Judge: David A. Hoffer, Case: 30-2022-1246921, Date: 2023-01-09 Tentative Ruling

Defendant American Honda Motor Company’s (“Defendant”) motion to compel arbitration is DENIED.

Defendant is not a signatory to the subject arbitration agreement, which appears in the retail installment sales contract (“RISC”) between Germer U Mejia and Jenalyn M Mejia (“Plaintiffs”) and Weir Canyon Acura. (See Dobberstein Decl. at Ex. 1, p. 5.)

A nonsignatory seeking to enforce an arbitration agreement bears the burden to establish standing to enforce the agreement. (Jones v. Jacobson (2011) 195 Cal.App.4th 1, 15.)

Defendant has failed to meet this burden. Felisilda v. FCA USA LLC (2020) 53 Cal.App.5th 486 (Felisilda), upon which Defendant relies, is distinguishable. Unlike in Felisilda, the complaint in this case does not allege or otherwise indicate that the sales contract between Plaintiffs and the nonparty dealer is the source of the warranties at the heart of this action as brought against Defendant. (See Felisilda, supra, 53 Cal.App.5th at p. 496.) Nothing in the complaint suggests that Plaintiffs’ claims against Defendant are based on any warranty in the RISC, and the material terms of the express written warranty as alleged in the complaint appear nowhere in the RISC. (Compare Compl. ¶ 10, with Dobberstein Decl. at Ex. 1.) The allegations of the complaint show that the only warranties that remain at issue consist of those warranties directly between Plaintiffs and Defendant. (See, e.g., Compl. ¶¶ 10-13.) Further, unlike in Felisilda, the only moving party here is the nonsignatory manufacturer, and the dealer is not a party to the case.

Moreover, the principles of equitable estoppel do not apply to the facts of this case because Plaintiffs’ claims do not depend on the existence of the RISC or any term contained therein. “In any case applying equitable estoppel to compel arbitration despite the lack of an agreement to arbitrate, a nonsignatory may compel arbitration only when the claims against the nonsignatory are founded in and inextricably bound up with the obligations imposed by the agreement containing the arbitration clause.” (Goldman v. KPMG, LLP (2009) 173 Cal.App.4th at 209, 219.) “[T]he sine qua non for application of equitable estoppel as the basis for allowing a nonsignatory to enforce an arbitration clause is that the claims the plaintiff asserts against the nonsignatory must be dependent upon, or founded in and inextricably intertwined with, the underlying contractual obligations of the agreement containing the arbitration clause.” (Id. at pp. 217-218; accord, Jensen v. U-Haul Co. of California (2017) 18 Cal.App.5th 295, 306.) As discussed above, Plaintiffs’ claims against Defendant are independent from and do not rely on the existence or terms of the RISC. This is even recognized in the RISC, which provides in relevant part: “Warranties Seller Disclaims…This provision does not affect any warranties covering the vehicle that the vehicle manufacturer may provide.” (Dobberstein Decl. at Ex. 1, p. 4.)

Defendant has also failed to demonstrate that it is a third-party beneficiary of the RISC or the arbitration agreement therein, as nothing in the RISC or the arbitration provision shows that it was made for the benefit of Defendant. (Goonewardene v. ADP, LLP (2019) 6 Cal.5th 817, 830.)

Defendant’s request for judicial notice is GRANTED. (Fontenot v. Wells Fargo Bank, NA (2011) 198 Cal.App.4th 256, 264; Arce v. Kaiser Foundation Health Plan, Inc. (2010) 181 Cal.App.4th 471, 482; Evid. Code § 452(d).)

Plaintiff is ordered to give notice of this ruling.