Judge: Gregory Keosian, Case: 22STCV27020, Date: 2023-01-09 Tentative Ruling

Case Number: 22STCV27020    Hearing Date: January 9, 2023    Dept: 61

Defendants Ford Motor Company, Inc. and For of Montebello’s Motion to Compel Arbitration is DENIED.

I.                MOTION TO COMPEL ARBITRATION

On petition of a party to an arbitration agreement to arbitrate a controversy, a court must order the petitioner and respondent to arbitrate the controversy if it determines the arbitration agreement exists, unless (1) the petitioner has waived its right to arbitrate; (2) grounds exist for the revocation of the agreement; or (3) “[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.” (Code Civ. Proc., § 1281.2.)

“[T]he party moving to compel arbitration bears the burden of establishing the existence of a valid agreement to arbitrate, and the party opposing arbitration bears the burden of proving by a preponderance of the evidence any fact necessary to its defense. The role of the trial court is to sit as a trier of fact, weighing any affidavits, declarations, and other documentary evidence, together with oral testimony received at the court's discretion, to reach a determination on the issue of arbitrability.” (Hotels Nevada v. L.A. Pacific Center, Inc. (2006) 144 Cal.App.4th 754, 758.)

Defendants Ford Motor Company and Ford of Montebello present an arbitration agreement signed by Plaintiff Lucia Mendez Jaimes (Plaintiff) upon her lease of the vehicle in question, which includes an arbitration provision. That provision applies to “any claim, dispute, or controversy . . . related to this contract.” (Proudfoot Decl. Exh. A.) These claims include “1) Claims in contract, tort, regulatory or otherwise, 2) Claims regarding the interpretation, scope, or validity of this provision, or arbitrability of any issue except class certification; 3) Claims between you and us, our employees, agents, successors, assigns, subsidiaries, or affiliates; 4) Claims arising out of or relating to your application for credit, this contract, or any resulting transaction or relationship, including that with the dealer, or any such relationship with third parties who do not sign this contract.” (Proudfoot Decl. Exh. A.) The “lessor” under this agreement is Defendant Ford of Montebello. Defendant Ford Motor Company is not a signatory to this agreement, but argues that it may enforce the agreement either as a third party beneficiary or under the doctrine of equitable estoppel. (Motion at pp. 6–9.)

Plaintiff in opposition argues that the arbitration clause applies only to claims “related to this contract,” and since her claims sound in the law of warranty and negligence, do not fall within the ambit of the arbitration provision. (Opposition at pp. 9–12.) Plaintiff also argues that the arbitration agreement cannot be enforced as it has been revoked pursuant to the Song Beverly Act. (Opposition at pp. 12–14.) Finally, Plaintiff argues that the agreement is unconscionable. (Opposition at pp. 16-19.)

Plaintiff is correct that the arbitration agreement here, which pertains to disputes “related to this [lease] contract,” does not apply to her claims. Plaintiff’s claims are of two sorts: those addressed to Ford Motor Company, which relate to warranties apart from the agreement at issue, and one claim addressed to signatory Ford of Montebello, which relates to negligent repairs of the vehicle performed after execution of the agreement. Neither of these claims relates to the lease agreement or any term thereof, save by the fact that the lease agreement brought Plaintiff into possession of the vehicle. Although Defendants correctly argue that arbitration agreements must be “liberally interpreted” (Motion at p. 6, citing Weeks v. Crow (1980) 113 Cal.App.3d 350, 352), they may not be interpreted to embrace claims clearly beyond the scope of their terms, and which do not “have their roots in the relationship between the parties which was created by the contract.” (See Rice v. Downs (2016) 248 Cal.App.4^th 175, 186.)

Corroborating this conclusion is the case of Felisilda v. FCA US LLC (2020) 53 Cal.App.5^th 486, 498. There, the court determined that a manufacturer of a vehicle could enforce the arbitration agreement executed by the dealer and the purchaser, based on the doctrine of equitable estoppel as applied to an arbitration provision that — the court emphasized — “expressly agreed to arbitrate claims arising out of the condition of the vehicle – even against third party nonsignatories to the sales contract.” (Felisilda, supra, 43 Cal.App.5^th at p. 497.) Here, there is no language in the arbitration agreement regarding the condition of the vehicle, which is the foundation of Plaintiff’s claims.

The motion is therefore DENIED.