Judge Christian R. Gullon, Case Number: 22PSCV01706, Date: 2023-08-31 Tentative Ruling

Judge: Christian R. Gullon, Case: 22PSCV01706, Date: 2023-08-31 Tentative Ruling

(1) DEFENDANT AMERICAN HONDA MOTOR CO., INC.’S MOTION TO COMPEL ARBITRATION AND STAY PROCEEDINGS is CONTINUED.

(2) AMERICAN HONDA MOTOR CO., INC.’S DEMURRER TO THE THIRD CAUSE OF ACTION FOR FRAUDULENT INDUCEMENT-CONCEALMENT IN PLAINTIFF’S FIRST AMENDED COMPLAINT is CONTINUED.

This is a lemon law case. The action pertains to Plaintiff’s lease of a new 2020 Honda Pilot, specifically pertaining to the “Honda Sensing Defect.”

On November 7, 2022 Plaintiff Vasquez filed suit for SBA violations and Fraudulent Inducement—Concealment.

On December 7, 2023, Defendant filed a demurrer, which the court sustained with leave to amend.

On July 6, 2023, the court heard oral argument on the motion to compel arbitration, which the court’s tentative was to continue.

During the July 6, 2023 hearing on Defendant’s motion to compel arbitration, the parties informed the court that the facts of this case are distinctive from that of Ford Motor Warranty Cases (2023) 89 Cal.App.5th 1324 (“Ochoa”) such that the court need not continue the motion pending the California Supreme Court’s decision whether it will grant the petition for review. Upon further consideration of the papers and Plaintiff’s July 5, 2023 filing of “Notice of Recent Authority in Support of Plaintiff’s Opposition to Defendant’s Motion to Compel Arbitration,” which but further addresses, references, and relies upon Ochoa, the court finds best course of action is to continue the motions pending the California Supreme Court’s opinion in Ochoa.[2]

Based on the foregoing, the motion to compel arbitration, demurrer, and motion to strike are continued.

[1] To the extent that Plaintiff argues Defendant waived its right to compel arbitration because it failed to file the motion at the time of filing its answer and has participated in litigation (Opp. p. 3), the court disagrees because participating in litigation of an arbitrable claim does not by itself waive the right to later seek arbitration. (Reply p. 10, citing Saint Agnes Med. Ctr. v. PacifiCare of California (2003) 31 Cal.4th 1187, 1196 [court should weigh factors including (1) whether a party either requested arbitration enforcement close to the trial date or delayed for a long period before seeking a stay or (2) whether a defendant seeking arbitration filed a counterclaim without asking for a stay, etc].) Here, however, the action is short-lived, and Defendant has served a single set of discovery, filed a mandatory case management statement, and mandatory demurrer and motion to strike because not filing otherwise would serve as a waiver of those two motions. (See Reply p. 11, Compare with Bower v. Inter-Con Security Systems, Inc. (2014) 232 Cal.App.4th 1035 [class wide discovery and engaging in a months-long effort to settle claims outside the scope of arbitration].)To the extent that such circumstances amount to waiver, it is Plaintiff who bears the burden of establishing waiver, but Plaintiff has failed to meet such burden. (Id. at p. 1195 [“[A] party who resists arbitration on the ground of waiver bears a heavy burden [citation omitted] and any doubts regarding a waiver allegation should be resolved in favor of arbitration.”].) Therefore, the court determines that Defendant has not waived arbitration.

[2] The issue on appeal is limited to the following: Do manufacturers' express or implied warranties that accompany a vehicle at the time of sale constitute obligations arising from the sale contract, permitting manufacturers to enforce an arbitration agreement in the contract pursuant to equitable estoppel? As Defendant heavily relies upon Felisilda v. FCA US LLC (2020) 53 Cal.App.5th 486—which allows for a manufacturer to invoke equitable estoppel principle(s)—the issue on appeal is relevant to adjudicate the instant arbitration motion.