Judge Carolyn M. Caietti, Case 37-2022-00036705-CU-BC-CTL 2023-08-18 Tentative Ruling

Judge: Carolyn M. Caietti, Case: 37-2022-00036705-CU-BC-CTL, Date: 2023-08-18 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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EVENT DATE:

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HALL OF JUSTICE

TENTATIVE RULINGS - August 17, 2023

08/18/2023 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) 37-2022-00036705-CU-BC-CTL GUTIERREZ VALADEZ VS AMERICAN HONDA MOTOR CO INC [IMAGED] CAUSAL DOCUMENT/DATE FILED:

Defendant American Honda Motor Co., Inc's Motion to Compel Arbitration and Stay Action 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 lease agreement with the dealership 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

2948637 52 CASE NUMBER: CASE TITLE: GUTIERREZ VALADEZ VS AMERICAN HONDA MOTOR CO INC 37-2022-00036705-CU-BC-CTL language in the sales contract.

Here, the arbitration clause states: 'YOU elect to have disputes resolved by arbitration. YOU, HONDA, or any involved third party may pursue a Claim. 'Claim' means any dispute between YOU, HONDA, or any involved third party relating to your account, this Lease, or our relationship, including any application, the Vehicle, its performance and any representations, omission or warranties.' (Plaintiff's Lease Agreement, Ex. 1, at § 52.) Plaintiff's causes of action are for breach of express and implied warranties related to the 'Honda Sensing' and Collision Mitigation Braking System. The 'warranty contract,' a document by Defendant American Honda Motor Co., Inc., is attached to the Complaint as Exhibit 1.The facts supporting the breach of warranty claims are not based on any terms of the lease or financing of the vehicle. The lease is not attached to the Complaint. The dealer-lessor, Norm Reeves Honda Superstore Vista, is a signatory party to the lease, but is not a party to this lawsuit. Defendant American Honda Motor Co., Inc.

did not sign the lease agreement.

Like in Ochoa, supra, Defendant does not point to any warranties in the lease, 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 lease states the vehicle is leased 'as is' and that the lessor 'makes no express or implied warranties or representations as to the vehicle's...condition, merchantability, sustainability or fitness for any particular purpose and Lessor makes no other representations or warranties whatsoever.' (Lease, at § 11 (emphasis omitted).) Although Defendant is identified in the lease's definition of 'HONDA,' its involvement with the lease is not articulated. There is no indication Defendant financed the lease, 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 provision's reference to warranties and Defendant, Plaintiff's claims are not 'intimately founded in and intertwined with' the lease, precluding application of equitable estoppel.

Further, as of June 26, 2023, on the same issue before the Second District/Division 7, the Court of Appeal in Montemayor v. Ford Motor Co. disagreed with Felisilda that equitable estoppel applies to enable the nonsignatory manufacturer to enforce the arbitration provision in a similar sales contract and concluded Ford could not enforce the arbitration provision in the sales contract because the plaintiffs' claims against Ford were founded on Ford's express warranty for the vehicle and not any obligation imposed on Ford by the sales contract. (Montemayor v. Ford Motor Co. 92 Cal.App.5th 958 [310 Cal.Rptr.3d 82, 85] rev. filed Aug. 1, 2023.) Thus, the plaintiffs' claims were not inextricable intertwined with any obligations under the sales contract. (Id., at p. 89-94.) The court also addressed the parties sued and found 'whether vehicle purchasers file suit against only the manufacturer, or the manufacturer and the car dealer, does not affect the analysis of whether a cause of action against the manufacturer may be compelled to arbitration.' (Montemayor, supra, 310 Cal.Rptr.3d at p. 94.) 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, assuming and notwithstanding the fact 'HONDA' means 'American Honda Motor Co., Inc.,' Defendant did not meet its burden to show Plaintiff and the lessor-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 reference of Defendant under the definition of 'HONDA'. This is insufficient. Like in Montemayor, the Calendar No.: Event ID: TENTATIVE RULINGS

2948637 52 CASE NUMBER: CASE TITLE: GUTIERREZ VALADEZ VS AMERICAN HONDA MOTOR CO INC 37-2022-00036705-CU-BC-CTL parties here agreed in the lease on terms for the financing and lease of the vehicle from Norm Reeves Honda Superstore Vista, and they agreed to arbitrate disputes between them including 'any application, the Vehicle, its performance and any representations, omissions or warranties.' (Ex. 1.) In no way was the lease 'made expressly for the benefit of a third person.' (Montemayor, supra, at p. 96, citing Civ.

Code, § 1559.) Finally, Honda's new reply argument that it is an undisclosed principal is not persuasive. Like in Ochoa, the concealment allegations do not rest on an agency relationship. (Ochoa, supra, at p. 1340-42.) Ochoa stated, 'we are directed to no allegations that the dealers from which plaintiffs bought their cars knew the legally significant information that FMC allegedly concealed from plaintiffs. To have fraudulently concealed information on FMC's behalf, it is necessary that the dealers had that information.' (Id., at p. 1342.) Here, the Complaint makes clear Honda 'was the only party with knowledge of the Honda Sensing Defect.' (E.g., Complaint, at ¶ 119; see also, ¶¶ 66-78, 120.) Notwithstanding and like in Ochoa, there are no allegations to support the conclusion the dealer acted as Honda's agent in executing the lease. (Ochoa, supra, at p. 1342-43.) Since Defendant did not prove the existence of an arbitration agreement between the parties, the burden did not shift to Plaintiff to provide a ground for denial. (Rosenthal, supra.) Thus, the Court declines to rule on Plaintiff's waiver defense. (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.'].) However, the Court notes the parties are well into preparation of this lawsuit and Defendant did not assert arbitration as an affirmative defense. (St. Agnes Medical Center v. PacifiCare of California (2003) 31 Cal.4th 1187, 1195; Guess?, Inc. v. Superior Court (2000) 79 Cal.App.4th 553, 558 [defendant acted inconsistently with intent to arbitrate by participating in discovery process, not asserting arbitration as affirmative defense, and remaining silent about arbitration for four months].) 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 August 22, 2023, unless all parties submit on the tentative ruling or waive notice at the hearing.

The parties are reminded to comply with Department 70's Policies and Procedures and to provide courtesy copies of all motion paperwork. The Court only received a courtesy copy of the reply.

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