Judge: Andrew E. Cooper, Case: 24CHCV02768, Date: 2025-02-28 Tentative Ruling

Case Number: 24CHCV02768    Hearing Date: February 28, 2025    Dept: F51

LOS ANGELES SUPERIOR COURT

NORTH VALLEY DISTRICT

DEPARTMENT F-51

MOTION TO COMPEL ARBITRATION

Motion filed: 10/25/24

MOVING PARTY: Defendant Hyundai Motor America (“Defendant”)

RESPONDING PARTY: Plaintiffs Brianna Ruckey; and Rodney Ruckey (collectively, “Plaintiffs”)

NOTICE: OK 

RELIEF REQUESTED: An order: (1) compelling Plaintiffs to submit their claims to arbitration; and (2) staying this action pending the outcome of the arbitration.

TENTATIVE RULING: The motion is denied. Defendant’s request for judicial notice is granted.

BACKGROUND

Plaintiffs bring this action under the Song-Beverly Consumer Warranty Act (Civil Code § 1790 et seq.) for a vehicle they purchased on 8/19/22, for which Defendant issued the manufacturer’s express warranty. (Compl. ¶¶ 13, 16.) Plaintiffs allege that “the Vehicle, from the time of the purchase of the Vehicle to the present, has suffered extensive and ongoing problems,” “and has never been repaired and/or Defendant’s authorized service facilities failed to repair the Vehicle in a reasonable amount of time.” (Id. at ¶¶ 18–20.)

On 7/30/24, Plaintiffs filed their complaint, alleging against Defendant the following causes of action: (1) Violation of the Song-Beverly Consumer Warranty Act – Breach of Express Warranty; (2) Violation of the Song-Beverly Consumer Warranty Act – Breach of Implied Warranty; (3) Violation of Business and Professions Code § 17200; and (4) Violation of the Magnuson-Moss Warranty Act. On 10/3/24, Defendant filed its answer.

On 10/25/24, Defendant filed the instant motion to compel arbitration. On 2/11/25, Plaintiffs filed their opposition. On 2/21/25, Defendant filed its reply.

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ANALYSIS

Under both the Federal Arbitration Act and California law, arbitration agreements are valid, irrevocable, and enforceable, except on such grounds that exist at law or equity for voiding a contract. (Winter v. Window Fashions Professions, Inc. (2008) 166 Cal.App.4th 943, 947.)

The party moving to compel arbitration must establish the existence of a written arbitration agreement between the parties. (Code of Civ. Proc. § 1281.2.) This is usually done by presenting a copy of the signed, written agreement to the court. “A petition to compel arbitration or to stay proceedings pursuant to Code of Civil Procedure sections 1281.2 and 1281.4 must state, in addition to other required allegations, the provisions of the written agreement and the paragraph that provides for arbitration. The provisions must be stated verbatim or a copy must be physically or electronically attached to the petition and incorporated by reference.” (Cal. Rules of Court, rule 3.1330.)

General principles of contract law determine if the parties have entered into a binding agreement to arbitrate. (Craig v. Brown & Root, Inc. (2000) 84 Cal.App.4th 416, 420.) Here, the issue presented is whether the parties entered into an enforceable agreement to arbitrate Plaintiff’s claims. Defendant argues that the instant action is subject to two different arbitration provisions, including a provision in the subject vehicle’s Owner’s Handbook and Warranty Information (“Owner’s Handbook”) and a provision in the Connected Services Agreement Terms and Conditions (“Bluelink Agreement”) for Defendant’s Bluelink services.

A.    Owner’s Handbook

Defendant asserts that “accompanying the purchase of the Vehicle to Plaintiffs was the Warranty, which included an agreement to arbitrate.” (Def.’s Mot. 4:6–7, citing Ex. 3 to Decl. of Ali Ameripour, pp. 12–14.) Defendant argues that “Plaintiffs’ Claims all on their face arise directly out of the sale of the Vehicle and the Vehicle’s Warranty, including HMA’s duties contemplated under the Warranty.” (Id. at 15:22–23.)

The arbitration provision contained in the Owner’s Handbook provides the following:

“If you purchased or leased your Hyundai vehicle in the State of California, you and we, Hyundai Motor America, each agree that any claim or disputes between us (including between you and any of our affiliated companies) related to or arising out of your vehicle purchase, advertising for the vehicle, use of your vehicle, the performance of the vehicle, any service relating to the vehicle, the vehicle warranty, representations in the warranty, or the duties contemplated under the warranty, including without limitation claims related to false or misleading advertising, unfair competition, breach of contract or warranty, the failure to conform a vehicle to warranty, failure to repurchase or replace your vehicle, or claims for a refund or partial refund of your vehicle's purchase price (excluding personal injury claims), but excluding claims brought under the Magnuson-Moss Warranty Act, shall be resolved by binding arbitration at either your or our election, even if the claim is initially filed in a court of law.” (Ex. 3 to Ameripour Decl., p. 12.)

In opposition, Plaintiffs argue that “the manufacturer’s warranty is a unilateral promise, which Plaintiffs have accepted. Without Plaintiffs’ consent, the unrelated arbitration provision is a unilateral offer, not a contract.” (Pls.’ Opp. 2:16–18.) Plaintiffs assert that while agreements to arbitrate are generally enforceable, “such a ‘written agreement’ to arbitrate is wholly absent from HMA’s motion or supporting papers.” (Id. at 3:22–23.) “To enforce an arbitration agreement, the Defendant must point to a valid agreement to which HMA and the Plaintiffs are both parties, and the arbitration provision is a bargained-for term of that valid agreement. … Here, there simply is no written, signed or bargained-for agreement of the arbitration terms by both parties, and no such evidence has or can be produced.” (Id. at 4:8–12.) Plaintiffs argue that “the terms of the arbitration provision were buried in the Handbook and sprung upon the Plaintiffs after the purchase of the vehicle had been finalized. It strains credulity to think that mere receipt of a Handbook constitutes manifestation of assent or acceptance of an [sic] non-bargained-for contractual limitation of Plaintiffs’ rights.” (Id. at 4:26–5:1.)

Defendant argues that Plaintiffs should be estopped from asserting that the absence of their signatures on a written contract precludes the enforcement of a contract’s arbitration clause. (Def.’s Mot. 12:13–20, citing Boucher v. Alliance Title Co., Inc. (2005) 127 Cal.App.4th 262, 269.) However, this principle in inapposite here, and only applies where there is an enforceable contract which is defective merely because one of the parties failed to sign.

Here, Defendant presents insufficient evidence that the Subject Vehicle’s warranty constitutes an enforceable contract under basic principles of contract formation. Defendant fails to show that the arbitration provision contained in the Owner’s Handbook constituted an offer to which Plaintiff assented, thus the statements included in the handbook do not amount to an enforceable contract. (Leslie v. Brown Bros. Inc. (1929) 208 Cal. 606, 621 [offer cannot be turned into agreement merely because the person to whom it is made makes no reply, even where offer states that silence will be taken as consent]; Norcia v. Samsung Telecommunications America, LLC (9th Cir. 2017) 845 F.3d 1279, 1291 [offeree, regardless of apparent manifestation of her consent, is not bound by inconspicuous contractual provisions of which she was unaware, contained in a document whose contractual nature is not obvious]; Golden Eagle Ins. Co. v. Foremost Ins. Co. (1993) 20 Cal.App.4th 1372, 1385 [silence or inaction do not constitute acceptance].)

Ultimately, the warranty agreement included in the Subject Vehicle’s handbook does not constitute an enforceable contract under principles of estoppel or foundational theories of contract formation. Because Defendant lacks evidence that the arbitration provision in the Owner’s Handbook amounts to a binding agreement to arbitrate, those provisions are not grounds on which the Court will order Plaintiffs to arbitrate their claims against Defendant.

B.     Bluelink Agreement

Defendant further asserts that “on or about August 20, 2022, Plaintiffs enrolled their Vehicle in Hyundai’s Bluelink services.” (Def.’s Mot. 3:8–9, citing Decl. of Vijay Rao ¶ 5.) Defendant argues that “by enrolling in Hyundai’s Bluelink services for the subject Vehicle, Plaintiffs specifically agreed to be bound by the CSA, which included the agreement to arbitrate.” (Id. at 13:26–27.)

The arbitration provision, in relevant part, provides as follows:

“Hyundai and you agree to arbitrate any and all disputes and claims between us arising out of or relating to this Agreement, Connected Services, Connected Services Systems, Service Plans, the Vehicle, use of the sites, or products, services, or programs you purchase, enroll in or seek product/service support for, whether you are a Visitor or Customer, via the sites or through mobile application, except any disputes or claims which under governing law are not subject to arbitration, to the maximum extent permitted by applicable law. This agreement to arbitrate is intended to be broadly interpreted and to make all disputes and claims between us subject to arbitration to the fullest extent permitted by law. […] The agreement to arbitrate otherwise includes, but is not limited to: claims based in contract, tort, warranty, statute, fraud, misrepresentation or any other legal theory; claims that arose before this or any prior Agreement (including, but not limited to, claims relating to advertising).” (Ex. 2 to Rao Decl., § 14.C.(a).)

Plaintiffs argue in opposition that the Bluelink Agreement is inapposite in this action because “Hyundai’s Bluelink allows the mobile app user to retrieve information about their vehicle and perform basic remote operations such as starting and unlocking the vehicle. Plaintiffs’ lawsuit for breach of warranty relates to the engine, transmission and suspension system of the vehicle, and not its software.” (Pl.’s Opp. 2:25–28.) “Defendant’s description that ‘Hyundai’s Bluelink services refers to a connected car system that includes various functions and features’ conveniently omits the nonoverlap with the vehicle’s engine, transmission, and other powertrain components.” (Id. at 7:20–23.) Plaintiffs therefore contend that “this lawsuit does not arise out of the CSA or the Bluelink software. Accordingly, the CSA is inapposite to this litigation and cannot serve as a mechanism to compel arbitration.” (Id. at 9:2–5.)

Plaintiffs further argue that “the CSA appears to specifically disclaim any application to the vehicle’s express warranty.” (Id. at 8:6–7, citing Ex. 2 to Rao Decl., § 10 [“HYUNDAI HEREBY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, ABOUT THE CONNECTED SERVICES SYSTEM.”]) Plaintiffs therefore argue that “if the manufacturer’s limited powertrain warranty does not apply to the Connected Services, then why should the Connected Services Agreement apply to the express warranty or its arbitrability?” (Id. at 8:8–11.) The Court agrees, and finds that Plaintiffs’ warranty claims are not within the scope of the Bluelink Agreement.

Based on the foregoing, the Court finds that Defendant has failed to meet its initial burden to establish a valid arbitration agreement binding Plaintiff which encompasses the claims against Defendant in the instant action.

CONCLUSION

The motion is denied.