Judge Jill Feeney, Case 22STCV22014 2022-09-30 Tentative Ruling

This is an action for negligence arising from a vehicle collision which took place in September 2021. Plaintiffs Ozra Fathollah and Vita Moghdam were passengers in Defendant Song Gongyu’s vehicle while she was working as a driver for Uber Technologies, Inc. Plaintiffs filed their Complaint against Gongyu and Uber on July 7, 2022.

Uber alleges that an arbitration agreement exists between Plaintiff Fathollah and Uber and that Plaintiff agreed to Uber’s terms when Plaintiff agreed to Uber’s Terms of Use. Uber further argues that Plaintiff Moghdam is a third-party beneficiary of the agreement between Uber and Fathollah.

Plaintiffs argue that no arbitration agreement exists because Fathollah was asleep at 4:00 a.m. on the night Uber alleges she agreed to the Terms of Use. Additionally, Fathollah argues she could not have understood that she was agreeing to the Terms of Use because she does not speak or read English.

Uber argues that Fathollah has not provided any admissible evidence refuting its claims that she agreed to Uber’s Terms of Use. Uber points out that Fathollah misunderstands the UTC designation and that Fathollah really agreed to the Terms of Use at 8:00 p.m. on December 24, 2021. Additionally, Uber argues that Fathollah’s claim her inability to speak or read English prevented her from understanding the agreement fails because she submitted a declaration completely in English.

Code Civ. Pro. section 1281.2 permits a party to file a petition to request that the Court order the parties to arbitrate a controversy. Under section 1281.2, a party is permitted to file a motion to request an order directing the parties to arbitrate a controversy. Section 1281.2 also states that the Court may grant the motion if the Court determines that an agreement to arbitrate the controversy exists.

When a motion to compel arbitration is filed and accompanied by prima facie evidence of a written agreement to arbitrate the controversy, the court itself must determine whether the agreement exists and, if any defense to its enforcement is raised, whether it is enforceable. (Rosenthal v. Great Western Financial Sec. Corp. (1996) 14 Cal.4th 394, 413.) The moving party bears the burden of proving its existence by a preponderance of the evidence because the existence of the agreement is a statutory prerequisite to granting the petition. (Ibid.)

Since binding arbitration is a matter of contract, the parties may freely delineate the area of its application, and a proceeding to compel arbitration is in essence a suit in equity to compel specific performance of a contract. (Freeman v. State Farm Mutual Auto Insurance Co. (1975) 14 Cal.3d 473, 479; Morris v. Zuckerman (1967) 257 Cal.App.2d 91, 96.) Arbitration, as a general rule, should be upheld by the court, unless it can be said with assurance that an arbitration clause is not susceptible to an interpretation covering the asserted dispute. (Bos Material Handling, Inc. v. Crown Controls Corp. (1982) 137 Cal.App.3d 99, 105; O’Malley v. Wilshire Oil Co. (1963) 59 Cal.2d 482, 490-491.) The court should, nonetheless, give effect to the parties’ intentions in light of the usual and ordinary meaning of the contractual language and the circumstances under which the agreement was made. (Victoria v. Superior Court (1985) 40 Cal.3d 734, 744.)

Uber alleges that that in December 2021, Fathollah was presented with a pop-up screen in the Uber application notifying her that Uber updated its terms of use. (Buscio Decl., ¶8.) Fathollah was presented with hyperlinks to Uber’s terms of use and privacy notice. (Id., Exhibit A.) The pop-up contained a clickbox which a user could select stating “By checking this box, I have reviewed and agreed to the Terms of Use and acknowledge the Privacy notice.” (Id., ¶9.) Plaintiff checked this box. (Id.) The terms that were in effect at the time Plaintiff agreed to be bound by them stated the following:

Except as expressly provided below in Section 2(b) [relating to small claims, sexual assault/harassment claims and intellectual property claims, none of which is applicable here], you and Uber agree that any dispute, claim or controversy in any way arising out of or relating to (i) these Terms and prior versions of these Terms, or the existence, breach, termination, enforcement, interpretation, scope, waiver, or validity thereof, (ii) your access to or use of the Services at any time, (iii) incidents or accidents resulting in personal injury that you allege occurred in connection with your use of the Services…whether the dispute, claim or controversy occurred or accrued before or after the date you agreed to the Terms…(iv) your relationship with Uber, will be settled by binding arbitration between you and Uber, and not in a court of law. This [Arbitration] Agreement survives after your relationship with Uber ends.”

Under the Arbitration Rules and Governing Law paragraph of the Dispute resolution section, the agreement states “the Federal Arbitration Act, 9 U.S.C §1 et seq. (“FAA”), will govern its interpretation and enforcement and proceedings pursuant thereto.” (Id.) Thus, the Federal Arbitration Act governs the motion to compel arbitration. (See Victrola 89, LLC v. Jamon Properties 8 LLC (2020) 46 Cal.App.5th 337, 346 [finding the FAA governs a motion to compel arbitration when an agreement provides its ‘enforcement’ shall be governed by the FAA].) Therefore, the Court’s inquiry is limited to a determination of (1) whether a valid arbitration agreement exists and (2) whether the arbitration agreement covers the dispute. (9 U.S.C., § 4;¿Chiron Corp. v. Ortho Diagnostics Systems, Inc.¿(9th Cir. 2000) 207 F.3d 1126, 1130;¿Howsam¿v. Dean Witter Reynolds, Inc.¿(2002) 537 U.S. 79, 84;¿see¿Simula, Inc. v. Autoliv, Inc.¿(9th Cir. 1999) 175 F.3d 716 [if the finding is affirmative on both counts the FAA requires the Court to enforce the arbitration agreement in accordance with its terms].)

A nonsignatory may also be compelled to arbitrate a dispute when the nonsignatory is a third-party beneficiary of the contract containing the arbitration agreement. (See Epitech, Inc. v. Kann (2012) 204 Cal.App.4th 1365, 1371.) A nonsignatory must be determined to be a third-party beneficiary in order to be bound by the arbitration agreement. (See id.) The contract must show an intent by the contracting parties to confer a benefit on the third party. (Id. at 1372.) “‘[I]t is not enough that the third party would incidentally have benefited from performance.’” (Id. (quoting Souza v. Westlands Water Dist. (2006) 135 Cal.App.4th 879, 891).)

Here, Fathollah and Moghdam benefitted from the use of Uber’s rideshare services when they became passengers in Defendant Gonyu’s vehicle. Additionally, the arbitration agreement additionally states under the Covered Disputes section that the agreement covers “incidents or accidents resulting in personal injury to you or anyone else that you allege occurred in connection with your use of the Services.” (Exhibit C.) Thus, the contract containing the agreement was intended to benefit and cover both Fathollah, the application user, and Moghdam, another passenger who also benefitted from using the Uber application.

Uber meets its burden of proving the existence of a valid arbitration agreement between Uber and Fathollah exist. Additionally, Uber demonstrates that the agreement covers incidents or accidents arising from Fathollah’s use of Uber’s services. Because this is an action for an accident which occurred while Plaintiffs were passengers using Uber services, the action is within the scope of the arbitration agreement.

Fathollah argues in opposition that she could not have entered into an arbitration because she was asleep and it was Christmas day when Uber alleges she entered into the agreement. (Fathollah Decl., ¶¶6-8.) Fathollah’s Counsel argues in the motion that she did not check the box agreeing to Uber’s Terms of Use. (Opp., p. 4.) However, Fathollah’s declaration itself does not refute that she checked the box agreeing to the Terms of Use.

Uber rebuts Fathollah’s allegations that she could not have agreed to the Terms of Use at 4:00 a.m. by pointing out that Fathollah misunderstood the meaning of Universal Time Coordinated. Converted to Pacific Standard Time, the time zone Fathollah was in when she entered the agreement, Fathollah agreed to the Terms of Use at 8:00 p.m. on December 24, 2021. Fathollah’s declaration only states that she did not use the Uber application at 4:00 a.m. on December 25, 2021, that she was asleep at that time, and that she did not use the Uber application throughout December 25, 2021. These facts do not refute that Fathollah checked the box agreeing to Uber’s Terms of Use the day before, on December 24, 2021.

Fathollah also argues that there is no conclusive presumption that she knowingly and voluntarily agreed to the arbitration agreement. Fathollah again alleges that she did not use the Uber application at 4:00 a.m. on December 25, 2021. However, as discussed above, Fathollah agreed to the Terms of Use the day before, on December 24, 2021 and no other evidence exists refuting Uber’s evidence. Fathollah also argues that she speaks Farsi and does not know how to read or write English. This argument is not persuasive because Fathollah submits a declaration written entirely in English without evidence of translation. Additionally, Fathollah used the Uber application at least nine times on December 31, 2021 and January 3, 2022. (Fathollah Decl., ¶9.) If language would have prevented Fathollah from understanding that she was agreeing to Uber’s Terms of Use by following the prompts in Uber’s pop-up notification, it is unlikely she would have been able to utilize the Uber application.

Moreover, the fact that Plaintiff may not have read the Terms of Use does not mean that Plaintiff is not bound to the Terms, including its arbitration provision. The applicable rule is that someone who agrees to a contract without reading it is bound by its terms. (Ramos v. Westlake Services LLC, supra, 242 Cal.App.4th 674, 686.) Here, Plaintiff states that Plaintiff does not speak, read, write, or understand English.

“‘Ordinarily, one who accepts or signs an instrument, which on its face is a contract, is deemed to assent to all its terms, and cannot escape liability on the ground that he has not read it. If he cannot read, he should have it read or explained to him.” (1 Witkin, Summary of Cal. Law (9th ed. 1987), § 120, p. 145.) This is not only the California but the general rule. (3 Corbin, Contracts (1960) § 607, pp. 668–669 [“One who signs an instrument when for some reason, such as illiteracy or blindness, he cannot read it, will be bound by its terms in case the other party acts in good faith without trick or misrepresentation. The signer should have had the instrument read to him.’”] as cited in Randas v. YMCA of Metropolitan Los Angeles (1993) 17 Cal.App.4th 158, 163.) Here, assuming arguendo that Plaintiff Fathollah cannot read or understand English does not preclude Plaintiff from being bound to Uber’s Terms because by clicking the acknowledgment box, Plaintiff knew Plaintiff was consenting to something, and the onus was on Plaintiff to have someone translate or explain what terms Plaintiff was assenting to. The fact Plaintiff could not read and understand English is not proof that Plaintiff lacked the capacity to contract and consent to Uber’s Terms, including waiver of a right to a jury trial.