Judge: Carolyn M. Caietti, Case: 37-2022-00025208-CU-BC-CTL, Date: 2023-09-15 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - September 14, 2023

09/15/2023  10:30:00 AM  C-70 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Carolyn Caietti

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Civil - Unlimited  Breach of Contract/Warranty Motion Hearing (Civil) 37-2022-00025208-CU-BC-CTL LOPEZ VS NISSAN NORTH AMERICA INC [IMAGED] CAUSAL DOCUMENT/DATE FILED:

Defendant Nissan North America, Inc.'s Motion to Compel Arbitration and Stay Proceedings is DENIED.

Defendant's unopposed request for judicial notice is granted and notice will be taken to the extent permitted.

Plaintiff's objection to the copy of Plaintiff's Retail Installment Sale Contract (RISC) with Mossy Nissan National City is overruled. The party seeking arbitration can meet its initial burden by attaching to the petition a copy of the arbitration agreement purporting to bear the respondent's signature. (Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1060.) At this step, a movant need not 'follow the normal procedures of document authentication' and need only 'allege the existence of an agreement and support the allegation as provided in rule [3.1330].' (Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 218.) Defendant has not proved the existence of an arbitration agreement. (C.C.P., § 1281.2; Rosenthal v. Great Western Fin'l Securities Corp. (1996) 14 Cal.4th 394, 413; Hotels Nevada v. L.A. Pacific Ctr., Inc.

(2006) 144 Cal.App.4th 754, 758.) Generally, one must be a party to an arbitration agreement to be bound by it or invoke it. (JSM Tuscany, LLC v. Sup. Ct. (2011) 193 Cal.App.4th 1222, 1236-37; see also, Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236 (explaining a party cannot be required to submit to arbitration any dispute which he has not agreed to submit).) However, exceptions apply.

One such exception is the doctrine of equitable estoppel, which allows a nonsignatory defendant to 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. (Felisilda v. FCA U.S. LLC (2020) 53 Cal.App.5th 486, 495 (holding equitable estoppel required vehicle purchasers to arbitrate their automobile warranty claims against a vehicle manufacturer pursuant to a dealer sale contract); Ford Motor Warranty Cases [Ochoa] (2023) 89 Cal.App.5th 1324, 1333, review granted (July 19, 2023) S279969 (Ochoa may be cited, not only for its persuasive value, but also for the limited purpose of establishing the existence of a conflict in authority that allows trial courts to exercise discretion to choose between sides of any conflict).) Ochoa is more persuasive. There, the court concluded a manufacturer could not compel arbitration based on agreements with the dealers that sold the vehicles. The court reasoned equitable estoppel did not apply because the plaintiffs' breach of warranty claims were not founded in or intertwined with the underlying sales contracts with the dealers and none of the claims were based on express contractual Calendar No.: Event ID:  TENTATIVE RULINGS

2948773  44 CASE NUMBER: CASE TITLE:  LOPEZ VS NISSAN NORTH AMERICA INC [IMAGED]  37-2022-00025208-CU-BC-CTL language in the sales contract.

Here, the arbitration clause states 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 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.' (ROA 27 – Declaration of James Leonard, at Ex. 1 - Plaintiff's RISC.) Plaintiffs' cause of action for breach of express warranty is related to the 'engine, transmission and electrical.' (Complaint, at ¶ 15.) The 'Warranty Information Booklet,' a document by Defendant, is attached to the Complaint as Exhibit 1.The facts supporting the breach of warranty claim is not based on any terms of the purchase or financing of the vehicle. The RISC is not attached to the Complaint. The dealer-seller is a signatory party to the RISC, but is not a party to this lawsuit. Defendant did not sign the RISC.

Like in Ochoa, supra, Defendant does not point to any warranties in the RISC, nor any assurances regarding the quality of the vehicle sold, promise of repairs or other remedies in the event problems arise. (Ochoa, supra, at p. 1335.) Rather, the RISC states, 'the Seller makes no warranties, express or implied, on the vehicle,...This provision does not affect any warranties covering the vehicle that the vehicle manufacturer may provide...' (RISC, at § 4.) Further, there is no indication Defendant financed the purchase, controlled or had any direct interest in the transaction. (Ochoa, supra, 89 Cal.App.5th at p. 1334 ['manufacturer vehicle warranties that accompany the sale of motor vehicles without regard to the terms of the sale contract between the purchaser and the dealer are independent of the sale contract'].) Thus, notwithstanding the arbitration provision's reference to warranties, Plaintiff's claims are not 'intimately founded in and intertwined with' the RISC, precluding application of equitable estoppel.

Other courts have agreed with Ochoa on the same issues. (See, Montemayor v. Ford Motor Co. 92 Cal.App.5th 958 [310 Cal.Rptr.3d 82, 85] rev. filed Aug. 1, 2023; Kielar v. Sup. Ct. (2023) 94 Cal.App.5th 614; Yeh v. Sup. Ct. (Sept. 6, 2023, No. A166537) 2023 WL 5741703).) There are also insufficient facts to show the third-party beneficiary exception applies. A third-party beneficiary is someone who may enforce a contract because the contract is made expressly for his benefit. (Ochoa, supra, at p. 1336-40, citing Jensen v. U-Haul Co. of California (2017) 18 Cal.App.5th 295, 301.) Here, Defendant did not meet its burden to show Plaintiffs and the seller-dealership intended to benefit Defendant. (Ochoa, supra, citing Goonewardene v. ADP, LLC (2019) 6 Cal.5th 817, 830.) To do this, Defendant is required to show, under the express terms of the contract 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 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. (Ibid.) Here, Defendant only points to the arbitration provision itself. This is insufficient. Like in Montemayor, the parties here agreed in the RISC on terms for the financing and purchase of the vehicle, and they agreed to arbitrate disputes between them. (Ex. 1.) In no way was the RISC 'made expressly for the benefit of a third person.' (Montemayor, supra, at p. 96, citing Civ. Code, § 1559.) Since Defendant did not prove the existence of an arbitration agreement between the parties, the burden did not shift to Plaintiffs to provide a ground for denial. (Rosenthal, supra.) Thus, the Court declines to rule on Plaintiff's waiver and unconscionability defenses. (See also, Ochoa, supra, at p. 1332 ['As FMC had no such right [to compel arbitration], we need not reach the question of whether FMC waived the claimed right through its litigation conduct.'].) Calendar No.: Event ID:  TENTATIVE RULINGS

2948773  44 CASE NUMBER: CASE TITLE:  LOPEZ VS NISSAN NORTH AMERICA INC [IMAGED]  37-2022-00025208-CU-BC-CTL Accordingly, the motion to compel arbitration is DENIED.

The Case Management Conference remains on calendar.

If the tentative ruling is confirmed without modification, the minute order will be the Court's final ruling.

Defendant is ordered to serve written notice of the Court's final ruling on all appearing parties by September 19, 2023, unless all parties submit on the tentative ruling or waive notice at the hearing.

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