Judge: Cynthia A Freeland, Case: 37-2023-00024298-CU-BC-NC, Date: 2023-12-22 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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SOUTH BUILDING TENTATIVE RULINGS - December 21, 2023

12/22/2023  01:30:00 PM  N-27 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Cynthia A. Freeland

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Civil - Unlimited  Breach of Contract/Warranty Motion Hearing (Civil) 37-2023-00024298-CU-BC-NC WOOD V. THOR MOTOR COACH, INC. [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion - Other, 08/16/2023

Defendant Thor Motor Coach, Inc. ('Defendant')'s motion to stay action is granted.

On August 20, 2021, Plaintiffs Sarah K. Rotter and David A. Wood (collectively, 'Plaintiffs'), as buyers, and La Mesa R.V. Center, Inc. ('La Mesa R.V. Center'), as seller, entered into a Retail Installment Sale Contract (the 'Sale Contract') for the purchase of a 2022 Thor Motor Coach Magnitude BT3 (VIN 1FDFF6LT5MDA06100) (the 'Vehicle'). See Ortega Decl., Ex. A; Stanley Decl., Ex. A. Defendant is the manufacturer of the Vehicle. See Stanley Decl., ¶ 4. In connection with the purchase, Defendant provided Plaintiffs with certain warranties as evidenced by the Thor Motor Coach Product Warranty Registration Form (the 'Warranty Registration Form') and the Thor Motor Coach Warranty Guide (the 'Warranty Guide'). See Ortega Decl., Ex. B; Stanley Decl., Exs. B-C. Relevant to the present dispute is the forum selection clause contained within the Warranty Registration Form and Warranty Guide. More specifically, the Warranty Registration Form provides that: I UNDERSTAND THAT EXCLUSIVE JURISDICTION FOR DECIDING LEGAL DISPUTES RELATING TO ALLEGED BREACH OF EXPRESS WARRANTY AND IMPLIED WARRANTIES THAT ARISE BY OPERATION OF LAW AS WELL AS THOSE RELATING TO REPRESENTATIONS OF ANY NATURE RESTS IN THE COURTS WITHIN THE STATE OF MANUFACTURE, WHICH IS INDIANA. IF THERE IS A CONFLICT BETWEEN THIS FORUM SELECTION CLAUSE AND ANOTHER PARTY'S FORUM SELECTION CLAUSE, THIS FORUM SELECTION CLAUSE CONTROLS.

See Warranty Registration Form, p. 2 (emphasis in original). The Warranty Guide contains a similar, albeit more expansive, forum selection clause which reads as follows: EXCLUSIVE JURISDICTION FOR DECIDING LEGAL DISPUTES RELATING TO ALLEGED BREACH OF EXPRESS WARRANTY AND BREACH OF IMPLIED WARRANTIES ARISING BY OPERATION OF LAW AS WELL AS THOSE RELATING TO REPRESENTATIONS OF ANY NATURE MUST BE FILED IN A STATE OR FEDERAL COURT WITHIN THE STATE OF MANUFACTURE, WHICH IS INDIANA. ALSO, THIS LIMITED WARRANTY SHALL BE INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF INDIANA. ANY AND ALL CLAIMS, CONTROVERSIES AND CAUSES OF ACTION ARISING OUT OF OR RELATING TO THIS LIMITED WARRANTY, WHETHER SOUNDING IN CONTRACT, TORT, OR STATUTE, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF INDIANA, INCLUDING ITS STATUTE OF LIMITATIONS, WITHOUT GIVING EFFECT TO ANY CONFLICT-OF-LAW RULE THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF A DIFFERENT JURISDICTION.

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3008031 CASE NUMBER: CASE TITLE:  WOOD V. THOR MOTOR COACH, INC. [IMAGED]  37-2023-00024298-CU-BC-NC See Warranty Guide, p. 9 (emphasis in original).

Mr. Wood contends that shortly after deciding to purchase the Vehicle, he and Ms. Rotter met with a finance manager at La Mesa R.V. Center to arrange the financing for the sale. The finance manager did not go over the warranty or owner's manual with Plaintiffs. See Wood Decl., ¶ 6. After signing the necessary paperwork for the sale, a dealership employee informed Plaintiffs that the warranties and owner's manual were in a black bag inside the Vehicle. Ibid., ¶ 7. Nothing was discussed regarding the contents of the documents contained in the black bag. Ibid., ¶ 8. At the time of the purchase, neither La Mesa R.V. Center nor its employees showed Plaintiffs the warranty or owner's manual for the Vehicle.

Ibid., ¶¶ 9-10. Moreover, Mr. Wood represents that he never signed the Warranty Registration Form.

Ibid., ¶ 12. Plaintiffs have discovered an array of defects with the Vehicle throughout their ownership.

Ibid., ¶ 15. Plaintiffs have brought the Vehicle to both La Mesa R.V. Center and La Mesa R.V. Center's service center in El Cajon, CA; however, the repair facilities were unable to timely repair the Vehicle.

Ibid., ¶¶ 15-16. To date, Defendant has not repurchased the Vehicle. Ibid., ¶ 17. On June 7, 2023, Plaintiffs commenced this action by filing a Complaint against Defendant for damages under the Song-Beverly Consumer Warranty Act (Cal. Civ. Code §§ 1790 et seq.) (the 'Song-Beverly Act'). See ROA No. 1; Gonzales Decl., Ex. D.

'In California, the procedure for enforcing a forum selection clause is a motion to stay or dismiss for forum non conveniens pursuant to Code of Civil Procedure sections 410.30 and 418.10.' Berg v. MTC Electronics Technologies (1998) 61 Cal. App. 4th 349, 358. In this case, Defendant seeks to enforce the forum selection clause contained within the Warranty Registration Form and Warranty Guide and stay this action under California Code of Civil Procedure ('CCP') § 410.30(a). CCP § 410.30(a) provides that '[w]hen a court upon motion of a party or its own motion finds that in the interest of substantial justice an action should be heard in a forum outside this state, the court shall stay or dismiss the action in whole or in part on any conditions that may be just.' Cal. Code Civ. P. § 410.30(a). California follows the modern trend of enforcing forum selection clauses. See Quanta Computer Inc. v. Japan Communications Inc.

(2018) 21 Cal. App. 5th 438, 444. Indeed, forum selection clauses are generally given effect unless they are unfair or unreasonable. See Smith, Valentino & Smith, Inc. v. Sup. Ct. (1976) 17 Cal. 3d 491.

However, the rules governing the enforcement of mandatory forum selection clauses differ from permissive forum selection clauses. Toward that end, the Second District Court of Appeal has explained: In a contract dispute in which the parties' agreement contains a forum selection clause, a threshold issue in a forum non conveniens motion is whether the forum selection clause is mandatory or permissive. A mandatory clause ordinarily is 'given effect without any analysis of convenience; the only question is whether enforcement of the clause would be unreasonable.' But, if 'the clause merely provides for submission to jurisdiction and does not expressly mandate litigation exclusively in a particular forum, then the traditional forum non conveniens analysis applies. [Citation.]' (Intershop Communications AG v. Superior Court (2002) 104 Cal.App.4th 191, 196, 127 Cal.Rptr.2d 847, citing Berg v. MTC Electronic Technologies Co. (1998) 61 Cal.App.4th 349, 358-360, 71 Cal.Rptr.2d 523 (Berg).) Animal Film, LLC v. D.E.J. Productions, Inc. (2011) 193 Cal. App. 4th 466, 471.

Accordingly, the court must first determine whether the subject forum selection clause is mandatory or permissive. 'A clause is mandatory if it requires the parties to litigate their disputes exclusively in the designated forum, and it is permissive if it merely requires the parties to submit to jurisdiction in the designated forum.' Verdugo v. Alliantgroup, L.P. (2015) 237 Cal. App. 4th 141, 162, fn. 2 ('Verdugo').

In this case, the court, having reviewed the pertinent language, finds that the forum selection clause is mandatory. Both the Warranty Registration Form and the Warranty Guide expressly state that the appropriate court in Indiana shall have exclusive jurisdiction for deciding legal disputes between the parties relating to the alleged breaches of express and/or implied warranties arising by operation of law as well as those relating to representations of any nature. The language requiring the parties to litigate their disputes exclusively in Indiana renders the forum selection clause mandatory. This is consistent with other courts' findings concerning similarly worded forum selection clauses. See, e.g., Intershop Calendar No.: Event ID:  TENTATIVE RULINGS

3008031 CASE NUMBER: CASE TITLE:  WOOD V. THOR MOTOR COACH, INC. [IMAGED]  37-2023-00024298-CU-BC-NC Communications v. Sup. Ct. (2002) 104 Cal. App. 4th 191, 196 ('To the extent permitted by the applicable laws the parties elect Hamburg to be the place of jurisdiction.'); Lu v. Dryclean-U.S.A. of California, Inc. (1992) 11 Cal. App. 4th 1490, 1492 ('Any and all litigation that may arise as a result of this Agreement shall be litigated in Dade County, Florida.'); CQL Original Products, Inc. v. National Hockey League Players' Assn. (1995) 39 Cal. App. 4th 1347, 1352 ('any claims . . . shall . . . be prosecuted in the appropriate court of Ontario [Canada]'); Cal-State Business Products & Services, Inc.

v. Ricoh (1993) 12 Cal. App. 4th 1666, 1672, fn. 4 ('[A]ny appropriate state or federal district court located in the Borough of Manhattan, New York City, New York shall have exclusive jurisdiction over any case of controversy arising under or in connection with this Agreement').

When a defendant seeks to enforce a mandatory forum selection clause, 'the party opposing enforcement of the clause ordinarily bears the burden of proving why it should not be enforced.' Handoush v. Lease Finance Group, LLC (2019) 41 Cal. App. 5th 729, 734. However, the burden is 'reversed when the claims at issue are based on unwaivable rights created by California statutes [in which case] the party seeking to enforce the forum selection clause bears the burden to show litigating claims in the contractually designated forum will not diminish in any way the substantive rights afforded .

. . under California law.' Verdugo, 237 Cal. App. 4th at 147. '[A] defendant can meet its burden only by showing the foreign forum provides the same or greater rights than California, or the foreign forum will apply California law on the claims at issue.' Ibid., at 157. In this case, Defendant bears the burden of demonstrating that litigating Plaintiffs' claims in Indiana will not diminish in any way Plaintiffs' substantive rights under California law. This is because the Song-Beverly Act contains a broad anti-waiver provision.

See Cal. Civ. Code § 1970.1 ('Any waiver by the buyer of consumer goods of the provisions of this chapter, except as expressly provided in this chapter, shall be deemed contrary to public policy and shall be unenforceable and void.'). The Fourth District Court of Appeal has recently stated: The Act's antiwaiver provision is extremely broad; it is not limited to warranties or any particular time frame during the purchase process, but encompasses all mandated remedies afforded to buyers. Such an interpretation follows the directive to give the Act a ' ' 'construction calculated to bring its benefits into action.' ' ' (Kirzhner v. Mercedes-Benz USA, LLC, supra, 9 Cal.5th at p. 972, 266 Cal.Rptr.3d 346, 470 P.3d 56.) Rheinhart v. Nissan North America, Inc. (2023) 92 Cal. App. 5th 1016, 1034.

The court finds that Defendant has met its burden. More specifically, Defendant has agreed to stipulate, should the case proceed in Indiana, that: (1) the Song-Beverly Act will apply to Plaintiffs' claims as pled in their Complaint, and (2) Defendant will not oppose Plaintiffs' request that the Indiana court utilize the Song-Beverly Act to adjudicate those allegations. Defendant also indicates its willingness to enter into a written stipulation to that effect. See Gonzales Decl., ¶ 4. On this point, Verdugo is instructive and apposite.

In Verdugo, plaintiff/appellant Rachel Verdugo brought a class action suit against her employer, defendant/appellee Alliantgroup, L.P. ('Alliantgroup'), alleging various Labor Code violations.

Alliantgroup then moved to stay or dismiss the action based upon the combined forum selection and choice-of-law provision in Ms. Verdugo's employment agreement, which stated that '[t]his Agreement shall be governed in all respects, including, but not limited to, validity, interpretation, effect and performance by the laws of the State of Texas. The parties agree that proper subject matter and personal jurisdiction shall be had solely in [the] State of Texas. The sole venue for disputes arising hereunder shall be in Harris County, Texas.' The trial court granted the motion and stayed the action based on its finding that the forum selection clause was enforceable. Ms. Verdugo appealed.

The Fourth District Court of Appeal found that the forum selection clause was mandatory, not permissive. Alliantgroup thus bore the burden of demonstrating that litigating the claims in Texas would not diminish the substantive rights afforded to Ms. Verdugo under California law. The Court of Appeal noted that, in order to meet its burden, Alliantgroup needed to prove that either: (1) Texas would provide Ms. Verdugo with the same or greater rights than California (by conducting a comparative analysis of the Calendar No.: Event ID:  TENTATIVE RULINGS

3008031 CASE NUMBER: CASE TITLE:  WOOD V. THOR MOTOR COACH, INC. [IMAGED]  37-2023-00024298-CU-BC-NC rights Ms. Verdugo would have under Texas and California law, respectively), or (2) Texas would apply California law to Ms. Verdugo's claims. Alliantgroup attempted to satisfy its burden by arguing that '[u]nder Texas'[s] choice of law doctrine, a Texas court would most likely apply California law to Verdugo's claims notwithstanding the [Employment Agreement's] choice of law provision. The Court of Appeal found this insufficient. More specifically, it noted that Alliantgroup's contention was 'conclusory speculation' as to what a Texas court would likely do, while Alliantgroup avoided making any specific and definitive argument that Texas courts have applied or will apply California wage and hour laws notwithstanding a choice-of-law provision designating Texas law. Notably, however, the Court of Appeal went on to explain that: Alliantgroup could have eliminated any uncertainty on which law a Texas court would apply by stipulating to have a Texas court apply California law in deciding Verdugo's claims, but Alliantgroup did not do so. Instead, Alliantgroup has preserved its ability to argue to a Texas court that it should apply Texas law, and Alliantgroup has hinted at its intention to do so by downplaying the significance of the statutory rights Verdugo seeks to enforce through this action . . . Accordingly, Alliantgroup's failure to stipulate that California law applies, coupled with its efforts to minimize the significance of the public policy underlying Verdugo's Labor Code rights, presents an even stronger case for rejecting Alliantgroup's contention a Texas court would most likely apply California law.

Verdugo, 237 Cal. App. 4th at 158-159.

In this case, Defendant, consistent with Verdugo, has offered a broad stipulation that fully recognizes that the Song-Beverly Act will apply to Plaintiffs' claims relating to the Vehicle. Defendant is also not preserving any argument to present to an Indiana court that Indiana law should provide anything other than what has been stipulated. This allays Plaintiffs' concerns that Defendant is 'offering to stipulate to an uncertainty' or that Plaintiffs are 'gambl[ing] with their rights.' In addition, by staying this action, rather than dismissing it, the court preserves Plaintiffs' ability to return to this court and request that the stay be lifted should the Indiana court refuse to apply the Song-Beverly Act. See, e.g., Hahn v. Diaz-Barba (2011) 194 Cal. App. 4th 1177, 1192; Guimei v. General Electric Co. (2009) 172 Cal. App. 4th 689, 704; Berg, 61 Cal. App. 4th at 356.

That being said, the court finds that Indiana has a logical connection to the parties or their transaction and there is a rational basis for the selected forum given that Defendant is located in Indiana. Plaintiffs' opposition is otherwise unavailing. First, the fact that Mr. Wood did not sign the Warranty Registration Form or the Warranty Guide is of no moment. Under California law, '[a] forum selection clause may also be enforced against a plaintiff who is not a party to the contract in question if the plaintiff is closely related to the contractual relationship.' Net2Phone, Inc. v. Sup. Ct. (2003) 109 Cal. App. 4th 583, 588 (internal quotation omitted). The evidence shows that Mr. Wood is, in fact, closely related to the contractual relationship between Ms. Rotter and Defendant. Ms. Rotter signed the Sale Contract and is listed as a co-buyer on that document. Additionally, Mr. Wood admits in his declaration that he and Ms.

Rotter share a family relationship ('to see what was available that would fit our familial needs.'). See Wood Decl., ¶ 4.

Second, Plaintiffs' contention that they did not receive or read the Warranty Registration Form and/or the Warranty Guide is not well taken. In executing the Warranty Registration Form, Ms. Rotter agreed to the following terms: Before I purchased my motorhome, I received, read and agreed to the terms and conditions of the Thor Motor Coach Limited Warranty and the Thor Motor Coach Structural Limited Warranty (TMC Structural Limited Warranty is not applicable to Class B motorhomes). I understand I can read and print a copy of the Owner's Manual and Limited Warranties from the Thor Motor Coach website. If for any reason I did not receive, read and agree to the terms and conditions of the Thor Motor Coach Limited Warranty and the Thor Motor Coach Structural Limited Warranty before closing the purchase of the motorhome, I understand and agree that by requesting and accepting the performance of Warranty repairs under the terms of the Limited Warranties, I am accepting all terms and conditions of the Limited Warranties, Calendar No.: Event ID:  TENTATIVE RULINGS

3008031 CASE NUMBER: CASE TITLE:  WOOD V. THOR MOTOR COACH, INC. [IMAGED]  37-2023-00024298-CU-BC-NC including by way of example, warranty limitations and disclaimers, the forum selection clause and the clause reducing the time period when suit must be filed for breach.

See Warranty Registration Form, p. 2. Ms. Rotter further agreed that 'I understand and agree to the forum selection clause and choice of law clause set forth in the Thor Motor Coach Limited Warranty and the Thor Motor Coach Structural Limited Warranty (TMC Structural Limited Warranty is not applicable to Class B motorhomes). Ibid.

Plaintiffs cannot now claim that they did not receive or read the forum selection clause given the foregoing contractual language. Additionally, as Defendant correctly notes, under California law, a party need not have actually read or been aware of a forum selection clause in order to be bound by it. See, e.g., Schlessinger v. Holland America, N.V. (2004) 120 Cal. App. 4th 552, 559; Desert Outdor Advertising v. Sup. Ct. (2011) 196 Cal. App. 4th 866, 872; Intershop Communications, 104 Cal. App. 4th at 202. Moreover, it is undisputed that Plaintiffs availed themselves of the benefit of the subject warranties by presenting the Vehicle for repairs and are thus estopped from disavowing the forum selection clause contained therein. Finally, the forum selection clause is enforceable even if it is contained within an adhesive contract. 'A forum selection clause need not be subject to negotiation to be enforceable [Citations.] Rather, a forum selection clause contained in a contract of adhesion, and thus not the subject of bargaining, is 'enforceable absent a showing that it was outside the reasonable expectations of the weaker or adhering party or that enforcement would be unduly oppressive or unconscionable.' [Citations.]' Korman v. Princess Cruise Lines, Ltd. (2019) 32 Cal. App. 5th 206, 216-217 (quoting Drulias v. 1st Century Bancshares, Inc. (2018) 30 Cal. App. 5th 696, 707-708).

Plaintiffs make no such showing.

Third, Plaintiffs' attacks on ancillary provisions of the warranties, i.e., the statute of limitations, the repair remedy, the back-up remedy, and damages, are not persuasive because, as Defendant aptly notes, such terms can be severed from the contract without affecting the enforceability of the forum selection clause.

Finally, Plaintiffs cite no authority for the proposition that the forum selection clause is substantively unconscionable because litigating their claims in Indiana will increase their costs and occasion additional inconvenience. To the contrary, 'neither inconvenience nor additional expense in litigating in the selected forum are part of the test of unreasonability.' Cal-State Business Products & Services, Inc., 12 Cal. App. 4th at 1679.

In light of the foregoing, the court grants the motion and stays this action to allow Plaintiffs to pursue their claims in the appropriate court in Indiana. Plaintiffs, in the ordinary course, may seek to lift the stay in the event that the Indiana court declines to apply the appropriate California law to Plaintiffs' claims.

This is the tentative ruling for the hearing at 1:30 p.m. on Friday, December 22, 2023. If no party appears at the hearing, this tentative ruling will become the order of the court as of December 22, 2023.

If the parties are satisfied with the court's tentative ruling or do not otherwise wish to argue the motion, they are encouraged to give notice to the court and each other of their intention not to appear, though this notice is not required.

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