Judge: Andrew E. Cooper, Case: 22CHCV00534, Date: 2023-09-11 Tentative Ruling

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Case Number: 22CHCV00534    Hearing Date: September 11, 2023    Dept: F51

MOTION FOR RECONSIDERATION

Motion Filed: 6/12/23

MOVING PARTY: Plaintiffs Julia Reniger and Peter Reniger (collectively, “Plaintiffs”)

RESPONDING PARTY: Defendant FCA US LLC (“Defendant”)

NOTICE: OK

RELIEF REQUESTED: Reconsideration and reversal of the Court’s 2/3/23 Order granting Defendant’s motion to compel the arbitration of Plaintiffs’ claims against Defendant.

TENTATIVE RULING: The motion is denied.

BACKGROUND

On 2/3/23 Judge Randy Rhodes granted Defendant’s Motion to Compel Arbitration and Stay Action. On 6/12/23, Plaintiffs filed the instant motion for reconsideration of the Court’s 2/3/23 Order. On 8/28/23, Defendant filed its opposition. On 9/1/23, Plaintiffs filed their reply.

ANALYSIS

“If a court at any time determines that there has been a change of law that warrants it to reconsider a prior order it entered, it may do so on its own motion and enter a different order.” (Code Civ. Proc. § 1008, subd. (c).) For case law to be considered “new law,” the following must be true: (1) the case must contain a new holding—that is, a holding different from case law that existed when the court took the motion under submission—and (2) the new holding must affect the court's ruling on the underlying motion. (State of California v. Superior Court (Flynn) (2016) 4 Cal.App.5th 94, 100–101.)

1.      Jurisdiction

As a preliminary matter, Defendant argues that the Court has no jurisdiction over matters already submitted to arbitration. (Def.’s Opp. 4:23–5:13.) Plaintiffs argue in reply that Code of Civil Procedure section 1292.6 explicitly states that the Court “retains jurisdiction to determine any subsequent petition involving the same agreement to arbitrate and the same controversy, and any such subsequent petition shall be filed in the same proceeding.” (Code Civ. Proc. § 1292.6.) Plaintiffs go on to cite several cases in which the Court of Appeal has consistently found that trial courts retain jurisdiction to reconsider an initial order granting arbitration. (Pls.’ Reply 5:3–13, citing Preston v. Kaiser Foundation Hospital (1981) 126 Cal.App.3d 402, Pinela v. Neiman Marcus Group, Inc. (2015) 238 Cal.App.4th 227, Malek v. Blue Cross of California (2004) 121 Cal.App.4th 44, Gallo v. Wood Ranch USA, Inc. (2022) 81 Cal.App.5th 621, Hollister v. Benzl (1999) 71 Cal.App.4th 582.)

The Pinela court addressed this exact issue, finding that “while it is correct as a general matter that the granting of a stay under Code of Civil Procedure section 1281.4 places the proceedings before the trial court in ‘the twilight zone of abatement’ …, such a stay does not effect the ‘ouster of the judicial power vested in the trial court of this state by our Constitution’ … Because contractual arbitration ‘dr[aws] its vitality from the contract’ …, a trial court has inherent power to revisit the foundational ‘question of whether the parties are bound by a particular arbitration agreement’ …, just as it may on its own motion revise any other interim ruling in the action pending before it.” (238 Cal.App.4th at 238 [citations omitted].)

Based on the foregoing, the Court finds that it has the authority and jurisdiction to reconsider its prior order granting Defendant’s motion to compel arbitration.

2.      Timeliness

Defendant further argues that the instant motion is untimely and therefore must be denied because it was not filed within 10 days after service of the written order. (Def.’s Opp. 4:13–22, citing Code Civ. Proc. § 1008, subd. (a).)

“When an application for an order has been made to a judge, or to a court, and refused in whole or in part, or granted, or granted conditionally, or on terms, any party affected by the order may, within 10 days after service upon the party of written notice of entry of the order and based upon new or different facts, circumstances, or law, make application to the same judge or court that made the order, to reconsider the matter and modify, amend, or revoke the prior order. The party making the application shall state by affidavit what application was made before, when and to what judge, what order or decisions were made, and what new or different facts, circumstances, or law are claimed to be shown.” (Code Civ. Proc. § 1008, subd. (a) [emphasis added].)

However, as Plaintiffs observe, “the ten-day requirement only applies to motions brought under Code of Civil Procedure, section 1008 subdivision (a). Plaintiffs’ Motion is brought under Code of Civil Procedure section 1008, subdivision (c).” (Pls.’ Reply 3:24–4:1.) Under Code of Civil Procedure section 1008, subdivision (c), the Court has inherent power to reconsider its own motion any time before issuing its final judgment if it determines that a change in law warrants reconsideration. As the instant motion concerns a purported change in law, and Code of Civil Procedure section 1008, subdivision (c) imposes no 10-day filing requirement, the Court finds that the instant motion is not untimely.

3.      Ochoa Applied

Here, Plaintiffs bring the instant motion based on the Court of Appeal’s recent decision in Ochoa v. Ford Motor Company (2023) 89 Cal.App.5th 1324, which conflicts with Felisilda v. FCA US LLC¿(2020) 53 Cal.App.5th 486. This Court based its 2/3/23 ruling granting Defendant’s motion to compel arbitration primarily on the Felisilda case.

In Felisilda, the Third District Court of Appeal found that the plaintiffs’ agreement to the sales contract constituted express consent to arbitrate their claims regarding the vehicle’s condition, even against third parties, as the agreement unambiguously included “an express extension of arbitration to claims involving third parties that relate to the vehicle's condition.” (53 Cal.App.5th at 498.) In Ochoa, the Second District Court of Appeal declined to follow Felisilda, and instead found that the nonsignatory manufacturer did not have the right to compel the plaintiffs’ claims to arbitration under either theory of equitable estoppel or third-party beneficiary standing.

Under the doctrine of stare decisis, superior courts are bound by all published decisions of the Court of Appeal, but where there is a split in authority, the superior court may choose which appellate decision to follow. (Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 456.)

The Ochoa court found that equitable estoppel would apply where the plaintiffs had sued the defendant based on a breach of the terms of the sale contract; however, this was not the case in Ochoa. (89 Cal.App.5th at 1335.) The Ochoa court ultimately found that “manufacturer vehicle warranties that accompany the sale of motor vehicles without regard to the terms of the sale contract between the purchaser and the dealer are independent of the sale contract.” (Id. at 1334 [emphasis added].)

The Ochoa court proceeded to distinguish Felisilda by reading the “third party” language in the arbitration provision “as a further delineation of the subject matter of claims the purchasers and dealers agreed to arbitrate” rather than the parties’ consent to arbitrate claims with nonsignatories to the agreement. (Id. at 1334–1335 [emphasis in original].) Ultimately, the Ochoa court found that the plaintiffs’ claims did not rely on the sales contracts with the dealership, and therefore equitable estoppel did not apply. (Id. at 1336.)

Defendant urges the Court to use its discretion to follow Felisilda instead of Ochoa, arguing that “Plaintiffs’ claims in this case arise from their purchase of a vehicle manufactured and warranted by FCA. Because the sales contract underlies Plaintiffs’ causes of action against FCA, the equitable estoppel doctrine may be applied in lemon law cases like this one.” (Def.’s Opp. 7:15–18.)

Defendant further argues that this Court should not reconsider its 2/3/23 Order because Ochoa is pending appeal. (Def.’s Opp. 5:26–6:9.) Plaintiffs observe in reply that although the California Supreme Court has granted review of Ochoa, “Ochoa was not depublished and may be cited for its persuasive value.” (Pls.’ Reply p. 2, fn. 1.) Plaintiffs also proffer additional case law supporting the Ochoa court’s finding that equitable estoppel does not apply to give manufacturer defendants nonsignatory standing to enforce an arbitration clause in a vehicle sales contract. (Montemayor v. Ford Motor Co. (2023) 92 Cal.App.5th 958; Kielar v. Superior Court of Placer County (Aug. 16, 2023, C096773) __ Cal.Rptr.3d __.)

While this Court understands the persuasive value of Ochoa and the subsequent similar cases, it agrees with Defendant that Felisilda remains good law, and Plaintiffs have not otherwise shown that the 2/3/23 Order by Judge Randy Rhodes was otherwise incorrectly decided based on then-existing law. The Court therefore exercises its discretion to uphold its previous ruling. Accordingly, the motion for reconsideration is denied.

CONCLUSION 

The motion is denied.