Judge: Latrice A. G. Byrdsong, Case: 23STLC04731, Date: 2024-04-30 Tentative Ruling
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Case Number: 23STLC04731 Hearing Date: April 30, 2024 Dept: 25
Hearing Date: Tuesday, April 30, 2024
Case Name: ANGEL ORTEGA, an individual v. AUSTRA MOTORS INC., a corporation; LENTEGRITY, LLC, a corporation; HUDSON INSURANCE COMPANY, a corporation and DOES 1-40
Case No.: 23STLC04731
Motion: Motion to Compel Arbitration of Complaint, Court to Pick Arbitration Forum and Stay of Proceedings
Moving Party: Plaintiff Angel Ortega
Responding Party: Lentegrity LLC, Austra Motors, LLC
Notice: OK
Post Arbitration Status Conference is set for November 6, 2024, at 9:30 a.m. in Department 25 of the Spring Street Courthouse.
Counsel are ordered to electronically file a JOINT Report Re: Status of Arbitration Proceedings at least (5) court days prior to 11/06/2024.
BACKGROUND
On July 27, 2023, Plaintiff Angel Ortega (“Plaintiff”) filed an action against Defendants Austra Motors, Inc. (“Austra Motors”), Lentegrity, LLC (“Lentegrity”), and Hudson Insurance Company (“Hudson Insurance”) (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., (3) violation of Civil Code § 1632, and (4) claim against surety.
On March 11, 2024, Plaintiff filed the instant Motion to Compel Arbitration of Complaint and Stay Proceedings (“Motion”). Plaintiff also requests the Court to select the arbitration forum. On April 3, 2024, Lentegrity filed a limited opposition.
MOVING PARTY POSITION
Plaintiff asserts that he and Austra Motors entered into a contract for the purchase of a used car, and within this contract, the parties agreed to resolve any dispute by arbitration. Also, the contract stated that Austra Motors would pay for the initial arbitration fees. The contract was assigned to Lentegrity. The controversy is covered by the arbitration provision and an order compelling Austra Motors and Lentegrity into arbitration should be issued. Plaintiff has the right to pick the arbitration forum and chooses AAA. In the alternative, Plaintiff selects JAMS to be the arbitration forum. Under the contract, Lentegrity is required to be a party to the arbitration as the holder of the contract.
OPPOSITION
Lentegrity does not oppose being compelled into arbitration but opposes a referral to JAMS.
REPLY
No reply has been filed as of April 25, 2024
ANALYSIS
I. Motion to Compel Arbitration
A. Legal Standard
Under California and federal law, public policy favors arbitration as an efficient and less expensive means of resolving private disputes. Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 8-9; AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333, 339. Accordingly, whether an agreement is governed by the California Arbitration Act (“CAA”) or the Federal Arbitration Act (“FAA”), courts resolve doubts about an arbitration agreement’s scope in favor of arbitration. Moncharsh, supra at 9; Comedy Club, Inc. v. Improv West Assocs. (9th Cir. 2009) 553 F.3d 1277, 1284; see also Engalla v. Permanente Med. Grp., Inc. (1997) 15 Cal.4th 951, 971-972 (“California law incorporates many of the basic policy objectives contained in the Federal Arbitration Act, including a presumption in favor of arbitrability [citation] and a requirement that an arbitration agreement must be enforced on the basis of state law standards that apply to contracts in general [citation]”]). “[U]nder both the FAA and California law, ‘arbitration agreements are valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.’ ” Higgins v. Sup. Ct. (2006) 140 Cal.App.4th 1238, 1247.
“Code of Civil Procedure section 1281.2 requires a trial court to grant a petition to compel arbitration ‘if the court determines that an agreement to arbitrate the controversy exists.’” Avery v. Integrated Healthcare Holdings, Inc. (2013) 218 Cal.App.4th 50, 59, quoting Code Civ. Proc., § 1281.2. Accordingly, “when presented with a petition to compel arbitration, the court’s first task is to determine whether the parties have in fact agreed to arbitrate the dispute.” Ibid. A petition to compel arbitration is in essence a suit in equity to compel specific performance of a contract. Id. at 71. As with any other specific performance claim, “a party seeking to enforce an arbitration agreement must show the agreement’s terms are sufficiently definite to enable the court to know what it is to enforce.” Ibid. (internal citations omitted). “Only the valid and binding agreement of the parties, including all material terms well-defined and clearly expressed, may be ordered specifically performed.” Ibid. An arbitration agreement “must be so interpreted as to give effect to the mutual intention of the parties as it existed at the time of contracting, so far as the same is ascertainable and lawful.” Civ. Code, § 1636. The language of the contract governs its interpretation if it is clear and explicit. Civ. Code, § 1368. If uncertainty exists, “the language of a contract should be interpreted most strongly against the party who caused the uncertainty to exist.” Civ. Code, § 1654.
The party seeking to compel arbitration bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence. Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972. It would then be plaintiff’s burden, in opposing the motion, to prove by a preponderance of the evidence any fact necessary to her opposition. (See Ibid.) “In these summary proceedings, the trial court sits as a trier of fact, weighing all the affidavits, declarations, and other documentary evidence, as well as oral testimony received at the court’s discretion, to reach a final determination.” Ibid.
B. Merits
The moving party bears the initial burden of showing the existence of an agreement to arbitrate by a preponderance of the evidence. Mitri v. Arnel Mgmt. Co. (2007) 157 Cal.App.4th 1164, 1169 (“Because the existence of the agreement is a statutory prerequisite to granting the petition, the petitioner bears the burden of proving its existence by a preponderance of the evidence.”).
Here, Plaintiff has met his initial burden of showing that a signed agreement containing an arbitration provision exists between the parties. See Sadr Decl. ¶¶ 3,12 Exh. 1. Pursuant to the Retail Installment Sale Contract that Plaintiff entered into with Austra Auto, it states:
“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.”
Id. at pg. 4.
Notably, no opposition has been filed claiming that there is ground for revocation of this agreement, and because the claims asserted in the complaint relate to the sale of the subject vehicle, it is undisputed that those claims are covered by this arbitration provision. Furthermore, the arbitration provision is equally applicable to Lentegrity as the holder of the contract for having financed the sale of the vehicle to Plaintiff. See Compl. ¶ 38; Young Seok Suh v. Superior Court (2010) 181 Cal. App. 4th 1504, 1513.
Plaintiff further requests to the Court to select AAA as the arbitration forum. (Motion at pp. 5-6.) Pursuant to the contractual language stated above, AAA is the default arbitration forum choice. Also, Plaintiff has stated that a claim before AAA has been filed and currently in abeyance due to status of this case. See Sadr Decl. ¶ 10, Exh. 5. Thus, it makes sense for AAA to be deemed the arbitration forum.
Accordingly, because an arbitration agreement exists between the parties that encompasses the claims asserted in the complaint, the motion to compel arbitration is granted.
III. Conclusion
Based on the foregoing, Plaintiff Angel Ortega’s Motion to Compel Arbitration of Complaint Between Plaintiff and Defendants Lentegrity, LLC and Austra Motors, Inc. is GRANTED. AAA shall be the proper arbitration forum to adjudicate Plaintiff’s claims. Thus, the entire action is STAYED pending the completion of the arbitration pursuant to Code of Civil Procedure § 1281.4.
The Court sets a Conference Re: Status of Arbitration is set for November 6, 2024 at 9:30 a.m. in Department 25 of the Spring Street Courthouse.
Counsel are ordered to electronically file a JOINT Report Re: Status of Arbitration
Proceedings at least (5) court days prior to 11/06/2024.
The January 23, 2025 Trial date is advanced to this date and hereby taken off calendar/vacated.
Moving party is ordered to give notice.