Judge: Malcolm Mackey, Case: 22STCV00253, Date: 2023-03-13 Tentative Ruling
Case Number: 22STCV00253 Hearing Date: March 13, 2023 Dept: 55
ARRIAGA
v. AMERICAN HONDA MOTOR CO., INC. 22STCV00253
Hearing Date: 3/13/23,
Dept. 55
#1: MOTION TO COMPEL ARBITRATION AND STAY
PROCEEDINGS.
Notice: Okay
Opposition
MP:
Defendant
RP:
Plaintiff
Summary
On 6/17/22, plaintiffs RUTH ARRIAGA and MARTINA
MARROQUIN filed a Complaint against AMERICAN HONDA MOTOR CO., INC., alleging that,
on October 6, 2019, plaintiffs purchased a new 2019 Honda CR-V, having
defective, irreparable, computerized driver-assisting safety systems, concealed
from plaintiffs, which cause dangerous driving conditions, such as sudden
braking for no reason, and steering outside lanes.
The causes of action are:
1. VIOLATION OF
SONG-BEVERLY ACT - BREACH OF EXPRESS WARRANTY
2. VIOLATION OF
SONG-BEVERLY ACT - BREACH OF IMPLIED WARRANTY
3. FRAUDULENT INDUCEMENT
– CONCEALMENT.
MP
Positions
Moving party requests an order compelling arbitration
of the Complaint, and staying this action, on grounds including the following:
·
Plaintiffs’ claims concerning a 2019 Honda
CR-V fall within the arbitration provision in the Retail Installment Sales
Contract entered into by Plaintiffs.
·
An arbitration provision of the contract
states:
Any claim or dispute,
whether in contract, tort, statute or otherwise
(including the
interpretation and scope of this Arbitration Provision,
and the arbitrability of
the claim or dispute), between you and us or
our employees, agents,
successors or assigns, which arises out of or
relates to your credit
application, purchase or condition of this
vehicle, this contract or
any resulting transaction or relationship
(including any such
relationship with third parties who do not sign
this contract) shall, at
your or our election, be resolved by neutral,
binding arbitration and
not by a court action.
·
As a nonsignatory, Defendant invokes its
right to arbitration under the terms of the arbitration clause which expressly
includes third parties, such as AHM, who are sued as a result of the purchase
or condition of the vehicle, and under the doctrine of equitable estoppel.
Felisilda
v. FCA US LLC (2020) 53 Cal.App.5th 486, 496–99.
RP Positions
Opposing party advocates denying, on bases including
the following:
·
Defendant lacks standing to compel this
matter to arbitration, as the alleged arbitration agreement exists purely
between Plaintiffs and the non-party dealership.
·
Defendant waived its right to compel this
action to arbitration, through its Case Management Statement, requesting a jury
trial in this matter and subsequently posting its jury fees, and conducting
discovery. “[I]n
the absence of legal excuse, a party’s failure to timely demand arbitration
results in a contractual forfeiture of the right to compel arbitration.” (Platt
Pacific, Inc. v. Andelson (1993) 6 Cal.4th 307, 319.)
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 Complaint specifically references the dealership
issuing the contract (e.g., Complaint, ¶¶ 85 (“Plaintiffs visited Galpin Honda
in Misson [sic] Hills, California in hopes of purchasing a new 2019 Honda CR-V.”),
115
(“AMERICAN HONDA and its authorized dealership at which Plaintiffs
purchased the subject vehicle had reason to know the purpose of the subject
vehicle at the time of sale of the subject vehicle. The sale of the subject
vehicle was accompanied by an implied warranty of fitness.”)). Further, the DOE and agency allegations are
general enough to impliedly reference the dealership as a party or agent of one
(Complaint, ¶¶ 5, 7).
Additionally, the contract expresses an agreement to
arbitrate certain actions arising out of the condition of the vehicle as to
third-party nonsignatories.
The Court finds no waiver. The 40th Affirmative Defense of
the Answer asserts arbitration.
Defendant’s small amount of discovery activity and motion for judgment
on the pleadings before moving for
arbitration in October 2022, do not amount to waiver of arbitration.
Applying equitable estoppel to compel arbitration,
without an applicable arbitration agreement, 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.”).
Nonsignatory persons capable of enforcing arbitration
agreements include those “who are agents or alter egos of a signatory party or
intended third party beneficiaries of an arbitration agreement.” Bouton v. USAA Casualty Ins. Co.
(2008) 167 Cal.App.4th 412, 424. Accord Smith v. Microskills San Diego
L.P. (2007) 153 Cal. App. 4th 892, 896.
“[A] plaintiff's allegations of an agency relationship among defendants
is sufficient to allow the alleged agents to invoke the benefit of an
arbitration agreement executed by their principal even though the agents are
not parties to the agreement.” Thomas
v. Westlake (2012) 204 Cal.App.4th 605, 614-15.
Courts “ look to the nature of the claims and the
relationships of persons, wrongs and issues in determining whether a plaintiff
is estopped from asserting the invalidity of an arbitration provision because
plaintiff's claims are dependent on, or inextricably bound up with, the
obligations imposed by the contract the plaintiff executed with the signatory
defendant.” Jones v. Jacobson
(2011) 195 Cal.App.4th 1, 21 n.13.
Parties may agree that arbitrators have jurisdiction
to decide whether arbitration provisions are enforceable, but such language
must so provide “‘clearly and unmistakably.’”
Parada v. Sup. Ct. (2009) 176 Cal.App.4th 1554, 1566. Unless a party makes a direct challenge in
court as to the enforceability of an arbitrator-delegation clause, the
arbitrator must resolve all the issues. Mendoza
v. Trans Valley Transport (2022) 75 Cal.App.5th 748, 767.
"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. “Because merely participating
in litigation … does not result in a waiver, courts will not find prejudice
where the party opposing arbitration shows only that it incurred court costs
and legal expenses.… Rather, courts assess prejudice with the recognition that
California’s arbitration statutes reflect ‘a strong public policy in favor of
arbitration as a speedy and relatively inexpensive means of dispute
resolution’.… Prejudice typically is
found only where the petitioning party’s conduct has substantially undermined
this important public policy or substantially impaired the other side’s ability
to take advantage of the benefits and efficiencies of arbitration.” Saint Agnes Medical Center v. PacifiCare
of Cal. (2003) 31 Cal.4th 1187,
1203-04. “A defendant’s pursuing
demurrers does not necessarily constitute litigation on the merits for purposes
of finding a waiver of arbitration.” See Groom v. Health Net (2000) 82
Cal. App. 4th 1189, 1195. No established
test determines waiver of arbitration, but courts may consider whether (1) a
party's actions are inconsistent with arbitrating, (2) litigation proceedings
were substantially invoked and parties were well into lawsuit preparations
before party notification of intent to arbitrate; (3) a party requested
arbitration close to trial or delayed for a long period; (4) a party seeking
arbitration filed a cross-action without requesting arbitration; (5) important
intervening steps occurred such as discovery procedures unavailable in
arbitration; and (6) delay prejudiced, affected or misled parties opposing
arbitration. Wagner Construction Co.
v. Pacific Mechanical Corp. (2007) 41 Cal. 4th 19, 30-31. "'[C]ourts have found prejudice where
the petitioning party used the judicial discovery processes to gain information
about the other side's case that could not have been gained in arbitration
[citations]; where a party unduly delayed and waited until the eve of trial to
seek arbitration [citation]; or where the lengthy nature of the delays
associated with the petitioning party's attempts to litigate resulted in lost
evidence.'” Adolph v. Coastal Auto
Sales, Inc. (2010) 184 Cal.App.4th 1443, 1451, 1452 ("Substantial evidence
supports the court's denial of the petition to compel arbitration."). See
also Roman v. Sup. Ct. (2009)
172 Cal. App. 4th 1462, 1479 (“the discovery requests Flo-Kem served (a set of
form interrogatories and a request for production of documents) were authorized
under the AAA rules; thus the discovery sought (although not received) did not
seek to take advantage of discovery tools unavailable in arbitration.”).
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.4th
188, 192; Heritage Provider Network,
Inc. v. Sup. Ct. (2008) 158 Cal.App.4th 1146, 1152, 1154 n. 12.