Judge: Blaine K. Bowman, Case: 37-2023-00026126-CU-BC-NC, Date: 2023-11-17 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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SOUTH BUILDING TENTATIVE RULINGS - November 16, 2023

11/17/2023  01:30:00 PM  N-31 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Blaine K. Bowman

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Civil - Unlimited  Breach of Contract/Warranty Motion Hearing (Civil) 37-2023-00026126-CU-BC-NC PEREZ VS. TOYOTA MOTOR SALES, U.S.A., INC. [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion - Other, 08/14/2023

The Motion to Compel Arbitration brought by defendant Lexus Carlsbad (entity status unknown) (hereinafter, Lexus Carlsbad) is disposed as follows: --GRANTED as to the request for an order seeking to compel arbitration between plaintiff Rafael Perez (Plaintiff) and Lexus Carlsbad --GRANTED as to staying the claims that are made in this case against defendant Lexus Carlsbad --DENIED as to the request for a stay of the proceedings against the other defendants named in this case (including Toyota Motor Sales, U.S.A., Inc. and Toyota Motor Credit Corporation) Background and Analysis Plaintiff purchased a 2023 Lexus RX 350 on or about April 11, 2023. Plaintiff alleges that he attempted to rescind the purchase contract on April 17, 2023 by serving a 'request for rescission' on 'defendants.' (ROA 1, ¶ 7.) The grounds for Plaintiff's asserted rescission were that defendants negotiated the sale transaction with Plaintiff in Spanish but then failed to provide him a copy of the written contract in Spanish as required by Civil Code § 1632. Plaintiff thus contends that he is entitled to rescission under that statute.

Notably, Plaintiff has not only sued the dealership (Lexus Carlsbad), but also, apparently, the manufacturer (Toyota Motor Sales, U.S.A., Inc.) and the manufacturer's financing arm (Toyota Motor Credit Corporation). The dealership – but notably not the manufacturer or the manufacturer's financing arm – now seeks to compel Plaintiff to arbitrate his dispute regarding rescission on grounds that the sale purchase agreement contains an arbitration clause.

Plaintiff contends that the arbitration clause cannot or should not be enforced for three reasons: (1) since it was in English, and the deal was negotiated in Spanish, under Civil Code § 1632 the arbitration clause is not enforceable, (2) the arbitration clause is unconscionable and thus unenforceable, and (3) because there are multiple named defendants, some of which are not subject to arbitration, the arbitration clause should not be enforced pursuant to Code of Civil Procedure § 1281.2(c) on grounds that there is a risk of multiple inconsistent rulings.

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3007546 CASE NUMBER: CASE TITLE:  PEREZ VS. TOYOTA MOTOR SALES, U.S.A., INC. [IMAGED]  37-2023-00026126-CU-BC-NC As to application of Code of Civil Procedure § 1281.2(c), there is some argument regarding whether that provision of California law can even be applied to an arbitration clause that requires application of the Federal Arbitration Act. This is ultimately a dispute of little import, however, because even if California law applied, this Court is not inclined to exercise discretion to apply that statute as it appears that the cases can proceed on different tracks against different parties (arbitration against the dealership, civil litigation against the manufacturer and financing company).

As to the question of whether a copy of the contract was provided in Spanish, Plaintiff has not met any evidentiary burden on this issue. There is something unique about the manner in which this issue is being argued. Plaintiff specifically declares: 'I do not speak or read English.' (Perez Decl., ¶ 3.) That sentence, however, appears in a declaration that is, itself, written in English. There is something self-defeating about trusting a document in which a party simultaneously states, in English, that '[t]he facts stated herein are true of my own personal knowledge and if called to testify thereto I could and would do so completely,' while at the same time declaring that he does not speak or read English.

(Perez Decl., ¶ 3 (emphasis added).) How can one have personal knowledge of the truth of the statements in a declaration of one is unable to read the statements for themselves? The declaration in question does not appear to be accompanied by a Spanish copy, with a declaration from a certified translator.

California Rule of Court, rule 3.1110(g), which applies to 'translation of exhibits,' states that: 'Exhibit written in a foreign language must be accompanied by an English translation, certified under oath by a qualified interpreter.' The instant declaration fails on several of these fronts. First, to properly submit evidence of this nature, Plaintiff would have had to be presented written declaration in Spanish that he could read and sign in order to have personal knowledge of what he is signing. Instead it looks like what Plaintiff did here was sign a document that is in a language he cannot read. Second, if a Spanish copy of the document was provided and signed by Plaintiff, to be understood by this Court, it would need to accompanied by a translation. Admittedly, there is a document in English submitted, which is what the 'translation' would be, so this is essentially the same problem as not having a Spanish copy, but the point is that there has been no translation for Plaintiff to understand what he was signing. Third, it appears that Plaintiff sought to overcome this issue by including a 'statement' from one Maria Acosta, who purports to be fluent in English and Spanish and who purports to have 'fully and accurately translated this document to Rafael Perez.' The Court's best guess of what this means is that the English copy of the document was provided to Plaintiff by his attorneys and Ms. Acosta translated it verbally because there is no written copy of the document provided in Spanish. Even if that were permissible, the statement by Ms. Acosta is not evidence, which is why the Court refers to it above as a 'statement' rather than a 'declaration' because a formal declaration must be under penalty of perjury and must be accompanied by certain identifying and foundational information. The 'statement' provided by Ms.

Acosta is not under penalty of perjury (and thus not evidence), but it also does not describe who Ms.

Acosta is. Beyond that, even if the statement were under penalty of perjury and did include foundational language stating who Ms. Acosta is and what her connection is to the litigation (such as 'I am Maria Acosta. I am a legal secretary who works for the law firm of Attorney Steven Alexander. I make this declaration in support of Plaintiff's opposition to Lexus Carlsbad's motion to compel arbitration. I have personal knowledge of the facts set forth herein and, if called to testify, and I could and would testify as follows.'). Finally, even if all of those requirements were met (a Spanish copy with Plaintiff's signature, and English copy translated by Ms. Acosta, a declaration identifying who Ms. Acosta is, and a declaration signed under penalty of perjury) there would still be a question of whether or not Ms. Acosta is a certified translator, as no formal certification number or reference to training in the precise skill of translating languages is provided as to Ms. Acosta. As such, the declaration provided by Plaintiff is self-defeating to the point that the Court gives it no weight. Furthermore, even if this issue could be cleared-up in the technical sense by providing a supplemental copy in Spanish with an English copy produced by a certified translator, the production of this document in English saps Plaintiff of much of his credibility, as the signing of this declaration indicates that Plaintiff is willing to sign documents in a language he does not understand.

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3007546 CASE NUMBER: CASE TITLE:  PEREZ VS. TOYOTA MOTOR SALES, U.S.A., INC. [IMAGED]  37-2023-00026126-CU-BC-NC Beyond the low (or non-existent) weight to be given to the declaration by Plaintiff, the dealership has provided a copy of a contract that, while the bulk is in English, contains a line in Spanish (and five other languages) that, when translated, means: 'The sale or lease of the Vehicle was negotiated primarily in English.' While that assertion would be dubious if the entire contract was in English (because a person who does not speak English would not be able to read and understand this line in the first place), the fact that this line is written in Spanish means that Plaintiff could understand it - unless, of course, Plaintiff could not read at all.

This is a point that Plaintiff actually makes in his declaration (the one the Court does not find credible). In that declaration, Plaintiff states: 'I attended school through the 3rd grade in Tijuana, Mexico. I do not speak or read English.' (Perez Decl., ¶ 3 (emphasis added).) The thrust of Plaintiff's point appears to be that he does not understand a particular language – not that he does not know how to read.

Nonetheless, it could be possible that Plaintiff does not speak English, but also does not read or write in Spanish. If that were the case, signing a contract containing a Spanish statement about having negotiated the deal in English would ring somewhat hollow. (As an aside, the Court notes some discussion in the papers that Plaintiff is a successful businessman who owns a chain of pharmacies, but 'success' in and of itself does not speak to whether or not Plaintiff can read, write, or speak English, so economic success has little to do with the ultimate question at issue in the present motion.) But again, Plaintiff has submitted a declaration, under penalty of perjury, making representations in a language he purports to not understand. On these facts, it is well within the realm of possibility to believe that Plaintiff is simply willing to sign papers that people put in front of him – regardless of whether or not he can read them.

Ultimately, it was Plaintiff who made the decision to sign the purchase agreement in question. None of the credible evidence before this Court indicates that Plaintiff did not intend to enter into the deal that the purchase agreement commemorated, as it appears to be undisputed that Plaintiff took the keys and drove the brand-new vehicle in question off the lot. While California law provides a rescission remedy when a deal is negotiated in Spanish but then commemorated in a document that is written in English, Plaintiff signed a document acknowledging that the deal was, in fact, negotiated in English. And, even if Plaintiff may not have understood English, the line admitting that the deal was negotiated in English is written in five languages, including Spanish. As such, there is no basis to invalidate the arbitration provision of the contract on the grounds that Plaintiff rescinded the agreement pursuant to Code of Civil Procedure § 1632.

Finally, Plaintiff channels the above arguments through the broader lens of traditional 'unconscionability.' While there is a certain amount of procedural unconscionability in any take-it-of-leave-it contract, which the purchase agreement here is as to all of the terms contained within (with the possible exception of price, which is often negotiated a bit in a car sale), that, in and of itself, does not render the contract unenforceable. Plaintiff argues that the arbitration clause at issue is substantively unconscionable because: (1) it is governed by the Federal Arbitration Act rather than California law, (2) provides for limited discovery in arbitration, and (3) lacks mutuality because it expressly requires Plaintiff to waive his right to bring a class action or a private attorney general action.

The Court does not find any of these to be substantively unconscionable in this context. While a choice-of-law provision could, potentially, be substantively unconscionable if the selected law was notably harsh (such as selecting application of the law of Iran or North Korea), here the selected law is law passed by the federal government of the United States. As such, the notion that the Federal Arbitration Act is, itself, unconscionable is wholly without merit. With regard to discovery, Plaintiff has not made a sufficient showing as to how and why limited discovery in arbitration is so substantively unconscionable that it warrants invalidating the arbitration clause at issue here. And, finally, with regard to mutuality, waiver of class actions and/or the right to bring claims in civil court in the role of a private attorney general are not unconscionable. See Viking River Cruises, Inc. v. Moriana (2021) 596 U.S.

_____, 142 S.Ct. 1906, 213 L.Ed.2d 179.

For the foregoing reasons, the Court concludes that Lexus Carlsbad has met its burden of establishing the existence of an arbitration clause that governs the dispute at issue, and, as such, an order Calendar No.: Event ID:  TENTATIVE RULINGS

3007546 CASE NUMBER: CASE TITLE:  PEREZ VS. TOYOTA MOTOR SALES, U.S.A., INC. [IMAGED]  37-2023-00026126-CU-BC-NC compelling arbitration between Plaintiff and Lexus Carlsbad must issue.

However, Lexus Carlsbad also requests a stay of this case as to the remaining defendants – the manufacturer and financing company. The Court declines to impose such a stay. Lexus Carlsbad advances an argument that a stay is mandatory. The Court disagrees. While the statute – Code of Civil Procedure § 1281.4 – does use the word 'shall,' it does so in relation to civil litigation proceedings between the parties who are subject to the arbitration agreement. In other words, staying this case as against Lexus Carlsbad is mandatory, but that mandate does not stretch to cover other parties.

Unless the ruling(s) above indicate that an appearance is necessary, parties who wish to submit, who are satisfied with the above tentative ruling(s), and/or who do not otherwise wish to argue the motion(s) are encouraged to give notice to the Court and each other of their intention not to appear.

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