Judge: Ashfaq G. Chowdhury, Case: 23GDCV01060, Date: 2024-02-16 Tentative Ruling
Case Number: 23GDCV01060 Hearing Date: February 16, 2024 Dept: E
Hearing Date: Friday,
February 16, 2024
Case No: 23GDCV01060 Trial
Date: [None set]
Case Name: Robeniol
v. Mercedes-Benz USA, LLC, et al.
MOTION TO COMPEL ARBITRATION
Moving
Party: Defendant Mercedes-Benz USA, LLC
Responding
Party: Plaintiff Ruperto Robeniol
Proof of service timely
filed (CRC 317(b)): ok
Correct Address (CCP §§
1013, 1013(a)): ok
16/+5 day lapse (CCP
§1005): ok
RELIEF REQUESTED:
Defendant Mercedes-Benz USA, LLC
moves for an order (1) compelling Plaintiff Ruperto Robeniol to arbitrate all
of his claims in accordance with the arbitration agreement and (2) staying this
action pending the outcome of arbitration.
BACKGROUND:
This is a Lemon
Law action. On June 27, 2023, Plaintiff Ruperto Robeniol filed the operative
First Amended Complaint (“FAC”) against Defendants Mercedes-Benz USA, LLC;
Envision Motors Holdings, LLC dba Mercedes-Benz of West Covina; and DOES 1
through 10, inclusive. The FAC alleges 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) Negligent Repair.
On September 7,
2023, Defendant Mercedes-Benz USA, LLC filed this instant Motion to Compel
Arbitration. On February 1, 2024, Plaintiff filed his opposition. [No reply has
been filed.]
EVIDENTIARY OBJECTIONS:
In support of its
motion, Defendant Mercedes-Benz USA, LLC advances the Declaration of Ali
Ameripour.
Plaintiff
objects to Paragraph 4, Exhibit 2 of the Ameripour’s declaration.
REQUEST FOR JUDICIAL NOTICE:
Defendant
Mercedes-Benz USA, LLC request judicial notice of Plaintiff’s Complaint filed
on June 27, 2023, a true and correct copy of which is attached to the
Declaration of Ali Ameripour as Exhibit 1.
Plaintiff request
judicial notice of (1) Appellate Court Opinion in Martha Ochoa v. Ford Motor
Company (2023) 89 Cal.App.5th 1324 attached as Exhibit 1; (2) Appellate
Court Opinion in Mark Kielar v. Hyundai Motor America (Case No. C096773;
Superior Court No. S-CV-0048230) certified for publication dated August 16,
2023 and attached as Exhibit 2; and (3) Ninth Circuit Opinion in Ngo v. BMW
of North America, LLC, et al. (9th Cir. 2022) 23 F.4th 942 attached as
Exhibit 3.
Pursuant to
California Evidence Code Sections 452 and 453, Defendant Mercedes-Benz USA, LLC
and Plaintiff’s requests for judicial notice are both GRANTED.
ANALYSIS:
Legal Standard
The Federal
Arbitration Act (the “FAA”) applies in both federal and state courts to
contracts evidencing a transaction involving interstate commerce. (9 U.S.C. §§ 1–2; Southland Corp. v.
Keating (1984) 465 U.S. 1, 12.) The FAA preempts conflicting state law. (Preston
v. Ferrer (2008) 552 U.S. 346, 353.) The party that contends the FAA
applies bears the burden to demonstrate that the arbitration agreement is in a
“‘contract evidencing a transaction involving commerce’ . . . .” (Woolls v. Super. Ct. (2005) 127
Cal.App.4th 197, 211.)
The Code of Civil
Procedure Section 1281.2, states in pertinent part, “[o]n petition of a party
to an arbitration agreement alleging the existence of a written agreement to
arbitrate a controversy and that a party thereto refuses to arbitrate such
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 the
revocation of the agreement.” (Code Civ. Proc., § 1281.2.)
Discussion
Applicability of the FAA
Defendant Mercedes-Benz USA, LLC
argues the FAA requires enforcement of Plaintiff’s arbitration agreement.
Defendant Mercedes-Benz USA, LLC also asserts (1) the arbitration provision is
in writing and (2) automotive sale contracts necessarily involve interstate
commerce. Therefore, Defendant Mercedes-Benz USA, LLC has met its burden of
demonstrating that the arbitration provision at issue is a contract that
evidences a transaction involving interstate commerce, as required for the FAA
to apply.
Prior Demand for Arbitration
A party seeking to compel
arbitration under Code of Civil Procedure Section 1281.2 must “plead and prove
a prior demand for arbitration under the parties’ arbitration agreement and a
refusal to arbitrate under the agreement.” (Mansouri v. Super. Ct.
(2010) 181 Cal.App.4th 633, 640; Civ. Proc. Code, § 1281.2.)
Here, Defendant Mercedes-Benz USA,
LLC contend on August 1, 2023, it requested Plaintiff stipulate to arbitration
pursuant to the agreement to arbitrate in the Motor Vehicle Lease Agreement
(“Lease”). Defendant Mercedes-Benz USA, LLC further contends Plaintiff has not
agreed to this request. (Ameripour Decl., ¶ 3.) The contention that Plaintiff
has not agreed to the request to
stipulate to arbitration affirmatively establishes Plaintiff’s refusal to
arbitrate his claims.
Existence of Valid Arbitration Agreement and Claims
Covered by Arbitration Clause
“[T]he petitioner bears the burden
of proving the existence of a valid arbitration agreement by the preponderance
of the evidence . . . .” (Giuliano v. Inland Empire Personnel, Inc.
(2007) 149 Cal.App.4th 1276, 1284 (Giuliano).) “In determining whether
an arbitration agreement applies to a specific dispute, the court may examine
only the agreement itself and the complaint filed by the party refusing
arbitration [citation]. The court should attempt to give effect to the parties’
intentions, in light of the usual and ordinary meaning of the contractual
language and the circumstances under which the agreement was made.” (Weeks
v. Crow (1980) 113 Cal.App.3d 350, 353.) “To determine whether a
contractual arbitration clause requires arbitration of a particular
controversy, the controversy is first identified, and the issue is whether that
controversy is within the scope of the contractual arbitration clause.” (Titolo
v. Cano (2007) 157 Cal.App.4th 310, 316.) “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.” (California Correctional Peace Officers Ass’n v. State
(2006) 142 Cal.App.4th 198, 205.)
[A] party opposing the petition bears the burden of
proving by a preponderance of the evidence any fact necessary to its
defense. [Citation.] 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, supra, 149 Cal.App.4th at p. 1284.)
Here, Defendant Mercedes-Benz USA,
LLC argues a valid agreement to arbitrate exists pursuant to the Lease executed
on or about September 9, 2017 for the subject vehicle, which included an
arbitration provision. (Ameripour Decl., ¶ 4, Ex. 2.) Furthermore, Defendant
Mercedes-Benz USA, LLC argues it may enforce the arbitration provision in the
Lease as an intended third-party beneficiary to the Lease. Likewise, Defendant
Mercedes-Benz USA, LLC asserts reading
the Lease as a whole, it is clear Defendant Mercedes-Benz USA, LLC is an intended third-party beneficiary of the
arbitration provision because it falls within the class of entities for whom
the arbitration provision was intended. (Cione v. Foresters Equity Services,
Inc. (1997) 58 Cal.App.4th 625, 636 (Cione).)
Similarly, Defendant Mercedes-Benz USA, LLC contends
it may also compel arbitration under the doctrine of equitable estoppel. (MS
Dealer Service Corp. v. Franklin (11th Cir. 1999) 177 F.3d 942, 947 (MS
Dealer).) Specifically, Defendant Mercedes-Benz USA, LLC argues Plaintiff’s
claims against it fundamentally results from and are inseparable from the Lease
and the alleged obligations of Mercedes-Benz USA that flow from the
relationship that was created by and through the Lease. As such, Defendant
Mercedes-Benz USA, LLC argues Plaintiff’s claims fall squarely within the scope
of the arbitration clause. In fact, Defendant Mercedes-Benz USA, LLC asserts
Plaintiff’s claims on their face arise directly out of the relationship between
Plaintiff as a purchaser/consumer and Defendant Mercedes-Benz USA, LLC as the manufacturer/retailer/warrantor.
The language of Important Arbitration Disclosures
states in pertinent part:
“1. If either you or we choose, any
dispute between you and us will be decided by arbitration and not in court.
2. If such dispute is arbitrated,
you and we will give up the right to a trial by a court or a jury trial.
3. You agree to give up any right
you may have to bring a class-action lawsuit or class arbitration, or to
participate in either as a claimant, and you agree to give up any right you may
have to consolidate your arbitration with the arbitration of others.
4. The information that can be
obtained in discovery from each other or from third persons in arbitration is
generally more limited than in a lawsuit.
5. Other rights that you and/or we
would have court may not be available in arbitration.
Any claim or dispute, whether in
contract, tort or otherwise (including any dispute over the interpretation,
scope, or validity of this lease, arbitration section or the arbitrability of
any issue), between you and us or any of our employees, agents, successors or
assigns, which arises out of or relates to a credit application, this lease, or
any resulting transaction or relationship arising out of this lease shall, at
the election of either you or us, or our successors or assigns, be resolved by
a neutral, binding arbitration and not by a court action. Any claim or dispute
is to be arbitrated on an individual basis and not as a class action. Whoever
first demands arbitration may choose to proceed under the applicable rules of
and be administered by the National Center for dispute settlement (www.ncdsusa.org)
or any other organization that you may choose subject to our approval.
Whichever rules are chosen, the
arbitrator shall be an attorney or retired judge and shall be selected in
accordance with the applicable rules. The arbitrator shall apply the law and
deciding the dispute. Unless the rules require otherwise, the arbitration award
shall be issued without a written opinion. The arbitration hearing shall be
conducted in the federal district in which you reside. If you demand
arbitration first you will pay the claimants initial arbitration filing fees or
case management fees required by the applicable rules up to $125, and we will
pay an additional initial filing fee or case management fee. We will pay the
whole filing fee or case management fee if we demand arbitration first. We will
pay the arbitration costs and fees for the first day of arbitration, up to a
maximum of eight hours. The arbitrator shall decide who shall pay any
additional cost and fees. Nothing in this paragraph shall prevent you from
requesting the applicable arbitration entity reduced or waived fees, or that we
voluntarily pay an additional share of said fees, based upon your financial
circumstances or the nature of your claim.
This lease evidences a transaction
involving Interstate commerce. Any arbitration under this lease shall be
governed by the Federal Arbitration Act ( 9 USC 1, et seq.) Judgment
upon the award rendered may be entered in any court having jurisdiction.”
Defendant Mercedes-Benz USA, LLC
has satisfied their initial burden of proving the existence of a valid written
agreement to arbitrate the claims in this instant action. Defendant
Mercedes-Benz USA, LLC quotes language verbatim from the Lease between Plaintiff
and signatory Mercedes-Benz of Anaheim and attached a copy of the Lease with
the arbitration provision to Ameripour’s declaration.
In opposition, Plaintiff has argued
facts that challenge whether the arbitration provision can be asserted by
Defendant Mercedes-Benz USA, LLC and as to all claims.
First, Plaintiff argues Defendant
Mercedes-Benz USA, LLC may not rely on the doctrine of equitable estoppel to
force him to arbitrate his claims against it despite never having agreed to do
so. Plaintiff contends he does not seek to enforce the financing agreement with
Mercedes-Benz of Anaheim against Defendant Mercedes-Benz USA, LLC, rather he
seeks to enforce the requirements of state consumer-protection law and related
contract and tort remedies.
Plaintiff further contends his
claims against Defendant Mercedes-Benz USA, LLC are not intimately founded in
the Lease because the Lease does not require Defendant Mercedes-Benz USA, LLC to
provide or comply with a warranty.
Plaintiff also argues Defendant
Mercedes-Benz USA, LLC is not a third-party beneficiary of the arbitration
clause in the Lease because (1) the language of the provision itself makes it
clear that it does not benefit Defendant Mercedes-Benz USA, LLC at all; (2) the
provision limits the parties who could enforce it to Plaintiff and
Mercedes-Benz of Anaheim demonstrating an intent not to benefit Defendant
Mercedes-Benz USA, LLC; and (3) permitting Defendant Mercedes-Benz USA, LLC to
enforce the provision would be inconsistent with the objectives of the Lease
and violate the reasonable expectations of Plaintiff and Mercedes-Benz of
Anaheim.
Under Ford Motor Warranty Cases (2023) 89
Cal.App.5th 1324, the court held “California law does not treat manufacturer
warranties imposed outside the four corners of a retail sale contract as part
of the sale contract.” (Ford Motor Warranty Cases (2023) 89 Cal.App.5th
1324, 1335.) Also, “[t]o show the contracting parties intended to benefit, a
third party must show that, under the express terms of the contract at issue
and any other relevant circumstances under which the contract was made, (1) ‘the
third party would in fact benefit from the contract’; (2) ‘a motivating purpose
of the contracting parties was to provide a benefit to the third party’; and
(3) permitting the third party to enforce the contract ‘is consistent with the
objectives of the contract and the reasonable expectations of the contracting
parties.’” (Ford Motor Warranty Case, supra, at 1337 [citing Goonewardene
v. ADP, LLC (2019) 6 Cal.5th 817, 830].)
Furthermore, the Lease Agreement states in relevant
part, “Unless otherwise specified, “lease” refers to this Motor Vehicle Lease
Agreement; “vehicle” refers to the vehicle described above; “you,” “your,” and
“yours” refer to the Lessee and any Co-Lessee; “we,” “us,” and “our” refer to
the Lessor and, after the lease is assigned, to DAIMLER TRUST, or its
successors and assigns; “Assignee” refers to DAIMLER TRUST or its successors
and assigns…You agree to lease the vehicle from us on the terms and conditions
provided for in this lease. The terms and conditions contained in this lease
are made on behalf of Lessor and Assignee.” (Ameripour Decl., ¶ 4, Ex. 2.)
As in Ford Motor Warranty Cases, the Lease
arbitration agreement does not read as consent by the Lessee, i.e.,
Plaintiff in this action, to arbitrate claims with third-party nonsignatories.
First, it is unclear whether the condition of the
vehicle is within the subject matter of the claims made arbitrable under the
Lease because it states, “any claim or dispute, whether in contract, tort, or
otherwise.” The use of the term “otherwise” could include statutory warranty
violations but the Lease does not expressly state that unlike in Ford Motor
Warranty Cases.
Also, neither the language of the Lease arbitration
provision nor the agreement as a whole name Defendant Mercedes-Benz USA, LLC as
a Lessor, Assignee, or successor to the Assignee. Similarly, Defendant
Mercedes-Benz USA, LLC makes no showing that it is an agent of Mercedes-Benz of
Anaheim. Furthermore, California law treats manufacturer vehicle warranties as
independent of the sale contract and Plaintiff’s claims as explained above
pertain to statutory warranty violations not the Lease.
Additionally, Defendant Mercedes-Benz USA, LLC fails
to address the Goonewardene requirements to establish it is an intended
third-party beneficiary. For the first prong, the express language of the
arbitration provision indicates Defendant Mercedes-Benz USA, LLC would not
benefit from it because it states only the Lessee (“you”), Lessor (“us”),
agents, Assignee (“Daimler Trust”) or its successors may compel arbitration,
none of which is Defendant Mercedes-Benz USA, LLC. As to the second prong, the
limitations on who could compel arbitration demonstrates neither Plaintiff nor
Mercedes-Benz of Anaheim had a motivating purpose to provide benefit to
Defendant Mercedes-Benz USA, LLC. On the third and final prong, provided the
explicit language of the Lease including the arbitration provision, permitting
Defendant Mercedes-Benz USA, LLC to enforce the arbitration provision would be
inconsistent with the objectives of the Lease and the reasonable expectations
of the contracting parties.
Accordingly, Defendant Mercedes-Benz USA, LLC has not
proven the existence of a valid written arbitration agreement that it has
standing to enforce.
Conclusion
In light of the foregoing,
Defendant Mercedes-Benz USA, LLC’s Motion to Compel Arbitration is DENIED.