, small font size is indicative of procedural
unconscionability because it contributes to the element of
surprise. Accordingly, small font size can provide a basis for
requiring a lesser showing of substantive unconscionability in
the sliding scale analysis. But because font size does not affect
the substance of an agreement’s terms, it cannot render a
contractual term substantively unconscionable.

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b. Mutuality of Arbitration Mandate
Fuentes next argues that the arbitration agreement is
substantively unconscionable because, when considered
together with the confidentiality agreements, it is unfairly one-
sided. We have held that “[g]iven the disadvantages that may
exist for plaintiffs arbitrating disputes, it is unfairly one-sided
for an employer with superior bargaining power to impose
arbitration on the employee as plaintiff but not to accept such
limitations when it seeks to prosecute a claim against the
employee, without at least some reasonable justification for such
one-sidedness based on ‘business realities.’ ” (Armendariz v.
Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th
83, 117 (Armendariz).) The trial court rejected Empire Nissan’s
business justification argument, and the company has not made
any such argument to us. Whether the confidentiality
agreements support a finding of substantive unconscionability
therefore turns on whether they created a one-sided exemption
from arbitration for claims that Empire Nissan would prosecute
against Fuentes.
Fuentes interprets the confidentiality agreements as
exempting claims brought under them from the arbitration
agreement’s general mandate that all claims related to her
employment must be resolved in arbitration. Fuentes contends
that these exemptions are unfair because claims for violations
of the confidentiality agreements — which prohibit Fuentes
from engaging in unfair competition with Empire Nissan or
using or disclosing confidential information and trade secrets
obtained through her employment — would only ever be
brought by Empire Nissan, never by Fuentes. As Fuentes reads
the confidentiality agreements, they allow Empire Nissan to sue
her in court, while the arbitration agreement requires Fuentes

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to arbitrate all claims she may have against Empire Nissan.
Fuentes argues that this renders the agreements, considered
together, substantively unconscionable. Empire Nissan, for its
part, does not dispute that an exemption for claims brought
under the confidentiality agreements would render the
arbitration agreement one-sided. But it contends that the
confidentiality agreements do not contemplate any particular
forum for their enforcement, and that the arbitration
agreement — which requires any exemption from it to be signed
by Empire Nissan’s president — therefore controls.
Our goal in interpreting the confidentiality agreements is
to give effect to the parties’ “ ‘mutual intention’ ” at the time of
their signing. (Waller v. Truck Ins. Exchange, Inc. (1995)
11 Cal.4th 1, 18.) To discern the parties’ intention, we look first
to the agreements’ text. (Ibid.) Nothing in the text of the
confidentiality agreements limits Empire Nissan’s right to bring
its claims under the agreements in court. Indeed, the
agreements specify that Empire Nissan may seek any remedies
available at law or in equity and that the prevailing party in a
“legal action” to enforce the agreements may recover attorney
fees and costs. We understand “legal action” in its ordinary,
popular sense, which — contrary to the dissent’s view — is a
proceeding in court, not an arbitration. (Civ. Code, § 1644
[words of a contract are generally to be understood “in their
ordinary and popular sense”]; see, e.g., Code Civ. Proc. § 22 [“An
action is an ordinary proceeding in a court of justice . . . .”
(italics added); Black’s Law Dict. (12th ed. 2024) [defining
“action” to mean a “civil or criminal judicial proceeding; esp.
lawsuit”].) Most significantly, the confidentiality agreements
make no reference to arbitration. The arbitration agreement, by
contrast, consistently uses the words “arbitrate” and

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“arbitration” when that is what it means and uses “court” and
“action” to refer to judicial proceedings. The absence of any
reference to arbitration in the confidentiality agreements
suggests that, at the time of their signing, the parties did not
intend for claims under them to be subject to mandatory
arbitration. (Waller, at p. 18.)
The dissent would have us read the absence of a statement
that expressly “confers on Empire Nissan the right to pursue
claims in court” as an indication that the parties intended to
require Empire Nissan to arbitrate its claims. (Dis. opn. of
Guerrero, C. J., post, at p. 9.) To be sure, the confidentiality
agreements could have been more explicit in authorizing Empire
Nissan to bring claims for their breach in court. (See, e.g.,
Carmona v. Lincoln Millennium Car Wash, Inc. (2014)
226 Cal.App.4th 74, 80 [confidentiality agreement providing:
“ ‘Any breach or threatened breach of this Agreement, therefore
may be present[ed] . . . to either a court or binding arbitrator
. . .’ ”].) But we part ways with the dissent because, as a general
matter, no agreement is necessary to authorize the parties to a
contract to pursue breach of contract actions in court.
Arbitration “ ‘ “ ‘is strictly a matter of consent’ ” ’ ” — absent an
agreement to arbitrate, the default rule is that parties may
litigate breach of contract claims in court. (Ford Motor Warranty
Cases (2025) 17 Cal.5th 1122, 1129.) The confidentiality
agreements’ silence about the forum for dispute resolution
therefore indicates that the parties did not intend disputes to be
subject to mandatory arbitration. (See ibid. [“ ‘Arbitration is “a
way to resolve those disputes — but only those disputes — that
the parties have agreed to submit to arbitration” ’ ”].) At least
when read in isolation, the confidentiality agreements reflect an

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understanding that Empire Nissan may bring its claims in
court.
Reading the confidentiality agreements together with the
arbitration agreement, however, reveals an ambiguity
concerning whether the parties intended claims under the
confidentiality agreements to be subject to mandatory
arbitration. (See Alberto v. Cambrian Homecare (2023)
91 Cal.App.5th 482, 490–491 [citing Civil Code section 1642 to
support construing arbitration and confidentiality agreements
executed as part of the same transaction together].) On the one
hand, the confidentiality agreements provide that they
“supersede[] any and all prior agreements” related to unfair
competition, trade secrets, and confidentiality. Such “prior
agreements” include the arbitration agreement — which was
signed first — to the extent that it applies to claims brought
under the confidentiality agreements. The arbitration
agreement mandates arbitration of all employment-related
disputes. The confidentiality agreements impose new
employment-related duties on Fuentes, giving rise to potential
claims for breach of those duties. Because the confidentiality
agreements contemplate that Empire Nissan will be able to
bring such claims in court, they appear to supersede the
arbitration agreement as to those claims. On the other hand,
the arbitration agreement limits the parties’ authority to
supersede it by requiring that any future modification of its
terms be “in writing and signed by the President of the
Company.” Reading the agreements together, it is not clear
whether the parties intended to supersede the arbitration
agreement as to Empire Nissan’s potential claims for breach of
the confidentiality agreements.

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FUENTES v. EMPIRE NISSAN, INC.
Opinion of the Court by Groban, J.

The Court of Appeal — relying on “the principle that the
law strongly favors arbitration” — concluded that the
arbitration agreement had “supervening force” over the
confidentiality agreements because the arbitration agreement
“specifies it can be modified only in a writing signed by the
company president, and that president never signed any
modification.” (Fuentes, supra, 90 Cal.App.5th at p. 931.) Based
on this conclusion, the court held that the confidentiality
agreements did not create a one-sided carveout for claims only
Empire Nissan would bring because any claim Empire Nissan
might bring for breach of the confidentiality agreements would
be subject to mandatory arbitration.
The Court of Appeal’s reliance on the policy favoring
arbitration as an interpretive presumption was misplaced. As
we recently reaffirmed in Quach v. California Commerce Club,
Inc. (2024) 16 Cal.5th 562, “the policy ‘ “favoring” ’ arbitration is
not one of promoting arbitration over litigation, but instead of
ensuring that arbitration agreements are not disfavored, i.e.,
that they are treated like other contracts.” (Id. at p. 579.) The
Court of Appeal contravened this equal treatment principle by
relying on “the principle that the law strongly favors
arbitration” to support its interpretation of the confidentiality
agreements as mandating arbitration. (Fuentes, supra,
90 Cal.App.5th at p. 931.) When, as in the present case, a high
degree of procedural unconscionability is involved in an
arbitration agreement’s formation, treating that agreement like
other contracts involves closely scrutinizing its terms for
unfairness or one-sidedness and resolving ambiguities in
meaning against the drafting party. (Kho, supra, 8 Cal.5th at
p. 130; see Graham v. Scissor-Tail, Inc. (1981) 28 Cal.3d 807,
819, fn. 16 [“The rule requiring the resolution of ambiguities

18
FUENTES v. EMPIRE NISSAN, INC.
Opinion of the Court by Groban, J.

against the drafting party ‘applies with peculiar force in the case
of a contract of adhesion.’ ”].)3
Applying an interpretive presumption favoring
arbitration over litigation, the Court of Appeal implicitly
resolved an underlying factual question — whether Empire
Nissan’s president signed the confidentiality agreements — in
favor of Empire Nissan’s preferred construction of the
agreements. Although the copies of the confidentiality
agreements in the record bear only Fuentes’s signature, it is fair
to assume that Empire Nissan — which drafted the agreements
and had Fuentes sign them — agreed to their terms. (See
Banner Entertainment, Inc. v. Superior Court (1998)
62 Cal.App.4th 348, 361 [“[I]t is not the presence or absence of a
signature which is dispositive; it is the presence or absence of
evidence of an agreement”], original italics.) Empire Nissan did
not assert in the trial court that its president had failed to sign
the confidentiality agreements. Nor did it argue that the

3
The dissent observes that the “principle of interpretation
against the drafter is subordinate to the principle of
interpretation in favor of validity.” (Dis. opn. of Guerrero, C. J.,
post, at p. 14.) In the dissent’s view, the validity presumption
supports Empire Nissan’s interpretation of the confidentiality
agreements because under Fuentes’s interpretation, the
arbitration agreement is unenforceable. But, as the dissent
acknowledges, the validity presumption applies only when a
contract can be interpreted in a manner that is “reasonable” and
capable of implementation “without violating the intention of
the parties.” (Civ. Code, § 1643.) Here, as we have observed,
the confidentiality agreements reflect the parties’ intent to allow
Empire Nissan to bring its claims under them in court. It would
thus violate the parties’ intention to presume that those
agreements mandate arbitration in order to uphold the validity
of the arbitration agreement.

19
FUENTES v. EMPIRE NISSAN, INC.
Opinion of the Court by Groban, J.

missing signatures on the copies of the agreements that were
before the court meant that the confidentiality agreements could
only be enforced in arbitration. As a result, Fuentes had no
reason to seek discovery related to the signature question, and
the trial court made no factual finding on it. The Court of
Appeal’s interpretation of the agreements as mandating
arbitration of Empire Nissan’s claims, which was largely based
on its assumption that the “president never signed” the
confidentiality agreements, therefore lacks an adequate factual
foundation. (Fuentes, supra, 90 Cal.App.5th at p. 931.)
We hold that the Court of Appeal erred in applying a
presumption in favor of arbitration to conclude that the
confidentiality agreements did not create a one-sided carveout
for claims only Empire Nissan would bring. In the Court of
Appeal’s analysis, whether the confidentiality agreements
created a substantively unconscionable one-sided carveout
turned largely on whether Empire Nissan’s president signed the
agreements. (Armendariz, supra, 24 Cal.4th at p. 117.)4

4
Separately, reliance on the missing signature to support
Empire Nissan’s preferred interpretation may raise concerns
about substantive fairness. Relying on the missing signature
may permit Empire Nissan — which drafted the agreement —
to have it both ways. (See Sandquist, supra, 1 Cal.5th at p. 247
[that drafting party “ ‘may leave meaning deliberately obscure,
intending to decide at a later date what meaning to assert’ ”
provides “ ‘substantial reason for preferring the meaning of the
other party’ ”].) If Empire Nissan brought a claim for breach of
the confidentiality agreements in court and Fuentes moved to
compel arbitration, Empire Nissan could produce a signed copy
and claim that it created a carveout from the arbitration
agreement. But Empire Nissan could also, as it did here,
disclaim its right to bring claims under the confidentiality

20
FUENTES v. EMPIRE NISSAN, INC.
Opinion of the Court by Groban, J.

Empire Nissan waived any argument that its president did not
sign the agreement by failing to make that argument in the trial
court, where Fuentes could have contested its factual basis and
sought related discovery. However, as the dissent observes,
Fuentes has not specifically contested the Court of Appeal’s
reliance on the missing signature in her briefs to this court.5
Because the parties have not addressed this issue, we do not
decide it here. (See Cal. Rules of Court, rule 8.516(b)(2).)

agreements in court when it would gain an advantage by doing
so, i.e., if an employee filed suit in court and argued that the
confidentiality agreements’ preservation of Empire Nissan’s
access to a judicial forum renders the arbitration agreement
substantively unconscionable. Though the dissent characterizes
our decision to remand this case for further consideration of the
signature issue as “unjustified,” in our view, it would be unjust
to permit Empire Nissan to argue for whichever interpretation
was more advantageous to it based on a matter over which it has
complete control: whether the president signs the
confidentiality agreements. (Dis. opn. of Guerrero, C. J., post,
at p. 4.) The trial court may allow further development of the
record, briefing, and argument on this issue on remand.
5
The dissent contends that it is “unjustified” for us to rely
on the lack of a factual foundation for the Court of Appeal’s
ruling as a basis for reversing its judgment because the parties
“have had no chance to respond.” (Dis. opn. of Guerrero, C. J.,
post, at p. 5.) But, as explained above, had Empire Nissan raised
the lack of signature as a defense, Fuentes could have taken
discovery on the issue. The Court of Appeal relied on the lack of
signature without a factual record to support that conclusion.
In remanding this case to the trial court, we are affording the
parties an opportunity to respond, and to litigate this factual
issue in an appropriate forum for resolving it. And, as detailed
above, we are concluding that the Court of Appeal applied the
wrong interpretive framework and allowing the trial court on
remand to apply the correct framework. Given this procedural
posture, Fuentes is entitled to have the trial court adjudicate the
issue on remand.

21
FUENTES v. EMPIRE NISSAN, INC.
Opinion of the Court by Groban, J.

Nevertheless, given the lack of an adequate factual foundation
for the Court of Appeal’s interpretation of the confidentiality
agreements as requiring Empire Nissan to bring its claims in
arbitration — which was the primary basis for its conclusion
that the agreements, considered together, are not substantively
unconscionable — we conclude that remand is appropriate to
allow the trial court to consider these questions and make
relevant findings. The trial court may, in its discretion, permit
further development of the record and entertain further briefing
and argument on remand.6
B. Validity of Arbitration Agreement
Separate and apart from arguing that the arbitration
agreement is unenforceable because it is unconscionable,

6
Fuentes also argues that the arbitration agreement is
substantively unconscionable because it contains an unlawful
waiver of Fuentes’s right to bring a representative action under
the Labor Code Private Attorneys General Act of 2004 (PAGA;
Lab. Code, § 2698 et seq.) in any forum. (See Iskanian v. CLS
Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 384
[holding that when “an employment agreement compels the
waiver of representative claims under the PAGA, it is contrary
to public policy and unenforceable as a matter of state law”].)
Fuentes acknowledges that the Court of Appeal held that she
had forfeited this argument, but she contends that we have
discretion to reach it anyway. (See Fuentes, supra,
90 Cal.App.5th at p. 935.) Empire Nissan does not contest our
discretion to reach the argument or the unlawfulness of the
PAGA waiver; instead, it argues that the arbitration
agreement’s language should be reformed or restricted to
preserve the enforceability of the balance of the arbitration
agreement. We recently clarified the analytical framework for
addressing questions of this nature in Ramirez, supra,
16 Cal.5th at pages 516–517. On remand, the trial court may,
in its discretion, allow briefing on these questions.

22
FUENTES v. EMPIRE NISSAN, INC.
Opinion of the Court by Groban, J.

Fuentes — supported by amicus curiae Public Justice — argues
that the written arbitration agreement did not give rise to a
valid contract because the agreement’s formatting and how it
was presented to her precluded her assent to its terms. (See
Domestic Linen Supply Co., Inc. v. L J T Flowers, Inc. (2020)
58 Cal.App.5th 180, 182, 185 [no agreement to arbitrate where
agreement hidden in tiny print on reverse side of signature
page]; Windsor Mills, Inc. v. Collins & Aikman Corp. (1972)
25 Cal.App.3d 987, 994 [no agreement to arbitrate where
arbitration provision was in small, inconspicuous print and
plaintiff was not advised of its existence].)
Empire Nissan contends that Fuentes waived this
argument by not contesting the trial court’s ruling that an
agreement to arbitrate exists. We disagree. It is true that
Fuentes did not contest that ruling. But the ruling was no more
than a determination that Empire Nissan’s motion to compel
arbitration had satisfied the pleading requirement set out in
California Rules of Court, rule 3.1330, which requires a motion
to compel arbitration to state “the provisions of the written
agreement and the paragraph that provides for arbitration.”
Fuentes did not waive her argument that she did not assent to
the arbitration agreement by acknowledging that Empire
Nissan’s motion adequately pleaded the terms of the arbitration
agreement in its motion to compel arbitration.
Indeed, Fuentes challenged the existence of an enforceable
contract in the trial court, arguing that the arbitration
agreement was invalid and that enforcing it would be contrary
to public policy due to its “illegible” formatting and the fact that
she “had less than five minutes to read the entire document
prior to signing it.” She contended that the “procedures and
tactics” Empire Nissan used to get her to sign the agreement

23
FUENTES v. EMPIRE NISSAN, INC.
Opinion of the Court by Groban, J.

“preclude formation of a valid contract.” The trial court
expressly declined to address these arguments because it
concluded that the agreement was unconscionable. The court
observed, however, that “the Court of Appeal has raised public
policy concerns with enforcing contract provisions containing
small, illegible text.” (See Celli v. Sports Car Club of America,
Inc. (1972) 29 Cal.App.3d 511, 521.)7
Although Fuentes did not waive her argument that the
written agreement did not give rise to a valid contract, we

7
The dissent highlights a difference in emphasis between
Fuentes’s arguments in the trial court and her arguments in our
court and asserts, based on this difference, that Fuentes has
waived the arguments she makes in our court. (Dis. opn. of
Guerrero, C. J., post, at pp. 23–25.) We disagree. We do not find
waiver, as the dissent would, based on the fact that Fuentes
framed her argument in the trial court as concerning whether
Empire Nissan’s conduct precludes the agreement’s
“ ‘enforcement,’ ” rather than framing the argument as
concerning whether Empire Nissan’s conduct rendered the
agreement invalid. (Id. at p. 24.) We also do not agree that
Fuentes waived her argument because she focused on public
policy grounds instead of arguing that she “could not or did not
assent” to the agreement. (Id. at p. 24.) The essence of her
arguments in the trial court and before us is the same: Fuentes
contends that the arbitration agreement is invalid and should
not be enforced because of its nearly illegible formatting and the
fact that she was given inadequate opportunity to review
it. Indeed, as the dissent acknowledges, Fuentes briefly argued
in the trial court that these factors “preclude formation of a valid
contract” (emphasis added) — the very sort of language the
dissent contends is necessary to preserve the assent-focused
argument that she made to us. Given this posture, it would be
“flawed and unjustified” not to remand this case to the trial
court to permit it to rule on this issue. (Id. at p. 4.)

24
FUENTES v. EMPIRE NISSAN, INC.
Opinion of the Court by Groban, J.

decline to reach it. Because the trial court did not rule on the
argument, it is not properly before us.8
The argument was also not properly before the Court of
Appeal, which nevertheless directed the trial court to grant
Empire Nissan’s motion to compel arbitration, implicitly ruling
that the trial court could not consider the agreement’s validity.9
This was error.

8
The dissent observes that Fuentes has not challenged the
Court of Appeal’s dispositional language. (Dis. opn. of Guerrero,
C. J., post, at p. 17.) The dissent contends that by relying on the
Court of Appeal’s dispositional error as a basis for remand, our
opinion “runs afoul of Government Code section 68081 and
applicable rules of court” (dis. opn. at p. 23) as well as
“fundamental fairness” (id. at p. 17). The dissent is correct that
Fuentes has not specifically challenged the Court of Appeal’s
dispositional language, but she has challenged its disposition:
She urges us to reverse the judgment of the Court of Appeal. We
agree with the dissent that it would be improper for us to render
a decision on a substantive issue the parties had not had an
opportunity to brief. (Dis. opn. at p. 21, citing Gov. Code,
§ 68081 & Rule 8.516(b)(2).) But there is a difference between a
decision on the merits and a decision to remand: The disposition
is not, by itself, a substantive issue and the parties have briefed
the substantive grounds for reversal. It does not contravene
Government Code section 68081, or the rules of court (or
“fundamental fairness”) to allow the trial court to consider on
remand an argument that it declined to reach because it ruled
on a different ground.
9
Contrary to the dissent’s assertion, Fuentes has not
conceded that this argument was raised for the first time in her
briefing in this court. (Dis. opn. of Guerrero, C. J., post, at p. 25,
fn. 7.) While Fuentes invoked the rule that pure questions of
law may be asserted for the first time on appeal, she did not
concede that she failed to raise the issue below or that it was not
fairly included in her petition for review.

25
FUENTES v. EMPIRE NISSAN, INC.
Opinion of the Court by Groban, J.

The trial court may consider the parties’ arguments
concerning whether the agreement gave rise to a valid contract
on remand. In light of our clarification that arguments about
font size and formatting are not relevant to substantive
unconscionability, the trial court may, in its discretion, allow the
parties to submit additional briefing on the relationship
between legibility and mutual assent. We express no view on
this subject.
III. CONCLUSION
In sum, we agree with the Court of Appeal that the trial
court erred in relying on the arbitration agreement’s illegibility
to support a finding of substantive unconscionability. A
contract’s legibility generally does not affect the substance of its
terms.
Nevertheless, we hold that the Court of Appeal erred in
two ways. First, it erred by relying on a presumption in favor of
arbitration to conclude that the agreement’s terms were not
substantively unconscionable, while declining to rule on
whether the agreement was procedurally unconscionable.
(Fuentes, supra, 90 Cal.App.5th at p. 931.) The court should
instead have treated the arbitration agreement like any other
contract and closely scrutinized the agreement’s terms for
unfairness or one-sidedness, given the high degree of procedural
unconscionability, and construed any ambiguous provisions
against Empire Nissan, as the drafting party. (Kho, supra,
8 Cal.5th at p. 130; Sandquist, supra, 1 Cal.5th at p. 248.)
Second, the court erred by directing the trial court to grant
Empire Nissan’s motion to compel arbitration rather than
permitting the trial court to consider on remand Fuentes’s
argument that the written agreement did not give rise to a valid

26
FUENTES v. EMPIRE NISSAN, INC.
Opinion of the Court by Groban, J.

contract. For these reasons, we reverse the judgment of the
Court of Appeal and remand with directions that the case be
returned to the trial court for further proceedings consistent
with our decision.
GROBAN, J.
We Concur:
CORRIGAN, J.
LIU, J.
KRUGER, J.
EVANS, J.
STEWART, J.*

*
Presiding Justice of the Court of Appeal, First Appellate
District, Division Two, assigned by the Chief Justice pursuant
to article VI, section 6 of the California Constitution.

27
FUENTES v. EMPIRE NISSAN, INC.
S280256

Dissenting Opinion by Chief Justice Guerrero

Plaintiff Evangelina Yanez Fuentes and her employer
Empire Nissan, Inc. (Empire Nissan) agreed by contract that
“any claim, dispute, and/or controversy that either party may
have against one another . . . shall be submitted to and
determined exclusively by binding arbitration.” They further
agreed that the contract could not be modified except by written
agreement signed by Empire Nissan’s president or majority
owner. Later, Fuentes signed two confidentiality agreements,
which were substantially identical and covered “the secrecy, use
and disclosure” of Empire Nissan’s confidential information.
The agreements in the appellate record are not signed by
Empire Nissan’s president or majority owner.
The majority speculates that the confidentiality
agreements could nonetheless have been signed or approved by
the required person, and it holds that remand is required to
address this “underlying factual question.” (Maj. opn., ante, at
p. 19.) The majority’s speculation has no basis in the record or
the parties’ briefing, which nowhere mentions the possibility of
an unresolved factual dispute. It contravenes basic appellate
procedure — and fundamental fairness — to reverse on this
basis.
Moreover, even on its own terms, this “factual question”
does not justify the majority’s decision to reverse and remand.
The required signature is only consequential if the

1
FUENTES v. EMPIRE NISSAN, INC.
Guerrero, C. J., dissenting

confidentiality agreements would render the arbitration
agreement nonmutual and therefore unconscionable. The
majority never addresses this question, even though it was fully
briefed by the parties and considered by the Court of Appeal
below.
If the majority had engaged in this analysis, it would be
compelled to conclude that the confidentiality agreements have
no effect on the parties’ mutual agreement to arbitrate,
regardless of whether they were signed or not. Based on their
plain language, and construed in accordance with settled rules
of contract interpretation, the confidentiality agreements do not
confer any right on Empire Nissan to proceed in court, in
contravention of the parties’ earlier agreement to arbitrate. The
majority cites language in the agreements confirming Empire
Nissan’s right to seek remedies “at law or in equity.” (Maj. opn.,
ante, at p. 15.) But it is black letter law that an arbitrator has
the power to order legal and equitable remedies, including final
injunctions, in his or her award. (Advanced Micro Devices, Inc.
v. Intel Corp. (1994) 9 Cal.4th 362, 390–391 (Advanced Micro
Devices); O’Hare v. Municipal Resource Consultants (2003)
107 Cal.App.4th 267, 278 (O’Hare).) The agreements’ bare
reference to these remedies does not imply the right to seek
them in court. The majority also cites language conferring the
right to attorney fees on a prevailing party in the event of “ ‘legal
action’ ” to enforce the agreements. (Maj. opn., ante, at p. 15.)
But this language, too, does not say anything about Empire
Nissan’s ability to pursue claims in court, in contravention of
the arbitration agreement. (See Lombardo v. Gramercy Court
(2024) 107 Cal.App.5th 1028, 1035 (Lombardo) [arbitration
agreement determined how plaintiff could “pursue legal action
against defendant”].) Finally, even if the confidentiality

2
FUENTES v. EMPIRE NISSAN, INC.
Guerrero, C. J., dissenting

agreements created some ambiguity regarding Empire Nissan’s
right to seek relief in court, any such ambiguity must be resolved
in favor of the agreements’ validity, i.e., in favor of arbitration.
(Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5th
478, 507 (Ramirez).)
Separately, the majority holds that reversal and remand
is justified because the Court of Appeal directed the trial court
to grant Empire Nissan’s motion to compel arbitration, instead
of remanding for further proceedings. (Maj. opn., ante, at p. 25.)
Like the allegedly unresolved “factual question” above, this
issue is entirely one of the majority’s own creation. Fuentes has
never claimed that the Court of Appeal erred by not remanding
the matter to consider any remaining arguments. The majority
attempts to draw a connection between those arguments and
certain arguments raised in this court regarding contract
formation and mutual assent. This connection is illusory, since
the arguments are not the same. It is also irrelevant to the
decision to remand. Fuentes seeks a ruling on the merits of her
arguments and does not claim the procedural error the majority
finds dispositive. (Cf. Gov. Code, § 68081.)
We granted review in this matter to consider several
issues related to substantive unconscionability. The majority
considers one — “ ‘fine-print terms’ ” — and correctly rejects it.
(Maj. opn., ante, at pp. 12–13.) But the majority ignores the
remainder, preferring instead to remand for further proceedings
based on errors neither raised nor briefed by the parties, and in
an apparent effort to give Fuentes the opportunity to raise
arguments she has clearly forfeited. (See, e.g., maj. opn., ante,
at p. 22 [required signatures]; id. at pp. 20–21, fn. 4 [purposely
omitted signatures]; id. at p. 22, fn. 6 [representative action
waiver]; id. at p. 26 [contract formation and mutual assent].)

3
FUENTES v. EMPIRE NISSAN, INC.
Guerrero, C. J., dissenting

Because I find the majority’s approach flawed and unjustified, I
respectfully dissent.
I. UNCONSCIONABILITY AND MUTUALITY
“An agreement to submit disputes to arbitration ‘is valid,
enforceable and irrevocable, save upon such grounds as exist for
the revocation of any contract.’ ” (OTO, L.L.C. v. Kho (2019)
8 Cal.5th 111, 125 (Kho).) One generally applicable ground for
invalidating a contract is unconscionability. (Sonic-Calabasas
A, Inc. v. Moreno (2013) 57 Cal.4th 1109, 1145.) “Because
unconscionability is a contract defense, the party asserting the
defense bears the burden of proof.” (Sanchez v. Valencia
Holding Co., LLC (2015) 61 Cal.4th 899, 911.) The burden of
proving unconscionability in this matter therefore falls on
Fuentes.
The majority accurately identifies the two elements of
unconscionability — procedural and substantive — and
confirms that both must be present to invalidate a contract.
(Maj. opn., ante, at pp. 6–7.) The majority correctly rejects
Fuentes’s argument that small font size and illegibility can
satisfy both elements. As the majority explains, “small font size
is indicative of procedural unconscionability because it
contributes to the element of surprise. . . . But because font size
does not affect an agreement’s terms, it cannot render a
contractual term substantively unconscionable.” (Maj. opn.,
ante, at p. 13.)
Fuentes does not rely solely on the illegibility of the
agreement, however. She also argues that the arbitration
agreement is nonmutual, and therefore substantively
unconscionable, based on language in the separate
confidentiality agreements. Her argument assumes that the

4
FUENTES v. EMPIRE NISSAN, INC.
Guerrero, C. J., dissenting

confidentiality agreements could modify the arbitration
agreement. She does not address the Court of Appeal’s point
that no modification was possible because the confidentiality
agreements do not comply with the arbitration agreement’s
strict limits on modification. (See Fuentes v. Empire Nissan,
Inc. (2023) 90 Cal.App.5th 919, 931 (Fuentes) [“The arbitration
contract has supervening force because it specifies it can be
modified only in a writing signed by the company president, and
that president never signed any modification”].) As the majority
admits, “Fuentes has not specifically contested the Court of
Appeal’s reliance on the missing signature in her briefs to this
court.” (Maj. opn., ante, at p. 21.)
Fuentes’s failure to address this point should undercut her
argument, since it was one of the grounds for the Court of
Appeal’s holding that the arbitration agreement was not
substantively unconscionable. (Fuentes, supra, 90 Cal.App.5th
at p. 931.) The majority pursues the opposite course. Despite
neither party raising the issue, the majority concludes it was the
Court of Appeal that erred by relying on the absence of the
president’s signature. It asserts that the Court of Appeal’s
holding “lacks an adequate factual foundation.” (Maj. opn., ante,
at p. 20.) The majority’s reliance on this ground is unjustified,
particularly since the parties have had no chance to respond.1
The majority is also incorrect that the Court of Appeal’s
holding lacks foundation. The confidentiality agreements in the

1
The majority claims that, in remanding to the trial court,
“we are affording the parties an opportunity to respond.” (Maj.
opn., ante, at p. 21, fn. 5.) But the parties have a right to be
heard in this court, before this court takes action and reverses
the judgment below.

5
FUENTES v. EMPIRE NISSAN, INC.
Guerrero, C. J., dissenting

record demonstrate that Empire Nissan’s president has not
signed them, and Fuentes has never suggested otherwise. The
majority invokes the general rule that a party’s agreement, not
its signature, is dispositive. (Maj. opn., ante, at p. 19.) That
general rule has no application here, where the parties’
arbitration agreement required any modification to be “in
writing and signed” by Empire Nissan’s president or majority
owner.
Nonetheless, seizing on this “factual question,” the
majority holds that reversal and remand is appropriate. (Maj.
opn., ante, at p. 19.) The premise of this holding is that the
confidentiality agreements, if signed by the president, would
render the arbitration agreement nonmutual and substantively
unconscionable. The Court of Appeal considered this question
as well, and the parties have fully briefed it, but the majority
barely mentions it. The majority briefly examines the
confidentiality agreements in isolation, and it claims the
existence of the arbitration agreement creates “an ambiguity”
(maj. opn., ante, at p. 17), but it does not consider whether this
ambiguity could be resolved — as the parties urge — without
considering the required signature. This lack of engagement is
telling. If the majority had examined the confidentiality
agreements in context, it would be compelled to conclude that
they do not undermine the mutuality of the earlier arbitration
agreement.2

2
The majority criticizes the Court of Appeal for “relying on
‘the principle that the law strongly favors arbitration.’ ” (Maj.
opn., ante, at p. 18.) Even assuming the Court of Appeal erred
by broadly interpreting that principle, it does not support the

6
FUENTES v. EMPIRE NISSAN, INC.
Guerrero, C. J., dissenting

We have held that an arbitration agreement “cannot
require ‘one contracting party, but not the other, to arbitrate all
claims arising out of the same transaction or occurrence or
series of transactions or occurrences.’ ” (Ramirez, supra,
16 Cal.5th at p. 495.) “ ‘Given the disadvantages that may exist
for plaintiffs arbitrating disputes, it is unfairly one-sided for an
employer with superior bargaining power to impose arbitration
on the employee as plaintiff but not to accept such limitations
when it seeks to prosecute a claim against the employee, without
at least some reasonable justification for such one-sidedness
based on “business realities.” ’ ” (Ibid.)
As noted, Fuentes contends the arbitration agreement is
unconscionable because it requires Fuentes to arbitrate all of
her claims against Empire Nissan but, because of the
confidentiality agreements, Empire Nissan does not have the
same obligation. Empire Nissan disputes that the

majority’s decision to reverse and remand for further factual
development in the trial court. The majority claims the Court
of Appeal used this interpretive principle to “resolve[] an
underlying factual question” (maj. opn., ante, at p. 19), but it is
unclear how a principle of contract interpretation could give rise
to a factual finding. The Court of Appeal’s view that Empire
Nissan’s president did not sign the confidentiality agreements
is based on the agreements in the record, which are not signed
by Empire Nissan’s president. These agreements in the record
are more than sufficient to support the Court of Appeal’s factual
determination, and Fuentes has never suggested otherwise.
The majority also criticizes the Court of Appeal for
“declining to rule on whether the agreement was procedurally
unconscionable.” (Maj. opn., ante, at p. 26.) But, as the majority
recognizes, a finding of unconscionability requires both
procedural and substantive unconscionability. If an agreement
is not substantively unconscionable, a court need not consider
procedural unconscionability.

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FUENTES v. EMPIRE NISSAN, INC.
Guerrero, C. J., dissenting

confidentiality agreements confer any right to pursue its claims
in court, as opposed to arbitration.
To resolve this dispute, we turn to familiar principles of
contract interpretation. “ ‘Under statutory rules of contract
interpretation, the mutual intention of the parties at the time
the contract is formed governs interpretation. [Citation.] Such
intent is to be inferred, if possible, solely from the written
provisions of the contract. [Citation.] The “clear and explicit”
meaning of these provisions, interpreted in their “ordinary and
popular sense,” unless “used by the parties in a technical sense
or a special meaning is given to them by usage” [citation],
controls judicial interpretation. [Citation.]’ [Citations.] A
policy provision will be considered ambiguous when it is capable
of two or more constructions, both of which are reasonable.
[Citation.] But language in a contract must be interpreted as a
whole, and in the circumstances of the case, and cannot be found
to be ambiguous in the abstract. [Citation.] Courts will not
strain to create an ambiguity where none exists.” (Waller v.
Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 18–19 (Waller).)
“ ‘The mere fact that a word or phrase . . . may have
multiple meanings does not create an ambiguity.’ [Citation.]
Rather, the meaning of the word or phrase must be considered
in light of its context.” (Yahoo Inc. v. National Union Fire Ins.
Co. etc. (2022) 14 Cal.5th 58, 69.) Where, as here, the parties
execute separate written contracts relating to the same subject
matter, the context includes all such contracts, which should be
construed together. (Chern v. Bank of America (1976) 15 Cal.3d
866, 874; see Civ. Code, § 1642.)
Fuentes’s argument fails for the simple reason that
nothing in the plain language of the confidentiality agreements

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FUENTES v. EMPIRE NISSAN, INC.
Guerrero, C. J., dissenting

confers on Empire Nissan the right to pursue claims in court.
The arbitration agreement imposes a fully mutual arbitration
obligation. It provides that “any claim, dispute, and/or
controversy that either party may have against one
another . . . shall be submitted to and determined exclusively by
binding arbitration.” Fuentes contends that the later
confidentiality agreements “provide a carve out for certain of
Empire Nissan’s claims.” But the plain meaning of the language
cited by Fuentes reflects no such carve out.
First, Fuentes cites language in the confidentiality
agreements allowing Empire Nissan to seek injunctive relief.
Conspicuously absent, however, is any language allowing
Empire Nissan to seek injunctive relief in court. (Cf. Carmona
v. Lincoln Millenium Car Wash, Inc. (2014) 226 Cal.App.4th 74,
86 [finding a lack of mutuality where an agreement allowed an
employer to seek relief from “ ‘either a court or binding
arbitrator’ ”].) Nor does the language confer such a right by
implication. An arbitrator has the power to order an injunction
(O’Hare, supra, 107 Cal.App.4th at p. 278), and any party to an
arbitration agreement may seek a preliminary injunction in
court (Code Civ. Proc., § 1281.8, subd. (b)). As such, this
language does not affect or undermine the bilateral obligation to
arbitrate in the arbitration agreement. It is not evidence of one-
sidedness.
Second, Fuentes cites the confidentiality agreements’
severability clause, which refers to a “court of competent
jurisdiction.” The clause provides, in relevant part, “Each
provision of this Agreement is intended to be severable. If any
court of competent jurisdiction determines that one or more of
the provisions of this Agreement, or any part thereof, is or are
invalid, illegal or unenforceable, such invalidity, illegality or

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FUENTES v. EMPIRE NISSAN, INC.
Guerrero, C. J., dissenting

unenforceability shall not affect or impair any other provision of
this Agreement . . . .” The plain meaning of this language, too,
does not confer on Empire Nissan any right to pursue claims in
court. It does not say anything about Empire Nissan’s claims at
all. Indeed, severability clauses commonly refer to a “court of
competent jurisdiction,” and it is well settled that a court’s
authority to consider the invalidity or unenforceability of a
contract (and the possibility of severance) is fully consistent
with an agreement to arbitrate. (See, e.g., Ramirez, supra,
16 Cal.5th at p. 514.)
Notably, the majority does not rely on either of the
provisions cited by Fuentes. Instead, it assesses the
confidentiality agreements as a whole, and “in isolation” from
the arbitration agreement, to conclude that the confidentiality
agreements would allow Empire Nissan to pursue claims for
relief in court. (Maj. opn., ante, at p. 16.) But it is irrelevant
whether the confidentiality agreements, read in isolation, would
allow Empire Nissan to pursue claims for relief in court. No one
disputes that they would. The issue is whether the
confidentiality agreements exempt certain claims from the
parties’ overall agreement to arbitrate. To determine this
question, the confidentiality agreements must be read in the
context of the parties’ earlier arbitration agreement. The
majority fails to undertake this essential task.
The majority cites two specific provisions of the
confidentiality agreements that, in the majority’s view,
“suggest[] that, at the time of their signing, the parties did not
intend for claims under [the confidentiality agreements] to be
subject to mandatory arbitration.” (Maj. opn., ante, at p. 16.)
Since Fuentes never raised these additional provisions, and
Empire Nissan has had no chance to respond, the majority’s

10
FUENTES v. EMPIRE NISSAN, INC.
Guerrero, C. J., dissenting

reliance on them is suspect. But even setting that hurdle aside,
the provisions cited by the majority do not confer any right on
Empire Nissan to pursue claims in court.
The first provision states that Empire Nissan may obtain
“any proper injunction . . . in addition to any other remedies
available to [it] at law or in equity.” The majority claims the
phrase “at law or in equity” means that Empire Nissan may
enforce the confidentiality agreements in court. (Maj. opn., ante,
at p. 15.) The majority provides no explanation for this claim,
so its reasoning is impossible to evaluate. But based on the plain
language of the agreements, the reference to law and equity does
not confer any right on Empire Nissan to pursue its claims in
court. An arbitrator has the power to order legal and equitable
remedies, including injunctions. (Advanced Micro Devices,
supra, 9 Cal.4th at pp. 390–391 [“remedies available to a court
are only the minimum available to an arbitrator”]; accord,
O’Hare, supra, 107 Cal.App.4th at p. 278.) The language at
issue does not confer any right on Empire Nissan to pursue such
remedies in a non-arbitration forum. Moreover, the phrase “in
addition to any other remedies” shows that it is “a general
reference to other remedies to which [Empire Nissan] may be
entitled, and not an investiture of remedies not otherwise
available.” (Lange v. Monster Energy Co. (2020) 46 Cal.App.5th
436, 451.)
The second provision cited by the majority states, “You
agree that if legal action is taken to enforce the terms of this
Agreement, the prevailing party in any such action shall be
entitled to recover legal cost [sic] and fees incurred in the action
including, but not limited to, attorney fees.” Contrary to the
majority’s assertion (maj. opn., ante, at p. 15), the phrase “legal
action” can refer to an arbitration proceeding. (See, e.g.,

11
FUENTES v. EMPIRE NISSAN, INC.
Guerrero, C. J., dissenting

Ramirez, supra, 16 Cal.5th at p. 508 [attorney fee award not
available “unless the arbitrator finds that the action was
frivolous, unreasonable, or groundless when brought” (italics
added)]; Lombardo, supra, 107 Cal.App.5th at p. 1035
[arbitration agreement determined how plaintiff could “pursue
legal action against defendant”].) But even if it referred to an
action before the court, the plain meaning of the cited provision
confers only the right to seek attorney fees. In other words, the
parties would have agreed that attorney fees are available in a
court action, but not otherwise. (Cf. Turner v. Schultz (2009)
175 Cal.App.4th 974, 983 [“defendants’ entitlement to attorney
fees in this legal action is independent of the outcome of the
arbitration of the merits of the underlying dispute”].) Nothing
about this attorney fee provision allows Empire Nissan to
pursue claims for relief in court, in contravention of the parties’
arbitration agreement.3
The majority also generally refers to the confidentiality
agreements’ silence regarding arbitration. The majority asserts,
“The absence of any reference to arbitration in the
confidentiality agreements suggests, at the time of their signing,

3
Because the confidentiality agreements, properly
interpreted, do not allow Empire Nissan to pursue claims for
relief in court, the majority’s speculation regarding Empire
Nissan’s ability to “argue for whichever interpretation was more
advantageous to it” is misplaced. (Maj. opn., ante, at p. 21,
fn. 4.) Regardless of whether Empire Nissan’s president signed
the confidentiality agreements, they do not confer on Empire
Nissan any right to pursue claims for relief in court, in
contravention of the parties’ earlier arbitration agreement.
Thus, the proper interpretation of the agreements does not
depend on “a matter over which [Empire Nissan] has complete
control.” (Ibid.)

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FUENTES v. EMPIRE NISSAN, INC.
Guerrero, C. J., dissenting

the parties did not intend for claims under them to be subject to
mandatory arbitration.” (Maj. opn., ante, at p. 16.) This
assertion ignores the parties’ prior arbitration agreement.
Given this prior agreement, something more than silence is
required to exempt claims under the confidentiality agreements
from arbitration. (See Jenks v. DLA Piper Rudnick Gray Cary
US LLP (2015) 243 Cal.App.4th 1, 17 [“Where one agreement
identifies arbitration as the forum for resolving disputes, and a
subsequent agreement omits any reference to such a forum,
‘ “any doubts must be resolved in favor of arbitration” ’ ”]; Cione
v. Foresters Equity Services, Inc. (1997) 58 Cal.App.4th 625, 638
[employment agreement, which “did not specify any forum for
resolving any disputes between the parties,” did not supersede
earlier arbitration agreement].)
The majority allows that the agreements, read together,
at least create “an ambiguity” regarding Empire Nissan’s ability
to pursue claims for relief in court. (Maj. opn., ante, at p. 17.)
In this context, the majority points out that the confidentiality
agreements contain a partial integration clause, which states
that they “ ‘supersede[] any and all prior agreements’ related to
unfair competition, trade secrets, and confidentiality.” (Ibid.)
The majority asserts that this partial integration clause may
impact the earlier arbitration agreement “to the extent that it
applies to claims brought under the confidentiality agreements.”
(Ibid.) The majority is incorrect. The partial integration clause
does not refer to any “claims,” directly or indirectly. Instead, it
states, “This is the entire agreement between the Company and
you regarding the secrecy, use and disclosure of the Company’s
Proprietary Information, Trade Secrets and Confidential
Information and this Agreement supersedes any and all prior
agreements regarding these issues.” Thus, the partial

13
FUENTES v. EMPIRE NISSAN, INC.
Guerrero, C. J., dissenting

integration clause covers “secrecy, use and disclosure” of
confidential information — not “claims” based on breach or
misappropriation, for example. The plain meaning of the clause
does not support any inference that the confidentiality
agreements supersede the arbitration agreement on the proper
venue for Empire Nissan’s claims. It does not create any
ambiguity regarding the scope of the parties’ arbitration
agreement.
But even if the provisions of the confidentiality
agreements were ambiguous regarding Empire Nissan’s right to
pursue claims for relief in court, our precedent — and general
principles of contract law — require us to resolve this ambiguity
against such a right, if finding such a right would render the
agreement unconscionable. “Where a contract is susceptible to
two interpretations, one which renders it valid and the other
which renders it void, a court should select the interpretation
that makes the contract valid.” (Ramirez, supra, 16 Cal.5th at
p. 507; accord, Pearson Dental Supplies, Inc. v. Superior Court
(2010) 48 Cal.4th 665, 682; 11 Williston on Contracts (4th ed.
2025) § 32:11.) We must adopt the interpretation that
“eliminates any unconscionability.” (Ramirez, at p. 507.)
The majority cites — though it does not apply — the
interpretive principle that contractual ambiguities should be
resolved against the drafting party, here Empire Nissan. (Maj.
opn., ante, at pp. 11, 18; see Sandquist v. Lebo Automotive, Inc.
(2016) 1 Cal.5th 233, 248.) Since the majority does not apply
this principle or interpret the agreements, the significance of
this principle in the majority’s analysis is unclear. But it is well
settled that the principle of interpretation against the drafter is
subordinate to the principle of interpretation in favor of validity.
“The rule [of interpretation against the drafter] applies ‘only as

14
FUENTES v. EMPIRE NISSAN, INC.
Guerrero, C. J., dissenting

a last resort’ when the meaning of a provision remains
ambiguous after exhausting the ordinary methods of
interpretation.” (Lamps Plus, Inc. v. Varela (2019) 587 U.S. 176,
186.) The principle of interpretation against the drafter is
embodied in Civil Code section 1654. That statute provides, “In
cases of uncertainty not removed by the preceding rules, the
language of a contract should be interpreted most strongly
against the party who caused the uncertainty to exist.” (Civ.
Code, § 1654, italics added.) One of the preceding rules
referenced in the statute is the principle of interpretation in
favor of validity: “A contract must receive such an
interpretation as will make it lawful, operative, definite,
reasonable, and capable of being carried into effect, if it can be
done without violating the intention of the parties.” (Id.,
§ 1643.) Thus, the principle of interpretation in favor of validity
has priority. Indeed, in Ramirez, we interpreted an adhesive
arbitration agreement to save its validity and did not invoke the
rule of interpretation against the drafter. (Ramirez, supra,
16 Cal.5th at p. 507; see id. at p. 493 [arbitration agreement was
“an adhesion contract”].)
The majority appears to suggest that, where there is “a
high degree of procedural unconscionability,” a court must
“resolve[] ambiguities in meaning against the drafting party.”
(Maj. opn., ante, at p. 18.) To the extent this suggestion is
intended, the majority cites no authority for the proposition that
procedural unconscionability should affect the interpretation of
a contract, and I am aware of none. In Kho, supra, 8 Cal.5th at
page 130, we considered the doctrine of unconscionability, not
contract interpretation. In Graham v. Scissor-Tail, Inc. (1981)
28 Cal.3d 807, 819, fn. 16, we explained, “The rule requiring the
resolution of ambiguities against the drafting party ‘applies

15
FUENTES v. EMPIRE NISSAN, INC.
Guerrero, C. J., dissenting

with peculiar force in the case of a contract of adhesion.’ ” We
did not suggest that the rule should be applied outside its
established bounds, to the exclusion of other rules of contract
interpretation. To the contrary, we held that adhesive contracts
“are subject to interpretation under established principles.”
(Ibid.)4
In sum, under well-settled principles of contract
interpretation, the confidentiality agreements do not confer any
right on Empire Nissan to pursue claims for relief in court, in
contravention of the parties’ earlier arbitration agreement.
Nothing in the confidentiality agreements contradicts or
undermines the parties’ fully mutual agreement to arbitrate all
disputes between them. It is therefore irrelevant whether
Empire Nissan’s president or majority owner signed the
confidentiality agreements or not. Even if they had signed, it
would have no effect on the mutuality of the arbitration
agreement itself, and it would not make the agreement
unconscionable. The majority is therefore mistaken that any
alleged “lack of an adequate factual foundation” undermines the
Court of Appeal’s unconscionability determination (maj. opn.,

4
The majority further suggests that the presumption in
favor of validity may not apply because any allowable
interpretation must be “ ‘reasonable’ and capable of
implementation ‘without violating the intention of the parties.’ ”
(Maj. opn., ante, at p. 19, fn. 3; see Civ. Code, § 1643.) But if an
ambiguity exists, the interpretations underlying the ambiguity
are by definition reasonable interpretations of the parties’
agreement that are capable of being implemented. (Waller,
supra, 11 Cal.4th at p. 18 [ambiguity exists if contract language
is subject to “two or more constructions, both of which are
reasonable”].) If one interpretation would “violate the parties’
intention” (maj. opn., ante, at p. 19, fn. 3), it cannot create an
ambiguity.

16
FUENTES v. EMPIRE NISSAN, INC.
Guerrero, C. J., dissenting

ante, at p. 22), and its decision to reverse and remand lacks any
legal or logical basis.
II. APPELLATE REVIEW AND ERROR
As a separate and apparently independent ground for
reversal, the majority concludes the Court of Appeal erred in its
disposition by directing the trial court to order the dispute to
arbitration, rather than remanding for consideration of any
remaining arguments not previously addressed. (Maj. opn.,
ante, at p. 25.) The majority’s consideration of this alleged
error — and its reversal on that basis — contravenes the
primary statute governing the scope of our review and related
rules of court. Fuentes has never argued that the Court of
Appeal made such an error, either in her petition for review or
in her merits briefing, and Empire Nissan has had no
opportunity to respond. The majority disregards basic appellate
procedure and fundamental fairness by raising the issue itself
and reversing on this basis.
The majority compounds this mistake by
mischaracterizing the arguments that may remain to be
addressed. It correctly notes that Fuentes argues in this court
that the arbitration agreement was so illegible as to preclude
her assent to its terms. (Maj. opn., ante, at p. 23.) But it
incorrectly asserts that Fuentes made the same argument in the
trial court. (Id. at pp. 23–24.) She did not. In fact, Fuentes
expressly acknowledges that she made this argument “for the
first time” in her opening brief on the merits here, which was
itself improper because the issue was not raised in Fuentes’s
petition for review. Thus, even if the majority were correct that
the matter should be remanded to the trial court to consider any

17
FUENTES v. EMPIRE NISSAN, INC.
Guerrero, C. J., dissenting

remaining arguments, Fuentes’s argument regarding mutual
assent should not be included.
A. Background
In the trial court, in addition to her unconscionability
defense, Fuentes argued that Empire Nissan had not shown
“there was an enforceable agreement to arbitrate.” This
argument had three components: (1) “At the time of signing, the
agreement was illegible, and in such small, condensed type that
it would be against public policy to enforce.” (2) “The Agreement
is not mutual. An agreement to arbitrate claims that is worded
to obligate only the employee, with no equivalent promise by the
employer, is unenforceable for lack of consideration.” (3) “The
Agreement was superseded by subsequent employment
agreements that do not include any arbitration clauses.”
Despite this framing, only the first appears to describe an
argument potentially distinct from unconscionability.
In its order denying Empire Nissan’s motion to compel
arbitration, the trial court noted that Empire Nissan had
submitted a copy of the arbitration agreement and a declaration
attesting that Fuentes had signed it. The court found that
Empire Nissan had met its burden of alleging the existence of
an arbitration agreement. (Cal. Rules of Court, rule 3.1330.)5 It
observed that Fuentes “acknowledges the existence of an
arbitration agreement,” but she “contends that it is
unenforceable.”
The trial court found the agreement unenforceable based
on unconscionability. It therefore declined to consider Fuentes’s

5
Subsequent rule references are to the California Rules of
Court.

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FUENTES v. EMPIRE NISSAN, INC.
Guerrero, C. J., dissenting

alternative argument based on public policy. The court wrote,
“Plaintiff argues that public policy precludes the arbitration
agreement from being enforced due to its small, illegible print.
The court notes that the Court of Appeal has raised public policy
concerns with enforcing contract provisions containing small,
illegible text.” In support, the trial court cited Celli v. Sports
Car Club of America, Inc. (1972) 29 Cal.App.3d 511, 521 (Celli).
Empire Nissan appealed. In its opening brief, it requested
that the Court of Appeal reverse and remand with directions to
grant its motion to compel arbitration. Fuentes did not
specifically contest this requested disposition, and she never
claimed that she had remaining arguments for the trial court to
address. In discussing her trial court opposition, Fuentes
mentioned only unconscionability.
The Court of Appeal majority concluded that the
agreement was not unconscionable. (Fuentes, supra,
90 Cal.App.5th at p. 923 (maj. opn. of Wiley, J.).) Its disposition
stated, “We reverse and direct the trial court to grant the motion
to compel arbitration. We award costs to appellants.” (Id. at
p. 936.) The dissenting opinion would have found the agreement
unconscionable, but it did not mention any error in the
majority’s dispositional language or any outstanding arguments
yet to be considered. (Id. at pp. 938, 941 (dis. opn. of Stratton,
P. J.).) Fuentes did not petition for rehearing.
In her petition for review in this court, Fuentes identified
four issues, all of which related to substantive
unconscionability. For example, her first issue stated, “Does
inclusion by the more powerful, drafting party of arbitration
terms that are so small, blurry, and crammed together as to be
unreadable, render the agreement ‘non-mutual,’ insofar as only

19
FUENTES v. EMPIRE NISSAN, INC.
Guerrero, C. J., dissenting

the drafting party knows what the agreement’s terms are, and
therefore substantively unconscionable?” Nowhere in the issues
identified for review, or in the petition for review itself, did
Fuentes take issue with the Court of Appeal’s dispositional
language.
In her opening brief on the merits in this court, Fuentes
attempted to brief a fifth issue: “Whether a valid contract can
form under California law, and specifically, whether there was
mutual assent where the material terms of the arbitration were
unreadable and hidden in tiny, blurry print, such that the
arbitration provision’s material terms were known only by that
the [sic] drafting party?” Fuentes claimed this issue was fairly
included in her petition for review because the illegibility of the
agreement “goes both to substantive unconscionability and to
mutual assent.” She did not contend the Court of Appeal erred
in its disposition by failing to remand for consideration of this
argument or any other.
Empire Nissan disagreed that this fifth issue was fairly
included in Fuentes’s petition for review. It noted that the
phrase “mutual assent” does not appear in the petition. Empire
Nissan further contended that Fuentes was bound by the trial
court’s factual finding that an arbitration agreement had been
formed.
In reply, Fuentes disagreed that the trial court had made
such a factual finding. She acknowledged, however, that her
mutual assent argument was raised for the first time in her
opening brief. In a heading, Fuentes argued, “Empire Nissan’s
waiver argument fails because arguments raised for the first
time in this court are routinely considered where the issue is
purely legal and based on undisputed facts.” (Italics added,

20
FUENTES v. EMPIRE NISSAN, INC.
Guerrero, C. J., dissenting

boldface and capitalization omitted.) Again, Fuentes did not
contend the Court of Appeal erred by failing to remand for
consideration of any argument.
B. Alleged Dispositional Error
As noted, the majority concludes the Court of Appeal erred
by directing the trial court to grant Empire Nissan’s motion to
compel arbitration, rather than remanding the case to the trial
court to consider any remaining arguments. (Maj. opn., ante, at
p. 25.) By raising this argument itself, and reversing on this
basis, the majority contravenes the statute governing the scope
of our review and applicable rules of court. For example,
Government Code section 68081 provides, “Before the Supreme
Court . . . renders a decision in a proceeding other than a
summary denial of a petition for an extraordinary writ, based
upon an issue which was not proposed or briefed by any party to
the proceeding, the court shall afford the parties an opportunity
to present their views on the matter through supplemental
briefing.” Similarly, rule 8.516(b)(1) provides, “The Supreme
Court may decide any issues that are raised or fairly included in
the petition or answer.” We may not decide any other issue, no
matter how compelling it might seem, without giving the parties
“reasonable notice and opportunity to brief and argue it.”
(Rule 8.516(b)(2).)
Government Code section 68081 and similar rules of court
are not mere technicalities. They ensure a baseline level of
fairness in appellate proceedings, so that courts do not rely on
grounds for reversal that the parties have not had a chance to
address. They also ensure that courts have the benefit of the
parties’ briefing and argument when deciding an issue, so that
any risk of error is minimized.

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FUENTES v. EMPIRE NISSAN, INC.
Guerrero, C. J., dissenting

The majority disregards both the letter and the spirit of
these provisions. It is evident that Fuentes did not raise any
issue regarding the Court of Appeal’s dispositional language in
her petition for review, nor is it fairly included. The majority
does not contend otherwise. Instead, Fuentes challenged the
Court of Appeal’s unconscionability holding on the merits.
Fuentes’s opening and reply briefs followed suit. They
addressed the merits of Empire Nissan’s motion to compel
arbitration, and they did not identify any error in the Court of
Appeal’s dispositional language.
The majority asserts that Fuentes’s challenge to the Court
of Appeal’s unconscionability determination, which provided the
basis for its disposition, was sufficient to raise any error in the
Court of Appeal’s dispositional language. (Maj. opn., ante, at
p. 25, fn. 8.) It was not. A party’s substantive challenge to the
judgment of the Court of Appeal does not automatically raise
every issue that might affect that judgment. Here, for example,
the proper disposition under the circumstances of a given appeal
is governed by its own body of law. (See, e.g., 9 Witkin, Cal.
Proc. (6th ed. 2021) Appeal, § 903, p. 914 [“If . . . the record
clearly shows that only one judgment is proper under the law
and undisputed facts and that a new trial would be a waste of
effort, that direction is proper”].) It is not a mere subset of the
substantive issues a party raises. For example, the Court of
Appeal could have been entirely correct in its discussion of the
merits (as I believe it was), and it still could have erred by
directing the trial court to grant Empire Nissan’s motion to
compel arbitration in its disposition. The two issues are
independent, and one is not fairly included in the other. Indeed,
the majority does not rely on Fuentes’s briefing in deciding to

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FUENTES v. EMPIRE NISSAN, INC.
Guerrero, C. J., dissenting

reverse. It expressly concedes the relevant argument “is not
properly before us.” (Maj. opn., ante, at p. 25.)
The majority claims “there is a difference between a
decision on the merits and a decision to remand.” (Maj. opn.,
ante, at p. 25, fn. 8.) But the majority has rendered a decision
on the merits — the merits of the Court of Appeal’s dispositional
language. It has found error in that language and, on that basis,
decided to reverse. Because no party raised any issue regarding
the Court of Appeal’s dispositional language, the majority runs
afoul of Government Code section 68081 and applicable rules of
court by considering and deciding this issue without briefing
and argument from the parties.
C. Directions on Remand
Even assuming the Court of Appeal erred by directing the
trial court to grant Empire Nissan’s motion to compel
arbitration, rather than remanding for further proceedings, the
majority mischaracterizes the issues that remain. The majority
focuses on arguments Fuentes made in this court regarding her
ability to assent to the terms of the arbitration agreement, given
its formatting and blurry text. It claims that its decision to
remand will allow Fuentes to pursue these arguments. (Maj.
opn., ante, at p. 26.) The majority is incorrect. The arguments
Fuentes makes in this court — which she admits she made “for
the first time” in her opening brief on the merits — are not the
same as the arguments she made in the trial court.6

6
Although it does not appear to be dispositive, given the
majority’s other procedural missteps, the majority’s focus on the
mutual assent argument is additionally noteworthy because the
rules of court require us to disregard it. Fuentes did not raise

23
FUENTES v. EMPIRE NISSAN, INC.
Guerrero, C. J., dissenting

In this court, Fuentes argues that she could not or did not
assent to the terms of the arbitration agreement. By contrast,
in the trial court, Fuentes did not mention mutual assent. She
argued that “the agreement’s illegibility precludes its
enforcement.” (Boldface and capitalization omitted.) As this
language shows, Fuentes’s argument was not about the
existence of an agreement, but its enforcement. Fuentes cited
cases where statutes or public policy required certain
contractual clauses be clear and conspicuous in order to be
enforced, like Celli, supra, 29 Cal.App.3d 511.
The majority highlights Celli. (Maj. opn., ante, at p. 24.)
But it shows just how starkly Fuentes’s current arguments
diverge from her trial court arguments. Celli expressed
skepticism, in dicta, that “public policy in this state would
permit judicial enforcement of a [release] provision printed in
such small type.” (Celli, supra, 29 Cal.App.3d at p. 521.) There
was no question in Celli that the parties had assented to the
contract. Its point was that the contract should not be enforced
on public policy grounds. The trial court’s reference to Celli does
not show that Fuentes made any argument regarding mutual
assent below.
The majority also quotes portions of a sentence from
Fuentes’s trial court opposition, in which she wrote, “The
procedures and tactics that Defendant used . . . preclude
formation of a valid contract.” (See maj. opn., ante, at p. 24.)
However, this sentence fails to articulate any legal basis that
would preclude contract formation, let alone raise an argument

the issue of mutual assent in her petition for review. Instead,
she explicitly added it as an additional issue in her opening brief
on the merits. This addition was improper. (Rule 8.520(b)(3).)

24
FUENTES v. EMPIRE NISSAN, INC.
Guerrero, C. J., dissenting

regarding mutual assent. Nor does any of the surrounding text
provide support for such an argument. The sentence appears at
the end of a section entitled, “The Agreement Defendants’ [sic]
Attempt to Enforce Has Been Superseded by Subsequent
Employment Agreements.” (Boldface and underscoring
omitted.) Nothing in this section, including the sentence quoted
by the majority, raises any argument regarding mutual assent.
Indeed, aside from the sentence quoted by the majority, the
section does not relate to contract formation at all. The majority
presumably sees this sentence as its best evidence that Fuentes
raised her mutual assent argument in the trial court. It is
wholly unpersuasive.7
Finally, the majority invites the trial court to receive
additional briefing “on the relationship between legibility and
mutual assent” in light of its “clarification that arguments about
font size and formatting are not relevant to substantive
unconscionability.” (Maj. opn., ante, at p. 26.) This invitation
wrongly suggests a connection between substantive
unconscionability and mutual assent. The majority’s discussion
of substantive unconscionability does not affect the well-
established body of law governing mutual assent. Nor does it
affect black letter law that a party may assent to a contract even
without being able to read it. (See, e.g., Hawkins v. Hawkins

7
The majority claims these distinctions merely reflect a
“difference in emphasis between Fuentes’s arguments in the
trial court and her arguments in our court.” (Maj. opn., ante, at
p. 24, fn. 7.) The majority is incorrect. A party’s assent to a
contractual offer and the enforcement of any resulting contract
are separate issues, governed by separate bodies of law. As
Fuentes herself admitted, she raised her mutual assent
arguments “for the first time” in this court, not the trial court.

25
FUENTES v. EMPIRE NISSAN, INC.
Guerrero, C. J., dissenting

(1875) 50 Cal. 558, 560; Caballero v. Premier Care Simi Valley
LLC (2021) 69 Cal.App.5th 512, 519 [a party’s “decision to sign
a document he could not read is not a basis for avoiding an
arbitration agreement”]; Windsor Mills, Inc. v. Collins &
Aikman Corp. (1972) 25 Cal.App.3d 987, 992 [“an offeree,
knowing that an offer has been made to him but not knowing all
of its terms, may be held to have accepted, by his conduct,
whatever terms the offer contains”]; see also 1 Williston on
Contracts, supra, § 4:19.) Notwithstanding the majority’s
unusual invitation, its opinion should not be read as questioning
any of these principles.
III. CONCLUSION
In her petition for review, Fuentes requested that this
court address four issues related to substantive
unconscionability that, in her view, justified reversing the
judgment of the Court of Appeal. The majority considers just
one — “ ‘fine-print terms’ ” — and concludes the Court of Appeal
was correct. From there, the majority forges its own path. It
discovers an allegedly unresolved “factual issue” that no party
has identified, and it speculates that the issue may be
dispositive without actually engaging in any substantive
analysis. The majority goes on to find error in the dispositional
language of the Court of Appeal, an issue likewise never raised
by any party, and it concludes that this alleged error requires
reversal as well. The majority does not consider the remaining
three arguments Fuentes raised in her petition for review.
Instead, it invites the lower courts to consider alternative
arguments that Fuentes plainly forfeited.
The majority’s approach runs afoul of the statute and
court rules governing our review, in addition to basic appellate

26
FUENTES v. EMPIRE NISSAN, INC.
Guerrero, C. J., dissenting

procedures and fundamental fairness. It also does a disservice
to the parties, who have now litigated this matter for over five
years but are no closer to a resolution of their dispute. If this
court had simply addressed the issues in Fuentes’s petition for
review, we could have made some progress toward that goal.
But the majority has chosen a different course. I respectfully
dissent.

GUERRERO, C. J.

27
See next page for addresses and telephone numbers for counsel who
argued in Supreme Court.

Name of Opinion Fuentes v. Empire Nissan, Inc.
__________________________________________________________

Procedural Posture (see XX below)
Original Appeal
Original Proceeding
Review Granted (published) XX 90 Cal.App.5th 919
Review Granted (unpublished)
Rehearing Granted
__________________________________________________________

Opinion No. S280256
Date Filed: February 2, 2026
__________________________________________________________

Court: Superior
County: Los Angeles
Judge: Mel Red Recana
__________________________________________________________

Counsel:

Fisher & Phillips, John M. Polson, Tyler Rasmussen, Bret Martin,
Megan E. Walker and Christopher C. Hoffman for Defendants and
Appellants.

Schaerr | Jaffe, Donald M. Falk and Gene C. Schaerr for the Chamber
of Commerce of the United States of America as Amicus Curiae on
behalf of Defendants and Appellants.

Shegerian & Associates, Carney R. Shegerian, Victoria A. Hane;
Javanmardi Law, Peter A. Javanmardi, Marc A. Holmquist; Clarkson
Law Firm, Glenn A. Danas, Ashley M. Boulton, Katelyn Leeviraphan;
Mossavar Law and Miranda A. Mossavar for Plaintiff and Respondent.

Hannah M. Kieschnick for Public Justice as Amicus Curiae on behalf
of Plaintiff and Respondent.
Counsel who argued in Supreme Court (not intended for
publication with opinion):

Christopher C. Hoffman
Fisher & Phillips LLP
4747 Executive Drive, Suite 1000
San Diego, CA 92121
(858) 597-9600

Glenn A. Danas
Clarkson Law Firm, P.C.
22525 Pacific Coast Highway
Malibu, CA 90265
(213) 788-4050

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/11249461. Public record. Not legal advice.