Judge: Cherol J. Nellon, Case: 21STCV27934, Date: 2023-04-13 Tentative Ruling

Case Number: 21STCV27934    Hearing Date: April 13, 2023    Dept: 28

Defendant Lyft Inc.’s Motion to Compel Arbitration

Having considered the moving papers, the Court rules as follows.

BACKGROUND

On July 29, 2021, Plaintiff Manzar Qureshi (“Plaintiff”) filed this action against Defendants Lyft Inc. (“Lyft”), Boots Apelacio (“Apelacio”) and Hovhannes Sahradyan (“Sahradyan”). Plaintiff later amended the complaint to include Defendant Julian Ragalie (“Ragalie”).

On March 7, 2022, Lyft filed an answer. On April 1, 2022, Apelacio filed an answer.

On January 20, 2023, Lyft filed a Motion to Compel Arbitration to be heard on March 30, 2023. The Court continued the hearing to April 13, 2023.

Trial is currently set for August 10, 2023.

PARTY’S REQUESTS

Lyft request the Court compel arbitration of Plaintiff’s claim.

LEGAL STANDARD

A petition to compel arbitration must allege both (1) a “written agreement to arbitrate” the controversy, and (2) that a party to that agreement “refuses to arbitrate” the controversy. (Code Civ. Proc., § 1281.2.) The Court shall grant the petition unless the petitioner waived the right to compel arbitration, or other grounds exist for rescission of the agreement. (Id.)

California Code of Civil Procedure § 1290.4, subdivision (b) requires a petition to compel arbitration under § 1281.2 to be served on the parties as provided in their arbitration agreement or, if no method was agreed to, in the same manner required for service of summons, if the party to be served has not previously appeared in the proceeding and has not previously been served in accordance with this subdivision. (Miranda v. 21st Century Ins. Co. (2004) 117 Cal.App.4th 913, 928.)

Waiver of the right to arbitrate is assessed through a number of factors, including: (1) whether the party’s actions are inconsistent with the right to arbitrate; (2) whether “the litigation machinery has been substantially invoked” and the parties “were well into preparation of a lawsuit” before the party notified the opposing party of an intent to arbitrate; (3) whether a party either requested arbitration enforcement close to the trial date or delayed for a long period before seeking a stay; (4) whether a defendant seeking arbitration filed a counterclaim without asking for a stay of the proceedings; (5) “whether important intervening steps [e.g., taking advantage of judicial discovery procedures not available in arbitration] had taken place”; and (6) whether the delay “affected, misled, or prejudiced” the opposing party. (St. Agnes Medical Center v. PacificCare of California (2003) 41 Cal. 4 th 1187, 1196.)

So long as an arbitration agreement is clear and explicit in meaning, an arbitration agreement can encompass incidents or claims that occurred or accrued prior to the agreement. (Salgado v. Carrows Restaurants, Inc. (2019) 33 Cal.App.5th 356, 356, 360-361.)

Under California law, an arbitration agreement must be in some measure both procedurally and substantively unconscionable in order for the agreement to be unenforceable. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114.) “But they need not be present in the same degree. . . . [T]he more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.” (Id.)

Procedural unconscionability focuses on two factors: oppression and surprise. (A & M Produce Co. v. FMC Corp. (1982) 135 Cal.App.3d 437, 486.) Oppression is an “inequality of bargaining power which results in no real negotiation and ‘an absence of meaningful choice.’” (Id.) Surprise involves the extent to which the agreed upon terms are hidden away “by the party seeking to enforce the disputed terms.” (Id.)

Substantive unconscionability does not have a precise definition, but generally a contract is found to be “substantively suspect if it reallocates the risks of the bargain in an objectively unreasonable or unexpected manner.” (Id. at 487.)

California case law establishes two categories of cases that bind non-signatories to arbitrate their claims: (1) those where a benefit was conferred to the non-signatory as a result of the contract, thereby making the non-signatory a third party beneficiary of the arbitration agreement, and (2) those where the non-signatory was bound to arbitrate because a preexisting relationship existed between the non-signatory and one of the parties to the arbitration agreement, making it equitable to compel the non-signatory to arbitrate. (County of Contra Costa v. Kaiser Found. Health Plan, Inc. (1996) 47 Cal.App.4th 237, 242.)

DISCUSSION

On March 8, 2018, Plaintiff created a user account through the Lyft app. As part of the registration process, Plaintiff was required to and did accept Lyft’s Terms of Service, dated February 6, 2018.

Lyft updated its terms of service on August 26, 2019, following the accident. Plaintiff affirmatively accepted said updated terms on November 21, 2019. The full text of the Terms of Service, including the arbitration provision, was directly on the screen in the Lyft App. Plaintiff was required to scroll through the entire Lyft Terms of Service and press a button indicating he consented to the terms of service. These terms of service stated that the arbitration provisions apply to any dispute, past, present or future, and “applies to all claims between [Plaintiff] and Lyft...arising out of use of...any goods or services made available through the Lyft Platform...” except as otherwise expressively indicated. (Ex. 5.) None of the limitations apply here. Plaintiff accepted the terms and continued to use the Lyft app.

Plaintiff alleges he was injured in an accident that occurred while Plaintiff was using the Lyft app on August 25, 2019. This would constitute an incident or accident resulting in injury that occurred in connection with a service made available through the Lyft Platform. Plaintiff did not file their lawsuit until after they agreed to the Terms of Use. Plaintiff must submit to arbitration. Plaintiff has refused to do so in submitting the complaint and refusing to arbitrate with Lyft attempted to meet and confer.

Plaintiff has not submitted an opposition. Lyft has complied with all requirements to compel arbitration. The Court grants the motion.

CONCLUSION

Defendant Lyft Inc.’s Motion to Compel Arbitration is GRANTED. Plaintiff is ordered to arbitrate their claims against Lyft. The action is stayed pending the outcome of arbitration.

Moving party is ordered to give notice of this ruling.

Moving Party is ordered to file the proof of service of this ruling with the Court within five days.

The parties are directed to the header of this tentative ruling for further instructions.