Judge: Lee W. Tsao, Case: 22NWCV00581, Date: 2023-03-23 Tentative Ruling

Case Number: 22NWCV00581    Hearing Date: March 23, 2023    Dept: C

NEGRETE v. NISSAN NORTH AMERICA, INC.

CASE NO.:  22NWCV00581

HEARING:  03/23/23

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TENTATIVE ORDER

Defendant NISSAN NORTH AMERICA, INC.’s motion to compel arbitration is GRANTED. The case is STAYED until conclusion of the arbitration.

Moving Party to give notice.

The parties’ Requests for Judicial Notice are GRANTED. (Cal. Ev. Code §452.)

Except for specifically enumerated exceptions, the court must order the petitioner and respondent to arbitrate a controversy if the court finds that a written agreement to arbitrate the controversy exists. (See CCP §1281.2.) “In California, [g]eneral principles of contract law determine whether the parties have entered a binding agreement to arbitrate.” (Craig v. Brown & Root, Inc. (2000) 84 Cal.App.4th 416, 420.) “A petition to compel arbitration or stay proceedings pursuant to CCP §§1281.1 and 1281.4 must state, in addition to other required allegations, the provisions of the written agreement and the paragraph that provides for arbitration. The provisions must be stated verbatim or a copy must be physically or electronically attached to the petition and incorporated by reference.” (C.R.C. Rule 3.1330.)

The petitioner bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence, and a party opposing the petition bears the burden of proving by a preponderance of the evidence any fact necessary to its defense. 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. (Engalia v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951.)

This is a lemon law action. Plaintiff alleges that NISSAN NORTH AMERICA, INC. (“Nissan”) is the vehicle manufacturer. (Complaint ¶3.)  The Arbitration Agreement at issue was signed by Plaintiffs and the leasing dealership—non-party Downey Nissan. (Kashani Decl., Ex. 3.) The Agreement states, in pertinent part “any claim or dispute, whether in contract, tort, statute or otherwise… between you and us or our employees, agents successors or assigns, which arises out of or relates to your credit application, lease or condition of this vehicle, this lease agreement or any resulting transaction or relationship (including any such relationship with third parties who do not sign this Lease) shall, at your or our election, be resolved by neutral, binding arbitration and not by court actions.” (Id.)

It is undisputed that Nissan is not a signatory to the Lease Agreement containing the Agreement.

As a general rule, only a party to an arbitration agreement may enforce the agreement. (Thomas v. Westlake (2012) 204 Cal.App.4th 605, 613.) However, the equitable estoppel exception may enable a non-signatory party such as the vehicle manufacturer to invoke an agreement to arbitrate. (JSM Tuscany, LLC v. Sup. Ct. (2011) 193 Cal.App.4th 1222, 1236-37.) A plaintiff may be equitably estopped from repudiating the arbitration clause contained in a contract where he or she relies on contract terms in acclaim against a non-signatory defendant, and when the causes of action against the non-signatory are “intimately founded in and intertwined” with the underlying contract obligations that are subject to the arbitration clause. (Boucher v. Alliance Title Co., Inc. (2005) 127 Cal.App.4th 262, 271.) Applying these principles, the Third District recently affirmed a trial court’s granting of an order compelling SBA plaintiffs to arbitrate their claim against a manufacturer even though the manufacturer was not a party or signatory to the sales contract that contained the arbitration provision. (Felisilda v. FCA US LLC (2020) 53 Cal.App.5th 486, 493.) In Felisilda, the sales contract provided that “[a]ny claim or dispute, whether in contract, tort, statute or otherwise ... between you and us ... which arises out of or relates to ... [the] condition of this vehicle ... shall ... be resolved by neutral, binding arbitration and not by a court action.” (Italics added.)   There was no dispute that the Felisildas’ refund-or-replace claim against the manufacturer under the SBA related directly to the condition of the vehicle, because the suit alleged the existence of nonconformities covered by the express warranty that the selling dealer did not remedy after a reasonable number of attempts to repair. 

Relying on Felisilda, Nissan argues that Plaintiffs’ claims arise out the purchase of the subject vehicle that form the basis of a retail installment sales contract, and thus, that it may enforce the Arbitration Agreement in the RISC under the doctrine of equitable estoppel.

In Opposition, Plaintiffs argue that Nissan should not be allowed to enforce the Arbitration Agreement under equitable estoppel because Plaintiffs’ claims are not rooted in the sales contract and the language in the sales contract makes clear that the sales contract is distinct from the express warranties.

The Arbitration Agreement in the Lease here is identical to that in Felisilda. Further, a review of the Complaint at issue confirms that Plaintiffs’ claims directly relate to the condition of the subject vehicle and the contention that Defendant violated warranties Plaintiff received as a consequence of the Lease.

To the extent that Plaintiff relies on Ngo v. BMW of North America, LLC (9^th Cir. 2022) 23 F.4th 942, wherein the Ninth Circuit opined (as to the issue of equitable estoppel) that it “ma[de] a critical difference that the Felisildas, unlike Ngo, sued the dealership in addition to the manufacturer” and noted that the signatory dealership in Felisilda was the party that moved to compel arbitration. However, “the decision of federal district and circuit courts, although entitled to great weight, are not binding on state courts even as to issues of federal law.” (Alan v. Sup. Ct. (2003) 111 Cal.App.4th 217, 229.) Felisilda did not address the situation “where the non-signatory manufacturer attempted to compel arbitration on its own.” (Ngo at 949-950.)

The Court determines that Nissan may compel arbitration on the basis of equitable estoppel.

The motion to compel arbitration is GRANTED.

Plaintiff’s Evidentiary Objections to the Declaration of Rachel Kashani are OVERRULED. The moving party may meet their initial burden to show an agreement to arbitrate by attaching a copy of the arbitration agreement bearing the opposing party’s signature. “[A]s a preliminary matter the [trial] court is only required to make a finding of the agreement’s existence, not an evidentiary determination of its validity. [Citations Omitted.]” (Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1058.)

Defendant’s Evidentiary Objections to the Declaration of Camran Pakbaz are SUSTAINED.