Judge: Christian R. Gullon, Case: 24PSCV01089, Date: 2024-09-04 Tentative Ruling

Case Number: 24PSCV01089    Hearing Date: September 4, 2024    Dept: O

Tentative Ruling

Defendant Hyundai Motor America’s (“Defendant”) MOTION TO COMPEL BINDING ARBITRATION is GRANTED.

Background

This is a lemon law case.

On April 5, 2024, Plaintiffs JENNIFER WHITESIDE and GARTH WHITESIDE filed suit against Defendants HYUNDAI MOTOR AMERICA for:

On June 4, 2024, Defendant filed its answer.

On June 28, 2024, Defendant the instant motion.

On August 21, 2024, Plaintiffs filed their opposition.

On August 28, 2024, Defendant filed its reply.

Legal Standard

A petition to compel arbitration must allege both (1) a “written agreement to arbitrate” the controversy,[1] and (2) that a party to that agreement “refuses to arbitrate” the controversy. (Code Civ. Proc., § 1281.2.) Once this is done, the burden shifts to the opposing party to demonstrate the falsity of the purported agreement. (Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 218–219.) In ruling on a motion to compel arbitration, the court must first determine whether the parties actually agreed to arbitrate the dispute, and general principles of California contract law help guide the court in making this determination. (Mendez v. Mid-Wilshire Health Care Center (2013) 220 Cal.App.4th 534, 541.) A petition to compel arbitration is a suit in equity to compel specific performance of a contract. (Frog Creek Partners, LLC. v. Vance Brown, Inc. (2012) 206 Cal.App.4th 515, 532.) 

Discussion

Defendant attempts to compel arbitration under two arbitration provisions. One provision is inside the vehicle glove box owner’s handbook and warranty information. The second provision was contained within the ‘Blue Link’ connectivity/GPS software subscription set-up by dealership personnel after the vehicle purchase. Here, the court compels arbitration.

First, Plaintiffs argue that “Hyundai has presented no evidence whatsoever that the buyer, i.e., the Plaintiffs, even knew the clause existed or reasonably may expect such to exist within the warranty itself.” (Opp. p. 5:16-17.) However, as noted in reply, it is unclear how Plaintiffs can allege in their Complaint to have understood and read the terms and conditions of the Warranty that benefit them, but not the arbitration provision. (Reply p. 4:1-3.) After all, the Warranty includes a binding arbitration provision requiring Plaintiffs to resolve any concerning the purchase or performance of the Vehicle by binding arbitration on an individual basis, if either party so elects. (Ameripour Decl., Ex. 3 [Warranty].) What is more, though Plaintiffs argue that this arbitration agreement is hidden in that there is no bold print (Opp. p. 5), that is not accurate. A review of the warranty illustrates that there is a ‘Table of Contents’ and that Section 4 which is entitled ‘Hyundai Warranty Information,’ which is bolded, contains a section entitled ‘Binding Arbitration for California Vehicles Only.’ (Ameripour Decl., Ex. 3, p. 8 of 35 of PDF.) And the statement that there is ‘binding arbitration for California vehicles only’ is capitalized and bolded in the warranty. (Ameripour Decl., Ex. 3, p. 17 of 35 of PDF.) Thus, Plaintiffs mischaracterize that the arbitration clause is “buried” in the warranty book. (Opp. p. 5:1-2.). To the extent that Plaintiffs argue that warranty lacks a signature, estoppel would apply to these facts. (See Reply p. 3, quoting Boucher v. Alliance Title Co., Inc. (2005) 127 Cal.App.4th 262, 269; Felisida v. FCA US LLC (2020 53 Cal. App. 5th 486, 496 [A nonsignatory is estopped from refusing to comply with an arbitration clause when it receives a direct benefit from a contract containing an arbitration clause.].)

Therefore, as Plaintiffs have pled and fundamentally rely on the existence of the Warranty and its terms in the Complaint—tacitly conceding the presence of mutual assent—the warranty book compels arbitration. With that, the court need not address the alternate method of enforcing arbitration via the CSA system. (See Motion p. 13:19-20 [“In the alternative, if this Court for any reason decides that arbitration cannot be enforced under the Warranty, arbitration may also be enforced by HMA via the CSA.”].)

To the extent that Plaintiffs argue that the warranty booklet is unconscionable, the court disagrees. Plaintiffs largely rely upon Dougherty v. Roseville Heritage Partners (2020) 47 Cal.App.5th 93.) But Dougherty is factually distinguishable. There, the arbitration clause was inconspicuously buried at page 70 of the contract. Here, the arbitration provision here is fully conspicuous and found on page 12 of a 17 booklet that has a table of content for easy navigation. Even assuming the agreement is adhesive in nature (even though there is an opt out provision), should there be any doubts as to the enforceability of the arbitration agreement, any doubts “are to be resolved in favor of sending the parties to arbitration.” (United Transp. Union v. Southern Cal. Rapid Transit Dist. (1992) 7 Cal.App.4th 804, 808); see also Lamps Plus, Inc. v. Varela (2019) 587 U.S. __ [139 S.Ct. 1407, 1418] [“ambiguities about the scope of an arbitration agreement must be resolved in favor of arbitration.”]; Chiron Corp. v. Ortho Diagnostic Systems, Inc., 207 F.3d 1126, 1131 (9th Cir. 2000) [“little doubt that the dispute [was] subject to arbitration” where agreement covered “[a]ny dispute, controversy or claims”]; AT&T Technologies, Inc. v. Communications Workers of Amer., 475 U.S. 643, 650 (1986) [“only the most forceful evidence” can overcome contract enforcement.].)

Thus, absent meeting its burden to establish a defense by a preponderance of the evidence (Pinnacle Museum Towers Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 246-247), that leaves no doubts that the parties are to arbitrate the matter.

Conclusion

Based on the foregoing—as Plaintiffs are suing upon a written contract that they, by judicial admission, assented to and that said warranty was provided by HMA (as the direct provider) and they have failed to meet their burden of establishing both procedural and substantive unconscionability—the motion is GRANTED.