Judge: Maurice A. Leiter, Case: 23STCV23176, Date: 2024-02-20 Tentative Ruling

Case Number: 23STCV23176    Hearing Date: February 20, 2024    Dept: 54

Hearing Date: February 20, 2024

Department 54, Judge Maurice A. Leiter

Motion to Compel Arbitration

Moving Party: Defendant Mercedes-Benz USA, LLC

Responding Party: Plaintiff Inkwon Yuh

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

DEFENDANT TO NOTICE.  

If the parties wish to submit on the tentative, please email the courtroom at SMCdept54@lacourt.org with notice to opposing counsel (or self-represented party) before 8:00 am on the day of the hearing.

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

BACKGROUND

This is a lemon law action arising out of Plaintiff’s lease of a 2023 Mercedes-Benz EQE350X manufactured and distributed by Defendant A Mercedes-Benz USA, LLC.

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. Existence of Arbitration Agreement

Defendant moves to compel arbitration based on the arbitration provision in the lease agreement executed by Plaintiff on May 29, 2023. (Decl. Ameripour, Exh. 2.) The agreement provides, in pertinent part, “Any claim or dispute, whether in contract, tort or otherwise (including any dispute over the interpretation, scope, or validity of this lease, arbitration section or the arbitrability of any issue), between you and us or any of our employees, agents , successors, assigns, or the vehicle distributor, including Mercedes-Benz USA LLC (each a ‘Third-Party Beneficiary’), which arises out of or relates to a credit application, this lease, or any resulting transaction or relationship arising out of this lease (including any such relationship with third parties who do not sign this contract) shall, at the election of either you, us, or a ThirdParty Beneficiary, be resolved by a neutral, binding arbitration and not by a court action.” (Id.) Defendant is a non-signatory to the agreement.

B. Non-Signatory

Defendant moves to compel arbitration at a third-party beneficiary of the lease agreement. Generally, a plaintiff or defendant must be a party to the arbitration agreement to be bound by it or invoke it. (See JSM Tuscany, LLC v. Superior Court (2011) 193 Cal.App.4th 1222, 1236.) A nonsignatory may be compelled to arbitrate a dispute when the nonsignatory is a third-party beneficiary of the contract containing the arbitration agreement. (See Epitech, Inc. v. Kann (2012) 204 Cal.App.4th 1365, 1371.) The contract must show an intent by the contracting parties to confer a benefit on the third party. (See id. at 1372.) “‘[I]t is not enough that the third party would incidentally have benefited from performance.’” (Id. (quoting Souza v. Westlands Water Dist. (2006) 135 Cal.App.4th 879, 891).)

Defendant is specifically named as a third-party beneficiary to the lease agreement. This shows an intent to confer a benefit to Defendant. In opposition, Plaintiff asserts this is insufficient but provides no authority stating a named third-party beneficiary cannot compel arbitration.

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