Judge: Barbara M. Scheper, Case: 22STCV21859, Date: 2023-02-03 Tentative Ruling
Case Number: 22STCV21859 Hearing Date: February 3, 2023 Dept: 30
Dept. 30
Calendar No.
Perez
vs. Nissan North America, Inc., INC., et. al.,
Case No. 22STCV21859
Tentative
Ruling re: Defendant’s Motion to Compel
Arbitration
Defendant Nissan North
America, Inc. (Nissan) moves to
compel Plaintiff Daniel Mozo Perez (Plaintiff) to binding arbitration and to stay
proceedings pending the arbitration. The motion is denied.
“On 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, subds. (a), (b).)
A proceeding to compel
arbitration is in essence a suit in equity to compel specific performance of a
contract. (Freeman v. State Farm Mutual
Auto Insurance Co. (1975) 14 Cal.3d 473, 479.) Such enforcement may be
sought by a party to the arbitration agreement. (Code Civ. Proc., § 1280, subd.
(e)(1).)
The petition to compel arbitration functions as a motion
and is to be heard in the manner of a motion, i.e., the facts are to be proven
by affidavit or declaration and documentary evidence with oral testimony taken
only in the court’s discretion. (Code Civ. Proc., §1290.2; Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th
394, 413–414.) The petition to compel must set forth the provisions of the
written agreement and the arbitration clause verbatim, or such provisions must
be attached and incorporated by reference. (Cal. Rules of Court, rule 3.1330;
see Condee, supra, 88 Cal.App.4th at 218.)
Once petitioners allege that an arbitration agreement
exists, the burden shifts to respondents to prove the falsity of the purported
agreement, and no evidence or authentication is required to find the arbitration
agreement exists. (See Condee, supra, 88 Cal.App.4th at 219.) However, if the
existence of the agreement is challenged, “petitioner bears the burden of
proving [the arbitration agreement’s] existence by a preponderance of the
evidence.” (Rosenthal v. Great Western
Fin. Securities Corp. (1996) 14 Cal.4th 394, 413; see also Espejo v. Southern California Permanente
Medical Group (2016) 246 Cal.App.4th 1047, 1058–1060.)
Plaintiff has asserted claims
against Nissan under the Song-Beverly Act based on Plaintiff’s lease of an
allegedly defective 2020 Infiniti QX60. (Comp. ¶ 4.) Plaintiff alleges that he
received various warranties from Nissan in connection with the lease, and that
Nissan failed to conform the vehicle to those warranties after numerous attempts
to repair it. (Comp. ¶¶ 5-10.)
In support of its motion to
compel arbitration, Nissan has produced a copy of the Retail Installment Sale
Contract (the Sales Contract) for the lease of the vehicle, made between
Plaintiff and the lessor, Infiniti of Ontario. (Gilefsky Decl. ¶ 2, Ex. B.)
The Sales Contract
included an “Arbitration Provision,” which reads as follows:
1.
EITHER YOU OR WE MAY CHOOSE TO HAVE ANY DISPUTE, EXCEPT
AS STATED BELOW, BETWEEN US DECIDED BY ARBITRATION AND NOT IN COURT OR BY JURY
TRIAL.
[.
. .]
Except as otherwise stated below, any
claim or dispute, whether in contract, tort, statute, or otherwise (including
the interpretation and scope of 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, lease or condition of this vehicle, this lease agreement or any
resulting transaction or relationship (including any such relationship with
third parties who do not sign this lease) shall, at your or our election, be
resolved by neutral, binding arbitration and not by a court action.
(Gilefsky Decl.
¶ 2, Ex. B [17].)
Nissan is a non-signatory to the
Sales Contract between Plaintiff and Infiniti
of Ontario, and argues that it may enforce the arbitration provision
under the doctrine of equitable estoppel.
Equitable
Estoppel
“Where a nonsignatory seeks to enforce an
arbitration clause, the doctrine of equitable estoppel applies in two
circumstances: (1) when a signatory must rely on the terms of the written
agreement in asserting its claims against the nonsignatory or the claims are
intimately founded in and intertwined with the underlying contract, and (2)
when the signatory alleges substantially interdependent and concerted
misconduct by the nonsignatory and another signatory and the allegations of
interdependent misconduct are founded in or intimately connected with the
obligations of the underlying agreement.” (Kramer v. Toyota Motor Corp.
(9th Cir. 2013) 705 F.3d 1122, 1128-29; see Goldman v. KPMG, LLP (2009)
173 Cal.App.4th 209, 219.) A nonsignatory seeking to enforce an arbitration
agreement has the burden to establish at least one of these circumstances
applies. (Jones v. Jacobson (2011) 195 Cal.App.4th 1, 16.)
In Felisilda v. FCA US LLC (2020) 53
Cal.App.5th 486, the dealership defendant sought to compel arbitration of the
plaintiffs’ Song-Beverly Act claim based on an arbitration provision similar to
the one at issue here. (Id. at 490.) The manufacturer defendant was a
non-signatory to the arbitration provision and so sought to enforce the
provision based on equitable estoppel. (Id. at 493-95.) The court
concluded that the manufacturer could enforce the arbitration provision based
on equitable estoppel, because the plaintiffs’ claim against the manufacturer “directly
relates to the condition of the vehicle that they allege to have violated
warranties they received as a consequence of the sales contract,” and the
plaintiffs “expressly agreed to arbitrate claims arising out of the condition
of the vehicle – even against third party nonsignatories to the sales
contract.” (Id. at 497.)
In Felisilda, the plaintiffs had sued
both the signatory dealership and the non-signatory manufacturer, and the
dealership moved to compel arbitration while the manufacturer filed a notice of
non-opposition. (Id. at 489.) The trial court granted the motion, and
the plaintiffs subsequently dismissed the dealership and arbitrated with the
manufacturer alone. (Id. at 499.)
In this action, only the non-signatory
manufacturer, Nissan, is a party to the action and alone seeks to compel
arbitration. Given this distinction, Felisilda is not controlling: “It
makes a critical difference that the Felisildas, unlike [plaintiff], sued the
dealership in addition to the manufacturer. In Felisilda, it was the
dealership—a signatory to the purchase agreement—that moved to compel
arbitration rather than the non-signatory manufacturer. . . . [T]he Felisildas
dismissed the dealership only after the court granted the motion to
compel arbitration. Felisilda does not address the situation we are
confronted with here, where the non-signatory manufacturer attempted to compel
arbitration on its own.” (Ngo v. BMW of North America, LLC (9th Cir.
2022) 23 F.4th 942, 950.)
Equitable estoppel applies when
the plaintiff’s claims are “intimately founded in and intertwined with the
underlying contract.” (Kramer, supra, 705 F.3d at 1128-29.) “[I]n order to be intertwined with the
purchase agreement, Plaintiff must allege a violation of a ‘duty, obligation,
term or condition’ imposed by the purchase agreement.” (Jurosky v. BMW of
North America, LLC (S.D. Cal. 2020) 441 F.Supp.3d 963, 970.) In Felisilda,
the court found that “the sales contract was the source of the warranties at
the heart of this case.” (Felisilda, 53 Cal.App.5th at 496.)
Here, the Sales Contract contains a section titled “Vehicle
Warranties,” which states that the vehicle is covered by a “Standard New
Vehicle Limited Warranty provided by the manufacturer or distributor of this
Vehicle.” (Gilefsky Decl. ¶ 2, Ex. B [17].) Below, there is a disclaimer that
reads as follows:
EXCEPT
AS EXPRESSLY PROVIDED UNDER THIS LEASE, WE OFFER NO EXPRESS OR IMPLIED
WARRANTIES WITH RESPECT TO THIS VEHICLE. WE MAKE NO IMPLIED WARRANTY OF
MERCHANTABILITY. THE LESSOR UNDERTAKES NO RESPONSIBILITY FOR THE QUALITY OF THE
GOODS EXCEPT AS OTHERWISE PROVIDED IN THIS CONTRACT. …
(Ibid.)
In a separate section, the Sales
Contract lists “Optional Insurance, Coverages, and Warranties,” that the lessee
may purchase by signing next to each item. The items listed do not include the manufacturer’s
“Standard New Vehicle Limited Warranty.” (Ibid.)
Taken together, these provisions “demonstrate[]
an intent to distinguish and distance” the manufacturer’s warranty, which is
not provided by the lessor, from the warranties that are expressly provided by
the lessor through the Sales Contract, such as those listed in the “Optional
Insurance, Coverages, and Warranties” section. (C.f. Jurosky, supra, 441
F.Supp.3d at 970.) The provisions indicate that the Sales Contract is not the
source of the manufacturer’s warranties on which Plaintiff’s Song-Beverly
claims are based. Consequently, those claims are not “intimately founded in and
intertwined with the underlying contract.” (Kramer, supra, 705 F.3d at
1128-29.)
Because
Nissan lacks grounds to compel arbitration of Plaintiff’s claims as a
non-signatory, the motion is denied.