Judge: Christopher K. Lui, Case: 22STCV17090, Date: 2023-03-10 Tentative Ruling

Case Number: 22STCV17090    Hearing Date: March 10, 2023    Dept: 76

            Plaintiff sues Defendant for failure to bring the subject vehicle into compliance with applicable warranties and for concealing the existence of a defective CVT transmission.   

            Defendant Nissan North America, Inc .moves to compel arbitration and stay this action. The Court continued the hearing on the motion for supplemental briefing.

TENTATIVE RULING 

            Defendant Nissan North America, Inc’s motion to compel arbitration is DENIED. 

ANALYSIS 

Motion To Compel Arbitration and Stay Action

Request For Judicial Notice 

            Defendant requests that the Court take judicial notice of the following: (1) Complaint filed in his action; (2) Answer filed in this action; (3) Notice of Entry of Dismissal and Proof of Service, filed in Sacramento Superior Court by Plaintiffs Dina C. Felisilda and Pastor O. Felisilda on February 11, 2016 in the matter of Dina C. Felisilda, et al, v. FCA US LLC, et al. (34-2015-00183668). Requests Nos. 1 – 3 are GRANTED per Evid. Code, § 452(d)(court records).

            Plaintiff requests that the Court take judicial notice of the following: (1) Ngo v. BMW of N. Am., LLC (9th Cir. Jan. 12, 2022) 23 F.4th 942; (2) Morgan v. Sundance, Inc., (U.S. Supreme Court, May, 2022) 142 S.Ct. 1708; (3) Davis v. Shiekh Shoes, LLC (Oct. 31, 2022) 84 Cal.App.5th 956. Requests Nos. 1 – 3 are GRANTED per Evid. Code, § 452(a)(decisional law).

Discussion

            Defendant Nissan North America, Inc. moves to compel arbitration and stay this action.

            The Court first addresses Plaintiff’s argument that Defendant waived the right to arbitration.

            Here, the Complaint was filed on May 24, 2022. Defendant filed its answer on August 11, 2022, asserting a demand for arbitration at ¶ 21. There was no law and motion heard before Defendant filed this motion to compel arbitration on November 28, 2022.

            Plaintiff argues that Defendant has waived the right to compel arbitration by requesting a jury trial and providing an estimated trial duration in the Case Management Statement, and objecting on November 22, 2022 to Plaintiff’s PMK Deposition Notice without mentioning arbitration. This is frivolous.

“A motion to compel arbitration is properly denied when the moving party has waived its right to do so.” (Spracher v. Paul M. Zagaris, Inc. (2019) 39 Cal.App.5th 1135, 1137 [252 Cal. Rptr. 3d 417]; accord, Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 982 [64 Cal. Rptr. 2d 843, 938 P.2d 903] [“[Code of Civil Procedure] [s]ection 1281.2, subdivision (a), provides that a trial court shall refuse to compel arbitration if it determines that ‘[t]he right to compel arbitration has been waived by the petitioner.’”].) However, “[i]n light of the policy in favor of arbitration, ‘waivers are not to be lightly inferred and the party seeking to establish a waiver bears a heavy burden of proof.’” (Citations omitted.) The FAA and California law apply the same standards for determining whether a party has waived the right to seek arbitration. (Citation omitted.)

 “‘California courts have found a waiver of the right to demand arbitration in a variety of contexts, ranging from situations in which the party seeking to compel arbitration has previously taken steps inconsistent with an intent to invoke arbitration [citations] to instances in which the petitioning party has unreasonably delayed in undertaking the procedure. [Citations.] The decisions likewise hold that the “bad faith” or “willful misconduct” of a party may constitute a waiver and thus justify a refusal to compel arbitration.’” (Citations omitted.)

The Supreme Court in St. Agnes, supra, 31 Cal.4th at page 1196 held that the following factors are relevant to the waiver inquiry: “‘“(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 [*465]  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.”’” (Accord, Iskanian, supra, 59 Cal.4th at p. 375.)

(Villareal v. LAD-T, LLC (2022) 84 Cal.App.5th 446, 464-65 [bold emphasis added].)

Plaintiff has not met the heavy burden to establish waiver under the foregoing factors. The Court does not find that there was an unreasonable delay which resulted in prejudice to Plaintiff by denying her the efficiencies of arbitration. (Spracher v. Paul M. Zagaris, Inc. (2019) 39 Cal.App.5th 1135, 139-40.) The Court does not find that the “litigation machinery has been substantially invoked” such that the parties were “well into preparation of a lawsuit” before this motion was filed. (Id. at 1138.) Plaintiff’s reliance on the U.S. Supreme Court decision of Morgan v. Sundance, Inc. (2022) 142 S.Ct. 1708 is inapposite, because that case addressed the federal rule of waiver.

Accordingly, the Court finds that Defendant did not waive the right to compel arbitration.

Existence of Agreement To Arbitrate

            Under California law, arbitration agreements are valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. (Blake v. Ecker (2001) 93 Cal.App.4th 728, 741 overruled on other grounds by Le Francois v. Goel (2005) 35 Cal.4^th 1094.) A party petitioning to compel arbitration has the burden of establishing the existence of a valid agreement to arbitrate and the party opposing the petition has the burden of proving, by a preponderance of the evidence, any fact necessary to its defense. (Banner Entertainment, Inc. v. Superior Court (1998) 62 Cal.App.4th 348, 356-57.)

            On December 30, 2016 Plaintiff entered into a Sales Agreement with non-party Cardinale Nissan to purchase a 2017 Nissan Rogue. (Declaration of Nicholas S. Maugeri II, Exh. 4.) Defendant did not submit a copy of the Sales Agreement which appears to be signed by Plaintiff. However, Plaintiff does not dispute that he signed the Sales Agreement.

            Yet, as Plaintiff points out, even the Sales Agreement which is purportedly the one Plaintiff signed does not include an arbitration provision. Defendant submits an arbitration provision from a different contract. (Maugeri Decl., Exh. 5.)

            The Court continued the hearing on the motion to compel arbitration to this date for supplemental briefing.

            As Plaintiff points out, the Declaration of Michael Joyce submitted on February 21, 2023 does not include a copy of the sales agreement with the reverse side purportedly containing the arbitration provision. Indeed, the agreement attached as Exhibit A to the Joyce Declaration does not contain any arbitration provision.

            As such, Defendant has failed to meet its burden of demonstrating that Plaintiff agreed to arbitrate the instant dispute. The motion to compel arbitration is DENIED.