Department 58

Hearing Date: March 8, 2023

Case Name: Celia Ortiz v. Nissan North America, Inc. et al.

Case No.: 22STCV16804

Matter: Motion to Compel Arbitration

Moving Party: Defendants Nissan North America, Inc. and Ontario Nissan Inc., dba Metro Nissan of Montclair

Responding Party: Unopposed / Plaintiff Celia Ortiz

Tentative Ruling: The Motion to Compel Arbitration is granted.

Background

This is an action under the Song-Beverly Act. Celia Ortiz (Plaintiff or Ortiz) sues Nissan North America, Inc. and Ontario Nissan Inc. (Defendants) for breach of express warranty, intentional misrepresentation, concealment, and negligent repair as to a 2020 Nissan Sentra.

Defendants move to compel arbitration based on a provision found in the Retail Installment Sale Contract (RISC) finance agreement between Ortiz and the dealership, Cerritos Nissan. The dealership is not named as a defendant in the Complaint.

The RISC lists Ortiz as the buyer and Cerritos Nissan as the seller-creditor. (Critchlow Decl., Ex. C.) The subject arbitration provision is as follows:

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, 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.

Defendant Nissan, a non-signatory to the RISC, asserts that it may compel arbitration based on the doctrines of equitable estoppel and third-party beneficiary. Plaintiff did not file an opposition.

Defendants’ request for judicial notice of various documents filed in this case is granted. (Evid. Code, § 452, subd. (d).

Legal Standard

Code of Civil Procedure section 1281.2 authorizes the court to order arbitration of a controversy if it finds the parties have agreed to arbitrate that dispute. Because the obligation to arbitrate arises from contract, the court may compel arbitration only if the dispute in question is one in which the parties have agreed to arbitrate. (Weeks v. Crow (1980) 113 Cal.App.3d 350, 352.)

The party moving to compel arbitration has the initial burden to (1) affirmatively admit and allege the existence of a written arbitration agreement, and (2) prove the existence of that agreement by a preponderance of the evidence. (Rosenthal v. Great W. Fin. Sec. Corp, 14 Cal. 4th 394, 413.) Once this is met, the burden shifts to the responding party to prove that the agreement is unenforceable by a preponderance of the evidence. (Ibid.)

Discussion

Defendants have produced the RISC, which was executed by Plaintiff on July 17, 2020. (Critchlow Decl., Ex. C.) This action arises out of the purchase and condition of the subject vehicle. Defendants, however, are non-signatories to the agreement.

Equitable estoppel

Defendant moves to compel arbitration¿under the doctrine of equitable estoppel. Under that doctrine, “a nonsignatory defendant may invoke an arbitration clause to compel a signatory plaintiff to arbitrate its claims when the causes of action against the nonsignatory are ‘intimately founded in and intertwined’ with the underlying contract obligations.” (Boucher v. Alliance Title Co., Inc. (2005) 127 Cal.App.4th 262, 271.) “By relying on contract terms in a claim against a nonsignatory defendant, even if not exclusively, a plaintiff may be equitably estopped from repudiating the arbitration clause contained in that agreement.” (Id. at p. 272.) “[I]f a plaintiff relies on the terms of an agreement to assert his or her claims against a nonsignatory defendant, the plaintiff may be equitably estopped from repudiating the arbitration clause of that very agreement. In other words, a signatory to an agreement with an arbitration clause cannot ‘ “ ‘have it both ways’ ” ’; the signatory ‘cannot, on the one hand, seek to hold the non-signatory liable pursuant to duties imposed by the agreement, which contains an arbitration provision, but, on the other hand, deny arbitration's applicability because the defendant is a non-signatory.’ ” (Goldman v. KPMG, LLP, supra, 173 Cal.App.4th at p. 220.)

The issue here is whether Plaintiff’s claims against Nissan depend on the specific terms of the RISC. Defendant primarily relies on Felisilda v. FCA US LLC (2020) 53 Cal.App.5th 486 (Felisilda). In that case,¿the plaintiffs purchased a vehicle and signed a sales contract, which provided in pertinent part, “‘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¿...¿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.’” (Id. at p. 490, original italics.) The plaintiffs sued FCA and the dealership and the dealership moved to compel all parties to arbitration based on the sales agreement. The trial court granted the motion.

In affirming the trial court, the Court of Appeal rejected plaintiffs’ argument that they could not be compelled to arbitrate their claims against non-signatory FCA. The appellate court held that a non-signatory may enforce an arbitration agreement when “the causes of action against the non-signatory are ‘intimately founded in and intertwined’ with the underlying contract obligations.” (Id. at p. 495.) Citing the arbitration provision above, the Court of Appeal explained, “[t]he Felisildas’ claim against FCA directly relates to the condition of the vehicle that they allege to have violated warranties they received as a consequence of the sales contract. Because the Felisildas expressly agreed to arbitrate claims arising out of the condition of the vehicle – even against third party nonsignatories to the sales contract – they are estopped from refusing to arbitrate their claim against FCA.” (Id. at p. 497.)

Here, the arbitration agreement is identical to the one in Felisilda. Thus, the reasoning in that case applies. Ortiz expressly agreed to arbitrate her claims arising out of the condition of the subject vehicle, including those against third-party non-signatories to the sales contract.

The Court finds there is a valid arbitration agreement and the burden shifts to Ortiz to establish why the agreement is unenforceable. Because Ortiz has not filed any opposition, she has failed to meet her burden and the motion to compel arbitration is granted. This case shall be stayed pending the arbitration proceeding.