Judge: Gary Y. Tanaka, Case: 22TRCV01200, Date: 2023-03-09 Tentative Ruling

Case Number: 22TRCV01200    Hearing Date: March 9, 2023    Dept: B

LOS ANGELES SUPERIOR COURT – SOUTHWEST DISTRICT

Honorable Gary Y. Tanaka                                                                                        Thursday, March 9, 2023
Department B                                                                                                                            Calendar No. 9

PROCEEDINGS

Deva Amiache v. Ford Motor Company, et al.

22TRCV01200

1.      Ford Motor Company and Airport Marina Ford’s Motion to Stay Entire Action

2.      Ford Motor Company and Airport Marina Ford’s Motion to Compel Arbitration and to Stay Action

TENTATIVE RULING

Ford Motor Company and Airport Marina Ford’s Motion to Stay Entire Action is moot, in part, and denied, in part.

Ford Motor Company and Airport Marina Ford’s Motion to Compel Arbitration and to Stay Action is denied.

Background

            Plaintiff filed the Complaint on November 10, 2022. Plaintiff alleges the following facts. Plaintiff alleges that her 2020 Ford Explorer suffers from transmission, engine, brake, and electrical defects. Plaintiff sets forth causes of action under the Song-Beverly Act as well as causes of action for Breach of the Implied Warranty of Merchantability and Negligence.  

            Motion to Compel Arbitration

            “California law reflects a strong public policy in favor of arbitration as a relatively quick and inexpensive method for resolving disputes.  [Citation.]  To further that policy, [Code of Civil Procedure] section 1281.2 requires a trial court to enforce a written arbitration agreement unless one of three limited exceptions applies.  [Citation.]  Those statutory exceptions arise where (1) a party waives the right to arbitration; (2) grounds exist for revoking the arbitration agreement; and (3) pending litigation with a third party creates the possibility of conflicting rulings on common factual or legal issues.  (§ 1281.2, subds. (a)–(c).)”  Acquire II, Ltd. v. Colton Real Estate Group (2013) 213 Cal.App.4th 959, 967.

            “The petitioner bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence, and a party opposing the petition bears the burden of proving by a preponderance of the evidence any fact necessary to its defense.  In these summary proceedings, the trial court sits as a trier of fact, weighing all the affidavits, declarations, and other documentary evidence, as well as oral testimony received at the court’s discretion, to reach a final determination.”  Giuliano v. Inland Empire Personnel, Inc. (2007) 149 Cal.App.4th 1276, 1284.

            “The party opposing arbitration has the burden of demonstrating that an arbitration clause cannot be interpreted to require arbitration of the dispute.  Nonetheless, this policy does not override ordinary principles of contract interpretation.  [T]he contractual terms themselves must be carefully examined before the parties to the contract can be ordered to arbitration:  Although [t]he law favors contracts for arbitration of disputes between parties, there is no policy compelling persons to accept arbitration of controversies which they have not agreed to arbitrate.”  Rice v. Downs (2016) 247 Cal.App.4th 1213, 1223 (internal citations and quotations omitted).

            In Rowe v. Exline (2007) 153 Cal.App.4th 1276, 1286, the Court of Appeal found that “a nonsignatory sued as an agent of a signatory may enforce an arbitration agreement.”  Id. at 1286.  In addition, “a nonsignatory who is the agent of a signatory can even be compelled to arbitrate claims against his will.”  Id. at 1285, citing Harris v. Superior Court (1986) 188 Cal.App.3d 475, 477–78.  Further, “in many cases, nonparties to arbitration agreements are allowed to enforce those agreements where there is sufficient identity of parties.”  Valley Casework, Inc. v. Comfort Construction, Inc. (1999) 76 Cal.App.4th 1013, 1021.  This includes nonparties as agents of a party as well as “a third party beneficiary of an arbitration agreement.”  Ibid. 

            “Under the 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. By relying on contract terms in a claim against a nonsignatory defendant, even if not exclusively, a plaintiff may be equitably estopped from repudiating the arbitration clause contained in that agreement. Where the equitable estoppel doctrine applies, the nonsignatory has a right to enforce the arbitration agreement.” Felisilda v. FCA US LLC (2020) 53 Cal.App.5th 486, 495–96 (internal citations and quotations omitted).

            First, Defendants’ motion “for an order to stay all proceedings and discovery in this action pending the resolution Defendants’ Motion to Compel Arbitration and Stay Proceedings (“Arbitration Motion”), which was filed on February 1, 2023” is deemed moot.  (Motion, page 1, lines 4-6.)  The motion to compel arbitration is being heard concurrently, and thus, any attempt to stay the proceedings prior to the hearing of this motion is now moot.  In addition, any attempt to stay the action is denied for the same reasons noted below.

            Second, Defendants move for an order compelling arbitration of Plaintiff’s claims and for an order for stay pending completion of arbitration.  The motion is made pursuant to Code of Civil Procedure §1281 et seq. and the FAA, on the grounds Plaintiff is bound by a written agreement to arbitrate the subject matter of the Complaint.  Defendants argue that a valid arbitration agreement exists between the parties that requires arbitration of Plaintiff’s claims.  

            Code Civ. Proc., § 1281.2 states, in relevant part: “On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate that controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists[. . .]” “Generally, an arbitration agreement must be memorialized in writing. A party's acceptance of an agreement to arbitrate may be express, as where a party signs the agreement. A signed agreement is not necessary, however, and a party's acceptance may be implied in fact or be effectuated by delegated consent. An arbitration clause within a contract may be binding on a party even if the party never actually read the clause.” Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236 (internal citations omitted).

            Defendants attached the California Motor Vehicle Lease Agreement (“lease”) which appears to indicate the existence of a lease between Plaintiff and an entity named Santa Monica Ford.  (Declaration of David M. Keithly, ¶ 2, Ex. B (misreferred to as Ex. A).)

            Moving Defendants have failed to establish that they are parties to the arbitration clause or that equitable estoppel principles allow them to enforce the arbitration provision.  As noted above, binding authorities exist to indicate that a non-signatory may enforce an arbitration provision. However, no competent evidence was submitted by moving parties to indicate that they are an agent of Santa Monica Ford, third party beneficiary of this entity, or that other circumstances exist, such as an identity of parties, to show that they can enforce the arbitration clause.  The only evidence submitted was in the form of the declaration of David Keithly.  The only evidence attached to the declaration was the above referenced lease, and an exhibit described as “cover pages and ITEM 1 (page 1) of Ford Motor Credit Company, LLC’s (“FMCC”) Annual Report on Form 10-K for the Year Ended December 31, 2019.  According to the Report, FMCC is ‘an indirect, wholly owned subsidiary of Ford Motor Company.’”  (Decl., David M. Keithly, ¶ 3). First, David M. Keithly fails to establish competency to testify as to the entity status and relationships of Ford Motor Company and FMCC.  Second, this statement and document makes no attempt to even address Airport Marina Ford.  Finally, this evidence does not establish the required relationship between the actual signatory on the lease, Santa Monica Ford, and moving party Ford Motor Company.  

            Defendants attempt to rely on the equitable estoppel principle delineated in Felisilda v. FCA US LLC (2020) 53 Cal.App.5th 486.  However, here, Defendants have failed to provide any facts or evidence to show that the causes of action against it is intimately founded and intertwined with the underlying contract obligation.  Only conclusory arguments set forth in the Memorandum of Points and Authorities were provided, with no underlying evidence.  Further, in Felisilda, it was actually the co-defendant dealership which moved to compel arbitration and also sought to include FCA in the arbitration within its own motion.  Such facts are lacking here.  Santa Monica Ford is not even a named Defendant in this action and did not move to compel arbitration.  Thus, there are no facts or evidence to show that moving parties herein can enforce an arbitration clause which is in the name of a completely different entity – Santa Monica Ford.

            As moving parties failed to meet their initial burden to show the existence of a valid arbitration clause between the parties, the burden does not shift to Plaintiff to show that the arbitration clause should not be enforced.  Rice, supra, 247 Cal.App.4th at 1223.

            Therefore, Defendants’ Motion to Compel Arbitration and to Stay Action is denied.  The Motion to Stay Action Prior to Hearing the Motion to Compel Arbitration is deemed moot.

            Plaintiff is ordered to give notice of this ruling.