Judge: Armen Tamzarian, Case: 23STCV12234, Date: 2023-08-25 Tentative Ruling

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Case Number: 23STCV12234    Hearing Date: August 25, 2023    Dept: 52

Tentative Ruling:

            Defendants LAX Auto Center, LLC and Ally Bank’s Motion to Compel Arbitration

Defendants LAX Auto Center, LLC and Ally Bank move to compel arbitration of this action by plaintiffs Isis Acuna Espinoza and Tiofilo Acuna Espinoza. 

            The gravamen of this action is that plaintiffs entered an agreement to purchase a vehicle from LAX Auto Center, LLC on specific terms (Opp. Ex. 1), but they allege the dealership forged their signatures on a new contract with different terms (Opp. Ex. 2).  Plaintiffs oppose the motion on the grounds that they never agreed to arbitrate these disputes because they did not sign the contract.  They do not, however, dispute entering the first agreement.  The question for this motion is thus whether, by signing the first agreement, plaintiffs agreed to arbitrate disputes arising from the alleged forgery of a second contract.

“In light of California’s strong public policy in favor of arbitration, broad contractual provisions for arbitration are to be liberally construed.  Doubts as to whether an arbitration clause applies to a particular dispute are to be resolved in favor of sending the parties to arbitration.  The court should order them to arbitrate unless it is clear that the arbitration clause cannot be interpreted to cover the dispute.”  (Bigler v. Harker School (2013) 213 Cal.App.4th 727, 738, internal quotes and citations omitted.)

The first retail installment sales contract has the following arbitration provision: “Any claim or dispute, whether in contract, tort, statute or otherwise (including the interpretation and scope of this Arbitration Provision, any allegation of waiver of rights under this Arbitration Provision, and the arbitrability of the claim or dispute), between you and us or our employees, agents, successors or assigns, which arises out of or relates to your credit application, purchase or condition of this Vehicle, this contract or any resulting transaction or relationship (including any such relationship with third parties who do not sign this contract) shall, at your or our election, be resolved by neutral, binding arbitration and not by a court action.”  (Magana Decl., Ex. A, p. 5.)

This arbitration provision applies to the present disputes.  The provision includes three categories of disputes: those that arise out of or relate to (1) plaintiffs’ credit application, (2) the purchase or condition of the vehicle, and (3) this contract or any resulting transaction or relationship.  Even if plaintiffs’ claims may not directly arise out of “this contract,” they arise out of or relate to the purchase of the vehicle.  Plaintiffs do not dispute that they purchased a 2022 Dodge Charger from LAX Auto Center.  (See opp. Ex. 4, vehicle registration card.)  The registration states it is valid beginning December 11, 2022, the date of the original contract.  The record thus indicates plaintiffs got their car when they signed the first contract.  Plaintiffs’ claims all arise from LAX Auto Center allegedly forging a different contract simply to change the terms of that purchase—not to completely fabricate a deal to purchase a vehicle.  Their claims are related to the initial contract via which they purchased the car.

Under the rule requiring liberal construction of broad arbitration provisions, the court concludes plaintiffs’ action falls within the scope of the arbitration provision in the first retail installment sales contract. 

            Plaintiffs’ reliance on Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394 is misplaced.  There, the plaintiffs claimed all the arbitration agreements were “void for fraud in their execution.”  (Id. at p. 402.)  They did not concede entering separate, enforceable arbitration agreements before the fraudulent agreements. 

Disposition

Defendants LAX Auto Center, LLC and Ally Bank’s motion to compel arbitration is granted.   

Plaintiffs Isis Acuna Espinoza and Tiofilo Acuna Espinoza are ordered to arbitrate this action against defendants LAX Auto Center, LLC and Ally Bank.  The court hereby stays the entire action, including plaintiffs’ claims against other defendants, pending resolution of the arbitration proceeding.