Judge: Armen Tamzarian, Case: 21STCV36292, Date: 2023-01-05 Tentative Ruling
Case Number: 21STCV36292 Hearing Date: January 5, 2023 Dept: 52
Defendant Nissan North America,
Inc.’s Motion to Compel Arbitration and Stay of Proceedings
Defendant Nissan North America, Inc. (Nissan) moves
to compel arbitration of the complaint by plaintiffs Rosa Melgoza and Naomi
Melgoza and to stay this action pending arbitration.
Evidentiary Objections
Plaintiffs make six objections to Nissan’s
evidence. In its initial moving papers, Nissan was not
required to prove the agreement’s existence via admissible evidence.
A motion
to compel arbitration is “a summary proceeding.” (Espejo
v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th
1047, 1057 (Espejo).) The moving
party can meet the “initial burden to show an agreement to arbitrate by
attaching a copy of the arbitration agreement purportedly bearing the opposing
party’s signature.” (Id. at p.
1060.) For this initial burden, “ ‘it is
not necessary to follow the normal procedures of document authentication.’
” (Id. at p. 1058.) Only after the opposing party “challenge[s]
the validity of that signature” must the moving party “establish by a
preponderance of the evidence that the signature was authentic.” (Ibid.)
All six objections are overruled.
Existence of Agreement
Plaintiffs
argue Nissan did not prove the existence of any arbitration agreement. The court finds Nissan met its burden. It shows plaintiff Rosa Melgoza signed the
retail installment sales contract attached as exhibit 4 to the declaration of
David Polyakov. Though that exhibit does
not include the text of the arbitration provision, Nissan attached a blank copy
of the back of the same form contract including the arbitration provision. (Polyakov Decl., ¶ 10, Ex. 5, p. 6.) Both agreements are labeled at the top,
“Retail Installment Sales Contract – Simple Finance Charge (With Arbitration
Provision).” Both contracts bear the
label “Form No. 553-CA-ARB (REV 7/16)” at the bottom. And the section just above and to the right
of plaintiff Rosa Melgoza’s signature provides, “You acknowledge
that you have read both sides of this contract, including the arbitration
provision on the reverse side.”
(Polyakov Decl., Ex. 4, p. 3.)
Plaintiffs do not dispute the authenticity of the
sales contract attached as exhibit 4. Challenging the agreement’s authenticity
generally requires a declaration by plaintiffs stating they did not sign the
agreement or did not recall signing it.
(Espejo, supra, 246 Cal.App.4th at p. 1054; Ruiz v. Moss Bros.
Auto Group, Inc. (2014) 232 Cal.App.4th 836, 846 [when plaintiff did
not “recall signing the 2011 agreement, (defendant) had the burden of proving
by a preponderance of the evidence that the electronic signature was
authentic”].) Plaintiffs provided no such evidence.
Waiver
Nissan
waived any right it had to compel arbitration.
For agreements subject to the Federal Arbitration Act (FAA), like this
one, “whether a party has waived a right to arbitrate
is a matter of federal, not state, law.”
(Davis v. Shiekh Shoes, LLC (2022) 84 Cal.App.5th 956, 300 Cal.Rptr.3d 787, 793 (Davis).) The agreement provides, “Any
arbitration under this Arbitration Provision shall be governed by the Federal
Arbitration Act… and not by any state law concerning arbitration.” (Polyakov Decl., Ex. 5, p. 6.)
Under federal law, waiver does not require prejudice to the
opposing party. Davis noted that
under the recent United States Supreme Court decision Morgan v. Sundance, Inc. (2022)
142 S.Ct. 1708, 212 L.Ed.2d 753, “prejudice … is no longer required to
demonstrate a waiver of one’s right to arbitration, and the waiver inquiry
should instead focus on the actions of the holder of that right.” (Davis, supra, 300 Cal.Rptr.3d at p.
795.)
Aside from prejudice, courts consider other factors
including “(1) whether the party’s actions are inconsistent with the right to
arbitrate; (2) whether the litigation machinery has been substantially invoked
and the parties were well into preparation of a lawsuit before the party
notified the opposing party of an intent to arbitrate; (3) whether a party
either requested arbitration enforcement close to the trial date or delayed for
a long period before seeking a stay; (4) whether a defendant seeking
arbitration filed a counterclaim without asking for a stay of the proceedings;
(5) whether important intervening steps [e.g., taking advantage of judicial
discovery procedures not available in arbitration] had taken place.” (St. Agnes Medical Center v. PacifiCare of
California (2003) 31 Cal.4th 1187, 1196, internal quotes omitted.) The first three factors weigh heavily toward finding
waiver.
Nissan’s actions have been inconsistent with the
right to arbitrate. Filing this motion
is the sole action it has taken consistent with any such right. Nissan’s answer did not mention a right to
arbitrate or raise that as an affirmative defense. (Mukai Decl., ¶ 5, Ex. 1.) Nissan’s case management statement does not
raise arbitration as an issue. (Id.,
¶ 7, Ex. 2.) Nissan
did not check the box indicating it is willing to participate in or agreed to
participate in binding private arbitration.
(Id., Ex. 2, p. 3, ¶ 10.c(5).)
Nissan
also responded to plaintiff’s discovery requests. (Mukai Decl., ¶ 11, Exs. 7-10.) As in Davis, Nissan “never once
suggested that discovery should be barred because the case had to be arbitrated.” (Davis, supra, 300 Cal.Rptr.3d at p.
798.) Finally, though counsel for the
parties held “mass mediations” involving numerous cases (Polyakov Reply Decl.,
¶ 2), three times the parties attempted to resolve this case at mediation
without Nissan asserting a right to compel arbitration. (Mukai Decl., ¶¶ 6, 10, 12.)
Nissan delayed filing this motion until October 21, 2022, almost a
year after it answered the complaint and only four months before trial. As in Davis, Nissan’s “‘extended
silence and much delayed demand for arbitration’ cuts strongly in favor of a
finding of waiver.” (300 Cal.Rptr.3d at
p. 797.) Moreover, Nissan gave no
explanation for its delay. “[T]he
absence of a reasonable explanation for delay is a significant factor weighing
in favor of finding waiver.” (Davis,
supra, 300 Cal.Rptr.3d at p. 798.)
After considering all relevant factors, the court finds Nissan waived
any right to compel arbitration.
Disposition
The
motion is denied.