Judge: Malcolm Mackey, Case: 21STCV04253, Date: 2023-04-24 Tentative Ruling

Case Number: 21STCV04253    Hearing Date: April 24, 2023    Dept: 55

MARTINEZ v. NISSAN NORTH AMERICA, INC.                                21STCV04253

Hearing Date:  4/24/23,  Dept. 55

#2:   AMENDED PETITION TO COMPEL ARBITRATION PURSUANT TO CAL. CODE OF CIVIL PROCEDURE 1281.2.

Notice:  Okay

Opposition

MP:  Plaintiff 

RP:  Defendant

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 appointing arbitrators other than with the AAA, and requiring Defendant to timely pay arbitration fees, on grounds including the following:

·         Can Defendant turn the word "may" into "must," and render the clause illusory when Defendant admits that AAA is only an option?  "May" gives Plaintiff the choice of arbitration forums and not a mandate to AAA or of arbitrator of Defendant's choosing.

·         Nissan refuses to allow other arbitration forums that other car manufacturers are allowing.

·         The facts that Nissan is a manufacturer, and the CEO of AAA is married to an executive of Ford Motor Company, also a manufacturer like Nissan, leads to bias by AAA or any of its arbitrators as neutral in the proceedings as it cannot be believed that AAA or any of its arbitrators will be able to be impartial to both parties. Therefore, AAA should be automatically disqualified.

·         Experience showed that AAA is biased against consumers.

·         The Court has the power to appoint a different arbitrator.

RP Positions

Opposing party advocates denying, for reasons including the following:

·         On October 26, 2022, the Court ordered Plaintiff’s claims into arbitration.

·         The Arbitration Provision Mr. Martinez signed provides that, unless the parties otherwise agreed, arbitration would commence before the AAA.

·         The Arbitration Provision states: “You may choose the American Arbitration Association, 1633 Broadway, 10th Floor, New York, New York 10019 (www.adr.org), or any other organization to conduct the arbitration subject to our approval.”

·         Other trial courts enforced that provision by ordering arbitration before the AAA.

·         The AAA’s rules make clear that (1) the arbitrator is appointed by the AAA administratively, (2) pursuant to the rules incorporated into the parties’ contract, but still (3) subject to either party’s objection. (See Pet. Ex. 4, AAA Consumer Arbitration Rules, R-15 (National Roster of Arbitrators), R-16 (Appointment from National Roster), R-19 (Disqualification of Arbitrator).)

·         AAA is neutral, not biased.

Tentative Ruling

The motion is denied. 

The subject arbitration provision is clearly worded to allow Plaintiff the option to choose the AAA, but any other choice would have to be agreed upon by Defendant.  The phrase before the comma saying Plaintiff “may” choose AAA is unqualified, but after the comma the option to select other arbitrators, is expressly subject to Defendant’s approval.  But Defendant has not approved other arbitrators that Plaintiff advocates.  Parties absolutely not wanting AAA to arbitrate, should not sign such a contractual provision.  “When … no conflicting extrinsic evidence is introduced to aid the interpretation of an agreement to arbitrate, the Court of Appeal reviews de novo a trial court's ruling on a petition to compel arbitration. California Correctional Peace Officers Ass'n v. State (2006) 142 Cal.App.4^th 198, 204.

Even arbitration provisions unequivocally requiring only one arbitration forum, are very common and enforced, and not considered illegal or oppressive.  Parties can agree to arbitration provider rules.  E.g.,  Cruise v. Kroger Co. (2015) 233 Cal. App. 4th 390, 399 – 400.

Disqualification issues are not considered before arbitration in the abstract, but instead based upon factual realities as to any motion to vacate or correct an arbitration award.  The only grounds for judicial review of an arbitration award are:  “(a) the award was procured by corruption, fraud or other means; (b) there was corruption in the arbitrator; (c) the rights of the party were substantially prejudiced by misconduct of a neutral arbitrator; (d) the arbitrator exceeded … powers and the award cannot be corrected without affecting the merits of the decision upon the controversy submitted; (e) the rights of the party were substantially prejudiced by the refusal of the arbitrator to postpone the hearing; or (f) there was a disclosure or disqualification issue….”  Allstate Ins. Co. v. Sup. Ct. (2006) 142 Cal.App.4^th 356, 362-63 (citing, e.g., CCP §1286.2)  [Emphasis added.];  SWAB Financial v. E*Trade Securities(2007) 150 Cal.App.4th 1181, 1201.  Circumstances not directly related to the case or the parties do not disqualify arbitrators or judges, perhaps except in extreme circumstances, as to the requirement to disclose matters that could cause someone aware of the facts reasonably to entertain a doubt they would be able to be impartial.  Haworth v. Sup. Ct. (2010) 50 Cal. 4th 372, 389.

Because AAA has arbitration selection rules, there is no motion properly before the Court involving arbitrator selection.  See, e.g.,  CCP § 1281.6.

Further, this Court lacks jurisdiction for other procedures, after compelling arbitration.  E.g.,  MKJA, Inc. v. 123 Fit Franchising, LLC (2011) 191 Cal.App.4th 643, 662 ("After a petition to compel arbitration has been granted and a lawsuit stayed, 'the arbitrator takes over. It is the job of the arbitrator, not the court, to resolve all questions needed to determine the controversy.'”).

Finally, the referenced trial courts’ rulings have no precedential value in this case.  Trial court rulings are not binding precedent.  E.g., Schachter v. Citigroup, Inc. (2005) 126 Cal.App.4th 726, 738.  Rulings in other cases are irrelevant absent some additional showing like the elements of claim or issue preclusion.  Drummond v. Desmarais (2009) 176 Cal.App.4th 439, 448.