Judge Lee W. Tsao, Case Number: 24NWCV00251, Date: 2024-07-03 Tentative Ruling

Judge: Lee W. Tsao, Case: 24NWCV00251, Date: 2024-07-03 Tentative Ruling

Case Number: 24NWCV00251 Hearing Date: July 3, 2024 Dept: C

ESQUIVEL v. HYUNDAI MOTOR AMERICA, INC., ET AL.

CASE NO.: 24NWCV00251

HEARING: 7/3/24 @ 9:30 A.M.

TENTATIVE RULING

Defendant Norm Reeves Hyundai Superstore Cerritos’ motion to compel arbitration is GRANTED. The scope of arbitrability does not include CLRA and UCL claims.

Moving Party to give NOTICE.

This is a Song-Beverly action. Defendant Norm Reeves Hyundai Superstore moves to compel arbitration based on the retail installment sales contract when he purchased a 2018 Hyundai Santa Fe Sport. Defendant also requests a stay of the action pending arbitration.

Existence of an Arbitration Agreement

The initial burden of proving the existence of an arbitration agreement is on Defendant. (See Bannister v. Marinidence Opco, LLC (2021) 64 Cal.App.5th 541, 541-543 [“The party seeking arbitration can meet its initial burden by attaching to the petition a copy of the arbitration agreement purporting to bear the¿respondent's signature.”].) Alternatively, the moving party can meet its initial burden by setting forth the agreement’s provisions in the motion. (See Cal. Rules of Court, rule 3.1330; see also Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 219.)

¿“If the moving party meets its initial prima facie burden and the opposing party disputes the agreement, then in the second step, the opposing party bears the burden of producing evidence to challenge the authenticity of the agreement.” (Gamboa v. Northeast Community Clinic¿(2021) 72 Cal.App.5th 158, 165.)

Here, Defendant attached a copy of the retail sales installment contract between it and the Plaintiff containing the arbitration provision. (Decl. Stephens, ¶ 5. Ex, A.)

Unconscionability

Plaintiff argues that the Agreement is procedurally and substantively unconscionable.

A showing of unconscionability requires procedural and substantive unconscionability. Procedural unconscionability asks whether there is oppression from unequal bargaining power or surprise from buried terms. (Armendariz v. Foundation Health (2000) 24 Cal.4th 83, 114.) Substantive unconscionability asks whether there are overly harsh, one-sided terms. (Id.) Both are required to be proven to find unconscionability. However, there is a sliding scale; if an agreement is particularly substantively unconscionable, the petitioner need not show a large amount of procedural unconscionability, and vice versa. (Id.) “The party resisting arbitration bears the burden of proving unconscionability.” (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236.)

i. Procedural Unconscionability

Plaintiff has not shown procedural unconscionability. Plaintiff bears the burden of proving, by a preponderance of the evidence, any fact necessary to show the Agreement was invalid. (See Banner Entertainment Inc., supra, 62 Cal.App.4th at 356-357.) Plaintiff asserts that the arbitration provision is procedurally unconscionable because it exists as a standard, pre-printed form with blanks filled in, offered to Plaintiff in a take it or leave it basis. But an arbitration agreement offered on a “take it or leave it basis,” i.e. without opportunity for meaningful negotiation, does not render the agreement unenforceable. (See Legaltree v. Luce, Forward Hamilton & Scripps (1999) 74 Cal.App.4th 1105, 1127.)

Therefore, Plaintiff has not shown that the agreement is invalid based on procedural unconscionability.

ii. Substantive Unconscionability

Plaintiff has not shown substantive unconscionability. Plaintiff argues evidence of substantive unconscionability is found in the fact the agreement contains a clause that is ambiguous and uncertain about the extent and scope of appeal rights and a clause about reimbursing the other party if the arbitration finds that any claim is frivolous. However, Plaintiff does not show how these two clauses are overly harsh and one-sided term that renders the entire agreement substantively unconscionable. Plaintiff also fails to cite any legal authority in support.

The Court finds the Agreement is not void due to unconscionability.

Thus, the Court grants the motion.

Scope of Arbitration Agreement

Plaintiff argues that the Consumer Legal Rights Act and Unfair Competition Law claims for injunctive relief are not subject to binding arbitration.

Absent the parties' commitment of the arbitrability decision to an arbitrator, disagreements over whether a particular dispute is within the scope of an arbitration provision are ordinarily the responsibility of a court. (Mendoza v. Trans Valley Transport (2022) 75 Cal.App.5th 748, 765.)

As the Court held in Cruz v. PacifiCare Health Systems, Inc. (2003) 30 Cal.4th 303, 316, claims seeking injunctive relief designed to protect the public by stopping ongoing practices unlawful under the CLRA and UCL are not arbitrable. Here, Plaintiff seeks injunctive relief under both the CLRA and UCL.

Thus, the claims are not subject to binding arbitration.