Judge: Malcolm Mackey, Case: 22STCV17491, Date: 2023-03-23 Tentative Ruling

Case Number: 22STCV17491    Hearing Date: March 23, 2023    Dept: 55

URENA v. NISSAN NORTH AMERICA, INC,                             22STCV17491

Hearing Date:  3/23/23,  Dept. 55.

#7:   MOTION TO COMPEL ARBITRATION AND STAY PROCEEDINGS.

Notice:  Okay

Opposition

MP:  Defendant NISSAN NORTH AMERICA, INC.

RP:  Plaintiff.

Summary

On 5/26/22, Plaintiff LILIA URENA filed a Lemon Law Complaint alleging that she purchased a 2020 Nissan Sentra from KAB GROUP INVESTMENTS INC., d/b/a NISSAN OF DUARTE, with a manufacturer’s warranty, involving defects, including vehicle unable to start, vehicle recalls, check engine light illuminating, engine concerns, transmission concerns, vehicle operability concerns, electrical concerns, engine misfiring, vehicle backup light turning blue, rear doors not opening or closing, multiple windows unable to open or close, abnormal clunking sound while putting vehicle in drive, rear and driver side doors not locking or unlocking, inoperable radio volume controls, solid black infotainment screen when initially turned on, and buzzing noises coming from driver side door and right passenger door.

MP Positions

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

·         Plaintiff purchased a new 2020 Nissan Sentra, from Metro Nissan of Duarte in Duarte,  on July 18, 2020, and entered into a Retail Installment Sales Contract containing a broad arbitration provision covering third parties including Nissan.

·         Her claims are intimately intertwined with the Sales Contract, which supports the ground of equitable estoppel.  Felisilda v. FCA US LLC (2020) 53 Cal.App.5th 486, 496–99.

·         Participation in litigation was not a waiver of arbitration.  Quach v. Cal. Commerce Club, Inc. (2022) 78 Cal.App.5th 470.

RP Positions

Opposing party advocates denying, for reasons including the following:

·         Defendant is not a third-party beneficiary of the Retail Installment Contract.  Instead, it has its own non-binding arbitration program.

·         The dealership distinguishably moved to compel arbitration in the cited opinion.  See  Felisilda v. FCA US LLC (2020) 53 Cal.App.5th 486.

·         Plaintiffs’ claims are not inextricably bound with Retail Installment Sales Contract, as none are based on that agreement.

·         Defendant waived any arbitration right. It filed its Answer on July 1, 2022; and responded to Plaintiff’s discovery requests on or about August 24, 2022. It filed a Case Management Statement and participated in a Case Management Conference on October 27, 2022.

Tentative Ruling

The motion is granted. 

Plaintiff and defendants 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 alleges and admits that Plaintiff purchased the subject vehicle with defects,  from the manufacturer’s agent, with a manufacturer’s warranty, which implies that a sales agreement was involved but it is unmentioned in an artfully pled complaint and only in evidence  (e.g., Complaint, ¶¶ 4 (“KAB is an authorized dealer of Defendant NNA.”), 16 (“KAB, from whom Plaintiff purchased the Subject Vehicle,…),  18 (“Defendant’s express warranty was integral to Plaintiff’s purchase….), 41  (“Defendant KAB is NNA’s authorized and actual agent regarding repairs and maintenance of the Subject Vehicle.”)).

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.”).  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.

Generally, just signatories to arbitration agreements have standing to enforce them, with exceptions as to  nonsignatory persons “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.

Participating in litigation does not by itself waive a party's right to later seek to arbitrate the matter, but the request must be in a reasonable time, and at some point continued litigation justifies a waiver finding, as a fact question, considering the party's actions as a whole in determining whether the conduct was inconsistent with intent to arbitrate.  Desert Regional Medical Center, Inc. v. Miller (2022) 87 Cal.App.5th 295, 316, 321.  Under the Federal Arbitration Act, finding an arbitration waiver would be improperly conditioned upon a showing of prejudice.  Davis v. Shiekh Shoes, LLC (2022) 84 Cal.App.5th 956, 967;  Desert Regional Medical Center, Inc. v. Miller (2022) 87 Cal.App.5th 295, 322.

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