Judge: George F. Bird, Jr., Case: 22CMCV00446, Date: 2023-03-07 Tentative Ruling

“INSTRUCTIONS:
If the parties wish to submit on the tentative ruling and avoid a court
appearance on the matter, the moving party must:

1. Contact the opposing party and all other
parties who have appeared in the action and confirm that each will submit on the
tentative ruling.

2. No later than 4:00 p.m. on the court day
before the hearing, call the Courtroom (310-761-4302) advising that all parties
will submit on the tentative ruling and waive hearing; and

3. Serve notice of the Court's ruling on all
parties entitled to receive service.

If this procedure is followed, when the case is
called the Court will enter its ruling on the motion in accordance with its
tentative ruling. If any party declines to submit on the tentative ruling, then
no telephone call is necessary, and all parties should appear at the hearing.
If there is neither a telephone call nor an appearance, then the matter may
either be taken off calendar or ruled on. 

Case Number: 22CMCV00446    Hearing Date: March 7, 2023    Dept: B

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES – SOUTH CENTRAL DISTRICT

I.       BACKGROUND

            Plaintiffs Alejandra Patino, Liliana Jacinto, and Oscar Hoil (“Plaintiffs”) filed the Complaint in this action on October 25, 2022. Plaintiffs allege they purchased a new 2021 Nissan Altima (the “Vehicle”) on November 16, 2021. (Complaint (“Compl.”), ¶ 8.) Plaintiffs allege that they received an express written warranty in which Nissan North America, Inc. (“Defendant”) undertook to preserve or maintain the utility or performance of the Vehicle or provide compensation for failures. (Compl., ¶ 9.) Plaintiffs allege that the Vehicle has an emergency braking system defect that is not in conformity with the warranty provided. (Compl., ¶ 11.) Plaintiffs now bring causes of action against Defendant for (1) violation of the Song-Beverly Consumer Warranty Act, (2) fraudulent inducement – intentional misrepresentation, and (3) fraudulent inducement – concealment.

II.       MOTION TO COMPEL ARBITRATION AND STAY PROCEEDINGS

A.    Motion filed on December 14, 2022.

            Defendant filed this Motion to Compel Arbitration and Stay Proceedings (“Motion”) alleging that Defendant may enforce the arbitration provision found in the Retail Installment Sale Contract (the “Sale Contract”) Plaintiffs signed when they purchased the Vehicle. Defendant argues they can enforce the arbitration provision on either a theory of equitable estoppel or as a third-party beneficiary.

B.     Opposition filed on February 22, 2023.

            Plaintiffs argue that the Sale Contract between Alejandra Patino, Liliana Jacinto, and Carson Nissan cannot be enforced by Defendant as to Alejandra Patino and Liliana Jacinto because the Sale Contract is allegedly unconscionable, the claims here do not arise from or relate to the obligations in the Sale Contract, and Defendant does not show a close relationship with Carson Nissan sufficient to allow Defendant to enforce the arbitration provision. Plaintiffs argue that the arbitration provision is unenforceable as to Oscar Hoil because Oscar Hoil is not a signatory to the Sale Contract.

C.     Reply filed on February 28, 2023.

            Defendant argues that state law applies to determine the scope and enforceability of the arbitration agreement, thus Felisilda v. FCA US LLC, (2020) 53 Cal.App.5th 486 (hereinafter “Felisilda”), is binding authority on this Court. Defendant argues that Felisilda allows a nonsignatory manufacturer to enforce an arbitration agreement against parties to a Sale Contract of a vehicle on a theory of equitable estoppel. Defendant also advances the theory that they can enforce the Sale Contract arbitration provision as a third-party beneficiary.

III.       LEGAL STANDARDS

            A written arbitration agreement is “valid, enforceable and irrevocable” unless grounds for revocation of any contract exist. (Code Civ. Proc., § 1281.) The court shall order the parties to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists unless grounds exist for rescission of the agreement. (Code Civ. Proc., § 1281.2, subd. (b).) If the court orders arbitration, the court shall stay the action or proceeding. (Code Civ. Proc., § 1281.4.)

            If the parties specifically contract to designate that the FAA controls the arbitration agreement, then the FAA governs rather than state procedural law. (Rodriguez v. American Technologies, Inc. (2006) 136 Cal.App.4th 1110, 1115.) Under Section 2 of the FAA and state law, written arbitration agreements are valid, irrevocable, and enforceable “save upon such grounds as exist at law or in equity for the revocation of a contract.” (Arthur Andersen LLP v. Carlisle (2009) 556 U.S. 624, 629–630; Bickel v. Sunrise Assisted Living (2012) 206 Cal.App.4th 1, 8.) However, state law is applicable to determine which contracts are binding under Section 2 and enforceable under Section 3. (Arthur Andersen LLP v. Carlisle, supra., 556 U.S. at pp. 630-631.)

            If the court compels arbitration, Section 3 of the FAA "requires the court, ‘on application of one of the parties,’ to stay the action if it involves an ‘issue referable to arbitration under an agreement in writing.’ 9 U.S.C. § 3.” (Arthur Andersen LLP v. Carlisle, supra., 556 U.S. at p.  630.)

IV.       EVIDENTIARY OBJECTIONS

            Plaintiffs object to the declaration of Scott D. Sharp, counsel for Defendant, who attempts to present “a true and correct copy of what I am informed and believe is the Retail Installment Sale Contract.” (Decl. of Scott Sharp, ¶ 3.) This Court SUSTAINS the objection. While Scott Sharp lacks the knowledge to provide a proper foundation for the evidence, Plaintiffs directly cite to the Retail Installment Sale Contract presented in the declaration of Scott Sharp and Plaintiffs rely on the authenticity of the agreement presented for their arguments. (See Opposition p. 5:17-19, 12:7-11.) Because both parties rely on the evidence provided by Scott Sharp, the Court will treat this as a stipulation by the parties that the Retail Installment Sale Contract presented as Exhibit B in the declaration of Scott Sharp is a true and correct copy of the Sale Contract at issue here.

V.          DISCUSSION

A.    Applicable law

            The parties dispute which laws the court must apply. Though the arbitration provision of the Sale Contract states that any arbitration under the agreement will be governed by the Federal Arbitration Act (“FAA”), state law still governs the enforceability and scope of the Sale Contract and arbitration provision. (See Decl. of Scott Sharp, Exhibit B, p. 7.)
            When the Supreme Court of the United States analyzed how the FAA provisions impacted the applicability of state law, the Supreme Court of the United States determined “Neither provision purports to alter background principles of state contract law regarding the scope of agreements (including the question of who is bound by them). Indeed § 2 explicitly retains an external body of law governing revocation (such grounds ‘as exist at law or in equity’). And we think § 3 adds no substantive restriction to § 2's enforceability mandate. ‘[S]tate law,’ therefore, is applicable to determine which contracts are binding under § 2 and enforceable under § 3 ‘if that law arose to govern issues concerning the validity, revocability, and enforceability of contracts generally.’” (Arthur Andersen LLP v. Carlisle (2009) 556 U.S. 624, 631 [129 S.Ct. 1896, 1902, 173 L.Ed.2d 832].)

            This Court will apply state law to determine the enforceability of this Sale Contract.

B.     Unconscionability

            “Courts may refuse to enforce unconscionable contracts and this doctrine applies to arbitration agreements. [Citation.]” (Salgado v. Carrows Restaurants, Inc. (2019) 33 Cal.App.5th 356, 362 [244 Cal.Rptr.3d 849, 853, 33 Cal.App.5th 356, 362], as modified (Mar. 25, 2019).) The decision of unconscionability is left to the court, not an arbitrator. (Bickel v. Sunrise Assisted Living, supra, 206 Cal.App.4th at p. 8.) To find an agreement unconscionable, the court must find both procedural and substantive unconscionability. (Sanchez v. Valencia Holding Co., LLC (2015) 61 Cal.4th 899, 910 [190 Cal.Rptr.3d 812, 820, 353 P.3d 741, 748] (hereinafter “Sanchez”).) Though both types of unconscionability must be present, they do not need to be present in equal amounts. The Supreme Court of California expressed that procedural and substantive unconscionability work as a sliding scale, so “the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.” (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114 [99 Cal.Rptr.2d 745, 767, 6 P.3d 669, 690].)

            Procedural unconscionability focuses on the oppression or surprise due to unequal bargaining power between the parties generally demonstrated by a contract of adhesion which is “imposed and drafted by the party of superior bargaining strength, relegates to the subscribing party only the opportunity to adhere to the contract or reject it. [Citations.]” (Internal quotations omitted.) (Nyulassy v. Lockheed Martin Corp., supra, 120 Cal.App.4th at pp. 1280–1281.) Plaintiffs argue that the Sale Contract is procedurally unconscionable because it is a contract of adhesion, the terms of the FAA were not provided upon signing, and that Alejandra Patino and Liliana Jacinto were forced to give up their statutory right to redress.

            In Sanchez, the Supreme Court of California reviewed a motion to compel arbitration by a car dealer against car buyers based on an arbitration provision in a sale contract. (Sanchez v. Valencia Holding Co., LLC, supra, 61 Cal.4th at p. 906.) The plaintiffs argued that the sale contract was unconscionable as it was a contract of adhesion. (Id. at 915.) While the Supreme Court of California agreed that the adhesive nature of the sale contract established some degree of unconscionability, “a finding of procedural unconscionability does not mean that a contract will not be enforced.” (Internal quotations omitted.) (Sanchez v. Valencia Holding Co., LLC, supra, 61 Cal.4th at p. 915.)

            Here, Plaintiffs allege that the contract was one of adhesion and presented on a ‘take it or leave it basis.’ As noted in Sanchez, the dealership is under no obligation to highlight or explain to buyers the arbitration clause in the Sale Contract. (Id. at 914.) The arbitration provision is on its own page within the agreement and outlined in a separate box. (Decl. Scott Sharp, Exhibit B, p. 7.) Plaintiffs Alejandra Patino and Liliana Jacinto signed the bottom of the page containing the arbitration provision indicating they were aware that the arbitration agreement was part of the Sale Contract. (Ibid.) Though Plaintiffs argue that this is a high-pressure situation in which Plaintiffs needed to purchase a vehicle, and thus they had to subject themselves to the arbitration agreement, the Court does not find any facts alleged or demonstrated by evidence that the signatory Plaintiffs were pressured, rushed, or denied the ability to negotiate the terms of the Sale Contract. The procedural unconscionability due to the adhesive nature of the Sale Contract is low.

            Plaintiffs also object that a copy of the arbitration rules were not provided at the time of signing the Sale Contract, which makes the agreement procedurally unconscionable. The Court of Appeal in Cisneros Alvarez v. Altamed Health Services Corporation, (2021) Cal.App.5th 572, states “the failure to provide a copy of the arbitration rules generally raises procedural unconscionability concerns only if there is a substantively unconscionable provision in the omitted rules.” (Cisneros Alvarez v. Altamed Health Services Corporation, (2021) Cal.App.5th 572, 590.) Plaintiffs do not argue that any excluded provisions of the arbitration are unconscionable, thus this argument does not add to the procedural unconscionability of the Sale Contract.

            Finally, Plaintiffs still have a right to seek relief for the alleged defects in the Vehicle through arbitration or small claims court. The agreement specifically leaves open avenues of redress through arbitration, small claims, or other available self-help remedies. (Decl. Scott Sharp, Exhibit B, p. 7.) Though Plaintiffs may view arbitration as a less convenient forum to address their claims, the Court cannot undue a bad bargain through the doctrine of unconscionability. (Sanchez v. Valencia Holding Co., LLC, supra, 61 Cal.4th at p. 911.)

            Because the level of procedural unconscionability is low, Plaintiffs must demonstrate a higher degree of substantive unconscionability to support a finding that the Sale Contract is unconscionable. Substantive unconscionability determines if the terms of the agreement are so one-sided as to “shock the conscience.” (Kinney v. United HealthCare Services, Inc. (1999) 70 Cal.App.4th 1322, 1330 [83 Cal.Rptr.2d 348].)

            Plaintiffs argue that the Sale Contract terms are unfairly one-sided because the arbitration forum selection clause allows Plaintiffs to select a forum subject to Defendants approval. The arbitration provision at issue here states “You may choose the American Arbitration Association, 1633 Broadway, 10th Floor, New York, New York 10019 (www.adr.org), or any other organization to conduct the arbitration subject to our approval.” (Decl. of Scott Sharp, Exhibit B, p. 7.) This provision is unbalanced. In practice, Plaintiffs are simply suggesting arbitration forums and Defendant has the ultimate say as to which forum the parties will be arbitrating in. This demonstrates some level of substantive unconscionability.

            Plaintiffs again argue that the arbitration provision deprives them of their right to a trial by jury. This argument is not persuasive to this Court. Plaintiffs have several avenues of redress including arbitration and “A party cannot avoid a contractual obligation merely by complaining that the deal, in retrospect, was unfair or a bad bargain.” (Sanchez v. Valencia Holding Co., LLC, supra, 61 Cal.4th at p. 911.) This argument adds no weight to the substantive unconscionability analysis.

            Plaintiffs next argue that the arbitration provision has a fee shifting clause that burdens Plaintiffs. The arbitration provision states “We will pay your filing, administration, service or case management fee and your arbitrator or hearing fee all up to a maximum of $5000, unless the law or the rules of the chosen arbitration organization require us to pay more. The amount we pay may be reimbursed in whole or in part by decision of the arbitrator if the arbitrator finds that any of your claims is frivolous under applicable law. Each party shall be responsible for its own attorney, expert and other fees, unless awarded by the arbitrator under applicable law.” (Decl. of Scott Sharp, Exhibit B, p. 7.)

            In Sanchez, the Supreme Court of California concluded “an ability-to-pay approach is appropriate in the context of consumer arbitration agreements.” (Sanchez v. Valencia Holding Co., LLC, supra, 61 Cal.4th at p. 920.) The analysis of fee shifting should be analyzed on a case-by-case basis to determine if the fees are so unreasonably high as to limit access to the arbitration remedy. (Ibid.) The provision cannot be deemed unconscionable “absent a showing that appellate fees and costs in fact would be unaffordable or would have a substantial deterrent effect.” (Ibid.)

            Here, Defendant will cover costs up to $5,000.00 and Plaintiffs argue that these costs are routinely exceeded in private arbitrations. Plaintiffs present several arbitration service charges in separate matters to demonstrate that the costs will exceed $5,000.00. (Decl. Jeffery Mukai, counsel for Plaintiffs, ¶ 5.) While the highest charge presented is over $9,000.00, the inquiry is not if Plaintiffs will have to bear costs over the $5,000.00, but if Plaintiffs have the ability to pay the costs. Plaintiffs have not demonstrated that they would be unable to pay the arbitration costs over the $5,000.00 that Defendant has agreed to pay. The condition that costs and fees may be reimbursed if the claims by Plaintiffs are deemed frivolous is in line with case law that a prevailing employer is limited to collect attorney’s fees when the action is determined to be frivolous, unreasonable, or groundless. (Cummings v. Benco Building Services (1992) 11 Cal.App.4th 1383, 1388 [15 Cal.Rptr.2d 53, 56].) This provision is not substantively unconscionable.

            Finally, Plaintiffs argue that some provisions skew the benefit of the bargain towards Defendant even though the provisions look neutral on their face. Plaintiffs argue that allowing the parties to retain the right to seek remedies in small claims court benefits Defendant as they are more likely to avail themselves to small claims jurisdiction. Plaintiffs also argue that provisions excluding resort to self-help from arbitration is not bilateral as a consumer will never resort to self-help by repossession.

            The Supreme Court of California in Sanchez addressed these same arguments when weighing substantive unconscionability and stated “the contract provision that preserves the ability of the parties to go to small claims court likely favors the car buyer. Second, arbitration is intended as an alternative to litigation, and the unconscionability of an arbitration agreement is viewed in the context of the rights and remedies that otherwise would have been available to the parties. (See Sonic II, supra, 57 Cal.4th at pp. 1146–1148, 163 Cal.Rptr.3d 269, 311 P.3d 184.) Self-help remedies are, by definition, sought outside of litigation, and they are expressly authorized by statute…. Moreover, it is undisputed that the remedy of repossession of collateral is an integral part of the business of selling automobiles on credit and fulfills a “ ‘legitimate commercial need.’ ” (Armendariz, supra, 24 Cal.4th at p. 117, 99 Cal.Rptr.2d 745, 6 P.3d 669.)” (Sanchez v. Valencia Holding Co., LLC, supra, 61 Cal.4th at p. 922.) The provisions allowing small claims court actions and self-help remedies are not substantively unconscionable.

            As there is only minimal procedural unconscionability and minimal substantive unconscionability, this does not satisfy the sliding scale test for a finding that the Sale Contract is unconscionable.

C.     Compelling arbitration - Alejandra Patino and Liliana Jacinto

            Plaintiffs Alejandra Patino and Liliana Jacinto do not contest that they signed the Sale Contract with Carson Nissan which contains the arbitration provision at issue here. Plaintiffs argue that Defendant was not a party to the Sale Contract and therefore cannot compel Plaintiffs to arbitrate their claims.

            Defendant argues that they may enforce the arbitration provision of the Sale Contract through the doctrine of equitable estoppel. “Under the doctrine of equitable estoppel, ‘as applied in ‘both federal and California decisional authority, 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.’” (Felisilda v. FCA US LLC, supra, 53 Cal.App.5th at p. 495.) “In determining whether the plaintiffs’ claim is founded on or intimately connected with the sales contract, we examine the facts of the operative complaint.” (Id. at 496.)

            The Complaint here alleges causes of action under the Song-Beverly Consumer Warranty Act and fraud related to misrepresentations about the emergency breaking system in the Vehicle. Plaintiffs specify that the “cause(s) of action for violations of the Song-Beverly Act arise from warranty obligations of NISSAN in connection with a vehicle purchased by Plaintiff(s).” Plaintiffs argue that the warranty which is allegedly breached by Defendant failing to repair or replace the Vehicle is not an obligation in the Sale Contract, but a separate warranty independent of the Sale Contract.

            In Felisilda, the warranties at issue “accompanied the sale of the vehicle” in which the manufacturer undertook to preserve the utility of the vehicle or provide compensation if there was a failure. (Felisilda v. FCA US LLC, supra., 53 Cal.App.5th at p. 496.) Based on these facts, the Court of Appeal determined “Thus, the sales contract was the source of the warranties at the heart of this case.” (Ibid.) The Court of Appeal recognized that the warranties received were “a consequence of the sale contract.” (Id. at 497.) The definition of an express warranty is “A written statement arising out of a sale to the consumer of a consumer good…” which further demonstrates that an express warranty arises out of the sale. (Civil Code § 1791.2, subd. (a)(1).)

            Here, as in Felisilda, the Sale Contract is the ultimate source of the warranty provided by Defendant. The warranty is not provided but for the Sale Contract. The claims for violation of the warranty are sufficiently founded on and arise out of the obligations in the Sale Contract.

            Additionally, signatory Plaintiffs Alejandra Patino and Liliana Jacinto agreed to arbitrate

“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 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 do not sign this contract)….” (Decl. Scott Sharp, Exhibit B, p. 7.)

            Plaintiffs’ claims under the Song-Beverly Consumer Warranty Act relate to the condition of the emergency braking system on the Vehicle, and Plaintiffs have agreed to arbitrate claims related to the condition of the Vehicle. Plaintiffs allege that the misrepresentations induced them to purchase the Subject Vehicle, and Plaintiffs have agreed to arbitrate claims that arise out of the purchase of the Vehicle. (Compl., ¶ 92.) Plaintiffs’ claims are subject to the arbitration provision.

            Felisilda considered and rejected federal authority cited by Plaintiffs. Notably, Plaintiff extensively relies on Ngo v. BMW of N. Am., LLC, (9th Cir. 2022) 23 F.4th 942, which disagrees with the state court’s interpretation and concluded that equitable estoppel did not apply since the manufacturer’s warranties arose “independently from the Purchase Agreements, rather than intimately relying on them.” (Ngo v. BMW of N. Am., LLC, (9th Cir. 2022) 23 F.4th 942, 950.) Given that Felisilda is a California appellate court opinion that interprets an arbitration provision with identical language as the Sales Contract here, it is binding authority. This Court will not rely on persuasive federal authority when binding state authority correctly addresses the present issue.

            Plaintiffs also argue that Defendant failed to demonstrate a ‘close relationship’ between the signatory dealer and Defendant to allow Defendant to enforce the arbitration provision of the Sale Contract on a theory of equitable estoppel. Plaintiffs point to Jarboe v. Hanlees Auto Group (2020) 53 Cal.App.5th 539 in which the Court of Appeal did not allow nonsignatory dealerships to enforce an arbitration provision because each of the dealerships were a separate corporate entity. This case is readily distinguishable as the relationship between the 12 dealerships at issue in Jarboe is not a parallel to the relationship at issue here between a Nissan brand dealership and the Defendant, the Nissan manufacturer. While not directly at issue before the Court of Appeal in Felisilda, the same relationship of a signatory dealership and the defendant manufacturer existed, and the Court of Appeal allowed defendant to compel arbitration on a theory of equitable estoppel. (Felisilda v. FCA US LLC, surpa, 53 Cal.App.5th at p. 497.) This Court finds that the relationship between the manufacturer and the signatory dealership is sufficiently close.

            Plaintiffs attempt to distinguish from Felisilda by arguing that both the dealership and the manufacturer were compelled to arbitrate in Felisilda while here, Plaintiffs have only brought these causes of action against the manufacturer, not the dealer. Again, Plaintiffs rely on  Ngo v. BMW of N. Am., LLC, (9th Cir. 2022) 23 F.4th 942. This Court has already determined that Felisilda is binding authority and that conflicting interpretation under Ngo will not be relied upon.

            As to Plaintiffs Alejandra Patino and Liliana Jacinto, who signed the Sale Contract, Defendant may compel these parties to arbitrate on a theory of equitable estoppel.

D.    Compel arbitration - Oscar Hoil

            It is unclear to the Court what interest Plaintiff Oscar Hoil has in this action. Oscar Hoil did not sign the Sale Contract at issue, but Plaintiffs allege in the Complaint that “Plaintiff(s) entered into an express written contract with NISSAN” and “Plaintiff(s) hereby revokes acceptance of the Subject Vehicle. Plaintiff(s) also reasonably revoked acceptance of the Subject Vehicle by contacting NISSAN, demanding that the Subject Vehicle be repurchased pursuant to the Song-Beverly Act.” (Compl., ¶¶ 9, 10.) “Plaintiff(s)” is defined as including “ALEJANDRA PATINO, LILIANA JACINTO, and OSCAR HOIL.” (Compl., ¶ 1.)

            “A nonsignatory plaintiff can be compelled to arbitrate a claim even against a nonsignatory defendant, when the claim is itself based on, or inextricably intertwined with, the contract containing the arbitration clause.” (JSM Tuscany, LLC v. Superior Court (2011) 193 Cal.App.4th 1222, 1241 [123 Cal.Rptr.3d 429, 445].) The causes of action in the Complaint against Defendant are for (1) violation of the Song-Beverly Consumer Warranty Act, (2) fraudulent inducement – intentional misrepresentation, and (3) fraudulent inducement – concealment.

            As discussed above, the Song-Beverly Consumer Warranty Act claims are intertwined with the Sale Contract containing the arbitration clause. Plaintiffs Complaint states that the “fraud related causes of action arise out of the facts that surround the misrepresentations and concealment of material facts at the time Plaintiff(s) purchased a new motor vehicle. The transaction which resulted from misrepresentations and concealment of material facts occurred in Carson, County of Los Angeles, California.” (Compl., ¶ 4.) Plaintiffs purchased the Vehicle at issue through the Sale Contract and the misrepresentations at issue relate to the breaking defect. Plaintiffs allege that the misrepresentations induced them to purchase the Subject Vehicle. (Compl., ¶ 92.) Such disputes are sufficiently intertwined with the Sale Contract to allow Defendant to compel arbitration as to nonsignatory Plaintiff  Oscar Hoil.

            As this Court has concluded Defendant may compel arbitration as to all Plaintiffs, the Court need not address the merits of Defendant’s third-party beneficiary theory.

VI.       CONCLUSION

            Based on the foregoing, this Motion to Compel Arbitration and Stay Proceedings is GRANTED. The action is stayed pursuant to 9 U.S.C. § 3 of the FAA. The court sets an Order to Show Cause Re: Completion of Arbitration for ____________________ at 8:30 a.m. in Department B of the Compton Courthouse.

Dated:                                                                         __________________________________