Judge Holly J. Fujie, Case Number: 24STCV23214, Date: 2025-03-17 Tentative Ruling

DEPARTMENT 56 JUDGE HOLLY J. FUJIE, LAW AND MOTION RULINGS. The court makes every effort to post tentative rulings by 5.00 pm of the court day before the hearing. The tentative ruling will not become the final ruling until the hearing [see CRC 3.1308(a)(2)], and are also available in the courtroom on the day of the hearing [see CRC 3.1308(b)]. If the parties wish to submit on the tentative ruling and avoid a court appearance, all counsel must agree and choose which counsel will give notice. That counsel must 1) call Dept 56 by 8:30 a.m. on the day of the hearing (213/633-0656) and state that all parties will submit on the tentative ruling, and 2) serve notice of the ruling on all parties. If any party declines to submit on the tentative ruling, then no telephone call is necessary and all parties should appear at the hearing in person or by Court Call. Court reporters are not provided, and parties who want a record of motions and other proceedings must hire a privately retained certified court reporter.

The Court has considered the moving papers only. As of March 11, 2025, the Court has not received any opposition papers.

Plaintiff Justin Edwards Borges (“Plaintiff”) initiated this action against Defendants Hyundai Motor America (“HMA”) and Does 1-10, alleging the following causes of action: (1) violation of Subdivision (d) of Civil Code § 1793.2; (2) violation of Subdivision (b) of Civil Code § 1793.2; (3) violation of Subdivision (a)(3) of Civil Code § 1793.2; (4) Breach of Express Written Warranty; and (5) Breach of Implied Warranty of Merchantability.

The Complaint alleges that Plaintiff purchased a 2023 Hyundai Ioniq 5, having a VIN No. KM8KN4AE7PU123756, on October 5, 2022, and in connection with the purchase, HMA issued a written warranty. It is further alleged that the subject vehicle contained or developed certain defects and nonconformities to warranty. These included issues to the body system, powertrain, safety system, electrical system, braking system, and noise system. Despite various attempts to repair the subject vehicle, HMA was allegedly unable to bring it into conformity. Consequently, Plaintiff revoked acceptance of the sales contract.

On May 25, 2023, HMA filed the instant motion to compel arbitration. No opposition has been filed.

HMA requests the Court to take judicial notice of the complaint filed in this action. The Court grants the request as to the existence of the document only pursuant to Evidence Code § 452(d).

When seeking to compel arbitration of a plaintiff’s claims, the defendant must allege the existence of an agreement to arbitrate.¿ (Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 219.)¿ The burden then shifts to the plaintiff to prove the falsity of the agreement.¿ (Ibid.)¿ After the Court determines that an agreement to arbitrate exists, it then considers objections to its enforceability.¿ (Ibid.)¿ The Court must grant a petition to compel arbitration unless the defendant has waived the right to compel arbitration or if there are grounds to revoke the arbitration agreement.¿ (Ibid.; Code Civ. Proc., § 1281.2.)¿

“[T]he petitioner bears the burden of proving its existence by a preponderance of the evidence.” (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413.) “If the party opposing the petition raises a defense to enforcement—either fraud in the execution voiding the agreement, or a statutory defense of waiver or revocation [citation]—that party bears the burden of producing evidence of, and proving by a preponderance of the evidence, any fact necessary to the defense.” (Ibid.)

In support of its burden, HMA submits evidence of two arbitration provisions existing in two separate agreements. The first is the arbitration agreement found in the Owner’s Handbook & Warranty Information (“Warranty Booklet”). (Motion at pp. 4-6; Ameripour Decl., Exh. 3 at pp. 14-16.) The second is the arbitration provision found within HMA’s Bluelink Connected Services Agreement (“Bluelink Agreement”) that Plaintiff had executed in connection with his acceptance of these complimentary services for the subject vehicle. (Motion at pp. 6-7; Roa Decl., Exhs. 1 and 2 at pg. 17.) Notably, neither Plaintiff nor HMA signed the arbitration provision found within the Warranty Booklet.

If you purchased or leased your Hyundai vehicle in the State of California, you and we each agree that any claim or disputes between us (including between you and any of our affiliated companies) related to or arising out of your vehicle purchase, use of your vehicle, the vehicle warranty, representations in the warranty, or the duties contemplated under the warranty, including without limitation claims related to the failure to conform a vehicle to warranty, failure to repurchase or replace your vehicle, or claims for a refund or partial refund of your vehicle's purchase price (excluding personal injury claims), shall be resolved by binding arbitration at either your or our election, even if the claim is initially filed in a court of law

IF YOU PURCHASED OR LEASED YOUR VEHICLE IN CALIFORNIA, YOUR WARRANTY IS MADE SUBJECT TO THE TERMS OF THIS BINDING ARBITRATION PROVISION. BY ACCEPTING BENEFITS UNDER THIS WARRANTY, INCLUDING HAVING ANY REPAIRS PERFORMED UNDER WARRANTY, YOU AGREE TO BE BOUND BY THESE TERMS. IF YOU DO NOT AGREE WITH THESE TERMS, PLEASE CONTACT US AT OPTOUT@HMAUSA.COM WITHIN THIRTY (30) DAYS OF YOUR PURCHASE OR LEASE TO OPT-OUT OF THIS ARBITRATION PROVISION.

With regard to the Bluelink Agreement, the arbitration provision therein states in pertinent part:

Hyundai and you agree to arbitrate any and all disputes and claims between us arising out of or relating to this Agreement, Connected Services, Connected Services Systems, Service Plans, the Vehicle, use of the sites, or products, services, or programs you purchase, enroll in or seek product/service support for, whether you are a Visitor or Customer, via the sites or through mobile application, except any disputes or claims which under governing law are not subject to arbitration, to the maximum extent permitted by applicable law. This agreement to arbitrate is intended to be broadly interpreted and to make all disputes and claims between us subject to arbitration to the fullest extent permitted by law.

The agreement to arbitrate otherwise includes, but is not limited to: claims based in contract, tort, warranty, statute, fraud, misrepresentation or any other legal theory; claims that arose before this or any prior Agreement (including, but not limited to, claims relating to advertising) […]

Based on the presentation of these documents, the Court finds that HMA has met its burden in establishing the existence of an arbitration agreement relating to the subject vehicle. No party signed the Warranty Booklet and the Bluelink Agreement, such that these provisions amount to a “clickwrap” agreement. Therefore, the issue of whether HMA may seek to enforce arbitration under either agreement must still be resolved. This shall be discussed further below

Standing to Enforce Arbitration Agreement Within Warranty Booklet Pursuant to the Doctrine of Equitable Estoppel

When a petitioner seeks to compel arbitration as to a non-signatory to the arbitration agreement, various theories are available to support the moving party’s demand, which include the doctrine of equitable estoppel. (JSM Tuscany, LLC v. Superior Court¿(2011) 193 Cal.App.4th 1222, 1237.) Under this doctrine, 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. (Id.)

Here, HMA argues that it has standing to compel arbitration pursuant to the arbitration provision found within the Warranty Booklet because it is directly connected to Plaintiff’s purchase of the subject vehicle. (Motion at pp. 13, 15-16.) Furthermore, HMA asserts that the Complaint is premises on the warranties under the Warranty Booklet, and it is alleged that Plaintiff presented the subject vehicle for repairs on several occasions. (Ibid.) Thus, HMA asserts Plaintiff has received a direct benefit under this warranty and that the claims are intertwined with the warranty. (Id. at pg. 12.) Consequently, HMA argues that Plaintiff must be estopped from refusing to comply with the arbitration provision found within the warranty. (Ibid.)

Notably, Plaintiff has failed to present any argument as to why HMA should be precluded from evoking the arbitration agreement found within the Warranty Booklet.

In consideration of HMA’s arguments, the Court finds that the doctrine of equitable estoppel applies to this arbitration provision, and as a result, HMA has standing to compel arbitration under the arbitration provision found within the Warranty Booklet. While Plaintiff did not manifest his express consent to this arbitration provision, this is not dispositive because their conduct following the purchase of the subject vehicle shows that they accepted the benefits found within the Warranty Booklet. (See Cavalry SPV I, LLC v. Watkins (2019) 36 Cal.App.5th 1070, 1081 [“[A] party may accept a contract by conduct, as well as by words.”]) As alleged in the Complaint, HMA issued a written warranty, and the claims asserted in the Complaint arise from HMA’s warranty and repair obligations. (Compl. ¶¶ 5, 9-10, 30, 33, 37.) Furthermore, it is alleged that Plaintiffs invoked HMA’s written warranty by presenting the subject vehicle for repairs on several occasions to an authorized repair facility. (Compl. ¶¶ 13, 19, 25, 33.) As a result, because Plaintiff invoked HMA’s written warranty and his claims are intertwined with this warranty, he is now estopped from refusing to arbitration their claims against HMA.

Accordingly, the Court finds that HMA has standing to compel arbitration pursuant to the arbitration provision found within the Warranty Booklet. Furthermore, the Court finds that the scope of this arbitration provision encompasses Plaintiffs’ claims under the Song-Beverly Act. (See Ameripour Decl., Exh. 3 at pg. 15.) Because HMA is entitled to pursue arbitration under this provision, the Court declines to address whether the arbitration provision of the Bluelink Agreement is also enforceable in the interest of judicial economy.

Because the arbitration agreement is valid and enforceable and encompasses the scope of Plaintiffs’ claims, the Court GRANTS HMA’s motion to compel arbitration. The Court further stays the proceedings during the pendency of the arbitration process and sets a Status Conference re Arbitration for October 15, 2025 at 8:30 am. The Court orders that the parties submit a Joint Status Report re Arbitration and file it at least seven Court days before the Status Conference.

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