Judge: Joel L. Lofton, Case: 22AHCV00434, Date: 2023-02-28 Tentative Ruling
Case Number: 22AHCV00434 Hearing Date: February 28, 2023 Dept: X
Tentative Ruling
Judge Joel L. Lofton,
Department X
HEARING DATE: February
28, 2023 TRIAL DATE: No date set.
CASE: MANUEL T. MABRA
JR. v. FCA US, LLC; BRAVO CHRYSLER DODGE JEEP RAM OF ALHAMBRA; and DOES 1
through 10, inclusive.
CASE NO.: 22AHCV00434
MOTION
TO COMPEL ARBITRATION
MOVING PARTY: Defendant FCA US, LLC (“FCA”)
RESPONDING PARTY: Plaintiff
Manuel T. Mabra Jr.
SERVICE: Filed November 30, 2022
OPPOSITION: Filed February 14, 2023
REPLY: Filed February 21, 2023
RELIEF
REQUESTED
FCA moves to compel
Plaintiff to submit this case to binding arbitration.
BACKGROUND
This case arises out of Plaintiff Manuel T.
Mabra Jr.’s (“Plaintiff”) lemon law claim for a certified pre-owned 2019
Chrysler Pacifica with Vehicle Identification Number 2C4RC1BG7KR685346
(“Subject Vehicle”). Plaintiff alleges he entered into a written warranty with
FCA on or about September 26, 2020, for the subject vehicle. Plaintiff filed
this complaint on June 30, 2022, alleging eight causes of action for (1)
violation of subdivision (d) of Civil Code section 1793.2, (2) violation of
subdivision (b) of Civil Code section 1793.2, (3) violation of subdivision
(a)(3) of Civil Code section 1793.2, (4) breach of the implied warranty of
merchantability, (5) fraudulent inducement – concealment, (6) negligent repair,
(7) violation of consumer legal remedies act, and (8) violation of the
Magnuson-Moss Warranty Act.
TENTATIVE RULING
FCA’s motion to compel arbitration
is GRANTED.
FCA’s request to stay the
proceedings pursuant to Code of Civil Procedure section 1281.4 is GRANTED.
REQUEST FOR JUDICIAL NOTICE
Plaintiff’s
requests for judicial notice are granted pursuant to Evidence Code section 452,
subdivision (d).
LEGAL STANDARD
“California
and federal law both favor enforcement of valid arbitration agreements.” (Aanderud
v. Superior Court (2017) 13 Cal.App.5th 880, 889.) “A party who files
a motion to compel arbitration ‘bears the burden of proving the existence of a
valid arbitration agreement by the preponderance of the evidence, and a party
opposing the petition bears the burden of proving by a preponderance of the
evidence any fact necessary to its defense.’’ (Cisnero Alverez v. Altamed
Health Services Corporation (2021) 60 Cal.App.5th 572, 580.)
DISCUSSION
FCA and Defendant Bravo Chrysler Dodge Jeep Ram of Alhambra (“Bravo”)
separately moved to compel Plaintiff to submit this case to binding
arbitration. However, on February 14, 2023, Plaintiff dismissed Bravo from the
present action. Thus, the issue remaining is whether FCA may compel
arbitration. The arbitration at issue in the present case provides:
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) shall, at your or our election, be
resolved by neutral, binding arbitration and not by a court action.
(Azemoon Decl. ¶ 2, Exhibit A at p. 5.)
Equitable Estoppel
FCA
argues that the doctrine of equitable estoppel applies to allow it to enforce
the arbitration provision as a nonsignatory.
“As a general
rule, only a party to an arbitration agreement may enforce the agreement.”
(Felisilda
v. FCA US LLC (2020) 53 Cal.App.5th 486, 495 (“Felisilda”.)
However, “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.” (JSM Tuscany,
LLC v. Superior Court (2011) 193 Cal.App.4th 1222, 1237.) “By relying on
contract terms in a claim against a nonsignatory defendant, even if not
exclusively, a plaintiff may be equitably estopped from repudiating the
arbitration clause contained in that agreement.” (Boucher v. Alliance Title
Co., Inc (2005) 127 Cal.App.4th 262, 272.)
In
Felisilda, supra, 53 Cal.App.5th at p. 490, the court’s analysis of
whether the plaintiff’s claims were intertwined with the sales agreement began
with an evaluation of the language of the arbitration clause at issue. The
arbitration clause in Felisilda encompassed “[a]ny claim or dispute . .
. which arises out of or relates to . . . 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 . . ..” (Id.
at p. 490.) The Court held that because the plaintiffs “expressly agreed
to arbitrate claims arising out of the condition of the vehicle – even against
third party nonsignatories to the sales contract – they are estopped from
refusing to arbitrate their claim against [the defendant].” (Id. at p.
497.)
The
reasoning from Felisilda supports the conclusion that where a plaintiff
agrees to arbitrate claims relating to the purchased vehicle’s condition and
involving third parties, a claim for a defect in the vehicle’s condition is
intertwined with the sales contract. Here, Plaintiff agreed to arbitrate claims
“which arises out of or relates to . . . condition of this vehicle”, and
the arbitration provision extended the scope of arbitration to relationships
“including any such relationship with third parties who do not sign this
contract”. (Azemoon Decl. ¶ 2, Exhibit A at p. 5.)
In opposition, Plaintiff relies on Ngo v. BMW of
North America (9th Cir. 2022) 23 F.4th 942, in support of his position that
Felisilda is not applicable in the present case. In Ngo,
the Ninth Circuit briefly distinguished Felisilda, stating that the key
distinction was that the plaintiffs initially sued both the dealership and the
manufacturer, after which the dealership moved to compel arbitration. (Id.
at p. 950.) The court emphasized that a signatory had moved to compel
arbitration and the signatory was only dismissed after arbitration was
compelled. (Ibid.)
However,
Plaintiff’s reliance on Ngo is insufficient to distinguish Felisilda
from the present case. In Felisilda, supra, 52 Cal.App.5th at p.
495, the court framed the relevant question as “whether a nonsignatory to
the agreement has a right to compel arbitration under that agreement.” In Felisilda, the operative issue was not who was named a party
to the case, and this court notes that a signatory was named and had moved to
compel arbitration prior to being dismissed, but rather the nature of the
claims encompassed within the arbitration clause. (Id. at p. 497.)
Plaintiff also
argues that the arbitration provision in the Agreement provides that
arbitration can only be compelled “at your or our election.” However, the same
language existed within the arbitration agreement in Felisilda, and the
court still held the doctrine of equitable estoppel applied. As previously
stated, the doctrine of equitable estoppel enables a nonsignatory to
invoke an arbitration clause. (JSM Tuscany, LLC, supra, 193 Cal.App.4th
at p. 1237.) Although Plaintiff attempts to point to the “you and us” language
as the basis for the Felisilda Court’s ruling, that is simply not the
case. The Felisilda Court distinguished the arbitration clause at issue
from other federal cases because in the other cases “the arbitration provision
lacked the key language present in this case, namely an express
extension of arbitration to claims involving third parties that relate to the
vehicle's condition.” (Felisilda, supra, 53 Cal.App.5th at p. 498, emphasis added.)
Plaintiff also argues
that equitable estoppel does not apply because he is seeking to enforce the
terms of the warranty and not the sales contract. In Felisilda, supra, the
Court expressly stated it was not resolving the conflict in federal cases
discussing the applicability of the “but-for” test to equitable estoppel. (53
Cal.App.5th at p. 497 .) Rather, the Court looked at the specific wording of
the arbitration provision. (Id. at p. 498.)
Additionally,
other published California cases support the conclusion that a claim for a
defect in the vehicle’s condition may be intertwined with the sales contract.
In Pacific Fertility Cases (2022) 301 Cal.Rptr.3d 611, 614, plaintiffs
had filed suit against the manufacturer and seller of a cryogenic storage tank.
The contract that contained an arbitration provision was between the plaintiffs
and a defendant that provided fertility-related services that had purchased and
used the cryogenic tank. (Ibid.) The court discussed a federal case Mance
v. Mercedes-Benz USA (N.D.Cal. 2012) 901 F.Supp2d 1147, 1157, where the
District Court held that a claim for breach of express written warranty arose
out of the sales contract because the sales contract allowed the buyer to receive
the warranty.
Some federal
cases such as Ngo, supra, 23 F.4th 942, 949, have rejected the
“but-for” reasoning. However, the court in Pacific Fertility Cases did
not expressly disapprove of the reasoning in Mance. Rather, the court
distinguished the facts of the cases before it and stated that the plaintiffs’
claims against the seller and manufacturer of the cryogenic tank were based on
a defective tank, which did not arise out of the plaintiffs’ contract to pay
for fertility-related services. Here, Plaintiff’s claims are not as easily
extricated from the sales agreement containing the arbitration provision
because the Agreement provided him with the Subject Vehicle and the warranties
from FCA.
Plaintiff also
argues that the court should apply the reasoning from Ngo instead of the
reasoning from Felisilda because the arbitration provision contains
language that provides: “If federal law provides that a claim or dispute is not
subject to binding arbitration, this Arbitration Provision shall not apply to
such claim or dispute.” (Azemoon
Decl. ¶ 2, Exhibit A at p. 5.)
Plaintiff also cites Davis v. Shiekh Dhoes, LLC (2022) 84 Cal.App.5th,
956 to support his position.
However, Davis is distinguishable because the
arbitration provision expressly provided that the parties agreed “that the
Federal Arbitration Act governs the enforceability of any and all of
the arbitration provisions” of the agreement. (Davis, supra, 84
Cal.App.5th at p. 963, emphasis added.) Plaintiff is unable to point to any
such language in the present case. “[T]he procedural provisions of the
CAA apply in California courts by default.
‘There is no federal policy favoring
arbitration under a certain set of procedural
rules.’ [Citation.] But the parties may ‘expressly designate that any arbitration
proceeding [may] move forward under the FAA’s procedural provisions rather than
under state procedural law.’ [Citation.] Absent such an express
designation, however, the FAA’s procedural provisions do not apply in state
court.” (Valencia v. Smyth (2010) 185 Cal.App.4th 153, 174.)
Further, “the
decisions of federal district and circuit courts, although entitled to great
weight, are not binding on state courts even as to issues of federal law.” (Felisilda,
supra, 53 Cal.App.5th 486, 497 (“Felisilda”.) Felisilda is
binding on this court. The decision in Felisilda relied on the existence
of language that extended arbitration to claims involving third parties that
relate to the vehicle conditions. Similar language extending the arbitration of
claims involved is present in the Agreement at issue here. Thus, the doctrine
of equitable estoppel applies to allow FCA to enforce the arbitration agreement
as a nonsignatory.
Stay of the Proceedings
“If a court
of competent jurisdiction, whether in this State or not, has ordered
arbitration of a controversy which is an issue involved in an action or
proceeding pending before a court of this State, the court in which such action
or proceeding is pending shall, upon motion of a party to such action or
proceeding, stay the action or proceeding until an arbitration is had in
accordance with the order to arbitrate or until such earlier time as the court
specifies.” (Code Civ. Proc. section 1281.4, emphasis added.)
FCA’s
request for a stay of the proceedings is granted.
CONCLUSION
FCA’s motion to compel arbitration
is GRANTED.
FCA’s request to stay the proceedings pursuant to Code of Civil Procedure
section 1281.4 is GRANTED.
Case Management
Conference is off calendar.
Status conference
regarding arbitration set for November 1, 2023, at 8:30am
Dated: February 28,
2023 ___________________________________
Joel
L. Lofton
Judge
of the Superior Court
Parties who intend to submit on this tentative must send an
email to the court indicating their
intention to submit.
Parties intending to appear are strongly encouraged to appear remotely. alhdeptx@lacourt.org