Judge: Martha K. Gooding, Case: 22-01250395, Date: 2023-05-15 Tentative Ruling

1) Motion to Compel Arbitration

2) ADR Review Hearing

3) Order to Show Cause

Before the Court are three matters: 

(1) Plaintiff’s Petition asking the Court to appoint an arbitration forum or a specific arbitrator.  Plaintiff’s Petition follows the Court’s Minute Order of October 31, 2022, (which granted Defendant’s motion to compel arbitration and ordered the case to arbitration), and was prompted by the parties’ inability, in the ensuing five months, to even agree upon an arbitral forum, much less a specific arbitrator.

(2) The OSC entered by the Court, on its own motion, ordering the parties to show cause why – given the lack of any progress in moving the arbitration proceeding forward – the Court should not reconsider its October 31, 2022 order compelling arbitration in light of the recent opinion in Ford Warranty Cases (Ochoa) (2023) 306 Cal.Rptr.3d 611.

(3) The Court’s previously-set ADR Review Hearing.

The Court addresses the OSC first.

OSC re: Reconsideration of 10/31/2022 Order

“If a court at any time determines that there has been a change of law that warrants it to reconsider a prior order it entered, it may do so on its own motion and enter a different order.”  (Code Civ. Proc., § 1008, subd. (c).)

“A ‘change of law’ under section 1008, subdivision (c), ‘is always an appropriate basis, up until a final judgment is entered, for changing an interim order....’ (Blake v. Ecker (2001) 93 Cal.App.4th 728, 739, fn. 10, 113 Cal.Rptr.2d 422 (Blake), disapproved on other grounds in Le Francois v. Goel (2005) 35 Cal.4th 1094, 1107, fn. 5, 29 Cal.Rptr.3d 249, 112 P.3d 636.) An appellate decision published during an action’s pendency may be a change of law under section 1008, subdivision (c), and requires a trial court to reconsider its earlier ruling if the decision materially changed the law.”  (State of California v. Superior Court (Flynn) (2016) 4 Cal.App.5th 94, 100.) 

“Even without a change of law, a trial court has the inherent power to reconsider its prior rulings on its own motion at any time before entry of judgment.”  (Id.; see, Le Francios v. Goel (2005) 35 Cal.4th 1094, 1108; Marriage of Barthold (2008) 158 Cal.App.4th 1301, 1307-1308.)  The Court has the power to reconsider – even if that desire is triggered by an improper motion.  (Le Francois v. Goel, 35 Cal.4th at 1108; Farmers Ins. Exchange v. Superior Court (2013) 218 Cal. App.4th 96, 102 and fn. 10; In re Marriage of Barthold, 158 Cal.App.4th at 1307-1312.)

As the Court discussed with the parties at the 4/18/2023 hearing on Plaintiff’s Petition to select the arbitral forum/arbitrator, after the Court granted Defendant’s  motion to compel arbitration, the Second District Court of Appeal issued its ruling in Ford Motor Warranty Cases (Ochoa) (2023) 306 Cal.Rptr.3d 611, which expressly disagreed with Felisilda v. FCA US LLC (2020) 53 Cal.App.5th 486.  This Court relied on Felisilda in finding that Defendant could, as a non-signatory third party, compel Plaintiff to arbitrate her claims on the ground of equitable estoppel. 

After considering the parties responses to the OSC, the Court exercises its discretion and finds that issuance of the Ford Motor Warranty Cases opinion warrants reconsideration of the Court’s 10/31/2022 Order granting Defendant’s motion to compel arbitration.  Accordingly, the Court reconsiders its 10/31/2022 Order on its own motion. 

The facts of this case, as alleged in Plaintiff’s Complaint, are more similar to those in Ford Motor Warranty Cases than those in Felisilda.  Plaintiff brings this action only against the manufacturer.  (Complaint, ROA No. 2.)  Plaintiff’s causes of action include both Song-Beverly claims and a fraudulent inducement claim.  (Id.)  The arbitration provision appears identical to the provision in both Ford Motor Warranty Cases and Felisilda.  (Ford Motor Warranty Cases, 306 Cal.Rptr.3d at 616-617; Felisilda v. FCA US LLC, 53 Cal.App.5th at 490; Lecky Decl., ROA No. 23, Exhibit 3.)  The sale contract here is similar to those in Ford Motor Warranty Cases, including finance terms and optional service contracts.  (Ford Motor Warranty Cases, 306 Cal.Rptr.3d at 616; Lecky Decl., ROA No. 23, Exhibit 3.)  Like Ford Motor Warranty Cases, the dealer’s sale contract expressly disclaims any warranty and qualifies that the disclaimer “does not affect any warranties covering the vehicle that the vehicle manufacturer may provide.”  (Ford Motor Warranty Cases, 306 Cal.Rptr.3d at 616; Lecky Decl., ROA No. 23, Exhibit 3, Section 4.) 

As in Ford Motor Warranty Cases, Defendant has not shown that equitable estoppel applies.  Plaintiff’s claims do not arise out of the sale contract, but rather from the manufacturer warranties.  The language of the arbitration provision does not support Defendant’s contention that they can enforce it as a third party non-signatory, even though the claims are based on the condition of the car. 

The Court therefore reconsiders its October 31, 2022 Order and now DENIES Defendant’s Motion to Compel Arbitration of Plaintiff’s claims.

Petition to Compel Arbitration

In light of the Court’s reconsideration of the 10/31/2022 Order granting Defendant’s motion to compel arbitration and its denial of Defendant’s Motion to Compel Arbitration, Plaintiff’s Petition asking the Court to appoint an arbitral forum or arbitrator is DENIED as moot. 

The ADR Review Hearing is hereby vacated. 

The parties shall be prepared at the hearing to set a trial date.

Plaintiff is ordered to give notice.