Judge: Jon R. Takasugi, Case: 24STCV34516, Date: 2025-03-20 Tentative Ruling

Case Number: 24STCV34516    Hearing Date: March 20, 2025    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

Defendants’ motion to compel arbitration is GRANTED IN PART, DENIED IN PART. Defendant’s motion is GRANTED as to the fourth cause of action against Garden Grove Nissan, but DENIED as to the first, second, and third causes of action against Nissan North America. This action is stayed pending the completion of arbitration.

On 12/30/2024, Guillermo Choto (Plaintiff) filed suit against Nissan North America, Inc and Garden Grove Defendants (collectively, Defendants), alleging: (1) breach of express warranty; (2) breach of implied warranty; (3) violation of the Song-Beverly Act section 1793.2(b); and (4) violation of Civil Code section 1796.5.

            On 2/7/2024, Defendants moved to compel arbitration of Plaintiff’s Complaint, and stay proceedings pending the completion of arbitration.

Legal Standard

Where the Court has determined that an agreement to arbitrate a controversy exists, the Court shall order the petitioner and the respondent to arbitrate the controversy …unless it determines that…  grounds exist for rescission of the agreement.” (Code Civ. Proc., § 1281.2.) Among the grounds which can support rescission are fraud, duress, and unconscionability. (Tiri v. Lucky Chances, Inc. (2014) 226 Cal.App.4th 231, 239.) The Court may also decline to compel arbitration wherein there is possibility of conflicting rulings on a common issue of law or fact. (Code Civ. Proc., § 1281.2 (c).)

Discussion

The party moving to compel arbitration “bears the burden of proving [the] existence [of an arbitration agreement] by a preponderance of the evidence.” (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413.) The moving party also bears the burden of demonstrating that the claims fall within the scope of the arbitration agreement. (Omar v. Ralphs Grocery Co. (2004) 118 Cal.App.4th 955, 961.)

A.    Existing Agreement

Defendants submitted evidence that on 1/9/2022, Plaintiff and Garden Grove Nissan entered into the Sales Contract regarding Plaintiff’s purchase of a new 2022 Nissan Altima. The Lease Agreement has a provision titled “ARBITRATION PROVISION PLEASE REVIEW – IMPORTANT – AFFECTS YOUR LEGAL RIGHTS.” (Liss Decl. pg. 7.)

The arbitration provision states that:

1.      EITHER YOU OR WE MAY CHOOSE TO HAVE ANY DISPUTE BETWEEN US DECIDED BY ARBITRATION AND NOT IN COURT OR BY JURY TRIAL.

2.      IF A DISPUTE IS ARBITRATED, YOU WILL GIVE UP YOUR RIGHT TO PARTICIPATE AS A CLASS REPRESENTATIVE OR CLASS MEMBER ON ANY CLASS CLAIM YOU MAY HAVE AGAINST US INCLUDING ANY RIGHT TO CLASS ARBITRATION OR ANY CONSOLIDATION OF INDIVIDUAL ARBITRATIONS.

3.      DISCOVERY AND RIGHTS TO APPEAL IN ARBITRATION ARE GENERALLY MORE LIMITED THAN IN A LAWSUIT, AND OTHER RIGHTS THAT YOU AND WE WOULD HAVE IN COURT MAY NOT BE AVAILABLE IN ARBITRATION.

(Id.)

      Moreover, the arbitration provision 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 ]the] 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.

Here, Plaintiff’s claim against Garden Grove Nissan for negligent repair arises between the contacting parties and concerns the condition of the vehicles. As such, this claim is subject to arbitration.

      However, in its motion, Defendant Nissan North America argues that it also has standing to enforce the agreement under a theory of equitable estoppel. 

The Court disagrees.

In the past, this Court has concluded that Defendant could enforce the arbitration agreement under a theory of equitable estoppel. This was based on a conclusion that Song-Beverly claims: (1) necessarily rely on the underlying contract, given that if a plaintiff did not enter into the RISC, he or she would not have received the Subject Vehicle or the corresponding warranties and certifications from the defendant; and (2) all directly relate to the condition of the vehicle and thus are intimately founded in and intertwined with the underlying contract and the condition of the vehicle bought subject to that contract.

            However, the Court of Appeal directly addressed the manufacturer’s standing vis-à-vis the Sales Contract and equitable estoppel in the newly published Martha Ochoa v. Ford Motor Company (2023) Cal.Ct.App. In rejecting the car manufacturer’s right to enforce the Sales Contract’s arbitration agreement under a theory of third-party beneficiary or equitable estoppel, the Court wrote:

We agree with the trial court that FMC [Ford] could not compel arbitration based on plaintiffs’ agreements with the dealers that sold them the vehicles. Equitable estoppel does not apply because, contrary to FMC’s arguments, plaintiffs’ claims against it in no way rely on the agreements. FMC was not a third party beneficiary of those agreements as there is no basis to conclude the plaintiffs and their dealers entered into them with the intention of benefitting FMC.

            Moreover, as noted by Plaintiff in opposition, Felisilda, the authority relied upon to allow manufacturers to enforce arbitration, dealt with a dealership’s motion under its own contract. As such, Ochoa is more directly analogous to the facts here, and the Court declines to follow Felisilda over Ochoa.

Taken together, the Court finds that while Plaintiff’s claim against Garden Grove Nissan is subject to arbitration, Plaintiff’s claims against Nissan North America are not.

            As such, the Court stays Plaintiff’s claims against Nissan North America pending the completion of arbitration. This will prevent the risk of conflicting rulings.

            Based on the foregoing, Defendants’ motion to compel arbitration is granted in part, denied in part. Defendant’s motion is granted as to the fourth cause of action against Garden Grove Nissan, but denied as to the first, second, and third causes of action against Nissan North America. This action is stayed pending the completion of arbitration.

It is so ordered.

Dated:  March    , 2025

   Hon. Jon R. Takasugi
   Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court at smcdept17@lacourt.org by 4 p.m. the day prior as directed by the instructions provided on the court website at www.lacourt.org.  If a party submits on the tentative, the party’s email must include the case number and must identify the party submitting on the tentative.  If all parties to a motion submit, the court will adopt this tentative as the final order.  If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar.  For more information, please contact the court clerk at (213) 633-0517.