Judge: Mark C. Kim, Case: 22LBCV00598, Date: 2023-05-11 Tentative Ruling

Case Number: 22LBCV00598    Hearing Date: May 11, 2023    Dept: S27

Plaintiffs, Mahnaz Shirazi and Mahmoud Herzarkhani filed this action against Defendants, Foothill Ranch Imports, LLC, Mercedes Benz of Foothill Ranch, and Mercedes-Benz USA, LLC for Violation of the Song-Beverly Act and negligent repair. 

Defendant, Mercedez-Benz USA, LLC seeks to compel Plaintiffs to arbitrate their dispute with it.  It concedes it does not have an arbitration agreement with Plaintiffs, but seeks to compel arbitration under Plaintiffs’ agreement with the dealership from whom Plaintiffs leased the subject automobile.  Defendant seeks to compel arbitration under a third party beneficiary theory and also under an estoppel theory.

Defendant filed this motion on 11/29/22.  On 4/04/23, the Court of Appeals decided Ochoa v. Ford Motor Company (2023) 89 Cal.App.5^th 1324.  In Ochoa, the Court of Appeals expressly considered whether a manufacturer of an automobile can enforce a dealership’s arbitration agreement under a third party beneficiary and/or estoppel theory.  The Court of Appeals held that it cannot. 

Plaintiffs’ opposition, filed on 4/28/23, does not mention Ochoa.  The Court cannot, however, ignore the binding precedent. 

Defendant, in reply, argues that Plaintiffs rely heavily on Ochoa, but Ochoa is distinguishable.  First, as noted above, Plaintiffs did not rely on Ochoa.  In any event, the Court finds Ochoa is not distinguishable.  It considered the exact issues presented here, and found that the manufacturer cannot enforce the seller’s arbitration agreement under an equitable estoppel and/or third party beneficiary theory.  In light of Ochoa, the motion to compel arbitration is denied. 

Moving Defendant is ordered to give notice. 

Parties who intend to submit on this tentative must send an email to the court at gdcdepts27@lacourt.org indicating intention to submit on the tentative as directed by the instructions provided on the court website at www.lacourt.org.  If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar.  If a party submits on the tentative, the party’s email must include the case number and must identify the party submitting on the tentative. If any party does not submit on the tentative, the party should make arrangements to appear remotely at the hearing on this matter.