Judge Holly J. Fujie, Case Number: 24STCV09712, Date: 2024-10-10 Tentative Ruling

Corporation (“Bridgecrest”) and Developers Surety and Indemnity Company (“Developers”)

The Court has considered the moving papers. No opposition has been filed. Any opposition was required to have been filed and served at least nine court days prior to the hearing. (Code Civ. Proc., § 1005, subd. (b).)

This case stems from a vehicle that Plaintiff purchased from Carvana in 2022. On April 17, 2024, Plaintiff filed a complaint (“Complaint”) asserting the following causes of action: (1) Violations of the Consumers Legal Remedies Act; (2) Intentional Misrepresentation; (3) Concealment; (4) Negligent Misrepresentation; (5) Breach of the Implied Warranty of Merchantability; (6) Violations of the Unfair Competition Law; and (7) Cause of Action under Vehicle Code § 11711.

On June 25, 2024, Defendants filed the present Motion to Compel Arbitration and Stay Action (the “Motion”), seeking to compel Plaintiff to arbitrate her claims in this matter and to stay this action pending completion of arbitration. The Motion is unopposed.

“California law reflects a strong public policy in favor of arbitration as a relatively quick and inexpensive method for resolving disputes. To further that policy, section 1281.2 requires a trial court to enforce a written arbitration agreement unless one of three limited exceptions applies. 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.” (Acquire II, Ltd. v. Colton Real Estate Group (2013) 213 Cal.App.4th 959, 967; Code Civ. Proc., § 1281.2.) Similarly, “under the FAA, the strong federal policy favoring arbitration agreements requires courts to resolve any doubts concerning arbitrability in favor of arbitration.” (Valencia v. Smyth (2010) 185 Cal.App.4th 153, 176 (internal quotations omitted).)

In deciding a petition to compel arbitration, trial courts must decide first whether an enforceable arbitration agreement exists between the parties, and then determine the second gateway issue whether the claims are covered within the scope of the agreement. (Omar v. Ralphs Grocery Co. (2004) 118 Cal.App.4th 955, 961.) The opposing party has the burden to establish any defense to enforcement. (Gatton v. T-Mobile USA, Inc. (2007) 152 Cal.App.4th 571, 579 [“The petitioner, T–Mobile here, bears the burden of proving the existence of a valid arbitration agreement and the opposing party, plaintiffs here, bears the burden of proving any fact necessary to its defense.”].)

Procedurally, a petition to compel arbitration or stay proceedings must state verbatim the provisions providing for arbitration, or must have a copy of them attached. (Cal. R. Ct., rule 3.1330.)

“With respect to the moving party’s burden to provide evidence of the existence of an agreement to arbitrate, it is generally sufficient for that party to present a copy of the contract to the court.” (Baker v. Italian Maple Holdings, LLC (2017) 13 Cal.App.5th 1152, 1160.)

Here, Defendants have met the initial burden of showing that an arbitration agreement exists between the parties. Defendants submitted the declaration of Brittnee Penson, Senior Manager, Customer Experience, Operational Development at Carvana, who attested that on November 15, 2022, Plaintiff purchased a 2020 Hyundai Tucson (the “Vehicle”) from Carvana. (Declaration of Brittnee Penson in Support of the Motion [“Penson Decl.”], ¶ 3.) On said date, Plaintiff signed, using DocuSign, both the Retail Purchase Agreement (the “Contract”) and the arbitration agreement (“Arbitration Agreement”) that was entered into in connection with the purchase of the Vehicle. (Id., ¶¶ 3-5; Exhs. A, B and C.) The Arbitration Agreement provided Plaintiff the right to opt out of the arbitration agreement within thirty days by emailing a rejection notice to Carvana, but Carvana has no record of receiving a rejection notice from Plaintiff. (Id., ¶ 6; Exh. A.)

The Arbitration Agreement, in pertinent part, provides that “Claim[s] shall be resolved through binding and final arbitration instead of through court proceedings…” (Arbitration Agreement, § 2.) Arbitrable “Claims” are defined broadly to include “any claims . . . disputes, or controversies between [Plaintiff] and [Defendants] . . . relating to or arising from,” among other things: (1) the “Vehicle,” including its “condition;” (2) Plaintiff’s “purchase . . . of the Vehicle;” (3) “advertisements, promotions, or oral or written statements regarding the Vehicle or the Contracts;” (4) the “Contracts, and duties or relationships arising therefrom;” and (5) “any goods or services incidental to the Contracts or the Vehicles, such as warranty service [or] extended vehicle service.” (Id., § 1.2.)

In her Complaint, Plaintiff asserts that at the time of sale, Carvana allegedly did not accurately disclose the Vehicle’s prior use and current condition, and allegedly did not make requested repairs to the Vehicle after it was sold to Plaintiff. (Compl., ¶¶ 16-20, 23-24.) Thus, Plaintiff’s claims as alleged in the Complaint fall squarely under the Arbitration Agreement.

Because Defendants established the existence of a valid and binding arbitration agreement, the burden shifts to Plaintiff to show why the Arbitration Agreement should not be enforced. Since the Motion is unopposed, it is undisputed that Plaintiff affirmatively consented to the Arbitration Agreement and that the Arbitration Agreement covers the claims asserted in the Complaint. Thus, there is no dispute that the present action is subject to arbitration pursuant to the Arbitration Agreement.

The Arbitration Agreement defines the parties to the agreement as not only Carvana and Plaintiff, but also “Bridgecrest Credit Company, LLC,” and any other “party providing products or services to the Vehicle in connection with or incidental to the Contracts.” (Arbitration Agreement, § 1.5.) The Arbitration Agreement thus also applies to Developers, whom Plaintiff alleges provided a bond to Carvana that covers the Vehicle. (Compl. ¶¶ 4, 101.) Therefore, all of Plaintiff’s claims, including those against Bridgecrest and Developers, are covered by the Arbitration Agreement.

Accordingly, the Motion is GRANTED. Plaintiff’s claims are stayed pending completion of arbitration. The Court sets a Status Conference for April 8, 2025, regarding the status of arbitration.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Hon. Holly J. Fujie

Judge of the Superior Court