Judge: John J. Kralik, Case: 24NNCV05993, Date: 2025-04-11 Tentative Ruling

Case Number: 24NNCV05993    Hearing Date: April 11, 2025    Dept: NCB

Superior Court of California

County of Los Angeles

North Central District

Department B

BACKGROUND

A.    Allegations

Plaintiff Bruce Montoya (“Plaintiff”) allege that on March 10, 2024, he entered into a warranty contract with Defendant Hyundai Motor America (“Defendant”) regarding a new 2024 Hyundai Elantra, which Plaintiff purchase for a total price of $57,714.96.  (Compl., ¶¶13, 16.)  Plaintiff alleges that (unspecified) defects and nonconformities manifested within the applicable express warranty period.  (Id., ¶17.)  Plaintiff alleges that he delivered the vehicle to an authorized repair facility for repair for nonconformities, but Defendant was unable to conform the vehicle to the applicable warranties after a reasonable number of attempts.  (Id., ¶¶18-19.) 

The complaint, filed November 21, 2024, alleges causes of action for: (1) violation of Song-Beverly Act – breach of express warranty; and (2) violation of Song-Beverly Act – breach of implied warranty. 

B.     Motion on Calendar

On January 7, 2025, Defendant filed a motion to compel binding arbitration.

On March 28, 2025, Plaintiff filed opposition papers.

On March 28, 2025, Defendant filed reply papers.

REQUEST FOR JUDICIAL NOTICE

            Plaintiffs request for judicial notice of Exhibit 4 attached to the declaration of Ali Ameripour, which includes a copy of the complaint in this action.  The request is granted.  (Evid. Code, § 452(d).) 

DISCUSSION

            Defendant moves to compel binding arbitration and to stay the action pending the outcome of the arbitration. 

A.    Terms of the Arbitration Agreements

Defendant provides a copy of the express written warranty located in Plaintiff’s 2024 Owner’s Handbook & Warranty Information (“Warranty”) and the Bluelink Connected Services Agreement (“CSA”) when Plaintiff enrolled his vehicle in Defendant’s Bluelink services. 

The Warranty is attached as Exhibit 3 to the declaration of defense counsel Ali Ameripour’s declaration.  Section 4 of the Warranty states:

ALTERNATIVE DISPUTE RESOLUTION FOR ALL VEHICLES

If a dispute arises regarding your warranty coverage, please follow the steps described under the “Consumer Information” section of this handbook. To ensure that you have had an opportunity to have your concern fully reviewed, Hyundai provides an Alternative Dispute Resolution program that is offered through:

BBB AUTO LINE a Division of BBB National Programs, Inc.

…

Important: You must use BBB AUTO LINE prior to seeking remedies through a court action pursuant to the Magnuson-Moss Warranty Act (“the Act”), except in Georgia, although that option is still available to you. However, if you choose to seek remedies that are not created by the Act, you are not required to use BBB AUTO LINE, although that option is still available to you. You must also use BBB AUTO LINE if you are seeking remedies under the “Lemon Laws” of your state if your state statute requires you to do so. Please consult the “Consumer Information” section of this handbook and the Owner’s Handbook Supplement for more information about the BBB AUTO LINE program. Time and mileage limitations may apply. Please refer to the Owner’s Handbook Supplement for additional information regarding eligibility requirements in your state.

BINDING ARBITRATION FOR CALIFORNIA VEHICLES ONLY

PLEASE READ THIS SECTION IN ITS ENTIRETY AS IT AFFECTS YOUR RIGHTS THIS SECTION DOES NOT PRECLUDE YOU FROM FIRST PURSUING ALTERNATIVE DISPUTE RESOLUTION THROUGH BBB AUTO LINE AS DESCRIBED IN THE “ALTERNATIVE DISPUTE RESOLUTION” PROVISION IN SECTION 3 OF THIS HANDBOOK.

If you purchased or leased your Hyundai vehicle in the State of California, you and we, Hyundai Motor America, each agree that any claim or disputes between us (including between you and any of our affiliated companies) related to or arising out of your vehicle purchase, advertising for the vehicle, use of your vehicle, the performance of the vehicle, any service relating to the vehicle, the vehicle warranty, representations in the warranty, or the duties contemplated under the warranty, including without limitation claims related to false or misleading advertising, unfair competition, breach of contract or warranty, the failure to conform a vehicle to warranty, failure to repurchase or replace your vehicle, or claims for a refund or partial refund of your vehicle's purchase price (excluding personal injury claims), but excluding claims brought under the Magnuson-Moss Warranty Act, shall be resolved by binding arbitration at either your or our election, even if the claim is initially filed in a court of law. If either you or we elect to resolve our dispute via arbitration (as opposed to in a court of law), such binding arbitration shall be administered by and through the American Arbitration Association (AAA) under its Consumer Arbitration Rules.

We will pay all fees for any arbitration except for the initial filing fee of $200. The arbitration will be held in the city or county of your residence. To learn more about arbitration, including the applicable rules and how to commence arbitration, please contact:

AAA at www.adr.org; 800-778-7879.

This agreement to arbitrate is intended to be broadly interpreted and to make all disputes and claims between us (including our affiliated companies) relating to or arising out of your vehicle purchase, use or performance of your vehicle, or the vehicle warranty subject to arbitration to the maximum extent permitted by law. The arbitrator (and not a court) shall decide all issues of interpretation, scope, and application of this agreement.

In any arbitration, the arbitrator shall be bound by the terms of this agreement and shall follow the applicable law. The arbitrator shall not have the power to commit manifest errors of law, and any award rendered by the arbitrator that employs a manifest error of law may be vacated or corrected by a court of competent jurisdiction for such error. The arbitrator may only resolve disputes between you and us and may not consolidate claims without the consent of all parties. The arbitrator cannot hear class or representative claims or requests for relief on behalf of others , or issue any award or remedy in arbitration against or on behalf of anyone who is not a named party to the arbitration, as permitted by law. In other words, you and we may bring claims against the other only in your or our individual capacity, and not as a plaintiff or class member in any class or representative action to the maximum extent permitted by law. You and we acknowledge and agree that, to the fullest extent permitted by law, we are each waiving the right to participate as a plaintiff or class member in any purported class action lawsuit, class-wide arbitration, private attorney general action, or any other representative proceeding. If a court or arbitrator decides that any part of this agreement to arbitrate cannot be enforced as to a particular claim for relief or remedy, then that claim or remedy (and only that claim or remedy) must be brought in court and must be stayed pending arbitration of the arbitrable claims and remedies. If a court or arbitrator decides that any part of this agreement cannot be enforced as to a particular request for public injunctive relief, then that request for public injunctive relief (and only that request for public injunctive relief) must be brought in court and must be stayed pending arbitration of the arbitrable remedies. If arbitration is elected by either party, the parties collectively agree that they waive their right to a jury trial.

Notwithstanding the above, either you or we may file a lawsuit in small claims court for any claims that otherwise require binding arbitration, if the small claims court has jurisdiction. In addition, either you or we may invoke any AAA Consumer Arbitration Rules that allow you or we to have a small claims court decide any claims that otherwise require binding arbitration. This agreement evidences a transaction involving interstate commerce and shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1-16. Judgment upon any award in arbitration may be entered in any court having jurisdiction.

IF YOU PURCHASED OR LEASED YOUR VEHICLE IN CALIFORNIA, YOUR WARRANTY IS MADE SUBJECT TO THE TERMS OF THIS BINDING ARBITRATION PROVISION. BY USING THE VEHICLE, OR REQUESTING OR ACCEPTING BENEFITS UNDER THIS WARRANTY, INCLUDING HAVING ANY REPAIRS PERFORMED UNDER WARRANTY, YOU AGREE TO BE BOUND BY THESE TERMS. IF YOU DO NOT AGREE WITH THESE TERMS, PLEASE CONTACT US AT OPT-OUT@HMAUSA.COM WITHIN THIRTY (30) DAYS OF YOUR PURCHASE OR LEASE TO OPT-OUT OF THIS ARBITRATION PROVISION.

(Warranty at pp. 11-14, § 4.)

Defendant argues that Plaintiff enrolled his vehicle in Defendant’s Bluelink services on March 10, 2024 and, by doing so, entered into the then-effective CSA.  (Rao Decl., ¶¶3-6.)  Vijay Rao, the Director of Connected Ops & Owner Apps/Web for Defendant, states that to enroll in the Bluelink services, the customer must agree to the CSA, which is made available to every customer who enrolls in the plan, and clock on the acknowledgement box stating that Plaintiff read and agreed to the Terms & Conditions of the CSA.  (Rao Decl., ¶6, Ex. 1 [example Subscription webpage].)  The CSA is attached as Exhibit 2 to the declaration of Vijay Rao.  Section 14 includes a section entitled “RESOLVING DISPUTES.”  In subsection A (Governing Law), it states that disputes arising out of or relating to the CSA will be governed by the laws of the state of California without regard to its conflict of law principles.  In subsection B (Time Limits), it states that except where prohibited by law, Plaintiff is not allowed to bring any claim against Hyundai or Genesis (or any other third party beneficiary) more than 1 year after the claim arises.  Subsection C (Binding Arbitration) states that most customer concerns can be resolved by Hyundai’s customer service department.  It further states:

IN THE UNLIKELY EVENT THAT THE APPROPRIATE CUSTOMER SERVICE DEPARTMENT IS UNABLE TO RESOLVE YOUR CONCERNS, WE EACH AGREE TO RESOLVE THOSE DISPUTES THROUGH BINDING ARBITRATION OR SMALL CLAIMS COURT INSTEAD OF IN COURTS OF GENERAL JURISDICTION TO THE FULLEST EXTENT PERMITTED BY LAW, AND SUBJECT TO THE TERMS OF THIS AGREEMENT. ARBITRATION IS MORE INFORMAL THAN A LAWSUIT IN COURT. ARBITRATION USES A NEUTRAL ARBITRATOR INSTEAD OF A JUDGE OR JURY, ALLOWS FOR MORE LIMITED DISCOVERY THAN IN COURT, AND IS SUBJECT TO VERY LIMITED REVIEW BY COURTS. ARBITRATORS CAN AWARD THE SAME DAMAGES AND RELIEF THAT A COURT CAN AWARD. ANY ARBITRATION UNDER THIS AGREEMENT WILL TAKE PLACE ON AN INDIVIDUAL BASIS TO THE MAXIMUM EXTENT PERMITTED BY LAW; CLASS ARBITRATIONS, CLASS ACTIONS OR REPRESENTATIVE ARBITRATIONS ARE NOT PERMITTED. HYUNDAI OR GENESIS WILL PAY ALL ADMINISTRATIVE COSTS OF THE ARBITRATOR, NO MATTER WHO WINS, SO LONG AS YOUR CLAIM IS NOT FRIVOLOUS OR BROUGHT IN BAD FAITH. HOWEVER, IN ARBITRATION, BOTH YOU AND HYUNDAI WILL BE ENTITLED TO RECOVER ATTORNEYS´ FEES FROM THE OTHER PARTY TO THE SAME EXTENT AS YOU WOULD BE IN COURT.

Arbitration Agreement:

(a) Hyundai and you agree to arbitrate any and all disputes and claims between us arising out of or relating to this Agreement, Connected Services, Connected Services Systems, Service Plans, the Vehicle, use of the sites, or products, services, or programs you purchase, enroll in or seek product/service support for, whether you are a Visitor or Customer, via the sites or through mobile application, except any disputes or claims which under governing law are not subject to arbitration, to the maximum extent permitted by applicable law. This agreement to arbitrate is intended to be broadly interpreted and to make all disputes and claims between us subject to arbitration to the fullest extent permitted by law. However, any dispute you or we may have relating to copyrights or other intellectual property shall not be governed by this agreement to arbitrate. For the avoidance of doubt, this means that any claims you or we may have relating to intellectual property rights against the other, including injunctive and other relief sought, may be brought in a court of competent jurisdiction. The agreement to arbitrate otherwise includes, but is not limited to: claims based in contract, tort, warranty, statute, fraud, misrepresentation or any other legal theory; claims that arose before this or any prior Agreement (including, but not limited to, claims relating to advertising); claims that are currently the subject of purported class action litigation in which you are not a member of a certified class; claims relating to the Vehicle for which you seek product or service support via the sites; claims arising out of or relating to the Telephone Consumer Protection Act; claims relating to your data privacy or information security; and claims that may arise after the termination of this Agreement.

For purposes of this arbitration provision, references to “Hyundai,” “you,” and “us” shall include our respective parent entities, subsidiaries, affiliates, agents, employees, predecessors in interest, successors and assigns, websites of the foregoing, as well as all authorized or unauthorized users or beneficiaries of services, products or information provided or made available under this or prior Agreements between us relating to or arising from any aspect of your use of the Connected Services, Connected Service Systems, Service Plans, the Vehicle or access of the sites. Notwithstanding the foregoing, either party may bring an individual action in small claims court. You agree that, by entering into this Agreement, you and Hyundai are each waiving the right to a trial by jury or to participate in a class or representative action to the maximum extent permitted by law. This Agreement evidences a transaction in interstate commerce, and thus the Federal Arbitration Act governs the interpretation and enforcement of this arbitration provision. This arbitration provision shall survive termination of this Agreement or your relationship with Hyundai for any reason.

(CSA at § 14(a).)  Subsection (b) discusses the notice procedure to initiate arbitration.  Subsection (c) states that Defendant will reimburse Plaintiff for paying arbitration filing fees; the arbitration will be governed by the AAA (with links/phone number to find the rules); the arbitrator shall decide the scope and enforceability of the arbitration provision; and how arbitration fees will be paid.  Subsection (d) states that discovery and/or the exchange of non-privileged information will be subject to the AAA rules.  Subsection (e) includes a waiver of class or representative proceedings.  Subsection (f) states that “batch” arbitrations (i.e., where a law firm/legal counsel has filed more than 150 arbitration demands of a similar nature against Defendant with identical/similar claims) shall be resolved together in groups of 150 and if subsection (f) is not enforced or the arbitrator declines to do so, then each arbitration may proceed individually and enforceable portions of the arbitration agreement may be stricken.  Subsection (g) states that if any changes are made to the arbitration provision, Plaintiff may reject the change and require Defendant to adhere to the language of the CSA at the time of enrollment. 

            As stated above, the Warranty’s arbitration terms state that the agreement is subject to the FAA.  The Warranty’s arbitration provision states that it applies to disputes arising out of the warranty coverage as well as any claim or dispute related to or arising out of “your vehicle purchase, advertising for the vehicle, use of your vehicle, the performance of the vehicle, any service relating to the vehicle, the vehicle warranty, representations in the warranty, or the duties contemplated under the warranty, including without limitation claims related to false or misleading advertising, unfair competition, breach of contract or warranty, the failure to conform a vehicle to warranty, failure to repurchase or replace your vehicle, or claims for a refund or partial refund of your vehicle's purchase price (excluding personal injury claims), but excluding claims brought under the Magnuson-Moss Warranty Act, shall be resolved by binding arbitration at either your or our election, even if the claim is initially filed in a court of law.”  The Warranty states that the arbitration agreement is intended to be broadly interpreted to “make all disputes and claims between us (including our affiliated companies) relating to or arising out of your vehicle purchase, use or performance of your vehicle, or the vehicle warranty subject to arbitration to the maximum extent permitted by law.”  Similarly, the CSA includes an arbitration provision that states that any and all disputes and claims arising out of or relating to the CSA, the services, the vehicle, etc. shall be subject to arbitration and that the arbitration provision is meant to be interpreted broadly. 

            In opposition, Plaintiff argues that he cannot be compelled to arbitrate on an agreement he did not agree to, he did not accept the arbitration clause in the Warranty, he is not equitably estopped from refusing to arbitrate because he did nothing wrong, and he did not sign the CSA Agreement as he never downloaded or used the Bluelink app. 

“When a plaintiff brings a claim which relies on contract terms against a defendant, the plaintiff may be equitably estopped from repudiating the arbitration clause contained in that agreement.”  (JSM Tuscany, LLC v. Superior Court (2011) 193 Cal.App.4th 1222, 1239 [emphasis in original].)  Here, even if Plaintiff claims that he “did nothing wrong,” equitable estoppel may still apply since Plaintiff is relying on the terms of the Warranty as the basis for his Song-Beverly Act claims.  For example, in Davis v. Nissan North America, Inc. (2024) 100 Cal.App.5th 825, 837, the Court of Appeal stated: “‘Equitable estoppel would apply if the plaintiffs had sued [Nissan] based on the terms of the sale contract yet denied [Nissan] could enforce the arbitration clause in that contract.’ [Citation.] But equitable estoppel does not apply here because plaintiffs are not relying on the terms of the sale contract to impose liability on Nissan.”  In contrast, here, Plaintiff is suing Defendant on the terms of the Warranty, such that equitable estoppel would apply since Plaintiff relies on the Warranty terms to impose liability against Defendant.  By relying on the Warranty terms, he acknowledges the existence and application of the Warranty.  Plaintiff cannot have it both ways—alleging in the complaint that his claims are based on the Warranty and yet disclaiming the Warranty terms (specifically the arbitration provision) when inconvenient.  (The Court notes that Plaintiff does not argue that the arbitration provision is unenforceable due to unconscionability.)  In the opposition brief, Plaintiff attempts to distinguish all the cases cited by Defendant supporting equitable estoppel, arguing that the cases involve nonsignatories.  However, whether a case involves or does not involve a nonsignatory seeking to compel arbitration, the core principle remains the same: Plaintiff is relying on the express terms of the Warranty as the basis for his claims.  Thus, he cannot seek to benefit under the Warranty and yet seek to repudiate the arbitration clause in the same Warranty agreement.   

Next, Plaintiff argues that he does not have the Bluelink app on his phone and has never downloaded it.  Even if he did not download or use the Bluelink app, and thereby did not click the agreement to arbitrate via the app for this particular service, this does not invalidate the arbitration agreement in the Warranty.  Defendant’s presentation of the CSA was an additional or alternative ground to seek arbitration, but is not necessary in light of the valid agreement to arbitrate in the Warranty.

            For these reasons, the Court grants Defendant’s motion to compel arbitration. 

CONCLUSION AND ORDER

Defendant Hyundai Motor America’s motion to compel arbitration is granted.  The action is stayed pending the resolution of the arbitration. 

The Court sets a Status Conference re: Arbitration for October 15, 2025 at 8:30 a.m. 

Defendant shall provide notice of this order. 

DATED: April 11, 2025                                                         ___________________________

                                                                                          John Kralik

                                                                                          Judge of the Superior Court