Judge: Christian R. Gullon, Case: 24PSCV01694, Date: 2025-02-27 Tentative Ruling

Case Number: 24PSCV01694    Hearing Date: February 27, 2025    Dept: O

Tentative Ruling

DEFENDANT’S MOTION TO COMPEL BINDING ARBITRATION is CONTINUED; arbitration agreement is not authenticated.

Background

This is a lemon law case.

On May 24, 2024, Plaintiff ARMEN ZARGARYAN filed suit against Defendants HYUNDAI MOTOR AMERICA (“Hyundai” or “Defendant”) and PUENTE HILLS HYUNDAI, LLC (“Dealership”), a California Limited Liability Company d/b/a PUENTE HILLS HYUNDAI for:

1.     VIOLATION OF SONG-BEVERLY ACT - BREACH OF EXPRESS WARRANTY (v. Hyundai)

2.     VIOLATION OF SONG-BEVERLY ACT - BREACH OF IMPLIED WARRANTY (v. Hyundai)

3.     VIOLATION OF THE SONG- BEVERLY ACT SECTION 1793.2 (v. Hyundai)

4.     NEGLIGENT REPAIR (v. Dealership)

On September 18, 2024, Hyundai filed its answer.

On September 19, 2024, the Dealership filed its answer.

On December 20, 2024, Plaintiff filed four (4) discovery motions.

On December 26, 2024, Defendant filed the instant arbitration motion.

On January 24, 2025, the court issued its minute order regarding Defendant’s ex-parte; Defendant requested an order staying the action, and specifically not permitting Plaintiff to conduct discovery, while Defendant’s motion to compel arbitration remains pending for determination by the court. The court determined that Code of Civil Procedure §1281.4 controls and mandates the stay requested by Defendant. Regarding the discovery motions, the court noted that “These hearings are advanced and continued for an OSC re: Discovery Motion Setting to February 27, 2025, 10:00 a.m., Dept. O (Pomona).”

On February 13, 2025, Plaintiff filed an opposition to the motion.

On February 20, 2025, Defendant filed its reply.

Legal Standard

Under Code of Civil Procedure (CCP) section 1281.2, a trial court must grant a motion or petition to compel arbitration only “if it determines that an agreement to arbitrate the controversy exists.” “The court makes this determination in a summary process.” (Gamboa v. Northeast Comm. Clinic (2021) 72 Cal.App.5th 158, 164.) This entails that the trial court, who sits as a trier of fact, to “weigh[] all the affidavits, declarations, and other documentary evidence, as well as oral testimony received at the court's discretion, to reach a final determination.” (Ibid, quoting Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972.) The moving party bears the burden of proving an agreement between it and the opposing party by a preponderance of the evidence. (Id. at pp. 164-165.) The moving party can do this by either attaching to the motion or petition a copy of the arbitration agreement purporting to bear the opposing party's signature or by setting forth the agreement's provisions in the motion. (Id. at p. 165.) For this step, “it is not necessary to follow the normal procedures of document authentication.” (Ibid, quoting Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 218.)

Once the moving party “meets its initial prima facie burden and the opposing party disputes the agreement, then in the second step, the opposing party bears the burden of producing evidence to challenge the authenticity of the agreement.” (Ibid.)

If the opposing party meets its burden of producing evidence, then in the third step, the moving party, once again by a preponderance of the evidence, must establish with admissible evidence a valid arbitration agreement between the parties.” (Id. at pp. 165-166.)

Discussion

Defendant seeks to compel arbitration based upon an arbitration provision found in Plaintiff’s Owner’s Handbook & Warranty Information (“Warranty”). In the alternative, binding arbitration must be compelled under the Bluelink Connected Services Agreement (“CSA”). (Motion p. 1:26-28.) For purposes of this motion, the court will only focus on the Warranty.[1]

Starting on page 11 of the Warranty, the page indicates in large and bold font that the proceeding information pertains to “Hyundai Warranty Information.” (Ameripour Decl., Ex. 3, p. 16 of 64 of PDF.) On pages 12 of Plaintiff’s Warranty is a section titled “BINDING ARBITRATION FOR CALIFORNIA VEHICLES ONLY.” (Ameripour Decl., Ex. 3, p. 17 of 64 of PDF.)[2] The binding arbitration provision of the Warranty provides:

PLEASE READ THIS SECTION IN ITS ENTIRETY AS IT AFFECTS YOUR RIGHTS THIS SECTION DOES NOT PRECLUDE YOU FROM FIRST PURSUING ALTERNATIVE DISPUTE RESOLUTION THROUGH BBB AUTO LINE AS DESCRIBED IN THE “ALTERNATIVE DISPUTE RESOLUTION” PROVISION IN SECTION 3 OF THIS HANDBOOK.  If you purchased or leased your Hyundai vehicle in the State of California, you and we, Hyundai Motor America, each agree that any claim or disputes between us (including between you and any of our affiliated companies) related to or arising out of your vehicle purchase, advertising for the vehicle, use of your vehicle, the performance of the vehicle, any service relating to the vehicle, the vehicle warranty, representations in the warranty, or the duties contemplated under the warranty, including without limitation claims related to false or misleading advertising, unfair competition, breach of contract or warranty, the failure to conform a vehicle to warranty, failure to repurchase or replace your vehicle, or claims for a refund or partial refund of your vehicle's purchase price (excluding personal injury claims), but excluding claims brought under the Magnuson-Moss Warranty Act, shall be resolved by binding arbitration at either your or our election, even if the claim is initially filed in a court of law.

Given Plaintiff have purchased his vehicle in California, is bringing this action pursuant to this Warranty, and has alleged that repairs have been performed under the Warranty, the arbitration provision applies. Put differently, there would be no claims under Song-Beverly or warranty but for the existence of the Warranty provided to Plaintiffs by HMA. (Motion p. 13:1-3.)

In opposition, Plaintiff advances the following arguments: (1) the motion must be denied on procedural grounds (Opp. pp. 5-7); (2) under both federal and state law, Defendant is not permitted to issue an express warranty that also forces a consumer into binding arbitration over disputes that stem from said warranty (Opp. pp. 7-10); (3) a manufacturer may not rely on an arbitration clause “surreptitiously inserted into a warranty manual” (Opp. pp. 10-12); (4) the agreement lacks mutual assent (Opp. pp. 12-13): (5) the arbitration clause in the BlueLink agreement does not apply to Plaintiff’s claims (Opp. pp. 13-15); and (6) the agreement/clauses are unconscionable.

Here, the court need only address Plaintiff’s first argument as the court concludes the Warranty has not been properly authenticated.

1.     Authentication of Warranty and Owner’s

First, Plaintiff argues that “[p]rocedurally speaking, Defendant’s Motion should be denied as to the Owner’s Handbook arbitration clause because Defendant failed to submit admissible evidence of such clause.” (Opp. p. 5:24-25.) More specifically, Plaintiff argues that the motion “completely fails to authenticate [the Owner’s Handbook and Warranty Information booklet] or even provide any facts as to when or how Plaintiff was even provided with this document, nor describe how Mr. Ameripour came to possess this document or establish any foundation of personal knowledge.” (Opp. p. 7:4-13.) To suffice, a declaration must “establish a foundation based on personal knowledge for authenticating any of the documents attached.” (Opp. p. 6:616-19, quoting San Diegans for Open Gov’t v. San Diego State University Research Foundation (2017) 13 Cal.App.5th 76, 108.)[3]

To support its position, Plaintiff relies upon Gamboa, supra, 72 Cal.App.5th 158. In Gamboa, the plaintiff sued the clinic for employment related claims. (Id. at p. 162.) The clinic filed a motion to compel arbitration arguing that Gamboa had signed an arbitration agreement as part of her required onboarding documents. (Id. at p. 163.) In opposition, the plaintiff stated that she did not remember the documents and that no one had ever told her about or explained the arbitration agreement. (Ibid.) The court addressed whether the employee's evidence was sufficient to satisfy her burden at step two by stating: “[W]e need not decide whether Gamboa challenged the authenticity of her purported signature on the arbitration agreement. It was enough that she challenged the authenticity of the agreement by saying under penalty of perjury that she did not remember it.” (Id. at p. 168.) Here, identical to Gamboa, Plaintiff states he “has never even seen, or known about, this document prior to the instant motion being filed.” (Opp. p. 7:10-12.)

In Reply, Defendant does not squarely address the argument or Gamboa, but mainly reiterates portions of Condee.

In Condee, the trial court denied a petition to compel arbitration because the arbitration contract “was not properly authenticated.” (Id. at pp. 217-218.) (In Condee, unlike here, the parties did not contest the existence or validity of the arbitration contract.) The appellate court reversed, holding the petitioner was not required “to follow the normal procedures of document authentication.” (Ibid.) As noted in opposition (Opp. p. 6:3-5), and otherwise not argued in reply, the court in Toal v. Tardif (2009) 178 Cal.App.4th 1208, 1219, fn. 8 noted that “To the extent Condee conflicts with Rosenthal, our Supreme Court's decision is controlling.”[4]

Notwithstanding and though the issue focuses on signatures, there appears to be a split of authority regarding the authenticity of arbitration agreements. (See Ramirez v. Golden Queen Mining Company, LLC (2024) 102 Cal.App.5th 821, 835 [“Thus, we join the federal district court in Prostek v. Lincare Inc. (E.D. Cal. 2023) 662 F.Supp.3d 1100 in following Iyere and rejecting Gamboa.”].)

With that, the court is amenable to either (i) supplemental briefing on the issue of authenticity or (ii) supplemental briefing for Defendant to cure the authenticity issue.