Judge: Gail Killefer, Case: 23STCV17250, Date: 2024-03-22 Tentative Ruling
Case Number: 23STCV17250 Hearing Date: March 22, 2024 Dept: 37
HEARING DATE: Friday, March 22, 2024
CASE NUMBER: 23STCV17250
CASE NAME: Jordan Clark v. Mercedes-Benz USA, LLC, et al.
MOVING PARTY: Defendant Mercedes-Benz USA, LLC
OPPOSING PARTY: Plaintiff Jordan Clark
TRIAL DATE: Not Set
PROOF OF SERVICE: OK
PROCEEDING: Motion to Compel
Arbitration and Stay Action
OPPOSITION: 20 February 2024
REPLY: 26
February 2024
TENTATIVE: Defendant
MBUSA’s Motion to Compel Arbitration is denied. Defendant to give notice.
Background
I. Legal Standard
Parties may be compelled to arbitrate a dispute upon the
court finding that: (1) there was a valid agreement to arbitrate between the
parties; and (2) said agreement covers the controversy or controversies in the
parties’ dispute.¿(CCP § 1281.2; Omar v. Ralphs Grocery Co. (2004)¿118
Cal.App.4th 955, 961.)¿¿¿¿
¿¿¿¿¿
A party petitioning to compel arbitration has the burden of
establishing the existence of a valid agreement to arbitrate and the party
opposing the petition has the burden of proving, by a preponderance of the
evidence, any fact necessary to its defense. (Banner Entertainment, Inc. v.
Superior Court¿(1998) 62 Cal.App.4th 348, 356-57.)¿¿¿¿¿
¿¿¿¿
“If a court of competent jurisdiction, whether in this
State or not, has ordered arbitration of a controversy which is an issue
involved in an action or proceeding pending before a court of this State, the
court in which such action or proceeding is pending shall, upon motion of a
party to such action or proceeding, stay the action or proceeding until an
arbitration is had in accordance with the order to arbitrate or until such
earlier time as the court specifies.” (CCP § 1281.4.)
II. Request for Judicial Notice
The court may take judicial notice
of records of any court of record of the United States. (Evid. Code, §
452(d)(2).) However, the court may only judicially notice the existence of the
record, not that its contents are the truth. (Sosinsky v. Grant (1992) 6
Cal.App.4th 1548, 1565.)
Defendant MBUSA
requests judicial notice of the following:
1)
Plaintiff Jordan Clark’s Complaint,
filed on or about July 24, 2023, a true and correct copy of which is attached
to the Declaration of Ali Ameripour as Exhibit “1”.
Defendant MBUSA request for
judicial notice is granted.
Plaintiff requests judicial
notice of the following:
1)
Plaintiff’s complaint filed on June 4,
2021 in the matter of Mark Kielar v. Hyundai Motor America, Alameda Co. Case
No. RG21101556, attached hereto as Exhibit A.
2)
The Court Order granting Defendant’s
Motion to Transfer Venue to Placer County filed on February 28, 2022 in the
matter of Mark Kielar v. Hyundai Motor America, Alameda Co. Case No.
RG21101556, attached hereto as Exhibit B.
3)
The Alternative Writ filed in the
Second Appellate District, Division Five for the California Court of Appeal in
the matter of Isrrael Rodriguez Contreras v. Superior Court, Case No. B331737,
attached hereto as Exhibit C.
Plaintiff’s request for
judicial notice is granted at to Exhibit A but denied as to Exhibits B and C as
Plaintiff fails to show their relevance. (See American Cemwood Corp. v.
American Home Assurance Co. (2001) 87 Cal.App.4th 431, 441, fn. 7
[“Although a court may judicially notice a variety of matters (Evid. Code,
§¿450 et seq.), only relevant material may be noticed”] [italics
original].)
II. Discussion
Defendant MBUSA asserts that on
or about July 27, 2020, Plaintiff leased the subject vehicle from Fletcher
Jones Motor Cars Inc. and on that day executed a Lease that included an
Agreement to arbitrate. (Ameripour Decl. ¶
4, Ex. 2.) Pursuant to the arbitration clause in the Lease, Defendant
MBUSA now moves to compel arbitration of Plaintiff’s claims and stay the
action.
MBUSA asserts that it has
standing to compel arbitration under the Lease as a third party beneficiary and
under the doctrine of equitable estoppel. Defendant MBUSA is aware that there currently
exists a split in authority amongst the court of appeals as to whether the
vehicle manufacturer can compel arbitration pursuant to a sale or lease
agreement.
In Felisilda v. FCA US LLC (2020) 53 Cal.App.5th 486 (Felisilda),
the Third District Court of Appeal found that despite the vehicle manufacturer
not being a party to the sales contract containing the arbitration clause, the
vehicle manufacture could compel arbitration under the doctrine of equitable
estoppel because the plaintiffs’ claims were based on warranties they received
as part of the sale and that vehicle manufacture could also enforce the
arbitration clause as third-party beneficiaries to the sales contact.
However, since Felisilda, four published California
Court of Appeal decisions, including one from the Third District, have rejected
the holding of Felisilda, and the California Supreme Court has granted
review of the four cases: Ford Motor Warranty Cases (2023) 89
Cal.App.5th 1324 (Ford Motor); Montemayor v. Ford Motor Company
(2023)92 Cal.App.5th 958 (Montemayor); Kielar v. Superior Court
(2023) 94 Cal.App.5th 614, 620 (Kielar); Yeh v. Superior Court of
Contra Costa County (2023) 95 Cal.App.5th 264, 272. These four cases are in
line with Ngo v. BMW of North America, LLC
(9th Cir. 2022) 23 F.4th 942 (Ngo), wherein the
Ninth Circuit ruled that Felisilda did not
apply because the warranties from a manufacturer that is not a
party to the sale contract are “not part of the contract of sale” and that
express and implied warranties arise independently of the purchase agreement. (Id.
at p. 949)
Most recently, the Fourth
District in Davis v. Nissan North America, Inc.
(Cal. Ct. App., Mar. 15, 2024, No. D083006) 2024 WL 1130508, agreed
with the holding in Ford Motor, Montemayor, Kielar, and Yeh
and similarly found that equitable
estoppel does not apply and that “[u]nder
California law, manufacturer warranties
that accompany the sale of a vehicle without regard to the substantive terms of
the sale contract between the buyer and the dealer are independent of the sale
contract.” (Id. at p.*5.) The
Defendant MBUSA
asserts that the decisions in Ford Motor, Montemayor,
Kielar, and Yeh should be disregarded because they are currently
pending review by the California Supreme Court. However, Defendant fails to
provide any legal support for this contention.
California Rules of Court, rule 8.1115 states
that while an appellate court opinion is pending review “a published opinion of a Court of Appeal
in the matter has no binding or precedential effect, and may be cited for
potentially persuasive value only.”(CRC, rule 8.1115(e)(1); see also CRC, rule
8.1115(e)(2) [providing that after a decision for review has been granted, the
underlying opinion “is citable and has binding or precedential effect”].) The
Editor’s Comments as to rule 8.1115 explain that:
[S]uperior
courts may choose to be bound by parts of a published Court of Appeal decision
under review when those parts conflict with another published appellate court
decision. (See Auto Equity Sales, Inc. v. Superior Court
(1962) 57 Cal.2d 450, 456 (Auto Equity) [“where
there is more than one appellate court decision, and such appellate decisions
are in conflict[,] ... the court exercising inferior jurisdiction can and must
make a choice between the conflicting decisions”].)
(Editors’ Notes COMMENT CRC, rule 8.1115
[italics original].)
Here, the court exercises its discretion
in declining to follow Felisilda and applying the holdings of Ford Motor, Montemayor,
Kielar, and Yeh which hold that the manufacturer’s vehicle
warranties rise independently of the sales contract and the vehicle
manufacturer cannot compel arbitration under the doctrine of equitable estoppel
or as a third party beneficiary.
Here, Defendant MBUSA fails to show that
Plaintiff’s claims are inextricably linked bound by the obligations imposed by
the Lease because the manufacturer warranties of the subject vehicle that
accompany the sale of a motor vehicle are independent of the sale contract. (Ford Motor, supra, 89 Cal.App.5th at p.
1334; Yeh, supra, 95 Cal.App.5th at p. 278.) The court is further
unpersuaded that Defendant MBUSA can enforce the arbitration agreement as a
third party beneficiary because “ ‘[t]he ‘third party’ language in the arbitration
clause means that if a purchaser asserts a claim against the dealer (or its
employees, agents, successors or assigns) that relates to one of these third
party transactions, the dealer can elect to arbitrate that claim. It says nothing
of binding the purchaser to arbitrate with the universe of unnamed third
parties.’ ”(Montemayor, supra, 92 Cal.App.5th at p. 971 citing Ford
Warranty at pp. 1335; see also Kielar, supra, 94 Cal.App.5th at
p. 621; Yeh at p. 278.)
Based on the foregoing, Defendant MBUSA’s
Motion is denied.
Conclusion
Defendant MBUSA’s Motion to Compel Arbitration is denied.
Defendant to give notice.