Judge: John J. Kralik, Case: 24BBCV00447, Date: 2024-10-25 Tentative Ruling
Case Number: 24BBCV00447 Hearing Date: October 25, 2024 Dept: NCB
North
Central District
|
joshua
eisenberg, Plaintiff, v. u-haul holding
company,
et al., Defendants. |
Case No.: 24BBCV00447 Hearing Date: October 25, 2024 [TENTATIVE]
order RE: motion to compel
arbitration and to stay proceedings |
BACKGROUND
A.
Allegations
Plaintiffs Joshua Eisenberg (“Eisenberg”)
and Thomas Moiseyev (“Moiseyev”) allege that on March 31, 2023, they were in
lawful possession of a U-Haul truck that they had rented from Defendants U-Haul
Holding Company (“U-Haul”) and City of Los Angeles’ (“City”) facility. Plaintiffs allege that unbeknownst to them,
U-Haul had reported the truck as being stolen to the police, such that the LAPD
performed a stolen vehicle stop, stopping the U-Haul truck, ordering Plaintiffs
out of the truck with guns drawn, handcuffing Plaintiffs, and having Plaintiffs
remain in custody as the police searched the vehicle. Plaintiffs allege that the LAPD discovered
that U-Haul made a mistake by negligently reporting the truck as being stolen
and Plaintiffs were released.
The complaint, filed on February 22,
2024, alleges a single of action for general negligence.
B.
Motion on Calendar
On August 16, 2024, U-Haul filed a motion
to compel Eisenberg to arbitration and to stay the proceedings pending the
completion of the arbitration.
On October 11, 2024, Eisenberg filed an
opposition brief.
On October 18, 2024, U-Haul filed a reply
brief.
REQUEST FOR
JUDICIAL NOTICE
U-Haul
requests judicial notice of Exhibits: (1) the complaint; and (2) the answer
filed in this action. The request is
granted. (Evid. Code, § 452(d).)
DISCUSSION
U-Haul
moves to compel Eisenberg to submit his claims to arbitration.
A.
Terms of the Arbitration Agreement
U-Haul moves
to compel arbitration based on the U-Haul Rental Equipment Contract, Rental
Contract Addendum, and the Arbitration Agreement. U-Haul provides the declaration of Ashley
Fish, who is the Vice President of U-Haul Co. of California. She states that Exhibit A includes the Rental
Equipment Contract entered between U-Haul and Eisenberg on March 31, 2023,
Exhibit B includes the Rental Contract Addendum effective as of March 31, 2023,
and Exhibit C is the applicable Arbitration Agreement that is available on the uhaul.com/arbitration
website. (Fish Decl., ¶¶4, 6, 7.) The documents were not attached to Ms. Fish’s
declaration but were later attached as an addendum to Craig Winterman’s
declaration.
The
Rental Equipment Contract is dated March 31, 2023 and names Eisenberg as the
customer. It states in relevant part:
I agreed to submit all legal claims in
accordance with the U-Haul Arbitration Agreement, incorporated by reference,
and available at uhaul.com/arbitration or from my local U-Haul representative.
(Winterman Decl., Ex. A [Rental Equipment
Contract at p.1].) The agreement is
signed by Eisenberg.
The
Rental Contract Addendum states that the agreement is between Eisenberg
(customer) and U-Haul (company) and that the Terms & Conditions, including
the Arbitration Agreement, constitute the entire agreement. (Winterman Decl., Ex. B [Rental Contract
Addendum at p.1].)
The
U-Haul Arbitration Agreement states that the Arbitration Agreement shall be
construed and interpreted under the FAA.
(Winterman Decl., Ex. C [Arbitration Agreement at p. 1, § 1].) It states that any claims between Eisenberg
and U-Haul relating in any way to the rental or purchase from U-Haul shall be
submitted to binding arbitration before the American Arbitration Association
according to the AAA Commercial Arbitration Rules and Supplemental Procedures
for Consumer-Related Disputes (website links provided). (Arbitration Agreement at p.1, § 2.) The term “Claims” “is to be broadly
interpreted to include any dispute, claim or cause of action arising out of or
relating to, Your [Eisenberg’s] dealings with U-Haul, including but not limited
to, the reservation and/or reservation process, use of any affiliated U-Haul
website, advertising, rental or sales contract, or Equipment. Claims include
any and all legal theories, including but not limited to, all statutory and
tort claims, that may be asserted by You.”
(Id. at p.2.) The
Arbitration Agreement discusses the notice procedure (page 2), the exceptions
to the application of the AAA rules (pages 2-3), the arbitrator’s authority (page
3), and confidentiality (page 4). Fees
are disclosed by referencing the www.adr.org website and AAA filing,
administration, and arbitrator fees will be paid by U-Haul to a maximum of
$5,000, and then the arbitrator will have discretion on how fees in excess of
$5,000 will be attributed between U-Haul and Eisenberg. (Id. at p.4.)
Eisenberg’s
claim for negligence against U-Haul arises out of his dealings with U-Haul
regarding the reservation and use of the truck.
As such, the negligence claim falls within the scope of the arbitration
provision. In opposition, Eisenberg
argues that the Court should apply CCP § 1281.2 and deny the motion.
B.
CCP § 1281.2(c)
Eisenberg argues that the Court should
apply CCP § 1281.2(c) and deny the motion because third-parties have joined the
action, the claims arise out of the same set of facts/events, and there is a
possibility of conflicting rulings on common issues of law and fact.
CCP § 1281.2
states in relevant part:
On petition of a party to an arbitration agreement
alleging the existence of a written agreement to arbitrate a controversy and
that a party to the
agreement refuses to arbitrate that controversy, the court shall
order the petitioner and the respondent to arbitrate the controversy if it
determines that an agreement to arbitrate the controversy exists, unless it
determines that:
…
(c) A party to the arbitration agreement is also a party to a pending court
action or special proceeding with a third party, arising out of the same
transaction or series of related transactions and there is a possibility
of conflicting rulings on a common issue of law or fact. For purposes of
this section, a pending court action or special proceeding includes an action
or proceeding initiated by the party refusing to arbitrate after the petition
to compel arbitration has been filed, but on or before the date of the hearing
on the petition. …
(CCP
§ 1281.2 [underline added].)
Eisenberg argues that there are 4
parties to this action: Eisenberg, Moiseyev, U-Haul, and City, such that if
arbitration were to proceed, it would result in: (1) an arbitration between
Eisenberg and U-Haul; (2) a civil lawsuit between Moiseyev and U-Haul; and (3)
a civil lawsuit between Plaintiffs and City.
Eisenberg argues that granting this motion would split the action into 3
proceedings and would create the risk of unnecessary, duplicative proceedings
and inconsistent rulings.
The Arbitration Agreement submitted
by Plaintiff states that the arbitration is governed by the rules of the
FAA.
The FAA states at
9 U.S.C. § 3:
If any suit or
proceeding be brought in any of the courts of the United States upon any issue
referable to arbitration under an agreement in writing for such arbitration,
the court in which such suit is pending, upon being satisfied that the issue
involved in such suit or proceeding is referable to arbitration under such an
agreement, shall on application of one of the parties stay the trial of the
action until such arbitration has been had in accordance with the terms of the
agreement, providing the applicant for the stay is not in default in proceeding
with such arbitration.
(9 U.S.C. §
3.) While CCP § 1281.2(c) provides the
Court with discretion to deny arbitration in certain circumstances, the FAA
states that matters that are subject to arbitration “shall” be referred to
arbitration. “The Federal Arbitration Act (FAA) (9 U.S.C. § 1
et seq.) does not include a provision comparable to section
1281.2(c) and therefore requires courts to enforce written arbitration
agreements even if there is pending litigation involving a third party that may
result in conflicting rulings.” (Acquire II, Ltd. v. Colton Real Estate Group (2013)
213 Cal.App.4th 959, 968.) “Thus, when a
complaint contains both arbitrable and nonarbitrable claims, the Act requires
courts to ‘compel arbitration of pendent arbitrable claims when one of the
parties files a motion to compel, even where the result would be the possibly
inefficient maintenance of separate proceedings in different forums.’” (KPMG LLP v. Cocchi (2011)
565 U.S. 18, 22.)
Despite
the provisions of the FAA and the case law above, courts have recognized that
the “procedural provisions of the FAA and section 1281.2 do not conflict….” (Cronus Investments, Inc. v. Concierge
Services (2005) 35 Cal.4th 376, 390.)
As stated in Volt Information Sciences, Inc. v. Board of Trustees of
Leland Stanford Junior University (1989) 489 U.S. 468:
Application
of § 1281.2(c) to stay arbitration under the parties' contract is not preempted
by the FAA. The FAA contains no express preemptive provision, nor does it
reflect a congressional intent to occupy the entire field of arbitration.
Moreover, since the FAA's principal purpose is to ensure that private
arbitration agreements are enforced according to their terms, it cannot be said
that application of § 1281.2(c) here would undermine the Act's goals and
policies. Arbitration under the Act in a matter of consent, not coercion, and
the parties are generally free to structure their arbitration agreements as
they see fit. Just as they may limit by contract the issues which they will
arbitrate, Mitsubishi Motors Corp. v. Soler Chrysler–Plymouth, Inc., 473
U.S. 614, 628, 105 S.Ct. 3346, 3354, 87 L.Ed.2d 444, so too may they specify by
contract the rules under which the arbitration will be conducted. Where … the
parties have agreed to abide by state arbitration rules, enforcing those rules
according to the terms of the agreement is fully consistent with the FAA's
goals, even if the result is that arbitration is stayed when the Act would
otherwise permit it to go forward.
(Volt
Information Sciences, supra, 489 U.S. at 469.)
Here, based on the Arbitration Agreement
submitted by U-Haul in its moving papers, the parties agreed to apply the FAA
when submitting to the Arbitration Agreement.
However,
Eisenberg argues that even if the Arbitration Agreement includes the FAA rules,
a party to an arbitration agreement may rely on CCP § 1281.2(c) if the
agreement incorporates a provision allowing the law of the State where the
arbitration takes place. Eisenberg cites
to a different version of the Arbitration Agreement on page 4 that has
been pulled from uhaul.com/arbitration (date not disclosed), which the Court
notes is different from the Arbitration Agreement attached to the declaration
of Mr. Winterman (which was inadvertently not attached to the declaration of
Ms. Fish). The Arbitration Agreement
attached to the declaration of Plaintiffs’ counsel Shayan Rahbar Vafaee in
support of the opposition papers states in relevant part:
g.
Location of Arbitration Hearing/Governing Law. The Arbitration shall take place
in the County (or Parish) where You reside, either at the time of the rental
and/or sale or return of the Equipment, unless otherwise agreed in writing by
U-Haul and You. This Agreement shall be interpreted and construed in
accordance with the law of the State where the Arbitration takes place. Any
and all Claims arising out of or relating to this Agreement, whether sounding
in contract, tort or statute, shall be governed by the law of the State where
the Arbitration takes place, including its statutes of limitations, without
giving effect to any conflict-of-laws rule that would result in the application
of the laws of a different jurisdiction.
(Vafaee
Decl., Ex. A [Arbitration Agreement at p.4, § 7.g] [emphasis added].) A similar provision is not provided in the
Arbitration Agreement submitted with the moving papers.
In the reply brief, U-Haul argues
that Eisenberg has not shown that the different Arbitration Agreement attached
to the opposition papers is the agreement that was in effect at the time of
Eisenberg’s rental. (Reply at p.2,
fn.2.) However, the Court likewise
cannot ascertain if the Arbitration Agreement attached with the moving papers
was the operative Arbitration Agreement at the time of Eisenberg’s rental. Ms. Fisher’s declaration states: “The U-Haul
Rental Equipment Contract refers to the ‘U-Haul Arbitration Agreement,’ which
it incorporates by reference, and which is available at uhaul.com/arbitration.
Attached hereto as EXHIBIT C is a true and correct copy of this ‘U-Haul
Arbitration Agreement.’” (Fish Decl.,
¶7.) When entering the
“uhaul.com/arbitration” website, the version of the Arbitration Agreement that
is provided is the one that is attached to the opposition brief. The Court notes that both submitted versions
of the Arbitration Agreement are not dated.
Despite this conflict in the
evidence, the Court will assume that CCP § 1281.2, can be harmonized so that
both arbitration and litigation can be accommodated. The Court would like to act practically to get
this matter resolved and scheduled. In view of the Court’s schedule, this
matter would be set for trial in July 2026. The Court will order the arbitration to be
held between U-Haul and Eisenberg. The
Court will expect that the arbitration be concluded within one year and will
expect both parties to proceed with deliberate speed to bring it to a
conclusion. There will then be adequate time to assess the results, and then
complete any discovery necessary for the remaining civil action. The Court will
not stay the remainder of the civil action. The parties should discuss a
stipulation that will allow discovery to be used in both proceedings.
CONCLUSION
AND ORDER
Defendant U-Haul
Holding Company’s motion to compel Plaintiff Joshua Eisenberg to arbitration is
granted. The request for stay is denied.
A Post Arbitration Status Conference is scheduled for September 17, 2025, at
8:30 a.m. as to the above mentioned parties only.
Defendant shall
provide notice of this order.
DATED:
October 25, 2024 ___________________________
John
Kralik
Judge
of the Superior Court