Judge: Frank M. Tavelman, Case: 24NNCV04210, Date: 2025-01-10 Tentative Ruling
Case Number: 24NNCV04210 Hearing Date: January 10, 2025 Dept: A
MOTION TO
COMPEL ARBITRATION
Los Angeles Superior Court
Case # 24NNCV04210
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MP: |
American Honda Motor, Co. (Defendant) |
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RP: |
Jose Javier Salgado (Plaintiff) |
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The Court is not
requesting oral argument on this matter. The Court is guided by
California Rules of Court, Rule 3.1308(a)(1) whereby notice of intent to appear
is requested. Unless the Court directs argument in the Tentative Ruling,
no argument is required and any party seeking argument should notify all other
parties and the court by 4:00 p.m. on the court day before the hearing of the
party’s intention to appear and argue. The tentative ruling will become
the ruling of the court if no argument is received.
Notice may be given
either by email at BurDeptA@LACourt.org or by telephone at (818) 260-8412.
ALLEGATIONS:
Jose Javier Salgado (Plaintiff)
brings this action against American Honda Motor, Co. (Honda) alleging violation
of certain provisions of Civil Code § 1791.2, commonly known as the Song
Beverly Act. Plaintiff alleges Honda sold him a defective 2024 Honda CR-V (the
Subject Vehicle) in violation of Song Beverly. Plaintiff states causes of
action for (1) Breach of Express
Warranty, (2) Breach of Implied Warranty, (3) Violation of the Song-Beverly Act
§ 1793.2.
Before the Court is a
motion by Honda to compel Plaintiff’s claims to arbitration. Plaintiff opposes
the motion and Honda replies.
ANALYSIS:
I.
LEGAL
STANDARD
C.C.P. §
1281.2 states: “[o]n petition of a party to an arbitration agreement alleging
the existence of a written agreement to arbitrate a controversy and that a
party thereto refuses to arbitrate such controversy, the court shall order the
petitioner and the respondent to arbitrate the controversy if it determines
that an agreement arbitrate the controversy exists.”
A party
seeking to compel arbitration has the initial burden to prove, by a
preponderance of the evidence, the existence of a valid and enforceable
arbitration agreement. (Engalla v. Permanente Medical Group, Inc. (1997)
15 Cal.4th 951, 972.) If the moving party has met its initial burden, then the
burden shifts to respondents to prove the falsity or unenforceability of the
arbitration agreement. (Id.)
II.
MERITS
The Court must first determine
whether Honda has evidenced a valid arbitration agreement which applies to the
claims Plaintiff assets. Honda’s motion appears to be premised on the following
two documents:
Honda’s appears to treat
these two documents as combining to form one binding arbitration agreement.
Honda states although it is not a signatory to the Lease Agreement, its
arbitration specifically contemplates Honda’s rights to compel arbitration as a
third-party. Honda further states that this intent to arbitrate is bolstered by
Plaintiffs’ failure to opt out of the Warranty Booklet’s arbitration provision.
The Court addresses each of these documents in turn.
Lease Agreement
As concerns the Lease
Agreement, its arbitration language is as follows:
Either you or we may choose to have any dispute between us decided
by arbitration and not in court or by jury trial. Any claim or dispute, whether
in contract, tort, statute or otherwise (including the interpretation and scope
of this Arbitration Provision, and the arbitrability of the claim or dispute),
between you and us or our parents, subsidiaries, affiliates, employees,
officers, agents, parents, subsidiaries, affiliates, successors or assigns,
(individually and collectively ‘'us’ or ’our') which arises out of or relates
to your credit application, origination or servicing of this Lease, the
manufacture, delivery, condition, or performance of this Vehicle, any
representations, omissions, or warranties, or any resulting transaction or
relationship (including any such relationship with third parties who do not
sign this Lease) shall, at your or our election, be resolved by neutral binding
arbitration and not by a court action.
(Exh. A, p. 6.)
Honda argues that the above
provision meets all of the qualifications for a third party non-signatory to
enforce an arbitration agreement, as set forth in Goonewardene v. ADP, LLC
(2019) 6 Cal.5th 817, 830. Honda further argues that this language is distinguishable
from the language examined in Ochoa v. Ford Motor Company (2023) 89
Cal.App.5th 1324. Honda argues that this new language is sufficient to entitle
them to compel arbitration as a third-party nonsignatory. The Court disagrees
for reasons set forth below.
The lease agreement in Ochoa
read in relevant part,
Either you or we may choose to have any dispute between us decided
by arbitration and not in court or by jury trial….[a]ny claim or dispute,
whether in contract, tort, statute or otherwise (including the interpretation
and scope of this Arbitration Provision, and the arbitrability of the claims or
dispute), between you and us or our employees, agents, successors or assigns,
which arises out of or relates to your credit application, purchase, or
condition of this vehicle, this contract or any resulting transaction or
relationship (including any such relationship with third parties who did not
sign this contract) shall, at your or our election, be resolved by neutral,
binding arbitration and not by a court action.
(Ochoa supra, 89
Cal.App.5th at 1330.)
The changes from the
language in Ochoa and the Lease Agreement here appear to be the expanded
definition of third-parties and the scope of arbitrable claims. The language
here expands third-parties to include “parents, subsidiaries, affiliates” in
addition to the previous “employees, agents, successors or assigns.” Further,
the Lease Agreement now includes claims arising or relating to “the
manufacture, delivery, condition, or performance of this Vehicle.” This is in
addition to the language in Ochoa which only discussed claims arising
out of or relating to “credit application, purchase, or condition of this
vehicle.”
The Court finds these
changes are insufficient to address the concerns voiced in Ochoa. Ochoa’s
discussion of third-party beneficiary status did not turn on the definition
of who was a contemplated third-party or the scope of the claims to be
arbitrated. Instead, Ochoa examined whether the language referencing
third-parties was evidence of an intent to benefit them. (Ochoa supra,
at 1335.) Ochoa found no such intent, stating that the language
referencing third-parties was meant as a “further delineation of the subject
matter of claims the purchasers and dealers agreed to arbitrate.” (Ochoa
supra, at 1335.) In other words,
whether a contract contemplates claims against a third-party and whether that
contract intends to benefit that third-party are two entirely separate
questions.
Here, the Lease Agreement’s
language has been expanded to more explicitly contemplate claims made against Honda
but does not evidence an intent to benefit them. The inclusion of additional
subject matter (the manufacture, delivery, condition, or performance of the Subject
Vehicle) simply does not function to invalidate the observations made in Ochoa.
Viewed through the lens of Ochoa, this language functions to allow
Plaintiff or Pacifica to compel arbitration on a wider range of claims. It does
not follow that this language shows the intent of either party to benefit Honda.
This is underscored by the fact that the provision still concludes that
arbitration will only occur “at your or our election.” In short, nothing about
the additional language of the provision establishes that the “motivating
intent” of the parties was to benefit Honda. (See Ochoa supra, at 1338.). As drafted, the triggering of arbitration
would be dictated by the lessor, Pacific Honda or purchaser and not by Honda,
which is not structurally connected to Pacific Honda. The provision states that arbitration will
occur “at your or our election,” rather than “at your election, our election or
that of any covered nonsignatory, including but not limited to Honda.” Had the latter language been used, it would
be clearer that the nonsignatory Honda could elect to arbitrate; however, it
makes little sense to the Court to find that Honda was an intended beneficiary
but not provided with the ability to invoke the provision without the lessor’s
consent given that only the lessee or lessor had the right under the express
language of the lease agreement to invoke arbitration.
In addition, there was
insufficient notice that the lease agreement between Plaintiff and the lessee
intended to provide benefits to the manufacturer of the vehicle or any other
third party. Nor did the lease agreement
expressly refer to California’s Song-Beverly law concerning express and implied
warranties. While not mandated, these
additional provisions would have placed a lessee on notice that other parties
may be covered under arbitration provision.
Warranty Booklet
As concerns the Warranty Booklet,
the Court finds this too is insufficient to evidence a binding arbitration
agreement. (Ford Motor Warranty Cases
(2023) 89 Cal.App.5th 1324.) “To form a valid contract there must be a meeting
of the minds, i.e., mutual assent. Mutual assent is determined under an
objective standard applied to the outward manifestations or expressions of the
parties, i.e., the reasonable meaning of their words and acts.” (Moritz v.
Universal City Studios LLC (2020) 54 Cal.App.5th 238, 246 [internal
citations and quotation marks omitted].) Mutual assent is determined under an
objective standard applied to the outward manifestations or expressions of the
parties, i.e., the reasonable meaning of their words and acts …’” (Chicago
Title Ins. Co. v. AMZ Ins. Services, Inc. (2010) 188 Cal.App.4th 401, 422.)
Here, there appears to be
no signature on the Warranty Booklet’s arbitration provision. (Exh. B.) Further,
Honda’s motion is completely silent on where the Warranty Booklet is located,
if it was given to Plaintiff, when it was given to Plaintiff, or any other
information which would allow the Court to evaluate its status as a binding
arbitration agreement. Given that Honda has not shown a signature nor
Plaintiff’s awareness of Warranty Booklet, it follows that they have failed to
evidence Plaintiff’s assent to arbitrate.
Conclusion
The Court finds that
neither the Lease Agreement nor the Warranty Booklet function to create an
enforceable arbitration agreement benefitting Defendant Honda. Honda’s
contention that these documents work in conjunction to create an enforceable
contract is unpersuasive. Neither document references the other and Honda has
failed to show that Plaintiff even received the Warranty Booklet. Accordingly,
the motion to compel arbitration is DENIED.
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RULING:
In the
event the parties submit on this tentative ruling, or a party requests a signed
order or the court in its discretion elects to sign a formal order, the
following form will be either electronically signed or signed in hard copy and
entered into the court’s records.
ORDER
American Honda Motor,
Co.’s Motion to Compel Arbitration came on regularly
for hearing on January 10, 2025, with appearances/submissions as noted in the
minute order for said hearing, and the court, being fully advised in the
premises, did then and there rule as follows:
THE MOTION TO COMPEL ARBITRATION IS DENIED.
THE CASE MANAGEMENT CONFERENCE SET FOR FEBRUARY
11, 2025 IS ADVANCED AND CONTINUED TO APRIL 9, 2025 AT 9:00 AM.
PLAINTIFF TO GIVE NOTICE.
IT IS SO
ORDERED.
DATE:
January 10, 2025 _______________________________
F.M.
TAVELMAN, Judge
Superior Court of California
County of
Los Angeles