Judge: Anne Hwang, Case: 21STCV22144, Date: 2023-10-30 Tentative Ruling

Case Number: 21STCV22144    Hearing Date: January 3, 2024    Dept: 32

PLEASE NOTE:   Parties are encouraged to meet and confer concerning this tentative ruling to determine if a resolution may be reached.  If the parties are unable to reach a resolution and a party intends to submit on this tentative ruling, the party must send an email to the Court at sscdept32@lacourt.org indicating that party’s intention to submit.  The email shall include the case number, date and time of the hearing, counsel’s contact information (if applicable), and the identity of the party submitting on this tentative ruling.  If the Court does not receive an email indicating the parties are submitting on this tentative ruling and there are no appearances at the hearing, the Court may place the motion off calendar or adopt the tentative ruling as the order of the Court.  If all parties do not submit on this tentative ruling, they should arrange to appear in-person or remotely.  Further, after the Court has posted/issued a tentative ruling, the Court has the inherent authority to prohibit the withdrawal of the subject motion and adopt the tentative ruling as the order of the Court. 

TENTATIVE RULING

BACKGROUND

On June 15, 2021, Plaintiffs Eloy Alfaro and Chris Northcross (Plaintiffs) filed a complaint against Defendants Uber Technologies, Inc. (“Uber”), Rasier LLC, and Does 1 to 50, alleging injuries from a motor vehicle accident that occurred on June 15, 2019.

On November 16, 2023, Uber filed and served a motion to compel arbitration and to stay the proceedings pending completion of arbitration. The motion was originally set for hearing on December 14, 2023. The Court posted a tentative ruling and no opposition was filed by Plaintiffs. On December 14, 2023, over the objection of Defendant, the Court continued the hearing to permit Plaintiffs time to file an opposition. The Court ordered Plaintiffs to file and serve an opposition by December 20, 2023 and Defendant to file a reply by December 27, 2023. Plaintiffs did not file a timely opposition. The Court declines to consider the late-filed opposition, which was not filed until December 28, 2023. (See Cal.R.Ct. 8.54(b)(1) [“The court may rule on a motion at any time after an opposition or other response is filed or the time to oppose has expired.”].)

LEGAL STANDARD

The Federal Arbitration Act (FAA) governs a motion to compel arbitration when an agreement provides its ‘enforcement’ shall be governed by the FAA. (Victrola 89, LLC v. Jamon Properties 8 LLC (2020) 46 Cal.App.5th 337, 346.)

Parties may be compelled to arbitrate a dispute upon the court finding that: (1) there was a valid agreement to arbitrate between the parties; and (2) said agreement covers the controversy or controversies in the parties’ dispute.¿(9 U.S.C., § 4;¿Chiron Corp. v. Ortho Diagnostics Systems, Inc.¿(9th Cir. 2000) 207 F.3d 1126, 1130.) If the finding is affirmative on both counts, the FAA requires the Court to enforce the arbitration agreement in accordance with its terms. (Simula, Inc. v. Autoliv, Inc.¿(9th Cir. 1999) 175 F.3d 716, 719–720.) ¿

“The petitioner bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence, and a party opposing the petition bears the burden of proving by a preponderance of the evidence any fact necessary to its defense. In these summary proceedings, the trial court sits as a trier of fact, weighing all the affidavits, declarations, and other documentary evidence, as well as oral testimony received at the court's discretion, to reach a final determination.” (Giuliano v. Inland Empire Personnel, Inc. (2007) 149 Cal.App.4th 1276, 1284.) 

“If a court of competent jurisdiction, whether in this State or not, has ordered arbitration of a controversy which is an issue involved in an action or proceeding pending before a court of this State, the court in which such action or proceeding is pending shall, upon motion of a party to such action or proceeding, stay the action or proceeding until an arbitration is had in accordance with the order to arbitrate or until such earlier time as the court specifies.” (Code Civ. Proc., § 1281.4.)

DISCUSSION

Uber moves to compel arbitration on the grounds that Plaintiffs agreed to arbitrate by agreeing to its Terms of Service. The agreement reads in pertinent part:

“Except as expressly provided below in Section 2(b), you and Uber agree that any dispute, claim or controversy in any way arising out of or relating to (i) these Terms and prior versions of these Terms, or the existence, breach, termination, enforcement, interpretation, scope, waiver, or validity thereof, (ii) your access to or use of the Services at any time, (iii) incidents or accidents resulting in personal injury that you allege occurred in connection with your use of the Services, whether the dispute, claim or controversy occurred or accrued before or after the date you agreed to the Terms, or (iv) your relationship with Uber, will be settled by binding arbitration between you and Uber, and not in a court of law. This Agreement survives after your relationship with Uber ends. You acknowledge and agree that you and Uber are each waiving the right to a trial by jury or to bring or to participate as a plaintiff or class member in any class, purported class, collective, coordinated, consolidated, or representative proceeding. This Arbitration Agreement shall be binding upon, and shall include any claims brought by or against any third-parties, including but not limited to your spouses, heirs, third-party beneficiaries and assigns, where their underlying claims are in relation to your use of the Services. To the extent that any third-party beneficiary to this agreement brings claims against the Parties; those claims shall also be subject to this Arbitration Agreement.”

“Notwithstanding any choice of law or other provision in the Terms, the parties agree and acknowledge that this Arbitration Agreement evidences a transaction involving interstate commerce and that the Federal Arbitration Act, 9 U.S.C. 5 1 et seq. (“FAA”), will govern its interpretation and enforcement and proceedings pursuant thereto.”

(Yu Decl., Exh. G, January 18, 2021 Agreement (“Agreement”) at 2(a).)

First, the FAA governs the agreement according to the explicit terms. (Id., Agreement at 2(c).) Uber presents evidence that Plaintiff Northcross registered for an Uber account on July 24, 2014 and accepted Uber’s Terms of Use, which included an arbitration agreement. (Id., Exh. B.) Northcross then agreed to Uber’s updated terms on April 4, 2021, January 13, 2022, and February 5, 2023. (Id. ¶ 15, Exh. G.)

Second, the agreement provides that all disputes and claims between Uber and Plaintiff Northcross involving any accidents resulting in personal injury will be resolved by binding arbitration. Additionally, the agreement includes claims brought by third-party beneficiaries. Uber argues that Plaintiff Alfaro is a third-party beneficiary to the Agreement. “Whether a third party is bound by an arbitration agreement presents a question of law. [Citation.] ‘[P]arties can only be compelled to arbitrate when they have agreed to do so.’”  (Williams v. Atria Las Posas (2018) 24 Cal.App.5th 1048, 1053.)  

A nonsignatory may be compelled to arbitrate a dispute when the nonsignatory is a third-party beneficiary of the contract containing the arbitration agreement. (See Epitech, Inc. v. Kann (2012) 204 Cal.App.4th 1365, 1371.) A nonsignatory must be determined to be a third-party beneficiary in order to be bound by the arbitration agreement. (See id.) The contract must show an intent by the contracting parties to confer a benefit on the third party. (Id. at 1372.) “‘[I]t is not enough that the third party would incidentally have benefited from performance.’” (Id. (quoting Souza v. Westlands Water Dist. (2006) 135 Cal.App.4th 879, 891).) “In other words, ‘[t]he mere fact that a contract results in benefits to a third party does not render that party a “third party beneficiary”’; rather, the parties to the contract must have expressly intended that the third party would benefit.” (Murphy v. DirecTV, Inc. (9th Cir. 2013) 724 F.3d 1218, 1234 [quoting Matthau v. Super. Ct., (2007) 151 Cal.App.4th 593].)

Here, Plaintiff Alfaro benefited from Uber’s services when he joined the ride with Plaintiff Northcross. The Agreement also expressly provides that it covers “any claims brought by or against any third-parties, including but not limited to your spouses, heirs, third-party beneficiaries and assigns, where their underlying claims are in relation to your use of the Services.” (Exh. G, Agreement at 2(a).) Therefore, the Agreement was intended to cover both Plaintiff Northcross, the application user, and Plaintiff Alfaro, a passenger who benefitted from Uber’s services.

Therefore, because Uber maintains Plaintiffs were using its services when the accident occurred, Uber has met its burden that the agreement covers the present controversy.

CONCLUSION AND ORDER

Defendant Uber Technologies, Inc.’s motion to compel arbitration and stay all judicial proceedings against Uber pending the completion of arbitration is GRANTED.

The Court sets the matter for an Order to Show Cause Re Dismissal due to Completion of Arbitration Proceedings for June 14, 2024 at 8:30 a.m. in Department 32 of the Spring Street Courthouse.

Defendant shall provide notice of the Court’s ruling and file a proof of service of such.