Judge: Katherine Chilton, Case: 22STLC03872, Date: 2022-09-15 Tentative Ruling

Case Number: 22STLC03872     Hearing Date: September 15, 2022    Dept: 25

PROCEEDINGS:      MOTION TO COMPEL ARBITRATION AND STAY PROCEEDINGS

MOVING PARTY:   Plaintiff Victor Arreola

RESP. PARTY:         None

MOTION TO COMPEL ARBITRATION AND STAY PROCEEDINGS

(CCP §§ 1281.2)

TENTATIVE RULING:

Plaintiff Victor Arreola’s Motion to Compel Arbitration and Stay Proceedings is CONTINUED TO OCTOBER 31, 2022, AT 10:00 A.M.

SERVICE: 

[X] Proof of Service Timely Filed (CRC, rule 3.1300)                 OK

[X] Correct Address (CCP §§ 1013, 1013a)                                                 OK

[X] 16/21 Court Days Lapsed (CCP §§ 12c, 1005(b))                     OK

OPPOSITION:          None filed as of September 13, 2022.                     [   ] Late                      [X] None

REPLY:                     None filed as of September 13, 2022.                     [   ] Late                      [X] None

ANALYSIS:

I.                Background

On June 9, 2022, Plaintiff Victor Arreola (“Plaintiff”) filed an action against Defendants Cerritos Ford, Inc., dba Norm Reeves Ford Superstore/Norm Reeves Lincoln (“Cerritos Ford”), Capital One, National Association, Successor in Interest to Capital One Auto Finance, Inc. a surrendered corporation (“Capital One”), and Hudson Insurance Company (“Hudson”) (collectively “Defendants”) for (1) violation of Consumers Legal Remedies Act, Civil Code § 1750 et seq., (2) violation of California Business and Professions Code § 17200, et seq., Unlawful Acts or Practices, (3) claim against Surety, and (4) violation of Code of Civil Procedure §§ 1281.97 and 1281.99.  The action arose out of an alleged Retail Installment Sales Contract for a purchase of a vehicle sold by Defendant Cerritos Ford and financed by Defendant Capitale One.  (See Compl.)

On July 11, 2022, Plaintiff filed the instant Motion to Compel Arbitration (the “Motion”), requesting an order to compel Defendants Cerritos Ford and Capital One to arbitrate the controversy with the American Arbitration Association (“AAA”) or in the alternative, JAMS, and for the Court to stay the proceedings pending results of the arbitration.  No opposition has been filed.

On August 12, 2022, Defendant Hudson filed an Answer.

II.              Legal Standard

Pursuant to Code of Civil Procedure §1281.2, generally, on a petition to compel arbitration, the court must grant the petition unless it finds either (1) no written agreement to arbitrate exists; (2) the right to compel arbitration has been waived; (3) grounds exist for revocation of the agreement; or (4) litigation is pending that may render the arbitration unnecessary or create conflicting¿rulings on common issues.

When seeking to compel arbitration, the initial burden lies with the moving party to demonstrate the existence of a valid arbitration agreement by prepondernace of evidence.  (Ruiz v. Moss Bros. Auto Group (2014) 232 Cal.App.4th 836, 841-42; Gamboa v. Northeast Community Clinic (2021), 72 Cal.App.5th 158, 164-65.)  It is sufficient for the moving party to produce a copy of the arbitration agreement or set forth the agreement’s provisions.  (Gamboa, 72 Cal.App.5th at 165.)  The burden then shifts to the opposing party to prove by a preponderance of evidence any defense to enforcement of the contract or the arbitration clause.  (Ruiz, 232 Cal.App.4th at 842; Gamboa, 72 Cal.App.5th at 165.)  Subsequently, the moving party must establish with the preponderance of admissible evidence a valid arbitration agreement between the parties.  (Ibid.)  The trial court then weighs all the evidence submitted and uses its discretion to make a final determination.  (Ibid.)  “California law, ‘like [federal law], reflects a strong policy favoring arbitration agreements and requires close judicial scrutiny of waiver claims.’”  (Wagner Const. Co. v. Pacific Mechanical Corp. (2007) 41 Cal.4th 19, 31.)

If the court orders arbitration, then the court shall stay the action until arbitration is completed.  (See Code Civ. Proc., § 1281.4.)

III.            Discussion

Plaintiff Arreola brings the instant Motion seeking to compel Defendants Cerritos Ford and Capital One to submit to arbitration based on a written retail installment sales contract between Plaintiff, on the one hand, and Defendants, on the other hand.  (Sadr Decl. ¶ 5; Exs. 2-3.)  Plaintiff argues that the Retail Installment Sales Agreement (“Contract”) has an arbitration provision and sets out the language of the provision:

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 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 decision… You may choose the American Arbitration Association, 1633 Broadway, Floor 10, New York, NY 10019 (www.adr.org); or any other organization to conduct the arbitration subject to our approval.

(Mot. p. 3; Sadr Decl. ¶ 5; Ex. 2.)  Plaintiff argues that “[t]he Contract governs the terms and conditions of the parties’ transaction” and “the right to compel arbitration has not been waived.” (Mot. pp. 3-5.)

Plaintiff’s counsel states that on or around November 19, 2021, counsel sent Defendants a Notice of Violation of the Consumer Legal Remedies Act and Demand for Arbitration.  (Sadr Decl. ¶ 3; Ex. 1.)  Defendants did not agree to the arbitration.  (Ibid. at ¶ 4.)  On or around February 22, 2022, counsel filed for arbitration with the American Arbitration Association (“AAA”), which accepted arbitration of the dispute on March 25, 2022, and requested payment of arbitration fees from Defendants.  (Ibid. at ¶¶ 8-9; Ex. 4.)  However, Defendants did not make the payments and the AAA closed the case.  (Ibid. at ¶ 10-11; Exs. 5-6.)

Plaintiff argues that he has a right to pick the arbitration forum pursuant to the arbitration provision of the Contract, which states “You may choose the American Arbitration Association, 1633 Broadway, Floor 10, New York, NY 10019 (www.adr.org); or any other organization to conduct the arbitration subject to our approval.”  (Mot. pp. 5-6; Sadr Decl. ¶ 5; Ex. 2.)  “Plaintiff hereby chooses AAA as the arbitration forum for this matter,” or in the alternative JAMS.  (Mot. p. 6.)

Finally, Plaintiff argues that the Contract requires Defendant Capital One, as “the finance company that financed the sale of the vehicle to Plaintiff” to be subject to the arbitration provision.  (Mot. pp. 6-7.)  The Contract states that “ANY HOLDER OF THIS CONSUMER CREDIT CONTRACT IS SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE DEBTOR COULD ASSERT AGAINST THE SELLER OF GOODS OR SERVICES OBTAINED PURUSANT HERETO OR WITH THE PROCESS HEREOF.”  (Ibid. at p. 7; Sadr Decl. ¶ 5; Ex. 2.)

            Defendants have not filed an opposition to the Motion.

The Court finds that there is no dispute regarding the existence of an arbitration agreement as Plaintiff has attached a copy of the Contract and set out the language in the Motion.  Defendants have not opposed the Motion on any grounds. 

            However, neither Defendant Cerritos Ford nor Defendant Capital One has filed an answer in this litigation.  The Court hereby continues this Motion to October 31, 2022 at 10:00 a.m. to allow Plaintiff to file additional authority on whether the Court can order Defendants to arbitration prior to their appearance in this action.   

IV.           Conclusion & Order

For the reasons discussed above, Plaintiff Victor Arreola’s Motion to Compel Arbitration and Stay Proceedings is CONTINUED TO OCOTOBER 31, 2022 at 10:00 a.m., in DEPARTMENT 25, SPRING STREET COURTHOUSE. At least 16 court days before the next scheduled hearing, Plaintiff must file and serve supplemental papers addressing the issue of whether the Court can order Defendants to arbitrate prior to the case being at issue.  Failure to do so may result in the Motion being placed off calendar or denied.

Moving party is ordered to give notice.