Judge: Lynette Gridiron Winston, Case: 24PSCV03368, Date: 2025-04-10 Tentative Ruling

Case Number: 24PSCV03368    Hearing Date: April 10, 2025    Dept: 6

CASE NAME:  Amber Jewel Hernandez v. Hyundai Motor America 

Defendant Hyundai Motor America’s Motion to Compel Binding Arbitration 

TENTATIVE RULING 

The Court DENIES Defendant Hyundai Motor America’s motion to compel binding arbitration. Defendant is ordered to file an Answer within 10 calendar days.

            Plaintiff is ordered to give notice of the Court’s ruling within five calendar days of this order. 

BACKGROUND 

This is a lemon law case. On October 8, 2024, plaintiff Amber Jewel Hernandez (Plaintiff) filed this action against defendant Hyundai Motor America (Defendant) and Does 1 through 10, alleging causes of action for violation of Song-Beverly Act – breach of express warranty, violation of Song-Beverly Act – breach of implied warranty, and violation of the Song Beverly Act section 1793.2. 

On February 21, 2025, Defendant moved to compel arbitration. On March 27, 2025, Plaintiff opposed. On April 3, 2025, Defendant replied. 

LEGAL STANDARD 

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 moving to compel arbitration has the burden of establishing the existence of a valid agreement to arbitrate and the party opposing the petition has the burden of proving, by a preponderance of the evidence, any fact necessary to its defense. (Banner Entertainment, Inc. v. Superior Court¿(1998) 62 Cal.App.4th 348, 356-357.) A party seeking to compel arbitration meets their initial burden of establishing the existence of a valid arbitration agreement by attaching a copy to the motion or setting forth its terms verbatim. (Condee v. Longwood Mgmt. Corp. (2001) 88 Cal.App.4th 215, 218-219 (Condee).) 

“California has a strong public policy in favor of arbitration and any doubts regarding the arbitrability of a dispute are resolved in favor of arbitration.” (Coast Plaza Doctors Hospital v. Blue Cross of California (2000) 83 Cal.App.4th 677, 686.) “This strong policy has resulted in the general rule that arbitration should be upheld unless it can be said with assurance that an arbitration clause is not susceptible to an interpretation covering the asserted dispute.” (Ibid. [internal quotations omitted].) This is in accord with the liberal federal policy favoring arbitration agreements under the Federal Arbitration Act (FAA), which governs all agreements to arbitrate in contracts involving interstate commerce. (9 U.S.C. § 2, et seq.; Higgins v. Superior Court (2006) 140 Cal.App.4th 1238, 1247.) 

PRELIMINARY ISSUES 

            Defendant’s reply memorandum improperly exceeds ten pages. (Cal. Rules of Court, rule 3.1113, subd. (d).) This also renders Defendant’s reply untimely. (Id., rule 3.1113, subd. (g).) The Court will still consider Defendant’s reply, but admonishes Defendant to comply with the requirements of the California Rules of Court going forward. (See id., rule 3.1300, subd. (d); Juarez v. Wash Depot Holdings, Inc. (2018) 24 Cal.App.5th 1197, 1202.) 

            Also, new evidence is generally not permitted on reply unless it fills in gaps in the evidence created by the opposing party’s opposition and is not raising new substantive issues for the first time; otherwise, a further hearing would be required to permit the opposing party to respond. (Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 1537-1538.) Defendant submitted an additional declaration from its counsel with its reply papers and provides nothing responsive to issues raised in Plaintiff’s opposition. (See generally, Ameripour Decl. (4/3/25).) The Court therefore declines to consider the declaration and its corresponding evidence. 

OBJECTIONS 

            The Court SUSTAINS both of Plaintiff’s evidentiary objections to the Declaration of Ali Ameripour for lack of personal knowledge, lack of foundation, and failure to authenticate. (Evid. Code, §§ 403, 702, 1400.) 

REQUESTS FOR JUDICIAL NOTICE 

            The Court GRANTS Defendant’s request for judicial notice. (Evid. Code,  § 452, subd. (d).) But, the Court takes judicial notice of the foregoing documents only as to “the existence, content and authenticity of public records and other specified documents”; it does not take judicial notice of the truth of the factual matters asserted in those documents. (Dominguez v. Bonta (2022) 87 Cal. App. 5th 389, 400.) 

DISCUSSION 

FAA v. CAA

“[T]he FAA's procedural provisions do not apply unless the contract contains a choice-of-law clause expressly incorporating them. [T]he question is not whether the parties adopted the CAA’s procedural provisions: The state's procedural statutes apply by default because Congress intended the comparable FAA sections to apply in federal court. The question, therefore, is whether the parties expressly incorporated the FAA’s procedural provisions into their agreements.” (Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337, 345, internal citations omitted and italics in original (Victrola 89).) “[P]revious cases have held that when an arbitration agreement provides that its ‘enforcement’ shall be governed by California law, the [CAA] governs a party's motion to compel arbitration. It follows that when an agreement provides that its ‘enforcement’ shall be governed by the FAA, the FAA governs a party's motion to compel arbitration.” (Id. at p. 346.) 

The Warranty Handbook (defined below) does not contain any language indicating that the FAA governs the enforcement of the arbitration provision contained therein. (Ameripour Decl., Ex. 2.)[1] Accordingly, the CAA governs this motion to compel arbitration. (Victrola 89, supra, 46 Cal.App.5th at p. 345.) 

Existence of Valid Arbitration Agreement and Covered Claims 

Defendant moves to compel arbitration based on language in its Owner’s Handbook & Warranty Information (the Warranty Handbook). (Ameripour Decl., Ex. 2, pp. 27-29 of pdf.) Having quoted the arbitration language from the Warranty Handbook in the moving papers and having attached a copy to the motion, Defendant has met its initial burden. (Motion, 4:3-5:17; Condee, supra, 88 Cal.App.4th at p. 218; Cal. Rules of Court, rule 3.1330.) The burden now shifts to Plaintiff. (Condee, supra, 88 Cal.App.4th at p. 219.) 

In opposition, Plaintiff objected to the Declaration attaching the Warranty Handbook and the Warranty Handbook itself on the grounds of lacks personal knowledge, lacks foundation, lacks authentication, and hearsay. The Court sustained the objections as set forth above. Plaintiff also contends that she never signed any post-sale arbitration agreement, that Defendant did not provide her a copy of the Warranty Handbook when she purchased the subject vehicle, and that she was never given notice that she was required to opt out of this post-sale arbitration agreement within 30 days of purchasing the subject vehicle. (Hernandez Decl., ¶¶ 5-6.) Plaintiff has adequately challenged the validity of the Warranty Handbook and its arbitration provisions. The burden now shifts back to Defendant to prove by a preponderance of the evidence with admissible evidence that the Warranty Handbook and its arbitration provisions are valid. (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165-166 (Gamboa).) 

            In reply, Defendant argues it has properly established the existence of the agreement to arbitrate because it is not necessary to follow the normal procedures of document authentication in a motion to compel arbitration. Defendant contends it has clearly alleged the existence of the agreement to arbitrate in the moving papers, but Plaintiff has not even remotely attempted to prove the falsity of the arbitration agreement. Defendant contends that the arbitration provision is enforceable, that Plaintiff has established mutual assent in the complaint, and that equitable estoppel applies. Defendant contends Plaintiff contradicts herself by claiming the parties entered into a warranty contract which binds Defendant, but then argues that there is no mutual assent. Defendant contends the Warranty Handbook makes clear that using the vehicle or accepting benefits under the warranty binds Plaintiff to its terms, and Plaintiff has used the warranty and concedes to having accepted its benefits. Defendant further argues that Plaintiff is estopped because her claims fundamentally rely on the warranty.

The Court finds Defendant’s arguments unavailing. Nowhere in Defendant’s reply does Defendant provide facts to establish a foundation for the admission of the Warranty Handbook or any other evidence to prove its validity. (See generally, Reply.) The declaration of Ali Ameripour submitted in support of the motion does not provide facts demonstrating personal knowledge regarding the Warranty Handbook or whether Plaintiff signed or accepted the arbitration provision in the Warranty Handbook. (See Ameripour Decl., ¶ 4, Ex. 2; Gamboa, supra, 72 Cal.App.5th at p. 169 [declaration in support of motion to compel arbitration held inadmissible due to lack of authentication and foundation].) Defendant provided no other evidence to show that the Warranty Handbook is admissible and valid.

Moreover, the fact that motions to compel arbitration do not necessarily require authentication of the arbitration agreement with the moving papers does not mean Defendant may avoid the foundation requirement altogether; rather, foundations must be established once the opposing party challenges the validity of the arbitration agreement, the latter of which Plaintiff has done here. (See Gamboa, supra, 72 Cal.App.5th at pp. 167-168.) The Warranty Handbook is therefore inadmissible.

Even if the Warranty Handbook was admissible, it would not be sufficient to demonstrate the existence of an arbitration agreement between the parties. Defendant did not present any evidence demonstrating that Plaintiff signed or accepted the arbitration agreement contained in the Warranty Handbook before or at the time of purchasing the subject vehicle. (See generally, Ameripour Decl.) Defendant did not present any evidence that Plaintiff even received the terms of the arbitration agreements in the Warranty Handbook before purchasing the subject vehicle. (See generally, Ameripour Decl.) Plaintiff on the other hand presented evidence that she did not sign or accept the arbitration provision in the Warranty Handbook or even receive the Warranty Handbook before or at the time of purchasing the subject vehicle. (Hernandez Decl., ¶¶ 5-6.)

Further, the Court does not find that the arbitration provision of the Warranty Handbook covers Plaintiff’s claims. Arbitration agreements are governed by contract law, not warranty law. (Norcia v. Samsung Telecommunications Am., LLC (9th Cir. 2017) 845 F.3d 1279, 1283, 1288 (Norcia) [interpreting California law]; see also Ford Motor Warranty Cases (2023) 89 Cal.App.5th 1324, 1335 (Ford Motor Warranty Cases), review granted July 19, 2023, S279969,[2] italics added [“California law does not treat manufacturer warranties imposed outside the four corners of a retail sale contract as part of the sale contract”].) Warranties generally bind only the seller and do not impose independent obligations on the buyer. (Norcia, supra, 845 F.3d at p. 1288 [applying California law].) In other words, Plaintiff was not required to accept Hyundai’s warranties to make them binding, Thus, there was no acceptance of a benefit that can serve as Plaintiff’s assent to the terms of the arbitration provision. (See Civ. Code, § 1589.) Additionally, as in Norcia, the benefits of Defendant’s warranty apply regardless of whether Plaintiff opted out of the arbitration provision. (Norcia, supra, 845 F.3d at p. 1286; Ameripour Decl., Ex. 2, p. 29 of pdf.) 

Finally, the Court finds Defendant’s equitable estoppel arguments unavailing. While there are some instances in which a signatory may move to compel arbitration against a nonsignatory under equitable estoppel, this is not one of those cases. (See Jenks v. DLA Piper Rudnick Gray Cary US LLP (2015) 243 Cal.App.4th 1, 9-10; Benasra v. Marciano (2001) 92 Cal.App.4th 987, 991 [third-party beneficiaries]; Smith v. Microskills San Diego L.P. (2007) 153 Cal.App.4th 892, 896 [pre-existing confidential relationship, such as agency relationship between nonsignatory and one of the parties to the arbitration agreement].) No evidence here shows that Plaintiff was a third-party beneficiary or that there was a pre-existing confidential relationship between the parties. The Court also does not find equitable estoppel applies for the same reason set forth above. (See Norcia, supra, 845 F.3d at p. 1288.) 

Moreover, for equitable estoppel to apply, “the causes of action against the nonsignatory must be intimately founded in and intertwined with the underlying contract obligations. Indeed, there must be actual reliance on the terms of the agreement, and the causes of action must premise liability on duties imposed by the agreement itself.” (Ballesteros v. Ford Motor Co. , ___Cal.App.5th___ [2025 Cal. App. LEXIS 193, at *12] (Mar. 25, 2025, No. A172271) [internal citations and quotations omitted].) Here, Plaintiff’s claims are not premised on duties imposed by the express warranties in the Warranty Handbook. Instead, Plaintiff’s claims are premised on Hyundai’s statutory obligations under the Song Beverly Act. (See Compl. Generally.) Numerous recent decisions from the Court of Appeal have rejected equitable estoppel in the context of a motion to compel arbitration arising out of a lemon law claim in part because the warranties existed separately from the sales contract. (See, e.g., Rivera v. Superior Ct. of Ventura Cnty. (2024) 105 Cal.App.5th 288, 294, review granted December 18, 2024, S287725; Davis v. Nissan N. Am., Inc. (2024) 100 Cal.App.5th 825, 837, review granted May 29, 2024, S284697; Yeh v. Superior Ct. of Contra Costa Cnty. (2023) 95 Cal.App.5th 264, 274-275, review granted November 15, 2023, S282228; Montemayor v. Ford Motor Co. (2023) 92 Cal.App.5th 958, 972, review granted September 20, 2023, S281237.)[3] 

For all of these reasons, the arbitration agreement in the Warranty Handbook does not entitle Defendant to compel arbitration. Accordingly, the Court DENIES the motion to compel binding arbitration. 

CONCLUSION 

The Court DENIES Defendant Hyundai Motor America’s motion to compel binding arbitration. Defendant is ordered to file an Answer within 10 calendar days.

            Plaintiff is ordered to give notice of the Court’s ruling within five calendar days of this order.