Judge: David A. Hoffer, Case: 30-2022-1253917, Date: 2022-09-19 Tentative Ruling

The motion by defendant Ford Motor Company (“defendant/Ford”) to compel plaintiffs Fernando Fuentes and Alfonso Fuentes (together “plaintiffs”) to submit their claims to binding arbitration and stay the proceedings is DENIED.

There is no dispute that Ford is not a signatory to the retail installment sales contract (“RISC”) between plaintiffs and Huntington Beach Ford (“Dealer”) nor the arbitration agreement contained therein.

A nonsignatory seeking to enforce an arbitration agreement against a signatory bears the burden to establish he or she is a party to the arbitration agreement/provision covering the dispute. (Jones v. Jacobson (2011) 195 Cal.App.4th 1, 15.) Ford has failed to meet this burden.

Ford contends that, under Felisilda v. FCA USA LLC (2020) 53 Cal.App.5th 486, Plaintiffs are equitably estopped from refusing to arbitrate their claims because their claims are intimately founded in and intertwined with the RISC.

Felisilda is distinguishable because Dealer has never been a party to this action and thus has never moved to compel arbitration.

In Felisilda, the complaint alleged that express warranties accompanied the sale of the vehicle. (Id. at p. 491) No such allegation is found in the present complaint. Although the complaint here alleges that implied warranties from Ford accompanied the “sale” (Compl. ¶16), the source of the warranties is alleged to be the Ford Warranty Guide provided to all customers who purchase or lease a Ford Vehicle (Compl. ¶8) not the RISC.  As plaintiffs argue, the same claims could be asserted by a cash buyer without a RISC.

Under California law, express and implied warranties from a non-signatory manufacturer are not part of the purchase agreement and instead arise independently of the sales contract.  (Ngo v. BMW of N. Am., LLC (9th Cir. 2022) 23 F.4th 942, 949)  

Thus, Ford has not shown that equitable estoppel applies here. It has not established that plaintiffs’ claims against Ford depend on the existence of, or are inextricably bound up with, the RISC or any term contained therein. (Goldman v. KPMG, LLP (2009) 173 Cal.App.4th 209, 217-218).

Ford 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 Ford’s benefit. (Goonewardene v. ADP, LLP (2019) 6 Cal.5th 817, 830.) Ford’s argument regarding the close relationship between it and Dealer is insufficient to establish that Ford would in fact benefit from the contract with these specific plaintiffs and that a motivating purpose of the contract was to benefit Ford.

Ford’s argument, that the “broad language” of the arbitration provision, that it applies to any dispute “which arises out of or relates to … purchase or condition of this vehicle, this contract or any resulting transaction or relationship (including any such relationship with third parties who do not sign this contract)…”  establishes that it was intended to be a third party beneficiary, lacks merit. The language referred to simply describes the category of disputes that the signatories agreed to arbitrate, not the parties who may compel it.

For the above reasons, the motion is denied.

Plaintiffs objection to Ex. 1 to the Decl. of Sharon Shin is OVERRULED.

Plaintiff is ordered to give notice of this ruling.