Judge: Douglas W. Stern, Case: 22STCV29748, Date: 2023-02-06 Tentative Ruling

Case Number: 22STCV29748    Hearing Date: February 6, 2023    Dept: 68

IRIS SUAREZ v. NISSAN NORTH AMERICA, INC., Case No. 22STCV29748

MOVING PARTY:   Defendant Nissan North America, Inc.

RESP. PARTY:   Plaintiff Iris Suarez

MOTION TO COMPEL ARBITRATION

Background

On September 13, 2022, Plaintiff filed the instant action against Defendant Nissan North Ameri, Inc., for causes of action related to breaches of the Song-Beverly Warranty Act and fraud.

On November 7, 2022, Defendant filed the instant motion to compel arbitration and stay the action. Plaintiff opposes. 

Request for Judicial Notice

            Plaintiff has requested that the Court take Judicial Notice of a published Ninth Circuit case, Ngo v. BMW of North America, LLC et al., (9th Cir. 2022) 23 F.4th 942.  It reached a conclusion that is contrary to another published decision.  It is the view of the Court that there is no need to ask for judicial notice of published federal decisions when the purpose is to present the decision as persuasive legal authority.  The Court declines to endorse the overused practice of filing pleadings to cite published decisions.

“TIG requests judicial notice of five documents.  The first four are unpublished trial court decisions in unrelated lawsuits.  TIG appears to rely on the decisions for their precedential value.  TIG’s RJN Exs. A-D.  Plaintiffs object to judicial notice of these documents because they are non-citable trial court opinions in unrelated actions.

It is not necessary for TIG to seek judicial notice of legal opinions relied on for their precedential value.  Rule 201 allows for judicial notice of “adjudicative facts,” Fed. R. Evid. 201(a), which “are simply the facts of the particular case,”  Fed. R. Evid. 201, Adv. Comm. Note to Subd. (a), “those to which the law is applied.”  Id.  While it is true that judges “are engaged in ‘judicial notice’ when they pull a lawbook off the shelves ...,” 21B Wright and Graham, Fed. Practice and Proc. § 5103.1, at 114 (2d ed. 2005), a formal request is not required to invoke judicial notice of precedential court decisions.  The Court thus denies TIG’s request for judicial notice of Exhibits A through D as outside the scope of Rule 201, but will nevertheless consider them for the purpose for which they have been offered, namely, as judicial decisions supporting particular propositions of law, although the Court agrees with Plaintiffs that the precedential value of such unpublished trial court decisions is minimal.”  Toll CA, L.P. v. American Safety Indemnity Company (S.D. Cal., June 16, 2017, No. 16-CV-1523-BTM-AGS) 2017 WL 2628059, at *3.

Further, the request seeks to have the Court apply legal principles that are contested by the parties in this litigation and thus not proposition that “cannot reasonably be disputed.”

“Judicial notice of a matter means the acceptance by the court of the existence of a matter of law or fact without the necessity of formal proof of that matter.  “The doctrine of judicial notice is an evidentiary doctrine that permits the court to consider as established in a case a matter of law or fact that is relevant to an issue, without the necessity of formal proof of the matter by any party.  Judicial notice is a substitute for formal proof.  Judicial notice may be taken of either a proposition of law or a proposition of fact.  The fundamental theory of judicial notice is that the matter that is judicially noticed is one of law or fact that cannot reasonably be disputed.”  (Jefferson, California Evidence Benchbook (1972) Judicial Notice, s 47Notice, s 47.1, p. 833.)”  Post v. Prati(1979) 90 Cal.App.3d 626, 633 [153 Cal.Rptr. 511, 514]

Judicial notice denied.

Evidentiary Objections

            The Court sustains the objections to Plaintiff’s Amarkarian Declaration: 1, 2, 3, 4

            Overruled: None

Legal Standard on Motion to Compel Arbitration

California law incorporates many of the basic policy objectives contained in the Federal Arbitration Act, including a presumption in favor of arbitrability. (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 971-972.) The petitioner bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence, the party opposing the petition then bears the burden of proving by a preponderance of the evidence any fact necessary to demonstrate that there should be no enforcement of the agreement, and the trial court sits as a trier of fact to reach a final determination on the issue. (Rosenthal v. Great Western Financial Securities Corp. (1996) 14 Cal.4th 394, 413.) The Court is empowered by Code of Civil Procedure section 1281.2 to compel parties to arbitrate disputes pursuant to an agreement to do so.  

Code of Civil Procedure § 1281.2 states that:

“The court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists, unless it determines that:

 

(a) The right to compel arbitration has been waived by the petitioner; or 

(b) Grounds exist for the revocation of the agreement.

             

(c) A party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact. For purposes of this section, a pending court action or special proceeding includes an action or proceeding initiated by the party refusing to arbitrate after the petition to compel arbitration has been filed, but on or before the date of the hearing on the petition. This subdivision shall not be applicable to an agreement to arbitrate disputes as to the professional negligence of a health care provider made pursuant to Section 1295.” (CCP § 1281.2.)

The party petitioning to compel arbitration under written arbitration agreement bears the burden of proving the existence of a valid arbitration agreement by a preponderance of the evidence, and party opposing petition must meet the same evidentiary burden to prove any facts necessary to its defense. The trial court acts as the trier of fact, weighing all the affidavits, declarations, and other documentary evidence. (CCP § 1281.2; Provencio v. WMA Securities, Inc., 125 Cal.App.4th 1028, 1031.)  

Discussion

            The main dispute rests on the fact that Defendant was not a signatory to the arbitration agreement in question, but Defendant argues that it should be able to compel arbitration by virtue of the doctrine of equitable estoppel and Defendant’s claim that it is a third party beneficiary of the arbitration agreement.

            “Under that doctrine [of equitable estoppel] …a nonsignatory defendant may invoke an arbitration clause to compel a signatory plaintiff to arbitrate its claims when the causes of action against the nonsignatory are intimately founded in and intertwined with the underlying contract obligations.” (JSM Tuscany, LLC v. Superior Ct. (2011) 193 Cal.App.4th 1222, 1237, quoting Boucher v. All Title Co. (2005) 127 Cal.App.4th 262, 271 and Goldman v. KPMG, LLP(2009) 173 Cal.App.4th 209, 217–18 (internal quotation marks omitted).) The sine qua non for application of equitable estoppel as the basis for allowing a nonsignatory to enforce an arbitration clause is, “that the claims 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.” (Goldman, supra, 173 Cal.App.4th at 217–18; accord, JSM Tuscany, LLC, supra, 193 Cal.App.4th at 1237.) “The fundamental point is that a party is not entitled to make use of [a contract containing an arbitration clause] as long as it worked to her advantage, then attempt to avoid its application in defining the forum in which her dispute . . . should be resolved.” (Jensen v. U-Haul Co. of Cal. (2017) 18 Cal.App.5th 295, 306, quoting NORCAL Mut. Ins. Co. v. Newton (2000) 84 Cal.App.4th 64, 84 (internal quotation marks omitted).) Courts examine the facts alleged in the operative complaint to determine whether equitable estoppel applies. (Goldman, supra, 173 Cal.App.4th at 229–30.)

            In one case relied upon by Defendant, an arbitration agreement that was in the retail sales agreement was found to extend to a nonsignatory car manufacturer because “the arbitration provision in this case provides for arbitration of disputes that include third parties so long as the dispute pertains to the condition of the vehicle.” (Felisilda v. FCA US LLC (2020) 53 Cal.App.5th 640, 648.)

            Here, the language of the arbitration provision in the retail sales agreement mentions third parties. It states as follows:

“Any claim or dispute … between you and us or our employees, agents, successors or assigns, which arises out of or relates to your … 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) shall, at your or our election, be resolved by neutral, binding arbitration and not by a court action. 

(Sharp Decl., Ex. B.)

            This language is very similar to the language in Felisilda, which allowed the defendant car manufacturer to compel arbitration as to the condition of the vehicle. However, it is also worth noting that nothing in the language of the arbitration agreement explicitly gives third parties the right to compel arbitration on a signatory to the agreement. Additionally, the plaintiff in Felisilda had sued both the dealership and the manufacturer, which is not the case in this instance. Plaintiff has only sued Defendant Nissan, as the manufacturer.

            Additionally, Defendant argues that the warranty is linked to the sales agreement which contains the arbitration.  But the sales agreement at issue explicitly disclaims warranties. (Sharp Decl., Ex. B.). In this case the warranty obligations arise independently form the sales agreement.  Hence, they are not so intertwined that this action should be governed by the sales agreement arbitration provision between Plaintiff and the non-party dealer.

            As such, this case is distinguishable from Felisilda, and the motion to compel arbitration is DENIED.