Judge Ashfaq G. Chowdhury, Case Number: 23GDCV00933, Date: 2024-12-05 Tentative Ruling

Judge: Ashfaq G. Chowdhury, Case: 23GDCV00933, Date: 2024-12-05 Tentative Ruling

Case Number: 23GDCV00933 Hearing Date: December 5, 2024 Dept: E

Hearing Date: 12/05/2024 – 8:30am
Case No: 23GDCV00933
Trial Date: UNSET
Case Name: MARTHA GRIFFITH, an individual; v. HYUNDAI MOTOR AMERICA, a California Corporation; and DOES 1-10 inclusive

TENTATIVE RULING ON MOTION TO COMPEL ARBITRATION

PROCEDURAL

Moving Party: Defendant, Hyundai Motor America

Responding Party: Plaintiff, Martha Griffith

Moving Papers: Motion; Request for Judicial Notice; Ameripour Declaration; Rao Declaration; Proposed Order

Opposing Papers: Opposition; Griffith Declaration; Request for Judicial Notice; Schmitt Declaration; Evidentiary Objections;

Reply Papers: Reply; Ameripour Declaration

Proof of Service Timely Filed (CRC Rule 3.1300(c)): Ok
16/21 Court Days Lapsed (CCP § 1005(b)): Ok
Correct Address (CCP § 1013, § 1013a, § 1013b): Ok

RELIEF REQUESTED
“Defendant Hyundai Motor America (“HMA”) will move, and hereby moves the Court for an order (i) compelling Plaintiff Martha Griffith to arbitrate her claims in accordance with her arbitration agreement; and (ii) staying this action pending the outcome of arbitration.

This motion is authorized by the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1-16, California Code of Civil Procedure § 1281 et seq. and supported by the accompanying Memorandum of Points and Authorities, Request for Judicial Notice and exhibits thereto, Declaration of Ali Ameripour and exhibits thereto; Declaration of Vijay Rao and exhibits thereto; any reply memorandum that HMA may file; all of the records on file in this action; and by such other written and oral argument as may be presented to the Court.”

(Def. Mot. p. 1-2.)

BACKGROUND
Plaintiff, Martha Griffith, filed the instant action on 5/8/2023 against Defendant, Hyundai Motor America, a California Corporation.

The Complaint alleges three causes of action for: (1) Violation of Song-Beverly Act – Breach of Express Warranty, (2) Violation of Song-Beverly Act – Breach of Implied Warranty, and (3) Violation of the Song-Beverly Act Section 1793.2.

Plaintiff alleges that on or about April 23, 2020, Plaintiff purchased a 2020 Hyundai Santa Fe.

Plaintiff further alleges that the subject vehicle was delivered to Plaintiff with serious defects and nonconformities to warranty and developed other serious defects and nonconformities to warranty including, but not limited to, transmission, steering, engine, emission, and electrical system defects.

LEGAL STANDARD – MOTION TO COMPEL ARBITRATION
CCP §1281.2, governing orders to arbitrate controversies, provides in pertinent part:

On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate that controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists, unless it determines that:

(a) The right to compel arbitration has been waived by the petitioner; or

(b) Grounds exist for recission of the agreement.

(CCP § 1281.2(a)-(b).

Under the Federal Arbitration Act, arbitration agreements “shall be valid, irrevocable and enforceable, save upon such grounds that exist at law or in equity for the revocation of a contract.” (9 U.S.C. section 2.)

There is a strong public policy in favor of arbitration of disputes and any doubts concerning the scope of arbitrable disputes should be resolved in favor of arbitration. (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 9 (“courts will ‘indulge every intendment to give effect to such proceedings.’”) (quotation omitted)). (See also AT&T Mobility, LLC v. Concepcion (2011) 563 U.S. 333, 339.)

ANALYSIS
Defendant here seeks to compel arbitration based on two different documents – (1) Plaintiff’s Owner’s Handbook & Warranty Information (Warranty) and (2) Hyundai’s Bluelink Connected Services Agreement (CSA).

Bluelink Connected Services Agreement (CSA)
As stated in Harris v. TAP Worldwide, LLC:

California law favors enforcement of valid arbitration agreements. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 97, 99 Cal.Rptr.2d 745, 6 P.3d 669 (Armendariz ); Broughton v. Cigna Healthplans (1999) 21 Cal.4th 1066, 1074, 90 Cal.Rptr.2d 334, 988 P.2d 67.) Because arbitration is a contractual matter, a party who has not agreed to arbitrate a controversy cannot be compelled to do so. (Grey v. American Management Services (2012) 204 Cal.App.4th 803, 808, 139 Cal.Rptr.3d 210; Sparks v. Vista Del Mar Child and Family Services (2012) 207 Cal.App.4th 1511, 1518, 145 Cal.Rptr.3d 318 (Sparks ).) When the material facts are undisputed, we determine the existence of an agreement to arbitrate de novo. (Casas v. Carmax Auto Superstores Cal. LLC (2014) 224 Cal.App.4th 1233, 1235, 169 Cal.Rptr.3d 96 (Casas, hereafter); Sparks, supra, 207 Cal.App.4th at p. 1519, 145 Cal.Rptr.3d 318.) The party seeking arbitration bears the initial burden of demonstrating the existence of an arbitration agreement. (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236, 145 Cal.Rptr.3d 514, 282 P.3d 1217 (Pinnacle ); Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972, 64 Cal.Rptr.2d 843, 938 P.2d 903; Sparks, supra, 207 Cal.App.4th at p. 1518, 145 Cal.Rptr.3d 318.) Once the moving party has satisfied its burden, the litigant opposing arbitration must demonstrate grounds which require that the agreement to arbitrate not be enforced. (Pinnacle, supra, 55 Cal.4th at p. 236, 145 Cal.Rptr.3d 514, 282 P.3d 1217; Engalla v. Permanente Medical Group, Inc., supra, 15 Cal.4th at p. 972, 64 Cal.Rptr.2d 843, 938 P.2d 903; Sparks, supra, 207 Cal.App.4th at p. 1518, 145 Cal.Rptr.3d 318.)

(Harris v. TAP Worldwide, LLC (2016) 248 Cal.App.4th 373, 380-81.)

Here, Defendant has met its burden in demonstrating the existence of an arbitration agreement.

Defendant submitted the declaration of Vijay Rao which states:

1. I am over the age of eighteen and am competent to make this declaration. I am the Director of Connected Ops & Owner Apps/Web, for Hyundai Motor America Corporation (“Hyundai”). I have held this position since January 10, 2022. I have held positions at Hyundai since April 24, 2017. Between April 24, 2017 and January 09, 2022, I was a Sr. Group Mgr. Digital Bus. & Connected Ops. In my capacity as Director of Connected Ops & Owner Apps/Web, I administer business activities and processes relating to the Hyundai Bluelink services for Hyundai vehicles. Except as otherwise stated, the facts stated in this declaration are of my own personal knowledge, including knowledge acquired in the course and scope of my job responsibilities and through the review of pertinent documents maintained and relied upon in the ordinary course of business by Hyundai and its affiliated entities.

2. I understand this action involves a 2020 Hyundai Santa Fe, with VIN No. 5NMS33AD0LH202697 (“Vehicle”), purchased by Martha Griffith (“Plaintiff”), on April 23, 2020.

3. Hyundai Bluelink services refers to a connected car system that includes various functions and features.

4. To enroll in Bluelink services, customers must agree to the then-effective Connected Services Agreement (“CSA”). Hyundai makes a copy of the CSA available to every customer who enrolls in the Bluelink services plan. The CSA is often called the “Terms and Conditions” or “Terms & Conditions.”

5. On April 23, 2020 Plaintiff enrolled their Vehicle in Bluelink service through the Dealer-Assisted Enrollment process.

6. When new Bluelink services enrollees like Plaintiff activates Bluelink services through the Dealer-Assisted Enrollment process, they agree to the then-effective CSA. An example screen capture that reflects the content and general layout that Plaintiffs would have seen when they activated Bluelink services through the Dealer-Assisted Enrollment process on April 23, 2020 is attached as Exhibit 1. To enroll, Plaintiff would have had to click the box to acknowledge that they “read and agree[d] to the Blue Link Terms & Conditions” and then click the “Complete” button. The phrase Terms & Conditions included a hyperlink to the then-effective CSA. As presented to Plaintiff, the box acknowledging the Terms & Conditions would not have been “prepopulated” with a check mark. Plaintiffs would have had to click that box to acknowledge assent to the CSA. A customer cannot successfully activate Bluelink services through the Dealer-Assisted Enrollment process unless they complete the step requiring them to click the box acknowledging they agree to the Bluelink Terms and Conditions. Attached hereto as Exhibit 2 is a true and correct copy of the CSA that was in effect at that time.

(Rao Decl. ¶¶ 1-6.)

Exhibit 2 in the Rao declaration is the Connected Services Agreement that contains the arbitration provision at issue in this case.

Plaintiff argues that Defendant failed to establish mutual assent. Plaintiff argues:

Here, Defendant has failed to establish mutual assent. While Defendant submits the declaration of Vijay Rao, the Director of Ops & Owner Apps/Web for Hyundai, Mr. Rao merely describes the process by which customers “like Plaintiff” agree to the BlueLink “Connected Services Agreement” (“CSA”) upon enrolling their vehicle in Bluelink service. (Rao Dec., ¶¶ 4, 6.) Exhibit 1 is purportedly the acknowledgment checkbox screen that Plaintiff “would have seen when they activated Bluelink services” and Exhibit 2 is the Bluelink Agreement “that was in effect at that time.” (Rao Dec., ¶ 6, Exs. 1, 2.) These documents are generic and not specific to Plaintiff, and thus do not establish that they apply to Plaintiff. Additionally, Defendant has not shown Plaintiff actually checked the box, or otherwise “signed” or agreed to the CSA. While Mr. Rao claims that “Plaintiff enrolled their Vehicle in Bluelink service through the Dealer-Assisted Enrollment process,” this statement completely lacks foundation because Mr. Rao was not involved in the process at all. To that end, Mr. Rao does not state he has personal knowledge that Plaintiff enrolled in the Bluelink service, nor does he attach or refer to any documents upon which he relied in making this assertion.

Moreover, Mr. Rao does not state, for example, that all purchasers of Hyundai vehicles must enroll in the Bluelink Agreement, or otherwise explain how he knows Plaintiff enrolled in the Bluelink service. Indeed, Exhibit 1 attached to Mr. Rao’s declaration, entitled “Complimentary Subscription,” states: “Your Hyundai includes 3 years of complimentary Blue Link services which offers a suite of safety and convenience features. This subscription includes the Connected Care, Remote and Guidance packages.” (See Rao Dec., Ex. 1.) Thus, all this shows is that the subscription is voluntary or optional, not that Plaintiff agreed to the terms and conditions of the CSA, including the arbitration provision.

(Pl. Oppo. p. 12-13.)

The Court does not find Plaintiff’s argument availing because although Plaintiff tries to argue there was no mutual assent, the crux of Plaintiff’s argument is that Defendant did not properly authenticate the arbitration agreement because Rao’s declaration lacked foundation and personal knowledge.

As stated in Condee:

For purposes of a petition to compel arbitration, it is not necessary to follow the normal procedures of document authentication. “[T]he court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists....” (§ 1281.2) The statute does not require the petitioner to introduce the agreement into evidence. A plain reading of the statute indicates that as a preliminary matter the court is only required to make a finding of the agreement's existence, not an evidentiary determination of its validity.

(Condee v. Longwood Management Corp. (2001) 88 Cal.App.4^th 21, 218-19.)

To the extent that Plaintiff is attacking mutual assent, Plaintiff’s argument is unavailing. Plaintiff argues that Defendant has not shown that Plaintiff actually checked the box to establish that Plaintiff agreed to the CSA.

There are two issues that are problematic with Plaintiff’s argument that she did not check the box agreeing to the CSA. The first is that in ¶ 5 of the declaration Rao states that Plaintiff did enroll in the Bluelink service through the Dealer-Assisted Enrollment process, and Rao states in ¶ 6 the process by which Plaintiff would have had to have enrolled. The second, and most importantly, is that Plaintiff’s declaration in Opposition does not contend that she did not check the box agreeing to the terms of the CSA. In light of the fact that the Rao declaration states that Plaintiff did in fact enroll, and that Plaintiff ‘s declaration in Opposition did not state that she did not in fact enroll, the Court finds Plaintiff’s argument that she did not assent to the CSA unavailing.

As stated in Weeks v. Interactive Life Forms, LLC:

Courts have generally enforced agreements to arbitrate formed via “clickwrap,”² where “ ‘an internet user accepts a website's terms of use by clicking an “I agree” or “I accept” button, with a link to the agreement readily available.’ ” (Id. at p. 463, 289 Cal.Rptr.3d 1.) Clickwrap agreements have been held to manifest assent, even on consumers who did not read them, because “the website [has] put[ ] the consumer on constructive notice of the contractual terms.” (Id. at p. 461, 289 Cal.Rptr.3d 1; accord, Lemley, Terms of Use (2006) 91 Minn. L. Rev. 459, 466 [“Because the user has ‘signed’ the contract by clicking ‘I agree,’ every court to consider the issue has held clickwrap licenses enforceable.” (Fns. omitted.)].)

(Weeks v. Interactive Life Forms, LLC (2024) 100 Cal.App.5th 1077, 1084-85; Fn. 2 states, “Clickwrap and browsewrap agreements derive their name by analogy from “ ‘shrink-wrap licenses’ ” in which companies selling software at brick-and-mortar retailers sought to bind customers to terms of use by placing notice of a license agreement on the software's packaging, though “ ‘the entire agreement [could] only be viewed after buying the product and breaking through the plastic shrink-wrap packaging.’ ” (Sellers, supra, 73 Cal.App.5th at p. 463, 289 Cal.Rptr.3d 1.)”)

Plaintiff also argues that the arbitration clause in the CSA does not apply to Plaintiff’s claims in the Complaint.

The Arbitration Agreement provides in relevant part:

MOST CUSTOMER CONCERNS CAN BE RESOLVED QUICKLY AND TO THE CUSTOMER'S SATISFACTION BY CONTACTING HYUNDAI’S CUSTOMER SERVICE DEPARTMENT AT CONSUMERAFFAIRS@HMAUSA.COM OR CALLING 800-633-5151 AND THE GENESIS CUSTOMER SERVICE DEPARTMENT AT CUSTOMERCARE@GENESISMOTORSUSA.COM OR CALLING 844-340-9741. IN THE UNLIKELY EVENT THAT THE APPROPRIATE CUSTOMER SERVICE DEPARTMENT IS UNABLE TO RESOLVE YOUR CONCERNS, WE EACH AGREE TO RESOLVE THOSE DISPUTES THROUGH BINDING ARBITRATION OR SMALL CLAIMS COURT INSTEAD OF IN COURTS OF GENERAL JURISDICTION TO THE FULLEST EXTENT PERMITTED BY LAW, AND SUBJECT TO THE TERMS OF THIS AGREEMENT. ARBITRATION IS MORE INFORMAL THAN A LAWSUIT IN COURT. ARBITRATION USES A NEUTRAL ARBITRATOR INSTEAD OF A JUDGE OR JURY, ALLOWS FOR MORE LIMITED DISCOVERY THAN IN COURT, AND IS SUBJECT TO VERY LIMITED REVIEW BY COURTS. ARBITRATORS CAN AWARD THE SAME DAMAGES AND RELIEF THAT A COURT CAN AWARD. ANY ARBITRATION UNDER THIS AGREEMENT WILL TAKE PLACE ON AN INDIVIDUAL BASIS TO THE MAXIMUM EXTENT PERMITTED BY LAW; CLASS ARBITRATIONS, CLASS ACTIONS OR REPRESENTATIVE ARBITRATIONS ARE NOT PERMITTED. HYUNDAI OR GENESIS WILL PAY ALL ADMINISTRATIVE COSTS OF THE ARBITRATOR, NO MATTER WHO WINS, SO LONG AS YOUR CLAIM IS NOT FRIVOLOUS OR BROUGHT IN BAD FAITH. HOWEVER, IN ARBITRATION, BOTH YOU AND HYUNDAI WILL BE ENTITLED TO RECOVER ATTORNEYS´ FEES FROM THE OTHER PARTY TO THE SAME EXTENT AS YOU WOULD BE IN COURT.

Arbitration Agreement:

(a) 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, your 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. However, any dispute you or we may have relating to copyrights or other intellectual property shall not be governed by this agreement to arbitrate. For the avoidance of doubt, this means that any claims you or we may have relating to intellectual property rights against the other, including injunctive and other relief sought, may be brought in a court of competent jurisdiction. 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); claims that are currently the subject of purported class action litigation in which you are not a member of a certified class; claims relating to your vehicle for which you seek product or service support via the sites; claims arising out of or relating to the Telephone Consumer Protection Act; claims relating to your data privacy or information security; and claims that may arise after the termination of this Agreement.

(Rao Decl. Ex. 2.)

Plaintiff specifically argues that the inclusion of “your Vehicle” in the arbitration clause does not support any argument that the parties reasonably intended such arbitration would govern warrantable defects. Plaintiff argues that if Defendant had, there would be no reason to include any of the other categories of disputes that would be subject to arbitration as they would be nothing more than surplusage, which courts avoid.

Plaintiff argues that the CSA applies only to concerns that relate to the “Connected Services” that are the subject of the agreement and that Defendant’s customer service departments are unable to resolve.

The Court does not find Plaintiff’s arguments availing.

Here, the arbitration provision is written broadly and includes “claims based in contract, tort, warranty, statute…”

Further, the agreement contains a clause that states, “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.”

Unconscionability
Plaintiff argues that the CSA is unconscionable.

As stated in Fisher v. MoneyGram Intern., Inc.:

“ ‘ “Unconscionability” ’ ” is commonly defined as “ ‘ “an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party.” ’ ” (Sanchez v. Valencia Holding Co., LLC (2015) 61 Cal.4th 899, 910, 190 Cal.Rptr.3d 812, 353 P.3d 741 (Sanchez).) Unconscionability, as the definition suggests, has both a procedural and a substantive element, the former focusing on oppression or surprise due to unequal bargaining power, the latter on overly harsh or one-sided results. (Carlson v. Home Team Pest Defense, Inc. (2015) 239 Cal.App.4th 619, 630, 191 Cal.Rptr.3d 29 (Carlson).) “ ‘ “The prevailing view is that [procedural and substantive unconscionability] must both be present in order for a court to exercise its discretion to refuse to enforce a contract or clause under the doctrine of unconscionability.” ’ ” (Ibid.) But they need not be present in equal parts. (Ibid.) Rather, California courts employ a sliding scale to determine unconscionability, the more substantively oppressive the contract terms, the less evidence of procedural unconscionability is required to conclude the terms are unenforceable, and vice versa. (Ibid.; see Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114, 99 Cal.Rptr.2d 745, 6 P.3d 669 (Armendariz).)

(Fisher v. MoneyGram Intern., Inc. (2021) 66 Cal.App.5th 1084, 1093.)

Procedural
With respect to procedural unconscionability, Plaintiff argues that the CSA was a pre-printed contract of adhesion which Plaintiff would have no ability or opportunity to negotiate, that the CSA was the epitome of a “take it or leave it basis.”

The Court does not find Plaintiff’s arguments on procedural unconscionability availing.

The mere fact an adhesion contract is involved does not per se render the arbitration provision unenforceable because such contracts are “an inevitable fact of life for all citizens—businessman and consumer alike.” (Graham v. Scissor-Tail, Inc.¿(1981) 28 Cal.3d 807, 817.)

Plaintiff argues the CSA was the epitome of a “take it or leave it basis;” however, plaintiff then goes on to state, “[S]he had but one choice: click the check box on her smartphone’s app (which linked to a terms and condition sheet that is approximately sixteen (16) pages long), or do not. This “decision” was actually not really a decision at all, and certainly lacked any meaningful choice given that, with the sale of the new vehicle, Defendant was offering “3 years of complimentary Blue Link services which offers a suite of safety and convenience features.”” (Oppo. p. 16.)

The Court does not find Plaintiff’s argument that she had only but one choice availing because Plaintiff did not have to click the box.

Further, Plaintiff’s argument that the terms of the arbitration provision in the CSA were hidden is also unavailing.

Substantive
Plaintiff appears to argue that the arbitration provision is substantively unconscionable because requiring arbitration of warranty claims is one-sided in favor of Defendant because there is no possibility that Defendant has any warranty rights against Plaintiff.

This argument is unavailing. This argument only focuses on the word “warranty,” and ignores the fact that both parties agreed to arbitrate any and all disputes relating to a broad range of other types of claims such as contract, tort, statute, and fraud.

Plaintiff also argues that the arbitration provision is unconscionable because Defendant would be able to recover attorneys’ fees to the same extent that Plaintiff would be able to recover them. Plaintiff appears to be arguing that under the Song-Beverly Act, only a buyer who prevails would be able to recover reasonable attorneys’ fees.

As a preliminary, the Court fails to understand Plaintiff’s reasoning that it would be unfair for Defendant to recover attorneys’ fees to the same extent Plaintiff would be able to. In fact, allowing Defendant to recover attorneys’ fees should Defendant prevail seems to be the definition of fair if Plaintiff is allowed to do the same thing.

Additionally, Plaintiff cites the following from the CSA, ““HOWEVER, IN ARBITRATION, BOTH YOU AND HYUNDAI WILL BE ENTITLED TO RECOVER ATTORNEYS’ FEES FROM THE OTHER PARTY TO THE SAME EXTENT AS YOU WOULD BE IN COURT.”

Therefore, if Plaintiff is arguing that Defendant would not be able to recover attorneys’ fees as the prevailing party in Court, Plaintiff’s citation appears to contradict Plaintiff’s argument that arbitration would be unfair with respect to attorneys’ fees since the citation qualifies the attorneys’ fees provision with “to the same extent as you would be in court.”

Plaintiff’s argument that the reduction of time from a four-year statute of limitations to a one-year statute of limitations is unconscionable is unavailing. Plaintiff cites Fisher v. MoneyGram International, Inc. (2021) 66 Cal.App.5th 1084, 1105 to argue that reduction of a four-year statute of limitation down to a one-year limitation is substantively unconscionable.

The Court does not find this argument availing in light of the fact that in Fisher there were also several other additional factors that the court found contributed to substantive unconscionability.

TENTATIVE RULING
Defendant’s motion to compel arbitration and staying this action pending the outcome of arbitration is GRANTED. The Court notes it did not rule on the issue of the arbitrability of the Warranty based on the fact that the CSA provided a grounds to compel arbitration.