Judge: Malcolm Mackey, Case: 22STCV15255, Date: 2023-01-09 Tentative Ruling

Case Number: 22STCV15255    Hearing Date: January 9, 2023    Dept: 55

SOSA v. NISSAN NORTH AMERICA, INC.                               22STCV15255

Hearing Date:  1/9/23,  Dept. 55

#5:   MOTION TO COMPEL ARBITRATION AND STAY PROCEEDINGS.

Notice:  Okay

Opposition

MP:  Defendant

RP:  Plaintiff

Summary

On 5/6/21, Plaintiff OMAR SOSA filed a Lemon Law Complaint alleging that he purchased a new 2019 Nissan Altima having defects, including the gas pedal shaking and the car hesitating when accelerating.

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 containing a broad arbitration provision covering all claims arising out of the purchase or condition of his purchased Altima.

·         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.

·         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.  The express language included in Plaintiff’s sales contract permits arbitration of any claim “which arises out of or relates to your … purchase or condition of the [Subject] Vehicle … or any resulting transaction or relationship, including any such relationship with third parties who do not sign this contract ….” (See Sales Contract, attached as Ex. C to Thomas Decl.)

·         There is no discovery impediment.  Arbitrators may issue “[a] subpoena requiring the attendance of witnesses, and a subpoena duces tecum for the production of books, records, documents and other evidence, at an arbitration proceeding or a deposition . . . for the purposes of discovery” under Civ. Proc. § 1282.6, subd. (a)).

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

·         The FAA applies per the contract, and the Sales Contract affects interstate commerce.

·         The opposition is untimely.

RP Positions

Opposing party advocates denying, for reasons including the following:

·         The Felisilda opinion was incorrectly decided, and is factually distinguishable as including the dealership as a party.

·         Evidentiary objections were filed to incompetent evidence of the arbitration agreement.

·         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.  An arbitrator does not have the authority to enforce third-party subpoenas, and granting Defendant's motion would strip Plaintiff of the ability to conduct discovery that is essential to his claims.

·         Defendant has not provided any factual support that there was an intent to benefit Nissan.

·         The FAA supersedes state law (CAA) if and only if the state law is in conflict with the federal policy favoring arbitration. Absent that, California law controls. The question of arbitrability is preserved for the courts. Sargon Enterprises, Inc. v. Browne George Ross LLP (2017) 15 Cal. App. 5th 749.

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, paragraph 11, expressly alleges vehicle conditions complained about.  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.”).  “[U]nder both federal and California decisional authority, a nonsignatory defendant may invoke an arbitration clause to compel a signatory plaintiff to arbitrate its claims when the causes of action against the nonsignatory are ‘intimately founded in and intertwined’ with the underlying contract obligations.”  Boucher v. Alliance Title Co., Inc. (2005) 127 Cal. App. 4th 262, 271.

Further, the Complaint sues Doe defendants who are admitted to be agents.  Dealers may be vehicle manufacturers’ agents or representatives for purposes of making warranty repairs, including based on the warranty provisions.  See  Ibrahim v. Ford Motor Co. (1989) 214 Cal.App.3d 878, 888;  Lundy v. Ford Motor Co. (2001) 87 Cal.App.4th 472, 477 n. 3.  An authorized dealer acts as the manufacturer's agent when the dealer make final inspections, corrections, and adjustments to make vehicles ready to be used.  Defries v. Yamaha Motor Corp. (2022) 84 Cal.App.5th 846, 860.

Intended third-party beneficiaries may enforce arbitration provisions.  Macaulay v. Norlander (1992) 12 Cal.App.4th 1, 7–8;  Michaelis v. Schori  (1993) 20 Cal.App.4th 133, 139.

The opposition contains no competent evidence attacking the validity of the arbitration agreement.  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;  Condee v. Longwood Mgt. Corp. (2001) 88 Cal.App.4th 215, 219 (once petitioners allege that an arbitration agreement exists, the burden shifts to respondents to prove the falsity of the purported agreement, and no evidence or authentication is required to find the arbitration agreement exists).

"‘[A]dequate’ discovery does not mean unfettered discovery....'"  Fitz v. NCR Corp. (2004)118 Cal.App.4th 702, 715.  An AAA provision allowing arbitrators to control the extent of discovery did not constitute substantive unconscionability.  See Roman v. Sup. Ct.  (2009) 172 Cal.App.4th 1462, 1476.

The Song-Beverly Act has not been a limitation on arbitration enforcement in related opinions.  Distinguishably, an arbitration clause that is contrary to FEHA (Gov. C. §12965(b)), is substantively unconscionable, but may be severed from the rest of the contract, and not enforced, in the Court’s discretion.  Trivedi v. Curexo Technology Corp.  (2010) 189 Cal.App.4th 387, 396-98  (applying AAA rules).

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.

Federal law applies to arbitration provisions in contracts involving interstate commerce.  Higgins v. Sup. Ct. (2006) 140 Cal.App.4th 1238, 1247.  Also, California courts must apply procedural provisions of the Federal Arbitration Act when the parties expressly so agreed.  Rodriguez v. American Technologies, Inc. (2006) 136 Cal.App.4^th 1110, 1122. 

The Court will not follow the many nonbinding authorities from other federal and state jurisdictions, or other trial court rulings, cited in opposition.  Federal case law is not binding upon California courts.  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.  Trial court rulings are not binding precedent.  E.g., Schachter v. Citigroup, Inc. (2005) 126 Cal.App.4th 726, 738.  “‘Courts exercising inferior jurisdiction must accept the law declared by courts of superior jurisdiction. It is not their function to attempt to overrule decisions of a higher court.’"  People v. Eastman (1993) 13 Cal. App. 4th 668, 674,  superseded by statute on other grounds as stated in   People v. Sup. Ct. (2017) 10 Cal. App. 5th 1316, 1321.

Where the trial court does not rule on evidentiary objections, as to a motion to compel arbitration, the objections are deemed waived.  See  EFund Capital Partners v. Pless (2007) 150 Cal. App. 4th 1311, 1319;  Tutti Mangia Italian Grill, Inc. v. Amer. Textile Maintenance Co. (2011) 197 Cal. App. 4th 733, 743-44  ("Although appellants objected to the ... declaration, the trial court did not rule on this evidentiary objection.... Accordingly, we reject appellants' claim that there was insufficient evidence to support the petitions to confirm the arbitration awards.").

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.