Judge David A. Hoffer, Case 30-2022-1254154 2022-10-24 Tentative Ruling

Judge: David A. Hoffer, Case: 30-2022-1254154, Date: 2022-10-24 Tentative Ruling

The Motion To Compel Arbitration and Stay Action filed by Defendant Nissan North America, Inc. (“Nissan”) is DENIED.

The arbitration agreement at issue at issue is found at page 7 of the Retail Installment Sale Contract (“RISC”) attached as Exhibit A to the Shin Declaration. The RISC, dated 12/23/17, is between plaintiff Kimberlin Monroe (“Plaintiff”) as “Buyer” and Fontana Nissan as “Seller-Creditor.” Nissan acknowledges that it is not a signatory to the RISC. 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.)

Nissan has failed to meet this burden. Felisilda v. FCA USA LLC (2020) 53 Cal.App.5th 486 (Felisilda), upon which Nissan relies, is distinguishable. Unlike in Felisilda, the complaint in this case does not allege or otherwise indicate that the sales contract between Plaintiff and Fontana Nissan, the nonparty dealer, is the source of the warranties at the heart of this action as brought against Nissan. (See Felisilda, supra, 53 Cal.App.5th at p. 496.) Nothing in the complaint suggests that Plaintiff’s claims against Nissan are based on any warranty in the RISC. In fact, the RISC expressly disclaims any warranty claims and states: “WARRANTIES SELLER DISCLAIMS ¶If you do not get a written warranty, and the Seller does not enter into a service contract within 90 days from the date of this contract, the Seller makes no warranties, express or implied, on the vehicle, and there will be no implied warranties of merchantability or of fitness for a particular purpose. ¶ This provision does not affect any warranties covering the vehicle that the vehicle manufacturer may provide. If the Seller has sold you a certified used vehicle, the warranty of merchantability is not disclaimed.” (RISC at ¶4) The allegations of the complaint show that the only warranties at issue consist of those warranties directly between Plaintiff and Nissan. Further, unlike in Felisilda, the only moving party here is the nonsignatory manufacturer, and the dealer has never been a party to the case.

The principles of equitable estoppel do not apply to the facts of this case because Plaintiff’s 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, Plaintiff’s claims against Nissan are independent from and do not rely on the existence or terms of the RISC.

Nissan 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 the motivating purpose of the contracting parties was to benefit Nissan. (Goonewardene v. ADP, LLP (2019) 6 Cal.5th 817, 830.) The arbitration agreement defines “we” and “us” as the seller and not the manufacturer. The RISC states on page one that only “you or we may elect to resolve any dispute by neutral, binding arbitration.” The Arbitration Provision at page 7 of the RISC states that disputes “shall, at your or our election, be resolved by neutral, binding arbitration.” The dealership was aware of the fact that each car had a manufacturer and if the dealership intended the manufacturer to be able to invoke the arbitration clause, it could have easily included the manufacturer in the definition of “us.” As the court stated in Ngo v. BMW of N. Am., LLC (9^th Cir. 2022) 23 F.4^th 942, “Though the language allows for arbitration of certain claims concerning third parties, it still gives only Ngo, the dealership, and the assignee the power to compel arbitration. Nothing in the clause or, for that matter, in the purchase agreement reflects any intention to benefit BMW by allowing it to take advantage of the arbitration provision.”

Plaintiff’s request for judicial notice of exhibits 1-9 is GRANTED as to request nos. 1-6 and DENIED as to request nos. 7-9. (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).) Defendant’s objections to the exhibits 2-9 attached to plaintiff’s request for judicial notice are OVERRULED as to exhibits 2-6 and SUSTAINED as to exhibits 7-9.

Plaintiff’s objections are OVERRULED.

Plaintiff is ordered to give notice of this ruling.