Judge: Malcolm Mackey, Case: 21STCV04253, Date: 2022-10-26 Tentative Ruling

Case Number: 21STCV04253    Hearing Date: October 26, 2022    Dept: 55

MARTINEZ v. NISSAN NORTH AMERICA, INC.                                21STCV04253

Hearing Date:  10/26/22,  Dept. 55

#11:   MOTION TO COMPEL ARBITRATION.

Notice:  Okay

Opposition

MP:  Defendant         

RP:  Plaintiff

Summary

On 2/3/21, Plaintiff PABLO MARTINEZ filed a Song-Beverly Consumer Warranty Act (Lemon Law) Complaint, alleging that Plaintiff purchased, on or about October 8, 2018, a vehicle manufactured and warranted by Defendant Nissan North America, Inc., and shortly thereafter experienced unrepaired problems, such as with air conditioning system failure, display issues, and squeaking brakes.

MP Positions

Moving party requests an order compelling arbitration, and staying this action, on grounds including the following:

·         Plaintiff entered into a Retail Installment Sales Contract (“Sales Contract”) that contained a broad arbitration provision.

·         Nissan may enforce the Arbitration Provision pursuant to the doctrine of equitable estoppel. Felisilda v. FCA US LLC (2020) 53 Cal.App.5th 486, 496–99.

·         Plaintiff might try to distinguish Felisilda, because Cerritos Nissan (the selling dealership) is not a party to this action. But in the Felisilda case, Plaintiff had already dismissed the selling dealership.

·         Nissan may enforce the Arbitration Provision as a third-party beneficiary because the Arbitration Provision expressly encompasses claims arising out of relationships with third parties who do not sign the Sales Contract.

·         Plaintiff’s actions in this litigation make it clear that his claims are intimately intertwined with the Sales Contract.

·         Nissan’s participation in this litigation does not operate as a waiver of its right to compel arbitration. Quach v. Cal. Commerce Club, Inc. (2022) 78 Cal.App.5th 470.

·         The Arbitration Provision explicitly says the FAA applies, and alternatively interstate commerce is involved.

·         The Arbitration Provision “clearly and unmistakably” delegated these issues to the arbitrator.

RP Positions

Opposing party advocates denying, or an order for moving party to provide a list of proposed arbitrators, for reasons including the following:

·         Defendant did not sell the Subject Vehicle and it is not a party to the retail installment sale contract.

·         None of Plaintiff’s claims arise from or under the sale agreement (“Retail Installment Sale Contract”) that contain the arbitration provision at issue and there are no breach of contract allegations concerning the condition of the vehicle.

·         Defendant’s motion almost entirely relies on Felisilda v. FCA, but Defendant has misrepresented the facts of that case and thus, has misapplied them to the instant matter. See  Felisilda v. FCA, (2020) 53 Cal.App.5th 486. Here, the dealership is not a party to this action and is not seeking to compel arbitration, which distinguishes Felisilda. See Ruderman v. Rolls Royce Motor Cars LLC, 511 F. Supp. 3d 1055, 1060 (C.D. Cal. 2021).

·         Defendant waived arbitration.  Defendant filed its Answer on or about April 5, 2021, yet waited until July 8, 2022, after much written discovery conducted and two PMK depositions were taken, to bring the motion.

·         Enforcement of the arbitration agreement violates public policy underlying the Song-Beverly Act as it would contradict and strip substantive statutory rights and remedies available to Plaintiff. The Act clearly provides that “[a]ny waiver by the buyer of consumer goods of the provisions of this chapter, except as expressly provided in this chapter, shall be deemed contrary to public policy and shall be unenforceable and void.” See, California Civil Code § 1790.1.

Tentative Ruling

The motion is granted. 

Plaintiff and Defendant shall arbitrate the controversies between them, including the entire Complaint, in accordance with their agreement to arbitrate. 

This entire case is stayed until such arbitration has been completed.

The instant Complaint is partially based upon the sales contract with the seller that has an arbitration provision .  (Complaint, ¶ 9  (“Plaintiff has delivered the Vehicle to the Manufacturer's authorized service and repair facilities, agents and/or dealers, including Seller, on at least Three (3) separate occasions resulting in the Vehicle being out of service by reason of repair of nonconformities.”)).

Applying equitable estoppel to compel arbitration, a nonsignatory may compel arbitration when the claims against the nonsignatory are founded in, and inextricably bound up with, the agreement’s obligations, as determined by examining the facts of the complaint.  Felisilda v. FCA US LLC (2020) 53 Cal.App.5th 486, 496-97  (“Because the Felisildas expressly agreed to arbitrate claims arising out of the condition of the vehicle—even against third party nonsignatories to the sales contract—they are estopped from refusing to arbitrate their claim against FCA.”).

The opposing declaration does not contest the existence of the arbitration agreement, and thus opposing objection to moving party’s declaration offered to prove the agreement, makes no difference.

Parties seeking to compel arbitration meet their initial burden simply by reciting the terms of the governing provision, or by attaching a copy of the provisions, unless there is a dispute over authenticity that is beyond merely contesting the preliminary showing.  Sprunk v. Prisma LLC (2017) 14 Cal.App.5th 785, 793;  Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 846   (“In the face of … failure to recall signing … had the burden of proving by a preponderance of the evidence that the electronic signature was authentic….”). 

The relatively brief delay in bringing the motion, after the Answer and discovery, does not constitute a waiver of arbitration.

"State law, like the FAA, reflects a strong policy favoring arbitration agreements and requires close judicial scrutiny of waiver claims.... Although a court may deny a petition to compel arbitration on the ground of waiver..., waivers are not to be lightly inferred and the party seeking to establish a waiver bears a heavy burden of proof. "  Saint Agnes Medical Center v. PacifiCare of Cal.  (2003) 31 Cal.4th 1187, 1195-96 (under both federal and state law, there is no single test of waiver, and courts can consider acts inconsistent with arbitration).

Agreeing to the alternate forum of arbitration does not equate with causing Plaintiff’s waiver of statutory rights referenced in California Civil Code Section 1790.1.

A clause in an agreement that is contrary to statute is substantively unconscionable. Trivedi v. Curexo Technology Corp.  (2010) 189 Cal.App.4th 387, 396-98  (applying AAA rules).

Cited federal cases do not governing in this California court.  Federal case law is not binding upon California courts, and may be only persuasive in some circumstances.  Alameida v. State Personnel Bd. (2004) 120 Cal. App. 4th 46, 61.  California courts are not bound to follow decisions of lower federal courts.  People v. Sup. Ct. (2002) 103 Cal. App. 4th 409, 431.

There is no motion now before the Court involving any failure to select an arbitrator.  See, e.g.,  CCP § 1281.6.

Finally, where a court has ordered arbitration, it shall stay the pending action, until an arbitration is had in accordance with the order to arbitrate, or another earlier time, and the stay may be with respect to an issue that is severable.  CCP §1281.4;  Cruz v. PacifiCare Health Systems, Inc. (2003) 30 Cal. 4th 303, 320;  Twentieth Century Fox Film Corp. v. Sup. Ct. (2000) 79 Cal.App.4^th 188, 192;  Heritage Provider Network, Inc. v. Sup. Ct.  (2008) 158 Cal.App.4th 1146, 1152, 1154 n. 12.