Supreme Court of California Justia
Docket No. S117735
Boghos v. Lloyd's of London


Filed 7/18/05

IN THE SUPREME COURT OF CALIFORNIA

ANTONE BOGHOS,
Plaintiff and Respondent,
S117735
v.
) Ct.App.
6
H024481
CERTAIN UNDERWRITERS AT
LLOYD’S OF LONDON, et al.,
Santa Clara County
Defendants and Appellants.
Super. Ct. No. CV803331

This case presents issues concerning the effect and enforceability of an
arbitration clause in a contract of disability insurance. The lower courts refused to
compel arbitration of contract and tort claims brought by the insured against the
insurer after the latter ceased paying benefits. We reverse and remand for further
proceedings.
I. BACKGROUND
Antone Boghos owned a plumbing business. In September 1998, he applied
to a Los Angeles insurance broker for disability insurance underwritten by certain
underwriters at Lloyd’s of London (hereafter the Underwriters). Boghos requested
and the Underwriters eventually granted coverage for monthly payments of up to
$10,000 for up to 60 months in the event Boghos, because of accident or sickness,
became unable to perform the material and substantial duties of his occupation.
An endorsement to the policy defined those duties as “administrative and
executive duties only.” Another endorsement excluded from coverage “any
1



disease or disorder or condition(s) due to or arising from the lumbar sacral back
and adjacent and related structures.” In his application, Boghos represented that
he had earned $176,080 from his business in the prior year. Boghos signed both
pages of the two-page application, thereby acknowledging his understanding and
agreement that “any dispute concerning this insurance must be submitted to
binding arbitration . . . .”1
The policy became effective on January 8, 1999. It contained the following
arbitration clause, printed bold: “BINDING ARBITRATION: Not withstanding
[sic] any other item setforth [sic] [2] herein, the parties hereby agree that any
dispute which arises shall be settled in Binding Arbitration. By agreeing to
Binding Arbitration, all parties acknowledge and agree that they waive their right
to a trial by jury. Binding Arbitration will be held before a neutral arbitrator who
will be agreed to by all parties. If the parties cannot agree as to the arbitrator, or
believe that a single arbitrator cannot adequately settle the dispute, then an
arbitration panel made up of three arbitrators shall be formed. One arbitrator shall
be appointed by Us. The second arbitrator shall be appointed by You. The third
arbitrator shall be agreed by the two appointed arbitrators. The venue shall be in
Los Angeles County or at another location if agreed by all parties. The arbitration

1
The full paragraph, printed bold, reads: “Binding Arbitration – Waiver of
Right to Trial by Jury: I understand and agree that any dispute concerning this
insurance must be submitted to binding arbitration if the amount in dispute
exceeds the jurisdictional limits of small claims court and is not resolved with a
formal review by Underwriters. I understand and agree that this is a waiver of my
and Underwriters[’] rights to a trial by jury.”
2
No party attributes any significance to the peculiarities of spelling in this
important sentence of the policy. Accordingly, we will regularize the spelling
throughout the remainder of this opinion.
2



will be governed by the commercial arbitration rules of the American Arbitration
Association. Costs for the arbitration shall be equally split among the parties.”
The policy also included, as part of Lloyd’s standard form “Certificate of
Insurance,” a “Service of Suit Clause.” As relevant here, the clause provides:
“Service of Suit Clause. In the event of the failure of Underwriters to pay any
amount claimed to be due under the insurance described herein, Underwriters have
agreed that, at the request of Assured (or Reinsured) they will submit to the
jurisdiction of a court of competent jurisdiction within the United States. Nothing
in this clause constitutes or should be understood to constitute a waiver of
Underwriters’ rights to commence an action in any court of competent jurisdiction
in the United States, to remove an action to a United States District Court, or to
seek a transfer of a case to another Court as permitted by the laws of the United
States or of any State in the United States. In any suit instituted against any one of
them upon the insurance described herein, Underwriters have agreed to abide by
the final decision of such Court or of any Appellate Court in the event of an
appeal.”
In November 2001, Boghos sued the Underwriters for ceasing to pay benefits
under the policy. In his complaint, Boghos alleged that he received, in May 2000,
“a traumatic blow to the back of his head, neck and buttocks which caused him to
lose consciousness. As a result of the incapacitating injuries [Boghos] suffered
during the accident,” his complaint continued, “he has been unable to return to
work since the accident.” In a subsequent declaration, Boghos further described
his continuing injuries as “constant vertigo and headaches, causing [him] to lose
thirty-five pounds from constant vomiting,” requiring him to take prescription
drugs, and leaving him “unable to concentrate and to be active enough to pursue”
his administrative and executive duties. At some unspecified point thereafter, the
Underwriters apparently began to pay disability benefits. In December 2000,
3

however, Boghos received a letter from the Underwriters refusing to continue
paying. In his complaint, Boghos alleged claims for breach of contract, breach of
the covenant of good faith and fair dealing, and intentional infliction of emotional
distress.
The Underwriters moved to compel arbitration of all claims. The trial court
denied the petition, holding among other things that the policy’s service of suit
clause conflicted with the arbitration clause and that any ambiguity between the
two should be resolved in Boghos’s favor by refusing to compel arbitration. The
Court of Appeal affirmed, adding its own conclusion that the arbitration clause
was unenforceable under decisions of this court holding that persons who have
agreed to arbitrate rights based on statute cannot be required to pay costs they
would not have to pay if suing in court. (See Armendariz v. Foundation Health
Psychcare Services, Inc. (2000) 24 Cal.4th 83 (Armendariz) and Little v. Auto
Stiegler, Inc. (2003) 29 Cal.4th 1064 (Little).) We granted the Underwriters’
petition for review.
II. DISCUSSION
A. The Arbitration and Service of Suit Clauses
The lower courts, as mentioned, concluded the policy’s arbitration and
service of suit clauses conflicted, thereby creating an ambiguity that had to be
resolved in favor of the insured. We conclude the lower courts erred.
Our goal in construing insurance contracts, as with contracts generally, is to
give effect to the parties’ mutual intentions. (Bank of the West v. Superior Court
(1992) 2 Cal.4th 1254, 1264; see Civ. Code, § 1636.) “If contractual language is
clear and explicit, it governs.” (Bank of the West, at p. 1264; see Civ. Code,
§ 1638.) If the terms are ambiguous, we interpret them to protect “ ‘the
objectively reasonable expectations of the insured.’ ” (Bank of the West, at
4

p. 1265, quoting AIU Ins. Co. v. Superior Court (1990) 51 Cal.3d 807, 822.) Only
if these rules do not resolve a claimed ambiguity do we resort to the rule that
ambiguities are to be resolved against the insurer. (Bank of the West, at p. 1264.)
When a party to an arbitration agreement challenges the agreement as
unenforceable, we decide the issue based on the same state law standards that
apply to contracts generally. (Engalla v. Permanente Medical Group, Inc. (1997)
15 Cal.4th 951, 971-972.) The United States Arbitration Act (9 U.S.C. § 1 et
seq.), commonly known as the Federal Arbitration Act (hereafter FAA), creates a
presumption in favor of arbitrability (Engalla v. Permanente Medical Group, Inc.,
supra, at p. 971; see 9 U.S.C. § 2) and permits courts to refuse to enforce
agreements to arbitrate only “upon such grounds as exist at law or in equity for the
revocation of any contract” (9 U.S.C. § 2). Similarly, title 9 of the Code of Civil
Procedure (§ 1280 et seq.) expresses a strong public policy favoring the
enforcement of valid agreements to arbitrate. (Moncharsh v. Heily & Blase (1992)
3 Cal.4th 1, 9.)
In a typical service of suit clause, one or more parties agree to submit to the
jurisdiction of courts for designated purposes related to the contract in which the
clause appears. Here, the Underwriters have agreed, “[i]n the event of [their]
failure . . . to pay any amount claimed to be due under the [policy],” and “at the
request of Assured,” to “submit to the jurisdiction of a court of competent
jurisdiction within the United States.”
Courts in other jurisdictions have generally enforced arbitration clauses in
contracts, including insurance contracts, that have also included service of suit
clauses, rejecting the argument that consent to service creates an ambiguity or
waives the right to compel arbitration. These courts have reasoned that the two
clauses do not conflict because the service of suit clause should be interpreted, in
view of the presumption favoring arbitration, as intended to facilitate enforcement
5

of the arbitration clause.3 The only California case on point is consistent with the
general rule. In Appalachian Insurance Co. v. Rivcom Corp. (1982) 130
Cal.App.3d 818, the Court of Appeals held that a service of suit clause did not
supersede, or create an ambiguity in light of, a clause requiring that the value of
any loss be determined by appraisal, a form of arbitration expressly subject by
statute to California arbitration law. (Id., at pp. 824, 827-828; see Code Civ. Proc.,
§ 1280, subd. (a).) The court reasoned that both clauses could operate because the
service of suit clause allowed the insured to sue in court if the insurer refused to
pay the appraised value. (Appalachian Insurance Co. v. Rivcom Corp., supra, at
pp. 827-828.)
This case is easier to resolve than the cases just mentioned. In none of those
cases did the court note that the contract at issue included language establishing
priority as between the arbitration (or appraisal) clause and the service of suit
clause. Here, in contrast, the contract does include such language. The first
sentence of the arbitration clause expressly declares that, “Notwithstanding any
other item set forth herein, the parties hereby agree that any dispute which arises
shall be settled in Binding Arbitration.” (Italics added.) The phrase

3
E.g., West Shore Pipe Line v. Associated Elec. & Gas (N.D.Ill. 1992) 791
F.Supp. 200, 203-204; Brener v. Becker Paribas, Inc. (S.D.N.Y. 1985) 628
F.Supp. 442, 451-452; NECA Ins., Ltd. v. National Union Fire Ins. Co. (S.D.N.Y.
1984) 595 F.Supp. 955, 957-958; Old Dominion Ins. v. Dependable Reinsurance
(Fla.Dist.Ct.App. 1985) 472 So.2d 1365, 1368; Hart v. Orion Insurance Company
(10th Cir. 1971) 453 F.2d 1358, 1361; cf. Gelderman, Inc. v. Stathis (Ill.App.Ct.
1988) 532 N.E.2d 366, 369-370 [forum selection clause]; but see Transit Cas. Co.
v. Certain Underwriters
(Mo.Ct.App. 1998) 963 S.W.2d 392, 399.

The Underwriters have asked us to take judicial notice of additional federal
decisions that do not appear in West’s Federal Reporter and Federal Supplement.
The motion is granted. (Evid. Code, § 451, subd. (a) [“Judicial notice shall be
taken of . . . [t]he decisional . . . law. . . of the United States . . .].”)
6



“[n]otwithstanding any other item” clearly indicates the parties intended the
arbitration clause to apply according to its terms and for all disputes to be settled
in binding arbitration, even if other provisions, read in isolation, might seem to
require a different result. No ambiguity exists.
Boghos advances several arguments against this conclusion. None is
persuasive.
First, Boghos argues that, given the service of suit clause, the arbitration
clause cannot be enforced without rendering the former surplusage. Boghos thus
invokes the general rule of contract interpretation that “[t]he whole of a contract is
to be taken together, so as to give effect to every part, if reasonably practicable,
each clause helping to interpret the other.” (Civ. Code, § 1641.) The rule’s effect,
among other things, is to disfavor constructions of contractual provisions that
would render other provisions surplusage. (Berg v. MTC Electronics Technologies
Co. (1998) 61 Cal.App.4th 349, 361-362.) To enforce the policy’s arbitration
clause according to its terms does not render the service of suit clause surplusage.
The service of suit clause continues to have real effect because it requires the
Underwriters to submit to the jurisdiction of United States courts in actions to
compel arbitration or to enforce arbitral awards, thus easing burdens the insured
might encounter in obtaining jurisdiction over the Underwriters in London. (Hart
v. Orion Insurance Company, supra, 453 F.2d 1358, 1361.)
Boghos argues that to read the service of suit clause in this manner would
cause it to duplicate a right guaranteed by statute, once again rendering it
surplusage. The Code of Civil Procedure, Boghos correctly points out, gives
California courts personal and subject matter jurisdiction to compel arbitration and
to enforce arbitral awards when a contract to arbitrate is made in this state. (See
7

Code Civ. Proc., § 1293.) 4 Nevertheless, the service of suit clause confers rights
the relevant statutes do not. For example, through the service of suit clause the
Underwriters consent to suit not just in California but in any “court of competent
jurisdiction within the United States,” apparently at Boghos’s choice. This is more
than California law provides. A contract term, in any event, is not surplusage
merely because it confers a right already guaranteed by statute. (See Berg v. MTC
Electronics Technologies Co., supra, 61 Cal.App.4th 349, 361-362.) Moreover,
policies issued by underwriters at Lloyd’s containing the same service of suit
clause are sold not just in California, but throughout the United States. That a
contractual provision intended to bind insurers to submit to service under a variety
of statutory schemes will duplicate certain statutory rights seems both unavoidable
and unobjectionable.
Boghos also argues that the service of suit clause, if read as intended to
facilitate arbitration, narrows the circumstances under which the insurers must
submit to the jurisdiction of a court. For purposes of this argument, Boghos
interprets the language by which the Underwriters submit to jurisdiction (“[i]n the
event of [their] failure . . . to pay”) as an assertion that they do not submit to the
court’s jurisdiction to compel arbitration of claims not involving a failure to pay,
even though the arbitration clause is broad enough to cover such claims. The
relevance of this additional argument to the issue before us, namely the
enforceability of the arbitration clause, is not evident. The argument lacks merit,
in any event. Regardless of the policy language, Code of Civil Procedure section

4
“The making of an agreement in this State providing for arbitration to be
had within this State shall be deemed a consent of the parties thereto to the
jurisdiction of the courts of this State to enforce such agreement by the making of
any orders provided for in this title and by entering of judgment on an award under
the agreement.” (Code Civ. Proc., § 1293.)
8



1293, as Boghos acknowledges, gives California courts personal and subject
matter jurisdiction to enforce arbitration agreements formed in California. The
service of suit clause, even if limited to claims based on the Underwriters’ failure
to pay benefits, still gives Boghos the additional, nonstatutory right to require the
Underwriters to appear not just in California courts but in any “court of competent
jurisdiction within the United States.”
Boghos next argues the service of suit clause must take priority over the
arbitration clause under the rule that more specific contractual provisions control
over more general ones. (See Code Civ. Proc., § 1859;5 National Ins.
Underwriters v. Carter (1976) 17 Cal.3d 380, 386.) But this rule applies only
when the provisions in question are truly inconsistent. (Code Civ. Proc., § 1859;
National Ins. Underwriters v. Carter, supra, 17 Cal.3d at p. 386.) The arbitration
clause here is neither inconsistent with, nor ambiguous in light of, the service of
suit clause because the first sentence of the arbitration clause (“[n]otwithstanding
any other item set forth herein”) explicitly requires that clause to be enforced even
if other provisions, read in isolation, might seem to dictate a different result.
Finally, Boghos argues that to enforce the arbitration clause would in effect
allow the Underwriters to disavow a promise to submit to suit in court and give
them a license to deceive policyholders. To the contrary, given the unambiguous
language of the arbitration clause, no such promise exists. Nor is the policy
deceptive. To be sure, insurers must draft policy language with an eye to how
insureds will likely understand it. An insurer must, for example, make

5
“In the construction of a statute the intention of the Legislature, and in the
construction of the instrument the intention of the parties, is to be pursued, if
possible; and when a general and particular provision are inconsistent, the latter is
paramount to the former. So a particular intent will control a general one that
is inconsistent with it.” (Code Civ. Proc., § 1859.)
9



“conspicuous, plain and clear” any provision that creates an exception to or
limitation on coverage reasonably expected by the insured. (Haynes v. Farmers
Ins. Exchange (2004) 32 Cal.4th 1198, 1204.) We have not held that an arbitration
clause constitutes an exception to or limitation of coverage for purposes of this
requirement. Yet even if we were to apply this prophylactic rule against
deception, the arbitration clause here would easily pass muster as conspicuous,
plain, and clear. A coverage limitation is conspicuous when it is positioned and
printed in a manner that will attract the reader’s attention. (Id., at pp. 1207-1208.)
A limitation is plain and clear when, from the perspective of an average layperson,
it is communicated in clear and unmistakable language. (Id., at p. 1212; State
Farm Mut. Auto Ins. Co. v. Jacober (1973) 10 Cal.3d 193, 201-202.) While the
arbitration clause here is printed in text the same size as the other provisions in the
policy, it is the only provision printed entirely in bold. Moreover, the arbitration
clause’s first sentence clearly and unmistakably requires arbitration of “any
dispute” arising under the policy, “[n]otwithstanding any other item” in the policy.
Finally, both pages of the application for insurance informed Boghos in bold print,
immediately above the signature line, that by signing he “underst[oo]d and
agree[d] that any dispute concerning this insurance must be submitted to binding
arbitration . . . .” A reasonable person reading the application and policy would
understand that he would be required to arbitrate all disputes arising under the
policy.
B. Armendariz and Little.
Boghos next contends the policy’s arbitration clause is unenforceable under
Armendariz, supra, 24 Cal.4th 83, and Little, supra, 29 Cal.4th 1064, because it
requires him to pay costs he would not have to pay were he suing in court, namely
10

costs imposed by the American Arbitration Association (AAA)6 and the
arbitrators’ fees. The cases on which Boghos relies, which address the legality
and effect of employer-mandated arbitration clauses covering claims by
employees based on statutory and constitutional provisions, do not support his
contention.
In Armendariz, supra, 24 Cal.4th 83, we set out the conditions under which
an employer can lawfully require its employees to arbitrate claims arising under
the California Fair Employment and Housing Act (Gov. Code, § 12900 et seq.)
(FEHA). Through the FEHA, we reasoned, the Legislature created substantive
and procedural rights not just for the benefit of individuals but also for public
purposes; accordingly, those statutory rights are unwaivable under Civil Code
sections 1668 7 and 3513.8 (Armendariz, at pp. 100-101.) To ensure that
employer-mandated arbitration agreements would not become vehicles for the
waiver of FEHA rights, we held that such agreements are enforceable only if they

6
As noted, the arbitration clause expressly invokes the AAA’s commercial
arbitration rules. The full, up-to-date text of those rules is available on the AAA’s
Internet site at <http://www.adr.org> (as of July 18, 2005). Having given the
parties appropriate notice before oral argument that we proposed to take judicial
notice of the rules on our own motion (Evid. Code, § 459, subds. (c) & (d)), we
now do take judicial notice of them. (See Evid. Code, § 452, subd. (h) [permitting
judicial notice of “[f]acts and propositions that are not reasonably subject to
dispute and are capable of immediate and accurate determination by resort to
sources of reasonably indisputable accuracy”]; Century City Medical Plaza v.
Sperling, Isaacs & Eisenberg
(2001) 86 Cal.App.4th 865, 869-870.)
7
“All contracts which have for their object, directly or indirectly, to exempt
any one from responsibility for his own fraud, or willful injury to the person or
property of another, or violation of law, whether willful or negligent, are against
the policy of the law.” (Civ. Code, § 1668.)
8
“Any one may waive the advantage of a law intended solely for his benefit.
But a law established for a public reason cannot be contravened by a private
agreement.” (Civ. Code, § 3513.)
11



provide for neutral arbitrators, more than minimal discovery, a written award, and
all of the types of relief that would otherwise be available in court and, in addition,
“ ‘do[] not require employees to pay either unreasonable costs or any arbitrators’
fees or expenses as a condition of access to the arbitration forum.’ ” (Armendariz,
at p. 102, italics added, quoting Cole v. Burns Intern. Security Services (D.C. Cir.
1977) 105 F.3d 1465, 1482.) We borrowed these requirements from an analogous
federal decision, Cole, which had in turn formulated them to ensure that employer-
mandated arbitration agreements did not violate title VII of the Civil Rights Act of
1964 (42 U.S.C. § 2000e et seq.).
In Little, supra, 29 Cal.4th 1064, we extended Armendariz, supra, 24 Cal.4th
83, and applied its requirements to employer-mandated arbitration of tort claims
for wrongful discharge in violation of public policy (i.e., claims under Tameny v.
Atlantic Richfield Co. (1980) 27 Cal.3d 167 (Tameny)). Justifying the extension,
we reasoned that Tameny claims, even though not statutory, are nevertheless
“almost by definition unwaivable” (Little, at p. 1077) because they seek to enforce
public policies that are carefully tethered to fundamental policies delineated in
constitutional or statutory provisions (ibid.; see Silo v. CHW Medical Foundation
(2002) 27 Cal.4th 1097, 1104; Gantt v. Sentry Insurance (1992) 1 Cal.4th 1083,
1095). To extend the Armendariz requirements to Tameny claims was also
consistent with the object of those requirements, which is “to ensure minimum
standards of fairness in arbitration so that employees subject to mandatory
arbitration agreements can vindicate their public rights in an arbitral forum.”
(Little, at p. 1080.)
Boghos asks us to extend the holdings of Armendariz, supra, 24 Cal.4th 83,
and Little, supra, 29 Cal.4th 1064, to insurance disputes and to declare the policy’s
arbitration clause unenforceable because it requires him to share with the
Underwriters the costs of arbitration and the arbitrators’ fees. We find no merit in
12

the request. Even if the holdings in Armendariz and Little might conceivably be
extended beyond the employment context to cover other types of unwaivable
claims based on or tethered to statutes, Boghos’s claims for nonpayment of
benefits and breach of the covenant of good faith and fair dealing cannot properly
be so described. Boghos’s claim that the Underwriters have failed to pay benefits
under the policy is a claim for breach of contract, pure and simple. His claim that
the Underwriters have, by failing to pay, violated the covenant of good faith and
fair dealing may properly be described either as a tort claim (Crisci v. Security Ins.
Co. (1967) 66 Cal.2d 425, 433-434) or as a special type of contract claim for
which we allow tort damages (ibid.; Erlich v. Menezes (1999) 21 Cal.4th 543, 551-
552). While insurance bad faith claims were for a time thought to have a statutory
basis in the Unfair Practices Act (Ins. Code, § 790 et seq.), we definitively rejected
that position in Moradi-Shalal v. Fireman’s Fund Ins. Companies (1988) 46
Cal.3d 287, 304, and expressly overruled prior contrary authority (ibid., overruling
Royal Globe Ins. Co. v. Superior Court (1979) 23 Cal.3d 880). For the same
reason, insurance bad faith claims also cannot properly be described as tethered to
a statute, in the sense that Tameny claims subject to arbitration under Little are
necessarily “ ‘based on policies “carefully tethered to fundamental policies . . .
delineated in constitutional or statutory provisions . . . .” ’ ” (Little, at p. 1077,
quoting Silo v. CHW Medical Foundation, supra, 27 Cal.4th 1097, 1104.) While
the business of insurance is sufficiently affected with a public interest to justify its
regulation by the state (see Ins. Code, § 680 et seq.), as Boghos observes, the fact
of regulation does not suffice to demonstrate that any given insurance-related
claim entails an unwaivable statutory right, or that any given claim seeks to
enforce a public policy articulated in a statute.
In any event, we have not extended the Armendariz/Little cost-shifting rule to
common law claims generally. The rule is a judicially created exception to Code
13

of Civil Procedure section 1284.2, which provides that the parties to an arbitration
agreement do share costs “[u]nless the arbitration agreement otherwise provides or
the parties to the arbitration otherwise agree . . . .” 9 We justified our creation of
the exception in Armendariz, supra, 24 Cal.4th 83, by reasoning that section
1284.2 “is a default provision, and the agreement to arbitrate a statutory claim
[e.g., a FEHA claim] is implicitly an agreement [by the employer] to abide by the
substantive remedial provisions of the statute” (Armendariz, at p. 112) and to pay
“all types of cost that are unique to arbitration.” (Id., at p. 113.) The same
reasoning fairly covers common law Tameny claims, which must be carefully
tethered to statutory or constitutional provisions (see Little, supra, 29 Cal.4th
1064, 1077, 1081-1082), but not to common law claims generally. To extend
Armendariz to the arbitration of claims not carefully tethered to statutory or
constitutional provisions would seem an arbitrary refusal to enforce section
1284.2, a legislative act, and thus raise concerns about judicial policymaking
similar to those that led us to require a statutory or constitutional basis for Tameny
claims. (Silo v. CHW Medical Foundation, supra, 27 Cal.4th 1097, 1104; Gantt v.
Sentry Insurance, supra, 1 Cal.4th 1083, 1095. )
C. Remaining Issues
Our decision leaves certain issues to be decided on remand. The trial court,
as mentioned, held that the policy’s service of suit clause conflicted with the
arbitration clause and that any ambiguity between the two should be resolved in

9
“Unless the arbitration agreement otherwise provides or the parties to the
arbitration otherwise agree, each party to the arbitration shall pay his pro rata share
of the expenses and fees of the neutral arbitrator, together with other expenses of
the arbitration incurred or approved by the neutral arbitrator, not including counsel
fees or witness fees or other expenses incurred by a party for his own benefit.”
(Code Civ. Proc., § 1284.2.)
14



Boghos’s favor by refusing to compel arbitration. The Court of Appeal affirmed,
adding its own erroneous conclusion that the arbitration provision was
unenforceable under Armendariz, supra, 24 Cal.4th 83, and Little, supra, 29
Cal.4th 1064. Consequently, no court has yet addressed the questions of
(1) whether the clause of the arbitration provision requiring Boghos to share the
costs of arbitration and the arbitrator’s (or arbitrators’) fees is is unenforceable
under the general law of unconscionability, (2) whether Boghos’s ability to pay his
share of the costs and fees is relevant to the question of unconscionability and, if
so, whether he must prove he is factually unable to pay,10 (3) whether the clause of
the arbitration provision selecting the venue of arbitration (“Los Angeles County
or at another location if agreed by all parties”) is unconscionable, and (4) whether,
if the cost-sharing clause, the venue-selection clause or both are unconscionable,
the offending clause or clauses should be severed and the matter nevertheless
referred to arbitration (see Civ. Code, § 1670.5). Considerations of judicial
economy make it appropriate to leave these questions to the lower courts in the
first instance. (See Cal. Rules of Court, rule 29(b)(3).)

10
The Underwriters dispute Boghos’s claim of inability to pay, asking us to
take judicial notice of court documents from his recent divorce proceeding
purporting to show that he has substantial income and assets. Because we remand
Boghos’s claim of unconscionability for consideration by the lower courts, we
deny the Underwriters’ related requests for judicial notice without prejudice to
refiling below. The Court of Appeal earlier denied a similar request for judicial
notice only because that court decided the case on a rationale that did not require
an examination of Boghos’s ability to pay.
15



III. DISPOSITION
The judgment of the Court of Appeal is reversed and remanded for further
proceedings consistent with the views set forth herein.
WERDEGAR, J.
WE CONCUR:
GEORGE, C.J.
KENNARD, J.
BAXTER, J.
CHIN, J.
MORENO, J.
16

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

Name of Opinion Boghos v. Certain Underwriters at Lloyd’s
__________________________________________________________________________________

Unpublished Opinion


Original Appeal
Original Proceeding
Review Granted
XXX 109 Cal.App.4th 1728
Rehearing Granted

__________________________________________________________________________________

Opinion No.

S117735
Date Filed: July 18, 2005
__________________________________________________________________________________

Court:

Superior
County: Santa Clara
Judge: Jamie A. Jacobs-May

__________________________________________________________________________________

Attorneys for Appellant:

LeBoeuf, Lamb, Greene & MacRae, Dean Hansell, Sharon C. Corda and Jared M. Katz for Defendants and
Appellants.

Hancock Rothert & Bunshoft, Paul J. Killion and Leslie Kurshan for Unionamerica Insurance Company as
Amicus Curiae on behalf of Defendants and Appellants.

Fred J. Hiestand for The Civil Justice Association of California as Amicus Curiae on behalf of Defendants
and Appellants.

__________________________________________________________________________________

Attorneys for Respondent:

Bohn & Bohn, Robert H. Bohn; Trial Lawyers for Public Justice, Michael J. Quirk, F. Paul Bland, Jr., and
Kate Gordon for Plaintiff and Respondent.

Robinson, Calcagnie & Robinson and Sharon J. Arkin for Consumer Attorneys of California as Amicus
Curiae on behalf of Plaintiff and Respondent.

Public Citizen Litigation Group, Scott L. Nelson, Brian Wolfman; Kasdan, Simonds, Riley & Vaughan and
Vance C. Simonds for Public Citizen, Inc., as Amicus Curiae on behalf of Plaintiff and Respondent.

Deborah Zuckerman, Michael Schuster; Kemnitzer, Anderson, Barron & Ogilvie and Nancy Barron for
AARP and The National Association of Consumer Advocates as Amicus Curiae on behalf of Plaintiff and
Respondent.



Counsel who argued in Supreme Court (not intended for publication with opinion):

Dean Hansell
LeBoeuf, Lamb, Greene & MacRae
725 Figueroa Street, Suite 3100
Los Angeles, CA 90017-5404
(213) 955-7300

Michael J. Quirk
Trial Lawyers for Public Justice
1717 Massachusetts Avenue, N.W., Suite 800
Washington, D.C. 20036
(202) 797-8600


Opinion Information
Date:Docket Number:
Mon, 07/18/2005S117735

Parties
1Boghos, Antone (Plaintiff and Respondent)
Represented by Paul Bland
Trial Lawyers for Public Justice
1717 Massachusetts Avenue, N.W. Ste. 800
Washington, DC

2Boghos, Antone (Plaintiff and Respondent)
Represented by Robert Herbert Bohn, Jr
Bohn & Bohn LLP
152 North 3rd Street, Suite 200
San Jose, CA

3Boghos, Antone (Plaintiff and Respondent)
Represented by Michael Quirk
Trial Lawyers for Public Justice, P.C.
1717 Massachusetts Avenue, NW, Suite 800
Washington, DC

4Lloyds Of London (Defendant and Appellant)
Represented by Dean Hansell
LeBoeuf Lamb et al LLP
725 S Figueroa St #3100
Los Angeles, CA

5Lloyds Of London (Defendant and Appellant)
Represented by Sharon C Corda
LeBoeuf Lamb et al LLP
725 S Figueroa St #3100
Los Angeles, CA

6Unionamerica Insurance Company Limited (Pub/Depublication Requestor)
Represented by Paul J. Killion
Hancock Rothert & Bunshoft LLP
4 Embarcadero Center, Suite 300
San Francisco, CA

7Public Citizen, Inc. (Amicus curiae)
Represented by Vance C. Simonds
Kasdan Simonds Riley & Vaughan LLP.
2600 Michelson Drive, Suite 1000
Irvine, CA

8Consumer Attorneys Of California (Amicus curiae)
Represented by Sharon J. Arkin
Robinson Calcagnie & Robinson
620 Newport Center Drive, 7TH Floor
Newport Beach, CA

9Civil Justice Association Of California (Amicus curiae)
Represented by Fred James Hiestand
Attorney at Law
1121 L Street, Suite 404
Sacramento, CA

10National Association Of Consumer Advocates (Amicus curiae)
Represented by Nancy Barron
Kemnitzer Anderson Barron & Ogilvie
445 Bush Street, 6th Floor
San Francisco, CA


Disposition
Jul 18 2005Opinion: Reversed

Dockets
Jul 28 2003Received premature petition for review
  by counsel for (LLoyd's of London, et al.)
Jul 29 2003Case start: Petition for review filed
  and request for depublication.
Jul 29 2003Record requested
 
Aug 1 2003Request for extension of time filed
  By Respondent Antone Boghos asking Until August 27, 2003 to file Respondent's Answer to petition for review.
Aug 1 2003Record requested
  1-file jacket, briefs, 1-vol. applts. appendix & RT-1
Aug 1 2003Extension of time granted
  To August 25, 2003 to file respondent's answer to petition for review.
Aug 22 2003Answer to petition for review filed
  By Respondent {Antone Boghos}.
Aug 28 2003Request for extension of time filed
  By Appellants {Certain Underwriters at Lloyd's of London et al.,} asking until September 12, 2003 to file Appellant's Reply to Answer to Petition for Review.
Aug 29 2003Request for depublication (petition for review pending)
  By Unionamerica Insurance Company Limited. (Non-party).
Sep 2 2003Reply to answer to petition filed
  appellants Certain Underwriters at Lloyd's, etal
Sep 2 2003Extension of time denied
 
Sep 24 2003Letter sent to:
  Counsel regarding Certification of Interested Parties.
Sep 24 2003Petition for Review Granted (civil case)
  Votes; George, C.J., Kennard, Baxter, Werdegar, Chin and Moreno, JJ.
Sep 29 2003Certification of interested entities or persons filed
  By counsel for Respondent {Antone Boghos}.
Oct 6 2003Certification of interested entities or persons filed
  counsel for appellant Lloyd's of London
Oct 10 2003Request for extension of time filed
  to file opening brief/merits - appellants Lloyd's of London - asking to Nov 24, 2003
Oct 20 2003Extension of time granted
  To November 24, 2003 to file Appellant's Opening Brief on the Merits.
Nov 25 2003Opening brief on the merits filed
  appellants Certain Underwriters at Lloyd's, etal [rule 40k]
Nov 25 2003Request for judicial notice filed (in non-AA proceeding)
  appellants Certain Underwriters' at Lloyd's, etal
Dec 5 2003Request for extension of time filed
  By Respondent asking for a 30-day extension to January 22, 2004, to file Respondent's Answer Brief on the Merits.
Dec 9 2003Extension of time granted
  To January 22, 2004 to file Respondent's Answer Brief on the Merits.
Jan 22 2004Answer brief on the merits filed
  By Respondent {Antone Boghos}.
Jan 26 2004Application to appear as counsel pro hac vice (granted case)
  F. Paul Bland as counsel for respondent Antone Boghos
Jan 26 2004Application to appear as counsel pro hac vice (granted case)
  Michael J. Quirk as counsel for respondent Antone Boghos
Jan 28 2004Application to appear as counsel pro hac vice granted
  F. Paul Bland, JR., of the District of Columbia on behalf of Respondent.
Jan 28 2004Application to appear as counsel pro hac vice granted
  Michael J. Quirk of the District of Columbia on behalf of Respondent.
Jan 28 2004Request for extension of time filed
  to file reply brief aplnts, Lloyd's, Petersen Int'l Und., and Int'l Risk mgmnt. Grp.., to Mar. 12th.
Jan 30 2004Extension of time granted
  To March 12, 2004 to file appellants' Reply Brief on the Merits. No further extensions of time are contemplated.
Mar 9 2004Supplemental brief filed
  on New Authority by Respondent {Antone Boghos}.
Mar 12 2004Request for judicial notice filed (granted case)
  appellant, "LLoyd's of London" submitted with exhibits under separate cover.
Mar 12 2004Reply brief filed (case fully briefed)
  appellant, " LLoyd's of London'".
Apr 12 2004Received application to file Amicus Curiae Brief
  UnionAmerica Insurance Company Limited in support of Appellant (Certain Underwriters at Lloyd's of London)./ with one volume of appendix of unpublished out of state authorities.
Apr 13 2004Received application to file Amicus Curiae Brief
  Public Citizen, Inc., in support of Respondent {Antone Boghos} / 40(K).
Apr 13 2004Received application to file Amicus Curiae Brief
  Consumer Attorneys of California in support o Respondent {Antone Boghos} / 40(K).
Apr 13 2004Received application to file Amicus Curiae Brief
  Civil Justice Association of California in support of Appellants {Certain Underwriters at Lloyd's of London et al.,} / 40(K).
Apr 13 2004Received application to file Amicus Curiae Brief
  AARP and National Association of Consumer Advocates in support of respondent Antone Boghos 40(K). Application and brief under separate covers.
Apr 13 2004Permission to file amicus curiae brief granted
  Unionamerica Insurance Company in support of appellants.
Apr 13 2004Amicus curiae brief filed
  Unionamerica Insurance Company in support of Appellants. Answer is due within twenty days.
Apr 13 2004Permission to file amicus curiae brief granted
  Public Citizen, Inc., in support of Respondent.
Apr 13 2004Amicus curiae brief filed
  Public Citizen, Inc., in support of Respondent. Answer is due within twenty days.
Apr 13 2004Permission to file amicus curiae brief granted
  Consumer Attorneys of California in support of Respondent.
Apr 13 2004Amicus curiae brief filed
  Consumer Attorneys of California in support of Respondent. Answer is due within twenty days.
Apr 13 2004Permission to file amicus curiae brief granted
  The Civil Justice Association of California in support of appellants.
Apr 13 2004Amicus curiae brief filed
  The Civil Justice Association of California in support of Appellants. Answer is due within twenty days.
Apr 13 2004Permission to file amicus curiae brief granted
  AARP and National Association of Consumer Advocates in support of respondent.
Apr 13 2004Amicus curiae brief filed
  AARP and National Association of Consumer Advocates in support of respondent. Answer is due within twenty days.
May 3 2004Response to amicus curiae brief filed
  By Respondent {Antone Boghos} to AC briefs filed by {The Civil Justice Association of California and by Unionamerica Insurance Company}. (Consolidated Response).
May 4 2004Response to amicus curiae brief filed
  Appellants, Certain Underwriters at Lloyd's, etc.,
Apr 18 2005Supplemental brief filed
  By counsel for Respondent {Antone Boghos} re: new authority.
May 3 2005Case ordered on calendar
  5/25/05, 1:30pm, S.F.
May 13 2005Request for judicial notice granted
  The parties are hereby notified that the court proposes to take judicial notice of the "Commercial Arbitration Rules and Mediation Procedures" of the American Arbitration Association as posted on that organization's internet site, http://www.adr.org. This notice is provided pursuant to the provisions of Evidence Code sections 459, subdivision (c) and 455, subdivision (a). If any party wishes to present information to the court relevant to the propriety of taking judicial notice of the matter and the tenor of the matter to be noticed, such information shall be submitted to the court on or before May 19, 2005.
May 16 2005Supplemental brief filed
  appellants' LLOYD'S OF LONDON, et al., re new authorities
May 18 2005Filed:
  response to court's order of 5/13/05 by counsel for applnts LLOYD'S OF LONDON, et al.,
May 18 2005Request for judicial notice filed (granted case)
  (supplemental) by counsel for appellants LLOYD'S OF LONDON, et al.
May 19 2005Filed:
  Respondent's Response to Order Regarding Judicial Notice.
May 23 2005Filed:
  Respondent's response to appellants' Supplemental Request for Judicial Notice.
May 25 2005Cause argued and submitted
 
Jul 18 2005Opinion filed: Judgment reversed
  And remanded. Opinion by Werdegar, J. ----joined by George, C.J., Kennard, Baxter, Chin & Moreno, JJ.
Aug 22 2005Remittitur issued (civil case)
 
Aug 24 2005Received:
  receipt for remittitur from CA/6.
Sep 27 2005Returned record
  To 6 DCA. (2 Vols.)
Dec 12 2005Received:
  Orignial record returned from CA 6

Briefs
Nov 25 2003Opening brief on the merits filed
 
Jan 22 2004Answer brief on the merits filed
 
Mar 12 2004Reply brief filed (case fully briefed)
 
Apr 13 2004Amicus curiae brief filed
 
Apr 13 2004Amicus curiae brief filed
 
Apr 13 2004Amicus curiae brief filed
 
Apr 13 2004Amicus curiae brief filed
 
Apr 13 2004Amicus curiae brief filed
 
May 3 2004Response to amicus curiae brief filed
 
May 4 2004Response to amicus curiae brief filed
 
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