Judge: Joel L. Lofton, Case: 22AHCV00497, Date: 2023-08-16 Tentative Ruling

Case Number: 22AHCV00497    Hearing Date: August 16, 2023    Dept: X

   Tentative Ruling

Judge Joel L. Lofton, Department X

HEARING DATE:      August 16, 2023                                  TRIAL DATE: No date set.

CASE:                         ALMA RAMIREZ ALEJANDREZ v. NISSAN NORTH AMERICA, INC., a Delaware Corporation; ONTARIO NISSAN, INC., a California Corporation dba METRO NISSAN MONTCLAIR; and DOES 1 through 10, inclusive.  

CASE NO.:                 22AHCV00497

MOTION FOR RECONSIDERATION

MOVING PARTY:               Plaintiff Alma Ramirez Alejandrez

RESPONDING PARTY:      Defendant Nissan North America, Inc.

SERVICE:                              Filed July 19, 2023

OPPOSITION:                       Filed August 3, 2023

REPLY:                                   Filed August 9, 2023

RELIEF REQUESTED

             Plaintiff moves this court to reconsider its previous motion compelling arbitration.

BACKGROUND

             This case arises out of Plaintiff Alma Ramirez Alejandrez’s (“Plaintiff”) lemon law claim for a 2019 Nissan Rogue, Vehicle Identification Number KNMAT2MT6KP560515 (“Subject Vehicle”). Plaintiff alleges she purchased the Subject Vehicle on September 28, 2019. Plaintiff alleges that Defendants Nissan North America, Inc.(“Nissan”) and Ontario Nissan, Inc., dba Metro Nissan Montclair (“Metro Nissan”), (“Defendants”) knew of defects in the continuously variable transmission in vehicles like the Subject Vehicle but failed to disclose their existence. Plaintiff also alleges Defendants failed to remedy the defect in the Subject Vehicle.

Plaintiff filed this complaint on July 22, 2022, alleging four causes of action for (1) violation of the Song-Beverly Act – Breach of Express Warranty, (2) Fraudulent Inducement – Intentional Misrepresentation, (3) Fraudulent Inducement – Concealment, and (4) Negligent Repair.

TENTATIVE RULING

Plaintiff’s motion for reconsideration is GRANTED.

LEGAL STANDARD

“When an application for an order has been made to a judge, or to a court, and refused in whole or in part, or granted, or granted conditionally, or on terms, any party affected by the order may, within 10 days after service upon the party of written notice of entry of the order and based upon new or different facts, circumstances, or law, make application to the same judge or court that made the order, to reconsider the matter and modify, amend, or revoke the prior order. The party making the application shall state by affidavit what application was made before, when and to what judge, what order or decisions were made, and what new or different facts, circumstances, or law are claimed to be shown.” (Code Civ. Proc. § 1008, subd. (a).)  

“If a court at any time determines that there has been a change of law that warrants it to reconsider a prior order it entered, it may do so on its own motion and enter a different order.” (Code Civ. Proc. § 1008, subd. (c).)

DISCUSSION

Plaintiff moves for reconsideration of the court’s previous motion compelling arbitration. On January 10, 2023, this court granted Defendants’ motion to compel arbitration and stayed the proceedings pursuant to Code of Civil Procedure section 1281.4.

Two preliminary issues are presented: (1) whether the court has jurisdiction to reconsider its previous order and (2) whether the timing of the present motion is proper.

“Once a court grants a petition to compel arbitration and stays the litigation, the court nonetheless retains (1) ‘vestigial jurisdiction over the action at law,’ which then ‘sits in the twilight zone of abatement,’ and (2) a ‘separate, limited jurisdiction over the contractual arbitration.’ ” (Williams v. West Coast Hospitals, Inc. (2022) 86 Cal.App.5th 1054, 1068-69.) However, a trial court does not lose the jurisdiction to reconsider its order compelling arbitration. (Malek v. Blue Cross of California (2004) 121 Cal.App.4th 44, 59.) Thus, the court has jurisdiction to reconsider its previous motion.

Further, pursuant to Code of Civil procedure section 1008, subdivision (c), the Court may reconsider a prior order based on a change of law at any time. Additionally, Defendants argue that the subsequent cases are not “new law” sufficient to meet the requirements of Code of Civil Procedure section 1008, subdivision (c). In Baldwin v. Home Sav. of America (1997) 59 Cal.App.4th 1192, 1196, the court held that a case was not “new law” because it could have been presented to the trial court prior to the ruling on the motion at issue. However, the cases discussed below were not published at the time of this court’s ruling on Defendants’ motion to compel arbitration and are therefore new law.

The next issue is whether the subsequent case law provides sufficient grounds for reconsideration of the court’s previous order. The previous order was based on the reasoning presented in Felisida, which, while still good law, was followed by other appellate court cases that presented trial courts with a different outcome. The court finds that the prudent course of action is to review the merits of the previous order compelling arbitration based on the subsequent case law.

            “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.)

            The issue, then, is whether Plaintiff’s claims are intimately founded in and intertwined with the retail installment sales contract.

            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.)

            However, another California Court of Appeals, in Ford Motor Warranty Cases (2023) 89 Cal.App.5th 1324 (“Ochoa”) disagreed with the reasoning and conclusion in Felsilda. The Court in Ochoa concluded that the plaintiffs’ warranty claims were not based on their sales contract. (Id. at p. 1334.) The Court specifically ruled that “California law does not treat manufacturer warranties imposed outside the four corners of a retail sale contract as part of the sale contract.” (Id. at p. 1335.) Additionally, the Court also that the language of the arbitration provision did not provide that the plaintiffs had consent to arbitrate claims with third party nonsignatories. (Id. at p. 1334.) Rather, the court interpreted the language as listing the subject matter of claims the plaintiffs agreed to arbitrate with the dealers. (Id. at p. 1335.)

            In Montemayor v. Ford Motor Company (2023) 92 Cal.App.5th 958, the Court agreed with the reasoning presented in Ochoa. The Court also provided it disagreed with “Felisilda that the language in the arbitration provision referencing ‘third parties who do not sign this contract’ provides a basis for nonsignatory manufacturers to compel arbitration of claims brought by vehicle purchasers.” (Id. At p. 971.)

            Here, the court opts to follow the decisions in Ochoa and Montemayor. The court holds that, based on the new case law, Plaintiff’s warranty claims are not intimately founded in and intertwined with the sales contract.

CONCLUSION

Plaintiff’s motion for reconsideration is GRANTED.  Defendants motion to compel arbitration is rescinded.

            Movie party to give notice.

Dated:   August 16, 2023                                ___________________________________

                                                                                    Joel L. Lofton

                                                                                    Judge of the Superior Court