Judge Curtis A. Kin, Case 22STCV14428 2022-12-06 Tentative Ruling

Judge: Curtis A. Kin, Case: 22STCV14428, Date: 2022-12-06 Tentative Ruling

Case Number: 22STCV14428 Hearing Date: December 6, 2022 Dept: 72

MOTIONS TO COMPEL ARBITRATION

Date: 12/6/21 (8:30 AM)

Case: Sarahi Salceda v. FCA US, LLC (22STCV14428)

TENTATIVE RULING:

Defendant B&W Automotive, Inc. dba Bravo Chrysler Dodge Jeep Ram of Alhambra’s Motion to Compel Arbitration is taken OFF-CALENDAR based on the dismissal of this defendant entered on November 22, 2022.

Defendant FCA US, LLC’s Motion to Compel Arbitration is GRANTED.

Defendant FCA US, LLC’s evidentiary objections are OVERRULED. Plaintiff Sarahi Salceda’s requests for judicial notice are DENIED as “unnecessary to the resolution” of the issues before the Court. (Martinez v. San Diego County Credit Union (2020) 50 Cal.App.5th 1048, 1075.)

Defendant FCA US, LLC, the manufacturer of the subject vehicle, seeks to compel arbitration of plaintiff’s claims against them under the provisions of the Retail Installment Sales Contract (“RISC”), which plaintiff signed. It is undisputed defendant is not a signatory to the RISC between plaintiff and dealer Bravo Chrysler Dodge Jeep Ram of Alhambra (“Bravo”). (Sandhu Decl. ¶ 4 & Ex. B.)

Generally, “one must be a party to an arbitration agreement to be bound by it or invoke it.” (Westra v. Marcus & Millichap Real Estate Investment Brokerage Co., Inc. (2005) 129 Cal.App.4th 759, 763.) However, the equitable estoppel exception to the general rule allows a “non-signatory defendant [to] invoke an arbitration clause to compel a signatory plaintiff to arbitrate its claim when the causes of action against the nonsignatory are ‘intimately founded in and intertwined with’ the underlying contract obligations.” (Garcia v. Pexco, LLC (2017) 11 Cal.App.5th 782, 786.)

Here, the outcome is dictated by binding authority in Felisilda v. FCA US LLC (2020) 53 Cal.App.5th 486. In Felisilda, the Court of Appeal determined that the sales contract between the plaintiff purchaser and dealership formed the core of the plaintiffs’ claims against the nonsignatory defendant manufacturer for breach of the express warranty that accompanied the sale of the vehicle to plaintiffs. (Felisilda, 53 Cal.App.5th at 496-497.) Just as in Felisilda, plaintiff in this action signed the RISC with identical arbitration language, stating: “Any claim or dispute, whether in contract, tort, statute or otherwise…between you and us…which arises out of or relates to…[the] condition of this vehicle…shall….be resolved by neutral, binding arbitration and not by a court action.’” (Compare Sandhu Decl. ¶ 4 & Ex. B with Felisilda, 53 Cal.App.5th at 496 [language in sales contract states “ ‘[a]ny claim or dispute, whether in contract, tort, statute or otherwise ... between you and us ... which arises out of or relates to ... [the] condition of this vehicle ... shall ... be resolved by neutral, binding arbitration and not by a court action.’ ”.)

The Court of Appeal in Felisilda concluded that plaintiffs’ claim against the manufacturer “directly relates to the condition of the vehicle that they allege to have violated warranties they received as a consequence of the sales contract.” (Felisilda, 53 Cal.App.5th at 497.) The Court thus held that “because the [plaintiffs] expressly agreed to arbitrate claims arising out of the condition of the vehicle—even against third party nonsignatories to the sales contract—they are estopped from refusing to arbitrate their claim against [the nonsignatory manufacturer].” (Ibid.)

Plaintiff argues that the express written warranty contract into which plaintiff allegedly entered is not part of the RISC. (See Law Decl. ¶ 1 & Ex. 1 [Express Warranty Booklet].) Even though plaintiff does not allege that she received the express warranty in connection with purchase of the subject vehicle, the express warranty is nevertheless an element of the RISC. (Hauter v. Zogarts (1975) 14 Cal.3d 104, 117 [“Into every mercantile contract of sale the law inserts a warranty that the goods sold are merchantable….”]; A. A. Baxter Corp. v. Colt Industries, Inc. (1970) 10 Cal.App.3d 144, 153 [“A warranty is as much one of the elements of sale and as much a part of the contract of sale as any other portion of the contract and is not a mere collateral undertaking”]; Windham at Carmel Mountain Ranch Assn. v. Sup. Ct. (2003) 109 Cal.App.4th 1162, 1168 [“A warranty is a contractual term concerning some aspect of the sale, such as title to the goods, or their quality or quantity”].)

Plaintiff cites authorities for the proposition that a manufacturer’s warranties are not a part of the sales contract. (See Corporation of Presiding Bishop of Church of Jesus Christ of Latter-Day Saints v. Cavanaugh (1963) 217 Cal.App.2d 492, 514 [finding defendant could be held liable for false representation even though there was no privity of contract between defendant and plaintiff]; Greenman v. Yuba Power Products, Inc. (1963) 59 Cal.2d 57, 61 [finding certain warranties arise “independently of a contract of sale between the parties”].) Even if the express warranty were separate from the contract, plaintiff could not assert claims under the Song-Beverly Consumer Warranty Act but for the RISC. To bring a Song-Beverly Act claim, a consumer must buy or lease “a new motor vehicle from a person (including an entity) engaged in the business of manufacturing, distributing, selling, or leasing new motor vehicles at retail.” (Dagher v. Ford Motor Co. (2015) 238 Cal.App.4th 905, 926.) Accordingly, plaintiff’s claims concerning the condition of the subject vehicle are intimately founded in and intertwined with the RISC.

Plaintiff attempts to distinguish Felisilda on the ground that the signatory dealership, Bravo, is no longer a party to this action. However, the Felisilda plaintiffs dismissed the dealership before filing the appeal. (Felisilda, 53 Cal.App.5th at 489 [“The trial court ordered the Felisildas to arbitrate their claim against both Elk Grove Dodge and FCA. In response, the Felisildas dismissed Elk Grove Dodge. The matter was submitted to arbitration, and the arbitrator found in favor of FCA. The trial court confirmed the arbitrator's decision. From the resulting judgment, the Felisildas appeal”].) Despite the dismissal of the dealership, the Court of Appeal considered the “question of whether a nonsignatory to the agreement has a right to compel arbitration under” the agreement therein and held that the plaintiffs’ claims against the manufacturer were subject to arbitration. (Id. at 495.) The Felisilda court did not require any signatory to the sales contract to be a party to litigation. Likewise, even though the dealership has been dismissed, plaintiff’s claims against defendant are subject to arbitration under the RISC.

Plaintiff’s claims arise out of the RISC because the allegations pertain to the condition of the vehicle, including alleged defects in the subject vehicle’s engine, transmission, and electrical system, and defendant’s failure to repair the vehicle or make restitution after a reasonable number of opportunities to repair the vehicle. (Compl. ¶¶ 15, 17, 18, 26, 28.) Accordingly, plaintiff here is estopped from refusing to arbitrate her claims against non-signatory defendant FCA US, LLC in this action.

Plaintiff cites to the Ninth Circuit case, Ngo v. BMW of N. Am., LLC (9th Cir. 2022) 23 F.4th 942 for the proposition that when the non-signatory manufacturer attempts to move to compel arbitration on its own without the dealership also moving to compel arbitration, the motion to compel should be denied. (Ngo, 23 F.4th at 950.) However, federal Court of Appeals opinions are not binding on this Court. (Qualified Patients Ass'n v. City of Anaheim (2010) 187 Cal.App.4th 734, 764 [lower federal court cases are not binding].)

Plaintiff also argues that, because the arbitration provisions in the RISC states “[i]f federal law provides that a claim or dispute is not subject to binding arbitration, this Arbitration Provision shall not apply to such claim or dispute,” Ngo is binding on this Court. (Sandhu Decl. ¶ 4 & Ex. B.) However, even Ngo holds that “[s]tate law determines whether a non-signatory to an agreement containing an arbitration clause may compel arbitration.” (Ngo, 23 F.4th at 946, citing Arthur Andersen LLP v. Carlisle (2009) 556 U.S. 624, 631-32.) For the reasons stated above, Felisilda requires the granting of defendant’s motion.

The motion is GRANTED. Plaintiff must pursue her claims in arbitration, and this matter is stayed pending completion of such arbitration.