Judge Latrice A. G. Byrdsong, Case Number: 24STLC00793, Date: 2024-05-01 Tentative Ruling

Judge: Latrice A. G. Byrdsong, Case: 24STLC00793, Date: 2024-05-01 Tentative Ruling

Case Number: 24STLC00793 Hearing Date: May 1, 2024 Dept: 25

Hearing Date: Wednesday, May 1, 2024

Case Name: ROSA TORRES vs. SAMO ENTERPRISES, INC. dba WESTERN MOTOR SPORT, a California corporation; WESTLAKE SERVICES, LLC dba WESTLAKE FINANCIAL SERVICES; HUDSON INSURANCE COMPANY; and DOES 1 through 40, inclusive

Case No.: 24STLC00793

Motion: Motion to Compel Arbitration Between Plaintiff and Defendants Samo Enterprises, Inc. and Westlake Services, LLC, for Court to Pick Arbitration Forum, and Request for Stay of Proceedings

Moving Party: Plaintiff Rosa Torres

Responding Party: Unopposed

Notice: IMPROPER. The notice of motion sets forth the incorrect address

for the hearing on the motion.

Tentative Ruling: Plaintiff’s Motion to Compel Arbitration is CONTINUED so that Plaintiff can provide proper notice of the hearing.

The hearing is continued to JUNE 18, 2024 at 10:00am in Department 25 at the Spring Street Courthouse.

Plaintiff must serve and electronically file an amended notice of motion at least 16 court days prior to the next hearing date. Failure to comply with this order may result in the motion being taken off calendar or denied.

BACKGROUND

This action arises from the sale of an allegedly defective 2008 GMC Sierra 1500 (the “Subject Vehicle”). On February 1, 2024, Plaintiff Rosa Torres (“Plaintiff”) filed a Complaint against Defendants Samo Enterprises, Inc. dba Western Motor Sport (“Samo”), Westlake Services, LLC dba Westlake Financial Services (“Westlake”), Hudson Insurance Company (“Hudson”) (collectively “Defendants”), and DOES 1 through 40, inclusive, alleging causes of action for: (1) Violation of the Consumer Legal Remedies Act; (2) Violation of California Business and Professions Code § 17200, et seq.; (3) Claim Against Dealer Bond; and (4) Violation of CCP §§ 1281.97 and 1281.99.

The Complaint alleges the following: on or about February 12, 2021, Plaintiff went to Defendant Samo’s place of business to purchase the Subject Vehicle. (Complaint, ¶ 16.) Prior to selling the Subject Vehicle, Defendant Samo made representations as to the history, safety, open recall and/or repair condition of the Subject Vehicle. (Complaint, ¶ 17.) At the time of sale, the Subject Vehicle had at least one open recall. (Complaint, ¶ 18.) Based on the representations of Defendant Samo as to the condition and value of the Subject Vehicle, Plaintiff agreed to purchase the Subject Vehicle and executed a Retail Installment Sales Contract (the “RISC”) and took delivery of the Subject Vehicle. (Complaint, ¶ 26; Exh. 1.) Subsequent to Plaintiff’s purchase of the Subject Vehicle, Plaintiff has discovered that the value of the Subject Vehicle is substantially diminished as a result of the true condition of the Subject Vehicle. (Complaint, ¶ 32.) Subsequent to the sale, the RISC was assigned to Defendant Westlake and Defendant Westlake accepted the RISC and payments under the RISC. (Complaint, ¶ 41.) By virtue of accepting the RISC, Defendant Westlake is liable for the claims and defenses pursuant to the RISC. (Complaint, ¶ 42.)

Plaintiff filed a proof of service indicating that Defendant Hudson was served with the summons and complaint on February 9, 2024, by personal service. (See 03/07/24 Proof of Service.) Plaintiff filed a proof of service indicating that Defendant Westlake was served with the summons and complaint on February 27, 2024 by personal service. (See 03/07/24 Proof of Service.) Plaintiff filed a proof of service showing that Defendant Samo was served with the summons and complaint on March 28, 2024. (See 04/29/24 Proof of Service.)

On March 8, 2024, Defendant Hudson filed and served an Answer to the Complaint.

On March 11, 2024, Plaintiff filed and served the instant Motion to Compel Arbitration, for the Court to Pick Arbitration Forum, and Request for Stay. Pursuant to the motion, Plaintiff seeks an order compelling Defendants Samo and Westlake to arbitrate this matter pursuant to the RISC, and for a stay of this action pending the completion of arbitration.

On April 17, 2024, Defendant Hudson filed and served a Notice of Non-Opposition indicating that it does not oppose Plaintiff’s motion to compel arbitration; however, Defendant Hudson contends that it is “a statutory surety who is not a party to the arbitration agreement” and therefore it “requests that the Court stay this action as to [Defendant] Hudson if the . . . motion is granted.” (04/17/24 Notice of Non-Opposition at p. 1:21-24.)

As of April 29, 2024, Plaintiff’s motion to compel arbitration is unopposed. Any opposition to the motion was required to have been filed and served at least nine court days prior to the hearing. (CCP § 1005(b).)

Initially, the Court notes that the notice of motion contains an error. Plaintiff indicates that the hearing on the motion is to take place “in Department 25 . . . located at 111 North Hill Street, Los Angeles, CA 90012.” (Notice at p. 1:24-25.) A notice of motion, below the number of the case, must specify “[t]he date, time, and location, if ascertainable, of any scheduled hearing and the name of the hearing judge, if ascertainable.” (Cal. Rules of Court, Rule 3.1110(b)(1).) Here, the notice of motion does not set forth the name of the judicial officer hearing the motion and sets forth an incorrect address for the courthouse in which the motion will be heard. Department 25 of this Court, because this is a limited jurisdiction action, is located at the Spring Street Courthouse, which is located at 312 North Spring Street, Los Angeles, CA 90012 and not at 111 North Hill Street, Los Angeles, CA 90012, which is the Stanley Mosk Courthouse.

MOVING PARTY POSITION

Plaintiff argues that the controversy in this action is covered by an arbitration provision and the right to compel arbitration has not been waived. Plaintiff asserts that the parties cannot agree on a forum of arbitration and that Plaintiff elects the American Arbitration Association (“AAA”) or, in the alternative, JAMS as the arbitration forum.

OPPOSITION

No opposition brief was filed as of April 29, 2024.

REPLY

No reply brief was filed as of April 29, 2024.

ANALYSIS

I. Compelling Arbitration and Staying the Action

A. Legal Standard

“A party who claims that there is a written agreement to arbitrate may petition the superior court for an order to compel arbitration” pursuant to California Code of Civil Procedure section 1281.2. Banner Entertainment, Inc. v. Superior Court (1998) 62 Cal.App.4th 348, 356. “California law, like federal law, favors enforcement of valid arbitration agreements.” Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 97. “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: (a) The right to compel arbitration has been waived by the petitioner; or (b) Grounds exist for rescission of the agreement.” (Code Civ. Proc. § 1281.2.) Parties may be compelled to arbitrate a dispute upon the court finding that: (1) there was a valid agreement to arbitrate between the parties; and (2) said agreement covers the controversy or controversies in the parties’ dispute. Omar v. Ralphs Grocery Co. (2004)¿118 Cal.App.4th 955, 961.

A party opposing a petition to compel arbitration “bears the burden of proving by a preponderance of the evidence any fact necessary to its defense.” Banner Entertainment, Inc. v. Superior Court, supra, 62 Cal.App.4th 348, 356. Where a petition to compel arbitration is granted, a court “shall, upon motion of a party to such action or proceeding, stay the action or proceeding until an arbitration is had in accordance with the order to arbitrate or until such earlier time as the court specifies.” (Code Civ. Proc. § 1281.4.)

“[T]here is no policy compelling persons to accept arbitration of controversies which they have not agreed to arbitrate.” DMS Services, LLC v. Superior Court (2012) 205 Cal.App.4th 1346, 1352. “[G]enerally one must be a party to an arbitration agreement to be bound by it or invoke it.” Ibid. “However, both California and federal courts have recognized limited exceptions to this rule, allowing nonsignatories to an agreement containing an arbitration clause to compel arbitration of, or be compelled to, arbitrate a dispute arising within the scope of that agreement.” Id. a p. 1353. “Even the strong public policy in favor of arbitration does not extend to those who are not parties to an arbitration agreement or who have not authorized anyone to act for them in executing such an agreement.” Suh v. Superior Court (2010) 181 Cal.App.4th 1504, 1512. “A nonsignatory can be compelled to arbitrate when a preexisting relationship existed between the nonsignatory and one of the parties to the arbitration agreement, making it equitable to compel the nonsignatory to arbitrate as well.” JSM Tuscany, LLC v. Superior Court (2011) 193 Cal.App.4th 1222, 1240. “Additionally, a nonsignatory can be compelled to arbitrate when it is suing as a third-party beneficiary of the contract containing the arbitration clause.” Ibid.

B. Discussion

In support of the motion, Plaintiff’s counsel, Kasra Sadr (“Sadr”), provides a declaration. Counsel attaches a copy of the RISC to her declaration. (Sadr Decl., ¶ 3; Exh. 1.) On or about August 14, 2023, counsel’s office sent a pre-filing CLRA demand letter to Defendants Samo and Westlake’s respective places of business on behalf of Plaintiff, and the demand included a demand for arbitration with the AAA. (Sadr Decl., ¶ 4; Exh. 2.) Counsel did not receive any agreement to arbitrate or pay for the AAA initial arbitration fees from Defendants Samo or Westlake before filing for arbitration. (Sadr Decl., ¶ 6.) On or around October 27, 2023, counsel’s office filed for arbitration with the AAA on behalf of the Plaintiff against Defendants Samo and Westlake. (Sadr Decl., ¶ 7.) On or around November 22, 2023, counsel’s office received a letter from the AAA which indicated that the AAA decided to close its file because there was a previous failure of Defendant Samo to comply with AAA policies. (Sadr Decl., ¶ 8; Exh. 3.) As such, counsel’s office filed for arbitration solely against Defendant Westlake with the AAA. (Sadr Decl., ¶ 9.) On January 8, 2024, the AAA accepted arbitration of the dispute between Plaintiff and Defendant Samo and demanded payment to be made by Defendant Samo on or by February 7, 2024. (Sadr Decl., ¶ 10; Exh. 4.) Due to Defendant Samo not making the required payments by the due date provided by the AAA, the AAA sent a letter indicating that it declines to administer the arbitration. (Sadr Decl., ¶¶ 11-12; Exh. 6.) Counsel states that the RISC, which was attached as Exhibit 1 to the Complaint, was authenticated by Plaintiff by way of an affidavit. (Sadr Decl., ¶ 13; Exh. 7.)

The Court has reviewed the RISC. (Sadr Decl., ¶ 3; Exh. 1.) The RISC was entered into between Plaintiff and Defendant Samo. (Id.) The RISC contains an arbitration provision therein which states that “[a]ny claim or dispute, whether in contract, tort, statute or otherwise . . . 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 court action.” (Sadr Decl., ¶ 3; Exh. 1 at p. 6.) The arbitration provision provides that Plaintiff “may chose the American Arbitration Association . . . or any other organization to conduct the arbitration subject to our approval.” (Id.)

The Court finds that there is a valid arbitration agreement between Defendant Samo and Plaintiff, and that the arbitration agreement covers the claims alleged in the Complaint. The Court notes that the Court can compel Defendant Westlake to arbitrate as the Complaint alleges that Defendant Westlake was assigned the RISC and is the holder of the RISC. (Complaint, ¶¶ 41-42.) Defendant Westlake has failed to oppose the motion and therefore the Court finds that Defendant Westlake has conceded to Plaintiff’s argument that it can be compelled to arbitration as “[c]ontentions are waived when a party fails to support them with reasoned argument and citations to authority.” Moulton Niguel Water Dist. v. Colombo (2003) 111 Cal.App.4th 1210, 1215.

As to Defendant Hudson, the Court notes that Plaintiff is not seeking to compel the arbitration of Defendant Hudson. Defendant Hudson is not a signatory to the RISC and Plaintiff does not present any authority to compel Defendant Hudson to arbitrate this action.

While presenting a valid arbitration agreement as well as the lack of an opposition to the instant motion, the Court cannot grant Plaintiff’s motion to compel Defendants Samo and Westlake to arbitrate this action, as the notice of motion is improper as Plaintiff sets forth the incorrect address at which the hearing will be heard. Due process requires that the parties be “given adequate notice.” Fenn v. Sherriff (2003) 109 Cal.App.4th 1466, 1481. Thus, the notice of motion is defective. Department 25 of this Court is located at 312 North Spring Street and not 111 North Hill Street as articulated in the notice of motion.

II. Conclusion

The Court therefore CONTINUES the hearing on the Motion to Compel Arbitration. The Cout orders Plaintiff to electronically serve and file an amended notice of motion setting forth the correct address at which the motion will be heard.

The hearing is continued to JUNE 18, 2024 at 10:00am in Department 25 at the Spring Street Courthouse.

Moving party is ordered to give notice.