The second-seeded Italian Errani was dispatched by 18-year-old Timea Babos, who reeled off 11 aces while outlasting Errani 6-4, 6-7 (7-3), 6-4 on the hardcourts at Sierra Madre Tennis Club.
The Hungarian did not face a single break point in the first set and jumped ahead to a 4-2 advantage in the second set before Errani rallied to even the match.
Babos, though, converted on 2-of-5 break chances in the final set and fended off Errani's lone chance to break serve en route to the marathon win.
Hungary's Arn, the tournament's sixth seed, dropped a 6-2, 4-6, 7-5 decision to Alexandra Cadantu of Romania.
Cadantu, who was appearing in her first career semifinals match, eased through the first set before struggling in the second, recording five double faults in the middle set.
But she regained control in the third as she converted on all four of her break chances while fending off 3-of-6 opportunities by Arn to set up Sunday's final match.
This week's champion will claim $37,000.