Judge: Melvin D. Sandvig, Case: 22CHCV00636, Date: 2023-02-08 Tentative Ruling
Counsel wishing to submit on a tentative ruling may inform the clerk or courtroom assisant in North Valley Department F47, 9425 Penfield Ave., Chatsworth, CA 91311, at (818) 407-2247. Please be aware that unless all parties submit, the matter will still be called for hearing and may be argued by any appearing/non-submitting parties. If the matter is submitted on the court's tentative ruling by all parties, counsel for moving party shall give notice of ruling. This may be done by incorporating verbatim the court's tentative ruling. The tentative ruling may be extracted verbatim by copying and specially pasting, as unformatted text, from the Los Angeles Superior Court’s website, http://www.lasuperiorcourt.org. All hearings on law and motion and other calendar matters are generally NOT transcribed by a court reporter unless one is provided by the party(ies).
Case Number: 22CHCV00636 Hearing Date: February 8, 2023 Dept: F47
Dept. F47
Date: 2/8/23
Case #22CHCV00636
MOTION TO
COMPEL ARBITRATION
Motion filed on 10/26/22.
MOVING PARTY: Defendant Nissan North America, Inc.
RESPONDING PARTY: Plaintiff Patricia Mares
NOTICE: ok
RELIEF REQUESTED: An order
compelling arbitration and staying this action during the pendency of the
arbitration.
RULING: The motion is granted.
PROCEDURAL DEFECTS
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). Both parties have
failed to bookmark exhibits attached to declarations and requests for judicial
notice submitted in support of their respective papers. This procedural defect did not affect the
Court’s ruling on the merits of the motion.
However, 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.
SUMMARY OF FACTS & PROCEDURAL HISTORY
This action arises out of Plaintiff Patricia Mares’
(Plaintiff) purchase of a used 2018 Nissan Rogue (the Vehicle) pursuant to a
“Retail Installment Sales Contract – Simple Finance Charge (With Arbitration
Provision)” (the Contract/RISC) Plaintiff entered with Nissan of Mission Hills. (Chung Decl., Ex.3, 4; Complaint ¶¶9, 11, 17,
53; Cohen Decl., Ex.4). The RISC was for
the sale of a warranted vehicle. Id. Plaintiff contends that the Vehicle is
defective and Defendant Nissan North America, Inc. (Nissan) has been unable to
service or repair the Vehicle to conform to the applicable express warranties
contained in the RISC after a reasonable number of opportunities. Plaintiff further contends that despite the
foregoing, Nissan has failed to promptly replace or repurchase the Vehicle as
required under the Song-Beverly Act.
(Complaint ¶¶8-9, 16-25, 31-37, 43-49).
As a result, on 8/12/22, Plaintiff filed this action against
Nissan for: (1) Violation of the Song-Beverly Consumer Warranty Act – Breach of
Express Warranty, (2) Violation of Song-Beverly Act – Breach of Implied
Warranty of Merchantability, and (3) Violation of Song-Beverly Act – Civil Code
1793.2.
Nissan filed an answer to the complaint on 9/13/22. On 10/26/22, Nissan filed and served the
instant motion seeking an order compelling arbitration and staying this action
during the pendency of the arbitration.
On 1/26/23, Plaintiff filed an opposition to the instant motion and on 1/31/23,
Nissan filed a reply to the opposition.
ANALYSIS
Plaintiff does not dispute that the RISC Plaintiff signed
regarding the Vehicle contains an arbitration provision which provides, in
relevant part:
ARBITRATION
PROVISION
PLEASE
REVIEW – IMPORTANT- AFFECTS YOUR LEGAL RIGHTS
1. EITHER YOU OR WE MAY CHOOSE
TO HAVE ANY DISPUTE BETWEEN US DECIDED BY ARBITRATION AND NOT IN COURT OR BY
JURY TRIAL.
2. IF ANY DISPUTE IS ARBITRATED,
YOU WILL GIVE UP YOUR RIGHT TO PARTICIPATE AS A CLASS REPRESENTATIVE OR CLASS
MEMBER ON ANY CLASS CLAIM YOU MAY HAVE AGAINST USE INCLUDING ANY RIGHT TO CLASS
ARBITRATION OR ANY CONSOLIDATION OF INDIVIDUAL ARBITRATIONS.
3. DISCOVERY AND RIGHTS TO
APPEAL IN ARBITRATION ARE GENERALLY MORE LIMITED THAN IN A LAWSUIT, AND OTHER
RIGHTS THAT YOU AND WE WOULD HAVE IN COURT MAY NOT BE AVAILABLE IN ARBITRATION.
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 your credit application, 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. If federal law provides that a
claim or dispute is not subject to binding arbitration, this Arbitration
Provision shall not apply to such claim or dispute.
…
…
This Arbitration Provision shall
survive any termination, payoff or transfer of this contract. If any part of
this Arbitration Provision, other than waivers of class action rights, is
deemed or found to be unenforceable for any reason, the remainder shall remain
enforceable. If a waiver of class action rights is deemed or found to be
unenforceable for any reason in a case in which class action allegations have
been made, the remainder of this Arbitration Provision shall be unenforceable.
(bold in original; italics added) (Chung
Decl., Ex.3, 4); (Opposition, generally; Cohen Decl., Ex.4).
Both California and federal law favor the enforcement of
valid arbitration agreements. Armendariz
(2000) 24 C4th 83, 97; Sanchez (2015) 61 C4th 899, 924; AT&T
Mobility, LLC (2011) 563 U.S. 333, 339.
The Federal Arbitration Act (FAA) applies where: (1) the
contract evidences a transaction in involving commerce; or (2) where the
parties expressly agree that the FAA governs arbitration agreement disputes
under the contract. Cronus
Investments, Inc. (2005) 35 C4th 376, 383-384; Victrola 89, LLC
(2020) 46 CA5th 337, 345-346; Buckeye Check Cashing, Inc. (2006) 546
U.S. 440, 442-443. Here, as noted above,
the Arbitration Provision in the RISC specifically states that “[a]ny
arbitration under this Arbitration Provision shall be governed by the Federal
Arbitration Act (9.U.S.C. § 1 et. seq.) and not by any state law concerning
arbitration.” (Chung Decl., Ex.3, 4). Additionally, the RISC affects commerce.
A party seeking to compel arbitration under the FAA must
show: (1) the existence of a valid arbitration agreement and (2) the agreement
to arbitrate encompasses the dispute at issue.
Ashbey (9th Cir. 2015) 785 F3d 1320, 1323. Here, the opposition does not dispute that Plaintiff
entered the RISC which contains the above Arbitration Provision. Additionally, Plaintiff’s claims are based on
the fact that Plaintiff entered the RISC which contains the warranties sued
upon. Further, Plaintiff seeks to
rescind the RISC through this action. (See
Complaint ¶¶41, 53).
Pursuant to both federal and California law, under the
doctrine of equitable estoppel, “a nonsignatory defendant may invoke an
arbitration clause to compel a signatory plaintiff to arbitrate its claims when
the causes of action against the nonsignatory are intimately founded in and
intertwined with the underlying contract obligations.” (internal quotation
marks omitted) JSM Tuscany, LLC
(2011) 193 CA4th 1222, 1237.
With regard to the purchase of a vehicle where the
plaintiff and the selling dealership entered a RISC, this very issue has
recently been decided by the Court of Appeal in Felisilda (2020) 53
CA5th 486 wherein the Court held:
“Under the doctrine of equitable
estoppel, as applied in both federal and California decisional authority, a
non-signatory defendant may invoke an arbitration clause to compel a signatory
plaintiff to arbitrate its claims when the causes of action against the non-signatory
are ‘intimately founded in and intertwined’ with
the underlying contract obligations [i.e., the purchase and condition of the
vehicle].” (internal citations omitted).
Felisilda, supra, at
495.
Because Plaintiff expressly agreed to arbitrate claims
arising out of the condition of the Vehicle, including against third party
non-signatories to the RISC, Plaintiff is estopped from refusing to arbitrate the
claims made against Nissan in this action.
See Felisilda, supra at 497. As explained by the Court in Felisilda:
“‘the fundamental point’ is that a
party is ‘not entitled to make use of [a contract containing an arbitration
clause] as long as it worked to [his or] her advantage, then attempt to avoid
its application in defining the forum in which [his or] her dispute… should be
resolved.’” (internal citations omitted)
Id. at 496.
Plaintiff’s causes of action against Nissan relate to the
purchase and condition of the Vehicle; therefore, they fall under the
Arbitration Provision in the RISC. (See
Complaint ¶¶8-11, 16-25, 31-37, 41, 43-49, 53).
The RISC is the source of the warranties Plaintiff relies on for the
claims in this action and Plaintiff seeks to rescind the RISC through this
action. As such, the warranties and
their purported breach are “intimately founded in and intertwined” with the
RISC. See Felisilda, supra
at 497.
Plaintiff’s reliance on Ngo (9th Cir.
2022) 23 F4th 942 and other federal cases for the proposition that Nissan as a
non-signatory to the RISC cannot rely on the arbitration provision because
Plaintiff has not sued the dealership/signatory to the RISC is unavailing.
Plaintiff’s reliance on Ngo, supra, and
other federal cases is misplaced. First,
these federal cases are not binding on this Court whereas Felisilda, supra,
is binding authority. See Auto
Equity Sales, Inc. (1962) 57 C2d 450, 455 (“When deciding matters of
California law, the doctrine of Stare Decisis requires the Court of inferior
jurisdiction follow the published decisions of California courts of superior
jurisdiction.”); Ngo, supra at 946 (“State law determines whether
a non-signatory to an agreement containing an arbitration clause may compel
arbitration.”); Franklin (9th Cir. 2021) 998 F3d 867, 874
fn.9; Felisilda, supra at 497.
Second, Ngo is inconsistent with Ninth Circuit precedent which
held that the signatory to a contract need not have been a defendant in order
for a non-signatory to compel arbitration under a theory of equitable
estoppel. See Franklin, supra
at 869-870, 875.
The warranties on which Plaintiff bases the claims in
this action are an essential part of the benefits Plaintiff received when Plaintiff
decided to enter the RISC. Additionally,
the protections provided by the Song-Beverly Act only apply to consumers who
purchase vehicles directly from the retail seller within the meaning of the
Act. See Dagher (2015) 238
CA4th 905, 926-927; Civil Code 1791.2(a)(1).
Without the RISC from a Nissan-authorized dealer, Plaintiff would have
no standing to seek relief under the Song-Beverly Act which underlies the
causes of action in the complaint. As
such, Plaintiff’s claims are inextricably intertwined with the RISC and Nissan may
enforce the Arbitration Provision under the doctrine of equitable
estoppel.
Plaintiff’s reliance on “extrinsic evidence” to support
her position also fails. Plaintiff
provides a blank form Dealer Agreement which Plaintiff contends is the
agreement between Nissan and the dealership that sold Plaintiff the Vehicle. (See Cohen Decl. ¶7, Ex.5). Plaintiff fails to establish that the Dealer
Agreement was ever entered by Nissan.
Even if Nissan did enter the agreement, it would only be relevant if the RISC is vague
or ambiguous. See WYDA
Associates (1996) 42 CA4th 1702, 1710; BMW of North America, Inc.
(1984) 162 CA3d 980, 990. Plaintiff does
not contend the RISC is ambiguous.
Further, contrary to Plaintiff’s conclusory assertion, the Dealer
Agreement does not “dispositively preclude[] [Nissan] from invoking the
equitable estoppel and third-party beneficiary doctrines.” (See Opposition, p.7:16-21).
First, Plaintiff fails to explain how the Dealer
Agreement has any bearing on Nissan’s equitable estoppel argument. To the extent the Dealer Agreement is
relevant, it supports Nissan’s position.
The Dealer Agreement contains a provision regarding warranties which
provides in part: “Section 10. Warranties . . . Dealer shall expressly
incorporate in full and without modification any warranty furnished by Seller
with a Nissan Vehicle as a conspicuous part of each order form or other
contract of sale of such Nissan Vehicle by Dealer to any buyer.” (Cohen Decl.,
Ex.5, p.30). This provision shows that
warranties are part of the sales contract.
Plaintiff also incorrectly asserts that equitable estoppel
does not apply because the Sales Contract “expressly disclaims all warranties.” (See Opposition, p.6:24-25; p.9:11-25). The warranty disclaimer provision actually
shows that Plaintiff’s claims are intimately founded in and intertwined with
the RISC. Under the Song-Beverly Act,
“every sale of consumer goods that are sold at retail in this state shall be
accompanied by the manufacturer’s and the retail seller’s implied warranty that
the goods are merchantable,” which can be disclaimed “only when a consumer good
is on an ‘as is’ or ‘with all faults’ sale.”
Civil Code 1792, 1792.3. The fact that contracting parties can disclaim
implied warranties in sales contracts reinforces the conclusion that such
warranties are necessarily terms of the sales contract.
Consistent with the foregoing, the RISC includes language
that could potentially, though not automatically, disclaim certain warranties
under circumstances which are not present here.
The RISC states that there would be no express or implied warranties
only if the purchaser did “not get a written warranty, and the [Seller/Dealer]
does not enter into a service contract within 90 days from the date of this
contract[.]” (See Chung Decl.,
Ex.4). However, Plaintiff admits that
express and implied warranties accompanied the sale of their vehicle. (Complaint ¶¶8, 32). The sale of the Vehicle was not an “as-is”
sale, much less one where Plaintiff did not get a written warranty, so the
warranty disclaimer provision was never triggered. Instead, the disclaimer provision reinforces
that the RISC contemplated the existence of the manufacturer’s warranty,
recognizes that the warranty affects the parties’ contractual obligations, and
demonstrates that such warranties are additional terms of and thus “intimately
founded in and intertwined with” the obligations imposed by the RISC.
Nissan may also compel arbitration as a third
party-beneficiary to the Arbitration Provision.
As noted above, the Arbitration Provision provides that Plaintiff agreed
to arbitrate any claim related to the RISC, including “[a]ny claim or
dispute…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)… .” (Chung Decl., Ex.3, 4). Nissan is one of the third parties
contemplated by the agreement. See
Felisilda, supra at 498-499; Ronay Family Limited Partnership
(2013) 216 CA4th 830, 836; Goonewardene (2019) 6 C5th 817.
CONCLUSION
Based on the foregoing, Nissan’s request to compel
Plaintiff to arbitrate this action is granted.
The action is stayed pending the resolution of the arbitration. See CCP 1281.4; 9 U.S.C. §3.