Judge: Melvin D. Sandvig, Case: 22CHCV00152, Date: 2022-09-21 Tentative Ruling

Case Number: 22CHCV00152    Hearing Date: September 21, 2022    Dept: F47

Dept. F47

Date: 9/21/22

Case  #22CHCV00152

 

MOTION TO COMPEL ARBITRATION

 

Motion filed on 5/12/22.

 

MOVING PARTY: Defendant Hyundai Motor America

RESPONDING PARTY: Plaintiffs Jack Kurtz and Fortuitas Inc.

NOTICE: ok

 

RELIEF REQUESTED: An order: (1) compelling Plaintiffs Jack Kurtz and Fortuitas Inc. to arbitrate all of their claims in accordance with the arbitration agreement; and (2) staying this action pending the outcome of the arbitration.

 

RULING: The motion is granted.

 

The parties are reminded to review the 5/3/19 First Amended General Order Re Mandatory Electronic Filing for Civil.  When e-filing documents, parties must comply with the “TECHNICAL REQUIREMENTS” which are set forth at page 4, line 4 through page 5, line 12 of the Court’s 5/3/19 First Amended General Order Re Mandatory Electronic Filing for Civil.  See also CRC 3.1110(f)(4).  While it appears that Defendant attempted to bookmark the exhibits attached to the declaration filed in support of the motion, the bookmarks are not linked to the exhibits.  While Plaintiff’s bookmarks are linked, Plaintiff has improperly bookmarked each page of the opposition and supporting declaration rather than bookmarking the exhibits, proof of service, etc.  Failure to comply with these requirements in the future may result in  matters being placed off calendar, matters being continued so documents can be resubmitted in compliance with these requirements, documents not being considered and/or the imposition of sanctions. 

This action arises out of Plaintiffs Jack Kurtz and Fortuitas Inc.’s (Plaintiffs) lease of a 2020 Hyundai Santa Fe (the Vehicle).  On 3/9/22, Plaintiffs filed this action for: (1) Song-Beverly Act – Breach of Implied Warranty of Merchantability; (2) Song-Beverly Act – Breach of Express Warranty; (3) Song-Beverly Act – Violation of Civil Code 1793.2(d)(2) and (4) Violation of Civil Code 1793.2(b).  On 5/12/22, Defendant Hyundai Motor America (Defendant) filed and served the instant motion seeking an order: (1) compelling Plaintiffs to arbitrate all of their claims in accordance with the arbitration agreement; and (2) staying this action pending the outcome of the arbitration.  Plaintiffs have opposed the motion. 

 

Defendant’s Request for Judicial Notice (RJN) is granted.

 

On or about 12/23/19, Plaintiffs leased the Vehicle from Parkway Hyundai.  (Tahsildoost Decl., Ex.2).  The Warranty, which accompanied the lease of the Vehicle, contains an agreement to arbitrate.  (Tahsildoost Decl., Ex.3, pages 13-14 “Binding Arbitration for California Vehicles Only”). 

 

The Federal Arbitration Act (FAA) applies to any arbitration agreement that is “written” and in a contract “evidencing a transaction involving commerce.”  9 U.S.C. § 2.  Here, the arbitration provision is in writing and provides that the agreement evidences a transaction involving interstate commerce and shall be governed by the FAA.  (See Tahsildoost Decl., Ex.3 p.16).  Additionally, automotive sales necessarily involve interstate commerce, because even when used intra-state, “cars are themselves instrumentalities of interstate commerce.”  United States v. Oliver (9th Cir. 1995) 60 F.3d 547, 550.  California law also provides for the enforcement of arbitration agreements such as the one contained in the Warranty.  See CCP 1281.2.  Plaintiffs have refused Defendant’s request to submit this matter to arbitration.  (See Tahsildoost Decl. ¶3).

 

Plaintiffs’ contention that Defendant has failed to present admissible evidence that the parties entered an arbitration agreement is without merit.  Contrary to Plaintiffs’ assertion, Defendant’s counsel’s declaration is sufficient to admit the agreement at this stage in the proceedings.  It has been held that “for purposes of a petition to compel arbitration, it is not necessary to follow the normal procedures of document authentication.”  Condee (2001) 88 CA4th 215, 218.  In fact, the Condee court held that CCP 1281.2 does not require the petitioner to introduce the agreement into evidence because a plain reading of the statute indicates that as a preliminary matter the court is only required to make a finding of the agreement's existence, not an evidentiary determination of its validity.  Id. at 219; See also CRC 3.1330 (formerly CRC 371).  Once Defendant alleged the existence of the agreement to arbitrate, the burden shifted to Plaintiffs to prove the falsity of the agreement.  Condee, supra.  Here, Plaintiffs have not shown the falsity of the agreement.  Further, Plaintiffs’ Complaint is based on alleged breach of the warranty which contains the arbitration agreement.  Therefore, Plaintiffs cannot avoid the terms of the agreement which are not to their advantage.  See Felisilda (2020) 53 CA5th 486, 496.

 

Plaintiffs offer two other arguments in opposition to the instant motion.  First, Plaintiffs argue that Defendant has waived its right to compel arbitration based on discovery it has conducted in this case.  See CCP 1281.2(a); (Ayvazian Decl. ¶¶7-8, 13-14, Ex.C, D, H, I).  Second, Plaintiffs argue that based on policy considerations, the motion should be denied.       

 

Plaintiffs concede that there is no single test for waiver of the right to compel arbitration.  See Augusta (2011) 193 CA4th 331, 337.  Rather, waiver may be found where the party seeking to compel arbitration has: (1) previously taken steps inconsistent with an intent to invoke arbitration, (2) unreasonably delayed in seeking arbitration, or (3) acted in bad faith or with willful misconduct.  Id.  "While engaging in litigation of the matter may be inconsistent with an intent to invoke arbitration, 'the party who seeks to establish waiver must show that some prejudice has resulted from the other party's delay in seeking arbitration."  Id.  Further, the party claiming that the other party waived the right to arbitrate bears a heavy burden of proof.  St. Agnes Medical Center (2003) 31 C4th 1187, 1195.  Plaintiffs have failed to meet their burden.      

 

Here, Defendant’s responsive pleading to the Complaint was the instant motion to compel arbitration.  The discovery conducted in this matter was for the purposes of obtaining a copy of the Lease Agreement in order to file/support the instant motion.  Further, Plaintiffs cite no prejudice they have suffered.

 

Plaintiffs’ argument based on policy considerations also fails.  Plaintiffs cite no evidentiary support for their claim that “there are arbitration provisions in virtually every sale, lease and warranty offered by dealerships and manufacturers for new or used vehicles.”  (See Opposition, p.4:18-19).  Nor have Plaintiffs cited authority to support their conclusion that that granting the motion “would eviscerate the consumer protection statutes passed by the Legislature.”  (See Opposition, p.4:18-23).

 

Based on the foregoing, Plaintiffs are ordered to arbitrate their claims against Defendant and this action is stayed pending the outcome of the arbitration.  See CCP 1281.4.