Judge: John J. Kralik, Case: 22BBCV01179, Date: 2023-08-25 Tentative Ruling

Case Number: 22BBCV01179    Hearing Date: August 25, 2023    Dept: NCB

Superior Court of California

County of Los Angeles

North Central District

Department B

BACKGROUND

A.   Allegations

Plaintiff Pravin Rao (“Plaintiff”) commenced this action against Defendant BMW of North America, LLC (“BMWNA”) concerning a 2022 BMW M8.  BMWNA is alleged to be the manufacturer and distributer of the vehicle.  Plaintiff alleges he purchased the vehicle on July 1, 2021.  Plaintiff alleges that he received an express written warranty in which BMWNA undertook to preserve or maintain the utility or performance of the vehicle or to provide compensation.  Plaintiff alleges that the vehicle contained or developed defects during the warranty period, including defective brakes, safety, sensor, and electrical systems.  Plaintiff alleges he provided BMWNA sufficient opportunity to service or repair the vehicle, but it was unable and/or failed to service/repair the vehicle within a reasonable number of attempts.  

The complaint, filed December 12, 2022, alleges causes of action for: (1) violation of Civil Code, § 1793.2(d); (2) violation of Civil Code, § 1793.2(b); (3) violation of Civil Code, § 1793.2(a)(3); (4) breach of express written warranty (Civil Code, §§ 1791.2(a), 1794); and (5) breach of the implied warranty of merchantability (Civil Code §§ 179.1, 1794).    

B.    Motion to Compel Arbitration

On May 4, 2023, BMWNA filed a motion to compel arbitration and to stay all proceedings. 

On July 31, 2023, Plaintiff filed an opposition to the motion.

On August 18, 2023, BMWNA filed a reply brief.

REQUEST FOR JUDICIAL NOTICE

         With the moving papers, BMWNA request judicial notice of: (1) Exhibit A to PJ Roshan’s declaration, which is Plaintiff’s July 1, 2021 Motor Vehicle Retail Installment Contract – California; (2) Exhibit A attached to Ivana Saddigh’s declaration, which includes the LLC-12 filing of BMW Financial Services NA, LLC with the Secretary of State; (3) Exhibit 1 which BMWNA claims is the Retail Installment Sales Contract – Simple Finance Charge (With Arbitration Provision) that was filed with the Felisilda v. FCA US LLC (2020) 53 Cal.App.5th 486 case and has a virtually identical arbitration clause as the one at issue here; (4) Exhibits 2-15, which include various court orders regarding motions to compel arbitration involving BMWNA.

         With respect to Exhibit A of PJ Roshan’s declaration, the Court declines to take judicial notice of the document as the Court will allow it to be admitted into evidence for the purpose of this motion.  As such, it is not necessary to seek judicial notice of the Purchase Agreement.

         The request to take judicial notice of the LLC-12 filing of BMWFS with the Secretary of State is granted. 

         The request to take judicial notice of the Retail Installment Sales Contract, Exhibit 1 to the request for judicial notice document, is denied.

While court documents are subject to judicial notice, the Court declines to take judicial notice of these other court orders as the Court is not bound by the rulings of other trial courts.  Thus, the request for judicial notice of Exhibits 2-15 attached to the request of judicial notice document is denied. 

With the opposition papers, Plaintiff seeks judicial notice of Exhibits: (1) the Court of Appeal’s decision in Ford Motor Warranty Cases, case no. B312261 (Cal. Ct. App., Apr. 4, 2023) 2023 WL 2768484 aka Ochoa v. Ford Motor Company (2023) 89 Cal.App.5th 1324; and (2) the Court of Appeal’s decision in Montemayor v. Ford Motor Company, case no. B320477 (2023) 92 Cal.App.5th 958.  The request is granted. 

With the reply papers, BMWNA seeks judicial notice of Exhibit 3, which includes the case Kielar v. Superior Court (Cal. Ct. App., Aug. 16, 2023) 2023 WL 5270559.  The request is granted. 

DISCUSSION

BMWNA moves to compel Plaintiff to arbitrate Plaintiff’s claims based on the arbitration clause in the Motor Vehicle Retail Installment Contract – California (“Purchase Agreement”).  BMWNA argues that it has standing to enforce the arbitration provision in the Purchase Agreement because the arbitration clause requires Plaintiff to arbitrate any claims against BMW of Mountain View, its assignees (BMW Financial Services, LLC and BMW Bank of North American), any of their affiliates (BMWNA), and against nonsignatory third parties concerning the purchase or condition of the subject vehicle.   

a.     Terms of the Agreement to Arbitration

In support of the motion, BMWNA provide the declaration of PJ Roshan, who is the General Manager at BMW of Mountain View, a BMWNA authorized dealership.  (Roshan Decl., ¶1.)  He states that he has access to repair, sales, and purchase file documents and that one of his responsibilities is to certify records for BMW of Mountain View.  (Id.)  Mr. Roshan provides a copy of the Purchase Agreement made between BMW of Mountain View and Plaintiff for the subject vehicle, dated July 1, 2021.  (Id., ¶¶2-3, Ex. A.) 

The Arbitration Clause is stated in section 19 of the Purchase Agreement.  (Purchase Agreement at p. 6, §38.)  Under the heading, the text states “PLEASE REVIEW – IMPORTANT – AFFECTS OUR LEGAL RIGHTS” in bold and red font.  The Arbitration Clause states in relevant part:

NOTICE: Either you or I may choose to have any dispute between us decided by arbitration and not in a court or by jury trial. If a dispute is arbitrated, I will give up my right to participate as a class representative or class member on any Claim I may have against you including any right to class arbitration or any consolidation of individual arbitrations. Discovery and rights to appeal in arbitration are generally more limited than in a lawsuit, and other rights you and I would have in court may not be available in arbitration.

"Claim" broadly means any claim, dispute or controversy, whether in contract, tort, statute or otherwise, whether preexisting, present or future, between me and you or your employees, officers, directors, affiliates, successors or assigns, or between me and any third parties if I assert a Claim against such third parties in connection with a Claim I assert against you, which arises out of or relates to my 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). Any Claim shall, at your or my election, be resolved by neutral, binding arbitration and not by a court action. However, "Claim" does not include any dispute or controversy about the validity, enforceability, coverage or scope of this Arbitration Clause or any part thereof (including, without limitation, the Class Action Waiver set forth below and/or this sentence); all such disputes or controversies are for a court and not an arbitrator to decide. But any dispute or controversy that concerns the validity or enforceability of the Contract as a whole is for the arbitrator, not a court, to decide. …

(Purchase Agreement at p.6, §19.)  The Arbitration Clause goes on to include a class action waiver, the choice of AAA or JAMS to administer the arbitration under the rules provided on their websites, the qualifications of the arbitrators, and a fees provision.  (Id.)  The Arbitration Clause also states that the Purchase Agreement involves interstate commerce and any arbitration “shall be governed by the FAA” and not by any state law concerning arbitration.  (Id. at p.7.)  It further states: “However, the governing law as to the substantive issues of this Contract and Vehicle shall be the law of the state of the Seller’s place of business [California] ….”  (Id.) 

b.     Is there an enforceable agreement to arbitrate?

BMWNA argues that Plaintiff is bound by the terms of the Purchase Agreement, including the Arbitration Clause because there is a valid agreement to arbitrate and BMWNA is a third-party beneficiary and can invoke the equitable estoppel doctrine.  In opposition, Plaintiff argues that the manufacturer, BMWNA, lacks standing to invoke the arbitration clause because BMWNA is not a signatory to the Purchase Agreement and the Arbitration Clause, BMWNA was not the intended third-party beneficiary of the Purchase Agreement, and BMWNA cannot invoke equitable estoppel because Plaintiff’s claims do not rely on the Purchase Agreement’s terms nor are founded in or intertwined with the Lease.  (Opp. at p.2.)

Here, the Purchase Agreement at issues was entered between Plaintiff and BMW of Mountain View.  While there appears to be a valid agreement to arbitrate, the parties dispute whether BMWNA can rely on the Arbitration Clause to compel arbitration.

BMWNA is not a signatory to the Purchase Agreement. This presents a problem for its election to enforce. For example, the Central District Court in the case In re Toyota Motor Corp. Hybrid Brake Marketing, Sales, Practices and Products Liability Litigation (C.D. Cal. 2011) 828 F.Supp.2d 1150, 1159 stated:

Toyota argues that Plaintiffs must arbitrate their claims against Toyota because all of their claims fall within the scope of the broadly-worded arbitration provision. (Defs.' Mem. in Supp. Mot. to Compel, at 8–9.) Toyota ignores the plain and clear wording of the arbitration provision in the Purchase Agreements. The arbitration provision states:

Any claim or dispute, whether in contract, tort, statute or otherwise (including the interpretation and scope of this clause, and the arbitrability of the claim or dispute), between you and us or our employees, agents, successor or assigns, which arise out of or relate 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.

(Nash Agrmt., at 6; Ramirez Agrmt, at 6 (emphasis added).) Here, the plain language of the provision is clear that the signatories—the Nash and Ramirez Plaintiffs and the Toyota dealerships—may invoke their right to arbitrate any claims arising under the Purchase Agreements. But the provision does not state that nonsignatory third parties, such as Toyota, may arbitrate claims under the Purchase Agreements. The Toyota dealerships have never been parties to this action. Thus, Toyota cannot compel arbitration of Plaintiffs' claims under the arbitration provision in the Purchase Agreements.

(In re Toyota Motor Corp., supra, 828 F.Supp.2d at 1159 [underline added].)  Similar to the Toyota case, the Purchase Agreement’s Arbitration Clause states in the “NOTICE” that “Either you [BMW of Mountain View] or I [Plaintiff] may choose to have any dispute between us decided by arbitration…” and the clause does not provide for other non-signatory third parties the right to enforce the clause.  (Purchase Agreement, §19.) 

         BMWNA also argues that it is entitled to invoke the Arbitration Clause because it is an affiliate or assign of BMW of Mountain View.  BMWNA provides the declaration of Aaron Grener, who is the Controlling and Finance Systems Manager for BMW Financial Services, LLC (“BMWFS”).  Mr. Grener states that BMW Bank of North America (“BMW Bank”) is a wholly owned subsidiary of BMWFS and that BMW Bank is the original assignee of the retail installment sales contracts for BMW vehicles.  (Grener Decl., ¶2.)  He states that BMWFS is an indirect automotive finance and servicing company, which accepts assignment of retail installment contracts from originating dealers and also retail install contracts originally assigned to BMW Bank, and then assigned by BMW bank to BMWFS.  (Id., ¶3.)  He states that BMWFS also services consumer leases for its subsidiary, Financial Services Vehicle Trust (“FSVT”).  (Id.)  He states that BMWNA and BMWFS are affiliates of one another because BMWFS is a wholly owned subsidiary of BMWNA and that BMW Bank and FSVT are affiliates of BMWFS and BMWNA due to BMW Bank’s status as a subsidiary of BMWFS.  (Id., ¶4.) 

Even in the face of such affiliate language, however, California state and federal courts have refused to allow the manufacturer to invoke arbitration.  For example, in Nation v. BMW of North America, LLC (C.D. Cal., Dec. 28, 2020) 2020 WL 7868103[1] the District Court stated:

As excerpted more fully above, the contract provides that “you or I” (Nation or the seller) may compel arbitration of any claim “between me and you or your employees, officers, directors, affiliates, successors or assigns.” BMW NA alleges that because it is an “assign” or “affiliate” of the auto seller, it is a third-party beneficiary of this contract and can compel arbitration. Nation counters that there is no evidence that either she or the auto seller intended BMW NA as a third-party beneficiary.

This is not the first time that BMW NA has sought to compel arbitration as a third-party beneficiary based upon this exact contractual language. Federal district courts in California have decided the issue both ways. Compare Tseng v. BMW of N. Am., LLC, No. 2:20-cv-00256-VAP-AFMx,  2020 WL 4032305, at *4 (C.D. Cal. Apr. 15, 2020) (BMW was an affiliate and therefore an intended beneficiary); Phillips-Harris v. BMW of N. Am., LLC, No. CV 20-2466-MWF (AGRx),  2020 WL 2556346, at *10 (C.D. Cal. May 20, 2020) (BMW's provision of the warranty makes it an intended third-party beneficiary) with Schulz v. BMW of N. Am., LLC, No. 5:20-CV-01697-NC, 2020 WL 4012745, at *5 (N.D. Cal. July 15, 2020) (BMW NA was not a third-party beneficiary because the clause at issue “refers to the subject matter of the dispute, not to the parties involved in the dispute”).

The Court finds the reasoning of Nation and the Schulz court more persuasive. The reference to “assigns” upon which BMW NA hangs its hat is in the definition of Claim: “ ‘Claim’ broadly means any claim, dispute, or controversy ... between me and you or your employees, officers, directors, affiliates, successors or assigns.” So far, so good, for BMW NA; the drafter of the contract evidently intended to include BMW NA in identifying which claims could be arbitrated. But BMW NA is not included in the class of litigants who may compel arbitration: “Either you or I may choose to have any dispute between us decided by arbitration and not in a court or by jury trial” (emphasis added). BMW NA proffers no evidence to suggest that the signatories of the contract intended to include BMW NA in the “you or I” who may compel arbitration. As the Schulz court found, BMW NA is therefore not an intended beneficiary of the contract, and it may not compel arbitration on this argument.

(Nation, supra, 2020 WL 7868103 at *2–*3.) 

BMWNA is not a party defined within the “you or I” statement in the Arbitration Clause, as that referred to BMW of Mountain View and Plaintiff.

Based on the evidence provided by BMWNA, the Court finds that BMWNA has not upheld its burden in showing that there is a valid agreement to arbitrate between Plaintiffs and BMWNA.  As such, the motion will not be granted on this basis.

c.     Third-Party Beneficiary

Next, BMWNA argues that it can enforce the Arbitration Clause as an affiliate of BMW of Mountain View’s assignees BMWFS and BMW Bank, as well as a third-party beneficiary.  (Mot. at p.14.)  BMWNA argues that the Arbitration Clause specifically references affiliates and assignees of the Purchase Agreement and that it is an affiliate of assignees (BMWFS) because the Purchase Agreement expressly names BMWFS and FSVT as assignees.  (Id. at p.15.) 

BMWNA relies on Felisilda v. FCA US LLC (2020) 53 Cal.App.5th 486.  In Felisilda, plaintiffs purchased a vehicle from Elk Grove Auto Group, Inc. dba Elk Grove Dodge Chrysler Jeep (“Elk Grove Dodge”), encountered problems with the vehicle, and sued Elk Grove Dodge and manufacturer FCA US LLC (“FCA”) for violating the Song-Beverly Act.  (Felisilda, supra, 53 Cal.App.5th at 489.)  Elk Grove Dodge moved to compel arbitration based on the agreement signed by plaintiffs, and FCA filed a notice of non-opposition.  The trial court ordered arbitration and plaintiffs dismissed Elk Grove Dodge.  (Id.)  The Court of Appeal affirmed the arbitration between plaintiffs and FCA, finding that plaintiffs’ claim against FCA was encompassed in the arbitration provision.  The arbitration provision stated that any claim or dispute between plaintiffs and Elk Grove Dodge (its employees, agents, successors, or assigns) “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)” shall be subject to arbitration at a party’s election.  (Id. at 490.)  The Court of Appeal found that the agreement signed by plaintiffs included the arbitration of matters directly related to the condition of the vehicle as the complaint alleged claims for violation of express warranties, “the sales contract was the source of the warranties at the hearing of this case,” and plaintiffs expressly agreed to arbitrate claims arising out of the condition of the vehicle—even against third party nonsignatories to the sales contract.  (Id. at 496.)  Thus, the Court of Appeal found that arbitration was proper.

Plaintiff relies on the Ford Motor Warranty Cases, Ochoa v. Ford Motor Company (2023) 89 Cal.App.5th 1324 (“Ochoa”).  There, the Court of Appeal held that Ford could not compel arbitration based on the plaintiffs’ agreements with the dealers that sold them the vehicles.  (Ochoa, supra, 89 Cal.App.5th at 1329.)  The Court held that equitable estoppel did not apply because the plaintiffs’ claims were in no way related to the agreements and Ford was not a third-party beneficiary of the agreements as there was no basis to conclude that the plaintiffs and their dealers entered into the agreements with the intent of benefitting Ford.  (Id.)  The sales contracts at issue identified the parties as the buyer/“you” and the selling dealer as “Creditor-Seller,” “we,” or “us,” and Ford was not a party to nor named in the sales contract.  (Id.)  Ford argued that equitable estoppel applied because the plaintiffs’ claims were intimately founded in and intertwined with the underlying obligations of the sales contracts and the sales contracts between the plaintiffs and dealers gave plaintiffs contractual rights they now sue on—warranty claims against the manufacturer.  (Id. at 1333.)  The Court of Appeal disagreed and declined to follow Felisilda because the fact that the plaintiffs and dealer agreed to arbitrate disputes did not include Ford and the plaintiffs’ breach of warranty claims against Ford were not based on their sales contracts as warranties accompany the sale of vehicles without regard to the sales contract’s terms.  (Id. at 1334.)  In addressing the contract language in Felisilda, the Court of Appeal stated:

We do not read this italicized language as consent by the purchaser to arbitrate claims with third party nonsignatories. Rather, we read it as a further delineation of the subject matter of claims the purchasers and dealers agreed to arbitrate. They agreed to arbitrate disputes “between” themselves—“you and us”—arising out of or relating to “relationship[s],” including “relationship[s] with third parties who [did] not sign th[e] [sale] contract[s],” resulting from the “purchase, or condition of th[e] vehicle, [or] th[e] [sale] contract.”

…

The “third party” language in the arbitration clause means that if a purchaser asserts a claim against the dealer (or its employees, agents, successors or assigns) that relates to one of these third party transactions, the dealer can elect to arbitrate that claim. It says nothing of binding the purchaser to arbitrate with the universe of unnamed third parties.

(Id. at 1334-35.)  The Court of Appeal further found that equitable estoppel did not apply because the plaintiffs’ claims were not founded in the sales contract, but were instead based on the manufacturer’s warranties.  (Id. at 1335.) 

         Most recently, the Court of Appeal decided Kielar v. Superior Court of Placer County (Cal. Ct. App., Aug. 16, 2023) 2023 WL 5270559 (certified for publication).  In this action, Kielar challenged the superior court’s decision to grant Hyundai Motor America’s motion to compel arbitration of his causes of action for violation of the Song-Beverly Consumer Warranty Act.  (Kielar, supra, 2023 WL 5270559 at *1.)  The superior court had relied on Felisilda and concluded that Hyundai, as a nonsignatory manufacturer, could enforce the arbitration provision in the sales contract between Kielar and his local car dealership under the doctrine of equitable estoppel.  (Id.)  The Court of Appeal joined the recent decisions disagreeing with Felisilda (Montemayor v. Ford Motor Co. (2023 92 Cal.App.5th 958 and Ochoa, supra) and issued a preemptory writ of mandate compelling the superior court to vacate its prior order and enter a new order denying Hyundai’s motion.  (Id.)  In arriving at its decision, the Court of Appeal recognized that Plaintiff’s claims did not rely on any terms of the sales contract with the dealership t.  (Id. at *3.)  The Court of Appeal instead found:

Kielar's complaint alleges “Hyundai issued a written warranty.” This warranty was not part of his sales contract with the dealership. Indeed, the sales contract acknowledges this separate warranty and disclaims any implied warranties by the dealership: “If you do not get a written warranty, and the Seller does not enter into a service contract within 90 days from the date of this contract, the Seller makes no warranties, express or implied, on the vehicle, and there will be no implied warranties of merchantability or of fitness for a particular purpose. [¶] This provision does not affect any warranties covering the vehicle that the vehicle manufacturer may provide.” [Footnote omitted] In Ford Motor and Montemayor, Ford Motor Company moved to compel arbitration of the same type of claims at issue in this proceeding based on “the same form arbitration provision” in the plaintiffs’ sales contract with dealerships. (Ford Motor, supra, 89 Cal.App.5th at p. 1333, 306 Cal.Rptr.3d 611, rev. granted; see also Montemayor, supra, 92 Cal.App.5th at p. 968, 310 Cal.Rptr.3d 82.) These sales contracts also included the same disclaimer regarding warranties. (Montemayor, supra, at p. 962, 310 Cal.Rptr.3d 82; Ford Motor, supra, at p. 1335, 306 Cal.Rptr.3d 611.) These authorities explained Felisilda’s statement that “the sales contract was the source of the warranties” was flawed because “manufacturer vehicle warranties that accompany the sale of motor vehicles without regard to the terms of the sale contract between the purchaser and the dealer are independent of the sale contract.” (Ford Motor, supra, at p. 1334, 306 Cal.Rptr.3d 611; accord Montemayor, supra, at p. 969, 310 Cal.Rptr.3d 82; see also Ngo v. BMW of North America, LLC (9th Cir. 2022) 23 F.4th 942, 949 [“the express and implied warranties arise ‘independently of a contract of sale’ ”].) Whether a manufacturers’ express or implied warranties that accompany a vehicle at the time of sale constitute obligations arising from the sale contract, permitting manufacturers to enforce an arbitration agreement in the contract pursuant to equitable estoppel is a question now pending before our Supreme Court. In the meantime, we agree with Montemayor and Ford Motor that they do not.

Additionally, we agree with Montemayor and Ford Motor that the parenthetical language in the arbitration provision referring to nonsignatory third parties “was a ‘delineation of the subject matter of claims the purchasers and dealers agreed to arbitrate’ ” and does not bind the purchaser “ ‘to arbitrate with the universe of unnamed third parties.’ ” (Montemayor, supra, 92 Cal.App.5th at p. 971, 310 Cal.Rptr.3d 82, quoting Ford Motor, supra, 89 Cal.App.5th at p. 1335, 306 Cal.Rptr.3d 611, rev. granted.)

(Kielar, supra, 2023 WL 5270559, at *3–4.) 

Although this Court does not find Ochoa’s reasoning persuasive, it is bound by the holdings of the Court of Appeal in Ochoa, Montemayor v. Ford Motor Company (2023) 92 Cal.App.5th 958, and most recently in Kielar.  If ever there were an intended third-party beneficiary of a contract to arbitrate a vehicle warranty claim, it would be the manufacturer who made the vehicle, sold it to the dealer and who backs the dealer financially with respect to the contract.  Likely, BMWNA itself drafted and printed the warranty, purchase agreement and arbitration clause and mailed it to the dealer for use in the transaction.  However, as the cases cited show, California courts remain hostile to arbitration clauses and give them only the narrowest possible meaning, especially in consumer transactions. While not intending to adopt the pretzel logic of these cases as its own, the Court recognizes that it is a mere lower court, and that as such it must follow the authority of the Courts of Appeal, or it would needlessly delay the resolution of matters with pointless intermediate appeals and accompanying expense and delay.

         Thus, the motion to compel arbitration will not be granted based on the third-party beneficiary argument.

d.     Equitable Estoppel

“[I]f a plaintiff relies on the terms of an agreement to assert his or her claims against a nonsignatory defendant, the plaintiff may be equitably estopped from repudiating the arbitration clause of that very agreement. In other words, a signatory to an agreement with an arbitration clause cannot ‘have it both ways'; the signatory ‘cannot, on the one hand, seek to hold the non-signatory liable pursuant to duties imposed by the agreement, which contains an arbitration provision, but, on the other hand, deny arbitration's applicability because the defendant is a non-signatory.’”  (Goldman v. KPMG, LLP (2009) 173 Cal.App.4th 209, 220.)  “Under the doctrine of equitable estoppel, as applied in both federal and California decisional authority, 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.”  (Felisilda v. FCA US LLC (2020) 53 Cal.App.5th 486, 495.)

BMWNA argues that equitable estoppel applies because: (1) Plaintiff’s claims asserted against BMWNA are premised on and arise out of the Purchase Agreement, which involves the same facts and vehicle; and (2) BMWNA’s alleged misconduct is substantially interdependent with the conduct of a signatory.  BMWNA relies largely on Felisilda, supra, 53 Cal.App.5th 486 and Mance v. Mercedes-Benz USA (N.D. Cal. 2012) 901 F.Supp.2d 1147. 

In opposition, Plaintiff argues that his claims are based on BMWNA’s warranty (i.e., breaches of express and implied warranty obligations under the Act), which is a document separate from the Purchase Agreement, as well as implied warranties.  (See Ochoa, supra, 89 Cal.App.5th at 1334 [“[M]anufacturer vehicle warranties that accompany the sale of motor vehicles without regard to the terms of the sale contract between the purchaser and the dealer are independent of the sale contract.”], 1335 [“California law does not treat manufacturer warranties imposed outside the four corners of a retail sale contract as part of the sale contract.”]; see also Kramer v. Toyota Motor Corp. (9th Cir. 2013) 705 F.3d 1122, 1132 [finding that equitable estoppel did not apply, in part, because the claims did not rely on the existence of the purchase agreement with the arbitration agreement, but were rather the claims arose based on the manufacturer’s independent duties owed to consumers]; see also Kielar, supra, 2023 WL 5270559, at *3–4.) 

Again, while the warranty claims were undoubtedly intended to be included in a clause regarding claims arising out of the sale of an automobile, California appellate courts refuse to discern such an intent.  To hold otherwise, would only necessitate a pointless and expensive appeal and reversal. 

For the reasons discussed above, the motion is denied.

CONCLUSION AND ORDER

Defendant BMW of North America, LLC’s motion to compel Plaintiff to arbitration and stay the action is denied.  Defendant shall provide notice of this order.