Judge: Armen Tamzarian, Case: 23STCV11962, Date: 2023-09-20 Tentative Ruling

Case Number: 23STCV11962    Hearing Date: September 20, 2023    Dept: 52

Defendant Hyundai Motor America’s Motion to Compel Binding Arbitration

Defendant Hyundai Motor America moves to compel arbitration of this action by plaintiff Julio Cesar Mejia Sorto.

Defendant relies on two arbitration provisions: one in the purchase contract between plaintiff and non-party dealership Downey Hyundai (Ameripour Decl., Ex. 2) and another in the plaintiff’s vehicle’s Owner’s Handbook & Warranty Information (id., Ex. 3).  Defendant is entitled to enforce the latter arbitration provision.

            Section 4 of Owner’s Handbook & Warranty Information provides: “If you purchased or leased your Hyundai vehicle in the State of California, you and we 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, use of your vehicle, the vehicle warranty, representations in the warranty, or the duties contemplated under the warranty, including without limitation claims related to 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.”  (Ameripour Decl., Ex. 3, p. 13.)

            This section further provides, “This agreement to arbitrate is intended to be broadly interpreted and to make all disputes and claims between us (including our affiliated companies) relating to or arising out of your vehicle purchase, use of your vehicle, or the vehicle warranty subject to arbitration to the maximum extent permitted by law.”  (Ameripour Decl., Ex. 3, p. 13.) 

Finally, section 4 provides, “If you purchased or leased your vehicle in California, your warranty is made subject to the terms of this binding arbitration provision.  By accepting benefits under this warranty, including having any repairs performed under warranty, you agree to be bound by these terms.  If you do not agree with these terms, please contact us at opt-out@hmausa.com within thirty (30) days of your purchase or lease to opt-out of this arbitration provision.”  (Ameripour Decl., Ex. 3, p. 14.)

Defendant can enforce this arbitration agreement.  “[A] nonsignatory ‘is estopped from avoiding arbitration if it knowingly seeks the benefits of the contract containing the arbitration clause.’ ”  (Crowley Maritime Corp. v. Boston Old Colony Ins. Co. (2008) 158 Cal.App.4th 1061, 1070.)  This action seeks the benefits of the express written warranty (Comp., ¶¶ 11-14, 19, 26, 30), which contains the arbitration clause.     

Plaintiff’s opposition only briefly addresses the arbitration provision in the Owner’s Handbook & Warranty Information.  A footnote states: “Defendant contends that it can compel arbitration through either the Arbitration Agreement found in the original February 28, 2021 Purchase Agreement between Plaintiff and the non-party selling dealership; and through an alleged post-sale ‘Arbitration Agreement’ found buried within the HMA’s fifty-page Warranty Booklet.  However, it is admittedly a non-signatory to the Purchase Agreement.”  (Opp., p. 1, fn. 1.)  The opposition further argues plaintiff makes no claims based on “any of the terms found within the post-sale ‘Arbitration Agreement’ buried with the fifty (50) pages of HMA’s Warranty Booklet.”  (Id., p. 3.) 

Arguing the provision is “buried” concerns procedural unconscionability.  Plaintiff does not show the agreement is unconscionable.  “Generally, the burden is on the party opposing arbitration to show an arbitration agreement is unconscionable.”  (Saheli v. White Memorial Medical Center (2018) 21 Cal.App.5th 308, 330.)  Unconscionability requires both procedural and substantive unconscionability using a sliding scale.  (Serafin v. Balco Properties Ltd., LLC (2015) 235 Cal.App.4th 165, 185.)  “Procedural unconscionability focuses on the elements of oppression and surprise.”  (Id. at p. 177.)  “Substantive unconscionability focuses on the actual terms of the agreement and evaluates whether they create overly harsh or one-sided results.  (Ibid., internal quotes omitted.) 

Assuming that being “buried” in a large booklet shows some procedural unconscionability, plaintiff shows no substantive unconscionability as required.  Plaintiff makes no attempt to do so.  The arbitration provision in the Owner’s Handbook and Warranty Information is fair and mutual. 

Disposition

            Defendant Hyundai Motor America’s motion to compel arbitration is granted.  Plaintiff Julio Cesar Mejia Sorto is ordered to arbitrate this action against defendant Hyundai Motor America.  The court hereby stays the entire action pending resolution of the arbitration proceeding.