Judge: Maurice A. Leiter, Case: 22STCV00707, Date: 2022-12-12 Tentative Ruling

Case Number: 22STCV00707    Hearing Date: December 12, 2022    Dept: 54

Hearing Date: December 12, 2022

Department 54, Judge Maurice A. Leiter

Motion to Compel Arbitration

Moving Party: Defendant Nissan North America, Inc.

Responding Party: Plaintiff Judith Randel

T/R:    DEFENDANT’S MOTION TO COMPEL ARBITRATION IS GRANTED.

THE ACTION IS STAYED.

DEFENDANT TO NOTICE.

            The Court considers the moving papers, opposition, and reply.

BACKGROUND

This is a lemon law action arising out of Plaintiff Judith Randel’s purchase of a 2019 Nissan Sentra, manufactured and distributed by Defendant Nissan North America, Inc. Plaintiff filed the complaint on January 7, 2022, asserting causes of action for violations of the Song-Beverly Act.

ANALYSIS

“On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate a controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists….” (CCP § 1281.2.) The right to compel arbitration exists unless the court finds that the right has been waived by a party’s conduct, other grounds exist for revocation of the agreement, or where a pending court action arising out of the same transaction creates the possibility of conflicting rulings on a common issue of law or fact. (CCP § 1281.2(a)-(c).) “The party seeking arbitration bears the burden of proving the existence of an arbitration agreement, and the party opposing arbitration bears the burden of proving any defense, such as unconscionability.” (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236.)

A.        Request for Judicial Notice

The Court grants Defendant’s unopposed request for judicial notice of the Complaint (Exhibit A) and court filings in Dina C. Felisida, et al, v. FCA US LLC, et al. Sacramento Superior Court Case No. 34-2015-00183668 (Exhibit B).

B.        Existence of Arbitration Agreement

Defendant moves to compel arbitration based on the arbitration provision in the Retail Installment Sale Contract (“RISC”) executed by Plaintiff on March 19, 2019. (Decl. Leonar, Exh. C.) The agreement provides, in pertinent part, “[a]ny claim or dispute, whether in contract, tort, statute or otherwise . . . between you and us or our employees, agents, successors or assigns, which arises out of or relates to your . . . purchase or condition of this vehicle, this contract or any resulting transaction or relationship (including any such relationship with third parties who do not sign this contract) shall, at your or our election, be resolved by neutral, binding arbitration and not by a court action.” (Id. at p. 2.) This action arises out the purchase and condition of the subject vehicle. Defendant, however, is a non-signatory to the agreement.

C.        Non-Signatory

Defendant moves to compel arbitration under the doctrine of equitable estoppel, relying on Felisilda v. FCA US LLC (2020) 53 Cal.App.5th 486, 489. In Felisilda, the plaintiffs purchased a vehicle and signed a sales contract, which provided in pertinent part, ”Any claim or dispute, whether in contract, tort, statute or otherwise (including the interpretation and scope of this Arbitration Provision, and the arbitrability of the claim or dispute), between you and us or our employees, agents, successors or assigns, which arises out of or relates to ... condition of this vehicle, this contract or any resulting transaction or relationship (including any such relationship with third parties who do not sign this contract) shall, at your or our election, be resolved by neutral, binding arbitration and not by a court action.” (Id. at p. 490, emphasis in original.)

The plaintiffs sued FCA and the dealership; the dealership moved to compel all parties to arbitration based on the sales agreement. The plaintiffs argued they could not be compelled to arbitrate their claims against non-signatory FCA. The Court of Appeal rejected this argument, finding that FCA could compel arbitration under equitable estoppel, which allows a non-signatory to enforce an arbitration agreement when “the causes of action against the non-signatory are ‘intimately founded in and intertwined’ with the underlying contract obligations.” (Id. at p. 495; quoting JSM Tuscany, LLC v. Superior Court (2011) 193 Cal.App.4th 1222, 1236-1237.) Citing the arbitration provisions above, the Court of Appeal explained, “[t]he Felisildas’ claim against FCA directly relates to the condition of the vehicle that they allege to have violated warranties they received as a consequence of the sales contract. 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.” (Id. at p. 497.)

The arbitration agreement executed by Plaintiff is not materially different from the one in Felisilda. Plaintiff asserts the Court should instead follow the 9th Circuit case Ngo v. BMW of North America, LLC (9th Cir. 2022) 23 F.4th 942 (Ngo). Federal cases are not binding on this Court and the Court does not find Ngo persuasive. Felisilda found equitable estoppel because the buyers’ claims related to the condition of the subject vehicle. The buyers expressly agreed to arbitrate their claims arising out of the condition of the subject vehicle, including those against third party non-signatories to the sales contract. That reasoning is present here.

D.        Waiver

“[T]here is no ‘single test’ for establishing waiver, ‘the relevant factors include whether the party seeking arbitration (1) has ‘previously taken steps inconsistent with an intent to invoke arbitration,’ (2) ‘has unreasonably delayed’ in seeking arbitration, (3) or has acted in ‘bad faith’ or with ‘wilful [sic] misconduct.’” (Christensen v. Dewor Developments (1993) 33 Cal.3d 778, 782, citing Keating v. Superior Court (1982) 31 Cal.3d 584, 605.)

Plaintiff argues that Defendant has waived the right to arbitrate because Defendant filed an answer that included an affirmative defense of arbitration, responded to discovery, and waited six months to move to compel arbitration. Defendant has only minimally participated in litigation and filed this motion within a reasonable time. The Court sees no bad faith or willful misconduct. Defendant has not waived the right to arbitrate.

Plaintiff’s arguments regarding Morgan v. Sundance, Inc. (2022) 142 S.Ct. 1708 are not persuasive. Morgan does not alter California’s interpretation and application of Civil Code § 1281.2, subdivision (a). In any event, the Court finds no waiver without needing to reach the question of prejudice.

E.        Conclusion

Defendant’s motion to compel arbitration is GRANTED. The action is STAYED.