Judge: Mark A. Young, Case: 23SMCV03229, Date: 2023-11-09 Tentative Ruling
Case Number: 23SMCV03229 Hearing Date: November 9, 2023 Dept: M
CASE NAME: Porsandeh, et
al., v. Tesla Inc., et al.
CASE NO.: 23SMCV03229
MOTION: Petition/Motion
to Compel Arbitration
HEARING DATE: 11/9/2023
Legal
Standard
Under California and federal law,
public policy favors arbitration as an efficient and less expensive means of
resolving private disputes. (Moncharsh
v. Heily & Blase (1992)
3 Cal.4th 1, 8-9; AT&T Mobility
LLC v. Concepcion (2011) 563 U.S. 333, 339.) Accordingly, whether an
agreement is governed by the California Arbitration Act (“CAA”) or the Federal
Arbitration Act (“FAA”), courts resolve doubts about an arbitration agreement’s
scope in favor of arbitration. (Moncharsh, supra, 3 Cal.4th at 9;
Comedy Club, Inc. v. Improv West
Assocs. (9th Cir. 2009) 553 F.3d 1277, 1284; see also Engalla v. Permanente Med. Grp., Inc.
(1997) 15 Cal.4th 951, 971-972 [“California law incorporates many of the basic
policy objectives contained in the Federal Arbitration Act, including a
presumption in favor of arbitrability [citation] and a requirement that an
arbitration agreement must be enforced on the basis of state law standards that
apply to contracts in general”].) “[U]nder both the FAA and California law,
‘arbitration agreements are valid, irrevocable, and enforceable, save upon such
grounds as exist at law or in equity for the revocation of any contract.’ ” (Higgins v. Superior Crout (2006) 140 Cal.App.4th 1238, 1247.)
“Code of
Civil Procedure section 1281.2 requires a trial court to grant a petition to
compel arbitration if the court determines that an agreement to arbitrate the
controversy exists.” (Avery v.
Integrated Healthcare Holdings, Inc. (2013) 218 Cal.App.4th 50, 59,
quotations omitted.) Accordingly, “when presented with a petition to compel
arbitration, the court’s first task is to determine whether the parties have in
fact agreed to arbitrate the dispute.” (Ibid.) A petition to compel arbitration is in essence a suit in equity
to compel specific performance of a contract. (Id. at 71.) As with any other specific performance claim, “a
party seeking to enforce an arbitration agreement must show the agreement’s
terms are sufficiently definite to enable the court to know what it is to
enforce.” (Ibid. [internal citations omitted].) “Only
the valid and binding agreement of the parties, including all material terms
well-defined and clearly expressed, may be ordered specifically performed.” (Ibid.) An arbitration agreement “must be so interpreted as to give
effect to the mutual intention of the parties as it existed at the time of
contracting, so far as the same is ascertainable and lawful.” (Civ. Code, §
1636.) The language of the contract governs its interpretation if it is clear
and explicit. (Civ. Code, § 1368.) If uncertainty exists, “the language of a
contract should be interpreted most strongly against the party who caused the
uncertainty to exist.” (Civ. Code, § 1654.)
The party
seeking to compel arbitration bears the burden of proving the existence of a
valid arbitration agreement by the preponderance of the evidence. (Engalla v. Permanente Medical Group, Inc.
(1997) 15 Cal.4th 951, 972.) It would then be plaintiff’s burden, in opposing
the motion, to prove by a preponderance of the evidence any fact necessary to her
opposition. (See Ibid.) “In these
summary proceedings, the trial court sits as a trier of fact, weighing all the
affidavits, declarations, and other documentary evidence, as well as oral
testimony received at the court’s discretion, to reach a final determination.” (Ibid.)
Analysis
Defendant
Tesla, Inc. moves to compel Plaintiffs Cameron Porsandeh and Shane Porsandeh’s
claims to arbitration in accordance with their arbitration agreement with
Defendant.
Valid Arbitration Agreement
As with any contract, mutual assent
or consent is necessary for the formation of a valid arbitration agreement.
(Civ. Code, §§ 1550, 1565.) “Consent is not mutual, unless the parties all
agree upon the same thing in the same sense.” (Civ. Code, § 1580.) The moving
party bears the initial burden of showing the existence of an agreement to
arbitrate by a preponderance of the evidence. (Mitri v. Arnel Mgmt. Co. (2007) 157 Cal.App.4th 1164, 1169
[“Because the existence of the agreement is a statutory prerequisite to
granting the petition, the petitioner bears the burden of proving its existence
by a preponderance of the evidence.”].)
Defendant provides the following
evidence in support of the motion. Plaintiffs placed an order for a 2023 Tesla
Model Y from Defendant Tesla, Inc. on January 14, 2023. (Kim Decl., ¶ 3.) In
placing that order, Plaintiffs executed the Order Agreement, thereby agreeing
to be bound by its terms and conditions, which included an agreement to
arbitrate. (Id., Ex. 1.) Specifically, Plaintiffs placed the order by clicking a
“Place Order” button on Tesla’s website. (Id. at ¶ 4.) Plaintiffs would not
have been able to place the order without clicking this button on Tesla’s
website. (Id.) Prior to placing the order, Plaintiffs saw text and were advised
that Plaintiffs were agreeing to the Order Agreement’s terms and conditions.
(Id. at ¶ 4.) Plaintiffs were presented with a hyperlink to the Order Agreement’s
terms and conditions, which Plaintiffs could click on and view prior to
proceeding with the order. (Id.) When someone clicks this hyperlink, a new
window would open revealing the Order Agreement. (Id.) Once executed, the Order
Agreement became available on the Plaintiffs’ mytesla.com account and remains
for as long as Plaintiffs own the vehicle. (Id.)
The Terms and Conditions of the
Order Agreement contains an Agreement to Arbitrate. Tesla provides that the
Arbitration clause is prominently displayed with a distinctive border on page 2
of the Order Agreement’s Terms and Conditions, and reads in full as follows:
Agreement to Arbitrate.
Please carefully read this provision, which applies to any dispute between you
and Tesla, Inc. and its affiliates, (together “Tesla”).
If you have a concern or dispute,
please send a written notice describing it and your desired resolution to resolutions@tesla.com.
If not resolved within 60 days, you
agree that any dispute arising out of or relating to any aspect of the
relationship between you and Tesla will not be decided by a judge or jury but
instead by a single arbitrator in an arbitration administered by the American
Arbitration Association (AAA) under its Consumer Arbitration Rules. This
includes claims arising before this Agreement, such as claims related to
statements about our products. You further agree that any disputes related to
the arbitrability of your claims will be decided by the court rather than an
arbitrator, notwithstanding AAA rules to the contrary.
(Id., Ex. 1 at p. 3.)
While the purchaser may opt out of
the Agreement to Arbitrate by sending a letter to Tesla stating that intention
within thirty days of executing the Order Agreement, Plaintiffs did not do so.
(Kim Decl. ¶ 5.) Tesla maintains letters in which its customers opted out of
the Agreement to Arbitrate, but it did not receive any such letter from
Plaintiffs. (Id.)
Indeed, the arbitration terms would
apply to the claims at hand. The arbitration provision applies to “any dispute
arising out of or relating to any aspect of the relationship between you and
Tesla… [including] claims related to statements about our products.” (Id., Ex.
1, at p. 3.) Plaintiffs’ claims arise from their purchase of the subject
vehicle provided by Tesla. The Complaint alleges that the Subject Vehicle was
delivered to Plaintiffs with serious defects and nonconformities, and states
three causes of action for violation of the Song-Beverly Act. As such, Plaintiffs’
claims generally arise out of the relationship between Plaintiffs and Tesla.
Accordingly, the Court finds that there
is an arbitration agreement between the parties that cover the claims here. Plaintiffs
fail to oppose, and therefore fail to demonstrate any applicable defense to
enforcement. Therefore, Defendant’s motion is GRANTED. The Court orders
Plaintiff’s claims to arbitration, as discussed above. The entire action is
STAYED pending the completion of the arbitration. (CCP § 1281.4.) The Court sets a Status Conference re
Arbitration for November 15, 2024, at 8:30 a.m.